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Ja n u a ry 1956 conowHc Volume X X X V I I I N um ber 1 o/ !955... ^jfor the Natfon T -R- HE YEAR 1955 was one of remarkable achievement from which, without making Rnal judgments, helpful inferences can be drawn about economic behavior. An impressive economic lesson of 1955 was the great regenerative power of the economy, evidenced by remarkable increases in the gross national product and industrial production. Inspection of the major categories of income-generating expenditures reveals that a small portion of the increase in GNP was attributable to inventory investment and an unusually large portion to the increase in consumer outlays. Of various explanations of the boom in consumer spending the most plausible seemed to be rising incomes, san guine expectations, and rapidly growing consumer debt. It has been generally assumed that agriculture would be well off in times of rapid industrial expansion, but the resurgence of 1955 did not assure a prosperous farm sector. Agricultural prospects were not without a few bright spots, but booming industry did not secure adequate resource transfers out of farming. The year's evidence also attested to the proposition that monetary policy can be an effective tool in helping to maintain economic stability. Federal Reserve policy during 1955, one of slowly increasing restraint, seemed achieve its immediate objectives. However, it was too soon to tell whether Ultimate ^nds of policy had been attained. Federal Bank 7^33 OMe 7*^777^7*^^^/^ . . . I N T H E E C O N O M IC H IS T O R Y of the United States most years fade into a quiet m ediocrity which makes them scarcely w orth rem em bering. A few years stand out, how ever, because of the association with them of bad or good perform ance of the econ omy. Eighteen eighty-four, 1893, 1907, and m ore spectacularly 1932 and 1933, w ere years of almost unrelieved depression and hardship. Then there have been the years of inAection in which output turned sharply upw ard or dow nward, years like 1896, 1920, 1929, 1953, and 1954. B ut perhaps most clearly etched in everyone's memory are the years of ever-increasing prosperity, of boom w ithout letup. Such w ere the years of Am erican participation in W orld W a r I and W orld W a r II and the rem arkable years of 1906, 1928, and 1952. )NDUSTR!AL PRODUCHON In this latter category must now be included 1955. The year just ended cam e as close to being one of uninterrupted prosperity as one is likely to find, except for the farm sector. Scarcely a tim e series took an adverse turn during the year, and when for a little while there was a sign of faltering in some particular line of production, recovery alm ost invari ably set in. Nineteen fifty-five was, in short, a year of pulsing, throbbing activity. . . . ^7*0777 777%/&77/g /?77<l/ / 7/ 6?g777 ^ 7 7 / y , 7 7 7 ^ 7 * C 7 2 f ^ J f<772 ^7*<7M '77 ^fO?;<97777f Aside from so broad a characterization, how shall the perform ance of the cconom y during 1955 be assessed? Contem porary observers of a shifting scene are notoriously unreliable historical witnesses, and w hat seems relevant and im portant today may not seem so even a few months from now. No one today has the perspective of the historian who writes two decades hence. Nevertheless, judgments about the meaning of recent events m ust be m ade, for purposes of 1956 decision-making, in the here and now. M orever, it is always possible to draw from a year's experience certain inferences about econom ic behavior which, though not altogether new, may com e as sudden, helpful insights. ^ 7 2 7777 / 7 7 * ^ 7 7 ^ ^ f 0 7 7 < 9 7 7 7 7 f / c jy < 9 7 ? 7 ^ 3 5 M W g7*^<7/ 7*^g^7^7*<2^7t'^ /70MJC7* (?/ Cf077<9777^ . . . An econom ic lesson of 1955, impressed upon even the least optimistic econom ic observers, was the tre mendous regenerative pow er of the econom y. This regenerative pow er is not the same thing as recu perative power. T he econom y has always been able eventually to rebound from declines; w hat was of especial interest in 1955 was the recovery to about 100 per cen t of potential in so short a time. The em ergence from the 1948-49 recession, though accom plished by early 1950, has always been cloud ed by the possibility that the Korean W a r strongly Page 2 affected the outcome. No similar doubt could be raised about the emergence from the recession of 1953-54. Only a tremendous, spontaneous vitality of the economy could account for it. A quick look at the figures is convincing. ... The gross national product, which for 1953 amounted to $365 billion, and in one quarter reached an annual rate of almost $370 billion, dropped in 1954 to $361 billion. But in the second and third quar ters of 1954 the annual rate of gross product was down to a little more than $355 billion, some $16 billion or more than 4 per cent below the peak of a year earlier. The drop was not serious, but it was enough to cause some concern because it meant that the economy was operating below its growing potential. Then the upturn in the annual rate of gross product in the fourth quarter of 1954 amounted to more than $8 billion. It was followed in the first three quarters of 1955 by successive quarterly in creases in the gross product of $8 billion, $10 bil lion and $8 billion. Although the fourth quarter increase was somewhat smaller, preliminary esti mates of the gross national product for 1955 indicat ed a figure of approximately $387 billion, up $27 billion or nearly 8 per cent in a year. ... Changes in business expenditures generated some thing less than half the $27 billion worth of new gross product for the year. Outlays for business con struction rose gently during the year, while amounts spent on producers' durable equipment moved up sharply from the first quarter low. The increased investment in inventories was just slightly greater than the advance in investment in fixed plant. It will be remembered that much of the rapid increase in gross national product in 1952 and the first half of 1953 was largely the result of two spurts in in ventory accumulation. But rapid accumulation in these months meant ultimate liquidation, which came in the latter part of 1953 and in 1954. Accum ulation in 1955 has been quite moderate relative to sales. Indeed, the rate of inventory investment ac tually fell in the third quarter to below the level of the second quarter, only to rise in the fourth quarter to an estimated seasonally adjusted rate above $3 billion. But since in every major manufacturing in dustry sales advanced at a more rapid rate than in ventories, inventory-sales ratios in the latter months of the year were lower than for the corresponding months a year ago and in some durables lines were at the lowest level in four years. Changes in the physical volume of industrial pro duction were equally remarkable. From a low point of 123 in July and August of 1954 the Board's seas onally adjusted index rose to 144 late in 1955, an increase of one-sixth. At year's end increases in out put were still possible in many lines, though some key industries had rammed up against capacity. BUSiNESS !NVESTMENT A nnua! Rates .. . There is no questioning the fact that in 1955 the economic machine accelerated with smoothness and power. As the year wore on economists looked intently behind the great economic aggregates which were making the headlines to see how they might account for the steady upward sweep. To which of the major categories of income-generating expenditures could the recovery be attributed? Cer tainly not to government purchases of goods and services. Outlays of the Federal Government actu ally fell a little from the 1954 figure, a slight in crease in state and local expenditures just about off setting the drop. Increases in private investment (i.e., outlays on new capital goods) and greatly en larged consumption expenditures accounted for the great 1955 addition to income. S o u rce: Based on D epartm ent of C om m erce q u arterty e stim ates, ad ju sted for s e a s o n a ! v a ria tio n . Business construction exciu d es resid en tia) an d p riv ate institutiona! buitding. Totat business investm ent inctudes com ponents show n. Page 3 . . . %7?;% /o roMV//w?^r Purchases of final products rose in each succeed ing quarter throughout the year, the most noteworthy advances occurring in the consumer-expenditure cat egory. Well over half the $27 billion gain in gross product during 1955 was accounted for by the phe nomenal increase in consumer outlays, which ac tually out-ran the increase in disposable personal income for the year. Budgets of American house holds were expanded to accommodate almost all ma jor items, durable and nondurable goods and servic es as well, but increases in outlays on durable goods were most pronounced. In the third quarter of the year nearly 15 per cent of the consumer dollar was being expended on durables, and though the well publicized increase in purchases of automobiles was the major influence, outlays on furniture and other equipment for the home also rose sharply. ... Explanations of the boom in consumer spending were various, ranging from the assertion that there had been a deep-rooted change in psychological at titudes of the American people to the contention that high pressure sales efforts—especially in the automobile business—could achieve any desired goals. Advocates of the view that Americans were changing their basic attitudes towards consumption could point for evidence to the facts that the pro portion of income saved fell in 1955 and that the pro portion of income spent on durables was some five percentage points higher than was usual in the years before World W ar II. Yet swings of a point or two in percentage of income saved in any year are not unusual; and in the postwar period there seems to have been a persistent tendency on the part of households to budget more for durables. And to the contention that salesmanship had done the job it could be rejoined that many times in the very recent past the jnost heroic selling efforts have had their limitations in persuading consumers to buy. ... i^77?C6? /O The common-sense answer to the why of soaring consumer expenditures seemed to be in rising con sumer incomes and increasingly sanguine expectations of most urban families regarding future prospects. The combination of uptrending incomes and rosy an ticipations led in turn to an unprecedented willingness of many consumers to go into debt. Total consumer credit outstanding at the end of the year according Page 4 to preliminary estimates amounted to about $36 billion, of which nearly $28 billion was instalment credit. An increase of more than 20 per cent in instalment credit (o r about one-sixth in total con sumer credit) has greatly exceeded all estimates made at the end of 1954. Scarcely less noteworthy was the increase in mortgage debt outstanding on non farm one-to-four family properties of about 18 per cent to nearly $89 billion. The fact of moderate accumulation of business in ventories during 1955 has been remarked. The ques tion then arises: has there not been a relatively large oifsetting accumulation of "inventories"—particularly of durable goods and more especially of automobiles —in American households? Those who insist on a strict usage of economic terms would say that the growing stock of consumer goods should be construed as a part of capital formation in general, and there is much to be said for taking this point of view. But periods of rapid capital formation, whether at the producer or consumer level, have in the past been followed by periods of retardation in the rate of ac cumulation. In the minds of a good many people there are serious doubts that the present rate of accu mulation can be sustained, for the service Rows which the present stock of durables yields to consumers are enormous. But the question of sustainability of pres ent outlays on consumer durables is one which can not be answered as the year 1955 comes to an end. /73 ^#3^ <7^ ... Since Civil W ar days agriculture has had its trouble in a great many more years than not. Indeed, it is not too much to say that, outside war years, the American farmer has enjoyed few more than thirty years of genuine prosperity out of the last eighty. Recent economic analysis has suggested, however, that so long as industrial output was expanding at a rapid rate agriculture would be well off; for rising incomes in the nonfarm sector meant increasing ex penditures for food and Rber, and more jobs in indus try and commerce meant that there were places for outmigrating farm workers to go. Certainly this was true during the years 1896-1915, the "golden age" of agriculture, a period when farm exports were not a strongly stimulating inHuence. During the half dozen years immediately following World W ar II it ap peared that the booming American economy was as suring a healthy agriculture, save perhaps during the brief recession of 1948-49. Hindsight enables us to see, however, that expenditures for food and Rber were maintained in the immediate post-war years at a level higher than they might otherwise have been because of the inability of many families to obtain scarce durable goods. W hat was probably more im portant, enormous exports of agricultural products during the half decade or so following W orld W ar II were made possible by loans and gifts.* These ex ports slackened considerably with the recovery of European agriculture and declining foreign relief programs. By 1953 world agricultural output was approximately equal to prewar, and foreign countries either needed less imports or could get them cheaper from America's foreign competitors, despite the fact that U.S. export prices are usually lower than domestic prices. ... 7933 The not altogether encouraging lesson of 1955 re mained, however, and there was little question that it will color the thinking of those who will have to wrestle with the farm problem in 1956. Even in a year of unprecedented boom, demand increases were insufficient to keep up with the increased output made possible by rising farm productivity per acre and per man. And though the nonfarm income of farmers was benefited by the boom, more jobs and higher wages in industry and commerce did not bring about anything like the resource transfers essential to a permanent solution of the farm problem. Mo; T&e W ith a persistently declining foreign market, the hope of agriculture lay in a great domestic boom. Yet the resurgence of 1955, as great as anyone could rea sonably expect to witness in peacetime, did not assure a prosperous farm sector. On the contrary, at mid-December, 1955, farm prices were 7 per cent lower than they were at mid-December, 1954, and 29 per cent below the peak of February, 1951. The net income of farm families declined again in 1955, per haps as much as 10 per cent from the 1954 level, con tinuing the drop which has been under way since 1951. Moreover, migration out of agriculture seemed to have slowed in 1955 with the result that an antici pated rise for the year in per capita farm income prob ably did not materialize in spite of some improvement in the nonfarm income of people living on the farm. 4 ... The prospects of American agriculture were not altogether gloomy. Unquestionably, a prosperous overall economy was of some benefit to the farmer. Consumer demand for farm products was certainly strong in 1955, exceeding that of 1954 by a margin of perhaps 4 per cent. Producers of cereal grains, cotton, and other storable commodities were concerned, how ever, as record or near record output more than offset positive shifts in demand. But producers of perish able foods—especially garden truck, milk, poultry, and eggs—were assisted by an improving demand at both farm and retail levels. And for the year a smaller proportion of agricultural production went into Gov ernment stocks. 1 At the peak of the foreign aid program in 1948-49, 60 per cent of agricultural exports were financed by United States foreign aid programs. By 1953 the proportion had fallen to only 15 per cent; it turned upward in 1954 and 1955 but remained well below the 1948-49 high. d/so w Although Rnal lessons could not be gleaned from inspection of the Rnancial series, another year s evi dence at least attested to the proposition that mone tary policy can be a strong, effective tool in the main tenance of economic stability. Throughout 1955 the Federal Reserve System pursued its object of con tributing ". . . to sustainable economic growth and to maintenance of a stable value for the dollar." The gains to consumers which were discussed earlier in this article haye been real gains as con sumer prices remained practically the same through out 1955. There was almost as much stability in the index of wholesale prices, the index of all commodi ties rising less than 2 points during the year. How ever, the rather severe downward movement of farm prices and the somewhat less pronounced fall in the prices of processed foods exerted a drag on the whole index which was deceptive. From June through Oc tober industrial prices rose by approximately one index point per month, and at year's end industrial prices were up perhaps as much as 4 per cent for the year, with some further increases threatening in industries which had reached capacity output. The broad outlines of Federal Reserve policy dur ing 1955 are by now familiar. W hen the magnitude of the recovery in the fourth quarter of 1954 became apparent in December of that year, the Federal Re serve shifted away from a policy of active ease. Free reserves of member banks, the difference be tween the excess reserves of member banks and mem ber bank borrowings from the Federal Reserve, had Page 5 been as high as $1 billion during the months of ex treme ease in 1954, and for the year 1954 averaged about $.7 billion. F re e reserves during the first half of 1955 fell to roughly $.2 billion and shortly after midyear becam e negative as m ore restraint was im posed on the banking system. levels of from $.3 billion to $.5 N egative billion reserve prevailed throughout most of the rem aining months of the year, sufficient reserves being furnished to the market tow ard y e a rs end to provide for am ount of money was being put to more intensive use. A more significant indicator of the restraint imposed upon the com m ercial banking system was the de creasing liquidity of m em ber banks. As total assets and total deposits rose slightly during the year, banks disposed of liquid assets, so that the ratios of liquid assets to total assets and of liquid assets to total d e posits continued a decline w hich has been going on with only minor interruptions since 1952. seasonal needs of business. ^ MW /CO M em ber bank borrowings w ere m ade progressively more costly as the discount rate w as raised four times from 1/2 per cent in April, to 2 p er cent in August, to 2M per cent in Septem ber, and finally to 2% per cent in November. Short-term interest rates generally fol lowed the discount rate upward. But if 1955 could dem onstrate effectively the ways in which m onetary policy works, at year's end it was too soon to tell w hether or not the ultim ate ends of policy w ere successfully attained. tion. rates The policy of m onetary restraint seem ed to achieve its immediate objectives, at least so far as the stand ard criteria of judgm ent w ere concerned. The money supply increased by less than 3 per cen t in 1955; in fact, unless preliminary figures are sharply revised, the final figure may well be only 2% per cent. Such a slow growth in the money supply during a boom p e riod would not of itself guarantee the abatem ent of inAationary pressures, but taken in conjunction with other data it was a good sign. The relative scarcity of money was evidenced in part by a m oderate in crease in deposit turnover, an indication that a given MEMBER BANK EXCESS RESERVES, BORROWiNGS AND FREE RESERVES T o be sure, from the m arket place cam e reports that lenders and their custom ers w ere feeling some pinch of credit restric M ortgage and lenders lenders in required the higher Fed erallv m ortgage m arket w ere at year's end making funds available at discounts of from 2 to 4 per cent. Rates on com m ercial loans had risen, and there seemed lit tle question that m arginal loans w ere being restrict ed and that established custom ers w ere being asked to pare their requirements. E ven lenders to con sumers reacted to restraints; the progressive red u c tion of down paym ents and lengthening of terms appeared to have ceased, and reports of rate increases w ere common. The question rem ained, how ever, had the purchase of final products by businesses and con sumers, in large p art m ade possible by credit ex tensions in 1955, gone on at a rate which could not be sustained in succeeding months? tNTEREST RATES M onthty A v e r a g e o f Dai!y Figures GOVERNMENT BONDS (LONC TERM ) FEDERAL R ESEjRVE DtSCOUNT RATE Page 6 nominal underwritten ... /or the Dtstnct IT WAS FO R T H E NATION, greater consumer spending was the prime genera ting force in the rise in business activity. Construction activity was also greater than in 1954. District industrial output expanded, both in durables and nondurables. Lumber production broke all recent records, but mineral output increased less rapidly. Employment in the district advanced from the lows of 1954. However, since 1953 district employment has not kept pace with that in the nation, and the supply of labor in the smaller district labor markets was still substantially in excess of demand. Farmers did not fully share in higher total district income, although they fared better than did farmers in the nation as a whole. Cotton and broiler receipts were higher, but for diverse reasons, while tobacco, rice, and hog receipts were depressed. The economic meaning of reduced prices and low income for farmers will become more clear with the passage of time, but there was evidence of underlying confidence in the farm economy. Monetary actions contributed to business stability within the district by altering the reserve positions of local banks, by influencing the money supply of the district, and by affecting the level of interest rates. I N A COUNTRY as large as the United States, where the flow of goods and the movement of people from region to region are uninhibited by major re strictions, changes in the national economy are more or less shared by each of the regions. During 1955 the Eighth Federal Reserve District participated in the prosperity of the nation as a whole, though certain district business indicators lagged behind those of some other districts. For example, power consumption by selected industrial firms in the district's major me tropolitan areas rose less than in the nation, total construction contracts awarded did not quite keep pace, and the employment gain in the district's ma jor labor markets was slightly below the national average. On the other hand, district cash farm in come was almost as high in 1955 as it was in 1954, in contrast to a rather severe decline in national farm income. Indeed, everything considered, the Eighth District economy fared very well in 1955. yly ^ MW /o r grcg;#? One of the main generating forces in the 1955 boom for the Eighth District, as well as for the na tion, was the remarkable expansion in personal con sumption expenditures. The advance in consumer outlays for goods and services stemmed from rising income, a willingness to spend a greater proportion of income received, and an increased use of credit. Consumers spent substantially more at Eighth Dis trict stores during 1955 than they did in 1954. Tent ative figures indicate that, for the Rrst ten months of 1955, retail sales of other than large chains rose somewhat more over the corresponding 1954 period than they did in the nation, where total retail sales averaged a 9 per cent gain. Preliminary registration data for passenger cars suggest that automobile sales increased more than Page 7 did sales of other m ajor types of goods.2 B u t hom efurnishings purchases by consumers also increased substantially in 1955. D istrict furniture stores sold 9 per cen t m ore in the first eleven months of 1955 than they did in the sam e months of 1954, and in district departm ent stores, sales of homefurnishings rose 15 per cent.s Sales of apparel in departm ent and specialty stores increased only slightly in the first eleven months of 1955 over the sam e months a year earlier. O ther nondurables m oved well, how ever, and total sales of district departm ent stores in 1955 w ere 7 p er cen t higher than in 1954 and 20 per cen t greater than the 1947-49 average. T h e rates of gain from both 1954 and 1947-49 closely approxim ated those of the nation. Sales volume expanded as the y ear advanced, and the seasonally adjusted index of daily average sales EIGHTH DISTRICT DEPARTMENT STORE SALES BY SELECTED MAJOR DIVISIONS AND DEPARTMENTS E ! e v e n M o n t h s 1 9 5 5 c o m p a r e d t o S a m e P e r i o d !n 1 9 5 4 in district departm ent stores was higher in the clos ing months of the year than at the start. T h e unusually sharp gain in automobile purchases in 1955 was attributable in p art to influences other than the general stimuli to consumption expenditures just mentioned. The 1955 models w ere extensively changed from 1954, and they caught the public's fancy. M oreover, active com petition am ong m anu facturers and dealers led to substantial price dis counts for consumers, and, according to the U. S. Bureau of L ab or Statistics, the average retail price of new automobiles in the first nine months of 1955 was 5 per cen t lower than in the corresponding months of 1954. L ow er prices, even though partially offset by purchases of extra equipment, apparently stimulated dem and, and many m ore cars w ere taken from the m arket than in 1954. Th e car buyer also was able to carry his purchase m ore easily in 1955, for there was a m arked easing of instalment financing term s. M aturities w ere lengthened until, by midsummer, 30-m onth contracts on new automobiles w ere typical and m aturities of 36 and 42 months were not uncommon. M ost lend ers continued to require down paym ents of onefourth to one-third, but over-allowances on trade-ins reduced the actual am ount of equity buyers had in their cars. L a te r in the year, the trend tow ard more liberal terms was halted and in some cases reversed as the dem and for credit continued to rise m ore rap idly than the supply of lendable funds. Th e am ount of consum er credit outstanding in the district jumped about $200 million during 1955 to an all-time peak, primarily to finance automobile purchases. H ow ever, consumers in 1955 also used credit m ore freely for purchases of goods other than automobiles than they did in 1954. Although the sharpest grow th in outstanding advances to house hold borrow ers was in instalment credit, single p ay m ent loans, ch arge accounts, and service credit work ed up also. A t district departm ent and furniture stores, sales charged to accounts or placed on an in stalm ent basis rose m ore percentagew ise than did cash sales. Consequently, a slightly g reater pro portion of departm ent and furniture store sales were m ade on credit in 1955 than in 1954. T h e sharp gain in construction activity in 1955 was another force augm enting district business a c tivity. Total construction contracts aw arded in the E igh th F ed eral Reserve D istrict during the first eleven months of 1955 rose 18 per cen t from the corresponding period of 1954 to a total of $1,258 Page 8 million. W hile the gain and the total w ere both impressive, district awards increased relatively less than those in the 37 easternm ost states, and the total was less than in corresponding periods of 1951 and 1952 w hen contracts w ere aw arded for the Atom ic E n ergy Commission plant near Paducah, Kentucky. Residential building, a m ajor com ponent of total construction activity, w ent on a p a c e .P r o b a b l y the prim ary reasons for the increased num ber of houses started in 1955 w ere the easier terms and the greater availability of m ortgage credit during the latter part of 1954 and the first part of 1955. In addition, the rise in em ploym ent brought new people to the employ m ent centers, and increased incom e allowed the d e sire for b etter housing to becom e effective demand. The high level of household formation and births was also a sustaining factor. Construction contracts aw arded for residential building in the E ighth F ed eral Reserve D istrict in creased 29 per cen t in the first eleven months of 1955 over the corresponding period of 1954. The district gain was som ew hat greater than in the 37 easternm ost states, w here contracts aw arded rose 22 per cent. B u t though the total volume of resi dential building put under con tract w ent up con siderably in 1955, the seasonally adjusted rate of awards declined almost steadily from January 1955 after a persistent rise from m id-1953. In the Septem ber-N ovem ber period, the seasonally adjusted rate of residential contracts aw arded was roughly CONSTRUCTION CONTRACTS AWARDED A d ju ste d in d exes 1947-49= 100 EIGHTH DISTRICT, UNtTED STATES S o u r c e : B a s e d on F. W . D o d g e * B a s e d on 1 0 m on t h i n d e x e s . Nonresidential construction activity also increased in the district during 1955. Contracts aw arded for other than residential building during the first ten months of 1955 w ere 9 per cent larger than in the corresponding period of 1954. H ere the increase, how ever, did not keep p ace with the trend in the 37 easternm ost states, w here such contracts rose 21 per cent. M anufacturing building did increase sharply in the district during 1955, and in the first ten months contracts aw arded rose 77 per cent from the co rre sponding period of 1954. This uptrend reflected pro ducer demand for greater industrial capacity in the data. district as output increased throughout the year. L arg e plant and equipment expansions w ere an nounced for production of steel, petroleum refining, chemicals, automobiles, appliances, kraft paper, elec tric motors, and furniture. On the other hand, build ing of stores, offices, and other com m ercial struc tures in the Eighth D istrict reached a peak in 1954, and contracts declined som ew hat in 1955. Public works and utility construction also declined in 1955, as indicated by an 8 per cen t drop in contracts awarded for these categories. half that of the three months ending Feb ru ary 1955. This decline reflected in p art the tightening of m ort gage credit terms as the year progressed, but a con tributing factor was the record volume of construc tion which pushed the dem and for construction m a terials almost to cap acity limits. Corp oration ... Industrial output in the district, as in the nation, expanded during 1955 to m eet the increasing de mands of consumers and businesses. The extent of the gains in m anufacturing activity are illustrated in Table I, which shows the increased consumption of electric power by leading district industries during the past year. Com parative gains ranged from 3 to 35 per cent for the first eleven months of 1955. TABLE [. P ER C EN TA G E C H A N G E IN C O N S U M P T I O N O F ELECTRIC P O W E R BY INDUS TR Y EIGHTH DI STR IC T* First 11 months 1955 compared with First 11 months First 11 months 1954 1953 5 + 12 23 + 10 23 17 3 + 19 35 —0— + 6 + 14 + 24 +22 — 1 — 15 + 25 Page 9 ... ... Another indicator of the boom in district manu facturing was the white-hot pace in steel-ingot man ufacture in the St. Louis area. The consistently high record of near capacity operations since Jan uary brought the year s average to about 98 per cent of rated capacity, the highest since 1951. By year's end some furnaces were in operation for the first time in five years. With output press ing on capacity and future demands large, one St. Louis producer announced a program for 15 per cent expansion in capacity. District automobile assembly lines contributed their share to record national output, and for most plants building and equipment expansions have eith er been completed or recently announced. Non electrical machinery manufacture in the district ex perienced several setbacks during the year because of work stoppages, reduced output of refrigerators in Evansville, and lower farm machinery production. However, major household durables output on bal ance was greater in 1955 than in 1954, largely at the tremendously expanded plant in Louisville. .. . Among the major nondurable commodities pro duced in the district are livestock products and shoes. The total number of livestock slaughtered in eight centers in the district during the first eleven months of 1955 was 7 per cent more than the year before, largely because a 16 per cent gain in number of hogs slaughtered more than offset declines in the slaugh ter of other animals. The district's important shoe industry was outpro ducing 1954 by a considerable margin, but was hit late in the fall by a virtually month-long strike af fecting two major shoe companies. Tentative esti mates of the output of members of the St. Louis Shoe Manufacturers Association indicated a probable 10 per cent or better gain over 1954 production. The food and beverages industry was another heavy producer during the year. But whiskey pro duction in Kentucky, which produces a major share of the nation's gallonage, was still far from capacity output. During the peak pre-holiday season, 35 of the state's 61 distilleries were in operation, the same number as in the like period of 1954. Lawyer Lumber output broke all recent records. Av erage production per unit of Southern Pine was Page 10 an estimated 206,000 board feet, equaling the pre vious high of 1950 and up some 7 per cent over the 1954 average. Southern hardwood producers oper ated at an estimated 91 per cent of capacity during the year, not an exceptional rate. However, the last quarter rate was at about 100 per cent of calculated capacity. Here, too, strong consumer demand, large ly for housing and furniture, spurred regional pro duction. Mineral production on the whole increased less rapidly than did either manufacturing or lumbering. Crude petroleum production, however, was an ex ception. The daily average flow of oil was almost 370,000 barrels, over 40,000 barrels per day more than in 1954, hitherto a record postwar year. Illi nois production ran about 60 per cent of the total, the daily average flow in that state being about 12 per cent higher at the end of the year than at the beginning. Almost 3,000 successful wells were brought into production in the district in the first ten months of the year, an average of 51 per cent of those completed compared with an average of 62 per cent for the United States. Coal production has traditionally employed the largest number of miners in the district, and it pres ently accounts for about one-fifth of total United States output. In 1955 the coal industry's perform ance contrasted greatly with that of most manufac turing industries. Production averaged 84 per cent of the 1947-49 level during the first eleven months of the year. Nonetheless, the 1955 total was far ahead of 1954 and apparently bettered 1953 by a substantial margin if preliminary estimates hold. Lead production in Missouri, for the 49th con secutive year the major lead-producing state, was only about 2 per cent higher for the first ten months of 1955 than it had been in the first ten months of 1954. Fluorspar production, of which district Illi nois and Kentucky supply about four-fifths of the national total, was well below earlier postwar peaks as heavy imports more than equaled domestic pro duction. Bauxite production in Arkansas, which fur nishes over 90 per cent of U. S. output of the alumi num-bearing mineral, was 5 per cent lower than in 1954 during the first three quarters of the year, as imports increased to supply the record output of alu minum. As a consequence of lively construction ac tivity, mining of asphalt, clay, gypsum and common construction materials, sand and gravels, was at a high level during the year. ^7*0773 o/ 2934. ^ e/ 7% The rise in m anufacturing and nonm anufacturing activities in 1955 led to increased demands for la bor. As a result, employment and the average length of the work week in the major labor markets of the district rose from 1954 lows. By N ovem ber 1955 total employment in nonagricultural establishments in the six largest areas (St. Louis, Louisville, M em phis, Evansville, L ittle Rock and Springfield) in creased 51,000 from a year earlier for a gain of 4 per cent. The increase was derived about equally from changes in m anufacturing and nonm anufactur ing employment. F o r the year employment aver aged 2 per cent higher than in 1954. 372 72% ?3# 73, . . . Nonfarm em ploym ent in the district's six major labor market areas in 1954 averaged 4 per cen t less than in 1953 com pared to a 3 p er cent decline for the nation. M oreover, in the first 11 months of 1955 employment in the six district areas averaged only 1.5 per cent higher than in the corresponding period a year earlier, com pared with a 2.1 per cent gain for the nation. This less favorable record for the district is in large p art the result of a sharper drop in m anufacturing em ploym ent from 1953 to 1954 and of a less rapid increase from 1954 to 1955 than nationally. In N ovem ber 1955, with employ m ent at its highest point for the year to date, em- EM PLOYM ENT tN FtVE M A JO R A REA S In the St. Louis metropolitan area total employment in nonagricultural establishments was about 21,000 high er in November 1955 than a year earlier. Manufacturing employment increased by about 14,000 persons, largely in the stone, clay and glass products, primary m etals, fur niture, printing and publishing, fabricated metal products, t l .'b 'i . i!ainln"inh''.'ln<':t]m .n'liiii<-!y. equipment, which more than offset continuing decreases in ordnance, and lower employment in food industries. Fo r the year nonfarm employment averaged about the same as in 1954. In the Louisville metropolitan area, total nonfarm em ployment increased :tb<<ut 12.000 in November 195.1<.\<i November 1954. Virtually all of the gain was in manu facturing employment, largely because of the sharp increase in transportation equipment and household ap pliance production. Employm ent gains in the Louisville area were limited by the closing of several plants during 1955, but in the first 11 months of 1955 employment averaged 3 per cent higher than in the same months of 1954. Employment in Evansville in November 1955 was about 2,000 higher than it had been a year earlier, most of the increase occurring in automobile assembly plants. Employment in refrigerator plants was somewhat lower in November than a year earlier and was scheduled to drop further in Decem ber, as the International Harvester Company prepared to cease operations before the W hirlpool-Seeger Corporation takes over its plant for the production of appliances. T otal employment in the Evansville area averaged one per cen t higher in the Rrst 11 months of 1955 than a year earlier, but manufactur ing employment averaged 2 per cent higher. ESTIMATED MANUFACTURING EMPLOYMENT )N FtVE DISTRICT METROPOLITAN AREAS Emplo\inent in Memphis increased about .12,000 dur ing 1955 foltowing an increase of about 5,000 in manu facturing employment and 7,000 in nonmanufacturing establishments. Nearly all manufacturing industries em ployed more workers in 1955 than in 1954. Construction employment increased sharply, employment in trade establishments rose about 2,000, and other nonmanufac turing establishments also increased hiring during 1955. In the 8rst 11 months of 1955 employment averaged 5 per cent greater than in the same months of 1954. At mid-November 1955 employment in the L ittle Rock area was about 3,000 above that of the corresponding 1954 month. [During the Rrst 11 months of 1955 total nonagricultural employment averaged 2 per cent higher than in the corresponding months of 1954. M anufactur ing employment increased slightly as did that of most nonmanufacturing activities. Construction employment was high throughout most of the year, but declined some what in the closing months, as work was completed on the jacksonville Air Base. Source: S t a t e E m p l o y m e n t S e c u r i t y Divi $i ons Page 11 ployment in the St. Louis area was still 27,000 be low the 1953 high. In both Louisville and Evans ville, employment was approximately 15,000 short of 1953 peaks. Employment in Memphis, on the other hand, was about 8,000 higher than its 1953 peak and in Little Rock and Springfield approximate ly equaled the 1953 highs. Reductions in defense production in St. Louis, Louisville, and Evansville accounted for a large part of the failure to return to 1953 highs. Employment gains in these areas, resulting from new plants and expansions of existing industries, helped to offset some of the employment lost as a result of reduced defense work production.^ But despite the record rate of manufacturing output as the year closed, manufacturing employment both nationally and in the district areas was still below mid-1953 peaks, for the most part reflecting increased productivity of labor. One measure of the lagging recovery of employ ment in the Eighth District's major labor market areas was the general availability of labor. In No vember all of the major areas were classfied by the Bureau of Employment Security as having a supply of labor slightly in excess of labor requirements. By comparison 47 of the nation's 149 major labor mar kets had job opportunities slightly in excess of job seekers. . . . tural producers. A portrayal of the district 1955 farm season also displays one major similarity to the total district economy; crop production increased sharply by about one-fifth, and livestock product outturn by a substantial, but smaller, proportion. According to estimates based primarily on United States Department of Agriculture data, district farm production for sale in 1955 increased by about 8 per cent. This estimate was considerably higher than previous ones almost entirely as a result of the unexpectedly large cotton crop, most of which was marketed during the last three months of 1955. The immediate financial benefits to be derived from in creased crop and livestock production were offset by an average price decline of almost the same mag nitude; for prices received fell approximately 7 per cent during 1955, and total cash receipts, reflecting the unexpected increase in cotton income, probably were no more than moderately different from the reduced level of 1954. Increased district farm output was not primarily a response to increased demand for or consumption of farm products. For the most part, higher produc tion was the result of price supports, better growing conditions, and increased application of improved farming methods. In contrast, greater activity in the nonfarm sectors resulted from rising consumer demand. Al&Of M3 Following the general rise in business activity the smaller labor markets in the district improved some what. However, the positive change by November was not sufficient to remove eleven of these areas from the surplus labor c a t e g o r y D u r i n g the year Greenville, Mississippi, Fort Smith, Arkansas and Springfield, Missouri, which had been previously classified as having substantial labor surpluses, were removed from this classification. However, the district agricultural picture was un like the national, where net farm income declined 10 per cent according to the most recent estimate of the United States Department of Agriculture. As THE FARM !NCOME EQUATION 1954^ t955"^ +<or o w e ,. . . The district agricultural picture for 1955 was sim ilar to that of the nation in one important aspect: district farmers as a whole did not share in the in crease in real income enjoyed by most nonagricul5 For a more complete analysis of these developments see the Mox/Ny Federal Reserve Bank of St. Louis, July 1955. ^ s^Frankfort, ^Kentucky, Owgnsboro^ Kentudky, Hemlerson, Kentucky, Page 12 -!0*- PRODUCTtON X PRICE = CASH R EC E tP TS noted above, 1955 district cash receipts, and possi bly net farm incom e, likely totaled very nearly the same as in 1954. Co?/OM /or ^rO^T* . . . Although total cash receipts in 1955 about equaled those in 1954, incom e derived from some products changed sharply. F o r example, receipts from the 1955 cotton crop and broiler production exceeded those of 1954 by approxim ately 15 per cent. F o r tunately for 1955 at least, this increase probably m eant a significant gain in cash farm receipts in Arkansas, w here cotton and broilers are num ber one and two in im portance in cash sales of farm , commodities and accoun t for well over one-half of the state's farm product sales. ceipts from each of these commodities declined from 10 to 20 per cent. Kentucky burley tobacco growers received a sharp acreage cut of m ore than 20 per cent from 1954, and production dropped by about the same proportion. Prices, how ever, w ere about 10 per cent higher, as suggested by the Rrst three weeks of the 1955 marketing season. R ice growers likewise absorbed the shock of a production drop of approxi m ately one-Rfth, m oderated by a price increase of a smaller proportion. In spite of a 10 per cent increase in production, cash receipts from hogs w ere down more than one-Rfth because of an offsetting price de cline of nearly 30 per cent. R eceipts from other major farm commodities changed only m oderately as pro duction and prices w ere relatively stable or changed in opposite directions, thus counteracting each other. tT 0 7 /0 7 7 3 7 f Increased receipts from these two commodities are the consequence, how ever, of largely different basic causes. Prices received by farmers have usually fallen as national production increased; but in the case of broilers in 1955, prices w ere m aintained at a relatively favorable level throughout most of the year, in fact averaging 10 per cent above those of 1954 despite an increase of more than 5 per cent in the num ber of broilers produced. Undoubtedly, rising personal incom e contributed to increased receipts from broilers. Perhaps of equal im portance was the rising secular trend in consumer accep tan ce of this m eat product now being produced at com paratively low cost by an efRcient, technologically revolution ized industry. W h ether 1955 cash receipts w ere a p erfect indication of long-term grow th in the industry, only the future will tell. It is at least clear that 1955's large volume of production and favorable prices w ere stimulated by an effective consumer demand. Not so with cotton. Prices w ere m aintained at a high level by price supports. Farm ers w ere encour aged to improve yields by more intensive farm ing methods, and total production in the district was about one-Rfth higher than in 1954, in spite of acreage re strictions. As a result, cotton inventories increased again in 1955, indicating that in all probability less new production can be absorbed by the m arket in the future. F arm sales of cotton above the rate of consumption w ere, in a very real sense, a form of borrow ing from future potential income. . . . /o&dffo, <?;;;? %?og Offsetting the pleasant experience of higher re ceipts in some farm areas are the distasteful memories of those farmers whose incomes were highly depend ent on tob acco, rice, and hog sales. F o r them re o / /or o/ f 0 7 3 / 7 ^ M f C 772 / o t ^ 777^0777^ worg MW o/ 0 7 7 0 7 7 7 )/ . The effects of both declining prices for farm prod ucts and the failure of farm incom e to recover during the boom will becom e more clear with the passage of time. It might at Rrst be thought that lower prices and continued low receipts would have a depressing inHuence on capital investments and other optional farm expenditures. This, how ever, was not the case in 1955. F arm equipm ent sales nationally w ere vari ously estimated at from 10 to 20 per cent above those of 1954, and trade estimates suggest the E ighth Dis trict fully shared in this increase. Fu rth er evidences of conRdence in E igh th D istrict farm prospects w ere increasing applications of com m ercial fertilizers, will ingness to use additional farm credit, and higher prices paid by farm ers for purchases of land. E a ch of these factors has been historically associated with prosperity in agriculture. There m ay have been subtle psychological reasons back of these 1955 de partures from long-established and widely accep ted relationships, and economists have oBrered several explanations. A question m ay be raised regarding the extent to w hich the farm economies of the district and nation are undergoing several basic structural changes which only the future will accu rately d e scribe. W h atever the real causes m ay prove to be, many of the Rrms which sold tractors, fertilizers, and real estate to farm ers, and which loaned funds to facilitate these purchases in 1955, have inquired if the rural segm ent of the district ecorlomy is not in a better long-run position than the price and cash re ceipts Rgures m ight on the surface suggest. In re trospect, 1955 m ay one day be described as a year of adjustment tow ard increased elRciency in agriculture and thus of contribution to over-all econom ic progress. Page 13 ^%&;/;/)' %//6T;Mg /ffd / ... Monetary actions, although primarily concentrated in the central money markets, had a pervasive inRuence on district commerce, industry, and agricul ture during 1955. As discussed above, monetary policy shifted slowly, but persistently, from active ease in late 1954 to comparative restraint by the end of 1955. This policy was in large part made effective by: ( 1 ) conducting open market operations so that the re serves of banks generally were progressively re stricted, and (2) raising discount rates at the Re serve Banks in four steps from 1% per cent to a level of 2% per cent. Monetary actions made their mark on district ac tivity in numerous indirect ways. The progressive tightening in the reserve positions of banks through out the country was paralleled by a similar tightening in reserve positions of district banks. For all member banks in the nation, free reserves on a daily average basis fell in a relatively even fashion from $460 mil lion in December 1954 to less than $100 million in July 1955, and to a negative $450 million during November 1955. At district member banks free re serves averaged $20 million in December 1954 but dropped progressively to $2 million in July 1955 and further to a negative level of $15 million during November 1955. These parallel developments were not simply coin cidental. Monetary actions, conducted so that cash positions of money market banks would tighten, had their effect on other banks as well. Specifically, money market banks became somewhat more selective in their lending and sold a large amount of securities on balance. These actions, in turn, caused the Row of funds into these institutions to rise relative to the outRow. Thus, pressure for cash assets was passed on to other banks, which in their turn were forced to become more conservative. The cycle was repeated many times, until by the end of 1955 most banks in the district felt some pinch in their reserve positions and thus made asset adjustments. As a result, many individuals and businesses in the district found that credit was less readily available during 1955 than in 1954. Some terms became more restrictive, some mar ginal borrowers that might otherwise have received funds were turned down, and better customers were asked to trim their requests. . . . TMOMgy . . . As pointed out earlier, preliminary figures indicate that the nation's money supply probably rose by less than 3 per cent during 1955. Although accurate Rgures on the size of the money supply within the dis Page 14 trict are unavailable, indications based on deposit data at district member banks and currency transac tions at the Federal Reserve Bank of St. Louis indi cate that the money supply within the area rose only slightly during 1955. Monetary operations during 1955 apparently re strained the growth in the district's money supply by aRecting the two basic ways an area can obtain funds, that is by inhibiting the net imports of money from other regions and by making it more difRcult for money to be created within the district. Complete data on the movement of funds into and out of the district are unavailable, but a substantial portion of the total movement takes place within the Interdis trict Settlement Fund. Analysis of total transactions conducted through the Fund during the twelve-month period ended December 7, 1955, indicates that the net Row of money into the area was somewhat less than normal during 1955. A smaller-than-usual net inRow into the district (or even a net outRow) might have been expected because the amount of new re serves Rowing to the banks most directly affected by System actions was limited. Being pressed for funds, these banks, in turn, were forced approximately to match the growth in their loans with a net liquida tion of investments; thus, no great net Row of funds out of these banks was forthcoming as a result of credit activities. Deposit money can also be created within the dis trict by an expansion of bank credit. However, dis trict banks were limited in their ability to expand total credit. It is true that loans rose sharply. At member banks in the district outstanding loans jumped $280 million in the twelve months ended November 30. During 1954, by contrast, loans worked up only $67 million. Each of the major loan categories (i.e., business, consumer, agriculture, real estate, and security) apparently shared in the gain. Data received from reporting (large) banks indicate that most types of Rrms shared in the expansion of loans to commerce and industry. However, to accommodate a large portion of the de mand for loans district banks reduced their security portfolios considerably. At member banks the amount of the net liquidation totaled $210 million in the twelve months ended November 30. Securities sold were largely Treasury bills and other short-term Government obligations. On the other hand, these banks were net purchasers of municipal and highgrade corporate securities during the same period. In summary, a sharp loan expansion at district banks in 1955 was nearly matched by a reduction in investment holdings. Thus, total bank credit (and created deposit money) rose only moderately. At district member banks, total credit rose $70 million in the twelve months ended November 30, 1955, com pared with $315 million during the year 1954. The growth during the 1955 period was occasioned by a $100 million increase at rural banKs less a $30 million decrease at city banks. However, as the demand for goods and services in creased, total spending rose. Debits to demand de posit accounts (the volume of checks cashed and other charges to these deposits) at banks in the 22 reporting centers of the district amounted to $52 billion in the first 11 months of 1955, up 9 per cent from the corresponding period of 1954. The sub stantially larger volume of spending was largely made possible by an increased velocity of circulation of the existing quantity of money. Holders of idle funds made them available to spenders, and the supply in circulation was utilized more fully. . . . Another development during 1955, affecting dis trict residents as well as others, was a rise in interest rates. The increase was quite large in the short-term sector. As a result yields on short-term obligations approached the return on longer-term securities. The following table of selected interest rates gives an indi cation of the magnitude and pattern of the interest rate changes during 1955: such things as schools and roads. On the supply side the level of interest rates was influenced by the amount of savings available for investment. Pre liminary figures showed that net personal saving in the year, although high, declined in dollar volume from 1954, and the marginal propensity to save of most families seemed to have fallen very low. The shift in monetary policy from active ease to re straint also had an impact on interest rates. The tighter policy meant that the central bank was not supplying reserves to commercial banks as freely as formerly. Too, funds supplied through advances from Reserve Banks became more costly. The resulting re striction on the rate of bank credit expansion was bound to cause the price of borrowed funds to rise. It is impossible to measure all the effects of the rise in interest rates on the economy of the district during 1955, though it may be assumed that the e jects were about like those felt by the country as a whole. To some extent, the shift in yields caused a redistribution of income. For certain people it increased costs; for others it brought higher revenues. For most financial institutions both receipts and expenditures rose. High er interest rates also had the effect of reducing certain capital values, such as prices of long-term, Rxed-income securities. Thus, some individuals and busi nesses suffered capital losses; and others, finding that they could not take advantage of new opportunities without taking a capital loss, were "locked in" the securities they held. TABLE m . SELECTED tNTEREST RATES Dec. 31, 1954 June 30, 1955 United States Government Securities: Longest-term Treasury b ill............ . 1.05% 1.48% 2.52% ................... . 2.31 Long-term bond (June 78-83). . . . . 2.66 2.67 2.88 2.81 2.91 2.92 . 3.44 3.05 3.51 3.15 3.63 2.35 2.55 2.72* 1% 1% 3 2 1% 3 3 2% 3% Moody's A aa................................ ^ M d ^ o y ^ d e (Standard .. Commercial paper (Prime 4-6 months).................. . . Bankers' Acceptances..................... . .. Prime rate on business loans . * December 28, 1955. Dec. 30, 1955 The rise in interest rates was the result of numerous market pressures. For one thing the demand for funds increased materially. Credit was desired in increasing quantities by individuals to finance the purchases of homes, automobiles, and other durable goods. Busi ness firms wanted more short-term funds to carry larger inventories and accounts receivable, and they required an increasing amount of longer-term money to purchase plant and equipment and to finance other term projects. Municipalities issued a sizable block of new securities in the capital markets to pay for The higher rates in 1955 may have had a slight tend ency to encourage thrift among district residents. In addition, greater interest cost was a deterrent to borrowing. In the short-term market, since interest cost is usually moderate in relation to anticipated gains, the effect of the rise on the demand for funds was, quite likely, small. But for capital market funds, where the contracted interest rate is to be in effect over an extended period of time, a fractional change in rate makes a sizable difference in total in terest cost. As a consequence, the higher yields were probably effective in reducing some of the demand for capital market money. It can only be concluded that business conditions in the district improved rapidly during 1955 until by the end of the year near boom levels were reached. Early in 1955, the pressing economic problem in the Eighth District, as in the rest of the nation, appeared to be how best to encourage and stimulate the up swing in activity which had begun in late 1954. But as business became more buoyant the problem shifted to one of avoiding unsustainable rates of increase in production and the development of inflationary pres sures in the industrial sector. Page 15 VA R tO U S !ND)CATORS O F Nov. 1 9 5 5 * tN DU STR tA L ACTtVtTY O ct. 1 9 5 5 1955 C oal Production Index— 8th D ist. (Season ally adju sted , 1 9 4 7 - 4 9 = 1 0 0 ) 14,601 103 82 p 376.4 . . . — - 108.5 134.3 2 06.0 98 BA N K CASH DEB tTS* 1955 *ir" ) Jack son , Tenn. Jefferson C ity, Mo. O w ensboro, Ky.......... P ad u cah , Ky. Pin e B lu ff, Ark. Springfield, Mo. T ex ark an a, Ark. T o ta l— O ther T o ta l— 2 2 C enters -0 - $ 3 9 .0 1 5 .5 2 8 .4 5 5 .3 3 5 .3 1 1 .0 14.9 3 2 .3 6 7 .9 5 0 .8 2 7 .8 5 2 .7 3 8 .9 1 4 .9 8 1 .5 2 2 .6 5 8 8 .8 $ 5 ,1 1 5 .5 + + + + + + + + + + 4% 1 5 2 8 6 3 3 7 2 8 8 8 1 5 6 + 12% 1955 T ennessee 1 9 5 5 O ct. '5 4 $ 1 2 9 ,8 3 4 + 1 0 % 1 9 6 ,3 1 2 — 5 1 3 1 ,4 8 7 — 10 3 2 ,1 1 9 + 3 1 1 9 ,9 5 7 + 11 1 3 0 ,9 9 3 -0 6 4 ,5 7 4 — 3 + — — — — — — 1954 1% 9 10 8 1 7 10 7 States . . 8th D istrict $ 8 0 5 ,2 7 6 $ 4 3 8 ,7 4 0 — — 7 6 Kentucky $ 0- + 15 + 8 — 5 + 5 + 14 + 16 + 14 1 — + 11 — 5 tNDE X O F C O N S T R U C T I O N C O N T R A C T S O ct. '5 5 1954 Arkansas $ 4 ,5 2 6 .7 + 14% +20 (1 9 4 7 -1 9 4 9 = 1 0 0 ) O ct. 1955 L ittle R o ck ^ A rk . O ther R ep ortin g C enters A lton, 111.......................... . C ape G irardeau, Mo. E l D orado, Ark. F o rt Sm ith, Ark. 2% A W A R D E D EIGH TH FEDERAL RESERVE D ! S T R ! C T * Nov. 1 9 5 5 ^ E a st St. Louis— N ational Stock Yards, 111......................................... T o ta l— Six L arg est C enters ................ FARM t N C O M E Nov. 1 9 5 4 + 15% + 12 + 12 + 1 + -0 4 A SSETS AND D ec. 2 1 , 1 9 5 5 L o an sl + 10% -0 -% + 12% IN D E X O F BA N K D E B I T S — 2 2 Centers Season ally A djusted ( 1 9 4 7 - 1 9 4 9 = 1 0 0 ) 1955 1954 O ct. 1 5 5 .9 152.8 1 7 4 .4 2 4 5 .2 p 2 5 9 .4 p 2 3 8 .6 p 2 3 0 .3 2 5 2 .3 2 2 0 .0 2 0 8 .6 2 4 6 .2 1 9 1 .1 T o ta l R esid en tial All O ther 2 7 3 .4 p 2 6 4 .7 p 2 7 7 .4 p 2 0 4 .9 2 2 3 .3 1 9 6 .4 2 4 5 .8 2 5 1 .2 2 2 2 .2 Nov. 2 3 , 1955 N ov. 3 0 , 1955 $+ + + — + — 54 42 5 3 Cash Assets O ther Assets T o ta l Assets $ 1 ,6 2 0 850 56 279 456 958 242 30 965 46 $ 3 ,8 6 1 + + 10 77 -0 $ + 125 1 ,4 5 0 69 $ 6 ,5 0 2 L iab ilities and C apital D em and D eposits of Banks $ $ + 8 7 + 36 — 1 + 3 - 0$ + 125 $ R eal E sta te ................................................ + 30 1% — 10 — 9 T o ta l R esid en tial All O th er HAB )L )T) ES EtG HT H DtS TR tC T ME M BE R B A N K S + 22 + 5 + 15 + 28 — 2 + 9 — 2 + 11 + — — — — — — O ct. 1 9 5 5 Sep t. 1 9 5 5 O ct. 1 9 5 4 1953 4% 10 9 13 21 6 14 T otal C apital A ccounts .............................. T o ta l L ia b ilitie s and C apital 761 2 ,1 9 7 560 76 267 $ 3 ,8 6 1 O ct. 2 6 , 1955 $ 2 ,5 2 5 11 17 $ + 56 1 ,9 6 1 497 — + 7 2 + 26 + 1 $ + 78 725 3 ,9 8 2 1 ,2 1 2 117 466 $ 6 ,5 0 2 + 43 — 4 + 34 + 3 $ + 78 1 D eb its to dem and deposit accounts o f individuals, partnerships and corporations and states and political DEPAR TME NT S T O R E S RETAtL FU RNtTURE S T O R E S N et S ales N ov., 1 9 5 5 ______ N et Sales__________ E xcl. O ct., '5 5 Nov., '5 4 period '5 4 53 18 + 7% 8th F .R . D istrict T o ta l + 6% + 9% 45 + 10 Fort Sm ith A rea, A rk.I + 5 + 3 1 2 4 7 L ittle R o ck A rea, Ark. + 6 + 1 + 11 — 4 + 1 + 8 Q u incy, ill. + 5 Evan sville A rea, Ind . + 11 + 11 20 51 + 10 + 6 Louisville A rea, K y., Ind. + 5 Data — 7 — 5 — 12 Pad ucah, K y........................ 19 60 + 8 + 6 St. Louis A rea, M o ., 111. + 11 request. + 36 + 32 Springfield A rea, Mo. + 6 41 16 — 1 + 5 + 5 M em phis A rea, T en n . + 16 — 7 + 9 All O th er C itiesi In order to perm it p u b lication of figures for this city (or area), a special sam ple has been co n structed w hich is not confined exclusively to departm ent stores. Figures for any such nondepartm ent stores how ever are not used in com puting the district percentage changes or in com puting d ep art O ct., '5 5 8 th D ist. T o ta li Springfield A rea + 6% + 7 . + 13 + 22 + 14 2 N ov., 1 9 5 5 N ov., 5 4 0 c t ., '5 5 N ov., '5 4 + 3% 2 + 12 + 2 + 16 + 3 + — — — 2% 2 8 + 7% + 10 + 1 + 3 + 4 N O T E :- F a y e tte v ille , P in e B lu ff, A rkansas; H arrisburg, Mt. V ernon, Illin ois; V incen n es, In d ia n a ; D an - H opkinsville, M ayfield, O w ensboro, K entucky; C h illicothe, M issouri; G reen v ille, M ississippi; ed IN D E X E S O F S A L E S AN D S T O C K S — 8T H D IS T R IC T Stocks, seasonally adjusted^ 3 D a ily average 1 9 4 7 - 4 9 = 1 0 0 4 E n d of M onth av erage 1 9 4 7 - 4 9 = 1 0 0 No\. 1955 149 124 N.A. N.A. O ct. 1955 135 122 145 129 P E R C E N T A G E D IS T R IB U T IO N O F Sept. 1955 122 119 133 123 T rad in g days: Nov., 1 9 5 5 — 2 5 ; O ct., 1 9 5 5 — 2 6 ; Nov., 1 9 5 4 —-25. 1954 137 11 4 129 11 4 F U R N IT U R E S A L E S Cash Sales C redit Sales T o ta l Sa les .......... N ov., '5 5 15% 85 100% O ct., '5 5 14% 86 100% N ov., '5 4 15% 85 100%
@FedFRASER