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Economic Profile
Few states in the nation have experienced such
sweeping economic change as has W est V irginia
during the last 15 years. Stated in broad terms, the
State has been going through a period of m ajor
readjustm ent. P rior to and during W orld W ar II.
coal mining and agriculture were thriving activities,
providing the bulk of employment. Even before the
war, however, agricultural employment had begun a
steady decline. In the 1950's, mining employment
fell off drastically, due to both reduced demand for
coal and large-scale automation by the mining com­
panies. W hile employment declines in both of these
activities have slowed, the heart of the S tate’s
problem remains that of finding new industries and
employment opportunities.
Recent expansion of the manufacturing sector
has begun to partially fill the job gap. More im­
portant for the long run, the State and Federal gov­
ernments and interested private groups are cooperat­
ing in program s to retrain workers and bring new
job-creating investments into the State. The fight is
far from won, but developments in the last few years
have been encouraging.
N atu ral R eso urces W e s t V irg in ia has an ab u n ­
dance of natural wealth. Today, as in the past,
these resources provide a broad base for economic
activity. The State is especially well endowed with
m inerals, but timber, w ater, and land are also
important resources.
Although, in large measure, current economic
problems have stemmed from developments in the
m ining industry, bituminous coal must be counted
as the S tate’s most valuable single asset. W est V ir­
ginia bituminous is a high-quality coal, with a wide
variety of uses, and total reserves are estimated at
103 billion short tons, about 6.2% of all coal re­
serves for the nation. A t present, only about half
of these are classified recoverable, but a larger
fraction should become available over time as tech­
nology continues to improve.
As shown by the map at the bottom of page 3,

bituminous reserves are distributed over most of the
State. M ining activities, however, are centered in
the southwestern and northcentral sections, and dur­
ing recent years, more than two thirds of total
annual production has come from the two areas.
N atural gas and crude petroleum are also avail­
able in substantial quantities, though reserves are
but small fractions of the nation’s stocks. Estimated
recoverable natural gas reserves at the present time
are almost two trillion cubic feet; recoverable natural
gas liquid reserves, approxim ately 59 million b arrels;
and crude oil reserves, 56 million barrels. Depletion
of these reserves has not become a m atter for con­
cern. as new discoveries have generally matched or
exceeded consumption.
Deposits of other mineral resources occur in com­
m ercially significant quantities in various parts of the
State. These include different types of limestones,
building stone, rock and brine salt, sandstone, glass
sand, clays, and sand and gravel.
W est V irg in ia’s stock of hardwood timber is one
of the largest in the East. Softwoods also are found
in various parts of the State, but are relatively much
less important. In all. the State has almost 9.9
million acres of commercial forest land, and the
estimated grow ing stock is almost 100 million cords.
M easures have been taken to preserve the timber
and in recent years new grow th has exceeded volume
cut by about 50 °/c.
W ater resources are abundant, and in most parts
of the State potentially more than adequate for ag­
ricultural. recreational, and industrial use. Usable
water, however, is not evenly distributed over the
State, and further development is needed in many
areas. In the river valleys, where chemical plants,
paper mills, mines, and other industries use the
rivers for waste disposal, pollution has caused some
problems. Even some of the mountain streams have
suffered, due m ainly to the w ashing operations of
small mining companies. C urrently, both government
and industry are taking action to elim inate these
difficulties. Flooding is also a problem in some river-

valley areas, and while there has been substantial
investm ent in flood control, the task is not finished.
Two national forests, nine State forests, and
tw enty State parks give W est V irgin ia a total of
almost two million acres of developed recreational
land. W ithin the next few years, five new State
parks w ill be opened. W ith the rapid growth of
tourism, recreational areas are assuming an increas­
ingly significant role in the S tate’s economy. Indeed,
development of this recreational acreage m ay well
prove to be one of the S tate’s wisest investments.
Population Characteristics In 1963, W e s t V ir ­
ginia had a total population of 1,778,000, ranking
thirtieth among the states of the nation. Since 1950,
however, population has been declining steadily,
and between the last two census years, the total fell

by 7.2% . W'hile this decline contrasts sharply with
experience in the nation and in all bordering states, it
should probably be viewed as a natural part of the
S tate’s economic readjustm ent. Only with the com­
ing of new industry and job opportunities can the
trend be expected to reverse.
About three fifths of all W est V irginians live in
towns with populations of 2,500 or under and are
classified by the Bureau of the Census as “rural
residents.” U rban population is concentrated in seven
cities— Charleston, Huntington, W heeling, P ark ers­
burg, Wreirton, Fairm ont, and Clarksburg. A pproxi­
m ately one half of the entire urban population lives
in these cities, the locations of which are shown on
the map at the bottom of page 4.
Not surprisingly, the decline in total population

West V irg in ia
Bituminous Coal

r Rivers
Sources: W est V irg in ia G eo logical and Economic
Survey; W est V irgin ia Departm ent of
Com m erce.

during the 1950's was confined largely to rural and
m ining areas. Most of those m igrating from the
rural areas left the State, but there was some intra­
state m igration to the cities, and six of the seven
urban, industrialized counties gained population.
The age structure of the W est V irgin ia population
today does not differ notably from that for the nation
as a whole. Sligh tly more than half of the S tate’s
population is in the w orking age group, between 18
and 64 years. In 1960, the median age in the State
w as 28.5 y e a rs; in the nation, 29.5 years. U ntil the
outm igration of the last decade, the State’s popu­
lation was, on balance, appreciably younger than the
nation’s. In 1950, for example, the median age was
26.3 years, compared w ith 30.2 years for the United
States. The trend toward an older age structure,
which has been under w ay since the beginning of the
century, has l>een due to net outm igration of young
people, a declining birth rate, and an increase in
life expectancy.
The general level of educational attainm ent in
W est V irgin ia has risen during recent years but has
remained below the level for the nation as a whole.
Between 1940 and 1960, the percentage of the popu­
lation 25 years old and over that had completed
four years of high school or more rose from 17.6%
to 30.5% . In the cities, where the level of attainment
has been higher throughout the period, the compar­
able increase wras from 30.5% to 42.4% . In addition,
special retraining program s have been operating suc­
cessfully in the larger urban areas for the past sev­
eral years.
Labor Force, Employment,
W est V irg in ia’s civilian labor
bered 586,700, about 33% of
B y comparison, approxim ately

\ ............................ !...../
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and Unemployment
force in 1963 num­
the total population.
36% of the nation’s


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population was in the civilian labor force. The
State’s total labor force, civilian and m ilitary, was
only 600 persons greater than the civilian force.
M ilitary employment in the State runs well below
that in other states, as W est V irginia has only one
operational m ilitary installation, an A ir Force Station
near Charleston.
Since 1950, the S tate’s civilian labor force has
declined 10.3%. The decline, however, has been less
rapid than the reduction in either total population
or total employment. Total employment at the end
of 1963 stood at 535,900, including 453,500 nonfarm
wage and salary w orkers, 46,000 farm ers and farm
workers, and 36,400 proprietors, self-employed per­
sons, unpaid fam ily w orkers, and domestics in pri­
vate households. T his figure represented a decrease
of about 92,000 or 15% from the 1950 level. A l­
though the decrease in the number of jobs is con­
tinuing, figures from the W est V irgin ia Department
of Employment Security show that the rate of de­
cline lias slowed during the last several years. Be­
tween 1950 and 1960, the average annual rate of
decrease wras 1.6% ; since 1960, only 0.1% .
The employment situation in W est V irgin ia con­
trasts most sharply to that in the nation when rates
of unemployment are compared. In every year since
1950, the average annual rate of unemployment has
been higher in the State than in the United States
as a whole—-during most of the period, appreciably
It should be noted, though, that the unemploy­
ment situation has improved since 1961. Also, use of
figures for the entire State tends to give a distorted
picture of the unemployment problem. A ctually, the
situation has been brighter in the industrialized rivervalley areas. M uch of the S tate’s unemployment is,
and has been, concentrated in the rural and mining
areas. The southern m ining counties have been
especially hard-hit.
Distribution of Nonfarm Employment A s show n
by the table at the top of page 5, the distribution of
nonfarm employment for W est V irgin ia is roughly
sim ilar to that for the nation. M anufacturing is
the most important source of employment, followed
by wholesale and retail trade, government, and serv­
ices. Employment in m ining, however, is ten times
as important in the State as in the nation.
Since 1950, there have been significant changes in
the distribution of employment w’ithin the State.
The relative importance of m anufacturing has in­
creased even though the number employed in the
sector declined until 1960, when an upturn began.






W est
V irg inia


V irg inia
















(Per Cent)


M anufacturing


N onm anufacturing












Transportation, Com ­
munication, and Public
Utilities ............. ........
.. 10.2







Governm ent

Contract Construction
Finance, Insurance, and
Real Estate ...................










Note: Details m ay not add to totals because of rounding.
Sources: W est V irg inia Department of Employment Security and
U. S. Department of Labor, Bureau of Labor Statistics.

In transportation, communications, and public u tili­
ties, employment has fallen, but the share of total
employment accounted for by the sector has increased.
Employment in m ining has decreased both absolutely
and in relative importance, while the trade, services,
government, and finance, insurance, and real estate
sectors have gained both absolutely and relatively.
Personal Income B etw een 1940 and 1963, W e s t
V irg in ia’s total personal income increased by 328% ,
from $777 million to $3.3 billion. Most of the in­
crease took place during the relatively prosperous
1940’s, but even during the period of readjustm ent
in the 1950’s and early 1960’s, the rise was a sub­
stantial 54% . P er capita personal income rose by an
even greater percentage during the 24-year span,
advancing 360% from $407 to $1,872. D uring the
period 1950 through 1963 the increase was 75% .
The seeming paradox of rising income during the
recent period of declining employment is explained
m ainly by substantial w age increases in the m anu­
facturing industries and in the m ining sector. W ages
in the K anawha V alley’s chemical industries, for
exam ple, are among the highest in the nation today.
Although income increases in the State have been
appreciable, they have been less than those in the
nation as a whole and in all bordering States (K en ­
tucky, M aryland, Ohio, Pennsylvania, and V irg in ia ).
A s shown in the chart on this page, the gap between
W est V irg in ia’s per capita personal income and the
national average has widened substantially since
the early 1940’s.

Forms and Sources of Income S lig h tly more
than two thirds of all income received by W est V ir­
ginians is in the form of w ages and salaries. Pro­
prietors’ income (earnings of self-employed persons
and owners of unincorporated businesses), property
income, and tran sfer paym ents account for the bulk
of the rem ainder. C urrently, the division of income
by m ajor form is quite sim ilar to the division in
the nation and in bordering states.
Between 1950 and 1962, however, the share of
total income derived from w ages and salaries de­
creased in W est V irgin ia, but increased in the
nation and in all bordering states. A t the same time,
tran sfer paym ents became relatively more important
in the State. The same trend was evident in the
nation as a whole, although the increase in relative
importance of transfer payments was only half as
Nine tenths of W est V irg in ia’s total personal in­
come originates in the private nonfarm sector of the
economy. i\bout 9% is generated by Federal, State,
and local government u n its; only 1% comes from
the farm sector. It is of special interest to note that
income from the three levels of government is a
sm aller part of the total in the State than in the
nation or in any bordering state, and that the
governm ent’s share of the W est V irgin ia total has
declined since 1950. In the private nonfarm sector,
(Continued on page 8)













U. S. Department of Commerce.


Facilities for higher education in West V irg in ia

Total enrollment at the State's colleges and universities in


1963 w a s approxim ately 35,000.

two universities, fourteen liberal arts colleges, one techno­
logical institute, and three technical colleges.

of 24,300 in 1950 and a pre-World W ar II level that never

WS ,|

West V irg in ia Uni-

institutions, eleven are State-supported.

O f the twenty

This com pares with a total


exceeded 14,500.

About 4,000 bachelor's degrees and 500

versify at M organtown is by fa r the largest of these institu-

higher degrees have been aw ard ed an n u ally by the State's

tions, with an enrollment of about 10,000.

colleges and universities since 1960.






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Top—W orking in conjunction with
the State Road Com m ission,
engineering students at West
V irg in ia University test the
durability of road -b uild in g
m aterials.
Center—In classroom s
like this one at M orris H arvey
College, students pursue their
varied academ ic interests.
Bottom—Faculty m em bers at West
V irg in ia W esleyan College assist
students during registration.

Top—The architecture of the State's
college cam puses v arie s from the
very modern to the more traditional.
M cM urran Hall at Shepherd College
exem plifies the latter. Center—Each
ye a r new facilities are added to
accom m odate increasing enrollments.
Pictured is the new student center
at Concord College.
m odern, $31 million com plex, is
West V irg in ia University's new
M edical Center. The entire project
w a s financed, in less than five years,
by a special tax on soft drinks.

(Continued from page 5)
approxim ately half of all civilian income received for
participation in current production comes from com­
modity-producing industries. Another fourth comes
from distributive industries; the balance from serv­
ice industries. Since 1950, the share of the S tate’s
current production income from m anufacturing has
increased substantially, w hile the share from mining
has fallen by more than half.
B itu m in o u s C oal M in in g T he S ta te ’s recen t
economic history has paralleled closely the vicissi­
tudes of the bituminous coal industry. D uring the
1940’s, when activity in the industry was at a high
level, production reached an all-tim e record of 176
million tons in 1947 and employment reached a high
of 125,000 in 1948. This was reflected in general
prosperity in the State. Then during the 1950's and
early 1960’s, the demand for coal fell off and pro­
duction declined, reaching a low of 113 million tons
in 1961. As production fell so did employment. The
employment problem was intensified as m ajor coal
companies responded to upward w age pressures by
autom ating rapidly. Although there were other con­
tributing factors, the substantial decline in mining
employment w as largely responsible for the State's
overall economic downturn.
The production slump during the 1950’s was
attributable in large measure to reduced demand in
the industrial, home-heating, and export markets.
The most serious single blow to the industry oc­
curred when railroads switched from coal-burning
locomotives to diesels. In 1947, railroads consumed
about 109 million tons, or one fourth of all United
States production; by 1961, this figure had dropped
to less than two million tons.
The decline in employment proceeded against a
background of wage increases well in excess of pro­
ductivity gains. D uring the period from 1939
through 1963, average hourly earnings increased from
$.86 to $3.29. U ntil 1958, as the chart on this page
shows, these increases exceeded gains in productiv­
ity by an average of approxim ately 1% a year,
encouraging the larger coal companies to mechanize.
M ost important has been the introduction of con­
tinuous cutting and loading machinery, which has
substantially raised productivity but has displaced
miners in large numbers.
D uring the last few years, the downward produc­
tion trend appears to have reversed. Production in
1963 rose to more than 129 million tons, and prelim ­
inary estim ates for this year indicate a further
increase. Increased sales in the electric utilities and
export markets have been prim arily responsible for

193*>= 100



A verag e H ourly Earning s









Per Man Per Day


I9 6 0
Sources: U. S. Departm ent of the Interior and N ational
C oal A ssociation.

this upturn. L ast year, electric utility users con­
sumed approxim ately 62 m illion tons of W est V ir­
ginia bituminous, roughly half of total production,
and another 30 million tons went to the export m ar­
ket, mostly to m etallurgical users in W estern Europe,
Japan, and South America.
Expansion in the important electric utilities market
has been possible only because the cost of coal has
been kept competitive w ith other energy fuels. The
companies, by autom ating, have kept the cost “at
the m ines” relatively stable over the past ten years,
and the railroads, which move about three fourths
of total annual production, have recently introduced
numerous cost-saving techniques, reducing trans­
portation costs. The transportation factor, of course,
has been important in expanding sales in the export
m arket also.
Demand of electric utility users m ay be expected
to rise even further if the development of “minemouth” power generating stations catches on among
the electric companies. Also, current research efforts
indicate that a number of new uses for bituminous
m ay be feasible in the not-too-distant future. It is
possible today, for exam ple, to produce gaseous and
liquid fuels, including gasoline, from coal. If these
processes can be made economical, the increased de­
mand for coal as a source of derived fuels could be
substantial. Other possible new sources of demand
include the use of coal in processing sewage and
industrial waste, the use of coal flv-ash as a soil
conditioner and as a lightw eight foamed ceramic,

and the use of coal as the base for an electricityproducing cell.
The hope for significant expansion of mining
employment, however, is apparently slight. A uto­
mation within the industry is continuing, perhaps at
an increasing pace. Even if production rises well
above the 1947 record, only a limited employment
increase is likely.
M a n u fa c tu rin g T h e S ta te ’s m a n u factu rin g sec­
tor has grown rapidly since W orld W ar II. Between
1947 and 1962, the increase in total value added by
m anufacture w as 145%, about the same as the
national gain and greater than the increases in the
bordering industrial States of Ohio and Penn­
In 1962, value added by m anufacture totaled $1.6
billion, a sum slightly more than twice as great as
the value of mineral production and almost sixteen
times greater than cash receipts from farm m arket­
ings. Nevertheless, m anufacturing was relatively
less important in W est V irgin ia than in the nation
and in all bordering states except Kentucky.
Chemicals, prim ary metals, and stone, clay, and
glass products are the S tate’s m ajor m anufacturing
industries shown in the table at the bottom of this
page. Combined, these industries account for about
three fourths of total value added, and each provides
roughly one fifth of m anufacturing employment.
The structure of m anufacturing in W est V irgin ia
presents an interesting contrast to that in the nation.
In the State, the m anufacture of nondurable goods
accounts for more than half of total value added but
for only about a third of m anufacturing employment.
N ationally, nondurables account for about half
of both value added and employment. This differ­
ence is explained principally by the relative impor­
tance of the S tate’s chemical industry, where value
added per worker is extrem ely high.
A ll of the S tate’s m anufacturing industries have
shared in the increase in value added since 1947.
The largest gains have been in chemicals, prim ary
m etals, and food processing. Between 1947 and
1962, value added by chemical production almost
quadrupled. In prim ary metals, the gain was close
to 200% and in foods, about 150%. Most of the
gains in value added were the result of rising output
per worker. As noted earlier, total m anufacturing
employment actually fell during the period.

In the panhandle, firms producing p rim ary metals,
fabricated metals, and glass account for almost a
fourth of the S tate’s m anufacturing employment
and a third of its total value added by m anufacture.
In the Charleston area, chemicals, food products,
and stone, clay, and glass products industries gener­
ate about a fifth of the employment total and a
fourth of value added. Establishments in the H unt­
ington area, m ainly in food and stone, clay, and
glass lines, account for about a tenth of both employ­
ment and value added. Clarksburg, Fairm ont, M or­
gantown, and P arkersburg are sm aller, but signifi­
cant, m anufacturing areas.
In v estm en t in M a n u fac tu rin g One of the m ost
prom ising trends in W est V irgin ia m anufacturing
has been the substantial volume of new investment.
Between 1951 and 1962, expenditures for new plant
and equipment totaled about $1,700 million. These
expenditures w ere for both plant establishment and
expansion. Most significantly, the annual rate of
increase in plant and equipment expenditures was
approxim ately equal to the rate for the nation and
exceeded the rates in all bordering states except
M aryland.
A g ric u ltu re A g ric u ltu re is a sm all and d eclin in g
part of the W est V irgin ia economy. In 1963, cash
receipts from farm m arketings totaled $98 million,
about 6% of total value added by m anufacture and
14% of the value of m ineral production. Farm em­
ployment was less than 2% of the State total, and


E m p lo y e e s

V a lu e A d d e d

Pe r C e n t

Am ount

P e r Cen1

N u m b er

o f Total

($ T ho us.)

o f Tota



1 ,62 5,5 02





7,79 0


Products ......

7 ,1 3 2




3 ,0 2 4

2 .7



In d u stry


T e x tile

M ill


P ro d u cts

K in d re d

A p p a re l and
Lu m b er a n d
C h e m ic a l

R e la te d
W ood


P ro d u cts ...

P ro d u cts.........

A llie d

Pro d u cts . .


2 4 ,1 9 7




4 2 .3










6,24 5


P rod u cts

2 0 ,7 6 9


2 09 ,13 8


In d u strie s ............

2 2 ,0 9 5


3 6 0 ,0 6 0




69,9 74





2 3 ,6 7 5


A u x ilia r y ...

3,39 7

3 .0

.............................................. ...........

1 1,785




P rin tin g

A llie d


L e a th e r a n d

P r o d u c t s .........

P u b lish in g
L e a th e r P ro d u cts ......

S to n e, C l a y , a n d G la s s
P r im a r y

M e ta l

M e ta l

P ro d u cts............

T ra n sp o rta tio n

E q u ip m e n t

A d m in is t r a t iv e


O th e r

6 ,5 6 4
2 1 ,5 4 6

3,67 8

Paper and

F a b r ic a t e d

G eo grap h ical C on cen tratio n of M a n u factu rin g
W est V irg in ia’s m anufacturing is concentrated in
the northern panhandle, around W eirton and W heel­
ing, and in the Charleston and Huntington areas.


S o u rce : U. S. D e p a rtm e n t of C o m m e rce , B u re a u of the C e n su s.


farm income accounted for only about 1% of total
personal income.
Employment in agriculture dropped by more than
half during the 1950-1963 period, declining more
than in any other state in the nation except New
Hampshire, and the number of farm s also fell by
almost half. Farm output, as reflected by cash re­
ceipts, declined by 14%.
T o u rism T o u rism is the fastest g ro w in g in d u stry
in the State today. Though still a relatively small
industry, tourism could become a m ajor economic
activity. T his year, the W est V irgin ia Department
of Commerce estimates that more than eight million
tourists and vacationers w ill visit the State, bringing
approxim ately $250 million into the economy and
providing jobs for about 25,000 men and women.
Especially in the central and eastern sections, the
State has much to offer the vacationer. Principal
attractions for the summer vacationer are State
parks and forests which offer not only natural
beauty, but also comfortable lodging or improved
camping sites, swimming, boating, riding, game
courts, fishing, and hunting. For the w inter vaca­
tioner and sports enthusiast, there are four devel­
oped ski resort areas— Bald Knob near Beckley,
Chestnut R idge near M organtown, Oglebay P ark
near W heeling, and W eiss Knob and Cabin M oun­
tain near Davis. The State also has numerous addi­
tional attractions for the tourist, including an exhibi­
tion coal mine at Beckley, the Coal Town Museum at
Stotesbury, 20 hand-blown glass factories around the
State, and several historical pageants during the
summer months. The only significant drawback to
the expansion of tourism as an industry is the need
for a better highw ay system, a matter which is
treated below.
N eeds for the F u tu re From the stan d p o in t of
economic development in the interm ediate-term
future, W est V irgin ia is faced with special problems
in two important areas. The first of these is public
education; the second, the highw ay system.
W h ile the S tate’s public school system confronts
numerous problems common to many other state
school system s, there are special problems as well.
Expenditure per pupil is only about two thirds the
national average and is lower than the comparable
figures in all bordering states except K entucky. Also,
the average annual salary of public school teachers is
more than $1,000 below the national average and is
lower than the average in all bordering states except
Kentucky. Perhaps the most pressing problem is the
existence of a relatively large number of rural schools


with seriously lim ited physical plants. In 1962-1963,
more than 500 of the rural schools were one-room
These problems have been attacked on a broad
front, and in recent years significant progress has
been made. Since 1950, almost 2,000 one-room
schools have been closed and the students moved to
larger consolidated schools. Both average teachersalaries and expenditures per pupil have more than
doubled. The State Department of Education is
currently em barking upon a program of improve­
ment which calls for expanded curriculum , addi­
tional physical facilities, and furth er pay increases
for teachers.
The S tate’s need for an improved and expanded
highw ay system w ill not be easily met. Because of
terrain, construction is difficult and costly. Also,
because of annual tem perature variation in many
parts of the State, pavement does not hold up well
and substantial annual expenditures are required
for maintenance.
E xpenditures for highw ay construction have risen
continuously in the last ten years. Between 1950 and
1963, net addition to the prim ary road system totaled
about 200 miles, and 51 miles of the new Interstate
H ighw ay System w ere built. W hen W est V irgin ia’s
presently projected share of the Interstate System
is completed in 1972, approxim ately 520 miles of
four-lane, lim ited-access highw ay w ill crisscross the
State, linking the m ajor industrial areas to each
other and to m arkets east and wrest and m aking the
vacation areas more readily accessible to tourists.
But while the projected improvements should go a
long w ay tow ard solving the State’s transportation
problem, it seems clear that more years of high level
expenditures for all types of roads w ill be needed to
give the State an adequate system of highways.
C onclusion W^est V irg in ia , then, is a S ta te in
transition. Its economic problems are incident to a
readjustm ent which, in all probability, w ill not soon
be completed. L arge-scale job losses in agriculture
and bituminous coal m ining have necessitated an
adjustm ent of m ajor proportions, and history has
shown that such changes are neither quick nor pain­
less. Still, appropriate actions are being taken and
recent progress has been substantial.

This article is the fifth of a series of economic profiles of
states hi the Fifth Federal Reserve District. Booklets
describing the Virginia Maryland, North Carolina, and
South Carolina economies are now available on request, and
a similar study of W est Virginia will be published later
this year.


Fifth District business activity continues at a high
level. Although the pace in some sectors slowed a
little during late spring and early summer, the latest
statistics suggest that the District economy is again
m oving up, perhaps at a quickening pace. In Ju ly,
seasonally adjusted bank debits rose to an all-tim e
high, 2°/c above the previous record reached in April
and 9 c above Ju ly a year ago. Seasonally adjusted
nonfarm employment also rose to a new high after
sm all gains in three consecutive months made up for
the A pril decline. Seasonally adjusted m anufacturing
m an-hours likew ise increased slightly, continuing the
seesaw behavior that has characterized factory manhours since the all-tim e high in March. Seasonally
adjusted department store sales were down in Ju ly,
but prosperity elsewhere seems to have boosted con­
sum er optimism, for department store business
jum ped 9% to a new high in A ugust.
Most usable economic capacity now appears to be
in operation despite some unemployment. Informed
spokesmen from many areas indicate that most Dis­
trict enterprises are handling about as large a work­
load as they reasonably can, and many feel that sup­
plies of suitable labor, as far as their particular in­
dustries are concerned, are just about exhausted.
Strength Widespread
D istrict em ploym en t
statistics reveal substantial stability and strength in
almost every sector. In June, seasonally adjusted
employment increased by small amounts in both
durable and nondurable goods m anufacturing, in
m ining, in transportation, communication, and public
utilities, in trade, and in finance, insurance, and real
estate. In construction and services, the number of
w orkers remained unchanged. The government
sector alone reported fewer jobs in June. In Ju ly,
notifarm employment rose in all m ajor categories
except nondurable goods m anufacturing.
M ixed movements in Ju ly produced a small net
gain in durable goods man-hours but no change in
nondurables. In the durable goods sector, strong
gains in prim ary metals, lumber, and stone, clay, and
glass, aided by a small increase in furniture, more
than offset declines in fabricated metals, machinery,
and transportation equipment. Strength in non­
durables was centered in tobacco, chemicals, and ap­


parel, but declines in foods and paper products coun­
terbalanced these gains. M an-hours in textiles and
printing remained at about the June level.
Prosperity in Textiles In the te x tile in d u stry the
current picture is p articularly bright. Order back­
logs are large, and new business has maintained good
average volume. Prices are firm, even rising a little
now and then on individual items, though not enough
perhaps to have a noticeable effect on the recent
slightly downward trend of textile prices generally.
The present improvement has been in progress
since the elim ination of two-price cotton. Before the
cotton price policy was changed, unfilled orders for
broad woven cotton goods had been declining and
in A pril were at a level equivalent to only 9.1 weeks
of production. Backlogs changed direction in M ay,
and all evidence indicates that they have since con­
tinued to rise. Recent trade reports, for instance,
show a substantial volume of orders placed for de­
livery later this year and in early 1965 at prices equal
to or just slightly below those recently charged for
immediate delivery from generally tight supplies.
Firm prices and risin g volume point to a con­
tinuing uptrend in textile mill dollar sales in both
the District and the nation. In the first half of this
year, national sales reached $8.7 billion, 7% above
the comparable figure for 1963. More significantly,
profits earned over the next year or so are also likely
to be higher. How much higher is hard to tell be­
cause a number of m ills have recently announced pay
hikes averaging around 5°/c, and these may well
spread through the industry as did sim ilar increases
last fall. It seems unlikely, however, that these or
other higher costs will offset the effects of the equali­
zation payments.
T extile industry profits in 1963 totaled about $350
million after taxes even though domestic m ills paid
for cotton, over and above its market value at world
prices, an amount roughly equal to after-tax profits.
Department of A griculture experts estim ate that
domestic consumption of cotton in the current crop
year will reach 9.6 million bales, a volume on which
price equalization paym ents would probably exceed
$300 million. The impact of these paym ents on

Fifth District Ports

Million Tons


Fifth District


Deportm ent of the Interior, Bureau of Mines.

prices and profits w ill be determined by supply and
demand conditions in m any m arkets, but the strongcurrent demand for cotton textiles suggests that some
share w ill lodge in mill profits in the months ahead.
B itu m in o u s Coal C onditions in the D istric t’s b i­
tuminous coal industry have been im proving gradually
for the past several years. Despite stiff competition
from other fuels, coal demand has continued to gain
strength at a fairly steady rate. Developments over­
seas, stemming m ainly from economic growth and
the rising cost of coal production, have increased the
flow of United States coal to foreign m arkets. Do­
m estically, sales to electric utilities and other trad i­
tional users have continued to increase, and extensive
research has improved coal’s practical potential as a
future source of liquid and gaseous fuels and of useful
organic raw m aterials.
The charts above picture the industry’s more im ­
portant developments during recent years. A s shown
in the first chart, output turned a corner in 1961 and
followed a m ildly upward trend through 1962 and
1963, although the declines of late 1963 seemed a
little greater than seasonal. Production then con­
tinued to rise during the first half of the current year
and exceeded last y ear’s output on a cum ulative basis
by 2.8% in the District and by 2.7% nationally.
The second chart, showing coal shipments through
District ports to both foreign and domestic destina­
tions, indicates that the volume of exports also moved
into a firm uptrend in 1961. The seasonal pattern
calls for heavier shipments toward the end of the year.

and foreign loadings declined as usual in the first
half of this year as compared to the second half of
last year. For the first six months, however, District
coal exports are up 11% this year over last.
Domestic users accounted for less than one third
of total shipments in 1960. Although the volume of
coal passing through D istrict ports to domestic des­
tinations has gradually increased, it now represents
only about one fourth of total D istrict port loadings.
About 8% more coal has been shipped through Dis­
trict ports for domestic use so far this year than was
shipped in the comparable period of 1963.
Although D istrict coal production reached 13.4
million tons per month in 1963, up 12% from 1961,
1963 m ining employment averaged only 69,200, down
6% since 1961. Thus, the industry’s continuing
efforts to compete with other fuels involve more ex­
tensive use of labor-saving equipment and have
resulted in declining prices for most types of coal.
Price reductions during the past year have ranged
from 4% on domestic stoker coal to around 2% on
larger domestic sizes and 1% or less on screenings
for industrial use. Prices for high grade metal­
lurgical coal remained unchanged, but those for low
and medium volatility grades decreased 1% or more.

6. & 7.
West V irg in ia University; Morris H arvey Col­
lege; West V irginia W esleyan College; Shepherd College;
Concord College
Bituminous C oal Institute.