The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
Monthly Review B A N K FEBRUARY, 1949 Volume X X X I L O U I S Number 2 The Eighth District Economy A Review of 1948 E IG H T H 25 AT A D IS T R IC T T R E N D S , 1 9 4 7 - 1948 Percent Decrease 20 15 (1) IN DU STRIAL COAL TH E YEAR 10 5 5 POWER CONSUMPTION PRODUCTION (2 ) CRUDE O IL PRODUCTION (3) RESIDENTIAL C O N STRU CTION (5)N O N RESIDEN TIAL CONSTRUCTION (I) MANUFACTURING EM PLO YM E N T (1) NON AG RICULTURAL (2)CASH FARM ST O R E (4 ) D E BITS TO (9) T O TAL LO AN S DEPOSIT (6) OTHER LOANS (6) R E A L ESTATE (6) B U S IN E SS (5) DEM AN D (5) T IM E 8 E M PLO YM EN T INCOME D EP ARTM EN T SALES ACCOUNTS (LAR G ELY CONSUM ER) LOANS AG RICULTURAL D EP O SITS LOANS ( EXC. IN TERBAN K) D E P O SIT S (5) IN VE STM E N TS - U. S. GOVT. S E C U R IT IE S 15) O T H E R IN VESTM ENTS (1) In ST. LO U IS, E V A N SV IL L E , L IT T LE L O U IS V IL L E A N D M EM PH IS (2) District S la tts (3)F. W. Dodgo Corp. Rtports (4)1 n 2 2 Soltctod C lt U s (5)All Member Banks - 8th District (6)Wo*kly Reporting Mombsr Bonks GLANCE ROCK Percent Increase 10 15 20 25 The expansionary forces that lifted the Eighth District economy to successive peaks in 1946 and 1947 continued to exert their upward pressure in 1948. As a result the third year of the great post war boom produced an even higher level of eco nomic activity in the district than either of the two preceding years, and the 1948 level was the highest in the district’s history. Virtually full em ployment of the district’s labor force was main tained throughout the year. These workers turned out in the aggregate more goods and services than ever before. Consumers’ expenditures and private capital investment hit new all-time highs, reflect ing a peak level of demand backed up with a peak level of income— and also higher prices. The continuation of the upward swing of the district economy as a whole also was characteristic of most of the segments of th a t, economy, as is indicated in the chart. But in some lines and in some areas the movement in 1948 was mainly sidewise and in others it was slightly down. By the end of 1948 it seemed that the boom had lost some of its momentum. The break in farm prices that came early in 1948, and the more gradual decline in the fall and winter, brought a marked readjustment in these prices. For the year, however, farm prices averaged higher than in 1947 and farm income also was higher. Agricultural output was at an all-time peak. But at year end the outlook was for lower district farm income in 1949. In nonagricultural activity the upward trend continued generally throughout the year, but the rate of increase tended to be smaller late in 1948 than earlier in the year. Gains over 1947 narrowed during the closing months and in some instances actual declines from the previous year occurred. Such decreases from the 1947 levels were relatively unimportant, however, in terms of the district economy as a whole, and mainly represented ad justments to the changing supply and demand situation as they were made in specific industries. The tendency of the boom to slow down in 1948 was reflected in smaller rates of increase over 1947 in employment as the year advanced. It was re flected, too, in the sharp decline in year-to-year gains in consumers’ expenditures late in 1948. Similarly, while bank credit continued to expand throughout the year, the rate of increase in 1948 was appreciably smaller than in the previous post war years. It should be stressed again that the movement was upward in 1948—that the loss of momentum was a slowing down of the rate of gain and not a reversal. And the fact that this slowdown occurred — that the edge was taken off the boom in some economic areas— should not be taken as presaging a reversal of the underlying trend in the near future. Historically our booms eventually have reversed— whether in time this one will do so re mains to be seen. For the near term future, how ever, this activity seems likely to continue at a slowed-down pace rather than giving way quickly to a slide off. During 1948 a number of line-by-line corrective adjustments occurred in various industries. These helped considerably in bringing the district econ omy more nearly into balance. During 1949 addi tional adjustments are anticipated in other seg ments of the economy; in fact, 1949 probably will see more divergences from the average level than did 1948. Unless the adjustments occur simul taneously in a number of areas, however, they are unlikely to result in any sharp or prolonged down turn during the year. Business Developments Nonagricultural activity in the district in 1948 reached new high levels. Employment, production, income, and spending all were higher than in any previous year. IN D E X E S O F N O N A G R IC U L T U R A L E M P L O Y M E N T IN E IG H T H D IS T R IC T C I T I E S 1946 Percent 1948 Percent EM PLOYM ENT The continuation of the postwar boom through 1948 was reflected in steadily increasing employ ment in the Eighth District. An all-time peak was reached late in the year. Average employment in 1948 was about 3 per cent above 1947 and was larger than in any previous year. The rate of gain over 1947 tended to shrink in the closing months of 1948, however. In July nonagricultural employment in the district’s five largest industrial centers was 4 per cent larger than in July, 1947. In November the margin over November, 1947 was but 2 per cent, as cutbacks occurred in a number of industries. W age rates and salaries increased fairly steadily in 1948. A larger-than-normal number of women entered the labor force during 1948 due both to the pressure of high living costs and to the attractive ness of high wages. Most of the remaining un employed W orld W ar II veterans were assimilated into the labor force in 1948. During the year, the demand for and supply of labor came more into balance, although some occupational shortages re mained and some of the older workers, particularly women, continued to have difficulty finding jobs. Total nonagricultural employment in the district’s five principal industrial areas in 1948 was nearly 39 per cent larger than in 1940. The district gain over Page 18 1947, as well as the longer term increase, closely approximated the national trend during the same periods, although in each case the increase in the five district cities combined was fractionally less than the national gain. The rate of increase over 1947 in average manufacturing employment was almost five times as large in the district as in the nation. As a result of the relatively sharp gains in 1948, following two years in which district increases were proportionately smaller than the national gains, manufacturing employment in the five cities at the close of 1948 showed a somewhat larger percentage increase over 1940 than that in the nation as a whole. The trends in these cities are shown in the chart. Average unemployment in the major district cities and in the nation was slightly lower in 1948 than in 1947, although unemployment in the nation in November and December, 1948 was greater than in the same months of 1947. Ever since the end of W orld W ar II, however, there have been propor tionately more people looking for work in the dis trict than in the nation. Unemployment compensa tion claims have increased considerably since about October, 1948. However, a number of these claims were filed by workers who were laid off only tem porarily. St. Louis Area— Employment reached an all-time peak in November, 1948 after increasing slowly but steadily throughout the year. In this peak month, about 200,000 more people were employed than in 1940, and about 35,000 more were employed than at the wartime peak. Employment was about 1 per cent higher than in November, 1947, reflect ing increases in the manufacturing, trade, finance, and service industries, which more than offset decreases in construction and government. As shown in the chart the major increases in manu facturing occurred in the primary metals, transpor tation equipment and food industries, while the leather industry showed the only major decrease. tween April, 1943 and April, 1948. Hourly earnings in manufacturing increased 58 per cent in St. Louis and 49 per cent in the nation during the same period. Louisville Area— Nonagricultural employment in November was about 2 per cent higher than in November, 1947, with the major increases in manu facturing, government and construction. Total em ployment increased steadily throughout 1948, with the result that average employment in 1948 was 3 per cent higher than the 1947 average. Compared with 1940 employment, Louisville has had the smallest percentage increase of any district city, although the gain over 1947 was second only to that of Memphis. Unemployment in the Louisville area in Novem ber, 1948 was estimated at about 8,000 by the Bureau of Employment Security. This was about 2.000 fewer than in November, 1947 and about 19.000 less than in 1940. S H IF T S IN M A N U FAC TU RIN G EM P L O Y M E N T IN S T LO U IS AND T H E U N IT E D S T A T E S NOVEMBER 18 Percent Decrease IS 10_______ 5 1947 TO NOVEMBER 1948 Percent Increase 15 5_______ !Q 20 Unemployment in the St. Louis area was esti mated at around 22,000 in November, 1948. This was slightly lower than a year earlier and was less than a fourth of the number unemployed in 1940. There were no critical labor shortages during 1948, although demand was greater than supply in some skilled occupations such as tool and die makers, machinists, automobile mechanics, and skilled shoe workers. Recent lay-offs have alleviated the short age of trained clerical workers. The Bureau of Labor Statistics reports that hourly earnings in St. Louis have increased con siderably more than in the nation during the past five years. Earnings in nonmanufacturing indus tries increased 67 per cent in St. Louis as com pared with 57 per cent in the United States be Page 19 Memphis Area— The 7 per cent increase in em ployment in Memphis between November, 1947 and November, 1948 was much greater than in any other district city. This relatively large increase reflected mainly the large number of new industries which were staffed during the year. The manufacturing, public utilities, trade and service industries em ployed more people in November, 1948 than in November, 1947, while construction, finance and government employed fewer persons. Nonagricultural employment increased throughout 1948 with the largest increase occurring between May and July. Manufacturing employment increased until September, but dropped rather sharply between September and November as the result of a decline in the food and lumber industries. The supply of labor in Memphis was estimated by the Department of Employment Security to be about 4,000 in N o vember, 1948. Evansville Area— Total nonagricultural employ ment has been trending downward since July, 1948, but the number of people employed in November, 1948 was still slightly higher than a year earlier. The drop since July was due to a decrease in manufacturing employment, which occurred pri marily in the fabricated metals and nonelectrical machinery industries. Average employment for 1948 was 5 per cent higher than the 1947 average as gains during the first half of 1948 more than off set the drop during the last half. INDUSTRY C O N S U M P T IO N OF N o. of D ec., N ov., ( K .W .H . Custom1948 1948 in thous.) ers* K .W .H . K .W .H . 9,000 Evansville .... 40 8,690 Little R ock.. 35 4,964 4,916 Louisville .... 80 72,136 71,033 Memphis ...... 31 5,883 5,869 Pine B luff .... 26 6,662 2,997 St. L ou is......139 83,068 80,772 Totals ......3S1 181,713 174,277 * Selected industrial customers. R — Revised. E L E C T R IC IT Y D ec., 1947 K .W .H . 9,082 R 4,781 63,219 R 5,296 6,953 77,879 R 167,210 R D ec., 1948 Compared with N o v .,’48 D e c .,’47 + 3.6 % — 0.9% + 1.0 4 - 3.8 + 1.6 + 1 4 .1 + 0.2 + 1 1 .1 + 1 2 2 .3 — 4.2 + . 2.8 + 6.7 + 4 .3 % + 8.7% L O A D S I N 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 Nine Days D e c.,’ 48 N o v .,’ 48 D e c .,’47 Jan.,’ 49 Jan.,’ 48 12 m os.’ 48 12 m os.’ 47 114,207 115,843 121,381 30,883 32,485 1,435,868 1,491,306 S ou rce: Term inal Railroad A ssociation o f St. Louis. C R U D E O IL P R O D U C T IO N — D A IL Y A V E R A G E D ec., 1948 com pared with (I n thousands D ec., N ov., D ec., N ov., D ec., o f bbls.) 1948 1948 1947 1948 1947 Arkansas .............. . 73.9 81.2 85.9 — 9% — 14% Illinois ................... ..178.9 180.0 176.7 — 1 + 1 Indiana ................. . 24.2 18.3 26.3 — 8 +32 Kentucky ............ . 24.0 24.3 27.7 — 1 — 13 Total ................. ,301.0 308.6 — 3% — 2% 311.8 Page 20 The Indiana State Employment Service estimated that there were between 4,500 and 5,000 workers unemployed in the Evansville area in November, 1948, This was a slight increase over a year ago, for although total employment was as high, the number of persons in the labor force increased. Little Rock Area— This was the only major dis trict with fewer persons employed in November, 1948 than in November, 1947, although the decline was relatively insignificant. Employment increased in trade and service, decreased in construction and public utilities and remained constant in manufac turing and government. Average employment in 1948 was about 2 per cent higher than the 1947 average. Little Rock has had a much larger per centage increase since 1940 in both total nonagri cultural and manufacturing employment than any other district city. The Arkansas Employment Security Division es timated that the labor surplus in Little Rock was about 3,700 in November, just about the same as a year earlier. INDUSTRY Industrial activity as a whole in the Eighth Dis trict in 1948 was at a higher level than in any peacetime year and in some lines new all-time records were reached. Month-to-month fluctuations in most cases were smaller than in 1947, principally reflecting a better flow of materials and more stable labor relations than in the previous year. There were still shortages of some materials during the year, notably steel and other metals, but most manufacturers found the problem of obtaining sup plies greatly improved over 1947. Although operations averaged well above pre vious years, there were increasing signs of a level ing off in activity in several lines late in 1948, with some of the major industries of the area announcing cutbacks. Shoe production, for example, was cur tailed in several of the- district’s plants during Oc tober and November, and production for the year dropped below the record 1947 volume. Cutbacks also occurred in the apparel industry, while in the heavy goods lines there were sharp reductions in some electrical equipment and metal fabricating industries. Coal stocks in November reached an alltime peak and the work week in many areas was shortened slightly. Construction activity also showed indications of a leveling off in the last months of the year. Despite reductions in operations in some indus tries late in the year, manufacturing activity in gen eral averaged higher than in 1947. Industrial power consumption in the five major industrial areas of the district reached peak levels. In every month of 1948, aggregate consumption in these centers was larger than in the corresponding month of 1947 and the annual total was 10 per cent higher than 1947. The trend during 1947-48 in each of the cities is shown in the chart. INDUSTRIAL POWER CONSUMPTION 1947 (948 Millions of K.W.H. Millions of K.W.H. Steel— Steel operations in the St. Louis area in 1948 were at the highest rate of the postwar period and month-to-month fluctuations were smaller than in any of the past three years. At the end of 1948, the steel supply situation had improved somewhat, although in most lines current demand was still considerably in excess of supply. Operations of open hearth furnaces during the year were scheduled at an average of 74 per cent of capacity, ranging from a low of 65 per cent in February, March and July to a high of 83 per cent in October. In 1947 the industry operated at an average of 66 per cent of capacity. Except in Jan uary, when scrap shortages were acute, cutbacks in operations usually reflected shutdowns of one or more of the steel-making furnaces for relining and repairs. It should be noted that the yearly average operating rate of 74 per cent actually represents an output much nearer to effective capacity than is indicated by the above rate since several furnaces which are included in capacity serve only as stand by facilities. Lumber— Lumber production in district mills in 1948 averaged slightly higher than in the previous year. Operations of southern hardwood plants were scheduled about 6 per cent higher than in 1947, whereas production of reporting southern pine op erators averaged about 2 per cent lower than in the previous year. In the industry as a whole, ad verse weather conditions in the early part of the year held production slightly below that of the comparable period of 1947, but during the summer operations were above the level of the previous year in both the southern hardwood and pine indus tries. During the latter months of the year pro duction followed much the same pattern as in 1947 when there was a considerable downturn from the high summer levels, largely due to seasonal factors. During 1948 there was some weakening in the lumber market, especially in the poorer grades. Inventories in most areas increased during the year and in December unsold stocks of southern pine were 50 per cent larger than a year earlier, accord ing to reports from southern pine producers. *T e n T im e s Sc a le Meat Packing— Meat packing plants in the St. Louis area in 1948 operated at a slightly higher level than in 1947. A total of 5.7 million animals were slaughtered under Federal inspection during 1948, an increase of 1 per cent over 1947. Nationally, Federally-inspected slaughter declined 7 per cent from the previous year. Annual totals in the St. Louis area included 3.6 million hogs, or nearly twothirds of the total animals slaughtered. In addition there were 820,000 sheep, 745,000 cattle and 531,000 calves killed under Federal inspection. Animal slaughter in the first two quarters of 1948 was well ahead of that of the previous year. However, marketings fell considerably during the third quarter, declining 20 per cent below the third quarter of 1947 and reaching a low for the year in August. In the fourth quarter livestock slaughter was 56 per cent larger than in the third quarter but totaled 8 per cent below the fourth quarter of 1947, which stands as a postwar high. Shoe Production— The shoe manufacturing in dustry was one of the principal district industries affected by a decline in demand in 1948. Production is estimated at about 95.7 million pairs as compared with 97.0 million in 1947 when output was at an alltime peak. Most of the decrease occurred in the last Page 21 four months of the year, although production in the second and third quarters was fractionally be low that in 1947. In the first three months of 1948, output was up 9 per cent from 1947 levels. In the June and Sep tember quarters production averaged about 1 per cent below 1947. Output dropped sharply in July, due largely to seasonal factors including vacation periods, but rebounded in August as operations were resumed. In subsequent months, however, sched ules were reduced considerably and in each month since August output totaled less than in 1947. Preliminary estimates indicate a decline of 10 per cent for the fourth quarter. In November produc tion was at the low point of the year and was the smallest since January, 1946. FEDERAL ADVISORY COUNCIL REPRESENTATIVE At the meeting of the Board of Directors of the Federal Reserve Bank of St. Louis on January 13 Mr. W . L. Hemingway, Chairman of the Board, Mercantile Commerce Bank and Trust Company, St. Louis, Missouri, was elected to serve as the Federal Advisory Council representative from the Eighth Federal Reserve District for a term of one year. He succeeds Mr. James H. Penick, President, Worthen Bank and Trust Company, Little Rock, Arkansas, who had served three one-year terms. Mr. Hemingway was born in Potosi, Missouri and is a graduate of Vanderbilt University. He began his career in banking in Little Rock, Arkan sas in 1900. He came to St. Louis in 1919, served as vice president of the National Bank of Com merce, as president of the Federal Commerce Trust Company, executive vice president, then president and finally chairman of the board of the Mercantile Commerce Bank and Trust Company. In 1942, Mr. Hemingway was president of the American Bankers Association. In addition to his active participation in banking and civic affairs, he has been particularly interested in international trade and finance. In the article on the Federal Advisory Council carried in the January, 1949 issue of this Review there appeared a list of Federal Advisory Council members representing the Eighth Federal Reserve District. Mr. Breckinridge Jones, President of Mississippi Valley Trust Company, who served as the district’s representative in 1925-27, was incorrectly shown on that list as Mr. Janies Breckinridge. Page 22 During most of 1948 the shoe industry was con fronted with a constricting market at the prevailing prices. Buying by retailers was cautious and largely on a short-term basis. This in turn caused manufacturers to exercise caution in buying raw materials, and as a result leather demand dropped sharply beginning in March. Although wholesale prices of leather, hides and skins throughout the year were off sharply from the 1947 peaks, retail shoe prices for the most part held firm after a slight downward trend in the first half of 1948. The scattered price reductions reported during the year were largely confined to the higher priced shoes. Trade reports indicate that, while there have been no general price reductions, manufacturers, faced with high costs that have tended to hold prices firm, have begun to initiate new lower priced lines. Whiskey— Production of whiskey by Kentucky distillers in 1948 was 8 per cent larger than in 1947. In 1948, 86.4 million tax gallons were distilled as compared with 79.7 million tax gallons in 1947. Output in the first quarter was considerably less than in the first quarter 1947 due to the voluntary grain allocation program adopted by the distillers. In that quarter production was off 43 per cent from 1947. From April through October, however, gains were registered over the* comparable months of 1947. Month-to-month declines during the summer were in part seasonal but also reflected cautious production in view of increasing stocks. There were indications of consumer resistance dur ing the middle of the year but consumption in creased during the latter part of 1948. Stocks of whiskey in storage reached an all-time high in 1948. Petroleum— Although showing an upward trend during the last half of the year, total production of crude oil in the district states in 1948 was frac tionally lower than in 1947. District wells produced an estimated 110 million barrels of crude oil in 1948 as compared with 112 million barrels in 1947. Output in the third quarter of 1948, totaling 28.4 million barrels, was larger than in any quarter of the past two years. Preliminary reports indicate that output in the fourth quarter held at about the same level as in the September quarter. The increased production in the latter part of the year was due largely to an increase in output of Indiana’s wells. Since September, production in that area has ranged from 32 per cent to 53 per cent higher than in the comparable month of 1947, and for the full year was 7 per cent larger than in 1947. Production in Arkansas in the first three quarters of 1948 ran slightly ahead of the comparable quarters of 1947 but was down slightly in the fourth quarter. Arkansas accounted for slightly more than onefourth of the district’s output, ranking second in that respect. In Illinois, the source of nearly 60 per cent of the district’s total output, production was off 3 per cent in 1948 despite a slight gain in the fourth quarter. Production in Kentucky was nearly 9 per cent less than in 1947. There were 24 per cent more wells drilled in the district states in 1948 than in 1947. Thus, while the ratio of oil producing wells to total completions was about the same as in 1947, the number of oil producing wells drilled increased. In 1948, total completions numbered 4,668 of which 2,257 or 48 per cent were oil producing wells. Another 183 or 4 per cent produced gas while the remaining 2,228 were dry. Coal— District mines in 1948 produced 116 million tons of bituminous coal, about 5 per cent less than the 122 million tons mined in 1947. Although output in Kentucky mines increased 3 per cent, decreases in the other areas in the district more than offset this gain. Output in Arkansas was off 10 per cent, in Indiana it dropped 9 per cent, while in Missouri and Illinois production was off 7 per cent and 5 per cent, respectively, from 1947. Illinois mines again accounted for 56 per cent of the district’s coal production. In western Kentucky, output increased slightly, relative to the district as a whole, ac counting for 20 per cent of the total. Indiana mines produced another 20 per cent, while the remaining 4 per cent originated in Arkansas and Missouri. Production in the first quarter was 16 per cent less than in 1947 due largely to a shutdown of United Mine W orkers’ mines in March and part of April. In the second quarter production increased considerably and was about 3 per cent larger than in the previous year. The margin over 1947 widened in the third quarter, amounting to 6 per cent, but in the fourth quarter output dropped to a level nearly 8 per cent below 1947. This reflected, in part, the unseasonably warm weather in many parts of the district, which caused an increase in stocks at the mines, at retailers and at the large consumers. In general, coal supplies at the year-end were large and, as a result, pressure on many marginal operators increased considerably. Construction— The boom in construction con tinued in 1948, particularly in the residential field. Contracts valued at $624 million were awarded in the district during the year, according to F. W . Dodge Corporation reports, as compared with $581 million in 1947. Except for 1942 when the wartime expansion program was at its peak, this was the largest dollar volume on record. Contracts for residential construction, amounting to $199 million, totaled 20 per cent larger than in 1947. The in crease in awards for housing construction wras sub stantially greater than the gain in nonresidential awards which increased less than 3 per cent to a total of $425 million. Although value of construction contract awards for the year was larger than in 1947, all of the gain occurred in the first half of the year. As indicated in the chart, contract volume in the second half of 1948 averaged lower than in the last half of 1947, and after July was lower in each month than in the comparable month of 1947. In the last three months of the year, the value of contracts awarded totaled 14 per cent less than a year earlier. A similar trend is apparent in the value of building permits awarded in the principal district cities, as shown in the chart. The lower value of contract awards in the last half C O N S T R U C T IO N C O N T R A C T S A W A R D ED IN E IG H T H D IS T R IC T 1 9 4 6 - 1948 Millions of Dollars Millions of Dolfors too too R ESID EN TIAL NONRESIDENTIAL 1947 1946 SO U R C E : F W. DODGE 1948 CCRS Page 23 of 1948, compared with a year earlier, reflected a relatively greater decline in awards for non-residential construction than for residential building. The decline was accentuated by the fact that late in 1947 the construction industry was operating at a level higher than normal for that period of the year. V A L U E OF B U IL D IN G P E R M IT S IN S E L E C T E D E IG H T H D IS T R IC T C IT IE S 1946 - 1943 Millions of Dollars EVANSVILLE Millions j of Dollars ^ j In the five major industrial areas in the district, the aggregate value of contracts awarded for manu facturing and commercial construction increased in 1948. Contracts for manufacturing construction amounted to $36.1 million as compared with $34.5 million in 1947 in these cities. Commercial awards rose from $24.3 million to $28.2 million. All the increase in manufacturing awards was in the St. Louis area, where volume climbed from $17.9 million to $25.4 million, and in Evansville, where these awards increased from $1.1 million to $2.6 million. In Louisville, Little Rock and Memphis manu facturing construction contracts dropped sharply during the year. In other parts of the district, outside the five industrial centers, this type of construction declined in 1948. Commercial building contracts increased in each of the five cities except in the St. Louis area and in Little Rock. The value of residential awards in the district increased more, percentagewise, from 1947 to 1948 than from 1946 to 1947. Volume was larger in most parts of the district, although in Louisville and Little Rock there were declines of 22 per cent and 11 per cent, respectively. The total value of resi dential contracts in the five major cities rose 17 per cent. However, the number of new dwelling units provided by this volume increased only 3 per cent, according to the F. W . Dodge reports, totaling 16,000 units as compared with 15,600 units in 1947. TRADE Retail trade in the United States and in the Eighth District climbed to new high levels in 1948. Nationally, total retail sales volume is estimated at $130 billion for the year, an increase of 6 per cent over 1947. In the Eighth District, retail volume increased somewhat more than in the nation as a whole, advancing an estimated 8 per cent to a total of more than $6 billion. 1946 . 1947 S O U R C E : S u i l i i n j C o m m is io n « r s In R « s p e c t i v e C > t i« s CONSTRUCTION (C o st in thousands) Evansville ..... la ttle R ock .... L ouisville ..... M em phis ....... St. L,ouis......... D ec. Totals. N ov. Totals.. B U IL D IN G P E R M IT S M onth of D ecem ber Repairs, etc. N ew Construction N um ber N um ber Cost Cost 1947 1948 1947 1948 1948 1947 1948 1947 23 $ 2S 88 $ 43 59 $ 495 59 $ 171 514 54 82 529 106 127 55 88 82 29 33 196 1,577 36 387 24 2,086 82 411 753 1,642 141 104 79 191 2,897 175 157 516 220 1,344 412 763 1,339 $3,961 $7,569 501 440 $ 745 $ 774 961 1,183 $3,483 $7,251 613 631 $ 736 $. 983. Page 24 In the last quarter of 1948 a general slackening developed in the rate of gain over 1947, and de clines in some lines were given considerable at tention. Late in October weekly dollar sales volume in department stores began to decline from the comparable period in 1947. In November and the first half of December, weekly sales volume in the United States and in the district generally was less than in the same weeks in 1947. Many explanations were advanced for the general slowing in sales. It was attributed to unseasonable weather, exception ally high sales in the last quarter of 1947 which made comparisons of 1948 sales relatively less favor- able, consumer resistance, high prices, lack of pur chasing power, reimposition of consumer credit controls, a consumer shift to lower priced merchan dise, and a return to prewar shopping habits. All of these factors probably played some part in the performance. Am ong the more important, how ever, was the return to prewar shopping habits by consumers. During the war years the necessarily early mailing of service personnel gifts, plus the existence of shortages and rationing, tended to ad vance the beginning of holiday purchases to early October. This tendency persisted in the postwar years and was reflected in scare-buying in the face of anticipated shortages of merchandise. These conditions have largely disappeared and the avail ability of almost all lines of goods may have caused consumers to postpone their holiday buying. Some support to this analysis was given by dollar volume gains shown at reporting district stores in the last half of December. The attention directed to the softening of de partment store sales late in 1948 has somewhat obscured the record for the year. In the nation, department stores rang up an estimated $10.2 billion volume of sales in 1948. Eighth District department stores’ sales gained more, percentage wise, over year-ago levels than volume in the nation and accounted for an estimated $443 million of the national total. Sales at district department stores showed an increasing rate of gain in the first three quarters of 1948, climbing from 9 per cent in the first three months to 10 per cent in the June quarter and to 11 per cent in the third quarter. As a result of the declines in November and December, fourth quarter sales volume was only 2 per cent ahead of the last quarter in 1947. For the year, however, district department stores’ sales volume was 7 per cent greater than in 1947. WHOLESALING Lines of Comm odities N et Sales Stocks Data furnished by Bureau o f Census, U . S. Dept, o f C om m erce* D ec., 1948 com pared with N ov ., 1948 D ec., 1947 D ec. 31, 1948 com pared with D ec. 31, 1947 D rugs and Chem icals.......... D ry Goods .............................. Groceries ................................ T o b a cco and Its Products.. Miscellaneous ....................... — 18% — 33 — 8 — 10 + 6 — 16 **T otal all lines..................... — 12% * Preliminary. # *Includes certain items not listed above. + 1% — 40 — 1 + 2 + 6 +14 + 1% — 9 +18 — 12 +26 — 4% +11% TRADE D E PA R TM E N T STORES Stocks on H and N et Sales Stock Turnover 12 m os.’ 48 D e c .31,’ 48 Jan. 1, to D ec., 1948 com pared with Dec. 31, to same com p, with N o v .,’48 D e c .,’47 period ’ 47 D ec.3 1,’ 47 1948 ■ 1947 4.06 4.48 ..+ 6 1 % + 13% + 3% + 8% 5.21 +22 4.57 ..+ 3 5 + r6 + 9 4.91 ..+ 3 8 +34 3.81 + 2 + 7 4.16 ..+ 3 7 + 18 + 18 3.84 + 7 5.26 + 4 +14 4.76 ..+ 4 3 + 9 4.32 ..+ 2 6 — 3 4.19 + 8 + 6 4.32 4.21 ..+ 2 6 — 4 + 8 + 13 ..+ 4 0 + 1 4.31 — 10 3.67 ..+ 3 5 + 2 4.62 — 4 4.29 ..+ 4 1 + 4 + 6 +12 3.36 4.12 ..+ 5 1 + 7 + 1 4.24 4.54 ..+ 3 4 -0 + 8 + 7 * E l D orado, Fayetteville, Pine B luff, A r k .; H arrisburg, M t. V ernon, 111.; N ew Albany, Vincennes, I n d .; Danville, H opkinsville, Mayfield, Paducah, K y .; Chillicothe, M o . ; and Jackson, Tenn. 1 Includes St. L ouis, M o., A lton, East St. Louis and .Belleville, 111. Outstanding orders of reporting stores at the end of Decem ber, 1948, were 46 per cent less than on the corresponding date a year ago. Percentage of accounts and notes receivable outstanding Decem ber 1, 1948, collected during Decem ber, by cities: Instalm ent E xcl. Instal. Instalm ent E xcl. Instal. A ccoun ts A ccoun ts A ccou n ts A ccoun ts F ort Smith............ % 60% 52% Q u in cy .............. 2 7% L,ittle R o ck ...... 22 46 St. L ou is............ 23 57 Louisville ........ 24 64 48 O ther cities...... 19 Memphis ........ 30 49 8th F. R . D ist. 24 53 IN D E X E S OF D E P A R T M E N T ST O R E SA L E S A N D STOCKS 8th Federal Reserve D istrict D ec., N o v ., O ct., D ec., 1948 1948 1948 1947 Sales (daily average), U nadjusted 2..................... .517 Sales (daily average), Seasonally adjusted 2.... 338 Stocks, U nad ju sted 3 .................................................. .276 Stocks, Seasonally adjusted 3 ................................ ..329 2 Daily A verage 1935-39 = 100. 3 End o f M onth A verage 1935-39 = 100. 404 321 347 325 S P E C IA L T Y S T O R E S Stocks N et Sales on H and D ec., 1948 12 m os.’ 48 D e c .31,’48 ■ com pared with to same com p, with N o v .’ 48 D e c.’ 47 p e r io d ’ 47 D ec.3 1,’ 47 362 338 355 317 516 337 250 297 Stock T urnover Jan. 1, to D ecem ber 31, 1948 1947 M en’s F urnish in gs+40 % —- 4 % — 4% +18% 3.02 3.94 B oots and S h oes....+ 48 + 6 + 6 + 1 4.55 4.87 Percentage of accounts and notes receivable outstanding Decem ber 1, 1948, collected during D ecem b er: M en’s Furnishings................... 50% B oots and Shoes..................... 4 7% Trading d ays: D ecem ber, 1948— 2 6 ; N ovem ber, 1948— 2 5 ; D ecem ber, 1947— 26. R E T A IL F U R N IT U R E N et Sales_____ D ec., 1948, com pared with N o v .,’ 48 D e c .,’ 47 S T O R E S ** Inventories D ec., 1948 R atio of com pared with Collections N o v .,’ 48 D e c .,’47 D e c .,’ 48 D e c .,’47 St. Louis A r e a 1 + 8 % — 8% — 9% +21% '50% 63% St. L o u is ........+ 7 — 9 — 9 +21 52 65 Louisville A r e a 2 + 4 1 — 24 — 8 +28 18 23 Louisville ......4-41 — 26 — 8 +29 16 21 Memphis ............ + 5 6 + 1 — 17 — 19 18 31 Little R o c k ........+ 3 6 — 12 — 11 + 4 23 31 8th Dist. T o t a l8 + 2 5 — 10 — 10 +16 30 40 1 Includes St. L ouis, M isso u ri; A lton , Illinois. 2 Includes Louisville, K e n tu ck y ; and N ew A lbany, Indiana. * In addition to above cities, includes stores in Blytheville, F ort Smith, and Pine Bluff, A rk a n sa s; H opkinsville, O wensboro. K e n tu ck y ; Green ville, Greenwood, M ississippi; H annibal and Springfield, M isso u ri; and Evansville, Indiana. * * 3 7 stores reporting. PERCEN TAG E D IS T R IB U T IO N OF D e c., ’ 48 Cash Sales............................................. Credit S a le s ......................................... F U R N IT U R E N ov., ’48 SALES D ec., ’47 18% 82 15% 85 20% 80 T otal S a le s ....................................... 100% 100% 100% Page 25 Am ong the major district cities a somewhat varied experience in the rate of gain over 1947 was shown. Greater-than-district-average gains were recorded in Evansville, East St. Louis, Louisville, and Little Rock. The gain in Quincy approximated the district average, but in St. Louis, Memphis and Springfield sales gains for the year averaged less than that for the district as a whole. Estimated total department store dollar sales for the district and selected cities are shown in the following table. ANNUAL D E P A R T M E N T STO R E SALES D I S T R I C T C I T IE S IN SELECTED (I n Thousands o f Dollars) 1939 (cen sus) 1947 1948 (estim ated) (estimated) 1948* com p. to 1939 1948* com p, to 1947 F ort Smith, A rk .....$..2,351 $ 6,900 $ 7,400 +215% + 7% Little R ock , A rk .........8,161 26,200 28,600 -J-250 + 9 Evansville, In d ........ ....4,372 13,200 15,800 4-261 + 20 Louisville, K y ......... ....14,554 43,900 48,300 +232 + 10 Q u in cy, 111....................2,943 7,300 7,900 +167 + 8 E . St. Louis, 111.........2,067 7,500 8,600 +318 + 15 St. Louis, M o ......... ....61,811 159,200 170,300 + 1 7 6 + 7 Springfield, M o ...........3,076 14,200 14,700 + 3 7 6 + 3 53,200 56,400 +244 + 6 M em phis, T en n........ ....16,403 E ighth D istrict........ 144,061 410,400 443,300 + 2 0 8 + 8 *Percentage figures m ay not check due to rounding of sales estimates. Of the many factors contributing to the increased level of sales during 1948 considerable attention has been centered on the part consumer credit has played. At department stores, the volume of credit sales, both open credit and instalment credit, in creased slightly relative to cash sales. Credit sales amounted to 50 per cent of the total as compared with 48 per cent in 1947 and 44 per cent in 1946. Percentagewise, the largest increase was in instal ment credit which accounted for 7.2 per cent of total sales as compared with 5.8 per cent in 1947 and 4.1 per cent in 1946. Open credit sales in the PRICES W H O L E S A L E P R I C E S IN T H E U N IT E D S T A T E S Bureau o f L abor Statistics D ec., 48 (1 9 2 6 = 1 0 0 ) A ll Comm odities... .. 162.2 Farm Products . .. 177.3 F oods ................ .. 170.2 Other ................ .. 152.8 R — Revised. N ov., ’ 48 163.9 180.8 174.3 153.2R D ec., ’ 47 163.2 196.7 178.4 145.5 D ec., ’ 48 com p, with N ov., ’48 D ec., ’47 — 0.6% — 1.0% — 1.9 — 9.9 — 4.6 — 2.4 — 0.3 + 5.0 C O N S U M E R P R IC E IN D E X Bureau of L abor Statistics D ec. 15, Sept. 15, D ec. 15, Dec. 15, ’ 48 com o. with (1 93 5 -3 9 = 1 0 0 ) 1948 1948 1947 Sept. 15, ’ 48 D ec. 15, ’ 47 U nited States..l71.4 174.5 167.0 — 1.8% + 2 .6 % St. L ou is......171.1 175.0 167.9 — 2.2 + 1 .9 Memphis ......174.3 177.1 173.5 — 1.6 + 0 .5 R E T A IL F O O D Bureau o f L abor Statistics D ec. 15 1948 (1935-39 = 100) U . S. (51 citie s)..205.0 St. Louis ......... 212.2 L ittle R o ck ..... 201.6 L ouisville ......... 196.6 Mem phis ........... 217.9 Page 26 N ov. 15, 1948 207.5 213.1 202.4 198.9 219.0 D ec. 15, 1947 206.9 ' 215.2 211.8 198.9 229.7 Dec. 15, ’48 com o. with N ov. 15, ’ 48 Dec. 15, ’ 47 — 1.2% — 0.9% — 0.4 — 1.4 — 0.4 — 4.8 — 1.2 — 1.2 — 0.5 — 5.1 year amounted to 43.3 per cent as compared to 42 per cent in 1947 and 39.5 per cent in the previous year. During the fall of 1948 department store sales on open.credit account grew more rapidly than either cash or instalment sales. In September the ratio of open account sales to total sales was almost 45 per cent, the highest level since early in 1942. In the last three months of the year the ratio was some what lower than in September but remained high relative to that of other years. Of the factors previously mentioned as contribut ing to the decline in rate of sales gain in the last quarter some support also may be given to the contention that consumer buying has tended to ward lower priced goods. At those district depart ment stores reporting sales by departments during the past year, dollar sales volume gains, percent agewise, generally have been greater in the base ment store divisions than in the comparable divi sions of the main store. The dollar volume in base ment store divisions averaged 11 per cent larger than in 1947 as compared with a 4 per cent increase in main store divisions. W om en’s and misses’ ready-to-wear apparel in the basement stores in creased 16 per cent as compared with a gain of 11 per cent in the upstairs store. Men’s and boys’ wear gained 14 per cent in the basement in compari son to a gain of 1 per cent in the comparable divi sion in the main store. Sales of shoes downstairs were 6 per cent larger in the year but declined slightly upstairs. During 1948 mounting production in many lines of goods, both durable and nondurable, filled re tailers’ shelves much faster than had been antici pated. At prevailing price levels, this resulted in some acceleration of the previous more gradual shift from a sellers’ to a buyers’ market. Clearance sales reappeared, some with appreciable markdowns in selling prices. Reflecting this there was a grow ing caution in buying by district department stores. Although the ratio of stocks to sales during 1948 showed little change from the 1947 pattern, out standing orders apparently were held to a minimum. In 1948, the ratio of average monthly outstanding orders to average monthly sales was 1.33 as com pared with 1.64 in 1947, 2.92 in 1946 and 1.36 in 1942. Inventories, in terms of value, at the end of December, 1948 were 21 per cent smaller than those on November 30, although they were 8 per cent greater than at the end of 1947. Banking Developments B A N K IN G B A N K IN G During 1948 banking developments in the Eighth District remained on the expansionary side but the pace was much slower than in 1947. Bankers in general were more cautious and fiscal and monetary action exercised restraining effects. Deposits tended to level off, loans grew less than in 1947, rates stiffened slightly, and there was some pressure on bank reserve positions. P R IN C IP A L ASSET S A N D L IA B IL IT IE S F E D E R A L R E S E R V E B A N K O F ST. L O U IS Change from Jan. 21, Dec. 22, Jan. 19, 1948 1949 1948 (In thousands of dollars) Industrial advances under Sec. 13b. ......$ ............ . . $ ................. $ ................. 10,345 + 3,302 — 3,594 Other advances and rediscounts....... U. S. Securities........................................ ...... 1,200,622 — 60,711 4 - 24,821 T otal earning assets........................... ......$1,210,967 $— 57,409 $4- 21,227 Federal Reserve-Treasury Action— Both the Fed eral Reserve System and the Treasury continued in 1948 the policies begun some time earlier, aimed at reducing the rise in the supply of money. The Treasury used much of its cash operating surplus and net receipts from sales of nonmarketable bonds to pay off portions of maturing Treasury bills and certificates. A large proportion of these repayments went to redeem Federal Reserve System held debt. In the fall the certificate rate was advanced. The bill rate also moved higher during the year. As a result, short-term Government securities became more attractive investments. As of the close of 1948 System holdings of all securities were but $776 mil lion larger than a year earlier, despite purchases of $8.1 billion in Treasury bonds. FE D E R A L RESERVE SYSTEM P O R T F O L IO (I n Millions of D ollars) D ec. 29, 1948 D ec. 31, 1947 Change ................ ................ 11,001 $11,433 6,797 1,477 2,853 — $5,967 — 725 — 670 4 - 8,148 $23,346 $22,560 +$ Bills .....................................$ 5,466 Certificates ....... Bonds 776 Federal Reserve System restraining action took the form of raising the discount rate and increasing reserve requirements for member banks plus rein stitution of consumer credit control. Until Septem ber, action on reserve requirements was confined to banks in the central reserve cities (New York and Chicago) since reserve ratios at other classes of member banks had been raised previously to legal maximums. In the central reserve cities require ments wrere increased 4 per cent (in two steps). The special session of Congress granted the Board of Governors power to increase reserve ratios over previous legal maximums by 4 points on demand deposits and \ l/ 2 points on time deposits. In the last half of September requirements at all classes Total reserves .......................................... ......$ 758,558 $ 4- 42,i(j~3 $ 4- 79,033 T otal deposits .......................................... ...... 840,314 — 6,161 4 - 86,569 F. R . notes in circulation.................... ...... 1,130,589 — 25,835 4 - 7,448 Industrial commitments under Sec. 13b..$ ........... •• $ ................. $— P R IN C IP A L A SSET S A N D L IA B IL IT IE S W E E K L Y R E P O R T IN G M E M B E R B A N K S E IG H T H F E D E R A L R E SE R V E D IS T R IC T (I n Thousands of Dollars) Change from Jan. 19,’ 49 Assets Gross com m ercial, industrial and agri cultural loans and open market $ 619,418 Gross loans to brokers and dealers in securities ............................................... 5,647 Gross loans to others to purchase and carry securities..................................... 21,898 160,855 Gross real estate loans........................... Gross loans to banks............................. 1,260 Gross other loans (largely consumer credit loa n s).......................................... 213,775 D ec. 22,’48 580 Jan. 21,’48 $— 27,315 — 1,014 — 4— 1,113 922 60 * * 4- 5,865 * $1,022,853 9,257 $1,013,596 $ 65,918 233,198 53,949 $— 4$— $— 4— 22,715 2,049 24,764 29,334 55,647 9,053 * * $4- 27,774 $ 4- 5,985 4-135,355 — 44,051 684,351 135,416 Other securities ...................................... T otal investments ............................. $1,172,832 864,989 Cash assets ............................................... Other assets ............................................ 23,560 Total assets .......................................... $3,074,977 4— $4-44$4- 19,709 106 36,863 18,524 471 31,094 — 122,670 — 11,010 $— 36,391 4 - 71,291 — 144 $4- 62,530 Liabilities Demand deposits of individuals, part nerships, and corporations............... $1,510,409 729,333 Interbank deposits ................................. 32,012 U . S. Government deposits.................. 138,944 Other deposits ........................................ T otal demand deposits...................... .$2,410,698 472,663 Tim e deposits .......................................... 2,000 Borrow ings ............................................... 15,598 Other liabilities .................- ..................... 174,018 Total capital accounts...................... ... T otal liabilities and capital ac counts ................................................. .$3,074,977 $— 8,665 -1- 42,115 — 10,269 + 6,194 $4- 29,375 3,885 4 - 1,000 — 1,541 — 1,625 $ + 31,094 $4- 62,530 Demand deposits, adjusted**................ $1,420,220 $4- $ 4- 48,311 Less reserve for losses.................. Net total loans................................... Treasury bills .......................................... Certificates of indebtedness.................. Treasury notes ........................................ U. S. bonds and guaranteed obliga 2,124 $4444$ 4— — 44- 23,413 11,204 17,526 11,077 63,220 107 6,750 413 5,754 *Comparative data not available due to change in method of reporting. **O ther than interbank and governm ent demand deposits, less cash items on hand or in process o f collection. D E B IT S T O D E P O S IT A C C O U N T S D ec., D e c .,’ 48 com p, with (I n thousands D ec., N ov., ^ o v .,’ 48 D ec., 47 1947 of dollars) 1948 1948 22,191 4 -1 6 % 24,586 $ 21,126 $ + 11% El Dorado, A rk .....$ 40,861 4 - 7 42,952 F ort Smith A rk..... 39,991 + 5 — 6 9,035 11,102 Helena, A rk ........... 10,460 + 16 120,522 + 3 137,013 133,171 Little R ock, Ark... + 14 + 25 28,804 — 4 36,146 37,668 Pine B luff, A rk ..... — 5 11,107 — 1 10,676 Texarkana, A rk.*.. 10,605 25,431 + 16 23,089 A lton, 111................. + 6 26,863 — 1 134,043 -4- 6 125,523 E. St. L--N at. S. Y.,111. 132,753 — 2 32,169 + 13 31,673 27,987 Quincy, 111............... 114,453 121,055 + 6 Evansville, In d ....... 114,425 + 6 581,217 + 12 595,056 533,641 + 2 Louisville, K y ......... — 11 37,206 + 9 33,058 Ow ensboro. K y ....... 30,238 17,751 14,121 17,151 4-26 + 3 Paducah, K y ........... 22.875 + 2 1 4 - 33 30,389 25,058 Greenville, M iss..... 10,475 + 9 + 16 12,172 11,212 Cape Girardeau, M o. - 0 8,496 + 1 7 8,462 7,256 Hannibal, M o ......... 33,210 — 5 45,674 43,590 + 31 Tefferson City, M o. 1,709,644 + 1 1 St. Louis, M o ......... 1,780,001 1,600,444 + 4 10,796 + 1 2 9.846 11,067 + 3 Sedalia, M o ............. 58,682 + 3 - 0 56,6^2 Springfield, M o ....... 58,400 20,067 — 6 21,982 20,601 + 3 Tackson, T enn......... 645,954 — 3 674,742 698,919 Memphis, Tenn....... + . 4 $3,694,389 + 7% + 4% Totals ...................$3,859,395 $3,599,811 T otal debits for •These figures are for Texarkana, Arkansas, only banks in Texarkana, T exis-A rkansas, including banks in the Eleventh District, amounted to $27,463 Page 27 of member banks were increased by 2 per cent on demand and \y 2 per cent on time deposits. This, plus the earlier increases at central reserve city banks, absorbed about $3 billion in reserves. At Eighth District member banks, required< reserves at the close of 1948 totaled $715 million or $95 million more than a year earlier. Excess; reserves in December, 1948 were off only $9 million from a year earlier, however. In effect the increase in required reserves during 1948 was somewhat more than sufficient to offset reserve gains accruing to member banks from con tinuation of the postwar gold inflow and the return flow of currency from circulation (the first signifi cant nonseasonal downturn since depression davs). The remainder of bank reserve needs were supplied by an increase in the holdings of Government secu rities at Federal Reserve banks. The special session of Congress also granted temporary authority to reinstitute consumer credit controls. Regulation W thus was re-established1 in modified form late in September, 1948. P E R C E N T A G E GROWTH WEEKLY REPORTING i9 46 Percen) 2 5 -------------------------------------------------------------------------------------- Page 28 The behavior of business and agricultural loans at district banks was similar to the pattern of a year ago but the upward swing lost momentum very gradually during the first three quarters. The final quarter of the year saw loans move up much less than in 1947. Real estate loans also grew at a much slower rate than in either 1947 or 1946 and at a much slower rate than these loans grew nationally. The irregular upward movement of “ other” loans, largely consumer credit loans, continued for ten months at a slightly faster rate in the district than nationally. In the closing two months of the year these loans declined 1 per cent from the November 3 peak partly in response to the reimposition of Regulation W and partly in response to greater banker and consumer cautiousness at the close of the year. B U S I N E S S AND OF T&TAL LOAN' S MEMBER BANKS (943 Smaller Rate of Loan Increase— Total loans at district member banks expanded in 1948 but at less than the 1947 rate. In checking the loan growth of district weekly reporting banks with all weekly reporting banks in the nation, the first post war year (1946) indicates a much greater relative expansion in the district, the second (1947) an equal growth percentagewise, and the third (1948) an appreciably smaller percentage increase than nationally. E IG H T H D IS T R IC T 125) RE PO R +IN G LOANS M EM 8ER BANKS 1 9 4 7 - 1948 I Percent | AGRICULTURAL W EEKLY Millions of Oof a ' 5 Millions of Doilars Within the district none of the reporting centers expanded loans as rapidly as in 1947 and one actually showed a decrease. The pattern was not uniform, however, especially in the final quarter of the year. For example, the St. Louis banks in the last quarter of the year showed a reduction in their total loan volume of 2 per cent as compared with an increase of 5 per cent in the same period of 1947, while Little Rock banks expanded their loans 15 per cent as compared with a 3 per cent decrease in the final quarter of 1947. Leveling of Deposits— Gross demand deposits, except interbank, at Eighth District member banks at the end of 1948 were almost unchanged from a year earlier. After declining sharply from the December, 1947 peak for the first three months of 1948, largely as a result of shifting portions of individual and business deposits to the Treasury in tax payments, deposit levels showed little change in the second quarter, but rose in the last half of the year (at member banks— $88 million in the third and $124 million in the fourth quarter) to close 1948 just barely above the level of a year earlier. Time deposits at all district member banks, likewise, were up but fractionally from the close of 1947. There were differences in the year’s change in demand and time deposits as between the smaller country banks and all other member banks in the district. At the smaller (mainly rural) banks, time OTHER LO ANS (LARGELY CONSUMER C R E D IT ) NATIONAL AND D IST R IC T deposits expanded $4 million while demand balances dropped $9 million. The opposite performance oc curred at the city institutions which lost $3 million in time deposits and gained $15 million in demand balances. The country banks thus lost net $5 million while the larger urban banks gained net $12 million. This minor shift of funds probably reflects some spending of accumulated liquid bal ances and of borrowings in these areas for the purchase of producers’ and consumers’ durable goods manufactured for the most part in the larger cities. Demand deposits of individuals, partnerships and corporations—available between call report dates only from the weekly reporting member banks— were down 1 per cent for the year. ^Banks in each of the six reporting centers within the district at the year-end were below or unchanged from the close of 1947 except the Little Rock banks which reported a 3 per cent gain. It should also be noted that the loan growth at country banks was greater than at the larger city banks— percentagewise about five times as great. Since the time data have been available on a monthly basis, January, 1947, there have been only two months in which the total loan figure for the smaller country banks has not increased. In N o vember, 1947 total loans declined $2 million and in G R O SS D E M A N D D E P O S IT S , E X C E P T IN T E R B A N K A L L M E M B E R B A N K S , 8th D IST R IC T W E E K L Y • 1948 Billions of Dollars 1947-1948 Billions of Dollars 1948 MONTHLY Millions of Dollars Millions of Dollors Page 29 November, 1948 they remained unchanged from the preceding month. Member Bank Reserves and Investments— Dis trict member bank investments in Governments were reduced during the year by Treasury repay ment and by liquidation to meet increased reserve needs. The over-all reduction for the year, $145 million, represents a 7 per cent shrinkage. The decline was most pronounced at the smaller country banks where $107 million of the total reduction took place. This reduced country bank holdings by 11 per cent while all other district member banks reduced their holdings only 3.6 per cent. A D D IT IO N S T O P A R L IS T IN 1948 At the beginning of 1949 there were 15 more par banks in the Eighth District than a year ago. Fourteen banks shifted from nonpar to the par list, and seven new banks which par their checks came into existence. Liquidations, mergers and the shift of one bank from par to nonpar account for the net gain of but 15 banks to the par list. As of midJanuary, 1949 there were 1,472 banks in the Eighth District of which 495 were member banks and 636 were nonmember par banks. The banks added to the par list in 1948 (through January 1, 1949) are as follows: Arkansas: Citizens Bank of Jonesboro, Jonesboro Mercantile Bank of Jonesboro, Jonesboro Peoples National Bank, Jonesboro* Stephens Security Bank, Stephens Peoples Bank & Trust Company, Van Buren Merchants and Planters Bank, Warren Warren Bank, Warren Cross County Bank, Wynn Illinois: Farmers State Bank, Dahlgren** Troy Security Bank, Troy** K entucky: Bank of Oldham County, LaGrange** The Paducah Bank, Paducah** M issouri: Center State Bank, Center** Peoples Savings Bank, Licking Farmers and Merchants Bank, Memphis** Tennessee: Barrettsville Bank & Trust Co., Barrettsville Citizens Bank, Colliersville Mason Hall Bank, Kenton Rutherford Bank, Rutherford Farmers Bank, Trimble Bank of Yorkville, Yorkville *N ew member bank. **N ew nonm em ber par bank. Page 30 Agricultural The drop in farm product prices and the bumper output of farm crops in 1948 were the two major developments in the agricultural segment of the economy. The postwar peak in farm prices apparently was reached during the first month of 1948. Although prices recovered to some extent following the break in February, steady declines were registered during the last six months of 1948 when the record output of crops became a certainty. Prices received by farmers were 13 per cent lower at the end of 1948 than at the beginning, the index dropping from 307 in January to 268 in December (1910-14= 100). One of the sharpest price declines in history occurred in late January and the first two weeks of February. During this period agricultural prices declined nearly 10 per cent. From midFebruary to July, prices gradually rose, and at mid-July the index of prices received was 301. However, declines were registered in each month from July through December. Sharpest drop in prices during the year was regis tered by feed grains, the index of feed grain prices being 45 per cent lower in December of 1948 than a year earlier. Food grain prices declined 26 per cent during the same period. However, tobacco prices were only slightly lower, and prices of cotton, livestock and livestock products declined less than 10 per cent. Prices of many agricultural products were at support levels at the close of the year. Wheat prices had been below support levels for two months after harvest and were narrowly above support level at the end of 1948. On December 15, the prices of A G R IC U L T U R E C A S H F A R M IN C O M E N o v ., ( I n thousands 1948 o f dollars) Arkansas ...... $102,966 176,691 Illinois .......... 94,298 Indiana ........ K entucky _...... , 54,089 M ississippi .... 102,056 M issouri ...... 140,775 Tennessee .... .. 57,245 T otals ........ ,,$728,120 R E C E IP T S AND ( I n thousands) Cattle and calves.. H o g s ....................... T otals ...... N o v ., com p, O ct., 1948 — 23% — 20 — 20 4 - 30 — 12 — 6 — 19 — 14% ’ 48, with N ov., 1947 4 -4 6 % — 12 — 15 +47 +32 +20 +15 +10% 11 mo. total Jan. to N ov. 1948 com p, with 1947 1946 +30% +11% — 3 +30 -0 +26 +21 — 6 +77 +10 +41 +25 + 5 +33% + 3% 1948 $ 499,196 1,672,328 964,988 433,664 478,882 1,084,146 433,836 $4,188,017 S H IP M E N T S A T N A T I O N A L STOCK Receipts 1948 com p, with 1948 1947 1946 1,336 — 28% — 2 5% + 41 2,681 4 - 5 — 22 — 79 4,774 — 9% + 1% Shipments 1948 com p, with 1947 1946 — 33% — 58% +10 +13 — 46 — 33 — 79 — 30 — 16% — 36% 1948 505 773 214 16 1,508 YARDS Developments corn, oats, barley, rye, hay, peanuts, potatoes, citrus fruits and eggs, all were below 90 per cent of parity. Prices of wheat, cotton, beans and butterfat were below parity, and only prices of rice, cottonseed, flaxseed, some types of tobacco, turkeys, beef, veal and lamb were as much as 20 per cent or more above parity. As is characteristic during a period of price de clines, prices paid fell less than prices received. During the year, the index of prices paid by farmers including interest and taxes, declined from 251 to 247, a drop of less than 2 per cent. The decrease A G R IC U L T U R A L C A SH FARM IN CO M E B IL L IO N S OF OO LLARS M IL L IO N S O F 8ALES IN C O M E , AND P R O D U C T IO N PRICES RECEIVED AND PAID 19 3 9 -1 9 4 8 PERCENT COTTON P R IC E S was due largely to a reduction in prices of feed and food, products which farmers produce. The parity ratio (ratio of prices received to prices paid) narrowed from 122 in January to 109 in December. Despite the drop in farm prices during the year, average farm prices in 1948 were higher than in 1947. Thus 1948 cash farm income in the United States exceeded that of 1947 ($31 billion as com pared %ith $30.2 billion). Cash farm income in Eighth District states in 1948 also was larger than the $6,058 million realized in 1947. The twelve month total, December, 1947 through November, ANNUAL M ILL IO N S OF POUNDS 450 BY FARM ERS IN THE E IG H T H D IS T R IC T ** FARM R E A L ( I9 I O * 1914* I OO) MONTHLY ------------ ESTATE V A L U ES* E ST IM A T ED V A LU E P E R A C R E 1 9 1 0 -1 9 1 4 *1 0 0 TOBACCO 450 350 250 19 4 5 M IL L IO N S OF B U SH E LS WHEAT M ILU O N S OF 8U SH ELS 1948 150 1935 19 45 1948 R IC E OATS M ILL IO N S OF BUSHELS 1948 * To ta l Fo r E ig h t h D istrict S ta te s * • F o r the United S t a t e s S O U R C E : U S O . A . , A gric u ltu ra l p r ic e s , C ro p Sum m ary 1 9 4 3 , Developm ents in Fa rm Real E s ta te M arket Page 31 1948, was $6,253 million. While cash (and gross) income was higher in 1948 than 1947, net farm income apparently was a little lower ($18 billion was realized nationally in 1947) due to a narrower profit ratio. per cent above the 1947 crop, and 87 per cent more than the 1946 crop. Nationally, the 1948 wheat crop of 1,288 million bushels was 77 million bushels less than the 1,365 million bushels record produc tion of 1947. Farm income in district states for the first eleven months of 1948 exceeded the income for the same period in 1947 b y '3 per cent. However, farm in come in Kentucky and Illinois was down 6 per cent and 3 per cent, respectively, from 1947. In Indiana there was no change, but in Missouri and Arkansas, income was up 11 per cent, and in Mississippi it was up 10 per cent. Winter wheat acreage for the 1949 crop in district states is about 4 per cent larger than in 1948, com pared with a 5.5 per cent increase nationally. The 61.4 million acres seeded in the nation is the largest seeded acreage on record and is one-fourth larger than the ten-year, 1937-46, average. Indicated acreage in the three Mid-South states of the district is lower than in 1948. Though other district states have an acreage increase, lower production is in dicated in all of them except Indiana. In November, farm income in Illinois and Indiana was 12 per cent and 15 per cent, respectively, less than in November, 1947. However, farm income in other district states was 15 per cent to 47 per cent larger than November, 1947. Nationally, farm income in November was 1 per cent larger than a year earlier, but final figures for the entire last quarter of 1948 are expected to be lower than in 1947. Total crop production in 1948 far exceeded pro duction in any other year. The index of physical output was 37 per cent above the 1923-32 average volume of production, and 9 per cent above the previous record production attained in 1946. This record output was due to harvested acreage larger than the wartime average, coupled with a yield index 51 per cent above the 1923-32 base, and 11 per cent higher than the previous record realized in 1942. Record production of 3,651 million bushels of corn was a substantial factor in the total output. This crop was nearly 400 million bushels larger than in any other year, and the yield of 42 bushels per acre exceeded the previous record yield by six bushels. Corn production in the Eighth District in 1948 was 18 per cent more than the previous record crop of 1946, and was 60 per cent larger than the poor crop of 1947. Cotton production in the Eighth District totaled 4,821,000 bales in 1948, 50 per cent more than 1947 production. This crop was only slightly smaller than the record crop produced in 1937. The district tobacco crop in 1948 was 340 million pounds, slightly larger than the 1947 crop, but smaller than the 1944-46 crops. Nationally, the crop was 10 per cent less than in 1947. Eighth District wheat production in 1948 was 71.7 million bushels, the second largest district crop on record, exceeded only in 1937. It was 39 Page 32 Nationally, winter wheat production for 1949 is now forecast at 965 million bushels, compared with a 1948 crop of 990 million bushels. However, the condition of the crop on December 1, 1948 was much better than a year ago, when the 1948 crop was estimated at only 839 million bushels. Thus favorable weather conditions for the remainder of the growing season easily could result in a 1949 winter wheat crop in excess of a billion bushels. District oats production in 1948 was 20 million bushels, or 37 per cent more than in 1947. Rice pro duction in Arkansas was 19.7 million bushels, a crop one-fifth larger than the previous record crop produced in 1947. The physical volume of farm marketings in 1948 was slightly less than in 1947. Meat production was about 7 per cent less, and milk production was 3 per cent less than in 1947. Chicken and turkey marketings were down, but egg production was about the same due to more eggs produced per hen. The 1948 fall pig crop is 8 per cent larger than in 1947. This, coupled with an estimated 10 per cent increase in the size of the spring pig crop, will result in substantially larger pork supplies in 1949. Total meat production, however, will be about the same as in 1948 since beef production is expected to be lower. Land values in all district states increased in the twelve-month period ending November, 1948. The value of farm land surpassed the 1920 peak in Arkansas, Indiana, and Missouri during the year. Values already were higher in March, 1947 in Kentucky and Tennessee than during the World War I postwar peak. Nationally, farm values passed the W orld W ar I peak during the period April to July, 1948, and in November the index of 177 (1910-14=100) was 4 per cent above the 1920 peak.
@FedFRASER