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FEDERAL RESERVE B A N K OF R I C H M O N D



N O V E M B E R 1961

RETAIN THIS STATEMENT
if is your personal record of earnings and deductions
for the period indicated
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The personal income of Americans was up again
in 1960. Total personal income in the country as a
whole and in each of the states moved up and set
new high records despite a slowing of economic ac­
tivity in the latter part of the year. The increase for
the whole country was 5% . The gains for indi­
vidual states clustered around the national average,
but ranged from 2% to 23% with five states showing
gains of over 10%.
On a per capita basis the gains were less pro­
nounced. Nationally the increase was 3 % , while
gains for most states ran between 2% and 5% .
Three states— Idaho, Louisiana, and New M exico—
experienced small declines of 1% or less. A t the
other extreme two states had increases of over 10% .
In the Fifth District the story was much the same
as in the nation, as can be seen in the details given
below. (F o r the purposes of this discussion the
Fifth District covers all of W est Virginia, including
six counties in the Fourth Federal Reserve District.)
This is a quick survey of the major changes in total
and per capita personal income in the District be­
tween 1959 and 1960, together with a few backward
glances at some of the more significant changes in
recent years.
TOTAL IN C O M E In the Fifth District total personal
income reached a new high in 1960 of $30.7 billion,
5% more than in 1959 and 73% more than in 1950.
The 1960 gain was only slightly less than the rise
recorded in 1959 and continued the string of annual
increases since the 1930’s which has been interrupted
only by a very small decline in 1954. Total income
for the District in 1960 was 7.7% of the United
States total; in 1950 the proportion was 7.9% .
All of the states in the Fifth District shared in the
1960 increase, but in varying degrees. For the third
year in a row, W est Virginia’s experience was sig­
nificantly worse than that of other District states,
but even so income there increased by 2 % . The
percentage gains in Virginia and the District of
2




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Columbia were slightly under the Fifth District
average of 5% , while Maryland’s gain was just over
this figure. The Carolinas led the growth parade
for the third straight year, this time with gains of
6 % . Everywhere except in the District of Colum­
bia, however, the relative increase from 1959 to 1960
was slightly under the previous year’s gain.
M ORE IN C O M E PER PERSON
Per capita income
was affected by population changes as well as changes
in total income. Thus in the District of Columbia
and W est Virginia, where population declined, gains
in income per man, woman and child were greater,
percentagewise, than the increase in total income.
Per capita income in the District of Columbia re­
corded its best gain since 1956. This state (count­
ing the District of Columbia as a state) became the
first in the Fifth District ever to register an average
income of better than $3,000 per person. The actual
rise of $140 in 1960 was almost twice as great as the
increase in any other Fifth District state. In rela­
tive terms, however, the gain of 5% was equaled in
both Carolinas.
The average increase of 4% in District per capita
income was a little better than that of the nation,
continuing a pattern that has held since 1957. Be­
tween 1950 and 1960, average District income in­
creased from 81% to 83% of the national per capita
figure. The 1960 ratio surpassed the high of the last
decade established in 1952 and fell only a hair short
of the all-time peak of just over 83% set in 1942.
The recent improvement resulted from a rate of popu­
lation growth slightly below the national average.
PRICE RISE CUTS REAL G A IN

In judging how much

better off people are after receiving higher incomes,
it is necessary to take account of changes in the prices
of things they buy.

The Consumer Price Index is

a convenient measure to employ for this purpose.
Its average value during 1960 was 1.5% higher than
the 1959 average, and on this basis the 5% gain in

total income in the Fifth District was equivalent to
a 3.3% gain in real purchasing power. As it hap­
pens, this increase was practically identical with the
average annual rate of growth of real income during
the past decade.
Per capita income also must be adjusted for the
price rise. After that adjustment, real per capita
income in the District showed a gain of 2.2% in 1960
— a rise about equal to the average annual increase
since the wr
ar. Since 1950 real per capita income has
risen about 24% . In' other words, the purchasing
power of the average income in the District increased
by almost one-fourth between 1950 and 1960.
W IDE DIFFERENCES A M O N G STATES Per capita in­
comes differ enormously among the states in the Dis­
trict, ranging in 1960 from the second highest in the
United States to the third lowest. They decline
rapidly as one moves from north to south. The
$3,008 in the District of Columbia was 135% of the
national average of $2,223 while Maryland’s $2,394
was 108%. At the other extreme, South Carolina’s
income was only 63% of the national average.
These differences, great as they are, do not ap­
proach those which prevailed only a short time ago.
In 1929, for instance, South Carolina’s per capita in­
come stood at 38% of the nation’s, while Maryland
was at 111% and the District of Columbia at 181%.
By 1932 the range was from 39% in South Carolina
to 262% in the District of Columbia. In succeeding
years, and particularly during W orld W ar II, the
gap closed as income in the Carolinas moved up while
in the District of Columbia it dropped in relation to
the national average. A t the end of the war, per
capita incomes in District states exhibited a rela­
tionship to each other and to the nation that was
similar to that shown in 1960. In the past ten years
there have been many ups and downs, but each state
has made limited progress in raising its per capita
income in relation to the national average.

W ith this information on a state basis, the analysis
of aggregate economic activity can be brought close
to home.
The table on page four shows the distribution of
personal income by major sources for the United
States and the District in 1950 and 1960. While the
general pattern remained about the same over this
period, two changes are worthy of note. First, the pat­
tern for the District became more like that of the
United States. Second, the proportion of income
represented by wages and salaries increased in both
areas, while proprietors’ income declined by about the
same amount. Within the wrage and salary sector, a
sharp drop in mining and a smaller decline in trans­
portation were more than offset by a large increase
in government payments and smaller increases in all
other groups.

The result wr
as the significant in­

crease in the proportion represented by wages and
salaries noted above.
M AN U FA C T U R IN G

Taking first things first compels

a look at manufacturing.

W ages and salaries of

$5.8 billion in this field account for 19.0% of total

IN C O M E BY SOURCE W hat are the reasons for the
income changes noted in 1960 and previous years?
An indication of the answers is found in the data
showing distribution of total income according to five
major types— wages and salaries, other labor income,
property income, proprietors’ income, and transfer
payments such as Social Security and unemployment
compensation. In addition, wages and salaries are
broken down into 24 source groups such as railroads
and trade, and proprietors’ income is divided into
farm and nonfarm sources. These data permit study
of changes in the structure of the economy and help
to explain variations in the economic welfare of groups
of persons who earn their living in different ways.



3

M A JO R SOURCES OF PERSONAL IN C O M E AS PER CENT OF TOTAL IN C O M E
U N IT E D STA T ES A N D FIFTH D IST R IC T , 19 5 0 A N D 1960
1950
Source

P E R S O N A L IN C O M E

1960

United
States

Fifth
District

United
States

Fifth
District

100.0

100.0

100.0

100.0

W A G E S A N D S A L A R IE S

64.4

67.2

67.2

69.7

M a n u fa c tu rin g
G o ve rn m e n t
Trade

21.9
9.2
12.1

18.4
16.9
10.4

21.9
11.4
12.3

19.0
18.9
10.9

Services
Contract construction
T ran sp o rtatio n

6.1
3.5
4.4

5.9
3.5
4.1

7.0
3.9
3.6

6.8
3.7
3.6

Finance
M in in g
O th er

2.6
1.4
3.2

2.1
2.8
3.1

3.1
1.0
3.0

2.7
1.3
2.8

O T H E R L A B O R IN C O M E

1.7

1.6

2.7

2.4

P R O P R IE T O R S ' IN C O M E

16.0

15.2

12.1

11.9

5.9
10.1

6.3
8.9

3.0
9.1

3.5
8.4

12.6

10.7

13.0

11.3

5.4

5.3

5.0

4.7

Farm
N o n fa rm
P R O P E R T Y IN C O M E
NET T R A N S F E R P A Y M E N T S

income in the Fifth District, compared with $3.3 bil­
lion and 18.4% in 1950. The national proportion
was approximately 22% in both years. Even more
significantly, this huge total exhibits considerable
cyclical variation. At its 1960 level it was up 4.5%
over 1959 in the District, 3% in the nation. These
changes go far to explain why total income showed
a moderate gain, just as past changes have been an
intrinsic part of recovery and recession. In both
1955 and 1959, Fifth District wages and salaries from
manufacturing jumped 10% over the previous year,
whereas they decreased in 1949, 1954, and 1958.
Considerable manufacturing is found in each Fifth
District state except the District of Columbia. Pro­
portionally, it is most important in the Carolinas,
where manufacturing wage and salary payments ac­
count for one-fourth of total income, and least im­
portant in Virginia, where the same ratio stands at
16%. Heavy representation of the cyclically sensi­
tive metals and chemicals industries in Maryland and
W est Virginia has caused manufacturing income in
these states to show more variation than in other
Fifth District states.

These states had the smallest

increases in 1960 but still gained more than the na­
tional average.

A s a whole, District manufacturing

continued its tendency to perform somewhat better
than the national total during periods of business
slowdown.
4




GO VERN M EN T LO O M S LARGE If any single factor
distinguishes the Fifth District economy from that of
other areas it is the mass of Government jobs in and
near the nation’s capital. O f the national totals,
21% of Federal civilian and 18% of Federal military
wages and salaries were paid to persons in the Fifth
District. The combined total was $4 billion, wT
ith
payments to civilians being about double those to
the armed forces.
Although P'ederal disbursements were concentrated
in the District of Columbia and its adjacent states,
the Carolinas also shared, particularly in the military
salaries. In W est Virginia, however, only 2% of
personal income came from this source, compared
with 5% in the nation and 13% in the Fifth District.
Federal wage and salary payments to civilians in
the District in 1960 wrere 7% greater than in 1959.
They have increased in every year since 1954, and
the 1960 gain wr about average for this period. In­
as
come payments to members of the armed forces
dropped by 5% , the biggest year-to-year decrease
since 1947. Since the end of the Korean W ar mili­
tary build-up in 1952, this income has decreased a
little in each year except 1959. The Carolinas did
not participate in the 1960 drop.
M IN IN G IN C O M E CO NTINUES DECLINE W est V ir­
ginia has little Federal employment and only a mod­
erate amount of manufacturing. Coal mining is the

difference— but the figures indicate that it is a poor
substitute, from an economic standpoint, for the
steadily rising Federal salaries. The postwar pat­
tern of total wages paid by coal mines has been one
of great cyclical variation superimposed on a down­
ward trend. In each of the recession years, 1949,
1954, and 1958, wages dropped by more than 20% .
Recovery from the first two declines almost reached
the previous peaks, but the 1959 experience was a
shocker— a drop of 3% on top of the 26% decrease
in 1958. X o relief came in 1960; instead, another
decline of 7 % . By any measure, the experience has
been disastrous to large sections of W est Virginia.
In 1948, wages from coal mining reached a peak of
$489 million; in 1960 they were down to $285 mil­
lion. In 1948 they provided 22% of total personal
income in the state; in 1960, only 9 % . Some day
soon the combination of automation and the decline
in coal demand will have run its course, but it seems
safe to say that mining will never regain its former
prominence in W est Virginia’s economy.
CYCLICAL ACTIVITIES Three more major business
activities— contract construction, transportation, and
trade— also quickly reflect cyclical fluctuations that
occur in manufacturing and thus make significant
contributions of their own to variations in District
personal income. W age and salary payments in each
of these fields increased in 1960, but by less than the
gain of 1959. Trade showed the most strength with
an increase of 6 % . W ithin the transportation sector
there occurred a development unusual in the postwar
period. W age payments made by railroads were
stable following a small decline in 1959, while pay­
ments by highway shippers registered the smallest of
the yearly gains of the postwar period and appeared
to confirm the long-run slowdown in the rate of
growth of income from this source.
FARM IN C O M E VARIES WIDELY Outside the area
of wages and salaries, the income of farm operators
is of special interest in the Fifth District. While
this item was up 17% in 1960, it has varied widely
over the past decade from almost $1.5 billion in 1951
to less than $0.9 billion in 1957. The general trend
has been downward in absolute amounts and down
very sharply as a percentage of the total, falling from
6.3% in 1950 to 3.5% in 1960. Because of the
vagaries of the weather, livestock price cycles, and
changes in demand and support prices for crops, yearto-year changes have ranged from an increase of 31 %
to a decline of 25% . Within the individual states,
variations have been even greater.
The proportion of total income received by farm
proprietors is fairly large in North and South Caro­



lina, the 1960 figures amounting to, respectively, 8%
and 5% of the total in those states. Mainly because
of an improved tobacco crop, farm income rose 19%
in North Carolina and 9% in South Carolina.
STEADY GROW ERS The Fifth District’s remaining
activities have shown steady growth. W ages and
salaries from finance, insurance and real estate, com­
munications, public utilities, services, and State and
local governments have never exhibited a year-toyear decline during the postwar period. Percentage
gains in 1960 were a little below recent averages in all
of these lines except services, which recorded a some­
what stronger than average gain. The latter sector
is becoming a more important part of the District
economy primarily on the strength of steady gains in
professional and social services and spectacular
growth in business and repair services.
IN C O M E BY TYPE
About 70% of the District’s per­
sonal income consists of wages and salaries, 12% is
proprietors’ income, 11% is income from property,
5% is net transfer payments, and the rest is made up
of other labor income. This is a far cry from the
distribution in 1929, when wages and salaries com ­
prised only 59% of the total, proprietors’ and prop­
erty incomes were 20% and 18% , respectively, and
transfer payments were less than 2 % . In the past
ten years, however, changes in the proportions, while
mostly in the same direction, have been much more
moderate than they were in the turbulent days of the
Great Depression and W orld W ar II. The propor­
tion represented by wages and salaries seems to have
stabilized in recent years at about 70% , while prop­
erty income has shown a slight tendency to increase
as a proportion of the total.
SU M M A R Y
Personal income in the Fifth District
continues to rise, but more slowly than in recent
years, and the fluctuations are smaller. The latter is
due principally to three factors. First, the national
economy has shown smaller fluctuations. Second,
manufacturing in the District is heavily concentrated
in the more stable field of nondurable goods. Third,
the two most volatile elements of District income,
mining wages and farm income, have declined sub­
stantially in relative importance.
Per capita income in the District continues to move
slowly toward the national average. In Virginia and
the two Carolinas incomes have inched steadily up­
ward toward that figure. In W est Virginia progress
has been interrupted in the past few years. In Mary­
land and the District of Columbia, with above-average
incomes, there have been fluctuations with little ap­
parent trend.
5

Ten-Year Trends In District
DURABLE GOODS
Growth in manufacturing employment during the decade of
the Fifties w as more rapid in the Fifth District than in the nation.
This w as true despite relatively smaller population gains. District
population grew 14% between 1950 and 1960 (rising from J-4.6
million to 16.6 million), but the ratio to the national tota
clined from 9.7% to 9.3%. In the same ten-year period,
ever, the District's share of national manufacturing em
increased from 8.2% to 8.7%. The actual change w as froiVi 1
million in 1950 to 1.4 million in 1960— a 16% rise in the ni/mber

PRIM ARY METALS
7 6,8 0 0 w o rk e rs in
1960, up 2 2 % since
1950 a n d eq u al to
6 .5 % of U. S. total

FABRICATED
METALS
41,7 0 0 w o rk e rs in
1960, up 1 9 % since
1950 a n d eq u al to
3 .9 % o f U. S. total

Chem icals
Prim ary m etals
Stone, clay, g la ss
Foods
M achinery
Lumber
Fab. m etals

M A C H IN ER Y
9 0 ,8 0 0 w o rk e rs in
1960, e q u a l to 3 .1 %
of U. S. total (1950
d a ta not co m p arab le )

TRANSPORTATION
EQUIPMENT
57,3 0 0 w o rk e rs in
1960, eq u al to 3 .5 %
of U. S. total (1950
d a ta not co m p arab le )

LUMBER
Textiles
A p p a re l
Lumber
Chem icals
Foods
Paper
Stone, clay, g la ss

88,3 0 0 w o rk e rs in
1960, d o w n 2 5 % since
1950 a n d eq u al to
1 4 % of the U. S. total




STONE, CLAY,
A N D GLASS
5 7,1 0 0 w o rk e rs in
1960, up 9 .6 % since
1950 a n d eq u a l to
1 0 % of U. S. total

27,600
25,200
22,300
9.100
8,400

8,200
7.100

Manufacturing Employment
NONDURABLE GOODS
of jobs available at District factories as compared to a 9.2% gain
for the nation.
The District's share of durable goods manufacturing employ­
ment increased only slightly in the decade— from 5.1% to 5.4%.
Workers in nondurable goods factories, however, 11.6% of the
nation's total in 1950, increased to 13.0% in 1960. The princi­
pal classes of Fifth District industry are pictured here, each with
a brief statistical summary. The seven industries that provided
the most jobs in each state in 1960 are listed on the map.

FOODS
124,300 w o rk e rs in
1960, up 3 8 % since
a n d eq u a l to
of U. S. total

4 2 .200
3 7 ,4 0 0
3 2 ,5 0 0
26.200
23,2 0 0
17,800

sxtiles
sods
hemicals
jm ber
pparel
•ans. equip
im iture

36,400
32,900
32,500
24,700
23,300

TEXTILES
3 9 3 ,3 0 0 w o rk e rs in
I9 6 0 , d o w n 6 .3 % since
19 5 0 a n d eq u a l to
4 2 % o f the U. S. total

20,000
17,100

APPAREL
xtiles
rniture
achinery
jparel
od s
m ber
bacco

1 15,600 w o rk e rs in
1960, up 6 4 % since
1950 a n d eq u a l to
9 . 5 % of U. S. total

221,500
44,500
36,400
34,100
33,200
32,700
31,800




PAPER
4 1 ,8 0 0 w o rk e rs in
1960, up 4 5 % since
1950 a n d eq u a l to
7 . 4 % of U. S. total

CHEMICALS
102,700 w o rk e rs in
1960, up 2 3 % since
1950 a n d equal to
1 2 % of U. S. total

North Carolina Trade Fair
.

Columbus Day 1961 marked the beginning of a
unique and impressive event, the North Carolina
Trade Fair. For ten days the Tarheel State held
“ open house” for potential buyers from all sections
of the nation and many parts of the world. The Fair
wras unique because it was the first such event—
planned along the lines of European trade marts— to
be sponsored by a state. It was impressive for sev­
eral reasons.
The physical facilities were first to catch the eye.
The Charlotte Coliseum is a modern, circular struc­
ture 300 feet in diameter. Its sheer, 50-foot outer
wall of concrete and glass is topped by an aluminum
dome rising another 50 feet. Its 70,000 square feet
of floor space provided room enough for 254 display
units of 80 or more square feet each.
A walkway bordered with flags of many nations
linked the six-year-old Coliseum with the brand-new
Merchandise Mart, symbol of the city’s expanding
role as a trade center. The Mart’s first and second
floors, each with an area of 80,000 square feet, pro­
vided more than enough additional space.
Some exhibitors who needed extra room combined
Digitized for 8
FRASER


several display units. Others found outdoor ex­
hibits more practical for showing large pieces of
equipment. A third building, Ovens Auditorium,
was available nearby for opening ceremonies in case
of rain, but excellent weather prevailed and these
formalities were conducted outside on the auditorium
steps. The three buildings— modern, functional, and
well-spaced in an open and attractive location— pro­
vided a near-perfect setting for the Fair.
STATE-WIDE VENTURE Credit justly due the citizens
of Charlotte for providing excellent facilities does not
obscure the important fact that the fair was truly
a state-wide project. Its success was due to the
efforts of hundreds of business and civic leaders and
thousands of workers. The array of participating
organizations and the crowds of visitors confirmed
this.

Events leading up to opening day proved it.

The idea was conceived last January as a means
of furthering North Carolina’s already outstanding
record of accomplishment in the field of industrial
development.

Several specific aims were adopted

early in the planning process.

Briefly, these wre re :

(1 ) to sell North Carolina and North Carolina prod­
ucts to the nation and the free world; (2 ) to encour­
age establishment of new industry and expansion of
existing plants; (3 ) to acquaint North Carolinians
with the scope of their own accomplishments, using
what has been done to inspire new concepts of what
can be d on e; and (4 ) to give recognition to the work­
ers of North Carolina by assembling a display of their
goods and services and making it the center of a
great effort to reach new markets.

and television time, and use of billboards was donated
to the cause.

quick installation by 350 business firms, trade asso­

STATE LEADERSHIP Responsibility for coordinating
these far-flung activities fell to the Chief of the Divi­
sion of Commerce and Industry in the North Caro­
lina Department of Conservation and Development.
Other state officials worked with him. A full-time
staff of only ten people handled the mail, set up and
kept the records, and attended to countless details
such as credentials, badges, and complimentary tick­
ets for exhibitors and buyers. The relatively modest
amount of public funds initially provided to meet
expenses was recovered through space and service
fees paid by exhibitors and admission fees collected
from the public. A considerable amount from private
donations gave additional assurance of success.
O f all that was done to make the Fair so successful,
the amount of voluntary service is perhaps the most
distinctive feature. Services donated by private
citizens included making vital personal contacts
throughout the free world, listing and reserving ac­
commodations for visiting buyers, serving as inter­
preters for foreign visitors who lacked adequate

ciations, educational institutions, and other groups.

knowledge of English, acting as hostesses and guides,

A list of more than 50,000 buyers received direct

and many others. It is unlikely that any estimate can

mail invitations, many of which were followed up

be made of the “ market value” of time and talent vol­

with personal contacts made by businessmen and

untarily contributed.

bankers touring this country, Canada, Latin America,

lina couldn’t care less. Their eyes are on the future—

Europe, and the Far East at their own expense. An
estimated $500,000 worth of newspaper space, radio

on their state’s progress measured by more and bet­

SIX M O N TH S TO DO A YEAR'S W ORK
Without a
high degree of enthusiasm and spirit of dedication
among a very large number of people, there could be
little hope of success on such short notice. By the
time a site had been selected and work begun in
earnest, only six months remained in which to ac­
complish a task estimated by experts to require
double or triple that amount of time.
In those six months work on the Merchandise
Mart was stepped up so that the first two floors
would be ready two months ahead of the original
schedule. Exhibits were designed and prepared for




But the people of North Caro­

ter job opportunities and richer lives for all.

M any

exhibits,

such

as

this

m odel

of

the

U nive rsity

of

N orth

C a ro lin a cam p us, d escribed ed ucational, go ve rn m e n ta l, a n d other
service facilities; thus the Fair revealed a cross section o f the state.

Left: In a d d ition to N orth C a r o lin a 's better k n o w n products such
as

textiles, furniture,

m achines

attracted

and

the

tobacco,

attention

of

a

w id e
b u y e rs

variety

of

at

T rade

the

m odern
Fair.

9

THE FIFTH DISTRICT
Recent comments on national economic conditions
have described business as good but not booming, im­
proving on balance but with a number of divergent
elements, and “ moving sideways” in some important
areas. These generalizations also describe recent
developments in the Fifth District.
Retail sales have been moving sideways almost
continuously during the recovery period even though
business in general and personal income in particular
have risen steadily. Sales in certain lines— apparel
and specialties for school, appliances, tools, and furni­
ture— have displayed encouraging seasonal strength.
Automobiles also have gained quite steadily, tending
to confirm the industry’s expectation that the 1962
model year will be one of the best. Other classes of
merchandise have moved relatively slowly, however,
so that total retail sales continue to lag.
M A N -H O U R S M IX E D
Diverse movements have re­
mained distinctive features of the manufacturing sec­
tor. Seasonally adjusted factory man-hours de­
creased 0.2% between August and September, the
net result of a 1.1% rise in durable goods and a
0.9% fall in the more extensive nondurable goods
group. There were nonconformists in both. Trans­
portation equipment and lumber lost momentum in
contrast to the generally faster pace in durables,
whereas wr
oven goods, yarn and thread, and tobacco
manufactures other than cigarettes registered gains
contrary to the behavior of most nondurables. The
strongest gains were made in machinery, furniture,
and yarn and thread. The sharpest declines occurred
in food products, apparel, chemicals, and transporta­
tion equipment.
EMPLOYMENT SH O W S STRENGTH
Job s ta t is tic s
provide broadly based evidence to support the con­
tention that business is good but not booming. Dis­
trict seasonally adjusted nonfarm employment in­
creased 0.4% between August and September. Even
manufacturing employment rose, indicating that the
net loss in man-hours stemmed from reductions of
working time in certain industries rather than fewer
jobs. W ork forces decreased more than seasonally
in contract construction, rose less than the usual sea­
sonal amount in trade, and remained unchanged in
10



transportation, communication, and public utilities.
In all other nonmanufacturing enterprises employ­
ment increased with mining, services, and govern­
ment contributing the strongest gains.
Variations among industries were also reflected in
geographic differences. S e p t e m b e r employment
reached new highs in Maryland, the District of Co­
lumbia, and Virginia. W est Virginia and the Caro­
linas, however, have not yet returned to their re­
spective employment highs which occurred just before
the onset of the 1960 recession. In W est Virginia,
the responsibility rests mainly on last year’s sharp
decline in mining activity. In the Carolinas, textiles,
apparel, lumber, and furniture all share the blame.
G RADUAL DECLINES IN UNEM PLOYMENT Monthly
estimates of total unemployment without seasonal ad­
justment are provided by Maryland, Virginia, W est
Virginia, and South Carolina. Back in February,
according to the figures for these four states, unem­
ployment as a per cent of the civilian labor force
ranged from 15.0% in W est Virginia to 6.2% in V ir­
ginia. The average was 8.3% compared with 8.1%
for the nation. By August, the latest month for
which these data wrere available for inclusion here,
the range of District rates had moved to a consider­
ably lower level— from 11.6% in W est Virginia to
4.0% in Virginia. The four-state average was down
to 5.8% compared with a 6.2% national rate.
Evidence that District rates generally have declined
further since August is found in recent revisions of
local unemployment estimates. The District em­
braces about 80 “ labor market areas.” Labor condi­
tions in one-fourth of these have been reviewed in
the last two months. Am ong the unemployment
rates that were changed, decreases outnumbered in­
creases five to one.
Insured unemployment declined more than sea­
sonally in every month from March through August,
and the latest weekly figures suggest a resumption
of this encouraging trend following some less favor­
able reports early in September.

Recent rates of

insured unemployment ranged from 5.2% in W est
Virginia (the only District rate higher than the na­
tional average) to 1.5% in Virginia and the District

of Columbia. The District average was 2.9% , which
compared favorably with the national rate of 3.6% .
FURNITURE MARKET O NE OF BEST The number of
furniture showings has increased in recent years to
cover virtually every season in all parts of the coun­
try. Sales executives in firms selling a variety of
lines nationwide hardly have time to unpack between
trips. Since recent markets in other regions posted
only moderately successful records, no one expected
anything unusual at the regular fall shows in District
furniture centers.
Furthermore, the statistical evidence until quite
recently was definitely gloomy. Retail furniture
sales started the year at a low ebb and showed only
spasmodic improvement through June. Factory manhours also looked bad compared with 1959 and 1960
figures. But the industry began to take heart when
national furniture sales strengthened in July and A u ­
gust. District sales persisted at a fair level through
the late summer, then increased sharply in Septem­
ber. Production in the District also increased in the
latter month, as factory man-hours rose to a par with
average levels of the past two years.
Reports from the Southern Furniture Market, in
progress October 20-27, were optimistic from the
beginning. It was said of most previous markets
that evaluations would have to wait until salesmen
could visit customers after the show and judge the
extent of the show’s impact on dealers’ willingness
to buy. This time the customers were buying on
the spot for several apparent reasons. Their inven­
tories had dwindled to unusually low levels— too low
for the fall and winter seasons with business on the
upgrade. New styles, some introduced at this mar­
ket and some unveiled earlier in the year, were a
stimulus to sales. Finally, manufacturers had pre­
pared, more carefully than ever before, a variety of
special services for dealers. Recognizing consumer
resistance as a barrier to general market improve­
ment and wishing to help dealers present products
most advantageously to their customers, some manu­
facturers offered retailers a wide variety of selling
aids ranging from suggested showroom arrangements
to actual training programs for salesmen. Such in­
terest in dealers’ problems gained an added measure
of good will for a number of producers and con ­
tributed to the over-all success of the markets.

week or two. The tone of the markets has changed
little in recent months. Increases in new orders and
rising backlogs have clearly shown a stronger trend
in demand. Producers have tried to use this as a
fulcrum to jack up prices. Such an effort is under­
standable with costs considerably higher and prices
significantly lower than they were two years ago dur­
ing the industry’s most recent period of general pros­
perity. The large inventories and phenomenal pro­
ductive capacity that are part and parcel of the textile
business exert so much downward pressure on the
price structure, however, that substantial price in­
creases remain unlikely unless stronger demands
develop.
Manufacturers’ modest success in raising prices
can be readily documented. The average level of the
index of wholesale prices for cotton products during
1960 was 94.2 (1 9 4 7 -4 9 = 1 0 0 ). Prices declined in
the second half of 1960, and the index dropped from
93.4 in September of that year to a low of 89.5 last
June. The influence of improving demand then
raised the index a point and a half in three months
to a September level of 91.0. Price gains have been
strongest in heavy industrial fabrics and man-made
fiber goods.
DEPRECIATION SCHEDULES REVISED
Mill opera­
tors welcomed the October 11 announcement of more
liberal depreciation allowances for textile machinery.
A “ useful life” of 15 years was recommended for
preparatory equipment (previously 30 years), cards
(previously 40 years), and other machines used to
process materials through the spinning and weaving
operations (most of which were formerly written off
over a 25-year period). These were the first such
revisions since 1942. The new schedules were favor­
ably received as much more realistic than the old
ones in view of more rapid rates of innovation and

Textile manufacturers con­

STANDOFF IN TEXTILES

tinue to chart a cautious course through a circum­
stantial maze to which something new is added every
Better retail sales, low d ealer stocks, new
ices

m ade

this

y e a r's

fall

fu rniture




styles, an d new

m arket

one

of

the

se rv ­
best.

11

B IT U M IN O U S C O A L TR EN D S
FIFTH

D IS T R IC T ,

1 9 5 1 -1 9 6 1
T h o u s a n d s o f P e rso n s

Millions of Tons

'J'Change in Series

obsolescence in the design of textile machines and as
an aid in, but not a solution to, the problem of foreign
competition. The original announcement made it
clear that the new schedules applied only to new
acquisitions. Regulations which will set forth changes,
if any, in the handling of machines not fully de­
preciated under the old schedules are said to be in
preparation.
BITUM INO US COAL Coal producers have experi­
enced more stable levels of production and sales long
enough to think that they may last for a while. As
the chart shows, average levels of production have
been fairly stable since 1958. Employment, however,
continued to decline until this year. At 71,500 in
September, seasonally adjusted mining employment
reached the high for the year and was just about even
with last December. The last such period of stable
employment spanned the second half of 1956 and the
first half of 1957. The number of District miners
dropped about 10% in each of the three intervening
years.
Several reasons for optimism are listed by the coal
experts.

Costs of production have been reduced to

competitive levels.

Within the present economic

framework coal has apparently struck a balance with
other fuels and power sources and will tend to hold
its own domestically.

Meanwhile, markets in Eu­

rope, Latin America, and the Far East are expand­
ing and should take increasing quantities.

Finally,

special research units in the Department of the In­
terior, at W est Virginia University, and elsewhere
12



are looking into new ways of using coal. These in­
vestigations will study coal as a source of special pur­
pose fuels and of chemicals for uses other than as
fuel. The coal industry believes that these studies
w ill eventually yield significant results in opening
new markets for its product.
AGRICULTURE Prospects continue to be generally
favorable for Fifth District farmers. Production of
fire-cured and sun-cured tobacco, wheat, grapes, and
pecans will probably be at least 15% greater than
last year. Output of hurley tobacco, soybeans, oats,
and peaches will also be significantly larger while
corn, sorghum grain, and sweet potato crops are ex­
pected to be considerably smaller this year than last.
By mid-October District farmers had sold over 1 bil­
lion pounds of fine-cured tobacco for $650 million, a
1c increase in poundage and a 7% increase in dol­
/c
lars over 1960. Both total value of sales and average
prices set new records for the Border Belt where the
marketing season ended September 28.

P H O T O C R E D IT S
C o v e r— C o lo n ia l Stu d io
6. & 7. V irg in ia C h a m b e r of
Com m erce, M ille r & R h o a d s, Inc., Bem iss Eq u ip m e nt C o r­
poration, N e w p o rt N e w s S h ip b u ild in g a n d D ry D ock
C o m p a n y , A m e rica n Forest Products Industries, Inc.,
Fostoria G la ss C o m p a n y , A m e rica n C otton M a n u fa c t u r ­
ers Institute, Inc., The C h a m p io n P a p e r a n d Fibre C o m ­
p a ny, C o lo n ia l Studio, E. I. du Pont de N e m o u rs & Co.,
Liggett & M y e rs Tobacco Co., Sou th ern States C o o p e r a ­
tive, Stone M a n u fa c t u rin g C o m p a n y , B ig g s Furniture Co.,
Inc. 8. & 9. K u g le r's, In co rp o ra ted
11. S ou th ern Furni­
ture E xp o sitio n Bldg., Inc.


Federal Reserve Bank of St. Louis, One Federal Reserve Bank Plaza, St. Louis, MO 63102