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Volume X X X III

JAN U ARY, 1951

Number 1

January I , 1951 is no occasion for an
optimistic report. We face a series of hard
choices and compromise of our objectives.
Our foreign policy programs are of vital
importance and will require much of our
resources. The price of freedom will be
high.

THE PATH AHEAD

by

Chester C. Davis,
President
Federal Reserve
Bank
o f St. Louis




Production needs involve problems of
allocation of human resources and of material resources. Conservation of the re­
source base is important9 especially in agri­
culture.
A major domestic problem is inflation
control, necessary to achieve our basic ob­
jectives. Production for defense intensi­
fies inflationary pressures which are in­
creased by credit expansion and use of past
savings. Inflation must be attacked at its
source; today that means on the money side.
Spending should be restrained— by Gov­
ernment9 individuals and businesses.
The banking system can contribute to
greater production. More important9 it
can help curb inflation. Credit growth adds
to inflationary pressures; the Federal Re­
serve attempts to limit total bank credit.
Inflation control is vital but the means
employed are imporant also. Direct con­
trols may be needed9 but they are no substi­
tute for fiscal-monetary measures.

Ja n u a ry 19 1951 . • .
New Year’s Day, 1951 dawns on a world again
overshadowed by the threat of global war. The,
forces of aggression press strongly at many points
on the perimeter of the free world. Hope for peace­
ful settlement with those forces still exists, but
unless Communist Russia modifies its course,
eventually only the meeting of strength with
strength seems likely to permit the free nations
to survive as free nations. And the efforts to build
up strength in the Western democracies and their
friends will in themselves change many of their
institutions. At best, developments aimed at higher
living standards will have to be postponed; at
worst, the trial by strength may bring total war
closer. But unless the free nations wish to capitu­
late to aggression they have to choose the hard
life and risk of war.

. . . is n o o c c a s io n f o r an o p tim is tic r e p o r t .
This is a somber outlook. By tradition New
Year’s messages should be filled with hope and
cheer. The beginning of the second half of the
Twentieth Century might have been the occasion
for a backward glance at the great scientific achieve­
ments of the past 50 years and an optimistic ap­
praisal of the future. Instead the future we face
is one of hard effort to preserve our political
freedom.

W e f a c e a s e r ie s o f h a rd c h o i c e s • . .
A year ago, writing in this Review I pointed out
that our goals and the means by which we strive
for them are essentially compromises of conflicting
objectives. Usually we have to try to attain the
overriding objectives by sacrificing or modifying
those less important. We have to choose our solu­
tions because they represent the best possible com­
promise, and this requires knowledge and under­
standing of issues and objectives.
. . . a n d c o m p r o m is e o f o u r o b je c t iv e s .
Our basic foreign policy objective is to help es­
tablish a just and lasting peace among nations.
Our major domestic objectives are the maintenance
of high level employment and stable values and the
achievement of a rising standard of living. Today
the foreign policy objective is overriding—to pre­
serve freedom for ourselves and for the world as a
whole, perhaps to maintain our very national ex­
istence, we have to oppose Communist aggression
abroad. In so doing we will inevitably have high
employment at home. W e should bend every effort
to maintain stable values. But probably we will
do well to approximate our present living standards
— more likely we will see some decline in them.
Page 2




In other words, some of our domestic objectives
become subordinate. The one that remains high
on the list is maintenance of stable values— control
of inflation.

O ur f o r e i g n p o li c y p r o g r a m s a r e o f vita l
im p o r ta n c e . • •
Attainment of our major goal involves action in
the political, economic, social and military fields,
and these must be coordinated to be most effective.
A short time ago, Mr. Gordon Gray made a report
to the President on our foreign economic policies.
While fully recognizing the need for greater mili­
tary strength for the free nations, Mr. Gray pointed
out that the present situation requires more than
military power. Swelling social, economic and po­
litical pressures throughout the world require posi­
tive social, economic and political programs to hold
the initiative, attract support and understanding,
and back up the military strength.
Thus in the foreign field it is necessary that we
do four things. First, build up our own military
strength— far beyond anything we have been used
to except when engaged in all-out war. Second,
help our friends keep their internal economies
strong while they also build up their military
strength, and aid them in their military build-up.
Third, offer positive hope to the peoples of the under­
developed areas for a better life in a free world
than in a totalitarian world. This will involve help
to strengthen them in spirit and ability to resist
aggression. And programs in these areas also will
have as a goal stimulation of production of scarce
materials necessary for our own defense effort.
Fourth, measure our foreign assistance programs
against our own resources and capabilities. It is
vital that we offer aid but it is equally vital that we
realize our resources are not unlimited.
. . . a n d w ill r e q u ir e m u ch o f o u r r e s o u r c e s .
Such a program requires that a large part of our
resources and our energies be devoted to building
up our own military power and to extension of as­
sistance abroad. Resources that might have been
used to make a better living standard for humanity
have to be turned toward defense against aggres­
sion.
T h e p r i c e o f f r e e d o m w ill b e h ig h .
Just how high the price of freedom will be to the
United States no one can tell as yet. W e do know
it will be much higher than we thought just two or
three months ago, and tremendously more than we
were prepared to pay before Korea. In dollars, we
spent $17 billion on defense and foreign aid in fiscal
1950. Our sights have been raised several times
since last June.

But dollars are merely symbols for goods and
services. In fiscal 1950 the $17 billion we spent
for defense and foreign aid represented about 7 per
cent of our gross national product. The President’s
talk on December 15 pointed to a program that
might involve as much as 25 per cent of our gross
product. And should total war come that propor­
tion would rise sharply. In World War II, at the
peak of our effort, close to half our production was
going to direct military programs or lend-lease.
As it is, a defense and foreign aid program of the
magnitude of 25 per cent of our total output will
bring about great changes in our domestic economy.
W e probably will not see what we thought of as
“normal” times for a long time. “ Normal” will
come to mean “ continuing emergency” to us. W e
will have far less freedom of individual action. W e
will have to work harder but there will be less
civilian goods. As I said earlier, we will have high
employment— probably overhigh— but not a rising
standard of living. For an indefinite period we will
face a more austere and a more regimented life.

P r o d u ctio n n e e d s in v o lv e p r o b le m s o f
a llo ca tio n . . .
For the United States economy then there is again
a problem of production. This nation’s resources
are to be used as fully as possible to attain the goods
and services necessary for our foreign policy ob­
jectives. The proportion of that production that
will go to our own defense effort and to our foreign
assistance program will be large and will auto­
matically limit the amounts going to the civilian
economy. These two facts—the great requirements
of the defense and foreign assistance programs and
the consequent limitation of civilian requirements
— face us with another series of hard choices.
The problem of production has several facets.
First, is the determination of some order of magni­
tude for defense requirements and for foreign assist­
ance. Then there is determination of the so-called
product-mix; what types of goods and services will
be required. Third, there is the question of allocat­
ing resources, both human and material, for those
purposes. Finally, there are the questions of impact
upon the economy as a whole and ways in which to
moderate that impact.

. . . o f h u m a n r e s o u r c e s . •.
To attain military forces of the size now con­
templated will require a step-up in military man­
power requirements. This will have its impact on
the labor force available for defense and for civilian
production. Ten years ago, when we were begin­
ning a major defense program, we had a large pool




of unemployed from which to draw manpower. W e
also could attract a lot of additional workers by
high wages in defense industries. Today we have
almost minimum unemployment. In addition, we
have many “ extra” workers already in the active
labor force. Also differentials in wages and working
conditions are not so pronounced. The net result
probably will be more difficulty in recruiting man­
power for production this time than in the early
1940’s. Longer hours will be required but we may
be forced into the hard choice of national service
legislation to direct labor into essential work.
. . . a n d o f m a teria l r e s o u r c e s .
The problem of handling material resources is
somewhat similar. Requirements for defense must
be met first and met efficiently. We already have
some limitation orders on critical materials. It may
become necessary to invoke a much more wide­
spread system of limitations, allocations and prior­
ities or find our resources flowing into less essential
uses.

C o n serv a tio n o f th e r e s o u r c e b a se is im p o rta n t . . •
In addition to this the manner of handling our
resource base is of key importance. During World
War II we needed everything so badly that we had
to deplete our resources to attain our objectives.
But without knowing precisely when war would end
we did know that it would end in a relatively few
years. Thus, in effect, we had a tentative termina­
tion date for our programs. Depletion would not
go on indefinitely. Today’s situation is much dif­
ferent. If we can avoid worldwide war, we are in
for a large-scale defense program without any ter­
mination date. The present emergency may last
ten years or twenty— or for a generation. W e have
to be careful as to how we handle our resource
base so as to insure our ability to carry on for an
indefinite time.
. . . e s p e c ia lly in a g r ic u ltu r e .
Nowhere is this problem more evident than in
agriculture. In W orld W ar II, and beyond, we had
to have so much output that farmers literally mined
the soil. They took away from the stored-up capital
of the land to get the immediate production needed.
With demand for food and fiber as strong as it
seems likely to be, with farm product prices high,
there will be great temptation to do this same thing
again. There will be temptation to break up grass­
lands, to farm exploitively. I hope that any na­
tional programs in the field of agriculture and in­
dividual farmer plans will be aimed at continued
conservation and wise land use. W e must preserve
the productivity of the land if we are to survive
a long period of defense preparedness.
Page 3

A m a jo r d o m e s tic p r o b le m is in fla tio n c o n t r o l • • •

I n fla tio n m u st b e a tta ck ed at its s o u r c e ;

Writing in the November issue of Fortune, Mr.
Marriner Eccles said: “ A preparedness program
without terminal point demands above all else that
confidence be maintained in the purchasing power
of the dollar.” This is one way of saying that a
major problem facing the United States economy
is the control of inflation. Unless it is controlled we
will pay an even higher price for our objectives—
higher in dollar cost and in terms of less efficiency,
general economic weakness and painful after effects.
Inflation occurs when the rate of flow of money
spending in the economy exceeds the rate of flow
of available goods and services onto the market.
It occurs when current effective demand exceeds
current available supply. The chief symptom is
rapidly rising prices. Accompanying symptoms are
rapid changes in both real and money income dis­
tribution which produce distortions in the economy.
When the distortions become too pronounced the
economic machine begins to falter and operates at
less than maximum efficiency.

Theoretically it is possible to cure inflation in
the long run by increasing the supply of goods and
services. Practically that is impossible at present,
at least impossible to do in the amount necessary.
W e are already running at close to capacity and we
can look forward only to relatively small gains in
total output. W ith defense demands growing, what­
ever increase occurs in total output will be more
than absorbed by these requirements. As I said
earlier, the civilian economy is faced with the pros­
pect of less rather than more goods and services.

n e c e s s a r y to a c h ie v e o u r b a sic o b je c t iv e s .
I mentioned earlier that our basic domestic objec­
tives are high employment, stable values and a
rising living standard. The last will have to be
sacrified in some degree. The first we will have
naturally or by necessity and directive. I hope we
can achieve the second— stable values— in large
measure, for if we do not our whole overriding ob­
jective will be jeopardized. W e have to preserve our
domestic economy to attain the production neces­
sary to carry out our defense program and our
whole foreign policy.

P r o d u ctio n f o r d e f e n s e in te n s ifie s in fla tio n a ry
p ressu res . .
The very fact that a large share of production
will be marked for defense purposes intensifies the
problem of inflation. Production, whether for defense
or for the civilian economy, generates income for the
civilian economy. The result from this factor alone
is that current civilian purchasing power grows at
a faster rate than current civilian supply. More
money begins to chase less goods.
• . • w h ich a r e in c r e a s e d b y c r e d it ex p a n sio n a n d
u s e o f p a st sa v in g s .
But purchasing power from current income can
be, and at present is, increased further from two
other sources. It is supplemented by the use of
past savings and by credit expansion—the use of
future income. These two factors widen the already
evident disparity between the flow of purchasing
power and the flow of goods and services.
Page 4




to d a y , th a t m ea n s o n t h e m o n e y s id e .
So from a practical standpoint we have to attack
inflation on the money side— hold down increases
in purchasing power. Since purchasing power comes
from current income it is desirable to have heavy
taxes to reduce that current income (and to pay
for the heavy Government expenditures) and to
have strong programs to induce savings. Since
current income purchasing power is reinforced by
the use of past savings, it is desirable to hold the
value of the dollar so as to prevent as much as
possible any flight from savings into goods. And
strong inducements to save will hold down the use
of past savings also. Since purchasing power is
created by credit expansion, it is desirable to curb
such expansion and confine the use of credit to
essential purposes only.

S p e n d in g s h o u ld b e r e s t r ic t e d — b y G o v e r n m e n t
in d iv id u a ls a n d b u s in e s s e s .
All of these are necessary to restrain spending
and to keep money from chasing goods up the
price spiral. But restraint in spending should apply
to Government as well as to individuals and busi­
nesses. Government expenditures for purposes
other than defense, foreign aid and fixed commit­
ments (such as interest on the debt) should be
minimized. I realize that this is an easy recom­
mendation to make and a most difficult one to
carry out since all of us have a split personality
when it comes to Government spending—we want
to cut out all programs with which we are not in
personal sympathy and maintain those we happen
to like. It is vital, however, to lay out some sort
of a priority system with respect to Government
spending, recognize that we must sacrifice some of
our services and then cut out those which are not
absolutely essential. In this connection it also
would be desirable to continue to work toward
efficient reorganization along the lines of the
Hoover Commission recommendations. And finally
it should be noted that restraint in Government

spending should apply to state and local govern­
ments as well as to the Federal Government.

T h e b a n k in g s y s te m ca n c o n tr ib u te to g r e a t e r
p r o d u c tio n .
The commercial banks of the nation can make a
double contribution to our defense effort. First,
they can facilitate production for defense by aiding
in its financing. The banking system is in strong
position at present. While loans have grown
sharply in the postwar years the banks are still
very liquid. They can meet the financing needs of
defense production and thereby help to accomplish
the smooth meshing of materials flow, labor, and
capital input.
T o aid in this the Federal Reserve System stands
behind the banks able to supply reserves as they
are needed. The V-Loan program has been re­
activated to provide guaranties for loans to defense
contractors who can perform services or produce
items needed for our military build-up.
M o re im p o r ta n t , it ca n h e lp c u r b in fla tio n •
An even more important function of the banks
is to distribute credit in such a way that the most
useful purposes are fulfilled and the least useful
ones curtailed. Adequate credit is essential to the
smooth functioning of the economy; it is vital to
defense production. But if purchasing power is
already too large relative to available goods, total
bank credit should not increase and thereby add to
existing purchasing power. The crux of the finan­
cing problem in time of inflation is to see that
essential financing needs are m et; that non-essential
financing is reduced.

C red it g r o w th a d d s to in fla tio n a ry p r e s s u r e s .
It is most important to recognize that credit
growth means growth in the money supply. Essen­
tial loans as well as non-essential loans expand the
money supply. Good loans create purchasing power
just as surely as bad loans. Once the money has
been created it can be used to bid up prices. So
it is vital to have some sort of over-all type of credit
limitation. Under that broad ceiling the individual
banker can then carry out his “ screening” opera­
tions and channel credit to essential needs.

T h e F ed era l R e s e r v e a ttem p ts to lim it to ta l bank
c r e d it .
Here lies the Federal Reserve System’s major
responsibility— to regulate the supply, availability
and cost of bank reserves so as to set, in effect, an
over-all ceiling over bank credit. Unless the com­
mercial banks can obtain additional reserves, they
cannot extend additional credit. In the present and
prospective situation the Federal Reserve will make
enough reserves available to the commercial banks




so that essential purposes can be served, but will
try to hold down the total supply of reserves so
as to curtail general credit growth.
The selective credit controls on stock loans, con­
sumer loans and real estate loans are helpful sup­
plements to the general credit control through
action on reserves. These selective controls limit
the amount a borrower can borrow. They make it
easier to curtail less essential credit demand.

In fla tio n c o n t r o l is v ita l • • •
The kind of program I have outlined is the only
real answer to inflation. It is aimed at reduction
in the supply of purchasing power to bring it into
balance with the supply of goods. It is not a very
palatable program. It will require very high taxes—
perhaps as much as $20 billion more at current in­
come levels. It will require a very restrictive money
policy to insure that purchasing power reduced by
taxes is not restored through credit. It will require
very high savings in addition to these. But if we
will take this strong dose of fiscal-monetary med­
icine we can keep our economy relatively free and
dynamic.
. . . b u t t h e m ea n s e m p lo y e d a r e im p o r ta n t a lso •
Our basic strength lies in the dynamic nature
of our economic machine. W e traditionally have
operated through the free enterprise system, partly
because that was in line with our concept of in­
dividual freedom, but mainly because that system
seemed to work better than any other. An essential
part of that system is the price mechanism which
tends to promote efficiency and meet scarcities
naturally. It impersonally directs labor, land and
capital into economic use. It keeps the economy
dynamic and flexible.
It seems to me that a key factor in our ability to
maintain a sustained readiness to combat aggres­
sion is a dynamic economy. Measures that make the
economy less flexible should be looked at very
carefully. Our strength lies in our ability to produce
efficiently— and to do so over an indefinite period
of time. Fundamentally it is the time involved that
makes it most important to assess carefully meas­
ures that control the economy more directly. For
as time advances flexibility tends to decline under
a system of direct controls.

D irect c o n t r o ls m a y b e n e e d e d • . .
There is, of course, a place for direct controls
and the present situation may well be one in which
they are necessary. Certainly they would be needed
if we were in worldwide war. Under current con­
ditions defense requirements come first and a
Page 5

system of priorities, allocations and limitation
orders may be essential to insure that such defense
requirements can be met quickly. Broad scale
direct price and wage controls also may be needed
to prevent the economy from getting into distor­
tions that would themselves imperil efficient pro­
duction. W e must keep our major objective before
us— a free and peaceful world— and not permit
that objective to be jeopardized at the expense of
less important considerations. The question with
respect to direct controls should be settled on the
basis of reason, however, and not of sentiment.
• . • b u t th e y a r e n o su b stitu te f o r
fisca l-m o n e ta r y m e a s u r e s .
It is important to understand that fiscal-monetary
medicine is just as necessary if we are to have
a system of direct price and wage controls as if we
do not have such a system. The direct controls by
themselves do little to bring the money supply and
the goods supply into balance. With controlled
prices, accompanied perhaps by rationing, there is
naturally a tendency for direct controls to slow down
spending at the time, to reduce the rate of turnover
of money, and to force some savings. But basically
such direct controls suppress inflation rather than
cure it— they push the effects of inflation off into
the future. They are no substitute for the funda­
mental attack on inflation.

T h e fu t u r e w ill b e h a r d .
As I said in beginning this article, the occasion is
not one for optimism. W e face a hard and demand­
ing future. W e have to make a series of hard
choices that probably will change the shape of
America for a long time to come. The questions
that confront us are many and complicated. No one
can prescribe in full the course we should follow.
We must rest our faith on the conviction that
freedom and the dignity of individual man will sur­
vive, and we must be willing to sacrifice and fight
to make that come true.

_ _ _ _ Survey
_
Inflationary pressures are still building up in the
district and the nation. Production increases dur­
ing recent months have been sizable— but not so
large as to offset the expansion occurring in pur­
chasing power and in total demand.
Employment and payrolls are moving higher in
the district's industrial centers. Consumers are
spending as much as or more than they did a year
tions on instalment credit. Construction expendi­
tures are still large but have been reduced some­
what by cold weather and, in some parts of the
district, by materials shortages. Private credit
expansion also is adding to the inflationary pres­
sures— here and elsewhere in the nation.
The problem of curbing further inflationary devel­
opments will become increasingly difficult during
the coming months. The President’s message of
December 15 pointed to considerable expansion in
defense requirements. Even the comparatively mod­
est military outlays of the last six months, together
with the large civilian demand for goods and serv­
ices, pushed wholesale prices up 10 per cent and
consumers’ prices up 3 per cent or more since June.
These are average increases, of course. In some
lines advances have been considerably larger.
Price advances, of course, reflect the sharp com­
petition that exists for the available supplies of
goods and services. Such competition will be more
intense during the next six months than it was
during the past half year— unless further steps are
taken to curtail demand. The nature of the prob­
lems that can be expected to arise is illustrated by
recent estimates of anticipated business expendiPRIC ES
W H O L E S A L E P R IC E S IN T H E U N IT E D S T A T E S
Bureau of Labor
N o v ., 1950
Statistics
compared with
(1 9 2 6 = 1 0 0 )
N o v .,’ 50 O c t.,’ 50 N o v .,’ 49
O c t.,’ 50
N o v .,’ 49
A ll Commodities....
171.6
169.1
151.6
+ 1 .5 %
+ 1 3 .2 %
Farm Products...
183.7
177.8
156.8
+ 3.3
+ 1 7 .2
Foods......................
175.2
172.5
158.9
+ 1.6
+ 1 0 .3
O ther......................
163.5
161.5
145.0
+ 1.2
+ 1 2 .8
C O N S U M E R P R IC E I N D E X
Bureau of Labor
Statistics
( 1 9 3 5 -3 9 = 1 0 0 )
United States..........

N ov. 15,
1950

O ct. 15,
1950

175.6

174.8
R E T A IL

Bureau of Labor
Statistics
( 1 9 3 5 -3 9 = 1 0 0 )
U . S. (51 cities).....
St. Louis...............
Little R ock..........
Louisville.............
M em phis...............

Page 6




N ov. 15,
1949
168.6

N o v ., 1950
compared with
O c t.,’ 50
N o v .,’ 49
+

0 .5 %

+

4 .2 %

FOOD

N ov. 15,
1950

O ct. 15,
1950

N ov. 15,
1949

209.5
221.1
210.1
198.8
216.9

209.0
220.0
209.5
198.0
218.9

200.8
208.6
198.8
188.3
210.2

N ov. 15, 1950
compared with
O ct. 15,’ 50 N ov. 15,’ 49
+

0 .2 %
+ 0.5
+ 0.3
+ 0.4
— 0.9

+
+
+
+
+

4 .3 %
6.0
5.7
5.6
3.2

of Current Conditions
tures for plant and equipment. Such outlays in
the nation during the first quarter of 1951 are
expected to be up 30 per cent from the comparable
period in 1950 and larger than in any previous first
quarter. Ultimately these expenditures will result
in an increased flow of goods. But until the new
capacity is brought into production, industry’s
demand for steel and other materials required to
complete the planned expansion will mean less
materials available for consumption goods— and
will intensify the inflationary pressures. Limitation
orders on civilian use of certain strategic materials
will lead to cuts in consumer durables output and
will add to the pressure.
Consumers’ expenditures also are large— and
since employment and income are expected to climb
higher, the prospects are for a continuation of largescale spending. Personal income in the nation is
now at an annual rate of upwards of $230 billion.
This is more than $13 billion larger than the annual
rate in June. Increased wage and salary receipts,
which reflect higher wage rates, more overtime and
larger employment, were largely responsible for the
expansion in total income.
When the near-term prospects for civilian demand
are coupled with those for military expenditures,
there can be little doubt that increasingly serious
economic problems will require solutions during
1951. T o some extent, voluntary actions may help,
but there is only remote possibility that they will
prove effective enough. Much stronger fiscalmonetary policies will be needed to prevent a ris­
ing money supply from competing for a smaller
volume of civilian goods, and, if pressures intensify,
the economic areas subject to Governmental con­
trol can be expected to broaden considerably.
EM PLOYM EN T

Seasonal patterns prevailed in the district and
national labor market during November. As could
be expected at this time of year, agricultural em­
ployment dropped as harvesting was nearly com­
pleted; nonagricultural employment edged upward,
due mainly to gains in trade and other industries
affected by the Christmas rush; and unemployment
went up slightly as women and youths entered the
labor market to seek temporary Christmas jobs.
Although the actual change in the number of
persons employed between October and November
was not too significant, other developments in the




labor market were. Some factory workers in the
nation were apparently laid off in November due
to dislocations in industries affected by the war
program. This might be the first sign of the
unemployment problem which could develop during
the next few months as more industries face the
problem of conversion. Other significant labor
market trends in the nation and in the district in
November included a number of wage increases
granted workers, more migration of workers from
rural areas into the larger cities, and entry into
the labor force of more women seeking industrial
jobs.
In the St. Louis area, employment moved upward
in November for the eleventh consecutive month
and reached a new all-time high. November em­
ployment was about 5 per cent higher than at the
same time last year, and was about 37 per cent
higher than in November, 1940. The gain in
employment between October and November was
due principally to a seasonal rise in trade employ­
ment which more than offset a drop in construction
activity. Manufacturing employment reached a
new peacetime high in November, although its
gain between October and November was relatively
minor. No manufacturing industry experienced a
significant change in employment during this period,
but small increases occurred in the food, printing
and publishing, basic and fabricated metals, non­
electrical machinery and transportation equipment
industries. Small declines took place in the apparel,
tobacco, leather, and stone-clay-glass industries.
Employment in the Louisville area in November
followed the same pattern as in St. Louis. The
largest increases occurred in nonmanufacturing in­
dustries; gains in Government and trade employ­
ment more than compensated for a loss in construc­
tion jobs. Manufacturing employment was at a
W H O LESALIN G
Stocks

Line of Commodities

N et Sales

Data furnished by
Bureau of Census
U . S. Dept, of Commerce*
Automotive Supplies....................
D rugs and Chemicals..................
D ry Goods........................................
Groceries...........................................
Hardware...... ...................................
Tobacco and its Products..........
Miscellaneous..................................

N o v .,’ 50
compared with
N o v .,’49
O c t.,’ 50
+ 29%
+ 3%
— 2
+ 9
+ 12
— 15
+ 6
+ 6
— 9
+ 17
— 4
+ 1
— 8
— 6

**Total A ll lyines......................
— 6%
* Preliminary.
**Includes certain items not listed above.

+

9%

N ov. 3 0 /5 0
compared with
N ov. 3 0 /4 9
+
+
+
+
+
+
+

19%
14
41
29
18
28
31

+ 24%

Page 7

peacetime high in November due to additional
workers hired by the furniture, chemicals and pri­
mary metals industries.
Nationally, more people were seeking work in
November than in October. Unemployment was
considerably lower than last November, but was
higher than in November, 1948. Practically all of
the decline over the past year was accounted for
by men. Although employment of women during
the year increased nearly as much as that of men,
more women than men entered the labor force.
In the seven district states, the volume of insured
unemployment in mid-November was about the
same as in mid-October. Insured unemployment
edged upward in Arkansas, Kentucky, Missouri and
Tennessee, but these increases were offset by a
large drop in Indiana. Less than half as many per­
sons in the district states collected unemployment
compensation this November as a year ago. The
largest percentage declines were in Illinois and
Indiana. In mid-November in St. Louis, there were
about 7 per cent fewer compensable claims than in
mid-October and SO per cent fewer than a year ago.
INDUSTRY

Eighth District industrial operations continued on
a high level in November, although there were some
slight declines in a few lines. Industrial power con­
sumption at the leading district cities was the same
as in October. Slaughter of Federally inspected
meat animals at the St. Louis yards rose to the
highest level since last December, reflecting heavier
hog marketings. Crude oil production declined
slightly but coal tonnage was practically unchanged.
Manufacturing Operations
The St. Louis basic steel industry operated at
88 per cent of capacity in November, a 3 per cent
increase over the previous month. Operations were
scheduled at a lower level (84 per cent) for the
first three weeks of December, however. Announce­
ment of the re-opening of a plant (closed since
W orld W ar II) for the production of armor plate
for tanks indicates higher future activity.
Production of southern pine and hardwood de­
clined in November— a usual seasonal movement.

Pine production decreased in each week of the
month, and the production index stood at 208 at
the end of the month as compared to 218 a month
earlier. Hardwood operations, stated as a per cent
of capacity, declined from 106 to 101 in Novem­
ber. Both month-end figures were above year-ago
figures, however.
Kentucky had 44 of its 61 distilleries in operation
at the end of November. Bulk whiskey prices and
stocks are high and warehousing is extremely tight.
Some distillers have been working to build up
inventories before a larger share of capacity goes
to the synthetic rubber program. Some others, how­
ever, have large stocks and inadequate storage.
Oil Production Declines— Coal Output Steady
Crude oil production declined somewhat in N o­
vember, breaking a climb that began in July. Daily
average production for four states was 315,000
barrels per day compared to 320,000 in October.
This slight drop left average output higher than a
year ago, and higher than in all but three of 1950’s
months, however. In the first week of December,
Kentucky daily oil production passed Indiana’s for
the first time this year. This was due in large part
to the new 1,200 acre Zion pool in Henderson
County, Kentucky.
Nationally the petroleum industry is greatly con­
cerned about steel shortages and drilling operations.
Oil equipment fabricators recently received a 25
per cent cut in steel allocation, but industry officials
hope for an upward revision of this cut. W ith suffi­
cient steel, 40,000 wells may be drilled in 1950
without difficulty. Drilling for the first 10 months
promised a possible record of 43,000 wells for the
year.
INDUSTRY

( K .W .H .
in thous.)
EvansvilleLittle Rock
Louisville...
M em phis....
Pine B lu ff..
St. Louis....
r—

PRODUCTION INDEXES

156*
•Preliminary.

156*

N o v /5 0

149

142*

Adjusted_______________
0 c t /5 0
N o v /4 9
145*

135

S H O E P R O D U C T IO N IN D E X
1 9 3 5 -3 9 = 1 0 0
______________ U nadjusted_____________
_______________ Adjusted_______________
S e p t./5 0

A u g ./5 0

S e p t./4 9

S e p t./5 0

A u g ./5 0

Sep t ./4 9

183

180

136

181

186

135

Page 8




236,739

196,518

—

0. 1%

+ 2 0 .4 %

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
N o v .,'50
0 c t ./5 0
N o v .,*49 D e c .,*50 D e c .,’ 49
11 m o s /5 0
11 m o s /4 9
115,346
126,548
101,995
35,300
30,348
1,244,211
1,146,356
Source: Terminal Railroad Association of St. Louis.

19 3 5 -3 9 = 1 0 0
N ov. *49

236,600
R evised.

L O A D S IN T E R C H A N G E D

C O A L P R O D U C T IO N IN D E X
_______ ______ Unadjusted
N o v /5 0
0 c t /5 0

C O N S U M P T IO N O F E L E C T R IC IT Y
O ct.,
N o v .,
N o v .,
N o v ., 1950
1950
1950
1949
compared with
K .W . H .
K .W . H .
N o v ./4 9
K .W . H .
0 c t . /5 0
13,681
14,057
+ 1 7 .8 %
11,938
+ 2 .7 %
6,365
5,868 r
+ 26.9
5,014
+ 8.5
77,757
75,378
+ 11.2
69,954
+ 3.2
30,159
29,119
+ 9.7
27,491
+ 3.6
8,815
+ 45.2
7,870
6,071
+ 12.0
99,447
104,823
+ 30.8
76,050
— 5.1

C R U D E O IL P R O D U C T IO N — D A IL Y
(I n thousands
o fb b ls .)

N o v .,
1950

Arkansas .................. 81.5
Illinois ....................... 173.9
Indiana ..................... 30.1
Kentucky ................ 29.9
Total .....................315.4

O ct.,
1950
82.1
178.1
31.1
28.9
320.2

N o v .,
1949
73.4
181.0
28.7
24.9
308.0

AVERAGE
N o v ., 1950
compared with
O c t.,*50
N o v .,*49

— 1%

+ 11%

—
—
+

— 4
+ 5
+20

2
3
3

— 2%

+ 2%

So iar in 1950, drilling activities for the nation
have gained 11 per cent in terms of completions and
13.4 per cent in footage. Ohio, Kentucky, Illinois,
Indiana, and Michigan were up 8.1 per cent in wells,
3.3 per cent in completions and 11 per cent in foot­
age over 1949. A 5 per cent increase in footage was
reported for Louisiana, Arkansas, Mississippi, Ala­
bama, Georgia, Florida and Tennessee.
Coal production in the district in November re­
mained about the same as in October— 10 million
tons. The index of daily average production, sea­
sonally adjusted, rose from 145 to 153, however
(1935-39 = 100). Slight tonnage decreases appeared
for all district states except Missouri, where pro­
duction increased about 50,000 tons.
Building Permits and Construction Contracts
Smaller than in October but Larger
than Year A go
The value of construction authorized by building
permits declined in November in the reporting
cities. Totaling $8.3 million, the month’s volume
was off 28 per cent from that in October but was
11 per cent larger than in November, 1949. Con­
struction contracts awarded also were off during
the month. In the St. Louis territory there was a
drop of 37 per cent, according to F. W . Dodge Cor­
poration reports.
The decline in building permits issued in the
major cities was consistent with the usual trend
between October and November. Since 1939 there
have been only two years— 1942 and 1945— when
the value of permits increased during November.
The decline this year was larger than average,
however, and was exceeded only in 1939, 1941, and
1948.
Residential permits also were off during the
month but by a substantially smaller percentage
— 9 per cent—than that for all construction. Re­
ductions occurred in each city except Little Rock
where permits were up 5 per cent. Although the
five city total volume was less than in October,
it was 22 per cent larger than in November, 1949
— and the decline from October was smaller than
that in the same period in either of the preceding
three years.
CONSTRUCTION

(C ost in
thousands)
Evansville.....
Little Rock...
Louisville......
M em phis........
St. Louis........
N ov. Totals...
O ct. Totals....

B U I L D I N G P E R M IT S
M onth of November
N ew Construction
Repairs, etc.
Num ber
Cost
Number
Cost
1950
1949
1950
1949
1950 1949
1950
1949
54
42 $
188 $ 270
36
$
20
47 $
61
1,898 2,347
3,560
3,539
99
180 141
129
133
136
663
548
63
57
66
51
91
101
1,042
562
131 227
106
104
301
336
1,953
1,841
184 214
539
419
2,477 2,962 $ 7,406 $6,760
588 680 $ 899 $ 707
2,877 $10,226 $7,979
3,171
928 838 $1,346
$1,889




TRAD E

The average retailer’s frame of mind at the end
of November reflected the line of trade he was in.
Soft goods dealers were happy. Their sales were
good—but not sensational. But hard goods dealers
were unhappy— their sales volume was down from
the high levels of the few months previous— mainly
the result of instalment credit controls and antici­
patory buying earlier in the year.
Department Stores— In the district November
sales gained more than seasonally from October and
were 6 per cent larger than in November, 1949.
During the month temperatures in much of the
district were unseasonally lo w ; and the bad weather
that coincided with “ post-Thanksgiving sales” did
much to limit volume at the start of the holiday
buying season. But even so adjusted daily average
sales in the month rose to 316 per cent of the 1935-39
average as compared with 305 per cent in October.
In November, 1949 they were 300 per cent.
Without exception November sales in the report­
ing major district cities were larger than in October.
Less-than-district average percentage gains oc­
curred in Springfield and Little Rock. Elsewhere in
the district increases equaled or exceeded that for
the district as a whole.
Cumulative 1950 sales through November were
5 per cent larger than in 1949 but were about 2 per
cent less than in the peak year of 1948. Preliminary
reports through mid-December indicate that holiday
shopping was in heavy volume but not as “ frantic”
as in several of the postwar years. Many depart­
ment store executives expect that sales during the
1950 Christmas season will equal or slightly exceed
those in 1949, even though buying started slowly.
Apparently reflecting some pressure from rising
prices, consumers concentrated buying in basement
divisions of St. Louis department stores. Basement
store sales in November gained 11 per cent from
last year as compared to a gain of 3 per cent in
the upstairs store. Downstairs women’s and misses’
apparel and accessories were up 3 per cent while
in the upstairs divisions sales were only fractionally
above those in 1949. Men’s and boys’ wear sales
in the basement were more than a third larger than
in 1949—while upstairs the gain was 15 per cent.
Basement store shoe sales were about one-sixth
larger than a year ago— upstairs the gain was 3
per cent.
Housefurnishing sales in the main store were 2
per cent larger than last year. Television sales—
long the spark plug of this division— were a fifth
larger than a year ago, even after dropping sharply
from the inflated post-Korean level.
Page 9

TRADE
DEPARTM ENT

STO R ES
Stocks
on Hand

N et Sales
Nov. 1950
compared with
O c t.,’ 50 N o v .,’49

Stock
Turnover

11 mos. ’ 50 N ov. 30,’ 50 Jan. 1, to
to same
comp, with
N ov. 30,
period 1949 N ov. 3 0 /4 9 1950
1949

+ 19%
3.51
3.61
. +18%
+ 6%
+ 5%
+ 4
+ 15
3.50
3.68
, +12
+ 15
3.37
3.76
+ 23
+ 4
, +25
+ 2
3.14
3.16
+ 6
+ 4
, +10
+ 7
+ 19
3.45
3.32
+ 13
+ 10
, +25
3.86
+ 25
3.89
+ 7
+ 8
Louisville, K y .... , + 1 4
3.49
3.61
+ 20
+ 3
+ 6
St. Louis Area x. . + 1 8
+ 21
3.50
3.61
+ 3
+ 6
St. Louis, M o. , + 1 8
3.18
3.05
+ 6
+ 11
Springfield, M o.. , + 9
+ 1
3.59
3.64
+ 5
+ 11
. +19
+ 7
2.91
2.92
+ 23
+ 6
+ 10
, +10
*E1 Dorado, Fayetteville, Pine Bluff, A r k .; Harrisburg, M t. Vernon,
111.; N ew Albany, Vincennes, I n d .; Danville, Hopkinsville, Mayfield,
Paducah, K y . ; Chillicothe, M o . ; Greenville, M i s s .; and Jackson, Tenn.
1
Includes St. Louis, M o . ; A lton, Belleville, and East St. Louis, 111.
Outstanding orders of reporting stores at the end of November, 1950,
w ere 25 per cent greater than on the corresponding date a year ago.
Percentage of accounts and notes receivable outstanding Novmber 1,
1950; collected during November, by cities:
Instalment Excl. Instal.
Accounts
Accounts

Instalment E xcl. Instal.
Accounts
Accounts
Fort Smith................%
Little Rock ....
14
Louisville ......
18
Memphis .........
17

519
46
48
44

Quincy ...............15%
St. Louis ........ ....18
Other Cities.... 14
8th F .R . Dist. 17

65%
56
55
52

IN D E X E S OF D E P A R T M E N T STO R E SALES AN D
8 th Federal Reserve District
N ov.,
1950
Sales (daily average), unadjusted2...............
Sales (daily average), seasonally adjusted 2
Stocks, unadjusted3 .............................................
Stocks, seasonally adjusted 3..............................
2 Daily average 1 9 3 5 -3 9 = 1 0 0 .
3 End of M onth Average 1 9 3 5 -3 9 = 1 0 0 .

S P E C IA L T Y

O ct.,
1950

398
316
400
374

326
305
409
365

STOCKS
Sept.. N ov.,
1950
1949
363
360
361
325

378
300
329
308

STOR E S
Stocks
on Hand

N et Sales

Stock
Turnover

N o v ., 1950
11 mos. 1950 N ov. 3 0 ,’ 50 Jan. 1, to
compared with
to same comp, with
Nov. 30,
O c t.,’ 50 N o v .,’ 49
period ’ 49 N ov. 3 0 /4 9 1950 1949
M en’ s Furnishings.... + 9 %
+ 5%
— 1%
+20%
2.14 2.28
Boots and Shoes........ — 6
+ 6
+ 1
^.93 3.87
Percentage of accounts and notes receivable outstanding November 1,
1950, collected during N ovem ber:
M en ’s Furnishings ..................
44%
Boots and Shoes....................... 4 3 %
Trading d a ys: N o v ., 1950— 2 5 ; O ct., 1950— 2 6 ; N ov., 1949— 25.

R E T A IL F U R N IT U R E

N o v ., 1950
compared with
O c t.,*50 N o v .,’ 49

ST O R E S**

Inventories

Ratio

N o v ., 1950
compared with

N et Sales

of
Collections

O c t.,’ 50 N o v .,*49 N o v .,’ 50 N o v .,’ 49

25%
+ 1 9%
24%
8th Dist. T o t a l 1..... — 9 %
+ 1%
— 3%
50
50
— 2
+ 9
+ 6
St. Louis Area 2..... — 8
— 2
52
51
+ 9
St. L ouis............... — 8
+ 5
15
+ 36
13
— 21
+ 6
Louisville Area 8.... — 25
14
+ 38
13
— 22
Louisville............. — 24
+ 6
13
— 3
13
— 24
— 4
M em phis................... — 5
16
16
— 19
— 3
+ 6
Little R ock............... — 1
17
+ 33
17
Springfield................ — 15
+ 15
+ 6
*
*
*
*
— 6
Fort Sm ith................ — 16
*N o t shown separately due to insufficient coverage, but included in
Eighth District totals.
1 In addition to following cities, includes stores in Blytheville, and Pine
Bluff, Arkansas;
Hopkinsville,
Owensboro, K entucky;
Greenwood,
M ississippi; Hannibal, M issouri; and Evansville, Indiana.
2 Includes St. Louis, M issou ri; and A lton , Illinois.
3 Includes Louisville, K en tu ck y; and N ew Albany, Indiana.
* * — stores reporting.

PERCENTAGE

D IS T R IB U T IO N

OF

F U R N IT U R E

N o v .,*50
Cash Sales ........................................
Credit Sales ...................................
Total Sales .................................

Page 10




15%
85
100%

SALES

O ct.,*50

N ov., *49

14%
86
100%

13%
87
100%

The retail value of inventories held by district
stores on November 30 was slightly above that
on October 31 but was about one-fifth larger than
on November 30, 1949. Outstanding orders on
November 30, while 20 per cent less than on Octo­
ber 31, were 25 per cent larger than a year ago.
Furniture Stores— After 13 consecutive months of
beating year-ago figures, district furniture store
sales in November declined 3 per cent from last
year. In analyzing the lower sales volume, fur­
niture store executives point to the large volume
of sales after Korea during normally slow summer
months. The imposition of credit regulations and
the color T V controversy also are regarded as limit­
ing factors. The full effect of the excise tax imposed
on T V and related items on November 1 was not
felt in the month. The tax is imposed at the manu­
facturer’s level and retailers had built up tax-free
inventories.
The retail value of furniture store inventories on
November 30 was slightly higher than that on Oc­
tober 31 and was 19 per cent larger than on Novem­
ber 30, 1949.
AGRICULTURE

As a result of the National Emergency, the De­
partment of Agriculture probably will announce
more specific production goals for various crops,
livestock, and livestock products than was contem­
plated earlier. Goals and support programs, how­
ever, had been geared toward encouraging bountiful
production since shortly after the start of the
Korean war. According to the Defense Act of 1950,
price ceilings for agricultural products cannot be
set below the parity price or the price existing just
prior to the outbreak of the Korean war, whichever
is higher. Prices of cottenseed, veal calves, beef
cattle, lambs and wool all had a parity index of
128 or higher on November 15. H og prices were
below parity on that date so any ceilings would
be above then existing prices. Most other agri­
cultural prices also were below parity at midNovember.
Agricultural activity in the district was at a
minimum during December. Crop harvesting was
completed for the most part during the favorable
late fall weather. The wheat crop was generally
in good condition. However, dry soil in parts of
Missouri retarded growth. The severe cold during
November and December was beneficial in the midSouth area by reducing the number of boll weevils
that will live through the winter.
Farmers’ financial positions improved during
1950. Although both farm mortgage and short-term
debt increased, the value of farmers’ assets increased

more. For farmers as a whole, proprietors’ equities
are higher at the beginning of 1951 than they were
in 1950, or at any other previous date. The financial
position of many individual farmers, however, may
be vastly different than the average indicates. The
data cannot be separated to show the financial posi­
tion of those in and out of debt, but it is a fair
guess that a large share of the liquid assets are in
the hands of non-debtors.
Total assets are estimated to be 5 per cent higher
in January, 1951 than a year earlier. Much of this
increase represents higher values for real estate
which was estimated to have increased 8 per cent
in value during the year. Livestock, machinery and
household goods, as a result of both higher prices
and net addition, increased in value 6 per cent.
Financial assets, however, declined about 1 per
cent as a result of lower net farm incomes in 1950
compared with 1949, and stepped up rates of pur­
chasing.
Farm mortgage debt continued to increase for
the fifth straight year. The increase was about
$300 million, or 5 per cent. Non-real estate debt
increased about 10 per cent to a total of $5.6 billion.
Generally higher prices for most agricultural
products pushed the index of prices received by
farmers up 8 points to 276 (1910-14 = 100) during
the month ending November 15. Highest prices on
record were being received for cotton, cottonseed,
calves, lambs and wool. On the other hand, prices
paid by farmers also rose to an all-time high, 263
or 18 points higher than a year earlier, and 1 point
above the previous peak reached in mid-1948.
BANKING

There was no let up in inflationary pressure dur­
ing November. Bank credit expanded in the Eighth
District and the entire country. Nationally, com­
mercial bank loans jumped $1.6 billion (3 per cent).

C A SH FA R M IN C O M E
10 month total Jan. to O ct.
O ct., 1950
1950
compared with
compared with
O ct.,
Sept.,
O ct.,
(I n thousands
1949
1948
1950
1950
1949
1950
of dollars)
— 12%
— 1 3%
$ 33 0,883
+ 26%
+ 245%
Arkansas ........ ...$128,452
_
4
— 10
1,400,937
— 2
+ 62
Illinois .......... ... 218,977
— 13
764,370
— 5
+ 29
- 0 Indiana .......... ... 115,332
— 9
— 3
370,502
33,646 —
8
— 7
Kentucky .....
— 15
306,483
— 16
+ 40
+ 149
Mississippi ... ... 138,631
— 8
— 2
+ 4
793,590
+ 50
Missouri .......
— 19
307,986
— 8
+ 111
— 1
Tennessee ..... ... 62,929
....... ,.$82 9,3 51

R E C E IP T S

AND

+

76%

+

8%

S H IP M E N T S A T
Receipts
N o v .,
1950

Cattle and calves....107,430
H ogs ............................ 291,063
Sheep ......................... 33,003
,.4 3 1 ,4 9 6
Totals ........




$4,274,751

N A T IO N A L

N o v ., 1950
compared with
O c t.,’ 50 N o v .,’ 49
— 23%
+13
— 41
— 5%

—

6%

STOCK

— 11%
YARDS

Shipments
N ov.,
1950

+ 41%
+ 58
+ 20

38,071
55,499
4,431

+ 50%

98,001

The growth in loan volume has been principally
in business loans. According to November reports
from all weekly reporting member banks (account­
ing for $1.5 billion of the $1.6 billion increase in
all commercial bank loans), roughly half of the
gain was in business loans.
Growth in business loans is to be expected during
this period, but the expansion in November ex­
ceeded normal seasonal experience and surpassed
the 1946 and 1947 growth— both periods of increas­
ing inflationary pressure. There are indications that
loan expansion has been mainly in the form of
commodity inventory and other inventory loans—
partly reflecting higher prices and partly expanded
physical volumes. A relatively small share of the
loan growth has been due to plant and equipment
expansion and only an insignificant share was
attributable to defense contracts up to the end of
November.
Among Federal Reserve districts, the greatest
percentage gain in business loans during the month
occurred at Eighth District weekly reporting mem­
ber banks. These banks added more than twice
as much percentagewise to their business loan
volumes as the national gain.
In the Eighth District in the first part of Novem­
ber, business loans increased sharply at Memphis
as these banks were called on to finance the move­
ment of the 1950 crop plus a large volume of cotton
previously stored by the CCC and released to proc­
essors at high prices. Loans on real estate were up
—mainly in the St. Louis and Evansville areas. But
consumer loans showed virtually no change during
DEBITS TO DEPO SIT ACCOUNTS
(In thousands
of dollars)

AGRICULTURE

Totals

Districtwise, member bank loans increased $75 mil­
lion in the month.

N o v ., 1950
compared with
O c t.,*50 N o v .,’ 49
— 32%
+ 9
— 75
— 22%

+ 35%
+ 153
+ 129
+

88%

November,
1950

October,
1950

November,
1949

E l Dorado, A rk ............ $
23,075 $
25,309 $
21,390
Fort Smith, A rk ..........
41,869
46,016
37,797
Helena, A rk....................
14,245
13,755
9,586
Little Rock, A rk ..........
149,716
158,542
132,320
Pine Bluff, A rk ............
48,266
48,217
32,622
Texarkana, A r k .* .........
11,102
12,992
10,447
Alton, 111...........................
26,508
27,125
22,679
E .S t.L .-N a t.S .Y .,I ll...
129,227
138,844
88,711
Quincy, 111.......................
32,130
34,389
29,370
Evansville, In d...............
137,459
146,150
109,131
Louisville, K y .................
581,706
621,820
480,552
Owensboro, K y ..............
40,746
41,095
36,837
Paducah, K y ....................
15,609
16,054
13,972
Greenville, M iss............
38,676
32,843
24,736
Cape Girardeau, M o...
12,676
12,627
11,356
Hannibal, M o .................
9,435
9,632
8,166
Jefferson City, M o .....
48,779
54,991
49,033
St. Louis, M o ............... 1,786,980
1,756,112
1,495,429
Sedalia, M o ......................
10,937
11,710
9,629
Springfield, M o ..............
63,354
69,712
54,215
Jackson, Tenn................
24,773
31,708
23,570
Memphis, Tenn............ .
850,753
920,340
645,903
Totals

......................... $4,098,021 $4,229,983 $3,347,457

November, 1950
compared with
O c t.,*50 N o v .,*49
— 9%
— 9
+ 4
— 6
- 0 — 15
— 2
— 7
— 7
— 6
— 7
— 1
— 3
+18
- 0 — 2
— 11
+ 2
— 7
— 9
— 22
— 8
—

3%

+ 8%
+11
+49
+13
+48
+ 6
+17
+46
+ 9
+26
+21
+11
+12
+56
+12
+16
— 1
+19
+14
+17
+ 5
+32
+ 22%

*
These figures are for Texarkana, Arkansas only.
Total debits for
banks in Texarkana, Texas-Arkansas, including banks in the Eleventh
District, amounted to $30,100.

Page 11

November up to Thanksgiving. There has been
some expansion after that date, reflecting Christmas
buying.

loans in this district reached and passed their sea­
sonal peak some two weeks earlier than usual.
Loan contraction at Memphis, where normally
gains are reported until mid-December, was largely
responsible for such downturn as took place. Louis­
ville, however, reported a slightly more than normal
increase in business loans for the first half of De­
cember as burley tobacco began moving in volume
and as whiskey stocks expanded.

On the basis of the latest reports available, how­
ever, (mid-December, 1950) it appears that business

BUSINESS AND AGRICULTURAL LOANS
8th

DISTRICT

WEEKLY

REPORTING

MEMBER

BANKS

In the month ending mid-December, total demand
deposits showed virtually no change as a $30 million
increase in individual and business deposits was
offset by withdrawals from bank and Government
deposits. Time deposits declined $7.5 million, largely
due to Christmas Club withdrawals. This decline
was more than normal, however, and continued the
shrinkage in time deposits which commenced in

1949 - 1950
MILLIONS
OF DOLLARS
800

MILLIONS
OF DOLLARS
800

/

\
700

700
i

July.

/.
600

SE LE CTED

/

“* \ 1949

‘*
s.

600

IT E M S O F A S S E T S A N D

L IA B IL IT IE S

Eighth District W eek ly Reporting Member Banks
(M illions of dollars)
Dollar Change in

r'

— ------ ^1950

Dec. 13, 1950

4 W eeks

Year

Business and Agricultural Loans..... $ 717.8
Real Estate Loans.................................... . 235.5
Loans on Securities.................................. .
30.9
Loans to Banks.........................................
3.7
Other Loans (largely consum er)..... . 268.1

400
2nd
Q uarter

1st
Q u arter

4 th
Quorter

3 rd
Quarter

^

$ + 143.4
+ 46.8
+
5.5
—
2.0
+ 48.4

T O T A L L O A N S (G r o s s )............... .$1256.0

400

5.1
1.7
0.4
0.9
3.6

$+

10.9

$ + 242.1

Total Investments.................................... . 1145.2
Time Deposits.............................................. . 483.7
Total Demand Deposits........................ . 2588.9
Demand Deposits Ad justed*............... . 1525.5

500

500

$+
+
—
+
+

+
—
—
+

8.7
7.5
1.4
74.0

— 126.5
+
5.3
+ 157.8
+ 95.3

* Other than interbank and government demand
items on hand or m process of collection.

E IG H T H

deposits,

less

cash

D IS T R IC T

M EM B ER B AN K A SSE TS A N D L IA B IL IT IE S
B Y SELECTED GROUPS
Large City Banks l

A ll Member
(In Millions of Dollars)

Change fro m :
O ct., 1950
to
N ov., 1950

Smaller Banks 2

Change fro m :

N ov., 1949
to
N ov., 1950

N ov., 1950

O ct., 1950
to
N o v ., 1950

Change fr o m :
O ct., 1950
to
N o v ., 1950

N ov., 1949
to
N o v ., 1950

N ov., 1949
to
N ov., 1950

N o v ., 1950
$1,667
582
897
188
484
210
274
20

$+
—
+
+
+
+
+
+

17
3
19
1
9
2
7
4

$+
+
—
+
—
- 0
—
+

68
69
9
8
10
10
6

Assets

N ov., 1950

Loans and Investm ents......................................
a. Loans ...................................................................
b. U .S . Government Obligations..................
c. Other Securities...............................................
2 . Reserves and Other Cash Balances...........
a. Reserves with the F .R . bank.....................
b. Other Cash Balances 3.................................
3. Other A ssets...........................................................

$4,089
1,862
1,859
368
1,265
598
667
49

$+
+
+
—
—
+
—
+

88
75
14
1
12
1
13
5

$ + 204
+ 330
— 141
+ 15
+ 34
+
9
+ 25
+
8

$2,422
1,280
962
180
781
388
393
29

$+
+
—

71
78
5

—
—
+

21
1
20
1

$ + 136
+ 261
— 132
+
7
+ 44
+
9
+ 35
+
2

$5,403

$+

81

$ + 246

$3,232

$+

51

$ + 182

$2,171

$+

30

$+

64

$4,027
703
3,324
974
67
335
$5,403

$+
+
+
—
+
+

62
40
22
7
24
2

$ + 194
+ 37
+ 157
+
6
+ 28
+ 18

$2,485
659
1,826
491
61
195

$+
+
—
—
+
+

31
37
6
5
23
2

$+

81

$ + 246

$3,232

$+

51

$+140
+ 32
+ 108
+
3
+ 28
+ 11
$+182

$1,542
44
1,498
483
6
140
$2,171

$+
+
+
—
+
- 0
$+

31
3
28
2
1
30

$+
+
+
+
- 0
+
$+

54
5
49
3
7
64

1.

Liabilities and Capital
5. Gross Demand Deposits...................................
a. Deposits of Banks..........................................
b. Other Demand Deposits............................
6 . Time D eposits.........................................................
7. Borrowings and Other Liabilities................
8 . Total Capital Accounts......................................
9.

Total Liabilities and Capital Accounts....

__

—

2

1 Includes 15 St. Louis, 6 Louisville, 3 Memphis, 3 Evansville, 4 Little Rock and 4 East St. Louis-National Stock Yards, Illinois, banks.
Some of these banks are located in smaller urban centers, but the majority are rural area banks.
2 Includes all other Eighth District member banks.
3 Includes vault cash, balances with other banks in the United States, and cash items reported in process of collection.

Page 12




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