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Monthly Review m m Volume X X X I V 1951 was a year of progress toward defense mobilization goals. Construction in the Eighth District reached a new record as a result of new housing more industrial construction and the AEC plant. 1951: , A Year of Progress Number 2 FE B R U A R Y , 1952 and Stability , Progress was made9 too9 in controlling infla tionary forces dominant in the opening months of the year Fiscal and monetary developments were significant factors in the stability of 1951. Infla tionary use of credit was dampened by System actions voluntary credit restraint and fiscal meas ures. While the money supply increased in 1951 its inflationary impact was lessened. District banking developments reflected these factors Direct controls were helpful also. . , , , . High levels of production kept supplies in fair balance with demand. In the Eighth District power consumption rose indicating generally increasing output. Some lines registered declines however including steel and lumber shoes, and whiskey Livestock slaughter increased. Oil and coal out put were down slightly. Reflecting the production levels district employment rose moderately. Em ployment was up in St. Louis Louisville Mem phis and Little Rock, but dropped in Evansville and some smaller centers. , , , , , . , Agricultural production was high in 1951. Farm prices rose in the latter part of the year. Land prices were moderately above their 1950 level. Consumer actions were strategic in maintain ing stability in 1951. Savings increased consider ably. Eighth District sales experience reflected the shift in consumer attitudes. 1951 was a year o f progress toward defense m o bilization goals. Considerable progress was made in the Eighth District during 1951 in organizing defense produc tion and in strengthening our capacity to produce. Districtwise, business and agriculture responded to the keynote of the defense program calling for expansion of basic industries so as to provide over the long run for both military and civilian needs. Expansion of the district’s production facilities proceeded at an all-time high rate during 1951. The largest project underway was the Atomic Energy Commission installation at Paducah. Five gov ernment-owned plants were reactivated in St. Louis and five in Louisville, including two synthetic rubber plants and three munitions plants. Gov ernment installations at Pine Bluff and Camden, Arkansas; Milan, Tennessee; Crane, Indiana; and Granite City, Illinois were undergoing expansions to cost a total of $50 million. In addition, construc tion plans calling for expenditure of $77 million were announced for enlarging and improving Scott Air Force Base, Illinois; Fort Knox and Camp Campbell, Kentucky. Along with growth in Government facilities, there was a substantial amount of private capital invest ment within the Eighth District during 1951, partly aided by rapid amortization of cost. Through No vember, 1951, about $450 million in industrial plant and equipment was certified as necessary for the defense effort and allowed the rapid amortization privilege. Total cost of these certified facilities, of course, exceeds the amount allowed rapid amorti zation. The largest part of the expansion (in terms of amortization amount), $185 million, was for basic metals: steel, aluminum, and magnesium. Expansion of oil refinery and coal products facil ities costing about $115 million was approved. Chemical facilities, aircraft and jet engine plants, and clay and glass products plants also were im portant under this program. The General Electric Company plant in Louis ville, which is planned to eventually employ 16,000 workers on appliance production, will manufacture jet engines during the mobilization period. A new aluminum plant, able to produce 55,000 tons an nually and costing $34 million, will be placed in Arkansas. Another, costing $55 million, is already under construction there. In addition, railroads and barge lines are expand ing their equipment under the rapid amortization program. About $55 million is to be spent by trans portation firms with headquarters located in the Eighth District. Page 14 While the main progress of the defense program was not in actual deliveries of war goods, but was in planning, contracting and fooling up, there was nevertheless a sizable increase in deliveries of mu nitions and other items. Nationally, at year end deliveries were running about $2 billion per month, triple the rate a year earlier. Defense output in this district was stepped up too. But indications are that the rate of increase was not as much as in the rest of the nation. Such information as is avail able, both from official reports and from miscella neous sources, indicates that the district is getting a smaller portion of the nation’s defense contracts and subcontracts than its ratio of total manufactur ing capacity to that of the nation would seem to justify. Pointing to the increased defense output in the district is the growth during the year in employ ment in defense industries. At the close of 1951, in the neighborhood of 50,000 persons were estimated to be in direct defense employment, including civil ian workers at military establishments— consider ably more than the number a year earlier. Nearly 40 per cent of the total was employed in the St. Louis area, where a large part was estimated to be working in direct military establishments— depots, camps, production plants or record centers. Construction in the Eighth District reached a neiv record, . . . Construction activity in the district clearly showed the year’s emphasis on strengthening our capacity to produce. Total activity was pushed to new heights during 1951, largely as a result of new de fense and defense-supporting facilities. W ork put under contract totaled $1.3 billion or 51 per cent more than in 1950, the previous peak year. This large increase was primarily due to the Atomic Energy Commission plant near Paducah, Kentucky, on which construction was started early in the year. . . . as a result o f new hdusing9 . . . Construction of new homes was not slighted, however. In fact, residential construction contracts awarded in this district increased 4 per cent, while those awarded in most of the nation showed a de crease of 8 per cent from 1950. It should be noted that, despite the gain in dollar amount of residen tial contracts awarded in the district, the number of units contracted for was smaller. For example, in the St. Louis territory, as defined by F. W . Dodge Corporation, and where 78 per cent of the value for the entire district’s residential contracts were awarded, a total of 26,000 new dwelling units was placed under contract. This was a decrease of 9 per cent from the 29,000 units contracted for in 1950. Public housing showed marked gains in 1951 as plans laid under the 1949 Housing Act progressed to the construction stage. In the St. Louis territory, public housing contracts were about three times larger than in 1950. Reflecting in part the sharp increase in public housing, there was a shift toward multi-unit dwellings. The floor area of apartment buildings put under contract in most of the Eighth District was about one-fourth larger than last year, while the area of one-family dwelling units was off about one-fifth. Where expansions or reactivations of existing Government facilities occurred or where new facil ities were started, the immediately surrounding areas generally experienced some tightening in their housing situations, as workers migrated to those areas. T o alleviate these situations special measures were taken under the defense program. In 1951, nine areas in the Eighth District were certi fied as critical1 and 3,800 dwelling units have been programmed for construction under relaxed credit restrictions. In addition, 350 trailers were scheduled for placement in the Fort Leonard W ood area by the Public Housing Authority. xFort Leonard W o o d , Rolla, and Knobnoster A ir Force Base, Sedalia, M issou ri; Benton-Bauxite, Cam den-Shum aker, and Pine B lu ff, Arkansas; Fort K n o x , Camp Campbell, Camp Breckenridge, and Paducah, K en tucky. VALUE OF CONSTRUCTION EI G H T H D IS TR IC T, QUARTERLY . . . m o r e in d u stria l c o n s t r u c t io n , . . . Other types of construction in this district re vealed the impact of the mobilization program upon the construction industry. Contracts awarded for commercial, social and recreational building in 1951 fell 43 per cent, primarily as a result of Government controls. Manufacturing building contracts were about twice as large as in 1950. Many of the recently started defense and defense-supporting plants will produce chemicals or metals and will be more complex and costly than other types. Con tracts for most other types of nonresidential build ing totaled less in 1951 than in the previous year. . . . a n d t h e AEC p la n t . W ork went forward on the Atom ic Energy Com mission plant near Paducah (estimated to cost $500 million) and the two allied electric power gener ating plants despite frequent work stoppages. About 20,000 workers were employed on these projects at year end. Present schedules call for a gradual taper ing off in number of construction workers until the projects are completed in 1953. P r o g r e s s w as m a d e9 t o o 9 in c o n t r o llin g in fla tio n a ry f o r c e s d o m in a n t in t h e o p e n in g m o n th s o f th e y e a r . The year 1951 started with strong inflationary pressures in evidence, but closed with a rough balance between inflationary and deflationary forces. Fiscal and monetary actions contributed impor tantly to attainment of this balance. The direct Gov ernment control program also was effective. Pro duction gains kept supply in fair balance with demand. But the key factor in stability was volun tary buying restraint by consumers. CONTRACTS AWARDED 1949-1951 F isca l a n d m o n e ta r y d e v e lo p m e n t s w e r e sig n ifica n t fa c t o r s in t h e sta b ility o f 1951 . Developments in fiscal and monetary fields aided in easing inflationary pressures and in maintaining stability throughout the greater part of 1951. The measures adopted by the Federal Reserve System, by the financial community, and by the Treasury lessened the inflationary use of credit, despite the fact that there was an expansion in bank earning assets and thus in the volume of money and credit in 1951. I n fla tio n a r y u s e o f c r e d it w as d a m p e n e d S y s tem a c tio n . . • by Although it is difficult to measure the effective ness of specific factors restraining inflationary pres sure, the wide range of actions to curb credit ex pansion taken by the Federal Reserve System in the fall and winter of 1950-51 appear to have played a significant role. Restrictions were placed on con Page 15 sumer instalment and mortgage credit and margin requirements on stocks were increased. In 1951, instalment credit declined as did the rate of increase of real estate credit and the outstanding volume of loans secured by stocks remained relatively small. By far the most significant credit development was the “ accord” reached in early March by' the Federal Reserve System and the Treasury. As a result of the agreement, System open market opera tions Could be oriented primarily toward avoiding monetization of the public debt and providing for orderly markets, rather than toward fairly rigid price supports for Government securities. W ith drawal of firm support by the System led to price declines in Government securities which brought them into line with market evaluations. As long as prices of Governments were supported at par or above, banking and nonbanking investors could monetize the public debt simply by selling Government securities which the System, as resi dual buyer, had to take to keep the support levels in being. W ith the accord, the System regained a considerable measure of control over the availa bility of bank reserves and credit. As a result of the limitations on supply of credit and the heavy demand for credit, interest rates rose in 1951. The prime rate on commercial bank loans increased from 2%. to 3 per cent. Average rates on accepted bids for Treasury bills went from 1% per cent to a temporary level at year end of over 1% per cent (the rate declined to about per cent in early January, 1952). The yield on long-term Government bank-restricted bonds rose from less than 2y2 per cent to a yield of 2% per cent. High grade corporate obligations yielded 22 /z per cent at the beginning of the year and over 3 per cent at year end. . . . voluntary credit restraint . . • A program of voluntary credit restraint was insti tuted in March at the request of leaders in commer cial banking, insurance, investment banking and other financial institutions. The program enlisted the mutual cooperation of financial institutions in screening loan applications with a view toward re ducing to a minimum nonessential loans and elimi nating speculative loans. Common standards on loans of these types were developed, with the result that there was less pressure to make such loans to maintain competitive positions. . . . and fiscal measures. Three sets of tax increases have been enacted since the Korean outbreak, increasing revenue about Page 16 $16 billion per year. In addition, higher incomes and profits also have increased total revenue. A l though defense outlays expanded rapidly, the Fed eral Government operated at a cash surplus of roughly $1 billion in 1951. In the first part of the year the much larger net surplus was a potent force in counteracting inflation. Public debt management in 1951 also contributed to restraining inflationary developments. It was aimed at inducing savers to invest in and hold Government securities. Among significant steps taken were: (1) the offer of a 2y± per cent long term nonmarketable bond, in exchange for the two longest-term 2 per cent restricted bonds outstand ing; (2) measures to encourage retention of matur ing savings bonds; and (3) issue of a new series of savings notes to yield 1.88 per cent (to maturity) as against the old rate of 1.40 per cent. While the m oney supply increased in 1951, . . . Nationally, commercial bank loan expansion was substantially smaller in 1951 than in 1950—$6 billion as against $9 billion. Bank investments, however, rose somewhat in 1951 as against a decline in 1950. The net result of bank credit movement (plus other factors affecting deposits) was that bank deposits— the major part of the money supply— rose more in 1951 than in 1950. The total private money supply increased $8.8 billion in 1951 as against $7.1 billion in 1950. . . . its in fla tio n a ry im p a ct teas le s s e n e d . The inflationary pressures generated by the money supply were less this year than last, how ever, reflecting a declining rate of turnover through out most of 1951 in contrast to an increasing rate throughout 1950. Further loan expansion in 1951, especially during the second half of the year, appeared to center in financing production and defense capacity rather than in financing consumer purchases and business inventory accumulation. The changed pattern of private credit expansion tended to reduce the direct inflationary impact of the growing money supply. D istrict b a n k in g d e v e lo p m e n t s r e fle c t e d fa c t o r s . th ese Member banks in the Eighth District expanded their loans $101 million in 1951. In the previous year the loan growth amounted to $340 million. Loan increases were largest at banks in the St. Louis, Louisville and Evansville areas. Banks in Memphis and Little Rock reported a small decline. Loans at banks in smaller centers rose only moder ately in the aggregate. Seventy per cent of the increase in loans at district weekly reporting banks went to businesses with a substantial share going to finance marketing and processing of agricultural products. Defense loans increased but slightly, pointing up this dis trict’s relative lack of defense business. Loans on real estate and “ other” (largely consumer) loans were up moderately in the year. Loans on securities were off slightly. Despite a sharp reduction of investments in the first quarter of 1951, district banks increased their portfolios for the entire year by $111 million, in contrast to 1950 performance when they reduced investments $123 million. Nearly all of the rise in investments was in U. S. Government obligations, principally Treasury bills and certificates. “ Other” securities showed a net gain of $8 million in the year. D irect c o n t r o ls w e r e h e lp fu l (dso. The general freeze on prices and wages in late January was replaced by a system of tailored price controls for individual industries and products and by formulas for wage stabilization. The overbur dened priorities system was replaced by the Con trolled Materials Plan, which attempted to allocate systematically the available supplies of scarce metals according to the essentiality of the various uses. The stockpiling program was modified to avoid bidding up prices of scarce materials for which it had been competing with the rest of the economy. And in the fourth quarter the construc tion industry was put completely under the Con trolled Materials Plan in order to direct critical materials into defense and related needs. H igh le v e ls o f p r o d u c t io n k ep t s u p p lie s in fa ir b a la n ce w ith d e m a n d . A generally high level of production throughout the Eighth District and the nation during 1951 also helped contain inflationary pressures. The transition from civilian to defense output was accomplished with minor dislocations. In t h e E ighth D istrict p o w e r c o n s u m p tio n r o s e , in d ica tin g g e n e r a lly in c r e a s in g o u tp u t . Industrial electric power consumed for the year indicated this high level activity. Industries in six of the district’s leading cities used about 11 per cent more kilowatts during 1951 than in 1950. For each of the cities, as well as for the group as a whole, power consumption was greater in 1951 than in 1950. While total district industrial output was higher in 1951 than in 1950, certain lines registered de creases on a year to year basis. Chemicals, machin ery, rubber products and various metals fabricators showed substantial gains. Among important excep tions to this over-all increase were the steel, lumber, shoe and whiskey lines. Page 17 IN D U S TR IA L CO NSUMPTIO N OF E L E C T R IC POWER 1950-1951 PerCent 19 5 0 = 100 Per Cent PerCent • • • sh oes, • • • About 75.4 million pairs of shoes were produced by St. Louis area manufacturers in the first eleven months of 1951. This was 11 per cent less thari for the same period in 1950. The 1951 market suffered from the production of too many shoes during 1950 and the first quarter of 1951. As in ventories rose, orders and output were reduced. St. Louis shoe manufacturers output in the last three quarters of 1951 (through November) was at a rate 23 per cent less than in the first quarter. The year closed on a note of optimism, however. A break in the hide market in the fourth quarter favored manufacturers and they made price reduc tions. Orders at St. Louis shoe factories rose in December and production was stepped up more than seasonally. • . • and whiskey• Whiskey gallonage in the district, measured by production of distilled spirits in Kentucky, failed to match that of 1950. It was 6 per cent below that of 1950 for the first eleven months of the year. But, it was not a bad year for the distillers. A buildup of stocks by producers in late 1950 in anticipation of defense cutbacks extended into the first half of 1951. Production then dipped, due to a tight warehouse situation, until the fall of the year. Then producers again turned up their output rate, possibly to compensate for reduction of retail stocks by consumers, who bought heavily to beat a November tax hike. During this latter period, bottling plants were particularly busy. IN DU STRY S o m e lin e s r e g is t e r e d d e c li n e s 9 h o w e v e r 9 in c lu d in g s t e e l a n d lu m b e r 9 . • . The 1951 production of steel ingots in the St. Louis area compared very favorably with that of 1950 during the first three-quarters of the year, though it dropped in the fourth quarter. Then, due to observance of the Christmas holidays and the slackening of demand in nondefense markets, the ingot production rate fell to 89 per cent of capacity from a high of 102 per cent in the first quarter. Lumber production generally was not quite as high in 1951 as a year earlier. During 1951, south ern pine production averaged 6 per cent under that of 1950. Southern hardwood operations, how ever, were at a slightly higher rate than in 1950, making 1951 the best year in the last fifteen. Page 18 C O N S U M P T IO N O F E L E C T R IC IT Y ( K . W .H . in th o u s.) D e c., 1951 N o v ., 1951 K .W . H . K .W . H . Evansville............... 14,354 L ittle R ock....... ..... 13,804 Louisville....... ........ 84,923 M em phis............ ..... 30,774 Pine B lu ff............... 11,286 St. Louis............ ..... 97,291 T otals............. r— R evised. 252,432 13,948 14,013 82,737 32,145 11,075 101,401 255,319 LOADS IN T E R C H A N G E D D e c .,*51 N o v .,’ 51 D e c .,*50 D ec., 1950 K .W . H . D ec., 1951 compared with N o v .,’ 51 D e c .,’ 50 13,953 r 13,406r 81,163 28,546 9,427 101,887 r + 3 % — 2 + 3 — 4 + 2 — 4 248,382 — 1% O IL P R O D U C T IO N — D A IL Y (I n thousands of bbls.) D e c .,’ 51 N o v .,’ 51 D e c .,’ 50 Arkansas............ Illinois................ Infliana............... K entucky........... 76.9 168.8 32.0 34.9 76.5 164.8 32.0 33.9 81.6 169.3 30.4 30.5 T o ta l............... 312.6 + 2% F O R 25 R A I L R O A D S A T S T . L O U I S First Nine D ays Jan.,*52 Jan.,’ 51 12 mos. *51 12 mos. *50 105,332 110,176 116,662 28,258 33,073 1,384,700 S ource: Terminal Railroad Association of St. Louis. CRUDE + 3 % + 3 + 5 + 8 +20 — 5 307.2 311.8 1,359,526 AVERAGE D ec., 1951 compared with N o v .,*51 D e c .,*50 + + -0 + + 1% 2 3 2% — 6% -0 + 5 +14 -Q -% Livestock slaughter increased. In the St. Louis area the number of animals slaughtered under federal inspection in 1951 was 2 per cent greater than in 1950. This gain was due to a 13 per cent increase in the number of hogs slaughtered,, which more than offset declines of 15, ir, and 37 per cent, respectively, in the numbers of cattle, calves, and sheep slaughtered. Oil and coal output was down slightly. Coal miners in the five producing district states mined about 2 per cent less coal during 1951 than in 1950, but above ground stocks were always well ahead of demand. Among district coal-producing states, Illinois (with over one-half of total district tonnage), Indiana, and Arkansas all showed smaller production in 1951 than during 1950. Western Kentucky and Missouri, however, mined more coal. The former area, in fact, reached the highest pro duction in its history. Since district oil production during 1951 was largely from fields which have been yielding oil for a number of years, the maintenance of produc tion during 1951 was encouraging. The daily aver age rate of production was only 5 per cent below that of 1950. Oil well exploration and discovery of producing areas continued at an only slightly reduced rate during 1951. For the first eleven months of the year there were 4,902 well completions in Illinois, Indiana, Kentucky and Arkansas, compared with 5,515 for the similar period in 1950. The percentage of dry holes was running higher, 58 per cent com pared with 52 per cent in 1950. of about 4 per cent. Defense employment increased while workers were laid off in automobile assembly and parts plants. Other industries, such as shoe, garment, and furniture, were forced to reduce employment because of lagging demand. Unem ployment in the St. Louis area during 1951 averaged below the 1950 level, but increased sharply from September to November, 1951, when it exceeded that of November, 1950. As the year closed, the ratio of unemployed to the total labor force was about 4 per cent, somewhat higher than the national average. In the Louisville area, nonagricultural employ ment reached record levels during 1951. Average employment was about 15,000 persons more than in 1950. The gain was due chiefly to defense activity in construction of new plants and increased Gov ernment and ordnance employment. In December, 1951, manufacturing employment, other than for ordnance, was less than a year earlier. Employment on cigarette production was up, but the number of workers in furniture plants was reduced. The overall supply of labor was considered to be slightly in excess of demand throughout the year. In Memphis, nonagricultural employment aver aged about 10,000 persons or 6 per cent higher than in 1950, a gain second only to Louisville among district cities. A slight gain in manufacturN0NAGR1CULTURAL U.S. AND 8th MARCH EMPLOYMENT D ISTRICT 1 940 » CITIES 100 Reflecting the production levels, district employment rose moderately• 150 District employment increased somewhat in 1951, but moderate labor surpluses continued at the major centers. Certain skills, however, were in increasingly short supply. Employment in various areas and lines moved in diverse directions throughout 1951. Gains, mostly moderate, in some areas contrasted with declining employment in others. The shift to defense production, the concurrent lull in certain civilian lines and curtailed production in others caused an uneven demand for labor between areas and industries. In at least three small areas in the district, there were substantial surpluses of labor. 140 130 120 1 60 150 140 130 ISO 140 130 120 170 160 150 Employment was up in St. Louis, Louisville, Mem phis and Little Rock9 •. . 140 180 In the St. Louis area, total nonagricultural em ployment was fairly stable throughout 1951 but averaged about 26,000 more than in 1950, a gain 170 160 150 1949 1 950 1951 ~ Page 19 111 g employment over the year was augmented by additional Government hiring and gains in trade and service employment. In manufacturing, the major gains in employment were in machinery, apparel and paper-products plants. Memphis was rated as having a moderate surplus of labor over immediate and future requirements at the end of the year. In Little Rock, November nonagricultural em ployment was approximately 1,700 persons above that of a year earlier, an increase of about 2 per cent. By November manufacturing employment was about 8 per cent higher than a year earlier, due largely to increases in defense production and apparel manufacturing plants. As with the other major labor market areas, Little Rock was classed as having a moderate labor surplus at year end. A year earlier it had been considered somewhat tighter with a balanced labor market. . . . b u t d r o p p e d in E va n sville • . . Evansville was the only major labor market area in the Eighth District which experienced declining employment during 1951. Due to the concentration of employment in this area in the refrigerator and automobile assembly industries, both of which experienced declining production in 1951, employ ment there dropped about 6 per cent in the year ended November, 1951. Unemployment in the area in November, 1951 was 4.5 per cent of the labor force, a level approximately double that of a year earlier. The total labor force also showed a de crease, with many workers reported migrating to other areas where job opportunities were more plentiful. • . . a n d in s o m e sm a lle r c e n t e r s . Two smaller areas in the Eighth District, Vin cennes, Indiana, and Crab Orchard, Illinois, had substantial labor surpluses. The Crab Orchard area situation is one of long standing and reflects a basic industrial problem, that of declining coal mining activity. However, recent plant locations in the area should be helpful in reducing dependence on coal mining. And the steam electric power plants being constructed by T V A and Electric Energy, Inc., should help revive the coal mines in this area. The Vincennes area was affected by the closing of a coal mine and the shutting down of a shoe factory. In a third area, Bedford, Indiana, a greater than seasonal decline in limestone quarries and a tem porary shutdown of a large aluminum foundry caused a large increase in unemployment at year end. Due to the buildup of the armed forces the pro portion of men in the work force decreased in 1951. Page 20 However, there were no fhajor vchanges in hiring specifications of major employers. W ith an easy labor market situation prevailing in most areas there was no large-scale hiring of women for de fense jobs as in W orld W ar II. A gricu ltu ra l p r o d u c t io n w a s h ig h in 1951 . Nationally production of 52 major crops in 1951 was exceeded only by the crops of 1948 and 1949 and was one per cent above 1950 production. The volume of livestock and livestock products sold also was about 4 per cent higher than in 1950. In the Eighth District, output also was high, but gains here apparently were smaller than in the nation. Agricultural production varied from record yields to complete crop failure in Eighth District areas. Particularly hard hit were bottomlands of the Mis souri and Mississippi rivers where floods ruined both winter and spring-sown crops. Early drouth and later wet weather and early frost also caused considerable damage to cotton in Mississippi and Arkansas. Drouths also were severe in localized areas in Kentucky. Parts of Indiana, Illinois, and Kentucky, however, had excellent crop yields. P R O D U C T IO N O F M A J O R C R O P S IN T H E E IG H T H D IS T R IC T A N D T H E U N IT E D ST A T E S Eighth District United States 1951 % change 1951 % change ( I n thousands) Production from 1950 Production from 1950 Cotton (b a le s)..................... 3,254 +21% 15,290 +53% Corn ( b u .) ............................ 372,754 — 8 2,941,423 — 4 W in ter W h ea t ( b u .) ........ 47,812 - 0— 645,469 — 13 O ats ( b u .) ..............' ............ 42,523 — 22 1,316,396 — 7 H a y (to n s )........................... 9,297 — 1 95,788 + 6 +19 2,282,386 +12 Tobacco ( l b s .) .................... 360,537 Soybeans (bu . ) 1................. 180,876 — 4 280,512 — 6 Rice (b ags) 1........................ 9,711 +22 43,805 +13 Source: U S D A and Board of Governors Federal Reserve System. 1 Total of District States. Despite the unfavorable weather during the grow ing season, district cotton production was 21 per cent larger than in 1950. The increase in district AGRICULTURE CASH (I n thousands of dollars) N o v ., 1951 ..$ 90,936 196,277 . 114,501 , 71,673 , 93,189 , 130,137 .. 63,747 ..$760,460 R E C E IP T S AND FARM IN C O M E N ovem ber, 1951 compared with O ct., N o v ., 1950 1951 + — — — 31% 26 23 45 34 21 18 — + + + — + + 12% 5 17 80 17 4 17 — 22% + 6% — — — S H IP M E N T S AT 11 month total Jan. to N o v ., 1951 compared with 1951 1950 1949 $ 503,777 1,867,437 1,072,410 485,589 483,263 1,119,009 436,890 $5,968,375 N A T IO N A L Receipts + + + + + + + 18% 15 21 16 24 20 19 + + + + + + + + 18% STO C K 5% 2 21 13 8 21 13 + 11% YARDS __________ Shipments________ D ec., 1951 D ec., 1951 compared with compared with D e c .,*51 N o v ./5 1 D e c .,*50D e c .,’ 51 N o v ./5 1 D e c .,*50 Cattle and calves.... 73,833 H o g s ............................ 316,317 Sheep........................... 36,094 — 27% — 5 — 1 — 11% + 4 + S 24,982 101,679 13,021 — 33% +35 +58 + 9% + 48 +135 Totals..................... 426,244 — 10% + 139,682 +16% + 2% 44% production was far short of the 53 per cent increase for the nation. Corn production was down in district states due to reduced acreage harvested in Mississippi, Arkan sas and Missouri. The crop in Indiana and Illinois was 14 and 17 per cent larger than in 1950. Floods and adverse weather cut the Missouri crop 22 per cent below 1950 production. The 8 per cent smaller production in the Eighth District and 4 per cent reduction nationally were reflected in corn stocks on January 1, 1952 of 1.9 billion bushels, 200 million bushels less than a year earlier. Production of oats, another important feed grain, was down 22 per cent in the Eighth District com pared with a 7 per cent reduction nationally. In other important district crops, production was more favorable (or less unfavorable) than the national totals. Winter wheat production remained unchanged in the district, but declined 13 per cent nationally. The rice crop, another important food grain, was 22 per cent larger in the district and 13 per cent larger nationally. The district tobacco crop was 19 per cent larger than in 1950. The crop, both light and dark tobacco, PRICES RECEIVED AND BY PAID FARMERS 1 9 1 0 - 1914 = 100 1 9 4 9 - 1951 Per C en t Pe r Ce n t 400 400 P RI CES RECEI VED 1951 300 1 200 . ... | 1 . 300 I 9 5 0 _ _ _____ — - , i l l i i ^ 200 400 400 P R IC E S P A ID 300 300 1951 1949 200 . 125 F IE O P A R IT Y R A T IO , 1 .....................................- 200 125 SCALE) (M A 6 N I 1949 1 100 100 75 ------------- 1------------- 1----------J ' ' U -------±------------ SO UR C E' A g r ic u ltu r a l P ric e s B .A .E . FARM INCOME D IS TR IC T STATES was of better quality than in 1950 and prices being paid for the crop averaged substantially higher than a year earlier. F arm p r ic e s r o s e in th e la tter p a rt o f th e y e a r . Farm prices declined in most of the first half of 1951, but after it became apparent that crop outturn would fall below earlier expectations, prices moved upward reaching an index of 305 in Decem ber. (This figure was 3 per cent below the Febru ary, 1951, peak of 313.) The net change for the year was only plus 1 per cent in contrast to a rise of 23 per cent in 1950. The average for 1951, how ever, was about 14 per cent higher than in 1950. The $30 billion cash farm income for the first eleven months of the year was 15 per cent higher than in 1950. Land p r ic e s w e r e m o d e r a te ly a b o v e t h e ir 1950 le v e l . During the July-November 1951 period, farm land prices increased but not as fast as in a similar period in 1950 (2 per cent in the district compared with 5 per cent a year earlier). However, for the year ending November, 1951, land values increased 16 per cent in the Eighth District compared with an 8 per cent increase in 1950. The increase for the year in all district states, except Illinois and Tennessee, exceeded the increase nationally. C H A N G E IN FA R M L A N D V A L U E S IN T H E E IG H T H D IS T R IC T 1951 ^ CASH E IG H T H 75 Increase Increase Increase July to N ov. 1950 to 1935-39 to* N o v ., 1951 N o v ., 1951 N o v ., 1951 Arkansas.. ... + 1% + 16% + 221 % Illinois...... ... + 3 + 14 + 192 Indiana..... + 3 + 16 ! 219 ... + 4 + 19 f 254 Mississippi.. ... + 2 + 19 + 207 Missouri...... ... + 3 + 17 H 60 Tennessee.... ... + 1 + 10 + 213 ... + 2 + 16 + 298 .. + 2 + 15 + 149 Source: The Farm Real Estate M arket, B .A .E ). November 1951. Page 21 Consumer actions were strategic in maintaining stability in 1951. While fiscal and monetary policy, direct controls and higher production all contributed to main tenance of stability throughout most of 1951, a key factor in the year's experience was the shift in con sumer attitudes. After the first quarter of 1951, consumers as a group increased their saving rate sharply and thus, by voluntarily restraining their spending, reduced pressure on supplies. In part this shift in consumer attitudes was conditioned by the restraint measures noted, which gave more assurance of price stability, and in part it reflected more general availability of civilian goods (particu larly durables) than had been anticipated. Finally, the heavy buying of late 1950 and early 1951 had raised consumer stocks of goods to very high levels. second quarter of 1951 slackened with consumers buying less than usual. In the meantime, retailers had added to already heavy inventories. The volume of outstanding orders dropped as orders were canceled and cut back until at the midpoint of 1951 they were at about the same level as in 1950. But the inventory problem was not so easily solved. Inventories peaked in the second quarter and retailers began the task of reducing them. Sales in the third quarter made a fair showing in comparison with sales in the same period of 1950. And fourth quarter sales were somewhat above year-ago levels. Retailers' stocks declined EIG H TH BY D IS T R IC T MAJOR Saving increased considerably. The shift in consumer spending-saving attitudes that occurred within the year is not evident from the comparison of total retail sales in 1951 with those of 1950. These show a new consumer spend ing record in excess of the $150 billion for 1951, more than $7 billion above the previous peak volume in 1950. Nor is the shift apparent from department store sales totals (including mail order sales) which amounted to $11.3 billion in 1951 in com parison with $10.8 billion in 1950. However, con sideration of the annual amounts spent by con sumers in terms of their expanding incomes does show the change. Personal income rose to a new record of $251.3 billion in 1951, an increase of $26.6 billion. Increased taxes took $8 billion of the $26.6 billion growth in personal incomes. O f the remaining $18.6 billion which represents the increase in consumers disposable income (after taxes) during 1951, they elected to spend only $10.8 billion, adding $7.8 billion to their savings in one form or another. PER CENT DEPARTMENT STORE SALES DIVISIONS AND SELECTED DEPARTMENTS* 1951 COMPARED TO 1950 OECREASE PER CENT INCREASE Eighth District sales experience reflected the shift in consumer attitudes. The shift in consumer spending attitudes within the year is also shown by the monthly index of Eighth District department store sales. In January, consumers bought heavily, but the buying wave was short-lived. By mid-February 1951 the apparent ease with which merchandise was replaced on shelves by retailers apparently convinced the buy ing public that shortages were not imminent. Easter shopping, from the retailer’s viewpoint, was disappointingly slow. Easter was early in 1951 (March 25), the weather was anything but ideal and both consumer and retailer were pondering the possible effects of price controls. Sales in the Page 22 *This chart is based on the sales of only 17 stores. 23 is based on the full sample of 54 stores. The table on page The records for the last half of 1951 for particular lines reporting to this Bank were quite similar. In department, men’s and women’s apparel and furniture stores, third quarter sales ran below the comparable months of 1950, with furniture store sales off. In the fourth quarter, sales at department, furniture and men’s wear stores averaged above fourth quarter 1950, while women’s specialty stores failed to equal the volume of that period. Unlike the pattern of sales in 1950, consumers showed a preference for “ soft goods” rather than “ hard goods” in 1951. Eighth District furniture store sales in 1951 totaled about 6 per cent less than in 1950. Automotive sales in 1951 dipped below 1950 totals and appliance dealers also reported a disappointing 1951 sales volume. While these “ hard goods” were off, “ soft goods” lines in reporting department stores, in men’s wear stores, and in shoe stores showed an increase in 1951 volume over that of 1950. All in all 1951 was a year of progress both in meeting defense goals and in expanding the district (and the national) economy. It was also a signifi cant year in the respect that a measure of effective ness in monetary controls was restored to the Sys tem and restraint was exercised over bank reserves. TRADE DEPARTM ENT STOR ES Stocks on H and N et Sales Dec. ,1 9 5 1 compared with N o v ./5 1 D e c ./5 0 12 m os.’ 51 D ec. 3 1 /5 1 to same comp, with period ’ 50 D ec., 3 1 /5 0 Tw o new banks in the Eighth District joined the Federal Reserve System during 1951. They are: the First National Bank of Doniphan, Doniphan, Missouri, which commenced busi ness on September 29; and the First National Bank of Buechel, Buechel, Kentucky, which opened for business on November 1. These new members of the Federal Reserve System bring the total membership of the Federal Reserve Bank of St. Louis to 495 banks. The First National Bank of Doniphan had a paid-in capital of $50,000 and surplus of $25,000. Its officers are S. H. Lawrence, presi dent ; E. V. Snodgrass, vice president, and L. E. Hood, cashier. The First National Bank of Buechel had a paid-in capital of $100,000 and surplus of $50,000. Its officers are: J, M.. Barr, presi dent ; S. A. Phillips, vice president; and James H. Ewing, cashier. Jan. 1, to D ec. 31, 1951 1950 + 31% 4.12 3.57 + 1% + 2% + 1% + 44 + 5 + 8 + 7 3.67 4.16 + 29 — 11 + 2 - 03.56 3.93 + 30 — 12 + 1 + 16 3.33 3.70 + 21 + 2 + 7 3.31 3.90 + 1 + 37 — 3 + 2 4.53 + 3 4.20 St. Louis Area 2.. + 28 - 0+ 2 4.12 3.40 + 1 Springfield, M o... + 47 + 1 + 4 + 8 3.14 3.55 Memphis, Tenn.., + 34 + 3 + 3 — 2 4.22 4.07 + 38 + 10 + 9 - 03.02 3.27 * Fayetteville, Arkansas; Harrisburg-, M t. Vernon, Illin o is; Vincennes, Indiana; Danville, Hopkinsville, Mayfield, Paducah, K en tu c k y ; Chillicothe, M issouri; Greenville, M ississippi; and Jackson, Tennessee. 1 In order to permit publication of figures for this city, a special sample has been constructed which is not confined exclusively to depart ment stores. Figures for any such nondepartment stores, however, are not used in computing the district percentage changes or in computing department store indexes. F t. Smith, A rk .1..... Little Rock, Ark.... Quincy, 111................ 2 Includes St. Louis, Clayton, M aplewood, M issou ri; Alton and Belle ville, Illinois. Outstanding orders of reporting stores at the end of December, 1951, were 27 per cent smaller than on the corresponding date a year ago. Percentage of accounts and notes receivable outstanding December 1, 1951, collected during December, by cities: Instalment E xcl. Instal. Accounts Accounts Fort Smith................ Little Rock......... 21 Louisville ......... 22 Memphis ........... 24 IN D E X E S OF 48% 47 50 38 Instalm ent E xcl. Instal. Accounts Accounts Quincy .................. St. L o u i s ............. Other Cities........ 8 th F .R . D ist.... 28% 21 14 21 55% 38 47 D E P A R T M E N T STO R E SA LE S A N D STOCKS 8th Federal Reserve District D ec., N o v ., O ct., D ec., 1951 1951 1951 1950 168 107 105 119 Two New Banks in Eighth District Join Federal Reserve System in 1951 Stock Turnover 130 109 125 114 171 108 110 125 111 105 134 119 8 Daily average 1 9 4 7 -4 9 = 1 0 0 . 4 End of month average 1 9 4 7 -4 9 = 1 0 0 . S P E C IA L T Y STO R ES Stock Stocks Turnover N et Sales on H and December, 1951 12 mos. ’ 51 D ec. 3 1 /5 1 Jan. 1, to compared with to same comp, with D ec. 31, N o v .,’ 51 D e c ./5 0 period ’ 50 D ec. 3 1 /5 0 1951 1950 M en’ s Furnishings....+ 5 1 % + 3% 2.07 2.57 + 2% + 4% Boots and S h o e s-....+ 4 0 + 3 4.27 4.45 + 4 + 9 Percentage of accounts and notes receivable outstanding December 1, 1951, collected during D ecem ber: Boots and Shoes..................... 4 1 % M en’s Furnishings................ 4 2 % Trading days: D ec., 1951— 25 ; N o v ., 1951— 2 5 ; D ec., 1950— 25. R E T A IL F U R N IT U R E ST O R E S Inventories N et Sales Dec.,, 1951 compared with N o v ./5 1 D e c ./5 0 Louisville... Memphis......... Ratio Dec. 31 , 1951 compared with N o v ./5 1 D e c .,50 .. „ .. ,. .. „ + 22% -o -% — 8% +13 — 7 + 7 +13 — 13 — 7 +30 + 1 + 13 +29 + 2 — 14 +26 + 33 — 8 +36 + 4 + 4 .. + 4 5 + 11 — 4 * . +28 — 9 separately due to insufficient totals. of Collections D e c .,51 D e c ./5 0 27% 56 58 13 11 14 21 18 * — 8% — 19 — 8 — 8 — 9 — 34 — 5 + 7 •je- 26% 49 49 16 15 13 19 18 * coverage, but included in 1 In addition to following cities, including stores in Blytheville, Pine Bluff, Arkansas; Hopkinsville, Owensboro, K entucky; Greenwood, M is sissippi; Hannibal, M issouri; and Evansville, Indiana. 2 Includes St. Louis, M isso u ri; and A lton , Illinois. •Includes Louisville, K en tu c k y ; and N ew Albany, Indiana. PERCENTAGE D IS T R IB U T IO N Cash Sales ................................,................. Credit Sales ............................................. Total Sales O F F U R N IT U R E SALES D e c ./5 1 18% 82 N o v ./5 l 15% 85 D e c ./5 0 19 % 81 100% 100% 100% Page 23 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 • S H O E P R O D U C T IO N 1 9 3 5 -3 9 = 1 0 0 Unadjusted D e c .,’ 51 N o v .,*51 D e c .,*50 D e c ./5 1 N o v .,'51 D ec.,*50 169.2P 184.6 206.6 162.7p 167.8 198.7 P— Preliminary. Bureau of Labor Statistics (1 9 2 6 = 1 0 0 ) O c t ./5 1 N o v ./5 0 N o v ., *51 102.1 107.5 126.5 103.1 A ll Commodities..,.. 177.8 Farm Products. .. 194.2 Foods.................... .. 187.3 O ther.................... N o v .,*51 D e c .,’ 50 178.3 195.2 188.8 166.9 175.3 187.5 179.1 166.6 CON SU M ER (A ll Item s) Bureau of Labor Statistics (1 9 3 5 -3 9 = 1 0 0 ) Dec. 15, 1951 United States........ .. 189.1 St. L ou is............ .. 190.2 M em phis................. 191.4 *N ew series. D ec. 15, 1951 U . S. (51 cities)... St. L ouis............. Little R ock......... 229.9 Louisville........... .. 219.1 M em phis................. 238.9 Sept. 15, 1951 D ec. 15, 1950 186.6 186.2 189.9 178.8 178.8 182.7 D ec., 1951 compared with N o v .,'51 D e c ./5 0 - 0- % — 1 — 1 - 0- (C ost in thousands) Evansville............ Little R ock.......... Louisville............. M em phis............... . St. Louis............. . + 1% + 4 + 5 - 0- + + + + + + 1% 2 1 D ec. 15, 1950 231.4 242.2 225.4 218.6 237.7 216.3 229.7 217.1 203.3 224.0 6% 6 5 (I n thousands of dollars) D ec. 15, 1951 compared with N ov. 1 5 /5 1 Dec. 1 5 /5 0 - 0- % + 1 + 2 - 0+ 1 + + + + + N et Sales D ec., 1951 compared with N o v ./5 1 D e c.,*50 — — — — — + — 14% 8 41 13 14 4 20 — 18% **T o ta l A ll Lines................................. * Preliminary. **Includes certain items not listed above. — 5% — 5 — 15 — 10 — 14 + 5 — 1 — 10 % 7% 6 6 8 7 Stocks Dec. 3 1 ,1 9 5 1 compared with Dec. 3 1 ,1 9 5 0 +24% — 20 — 2 + 5 + 2 — 13 — MEM BER Repairs, etc. N um ber Cost 1950 1951 1950 1951 27 $ 18 $ 551 21 88 93 96 70 49 18 144 25 195 134 112 118 121 781 135 441 410 $ 588 $ 479 534 D ec., 1951 N o v ., 1951 785 $1,563 847 $ 899 D ec., 1951 compared with N o v ./5 1 D e c ./5 0 D ec., 1950 E l Dorado, A r k ............ , $ Fort Sm ith, A r k ........... H elena, A rk .................... Little Rock, A r k ........... .. Pine B luff, A r k .............. Texarkana, A r k .* ......... W H O L E S A L IN G Autom otive Supplies............................... D rugs and Chemicals........................... ,. D ry G oods..................................................... Groceries....................................................... Hardw are..................................................... Tobacco and its Products..................... Miscellaneous.............................................. 127.8 DEBITS TO DEPOSIT ACCOUNTS *N ew series. D ata furnished by Bureau of Census, U .S . D ept, of Commerce* Num ber Cost 1951 1950 1951 1950 39 93 $ 160 $ 339 43 48 406 331 114 176 834 1,190 1,344 1,990 2,0 2 8 5,789 169 195 763 10,547 D ec. T otals....... 1,709 2,502 $ 4,191 $18,196 N ov. Totals.... . 2,247 2,477 $ 4,856 $ 7,406 Dec. 15, 1951 compared with Sept. 15,*51 Dec. 1 5 /5 1 FOOD* N o v . 15, 1951 Line of Commodities N ov./54> 110.8 B U IL D IN G P E R M IT S M onth of December N ew Construction STATES P R IC E I N D E X * R E T A IL Bureau of Labor Statistics (1 9 3 5 -3 9 = 1 0 0 ) O c t ./5 1 CONSTRUCTION P R IC E S IN T H E U N IT E D D e c .,’ 51 Adjusted N o v ./5 1 PR IC ES W H OLESALE IN D E X 28,953 $ 27,633 $ 30,038 47,746 46,668 46,551 10,766 12,751 13,938 154,434 150,674 153,211 44,986 48,099 38,080 17,997 16,108 13,494 32,129 28,896 29,702 E .S t .L .-N a t .S .Y ., 111.. . 130,087 138,155 124,269 32,621 33,784 35,429 Evansville, In d .............. . 140,771 139,638 138,076 Louisville, K y ................ . 726,019 666,605 666,009 Owensboro, K y ............. 45,404 45,884 42,515 Paducah, K y ................... 35,659 32,808 19,150 31,969 27,784 Greenville, M iss............ 28,990 Cape Girardeau, M o.... 13,527 12,866 12,694 Hannibal, M o ................ . 9,364 9,906 9,056 Jefferson City, M o ....... 44,224 46,377 57,034 St. Louis, M o ................. 1,947,797 1,873,676 1,869,615 12,173 11,421 12,003 69,384 Springfield, M o ............ 66,706 63,823 Jackson, T enn................ 22,619 23,415 24,287 Memphis, T enn............. 745,335 747,248 833,825 + + — + — + + — — + + + + — + — — + + + — — 5% 2 9 2 7 12 11 6 5 1 9 7 9 9 5 6 23 4 7 4 4 10 .$4,3 46,842 $4,308,856 $4,157,157 + 1% — 4% + 3 + 18 + 1 + 18 + 33 + 8 + 5 + 4 + 2 + 9 — 1 +86 + 4 + 7 + 3 — 5 + 4 + 1 + 9 + 4 - 0+ 5% E IG H T H D IS T R IC T B A N K A SSE T S A N D L IA B IL IT IE S B Y SELECTED GROUPS A ll Member Large C ity Banks1 Change fro m : Smaller Banks2 Change fro m : Change fro m : D e c ./5 1 N o v ./5 1 to D e c ./5 1 1. Loans and Investm ents................................. a. Loans .............................................................. b. U .S . Government O bligations........... c. O ther Securities ........................................ , 2. Reserves and Other Cash Balances......... a. Reserves with the F .R . bank............. b. Other Cash Balances3............................... 3. Other A ssets ................ .................................... 4,323 1,964 1,980 379 1,544 748 796 48 + 47 + 28 + 14 + 5 + 99 + 32 + 67 — 5 +212 + 101 + 103 + 8 + 112 + 119 — 7 - 0- 2,555 1,347 1,032 176 962 489 473 30 — 37 32 4 1 77 22 55 1 + 112 + 67 + 53 — 8 + 51 + 73 — 22 + 2 1,768 617 948 203 582 259 323 18 + + + + + — 10 4 10 4 22 10 12 4 + 100 + 34 + 50 + 16 + 61 + 46 + 15 — 2 4. Total Assets ....................................................... , 5,915 + 141 + 324 3,547 + 113 + 165 2,368 + 28 + 159 Liabilities and Capital Gross Demand Deposits............................... a. Deposits of Banks...................................... b. Other Demand Deposits.......................... Tim e Deposits .................................................. Borrowings and Other Liabilities........... Total Capital A ccounts................................. 4,487 840 3,647 990 75 363 + 141 + 55 + 86 - 0- 0- 0- + 245 + 33 + 212 + 32 + 17 + 30 2,785 792 1,993 482 68 212 + 114 + 56 + 58 — 1 - 0- 0- + 125 + 29 + 96 + 6 + 16 + 18 1,702 48 1,654 508 7 151 + + + 27 1 28 1 - 0-0- + 120 + 4 + 116 + 26 + 1 + 12 9. T otal Liabilities and Capital Accounts.. 5,915 + 141 + 324 3,547 + 113 + 165 2,368 + 28 + 159 (I n M illions of D ollars) Assets 5. 6. 7. 8. D e c ./5 0 N o v ./5 1 to D e c ./5 1 D e c ./5 1 to D e c ./5 1 + + + + + + + D e c ./5 0 to D e c ./5 1 D e c ./5 1 N ov. / 5 1 to Dec. / S I + — — D e c ./5 0 to D e c ./5 1 1 Includes 13 St. Louis, 6 Louisville, 3 Memphis, 3 Evansville, 4 Little R ock and 4 East St. L ouis-N ational Stock Y ards, Illinois, banks. 2 Includes all other Eighth District member banks. Some of these banks are located in smaller urban centers, but the m ajority are rural area banks. 8 Includes vault cash, balances with other banks in the United States, and cash items reported in process of collection. Page 24 5% * These figures are for Texarkana, Arkansas, only. Total debits for banks in Texarkana, Texas-Arkansas, including banks in the Eleventh D is trict, amounted to $38,084.
@FedFRASER