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Monthly Review Volume X X X III DECEMBER, 1951 POSTWAR CHANGES IN EIGHTH DISTRICT AGRICULTURE Number 12 Agricultural progress was rapid in the period, 1920-40; high output in World War II and the postwar years was based largely on this development. Progress also was great from 1945-50. The Eighth District is a major farming region. Progress here also has been great in recent years and provides a base for meeting defense needs and for increasing income. Use of tractors and trucks has doubled since 1945 and increased use of fertilizer has helped production. Many farm homes have been modernized. Farm population has shown a declining trend for some time. From 1945 to 1950 it registered no net decrease but continued to drop relative to total population. This trend has resulted in fewer but larger farms. Cotton farms have increased in size but tobacco farms have not changed much. De clining tenancy has accompanied increasing farm size but tenant operation is still preva lent in the South. Owner operation usually means better farming practices. One-half of district farm income came from livestock products in 1949. Livestock numbers have climbed steadily— an impor tant factor in diversifying and increasing farm income. Cotton and tobacco still are the chief cash crops but soybeans and rice have become increasingly important. Many district farms produce little for sale and on many commercial farms sales were less than $1,200 in 1949. Few had sales in excess of $5,000. The changes o f recent years are good evi dence that district agriculture will do its share in meeting production needs. Agricultural progress was rapid in the period9 1920-40; high output in World War II and the postwar years was based largely on this development. Progress also was great from 1945-SO. American agriculture entered the 1950’s con cerned about problems reminiscent of the 1930’s— farm surpluses and prospective weakness in farm prices. The decade of the ’forties with the tre mendous wartime and postwar rehabilitation de mand for farm products had been practically free of such problems, but by the beginning of 1950 they seemed to be again at hand, even though the long range outlook was good. More people and higher nutritional standards would be strong factors in future potential demand. The Korean war and the resulting increase in our efforts to build and maintain a much stronger de fense structure brought a new and different set of problems to agriculture. The expanded defense program called for high and rising output plus continued strengthening of the farm resource base and continued building up of the farm productive plant. It meant high output without mining the land and pulling down fertility; it meant additions to farm capital and capacity. Agriculture’s major problem in the post-Korea world thus was and is much like the prime problem facing the rest of the economy. The key points are to get strong quickly— and to stay strong. In the ’forties the problem was mainly one of produc tion. Food and fiber were needed so desperately in the war years that they were obtained partly at the expense of using up capital and, in some cases of weakening the resource base, the land. In the 1930’s (and during much of the ’twenties), as noted, the problems were surpluses and weak prices. Fortunately the interwar decades, 1920-1940, had seen a tremendous growth in farm productive ca pacity which made possible the great production gains of the W orld W ar II years. Total output of crops and livestock during W orld W ar II aver aged 22 per cent larger than in the 1935-39 period. In the postwar years demand stayed high and production was even larger than in W orld W ar II. There was a great net addition to farm capital, particularly machinery, during this period. The Eighth District is a major farm region. The Eighth Federal Reserve District contains some of the major farming sections of the United States. About one-tenth of the nation’s agricultural output comes from the district’s farms. Most of the problems and the progress of American agriculture are mirrored on a regional scale in this area. Page 170 Progress here also has been great in recent years . . . District agriculture, however, has lagged ap preciably behind that of the nation for many years, a fact noted frequently in articles carried in this Review. That lag was reduced in the late ’thirties and early ’forties and apparently was narrowed even further between 1945 and 1950. In fact, the district farm picture may well have changed more in the 1945-50 period than in any other five-year term in the region’s history. Changes have been social as well as technical; results have had and will continue to have profound effects on the economy* • • . and provides a base for meeting defense needs and for increasing income. In the time since Korea further changes have oc curred. All of these developments which expand the farm production base put this district’s agriculture in a stronger position to make its needed contri bution to the defense effort. At the same time they furnish a basis for future income gains, a most im portant factor to a region where income tends to run below the national average. The balance of this article discusses the changes which took place in Eight District agriculture be tween 1945 and 1950. Most of the statistical in formation is from the new Census of Agriculture.1 An earlier article 2 emphasized the changes brought about in the mid-South portion of the district in the years during and immediately preceding W orld W ar II. Use of tractors and trucks has doubled since 1945 . . . District farmers added considerably to their capi tal equipment during the five-year period, 1945-50. New labor saving equipment came out after the 1 The Census of Agriculture, taken every fifth year, is the major source of small area data (county figures) on agriculture. Final figures for the 1950 Census are not yet fully available, but a substantial amount of preliminary data has been released and such data point to important changes in the structure of Eighth District agriculture. Complete data are not yet available for all states. Generally speaking* data for Arkansas and Indiana are less complete than for the other district states. Census data on agriculture are reported as of several dates. D ata on acreage, production, sales and income are for the full year 1949 (and similar data for previous Censuses cover the full year preceding the Census date). Information on number and size of farms, type and ownership status of operation, population characteristics, and amount and kind of machinery, other capital equipment, buildings, and household char acteristics is as of April 1, 1950, the actual enumeration date. Figures on livestock numbers are as of January 1, 1950 (similar data for the even year Censuses, 1930 and 1940 are for January 1, but for 1935 and 1945 are for April 1 ). I t should be noted that some data for the 1950 Census are not strictly comparable with those reported for other Censuses because of minor changes in definition and enumeration techniques. Such changes do not appreciably affect the broad comparisons noted in this article. U nless otherwise noted, all data presented relate to the Eighth D istrict proper and represent mainly summations of county figures. Thus when states are referred to in the text, the references are to the Eighth D istrict portion o f the state (as shown in the m aps) except when specific mention is made of the full state. 2 Agricultural Changes in the M id-South, M onthly R eview . December 1, 1946. war and many items of mechanical equipment, not available during the war years, were produced in volume in the postwar period. Farmers had accumu lated substantial funds during W orld W ar II and these plus continued high income after 1945 pro vided purchasing power for new or replacement machinery. The number of district.farms with tractors prac tically doubled between 1945 and 1950. But, indica tive of this area’s lag in development, even in Eighth District Illinois the number of farms with tractors in 1950 was only 62 per cent of all farms, and in Mis sissippi the proportion was but 14 per cent. TABLE I O F F A R M E R S H A V IN G V A R IO U S IT E M S O F FA R M E Q U IP M E N T E IG H T H D IS T R IC T Tractor Truck Autom obile PERCENTAGE 1950 1945 1950 A rk an sa s1 ................ 2 2 % 9% 30% Illinois ....................... 62 46 36 In d ian a2 ...................51 35 34 ................ 30 15 24 K entucky Mississippi ................ 14 6 18 Missouri .....................42 26 33 Tennessee ................ 27 11 23 1 1950 data based on 12 county sample. 2 Based on 18 county sample for both years. 1945 15% 19 20 12 8 19 10 1950 31% 73 69 55 26 61 39 1945 26% 74 72 51 19 62 34 The use of other equipment items also increased at a remarkable rate in the 1945-50 period. ^District farms had many more combines, corn pickers, cotton pickers and milking machines in 1950 than in 1945. All of these added to the capacity of the district farm plant, but similar to the tractor situa tion the number of farms without such equipment still was large in 1950 even after the substantial number of additions. It should be noted that trac tors on many small farms are not now justified. Farm combination and different management techniques would make additional mechanization feasible. The same kind of picture obtained for trucks and automobiles — a large increase in number and use, but a large number of farms remaining without such equipment. A major factor curtailing in creased use of trucks, autos and even tractors in large portions of the Eighth District is the relative lack of hard surfaced roads. In ten Missouri counties 60 per cent of the farms in 1950 were served by dirt roads only. In many other Missouri and Arkansas counties 40 per cent of the farms were on dirt roads. In contrast, most counties in Illinois, Indiana, Kentucky and Tennessee had less than one-fifth of their farms so located. . . . and increased use of fertiliser has helped production. Highly productive pastures could not have been established without the greatly expanded use of lime, phosphate, and fertilizer. Experiments have shown that adequate returns can be made on capital invested in improvement of many abandoned fields by applying fertilizer, providing, of course, it is applied according to need and later operations are managed soundly. Historically, the use of commercial fertilizer has lagged in some district states as compared with the southeast, partially because good yields could be obtained in those states without such applica tions. In the last decade, however, price-cost rela tions have been such that even in states with good yields, increased production costs from fertilizer applications were more than offset by increased returns. And it was found that substantial pro duction responses could be obtained from the use of fertilizer. Thus, during the past ten years, fertilizer consumption in district states increased by 225 per cent compared with a 122 per cent increase nationally. The greatest relative changes in use of fertilizer occurred in the three northern states. Even with present expanded use of fertilizer a good many soil scientists believe that the next bulge in production will come from the use of even more fertilizer, particularly nitrogen. A humid climate is necessary if heavy nitrogen applications are to be effective. Since moisture is not a limiting factor in most district areas, district farmers should be able to profit from such applications. F E R T IL IZ E R T A B L E II C O N S U M P T IO N E X P A N D E D R A P ID L Y IN D IS T R IC T S T A T E S Fertilizer consumption Increase in Consumption fro m : 1950 1949 1946 1940 (1 0 0 0 tons) (per cent) (per cent) (per cent) Arkansas ....................... 366 Illinois ............................ Indiana .......................... Kentucky ....................... Mississippi .................. M issouri ....................... Tennessee ..................... 503 578 922 621 764 556 9% 46 24 17 32 22 5 112% 80 33 65 60 84 40 215% 1,045 258 128 136 499 137 4,310 23 60 225 District States ........... United States ..............18,346 _ 12 23 . 122 Data adapted from National Fertilizer Association Fertiliser Review, April-June, 1951. Many farm homes have been modernized. Home improvements have been made as rapidly as or more so than farm capital improvements. And many labor-saving devices in the home affect efficiency of farm operations. Chore time can be reduced, releasing labor for other productive uses. With more comforts of the city available to farm people, there is less incentive for young people to leave farms. No other single improvement has done more to make farm life more livable than extension of electric lines to farm people. Electricity not only means lights in homes, but also means mechanical refrigeration, milkers,-water systems, freezers, and a host of other devices common to many city people. In 1945 of the 363 district counties there Page 171 were but two in whieh four out of five farms had been electrified. Complete data for 1950 in all dis trict counties are not yet available, but records in 294 counties in that year show 96 with four out of five farms electrified. An example of rapid elec trification of a rural community may be seen in the record for Benton County, Tennessee. vn 1945 only I 6 per cent of the farms in the county were elec trified. By 1950 this number had increased to 84 per cent of all farms. Few counties, of course, have become electrified so rapidly, although several have a higher percentage of farms with electricity. While many farms undoubtedly have been elec trified since 1950, at that time there were a number of farms still lacking electric power. The increased availability of electricity has led to increased acquisition of equipment powered with electricity. The table shows the number of farms T A B L E III P E R C E N T A G E O F F A R M E R S H A V IN G V A R IO U S H O M E F A C IL IT IE S E IG H T H D IS T R IC T Electric Electric W ash in g W a ter H om e Electricity Telephone Machine Pum p Freezer 1950 1945 1950 1945 1950 1950 1950 Arkansas .............. 6 9 % * 22% 9% * 7% 39% * 15% 2 6%* Illinois ................... 80 42 49 46 70 33 15 Indiana* ...... ....... 87 50 49 44 76 36 16 Kentucky ........... 67 29 25 24 51 15 5 17 6 4 20 10 4 Mississippi ......... 53 Missouri .............. 67 29 43 42 52 21 7 Tennessee ........... 70 22 20 18 43 19 6 2 D ata for June 30, 1949. Annual Report 1949. R E A . 2 Estimate based on 12 county sample. * Based on 18 county sample for both years. with various kinds of such equipment in 1950. Con siderable progress still can be made in adding elec tric washers, water pumps and home freezers, but the 1950 record was much better than obtained in previous censuses. A surprising number of district farms still are without telephones. Only 6 per cent of Mississippi farms had telephones in 1950. Actually, not many more district farms had telephone service in 1950 than had it at the time of the last census. Farm population has shown a declining trend for some time. From 1945 to 1950 it registered no net decrease but continued to drop rela tive to total population. One of the most persistent trends in American agriculture has been the decline in the farm popula tion, both in actual numbers and as a proportion of the total population. The number of people in the United States in 1950 was more than 28 million larger than in 1930; the number living on farms dropped 5 million in that period. As a result, the farm population as a proportion of total population was just 16 per cent in 1950 as against 22 per cent in ,1940 and 24 per cent in 1-930. The 24.3 million people on farms in 1950 was practically the same as the number living there in 1945 (actually farm Page 172 population rose from the 1945 level in 1946 and 1947 and then dropped back again), whereas the total population jumped 12 million in that period. Since the outbreak of war in Korea this down ward trend may well have been accentuated. If the decrease were to continue at the rate of the past 20 years, farm population in 1955 would be only 23.3 million, and but 21.4 million in 1965. This trend has resulted in fewer but larger farms. The Eighth District has a much higher propor tion of its people living on farms than have most other sections of the country. This reflects the obvious fact that this region is a major farm sec tion. It also reflects, however, one of the primary characteristics of district agriculture, and inci dentally one of the primary causes of low per capita income here. Two of the major district crops are cotton and tobacco. Both of these require considerable hand labor. (Furthermore, as is noted later, the method of allotment of tobacco acreages contributes to maintenance of a number of small farms.) The result is that a farmer can handle relatively few acres and thus the average size of farm tends to be small in this district. Recently there has been, however, a trend toward fewer but larger farms in this district. The move ment here has not been as strong as in the nation as a whole. In 1935 there were 1,046,000 farms in the Eighth District. Ten years later the number had dropped to 871,000 and in 1950 it was about 818,000. At the same time, the average size of farm increased— from 87 acres in 1935 to 103 acres in 1945 and to about 111 acres in 1950. Generally speaking, size of farm is substantially larger in the northern portion of the district than in the southern sections. In 1950, Missouri farms averaged 154 acres in contrast to 75 acres in Mississippi and 98 acres in Kentucky. Fewer but la rg e r fa rm s 1950 data * preliminary estimates in the 8th d is tric t. PROPORTION OF FARMS TENANT OPERATED 1950 Counties with no figures indicate data not available. Cotton farms have increased in size . . . Increased mechanization on cotton farms has resulted in freeing some labor (which in these times generally has found employment in nonfarm activity) and in making for larger farm units. Actually mechanization usually requires larger tracts of land if it is to be operated efficiently. In the 'forties the average Mississippi farm grew from 59 to 75 acres. From 1945 to 1950 the average Delta farm increased 21 per cent in size (from 45 to 54 acres). Indications are that output per worker has been increasing gradually as mechanization proceeds and as further diversification takes place. Page 173 . . . but tobacco farms have not changed much. Farms in Kentucky averaged 98 acres in size in 1950, just two acres larger than in 1945. However, in 26 out of 64 Eighth District counties in Kentucky the average size of farm decreased in this period. Farm size averaged smaller in 1950 than in 1945 in a few counties in other district states, but in none of the other states was the number of cases as large as in Kentucky. This apparent divergence from the nati<pnal trend in many Kentucky counties may be attributed partially at least to the system of tobacco allotments, which has tended to keep farm size small, and in some cases has encouraged division of existing farms. Declining tenancy has accompanied increasing farm size . . . Accompanying the movement toward fewer and larger farms has been a decline in the number of tenant-operated farms. More farms and more acreage were operated by owners and part-owners in 1950 than in 1945. Partly this reflects a generally prosperous agriculture. Many tenant farmers were able to accumulate sufficient capital to purchase the farms they worked. But to some extent the reduction in tenancy has resulted from mechaniza tion. This also has led to some shifting in status — from tenants or croppers to hired hands. In such cases there also have been indications of gain in productivity per worker. . . . but tenant operation is still prevalent in the South. As indicated by the map, tenant-operated farms are still prevalent, particularly in the Delta of Mississippi and Arkansas, and the Bootheel of Mis souri. Hill land in Tennessee and Mississippi and tobacco-raising areas in Kentucky also have a high proportion o f tenancy. In fact, the proportion of tenant-operated farms actually increased in 20 Kentucky counties between 1945 and 1950. It was noted previously that farm size had decreased in 26 Kentucky counties. Apparently, many of the farms have been divided with a tenant operating part of the land. On the other hand, in Missouri the proportion of tenant-operated farms declined in all counties in the Eighth District. And there was a similar decline in tenancy in Mississippi and in Illinois. Owner operation usually means better farming practices. Generally speaking, the decline in tenancy and the increase of o w n e r -o p e r a te d farms should encourage better land use, expansion of livestock production and permit more long-term improve ments which are important in the long range goal Page 174 of expanding production. Further, owner-6peration has simplified problems of credit extension, par ticularly for projects requiring several years to complete or pay out.3 OneJudf m district farm income came from live• f stock and livestock products in 1949. The shift from tenant operation to owner opera tion has been a major factor in the declining importance of tobacco and cotton in relation to production of livestock and livestock products. In 1949, a larger proportion of income came from live stock and its products than in previous years in the four southern district states. For the entire district, almost one-half, some 47 per cent, of farm income came from this source. The more important livestock farming areas in the Eighth District are in the northern portions, but activity in this field has been growing through out the area. In 68 of the 95 counties in Eighth District Missouri, more than 80 cents of every 1949 cash farm sales dollar came from livestock and livestock product sales. In the Ozarks area the proportion frequently ran as high as 95 per cent. In contrast, Eighth District Mississippi received 83 per cent of its cash farm income from crop sales in 1949. The significant points to note, however, are (1) the change in proportion of crop, income to total income in the South and (2) the fact that crop income (adjusted to eliminate price changes) has grown absolutely while livestock income has been added at the same time. Thus in Mississippi in 1939 crop income accounted for 88 per cent of total farm income. By 1949, the proportion was 83 per cent despite the fact that there was more crop income even in dollars adjusted for price changes. Similar developments have taken place in Arkansas, Tennessee and Kentucky. Crop income is most important relative to total income in the Delta regions of Arkansas and Missis sippi, the Missouri Bootheel and the tobaccogrowing areas of Kentucky. In the Delta and Bootheel cotton still is the major crop, although rice and soybeans are important in some sections. Livestock numbers have climbed steadily . . . Cattle numbers in Kentucky increased about 30 per cent in each of the decades, 1920-30 and 1930-40. In the latter ten years Missouri cattle numbers rose by about the same percentage. Substantial increases also occurred in Arkansas, Mississippi and Ten nessee. 3 I t m ight be rioted, however, that such advantages do not always accrue from owner operation. During depression years, # owners with debts frequently mined their soil and impaired their working capital to meet m ortgage payments, thus being unable to operate at full capacity. SOURCE OF EIGHTH DI STRI CT FARM INCOME BY STATES Per Cent 100 '2 9 39 4 4 49 M ississippi poultry 29 39 '4 4 '4 9 T e nn essee ir r m dairy 29 39 '4 4 ‘4 9 A rk a n s a s ** *2 9 39 44 '2 9 VI 39 ’4 4 49 In d ia n a * * Kentucky a IVESTOCK O T H E R THAN •2 9 ’39 44 49 Illin o is L IV E S T O C K PRODUCTS DAIRY a POULTRY 39 44 49 M is s o u ri A LL *2 9 * 3 9 ,'4 4 '4 9 8th D is t r ic t* * CROPS * A II livestock ond livestock products * * 1 9 4 9 Arkansas data from Farm Income S itu atio n, B. A. E. 1949 Indiana data for 18 counties 1949 8 th O is tric t data p a rtially estim ated H og numbers showed a fairly consistent growth in most district areas in both decades. Sheep numbers in the major district producing states of Missouri and Kentucky were about the same in 1950 as ten years earlier. Chicken numbers declined in Missouri between 1940 and 1950 but increased in Arkansas, Kentucky and Tennessee. It should be noted that chicken numbers as of January 1 do not reflect the shift toward broiler production since broiler producers usually fill their houses three or four times each year. . . . an im p o r ta n t fa c t o r in d iv e r s ify in g a n d in c r e a s in g fa r m in c o m e . The significance of the movement toward more livestock farming is great. Increased output of beef cattle, milk cows and sheep has been made possible largely by pasture land improvement. This gain in pasture productivity has permitted live stock expansion without materially reducing pro duction of cultivated and small grain crops. The growth in livestock farming thus has made possible a more diversified farm income. Furthermore, in many cases (particularly in dairying and poultry raising) it has resulted in fuller utilization of labor with the attendant benefits of greater labor pro* ductivity and higher and more stable income. C otton a n d t o b a c c o cro p s . . . stUl a r e t h e c h i e f ca sh Important changes also have taken place in crop p r o d u c t io n during the past 20 years. Cotton acreage was higher in 1949 than in any of the previous three census years. However, only in Missouri did the 1949 acreage exceed that of 1929. Some of the increase in cotton acreage between 1944 and 1949 probably came at the expense of small grain acreage. Small grain acreage (prin cipally oats) in Mississippi increased from 87,000 acres to 292,000 acres between 1939 and 1944, but in 1949 had declined to 73,000 acres. Small grain acreages also declined in Kentucky, Tennessee and Arkansas during this latter period. Although tobacco acreages are not shown on the chart, the importance of this crop in Kentucky should not be overlooked. Thirty-five per cent of Kentucky farm income in 1949 came from tobacco sales, although the crop took but 2 per cent of total farm acreage. Acreage allotments have been in effect since before 1940. Page 175 MAJOR FARM PRODUCTION CHANGES IN EIGHTH D IS T R IC T , 1930 - 1 9 4 9 * COTTON CORN ACREAGE HAY MILK C OWS OATS ON FARMS ARKANSAS 1949 OATA • CROP REPORTING BOARD U. S. 0. A. IN D IA N A 1949 DATA ESTIM ATED PARTIALLY FROM INDIANA CATTLE CROPS « a 8 W H E A T ACREAGE CALVES ON F A R MS C HI CKENS HOGS a ACREAGE ON PIGS FARMS ON FARMS L IV E S T O C K , 1950 . . . b u t s o y b e a n s a n d r i c e h a v e b e c o m e in c r e a s ingly im p o r ta n t . Corn acreage likewise tended to be lower in 1949 than in previous years. However, as in the case o£; cotton, increased yields have offset acreage reduction, making possible the same production level while releasing acreage for other productive Page 176 SOYBEAN ACREAGE uses. Soybean acreage, on the other hand, has increased at a phenomenal rate and undoubtedly has replaced some of the acreage formerly in corn, cotton, and small grain. District soybean acreage in Illinois, for example, increased from 158,000 acres in 1929 to 508,000 acres in 1939, and 1,304,000 acres in 1949. In 1929 soybeans utilized less than one-sixth the acreage of small grain in the Eighth District, but in 1949 utilized nearly the same number of acres. Rice acreage (not shown on the chart) also has expanded rapidly in Arkansas, and recently in a few counties in Mississippi. M any d is tr ict fa r m s p r o d u c e little f o r sa le . • • The over-all picture of district agriculture in recent years is one of growing mechanization, more fertilizer use, increased livestock operations, bigger but fewer farms, and more owner operations. It is a picture of progress in strengthening the farm plant and in increasing production. It is also a picture of continued economic lag even though the lag is being shortened. That lag is seen in the number of farms still lacking tractors, trucks and home improvements. It also shows up in the number of farms that are not operated at full commercial status. About one-eighth of the district’s farms are classed as residential farms — operations which produced less than $250 of sales in 1949. A number of these are purely residential farms, close to cities and occupied by city people who just like to live in the country. Such units offer no particular economic problem; they really are country resi dences rather than farms. Movement to rural homes outside cities has been particularly notice able since W orld W ar II — and, of course, really masks some movement of producing farm popula tion to urban areas. There are a number of “ residential” farms in theArkansas and Missouri Ozarks and the hill areas of Mississippi, however, that are really subsistence or less-than-subsistence operations. These farms do pose economic and social problems. They are not efficient units and they represent weaknesses in the broad economic picture. M any farm s p ro d u c e d only of p ro d u c ts fo r sale* s m a ll Cent of Forms ARK** MISS. am ounts Products Sold TENN IND.** ILL. MO KY. •Percentage distribution of commercial forms according to amount sold in 1949 * * Arkansas data for 12 counties - Indiana data for 18 counties SOURCE Agriculturot Census, 1950 (preliminary) of produce Another one-eighth of the district’s farms are classed as part-time operations. Sales either were less than $1,200 (but more than $250) and the operator worked more than 100 days off the farm, or he had other income which exceeded his farm sales. In some instances part-time farms are useful as an unemployment hedge, for utilizing labor in off hours, and for rounding out seasonal employment. In other cases, such farms indicate generally poor farming conditions and low income. The latter cases represent additional weaknesses in the farm picture. T A B L E IV F O U R D IS T R IC T F A R M S IS N O T A C O M M E R C IA L F A R M * Per cent distribution of farms Commercial Part-time Residential A rk an sa s1 ............................ ........... 6 3 % 14% 23% Illinois ................................... ........... 73 12 16 In d ian a2 .............................. ........... 65 15 20 Kentucky ....... ...................... ........... 72 12 16 Mississippi ............................ ........... 73 12 15 Missouri .............................. ........... 71 13 16 Tennessee ....................................... 76 11 13 1 Based on 12 county sample. 2 Based on 18 county sample. * Per cent distribution according to economic classification, 1949. Residential farms— less than $250 products sold. Part-time farms include those from which $250 to $1,199 products were sold and operator either worked 100 days or more off farm or reported other income which ex ceeded the value of agricultural products sold. ABOUT ONE IN . . . a n d m a n y c o m m e r c ia l fa r m s sa les w e r e le s s th a n $1,200 in 1949 . About three out of four farms included in the census were commercial farms. Counties in the Arkansas and Mississippi Delta, the Bootheel, northern Missouri, and better farming areas of Illinois, Indiana, and Kentucky had relatively high ratios of commercial farms. However, the propor tion of commercial farms, although varying from county to county, varied only from 65 per cent in Indiana to 76 per cent in Tennessee, taking the dis trict portions of those states as a whole. Small commercial farm operators are little better off and frequently may be worse off from the eco nomic standpoint than either the residential or part-time farmer. Commercial farms included all farms selling products in 1949 valued at $250 or more and on which the operator worked less than 100 days off the farm or on which the off-farm income did not exceed farm income. Thus, commer cial farmers with low farm income had little non farm income either. Prices in 1949 were high by any World W ar II or earlier standard, although somewhat lower than in 1947, 1948 or 1950. Even with relatively high prices for farm products, nearly every other farm in Mississippi in 1949 had sales of less than $1,200. One out of three farms in Tennessee and Kentucky, and one out of five farms in Missouri were in this category. It should be remembered that these data are for gross sales, before production expenses were Page 177 taken out, and out of which family living expenses had to come. Thus, even in a prosperous year for agriculture there were many farms on which a reasonable standard of living was practically un attainable, and from which the nonfarm population obtained very little food or fiber. F ew h a d sa les in e x c e s s o f $5,000. Despite the fact that farm prices have risen in recent years, and despite the fact that average size of farm has increased, few farms had annual sales of crops and livestock of $5,000 or more in 1949. This varied considerably from state to state. In Mississippi, for example, only 4 per cent of the farms had sales above $5,000. Sales were more than $5,000 on 36 per cent of Illinois farms, 21 per cent of Missouri farms, 13 per cent of Kentucky farms, and 9 per cent of Tennessee farms. Although small in number, an important part of total farm output comes from the larger farms. T h e c h a n g e s o f r e c e n t y e a r s a r e g o o d e v id e n c e th at d is tr ict a g r ic u ltu r e w ill d o its sh a r e in m e e t in g p r o d u c tio n n e e d s . The Census record indicates that great progress has been achieved. It also points up the fact that much more progress is needed. The progress achieved in this district’s agricul ture during the past few years is the best evidence that the region’s farmers will be able to make a substantial contribution to the demand for Ameri can farm production over the next few years. The farm plant simply has more capacity than it had ten or even five years ago. It is a known fact that many individual farmers have added far more to their farm productive capacity and have achieved levels of production far greater than the average used in this article. This Bank has done considerable field work in investigating such performances and publicizing the records of these most progressive farms. The problem of economic lag in this district’s agriculture largely could be solved if more district farmers merely carried out the good farm management prac tices already known and carried out on the better farms. T o obtain a completely efficient farm plant in this region, of course, would require substantially more capital input and some change in structure. Adoption of better farming techniques alone, how ever, would result in production increases and bring about generally improved economic conditions. Donald L. Henry Survey of Current Conditions Some quickening in the economic pulse of the Eighth District was noticeable at mid-November. Industrial employment and production increased somewhat over previous months, extending the gradual improvement from last summer’s lull. De partment store sales were running ahead of last year, according to preliminary reports through midNovember. Bank loans were up and the dollar volume of checks cashed during October was at record levels. But some soft spots were still apparent in the district economy. The same picture of mixed trends with overall slow improvement apparent in the district was seen nationally. Industrial production as measured by the Federal Reserve Board’s index in October re mained unchanged from September at 219 per cent of the 1935-39 average. Employment in the nation Page 178 remained unchanged during October despite the shifting pattern of manufacturing employment. Retail sales in the nation, as in the district, were more favorable in early November. Nationally, the private money supply has risen since midyear at a fairly rapid rate. T o some extent the quickening pulse represents stimulation from the approaching holiday buying and movement into the Christmas season. Partly it reflects the expanding military preparedness program. The defense effort now takes roughly 10 per cent of our national output; at its peak as now scheduled it may take twice that amount of goods while still pumping increased amounts of consumer income into the economy. Many defense projects are currently getting under way and others are yet to begin active production. Another important factor in the present economic situation is the abnormally high and vulnerable rate of saving. Reduced consumer spending and increased saving relieved inflationary pressures somewhat in the second and third quarters of the year. Future developments will depend to a great extent on whether consumers elect to continue their current high rate of saving or to spend more than they do now. It should be noted that consumer savings habits may be adversely influenced by the steadily mounting pressure of “ money in hand” . EM PLOYM ENT Employment conditions in the Eighth District improved slightly from September to October, but nationally there was little change. The diverse trends which have been apparent in previous months continued. Reduced employment in con sumer goods industries was offset by increases in other industries and in trade and service. Unem ployment was little changed from September. The proportion of jobless in the nation in October was 2.5 per cent, as compared with 3 per cent in Octo ber, 1950. As a result of the shifting pattern of economic activity in the Eighth District, there has been a considerable movement of workers to locate better job opportunities during the past year. In addition, labor has moved from those areas where job oppor tunities are limited to those areas where they are more plentiful. For instance, employers in the St. Louis area report that many of their applicants are from the small towns and rural areas in the Eighth District. When job opportunities are listed, as they have been in some of the areas in the Eighth Dis trict, workers at least temporarily seek jobs in those areas. This is indicated by the fact that unemploy ment compensation claims do not increase as greatly as the lay-offs which have occurred in some areas would seem to occasion. In Louisville, October registered a postwar peak with an estimated 213,700 persons employed in the metropolitan area. Increases in bottling of distilled liquors and production of cigarettes during October required the addition of approximately 1,600 per sons. Material shortages in the metal-working establishments and reduced output in furniture plants caused some lay-offs. In Memphis October non-farm employment in creased slightly over that of September. A decrease in workers at manufacturing plants was more than offset by increases at retail trade establishments and some other non-manufacturing industries. Evansville also showed employment increases over the month, but some reduction in comparison with October 1950. There were temporary layoffs at month’s end inkrefrigerator plants due to inven tory and model changeover. Employment in the St. Louis area during October held steady despite seasonal layoffs in the shoe and garment industries. Defense plants increased em ployment considerably and retail stores added work ers for the holiday season. Employment in Little Rock rose for the third con secutive month to a post-war peak. Factory em ployment increased to a new high of 7 per cent over the level a year earlier. Construction employment showed the only decline. IN D U S T R Y Industrial activity in October was ahead of Sep tember as the district economy continued its grad ual improvement from the summer lull. Industrial power consumption in the district’s major cities in October was up 6 per cent from September and 9 per cent from October, 1950. Manufacturing activity in general was at a higher rate in October than a month earlier. Steel and lum ber output increased over the previous m onth; live stock slaughter was up more than seasonally and whiskey production increased. Some soft spots were W H O L E S A L IN G Line of Commodities Data furnished by Bureau of Census, U .S . Dept, of Commerce* N et Sales October, 1951 compared with Sept.,’ 51 O c t.,’ 50 Automotive Supplies.................... Drugs and Chemicals.................. D ry Goods........................................ + 4% + 8 - 0+ 8 +23 + 17 + 15 + 17% Hardware.......................................... Tobacco and its Products.......... Miscellaneous.................................. ♦♦Total A ll Lines...................... ♦Preliminary. ♦♦Includes certain items not listed above. + + — + — + + 17% 8 10 14 4 14 15 + 5% Stocks O ct. 31, 1951 compared with O ct. 31, 1950 + + + — + + + 21% 7 1 13 24 5 28 + 11% PR IC ES W H O L E S A L E P R IC E S IN T H E U N IT E D S T A T E S Bureau of Labor O ct., 1951 Statistics compared with (1 9 2 6 = 1 0 0 ) O c t.,'51 Sept.,’ 51 O c t.,’ 50 Sept.,’ 51 O c t.,’ 50 A ll Commodities.... 178.2 177.6 169.1 + 0 .3 % + 5 .4 % Farm Products... 192.4 189.2 177.8 + 1.7 + 8.2 Foods..................... 189.5 188.0 172.5 + 0.8 + 9.9 Other...................... 166.7 166.9 161.5 — 0.1 + 3.2 C O N S U M E R P R IC E IN D E X * Bureau of Labor O ct. 15, 1951 Statistics O ct. 15, Sept. 15, O ct. 15, compared with (1 9 3 5 -3 9 = 1 0 0 ) 1951 1951 1950 Sept. 1 5 /5 1 O ct. 1 5 /5 0 United States.......... 187.4 186.6 175.6 + 0 ,4 % + 6 .7 % *N ew series. R E T A IL F O O D * Bureau of Labor Statistics (1 9 3 5 -3 9 = 1 0 0 ) U . S. (51 cities)..... St. Louis............... Little Rock...... . Louisville............. Memphis....... ....... ♦New series. O ct. 15,Sept. 15, O ct. 15, 1951 1951 1950 229.2 227.3 210.6 239.3 238.8 220.2 224.4 223.0 210.9 216.7 215.6 198.0 238.0 237.4 220.1 O ct. 15, 1951 compared with Sept. 15,’ 51 O ct. 15,’ 50 + 0 .8 % + 8 .8 % + 0.2 + 8.7 + 0.6 + 6.4 + 0.5 + 9.4 + 0.3 + 8.1 Page 179 still apparent, however, with shoe and furniture production continuing at reduced levels. District coal mines and oil wells produced more in October than in September. Transportation activity also was higher but construction fell off more than sea sonally reflecting some material shortages and also government restrictions. Manufacturing — Industrial electric power con sumption in six cities in the district continued to increase in October in comparison with the previous month and the same month last year. Among the cities, Little Rock and Pine Bluff showed the largest increases with respective gains of 18 and 13 per cent over the previous month and 16 and 45 per cent over October, 1950. Among industry groups, in creases were shown in comparison with September in almost every case. Compared with October* a year ago, however, lumber and wood products, tex tiles, and stone, clay and glass producers used con siderably less power. Steel production at mills in the St. Louis area con tinued at a high level of operations in October. By early November, however, some weakness had de veloped in demand for products which ordinarily go into civilian goods production so that a few furnaces were closed down. October operations, at 98 per cent of capacity, showed a 3 per cent gain over those for September, but a slight drop from October last year.1 Southern pine lumber production increased 9 per cent on a weekly average basis during October com pared with September. It was still, however, sub stantially under that of October, 1950. Southern hardwood mills operated at practically the same INDUSTRY C O N S U M P T IO N ( K . W .H . O ct., 1951 in thous.) K .W . H . Evansville..,... 15,629 Little Rock ... 14,440 Louisville... .... 84,191 M em phis..... , 33,566 Pine Bluff.. 11,440 St. Louis.... ...107,544 T o ta ls.........266,810 r— R evised. LOADS Sept., 1951 K .W . H . 15,058 12,236 82,540 30,891 10,103 101,059 251,887 O F E L E C T R IC IT Y O ct., 1950 K .W .H . 13,681 12,500 r 75,378 29,119 7,870 105,344 r 243,892 O ct., 1951 compared with O ct.,’ 50 Sept.,’ 51 + 14.2% + 3 .8 % + 15.5 + 18.0 + 11.7 + 2.0 + 15.3 + 8.7 + 45.4 + 13.2 + 2.1 + 6.4 + 9 .4 % + 5 .9 % level in both September and October, but likewise produced less lumber than during October last year. District shoe production is below that of last year but increased output is expected to respond quickly to any improvement in consumer demand. Livestock Slaughter — In October, livestock slaughter in the St. Louis metropolitan area not only experienced the usual seasonal gain, but made up for last month’s relatively poor record. The over-all total of 508,700 head slaughtered repre sented an increase over September of 45 per cent in number of sheep, 32 per cent in number of hogs, 23 per cent in number of cattle, and 10 per cent in number of calves. Whiskey Production— Judging from the number of distilleries in operation at the end of October, whiskey production is continuing at a rather mod erate level. At that time, 32 of the 62 Kentucky distilleries were in operation as compared with 26 at the end of September. High stocks and a short age of warehouse space were immediate factors retarding production. On August 31, for example, whiskey in bonded warehouses in Kentucky was reported to be 16 per cent higher than a year previously. Mining— Crude oil production continued to show a moderate upward daily average production rate in October. The rate, however, was 3 per cent below that of October, 1950, since reduced flow from the large fields in Arkansas and Illinois more than offset substantial percentage gains in the performance of smaller Kentucky and Indiana fields. More coal was mined during October than Sep tember this year, though total production was 9 per cent under that of October, 1950. 1 The index of steel production (per cent of capacity) has been revised to take account of changes in steel making capacity here. The new fig ures, appearing above, are not comparable with those published previously. PRODUCTION IN DEXES IN T E R C H A N G E D F O R 25 R A I L R O A D S A T S T . L O U I S First N ine Days O c t.,’ 51 Sept.,’ 51 O c t.,’ 50 N o v .,’ 51 N o v .,’ 50 10 m o s .’ 51 10 m o s .’ 50 121,009 112,312 126,548 3 2 ,6 5 9 ‘ 36,138 1,169,192^ 1,128,834 Source: Terminal Railroad Association of St. Louis. CRUDE O IL ( I n thousands o fb b ls .) O ct., 1951 Arkansas........ 77.3 Illinois............ 168.9 Indiana........... 33.1 K entucky....... 32.8 T o ta l.......... 312.1 Page 180 P R O D U C T IO N — D A IL Y Sept., 1951 76.6 167.0 31.2 31.7 306.5 O ct., 1950 82.1 178.1 31.1 28.9 320.2 AVERAGE O ct., 1951 compared with Sept.,’ 51 O ct.,’ 50 + 1% — 6% + 1 — 5 + 6 + 6 + 3 +13 + 2% — 3% O c t .,’ 51 162.7* C O A L P R O D U C T IO N IN D E X 1 9 3 5 -3 9 = 1 0 0 ______________ Adjusted Unadjusted______________ Sept.,’ 51 O c t.,’ 50 O ct., ’ 51 Sept.,’ 51 152.1* 158.5 157.4 165.3 S H O E P R O D U C T IO N IN D E X 1 9 3 5 -3 9 = 1 0 0 Unadjusted_____________ ______________ Adjusted A u g .,’ 51 Sept.,’ 51 A u g .,’ 51 Sept.,’ 50 Sept., ’ 51 114 122 159 113 125 * Preliminary. O c t.,’ 50 148.1 Sept.,*50 157 Transportation — Railroad freight interchanges at St. Louis increased 8 per cent in October in com parison with September. They were considerably below those of a year ago, however, for both Octo ber and early November. Construction —W ith the combination of material shortages and the restrictions imposed by the Con trolled Materials Plan, construction activity in the nation during October declined more than season ally. The total value of construction put in place in October was about $2.7 billion, off about 5 per cent from the September total and 3 per cent less than in October, 1950. During September and October the value of construction put in place dropped below corresponding months last year, and the physical amount of construction has been lower than last year since June. According to Engineering News Record, the total amount of construction put in place during this year is expected to be about $29.5 billion, as com pared with a little less than $28 billion for all of 1950. Construction activity next year is ex pected to total only about $27 billion. However, it is expected that controls will channel materials to projects which have high priority in the defense program. Chief among these projects are the basic steel, electric power, aluminum, and oil refinery ex pansion programs. A large increase in construction of military and naval facilities also is expected next year. Residential construction is expected to be off about 20 per cent from 1951. In the Eighth District construction contracts awarded during October decreased 11 per cent from October, 1950; residential construction contracts increased 11 per cent; while nonresidential con struction contracts awarded were off 24 per cent. TRADE D E P A R T M E N T STORES Stock Stocks Turnover on Hand N et Sales Jan. 1, to 10 m os.’ 51 O ct. 3 1 /5 1 O ct., 1951 O ct. 31, to same comp, with compared with 1951 1950 Sept., 51 O c t.,’ 50 period ’ 50 O ct. 3 1 /5 0 3.22 2.68 — 3% 8th F . R . District. + 1 2 % +15% + 2% 3.15 2.71 Ft. Smith, A rk .1... + 3 +19 + 9 3.05 2.62 Little R ock, A r k .. + 3 +16 — 11 2.83 2.57 + 6 Quincy, 111.............. + 9 + 19 3.01 Evansville, In d ..... + 4 +14 2.43 + 9 3.50 Louisville, K y ........+ 1 0 + 9 3.09 — 7 2.57 3.24 St. Louis A r e a 1- 2 + 1 7 +17 2.82 2.41 Springfield, M o .....+ 1 3 +33 + 3 3.27 3.06 Memphis, Tenn.....+ 7 +14 2.61 2.31 A ll Other Cities*.. + 1 2 +30 1 In order to permit publication of figures for this city (or area), a special sample has been constructed which is not confined exclusively to department stores. Figures for any such nondepartment stores, how ever, are not used in computing the district percentage changes or in computing department store indexes. 2 Includes St. Louis, Clayton, M aplewood, M issouri; Alton and Belle ville, Illinois. * Fayetteville, A rkansas; Harrisburg, M t. Vernon, Illin o is; Vincennes, Indiana; Danville, Hopkinsville, M ayfield, Paducah, K en tu c k y; Chillicothe, M issouri; Greenville, M ississippi; and Jackson, Tennessee. Outstanding orders of reporting stores at the end of October, 1951, were 21 per cent smaller than on the corresponding date a year ago. Percentage of accounts and notes receivable outstanding October 1, 1951, collected during O ctober, by cities: + 8 + 1 —8 —1 Instalment E xcl. Instal. Instalm ent Excl. Instal. Accounts Accounts Accounts Accounts Fort Smith................. °j 48% Q uincy.................... 2 4 % 62% Little R ock......... 19 48 St. Louis............... 23 52 Louisville........... 23 48 Other Cities....... 16 55 M em phis............. 22 43 8 th F .R . D ist...... 22 50 IN D E X E S OF D E P A R TM E N T STOR E SALES 8 th Federal Reserve District Sales (daily average), unadjusted®....... .................... Sales (daily average), seasonally adjusted8........... Stocks, unadjusted * ......................................................... Stocks, seasonally adjusted4........................................... ® Daily average 1 9 3 5 -3 9 = 1 0 0 . 4 Eftd of month average 1935-39 = 100. O ct., 1951 352 329 384 343 AND STOCK S Sept., A u g ., O ct., 1951 1951 1950 349 301 326 346 350 305 385 392 409 347 359 365 S P E C IA L T Y ST O R E S Stocks Stock N et Sales on Hand Turnover October, 1951 10 mos. ’ 51 O ct. 3 1 /5 1 Jan. 1, to compared with to same comp, with O ct. 31, S e p t./5 1 O c t .,'50 period ’ 50 O ct. 3 1 /5 0 1951 1950 M en’s Furnishings....+ 2 2 % + 3 % + 1% + 12% 1.52 1.96 Boots and Shoes.........+ 5 +26 +10 + 5 3.40 3.57 Percentage of accounts and notes receivable outstanding O ct. 1, 1951, collected during O ctober: M en’s Furnishings .................. 46% Boots and Shoes....................... 43% Trading d ays: O ct., 1951— 2 7 ; Sept., 1951— 2 4 ; O ct., 1950— 26. TRADE District retailers have anticipated for some time a last-quarter upturn in sales. October’s total sales were not quite as high as had been hoped for, how ever, despite the cool weather boost to sales of seasonal items. In the important department store and furniture store lines, October sales were ahead of September R E T A IL F U R N IT U R E N et Sales Springfield... Fort Smith.. (C ost in N um ber Cost thousands) 1951 1950 1951 1950 Evansville.............. 119 78 $ 157 $ 170 Little R ock....... . 84 92 7,312 1,058 Louisville............... 149 223 883 1,828 M em phis................ 2,516 2,432 2,897 4,023 St. Louis................ 315 346 1,280 3,147 O ct. T otals...... 3,183 3,171 $12,529 $10,226 Sept. Totals..... 3,228 3,172 $12,949 $10,892 Ratio O c t 31, 1951 of # compared_____ __________ with Collections Sept. 3 0 /5 1 O ct. 3 1 /5 0 O c t ./5 1 Q c t.,’ 50 + + + + + — + + 3% 1 1 5 5 1 4 6 * — — — — — — — + 7% 9 9 2 2 18 18 16 * 25% 35 35 15 14 16 19 20 * 21% 27 26 15 14 13 19 17 * * N o t shown separately due to insufficient coverage, but included in Eighth District totals. C O N S T R U C T IO N B U IL D IN G P E R M IT S M onth of October N ew Construction O ct., 1951 compared with S e p t./5 1 Q c t .,’ 50 ,. + 1 8 % + 1% ..+ 2 4 — 2 . .+ 2 6 — 2 ‘..+ 7 + 7 + 5 , ,+ 2 8 + 22 — 3 ..— 13 — 8 ..+ 24 — 5 STORES Inventories ______ Repairs, etc. Num ber Cost 1951 1950 1951 1950 78 69 $ 36 $ 175 361 142 240 218 86 296 105 127 273 191 290 849 638 260 265 1,669 $1,346 874 928 1,490 $2,182 867 867 118 1 In addition to following cities, includes stores in Blytheville, Pine Bluff, Arkansas; Hopkinsville, Owensboro, K en tu ck y; Greenwood, M is sissippi; Hannibal, M issou ri; and Evansville, Indiana. 2 Includes St. Louis, M issou ri; and A lton , Illinois. 3 Includes Louisville, K en tu c k y ; and N ew A lbany, Indiana. PERCENTAGE D IS T R IB U T IO N OF F U R N IT U R E SALES O c t ./5 1 S e p t./5 1 0 c t . /5 0 Cash Sales ..................................................................... Credit Sales ........................ *....................................... 14% 86 14% 86 15% 85 Total Sales .............................................................. 100% 100% 10 0 % Page 181 and were above those of October, 1950. Sales at women’s specialty stores were not quite up to year-ago figures but were favorable relative to Sep tember totals. Except at men’s wrear shops, inventories held by district retailers on October 31 were reported as slightly larger than a month earlier but somewhat smaller than on October 31, 1950. Their outstanding orders were also below those of a year ago. D e p a rtm e n t S t o r e s — October sales volume throughout the district totaled 12 per cent higher than in September and 15 per cent above that in October, 1950. On a seasonally adjusted basis, however, daily-average sales in October this year were 329 per cent of the 1935-39 base in comparison with 346 per cent in September. In October, 1950, the index was 305. Sales gains from the previous month were general throughout the major district cities. In comparison with last year, sales gains ranged from 6 per cent in Quincy to 33 per cent in Springfield. The retail value of inventories held by district department stores on October 31 was reported 2 per cent larger than a month earlier but 3 per cent under a year ago. The value of outstanding orders at the end of the month was about one-twelfth larger than a month earlier but about one-fifth less than last year. Specialty Stores — St. Louis women’s specialty store sales during October were 10 per cent above those in September. In comparison to last year they declined 4 per cent. Inventories at the end of the month were slightly larger than on September 30, but were about one-tenth below those on October 31, 1950. A G R IC U L T U R E C A S H F A R M IN C O M E Sept., 1951 9 month total Jan. to Sept., ( I n thousands Sept., of dollars) 1951 Arkansas....... $ 62,557 Illinois............ 157,360 Indiana........... 113,966 K entucky....... 38,040 Mississippi.... 57,604 M issouri......... 112,063 Tennessee...... 41,500 T otals......... $583,090 R E C E IP T S A N D Cattle and calves.... H o g s............................ Sheep........................... H orses........................ Totals..................... Page 182 compared with A u g ., Sept., 1951 1950 +135% + 68% -0 +16 + 11 +28 + 5 + 4 + 94 + 3 + 7 +28 + 22 +39 + 19% +24% 1951 $ 281,858 1,406,911 808,542 364,343 248,245 823,280 295,592 $4,228,771 1951 compared with 1950 1949 +38% + 1% +14 +15 +20 +17 + 7 + 5 +44 7 +23 +20 +22 + 9 +19% +12% S H IP M E N T S A T N A T IO N A L ST O C K Y A R D S Receipts Shipments O ct., 1951 O ct., 1951 compared with compared with O c t.,'51 Sept., 51 O c t.,*50 O c t.,'51 Sept.,f51 O c t.,50 158,821 +10% +14% 80,154 — 2 % +42% 290,658 +23 +13 71,798 + 7 +40 55,709 +13 — 1 24,531 — 16 +37 _____ _______ _______ _______ _______ ________ 505,188 +18% + 11% 176,483 — 1 % +41% Men’s wear store sales in the district were substantially larger than in September and were slightly above those last year. Inventory on Octo ber 31 was slightly larger than a month earlier and about one-eighth larger than last year. Furniture Stores— October furniture store sales throughout the district were almost one-fifth larger than in September and were slightly larger than in October, 1950. The ratio of credit sales to total sales, despite somewhat easier instalment credit regulations, did not show much change in October from that twelve months ago. In October, 1951, the ratio of credit sales was 86 per cent; a year ago the ratio was 85 per cent. Inventories held by reporting stores on October 31 were 3 per cent above those on September 30 but 7 per cent below a year ago. A G R IC U L T U R E Cotton prospects in the three southern district states deteriorated from October 1 to November 1. November 1 estimated production was less than a month earlier in Tennessee, Mississippi, and Arkan sas by 65,000, 150,000 and 250,000 bales respectively. The 3.8 million bale estimate for all district states was 11 per cent lower than the October 1 forecast. This would still be 22 per cent larger, however, than their 1950 crop. Large declines also were fore cast in Texas and Oklahoma, in addition to district states, bringing the national production estimate down to 15.8 million bales, nearly 7 per cent less than forecast as of October 1. Prospects for other important crops in district states brightened some during October. Estimated corn production on November 1 was 8 million bushels higher as a result of increases expected in Kentucky and Tennessee. Estimates for other dis trict states were unchanged. Nationally, however, the estimate of corn production was 17 million bushels less than that of October. Estimated soy bean production nationally was 6 million bushels higher in November than a month earlier. Four million bushels of this increase was indicated for district states. The 398.8 million pound burley to bacco estimate for Kentucky in November also was higher (3 per cent) than a month earlier. On the other hand, rice production prospects declined in Arkansas. The estimated 9.5 million bag crop was 8 per cent under the estimate a month earlier. The wheat crop was seeded under generally fa vorable conditions. Although the seeding was later than usual, the crop is considered to be in good condition for winter. Growth during October was retarded in some district areas, as well as in the Great Plains, due to lack of surface moisture. Esti mated wheat acreages will not b€ available until December 19. The index of prices received by farmers on Octo ber 15 was 296 (1910-14=100), an increase of 5 points during the month. This arrested the downward swing of prices received by farmers begun in March. | Increases in prices of cotton and dairy products more than offset declines in prices of cattle, corn, ichickens, and fruit. Prices paid by farmers also rwere higher by one point and equaled the alltime high index of 283. The parity ratio (ratio of prices received 16 prices paid) widened from 103 to 105. clines in the period. In contrast with the entire nation, where defense loans are steadily rising, defense loans in the district showed slight declines in October. The loan contraction at the smaller banks centered in banks in places under 15,000 population and reflected primarily net repayment of loans by farmers. Deposits rose substantially in the month at both the large and smaller banks. The $9 million increase in time deposits indicates that the high rate of indi vidual saving continued during October. B A N K IN G A N D F IN A N C E | Reflecting higher levels of production, district Imember bank loans rose about seasonally in Octo^ jber and early'November. Nationally growth also was about seasonal during this pjeriod. Since mid-year the private money supply of the country has risen at a fairly sharp rate. Both nationally and districtwise the expanding money supply is being used at a rapid rate. ! District B anking Developm ents — Loans rose $56 million at district member banks in October. The gain was occasioned by a $59 million increase in large city banks offset in part by net repayments at smaller banks. The loan increase at the larger banks, normal at this time, centered in loans to finance the marketing and processing of farm prod uce. On the other fiand, outstanding loans to textile, apparel and leather manufacturers, trade (wholesale and retail) and sales finance companies showed de MEM BER Changes in Business Loans— The following table compares the principal changes in commercial loans from the end of June through the end of October this year with a comparable period last year at large banks in leading cities of the country. P R IN C IP A L C H A N G E S IN C O M M E R C IA L A N D I N D U S T R IA L LOANS. R E P O R T IN G M E M B E R B A N K S (I n Millions of D ollars) Mid-year thru October 1950 Business of Borrower 1951 Manufacturing and m ining: Food, liquor, and tobacco................................................. Textiles, apparel, and leather......................................... Metals and metal products.............................................. Petroleum, coal, chemicals, and rubber................. .. Other manufacturing and mining............................... Trade— wholesale and retail.................. ............................. Commodity dealers .................................................................. Sales finance companies.......................................................... Public utilities and transportation.................................... Construction ................................................................................ A ll other types of business................................................... .. .. .. .. .. + — + + + + — + 521 217 537 68 75 40 394 104 318 61 6 + + — + + + + + + + + 413 130 17 19 17 272 690 324 50 55 112 Classified changes .......................................................... .. Unclassified changes ...................................................... + 1 ,565 214 + 2 ,065 + 809 N et changes in commercial, industrial, and agricultural loans ............................................................ + 1,351 + 2 ,8 7 4 The expansion of commercial loans from mid year through October was less than half that of the comparable period of 1950. In both years, in crease in loans to processors of food and com E IG H T H D IS T R IC T B A N K A SSE TS A N D L IA B IL IT IE S B Y SELECTED GROUPS Large City Banks 1 A ll Member 4 ( I n Millions of Dollars) .. Change fro m : O ct., 1950 to O ct., 1951 +206 + 132 + 75 — 1 +243 + 132 + 111 + 7 Smaller Banks 2 Change fr o m : O ct., 1950 Sept., 1951 to to O ct., 1951 O ct., 1951 + 98 + 129 + 59 + 89 + 40 + 48 — 1 — 8 + 63 + 141 + 36 + 92 + 27 + 49 + 2 + 3 Change fro m : Sept., 1951 O c t., 1950 to to O ct., 1951 O ct., 1951 + 14 + 77 — 3 + 43 + 18 + 27 — 1 + 7 + 58 + 102 + 7 + 40 + 51 + 62 + 1 + 4 1. Loans and Investments.................................. a. Loans ............................................................... b. U . S. Government Obligations............ c. Other Securities ......................................... 2. Reserves and Other Cash Balances.......... a. Reserves with the F .R . bank.............. b. Other Cash Balances 3............................. 3. Other Assets ...................................................... 1,911 367 1,516 727 789 51 Sept., 1951 to O ct., 1951 + 112 + 56 + 58 — 2 + 121 + 43 + 78 + 3 4. T otal A sse ts ........................................................ 5,754 + 236 +456 3,430 + 163 + 273 2,324 + 73 + 183 Liabilities and Capital 5. Gross Dem and D eposits................................ a. Deposits of Banks....................................... b. Other Demand Deposits......................... 4,345 794 3,551 7. Borrowings and Other Liabilities............ 8 . $ o ta l Capital Accounts.................................. 53 365 + 225 + 137 + 88 + 9 + 2 - 0- + 389 + 131 +258 + 24 + 10 + 33 2,686 745 1,941 485 47 212 + 152 + 127 + 25 + 4 + 4 + 3 +241 + 123 + 118 + 3 + 9 + 20 1,659 49 1,610 506 6 153 + + + + _ — 73 10 63 5 2 3 + 148 + 8 + 140 + 21 + 1 + 13 9. Total Liabilities and Capital Accounts. 5,754 + 236 +456 3,430 +163 +273 2,324 + 73 + 183 Assets O ct., 1951 1 2 * * O ct., 1951 2,460 1,281 1,006 173 939 479 460 31 O ct., 1951 1,727 628 905 194 577 248 329 20 Includes 13 St. Louis, 6 Louisville, 3 M em phis, 3 Evansville, 4 Little Rock and 4 East St. Louis-N ational Stock Yards, Illinois, banks. Includes all other Eighth D istrict member banks. Some of these banks are located in smaller urban centers, but the majority are rural area banks. Includes vault cash, balances with other banks in the United States, and cash items reported in process of collection. A ll member banks as of end of month. Change from month ago, and year ago, however, are for identical group of banks. Page 183 modity dealers accounted for over one-half the total classified loan expansion. Expansion of these loans is normal at this season. In most other respects, however, the patterns of the two periods are quite different. Outstanding loans to manufacturers of metal and metal products rose substantially this year compared with a decline last year, indicative of the present defense effort. In the same connec tion, loans to petroleum, coal, chemical, rubber and “ other” industries expanded much more this year than last as did loans to public utilities and trans portation concerns. Money Supply— Despite the smaller increase in bank loans this fall than last, the private money supply in this country has risen sharply in the past several months. In fact the increase since the end of June has been substantially larger than in the like period of 1950. On the other hand, outstanding loans to textile, apparel and leather manufacturers, wholesale and retail trade and commodity dealers were up sharply in the four months last year as inventories were accumulated by these businesses. In the com parable period this year these borrowers either reduced inventories or expanded them at a sub stantially reduced rate. Sales finance companies and construction industries made net repayments in the period this year compared to net borrowings last year, reflecting the different trends in consumer credit and construction. D E B IT S T O D E P O S IT AC CO UN T S (I n thousands of dollars) O ct., 1951 S e p t., 1951 1950 O ct., 1951 O c t ., com p a red w ith S e p t.,*51 O c t .,’ 50 26,950 $ 25,309 28,040 $ E l Dorado, A r k .......... $ 4 4,877 46,016 Fort Smith, A r k ............ 51,119 9,119 13,755 14,131 Helena, A r k ..................... 1 35,219 158,542 Little Rock, A rk ............ 176,007 Pine Bluff, A rk ............... 49,235 34,028 48,217 15,465 12,992 Texarkana, A r k .* .......... 18,930 2 7,839 27,125 A lton , 111........................... 29,797 132,722 138,844 EJ.St.Iy.-N at.S.Y., 111... 166,382 40,078 32,116 34,389 Quincy, 111..................... 125,318 146,150 Evansville, In d............... 147,762 602 ,547 621,820 I^ouisville, K y ................. 726,651 43,8 2 4 41,095 Owensboro, K y ............... 46,718 2 6,724 16,054 Paducah, K y .................... 30,184 23,298 32,843 Greenville, M iss.............. 34,843 12,746 12,627 13,930 Cape Girardeau, M o ..... 10,030 9,632 H annibal, M o .................. 11,516 52,816 54,991 Jefferson City, M o ........ 65,501 1,756,112 St. L,ouis, M o .................. 2,046,665 1,702,651 Sedalia, M o ...................... 12,63-0 11,018 11,710 74,583 69,712 Springfield, M o ............... 82,991 Jackson, Tenn................. 29,069 21,353 31,708 5 71,366 920,340 M em phis, Tenn............... 823,921 T o t a ls .................................. $4,646,100 $ 3 ,736,609 $4,229,983 * T h e se figu res are fo r T e x a rk a n a , A rk a n sa s, on ly. b an k s in T ex a rk a n a , T e x a s-A rk a n sa s, in clu d in g ban ks D is trict, am ou n ted to $42 ,394 . Page 184 + 4% +11% +14 +11 +55 + 3 +30 +11 +45 + 2 +22 +46 + 7 +10 +25 +20 +25 +17 +18 + 1 +21 +17 + 7 +14 +13 +88 +50 + 6 + 9 +10 +15 +20 +24 +19 +20 +17 +15 + 8 +11 +19 +36 — 8 +44 — 10 +24% +10% T o ta l debits fo r in the E leven th Use of Money Supply—Volume of checks cashed during October was at record levels. Debits to deposit accounts (except interbank) at 22 cities in the Eighth District reached an all-time monthly high of over $4.6 billion in October, up 24 per cent from September. Each of the 22 reporting centers had more debits in October than in September. District cities with largest percentage gains from September to October were Helena, Arkansas (55 per cent) ; Greenville, Mississippi (50 per cent) ; Pine Bluff, Arkansas (45 per cent) ; and Memphis, Tennessee (44 per cent). Nationally, at the 342 reporting centers, debits were $139 billion in October. This compares with $121 billion debits in September.
