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Monthly Review
Volume X X X IV

JULY, 1952

Number 7

Expansion of the district’s basic industrial
capacity since Korea has been aided by rapid
tax amortization on investment totaling nearly $1
billion.

Eighth District
Industrial Development
and the

Defense Mobilization
Program




A large part of the expansion has been for
primary metals production, oil refining chemicals
aircraft facilities and transportation equipment.
Privately financed and unaided industrial devel­
opment has been large. Geographically invest­
ment aided by rapid tax amortization has thus
far been concentrated in the St. Louis area and
in Arkansas.

,

,

,

,

,

To keep pace with industrial development utili­
ties serving the district plan a 50 per cent increase
in generating capacity in 1952-53.
Atomic Energy Commission plants will be an
important addition to the industrial structure of
the district. Further the Defense Mobilization
Program has resulted in reactivation and expan­
sion of other Government-owned facilities in the
district, particularly ordnance production. Mili­
tary depots have been expanded and military
camps have been reactivated and enlarged.

,

The more immediate impact of these develop­
ments has been to increase job opportunities and
to support the high level of district economic
activity prevailing today.

,

Over the longer run increased military goods
production introduces an element of instability
into the district economy but growth in basic
industrial capacity will tend to increase related
industrial growth and hold down out-migration9
thus building a stronger economy.

,

K
ZZZZZZZZZH ZZZZZZZZX
X

L importance to the people of the Eighth Federal

is of particular

in the Eighth District in which the proposed invest­
ment totaled close to $1 billion.

Reserve District because such development is a
lever by which the economy can raise its relatively
low per-capita income. W hile progress has been
made, especially during the 1940’s, much remains
to be done if hoped-for levels are to be reached.

There is no precise yardstick by which to measure
whether the district is obtaining its “ fair” share
of the national expansion in the defense mobiliza­
tion program. As of March 15, 1952, the latest date
on which comparable data were available, some 4.8
per cent of the proposed tax-aided investment in
production and mining facilities in the nation was
to be located in this district. By comparison, factory
employment in this district amounts to about 4.5
per cent of the national total. It should be pointed
out that the cost of new facilities under this pro­
gram may be more or less than the proposed invest­
ment indicated when the certificate of necessity is
granted. Costs or company plans (or both) may
change between the application for a certificate and
actual construction of the facility. Further, the
approval of an application is no indication as to
the time of construction: in some cases the proposed
facility may be well underway when approval is
granted, in others it may not yet be started, and in
still other cases (relatively few) it may never be
constructed. Subject to these qualifications, a study
of the certificates approved indicates the areas in
which the expansion of basic industry in the dis­
trict is taking place.

o cal

in d u s t r ia l

d e v e l o p m e n t

More recently, expansion of the industrial struc­
ture of the Eighth District has been accelerated
by the Defense Mobilization Program. One of the
primary objectives of the program has been to estab­
lish additional capacity for military production and
to expand the nation’s basic industrial resources, in
order to meet both the increasing civilian demand
for goods and a potentially large military demand.
To achieve this objective it has been necessary to
expand business expenditures on plant and equip­
ment well beyond the amount required for peace­
time needs alone. In some instances new plant
capacities originally planned for peacetime produc­
tion have been switched to meet defense goals. In
others, expansions have been encouraged by Gov­
ernment assistance. Standby Government plants
have been reactivated and in some cases enlarged.
On the other hand, some industrial expansions less
essential to these goals have been slowed or stopped
during the time materials supplies were insufficient
to meet all proposed programs. On balance, indus­
trial expansion, both nationally and in the district,
was at an all-time high last year and appears to be
headed for another large year—perhaps even larger
than the preceding one— in 1952.

District Industries Expand
C e rtific a te s
of necessity totalling $ 9 8 0 million
have been issued for E i g h t h Federal R e s e r v e
D i s t r i c t f a c i l i t i e s through M ay 2 9 , 1 9 5 2

KZZZZZXKZZZZZX

Millions
O

E x pansion o f t h e d is tr ict’s b a sic in d u stria l ca p a c­
ity s in c e K o r e a h a s b e e n a id ed b y ra p id tax
a m o rtiz a tio n o n in v e s tm e n t to ta lin g n e a r ly $1
b illio n .
Expansion of basic industrial capacity in the
Eighth District is being implemented by Govern­
ment aids, primarily by authorizing rapid amortiza­
tion of all or part of the cost of the new facilities
for tax purposes. The percentage of total cost that
may be written off in a five-year period, instead of
the much longer normal period, varies according to
the type of facility, the post-emergency usefulness
of the plant to the owner, and the degree of finan­
cial aid necessary to encourage the expansion.
Through May 29, 1952, certificates of necessity
had been approved for privately owned facilities
Page 87




50

100

of

Oolfars
1 50

200

250

A large part o f the expansion has been for
primary metals production, . . .
Roughly a quarter of tax-aided investment ($249
million) has been channeled into the primary metals
industry. About half of this expansion, so far, has
been in the St. Louis metropolitan area, where
approximately $135 million is to be invested in plant
and equipment for producing or rolling steel, mag­
nesium, and zinc. In Arkansas, nearly $100 million
will be invested in facilities for bauxite mining, the
production of alumina (the intermediate product
in the conversion of bauxite to aluminum) and
aluminum producing facilities. And at Batesville,
Arkansas, a $4.5 million manganese ore beneficiation
plant is being built. A $1.3 million ferro-chrome ore
reduction plant is going up in Memphis. Other
important nonferrous producing facilities— lead and
zinc mining and refining— located in Missouri will
also be expanded under this program. In addition,
a steel mill with an annual ingot capacity of 198,000
tons will be erected at Owensboro, Kentucky, at a
cost of about $12 million.
. . .

oil refining, . • .

Expansion of oil refineries and coal products
facilities costing about $137 million has been ap­
proved under this program. Again, the largest part
of the expansion is in the St. Louis metropolitan
area, where approximately $90 million is being
invested in the expansion of oil refining and coking
facilities. Other large expansions are located in
Memphis, Tennessee; El Dorado, Arkansas; Robin­
son, Illinois; and Louisville and Brandenburg, Ken­
tucky.
. . . chemicals9 . . .
The third largest tax-aided investment when clas­
sified by manufacturing industries is in chemical
plants. Most of the chemical expansion is located
in the nonmetropolitan areas of the district portion
of Kentucky, where a large increase in this indus­
try is taking place. In Calvert City five large chem­
ical plants are being or have recently been con­
structed. Chemical industry facilities located in the
St. Louis metropolitan area are also undergoing a
large expansion. Tw o new chemical plants and the
expansion of duPont’s synthetic rubber plant ac­
count for almost all of the $13 million chemical
industry expansion under the rapid amortization
program in Louisville.
. . . aircraft facilities, . . .
The expansion and purchase of aircraft manu*T h e above cost does not include a $15 million certificate of necessity
granted to the General Electric Company for facilities for producing jet
engine parts at Louisville, but which will not be used, due to cancellation
of the contract.




facturing plants under the rapid amortization pro­
gram will cost about $32 million.*
Much of the increased production of aircraft and
aircraft equipment has been achieved by fuller uti­
lization of existing plant capacity; development of
new facilities has been confined to a few large
plants. McDonnell Aircraft Corporation, the only
airplane manufacturer in this district in peacetime,
has started a plant expansion in the St. Louis area.
And in Evansville, Servel, Inc., has completed a
plant addition to manufacture aircraft wings under
a subcontract.
Most other aircraft or parts producers in this
district have converted existing plant facilities from
their normal peacetime output. These subcontrac­
tors have been producing refrigerators, automobiles
or railroad passenger cars, all of which have been
restricted in output.
This district has only limited capacity for aircraft
production. (This is evidenced by the licensing of
another firm to produce part of the total Navy re­
quirement of McDonnell airplanes in a plant out­
side the Eighth District.)
Further, while factors important in determining
the location of aircraft plants appear to be as favor­
able for cities in this district as most others, no
major increase in the district’s aircraft production
capacity has occurred or appears likely to take
place. The small increase in aircraft production
capacity in this district indicates lagging develop­
ment relative to the rest of the nation in a grow­
ing industry.
. . . and transportation equipment.
Transportation firms, primarily railroads but some
barge and truck lines, with headquarters in the
Eighth District have received certificates of neces­
sity for equipment and facilities totaling $222 mil­
lion as of May 29, 1952. Since the use of this equip­
ment is not necessarily confined to the Eighth
District, the additional transportation facilities
obtained under this program cannot all be con­
sidered as applying to this district. The extent to
which these additional transportation facilities
should be allocated outside the district is, of course,
partly balanced off by the use in the district of taxaided transportation facilities owned by concerns
with headquarters elsewhere.
Privately financed and unaided developments
have been large.
The expansion of the basic industrial capacity
under the stimulus of the rapid amortization pro­
gram has been a substantial part of total industrial
investment in this district since Korea. Partly this
is due to the fact that many projects planned prior
Page 88

to Korea to meet the growing civilian demands have
now been declared necessary for the realization of
the defense mobilization goals. Another reason that
most of the recent expansion has been in the Federal-aided category is that nonessential expansion
has been restricted by construction controls im­
posed. And the decline in demand for certain con­
sumer goods has provided these industries with
little incentive to expand even within the allowed
limits.
A substantial portion of this unaided investment
has been in industries less essential to the defense
goals. The following examples may be cited. The
largest unaided plant expansion in the district is
the appliance manufacturing center being estab­
lished by General Electric Company at Louisville.
Plans call for eventual employment of about 16,000
workers when all units are completed. Philip
Morris Company recently completed a $10 million
expansion of its cigarette and tobacco manufactur­
ing capacity, also in Louisville. In St. Louis two
new detergent plants will be added by Lever Broth­
ers and Purex Corporation. In Springfield, Missouri,
Lily-Tulip Company recently completed a paper cup
manufacturing plant. In Greenville, Mississippi, the
Alexander Smith Carpet Company has an $8 million
plant under construction. In Memphis the duPont
Company is erecting a $7 million chemical plant.
Geographically9 investment aided hy rapid tax
amortization has thus far been concentrated in
the St. Louis area and in Arkansas.
Facilities being expanded under the rapid amorti­
zation program are primarily located in metro­
politan areas, especially in St. Louis. Proposed
investment on industrial facilities costing $302
million are being constructed in the St. Louis area,
while only $19 million is being invested in the
Louisville area and lesser amounts in Memphis,
Evansville and Little Rock.
Notwithstanding the concentration of investment
in the metropolitan areas, the nonmetropolitan sec­
tions of the district have come in for roughly $250
million worth of tax-aided investment. The size of
the nonmetropolitan share, relative to previously
existing capacity, reflects the trend toward decen­
tralization of industry. The increasing location of
industrial plants in the smaller communities is allied
to the trend toward decentralization of industrial
development within the metropolitan areas, where
an increasing proportion of the new plants are now
being placed in the suburbs. Nationally, of 900
plants receiving certificates of necessity valued at
over $1 million and considered “dispersible,” only
12 per cent were located inside the central city of a
Page 89




metropolitan area, 42 per cent in surburban sections
and 46 per cent outside the industrial metropolitan
areas.
To k eep pace with industrial developm ent9 utili­
ties serving the district plan a 50 p er cent
increase in generating capacity in 1952-53.
Utilities serving the Eighth District (and, in some
cases, bordering areas) had a dependable capacity
of about 8.9 million kilowatts as of December 31,
1951. Scheduled additions to this installed capacity
will add 5.0 million kilowatts by the end of 1953.
The increase will meet the growing demands of the
defense program and maintain, at the same time,
an adequate supply of power for enlarging civilian
uses. About half of this expansion is in the Tennes­
see Valley Authority system, with about oneseventh of its total k ilo w a tt sa les g o in g to
consumers in the Eighth District. Excluding the
T V A , utilities serving the Eighth District will add
2*5 million kilowatts generating capacity by the end
of 1953, an increase of 46 per cent in dependable
capacity as of December 31, 1951. The generating
capabilities of utilities serving this district are being
expanded at a faster rate than in the nation. By the
end of 1953, major utilities of the nation will have
20 million kilowatts additional capacity, an increase
of 27 per cent in the capacity as of December 31,
1951.

St. Louis and Arkansas Gain Most
C e r t i f ic a t e s of necessity for industrial
in the Eighth Federal Reserve District
May
29, 1952.
Millions
Of Dollors

C* w
*lH9

*»»«•

Aroao not shownt Metropolitan - Evantvillo * 1 9 , U t t l e
.
W o n-M e trop o lita n- M lctftcippi *1 7 , T tn n r H O * #0.1
.

Rock *0 .9 :

facilitie s*
through

Atom ic Energy Commission plants will be an
important addition to the industrial structure
o f the district.
The atomic energy program is a relatively new
and important defense activity requiring huge
outlays of Government funds which will result in
significant additions to the industrial structure of
the district. The Atomic Energy Commission has
two facilities in this district. The first, established
in 1942 at the Mallinckrodt Chemical Works in St.
Louis, has been considerably expanded since 1945.
A t Paducah, Kentucky, a $500 million uranium
separation plant under construction will employ
approximately 1,000 persons when in operation. Cur­
rently, over 22,000 persons are working on the con­
struction of this plant which is scheduled to be
completed in 1953.
In addition, a proposed AEC plant may be located
in this district— sites in the Ohio River valley and
southern Illinois have been under consideration.
Further? the D efense Mobilization Program has
resulted in reactivation and expansion o f other
Government-owned facilities in the district, par­
ticularly in ordnance production.
Another major impact of the Defense Mobiliza­
tion Program on the district economy has come
through increased production of certain military
goods and services requiring expansion or reacti­
vation of existing Government-owned facilities.
Ordnance production has been an important fac­
tor. In St. Louis five Government defense plants
have been reactivated. Scullin Steel Company has
reopened the tank armor casting plant and employs
about 1,200 workers in that operation; Chevrolet
Shell Division of General Motors Corporation has
reactivated the same plant operated during W orld
W ar II and employment is close to the announced
peak of 2,800 workers; McQuay-Norris Company
has reopened two plants— one for proximity fuse
output and the other for production of bullet cores;
the U. S. Defense Corporation, a subsidiary of Olin
Industries, is reactivating part of the small arms
plant and will employ about 5,000 workers in that
operation. (The only privately owned ordnance
plant in the district, Olin Industries, Inc., is also
undergoing expansion in the St. Louis area.)
In the Louisville metropolitan area four Govern­
ment-owned plants have been reactivated— two syn­
thetic rubber plants and two munitions plants. The
synthetic rubber plants were reactivated early in
1951 to offset the high price and the possibility of
being cut off from the source of supply of natural
rubber. One of the rubber plants is being converted
to a more efficient process at a cost of $1.3 million.




The other uses a high-cost process and is to be put
on a standby basis again effective July 1. The Navy
Ordnance Plant is undergoing a $3.5 million ex­
pansion and will employ about 1,000 workers manu­
facturing cartridge cases. Across the Ohio River in
Charlestown, the Indiana Arsenal plant is being
expanded and reconditioned at a cost of $21 million
for production and loading of gunpowder. Employ­
ment may rise to about 7,500 workers.
Other Government-owned ordnance plants in this
district are located in nonmetropolitan areas. Em­
ployment will be increased to between 3,000 and
4,000 persons at the Naval Ammunition Depot near
Camden, Arkansas. About $33 million will be spent
for enlarging and completion of production lines
which were unfinished at the close of World W ar II.
The plant is capable of a production rate which
would require 10,000 employees. About $18 million
will be spent providing additional plant and equip­
ment for producing incendiary bombs at the Pine
Bluff (Arkansas) Arsenal. At the Milan (Tennes­
see) Arsenal, in partial operation prior to Korea,
expansion of the shell-loading plant cost about $2.8
million and will require about 7,500 employees. Pro­
duction facilities for three-inch gun ammunition
costing about $5 million will be installed at the
Naval Ammunition Depot, at Crane, Indiana, which
currently employs about 5,000 persons.
Military depots have been expanded, . . .
Military depots located in this district are also
undergoing considerable expansion and consequent
increase in employment. Four such centers in the
St. Louis metropolitan area are being expanded at
a cost of $33.8 million: Granite City Army Engi­
neering Depot, St. Louis Medical Depot, and the
Army Record and Publication Centers, which will
be moved to quarters not yet constructed in order
to make way for reactivation of the Small Arms
Plant. In addition, the Air Force Aeronautical Chart
Plant in St. Louis is moving to larger quarters. In
the Louisville area the Quartermaster Depot and
Jefferson Proving Grounds are both undergoing
enlargement at a total cost of about $2 million.
Storage facilities and utilities at the Memphis Gen­
eral Depot will be expanded at a cost of $10 million.
. . . and military camps have been
reactivated and enlarged.
Still another aspect of the defense program of
importance in adding to the payrolls of the Eighth
District is the reactivation and expansion of military
camps. In the eleven major military installations of
this district, about $136 million has been or will be
spent reactivating, improving, and enlarging facili­
ties. Installations already reopened or scheduled for
Page 90

use are Camp Chaffee, and Camp Robinson, in
Arkansas; Fort Leonard W ood, and Sedalia Air
Force Base, in Missouri; and Camp Breckinridge,
Kentucky. In addition, Congressional authorization
has been requested by the Defense Department for
an Air Force jet bomber base costing $31 million
to be located near Jacksonville, Arkansas. Other
military facilities of permanent nature have also
been authorized by Congress : Fort Knox is to be
enlarged at a cost of about $38 million ; Camp
Campbell and the adjoining air base are also being
expanded, with expenditures in the near future
authorized to reach about $35 million. Additions
costing $24 million will be or have been recently put
up at Scott Air Force Base near St. Louis. Planned
construction at the Memphis Naval Air Station in
fiscal 1952 amounted to $16 million, roughly onefourth of the long-range program of enlargement
and erection o f permanent structures there.

T h e m o r e im m e d ia te im p a ct o f t h e s e
d e v e lo p m e n ts h as b e e n to in c r e a s e
jo b o p p o r tu n itie s , . . .
The expansion of private industrial capacity and
Government-owned facilities will, of course, aid in
meeting the national goals established by the
Defense Mobilization Program. Further, in immedi­
ate terms, these developments have had and will
have an impact on the market demand for workers.
These job opportunities come first in constructing
the new facilities or renovating those reactivated;
then in manning the additional industrial capacity
or military facility. The new jobs usually pay betterthan-average wages and tend to lift the level of
income of workers in the area.
In additiori to the growth in job opportunities
created directly by new industrial and Government
facilities, there is an increase in jobs in fields related
to the expanded industry and in the service fields
dealing with household needs. As an example of the
increased opportunities in related industries, the
scheduled additions to electric power production
capacity of utilities serving the Eighth District dur­
ing 1952 and 1953 will consume approximately 10
million tons of coal per year, equal to 10 per cent of
the district’s 1951 coal output. It is generally true
that as the immediate impact fans out in terms of
local purchases and, wages paid, new installations
or expansions tend to produce sizable increases in
local area incomes.
. . . a n d to s u p p o r t th e h ig h le v e l o f d istr ict
e c o n o m ic a ctiv ity p r e v a ilin g to d a y .
The rapid expansion of plant and equipment by
many business and agricultural enterprises, particu­
larly the industrial concerns, has contributed to the
Page 91




high level of employment and income prevailing in
the district (as well as in the nation) during the
past two years. Currently the defense mobilization
build-up is only about one-half completed and pri­
vate business investment in plant and equipment
plus substantial Government expenditures on mili­
tary facilities are scheduled in sizable volume during
the months ahead, continuing their support of the
present level of district economic activity.

O v er t h e lo n g e r r u n , in c r e a s e d m ilita ry g o o d s
p r o d u c t io n m a y in t r o d u c e a n e le m e n t o f in sta ­
b ility in to t h e d is tr ict e c o n o m y . • .
In addition to the short-run influences, bolstering
employment and maintaining over-all economic ac­
tivity, certain long-run influences of the district’s
industrial development should be noted. First of
all, an unfavorable consequence might be indicated.
The increased reliance on military goods produc­
tion and Government defense expenditures in mili­
tary camps may introduce a measure of instability
into the Eighth District economy. Any activity
connected with defense will be subject to large and
often sudden variations, greater in all probability
than the variations experienced in operations pro­
ducing civilian goods. Technical changes in weapons
required for modern warfare, together with the
continuing pressure to keep ahead of others in
design and performance lie at the root of the insta­
bility of existing military production. Thus, the
location of munitions plants and military camps in
this district, while beneficial in the short-run, might
from a longer-run point of view introduce a less
desirable element of instability into the district’s
production and employment. Instances of the insta­
bility of defense production have already occurred.
In Louisville, for example, the defense contract with
the General Electric Company was canceled and one
of the synthetic rubber plants was put on standby
basis.
. . . b u t a d d itio n a l b a sic in d u stria l c a p a city w ill
t e n d to in c r e a s e r e la te d in d u stria l g r o w t h . . .
Certain other long-run effects of the increased
industrial capacity (both Governmental and private)
are definite plus factors. Growth of basic industries
in the district widens the foundation upon which
further industrial expansion can be made. For ex­
ample, primary metals industries are helpful because
of the likelihood of other metal-using industries
locating close to the primary metal source. An
instance of this is the location of an aluminum cast­
ings plant by General Motors Corporation adjacent
to the aluminum reduction mill at Jones Mill,
Arkansas. The plant will use hot metal from the
reduction mill, gaining an additional saving in cost.

Further, the expansions have centered, as noted,
in the industries which have large potentials for
growth: metals (especially light metals), chemicals
and chemical processes such as petroleum refining.
At the same time, these are the industries which
have a high value-added per worker. A manufactur­
ing process which adds a relatively high value to
the raw materials and purchased goods used is more
attractive than a process which adds relatively little
value. The wider the margin, the greater the possi­
bility for increased wages and profit. Chemical,
petroleum and coal products industries, which bulk
large in the plant expansion of this district, have a
high value-added by their manufacturing processes.
. . • a n d h o ld d o w n o u t-m ig r a tio n , th u s b u ild in g
a stro n ger eco n o m y .
The new and enlarged facilities will offer many
new jobs for residents of the district and increase

the income level. While the amount of expansion is
substantial, it probably is not yet sufficient to
utilize all of the increasing nonagricultural labor
force resulting from the district’s population growth
and technological developments* on the farms. But
the out-migration (indicated by a population growth
of less than the rate of natural increase) will be
slowed. Income levels will be enhanced as the work
force is shifted to higher-paying industrial jobs. The
long-run development toward maximum productive
use of our resources has been given impetus by the
present emergency. It also makes this district’s
contribution to the defense program more effective.
Further improvements in the use of our resources
are still possible and the recent developments pro­
vide a better base for that progress.
W il l ia m H. K ester

Survey of Current Condition
the exception of strike-imposed curtail­
ments, business activity in the Eighth District
during May and early June appeared to improve
from April. Employment increased, seasonally and
unemployment declined during May. Retail sales
during May were firmer than in previous months,
with durable goods sales improving noticeably after
the suspension of Regulation W . Construction activ­
ity was higher than in April. But industrial output
was again restricted primarily by strikes, and also
by lagging demand for some civilian products.
Nationally, the volume of industrial production
in May, as measured by the Federal Reserve Board,
dropped to 214 per cent of the 1935-39 average,
compared with 216 per cent for April and 221 per
cent for the first three months of the year. Strikes
were important influences in reduced output of both
durable and nondurable goods. Defense output,
however, continued to expand. As in the district,
department store sales improved more than season­
ally in May, with an even greater improvement in
most durable goods sales. Average prices of whole­
sale commodities strengthened slightly in May, but
moved lower again in early June. Consumer prices
also increased slightly, largely due to higher food
prices.

W

it h




While industrial output was reduced during the
second quarter of the year, final demand remained
strong and showed some signs of increasing in May
and June. With production off and purchases up
some, the net impact has been in the direction of
drawing down inventories. The action has not

PRIC ES
W HOLESALE

IN

M a y ,*52

Bureau of Labor
Statistics
(1 9 4 7 -4 9 = 1 0 0 )

P R IC E S

A p ril,*52

A ll Commodities................ .....111.6
Farm Products....................108.1
Foods...................................... 108.6
Other.......................................113.0

Bureau of Labor
Statistics
0 9 3 5 -3 9 = 1 0 0 )

THE

111.8
108.7
108.0
113.3

U N IT E D

M a y /5 1
115.9
115.7
112.3
116.8

STATES

M ay, 1952
compared with
A p ril,’ 52 M a y /5 1

-0 ~ %
—
+

1
1
- 0-

—
—
—
—

4%
7
3
3

C O N S U M E R P R IC E I N D E X *
#
M a y 15, 1952
M ay 15, April 15, M a y 15,
compared with
1952
1952
^ 1951 Apr. 1 5 /5 2 M ay 1 5 /5 1

United States....................... 189.0
*N ew series.
Bureau of Labor
Statistics
(1 9 3 5 -3 9 = 1 0 0 )
U .S . (51 cities)..................
St. Louis...........................
Little R ock......................
Louisville.........................
M emphis...... ....................
*N ew series.

188.7

185.4

- 0- %

+

2%

R E T A IL F O O D *
M a y 15, 1952
M ay 15, April 15, M a y 15,
compared with
1952
1952
1951 A p r. 1 5 /5 2 M ay 1 5 /5 1
230.8
243.6
226.5
216.4
231.7

230.0
240.5
226.1
214.5
231.4

227.4
2 38.4
225.1
213.7
234.6

- 0- %
+ 1
- 0+ 1
- 0-

+ 1%
+ 2
+ 1
+ 1
— 1

Page 92

been general, however, with the most pronounced
reduction in ferrous metal items and related materi­
als. There has been little reduction in stocks of
those items generally in oversupply; for example,
textiles and whiskey.
Preliminary evidence suggests that the level of
spending by the three principal sectors of the
economy (private investment, governmental out­
lays, and personal consumption of goods and serv­
ices) remained firm during the second quarter.
Private residential construction during April and
May was somewhat below the seasonally adjusted
peak reached in March but slightly above the firstquarter rate. Business plant and equipment expen­
ditures planned for the second quarter, according to
a recent Department of Commerce survey, will total
$6.4 billion, slightly above the first-quarter rate.
National defense expenditures in April and May
were $4 billion above the first quarter at annual
rates. Consumers, responding to easier credit terms,
lower prices of some items, and high level of per­
sonal savings, stepped up their purchases in May
and early June, especially of durable goods. As a
result, total retail sales were probably slightly above
the first-quarter rate.
Factors of strength during the past few months
are also evident in the current outlook: scheduled
increase in defense outlays; extent of planned in­
vestment on plant and equipment in the third quar­
ter ; growing volume of residential construction,
given some impetus by the easing of credit terms;
and consumers’ ability and apparent willingness to
spend.
EM PLO YM ENT

Employment in the United States continued to
climb seasonally with 61.2 million persons estimated
to be employed at mid-May. Spring planting and
cultivation demands pushed farm employment up
500,000 from April levels. Non-farm employment
was unchanged from mid-April to mid-May, in
contrast to an increase of over 200,000 in the same
period last year. Strikes in construction, oil refin­
eries and lumber camps dampened the usual spring
W H O L E SA LIN G
Line of Commodities

N et Sales

Stocks

D ata furnished by
Bureau of Census,
U .S . D ept, of Commerce*

M ay, 1952,
compared with
A p r.,’ 52 M a y ,’ 51

M ay 31, 1952,
compared with
M ay 31, 1951

11%
011
1
18
10
3

+ 5%
+ 13
— 34
— 9

3

+
—
—
—
+
—

1%

—

7%

— 18%

...

—

4

.......

—

D ry G oods......................................................

**T o ta l A ll Lines.......................................... —
*Preliminary.
**Includes certain items not listed above.

Page 93




-0-

— 9
— 13

employment gains in these industries. In addition,
expansion of defense-related industries was virtually
halted.
Unemployment remained unchanged between
April and May at 1.6 million, equal to last year’s
minimum.
Unemployment compensation claimed in the seven
district states decreased during May after rising
somewhat in April. In the week ended May 24,
unemployment compensation claims totaled 177,000
as compared with 195,000 four weeks earlier. Sea­
sonal improvements in outdoor activity and the
return to work of employees in clothing, shoe, and
glass products industries contributed to the de­
crease. However, unemployment resulted from tem­
porary lay-offs in coal mining and in refrigerator
production.
In Louisville over-all employment remained
steady between April and May, despite marked
fluctuations in some industries.
Employment in St. Louis was up somewhat from
April to May, largely as a result of expanding de­
fense work and construction activity. Seasonal
decreases in employment in apparel and shoe plants
limited the over-all increase. In addition, employ­
ment in fabricated metals plants was reduced
sharply in May.
IND USTRY

The slightly lower industrial production of April
continued through May and into early June in the
district as work stoppages became even more pro­
nounced. Steel ingot production in June was at a
rate less than one-half that of the first quarter.
Crude oil production in May was cut due to ac­
cumulated stocks at closed refineries. Am ong other
district industries, lumber was off somewhat, whis­
key output was even lower, and coal, also affected
by the steel strike, showed more-than-seasonal
weakness. Shoe production was down seasonally
(but the year’s record so far was good).
Manufacturing— Manufacturing activity at six
major cities in the district in May, according to use
of electric power at selected industrial firms, failed
to recover all of the 5 per cent loss shown in April
(on a daily average basis), and registered only a
nominal gain over May a year ago. A reduction
in industrial power consumption at Pine Bluff due
to a cut in chemical production was the largest
single contributor to the lower figure. Among
industries in the other cities, the nonelectrical
machinery, primary metals, food, and printing
groups were the only ones (in the sample) that
showed much strength in terms of improvement
over a month earlier, or May in 1951.

The lower production activity was reflected most
sharply in the steel ingot rate in June. Only about
41 per cent of steel ingot capacity in the St. Louis
area was in use during the first three weeks after
the June 2 work stoppage. The rate was 78 per cent
of capacity during May.
W ork stoppages were not direct factors as far
as lumber and whiskey production were concerned.
Rather, there was continued weakness on the part
of demand. There was little change in lumber pro­
duction from April to May and the first weeks in
June, and operations for both southern pine and
hardwoods continued under those of a year ago. In
May, even less whiskey was distilled in Kentucky
than in earlier months this year. At month’s end
only 21 distilleries were operating compared with 42
for May last year and 28 at the end of April 1952.
W ith the June vacation period, monthly figures
o f sh o e p r o d u c tio n w ere expected to decline.
Through May, the record was good. Nationally, the
Tanners’ Council estimated production for the first
five months of the year at only 1.5 per cent less than
the same period a year ago. Civilian output was
even higher than a year ago.
Mining— Coal production in district states was
more-than-seasonally low in May, and early June
figures show an even greater decline. Captive mines
in Kentucky reduced output sharply due to the steel
INDUSTRY
C O N S U M P T IO N

O F E L E C T R IC IT Y — D A IL Y A V E R A G E *
M a y , 1952
M ay, 1952 April, 1952 M ay, 1951
compared with
K .W . H .
K .W .H .
K .W . H . April, 1952 M ay, 1951

( K . W .H .
in th o u s.)
Evansville..............
Little R ock...........
Louisville...............
M em phis................
Pine B lu ff..............
St. Louis................

846
559
4,079
1,428
329
4,864

826
553
3,825
1,407
487
4,704

T otals.................

12,101

11,802

729
568
3,761
1,293
413
4,718
11,482

4*
+
+
+
—
+
+

2%
1
7
1
33
3
3%

+16%
— 2
+ 8
+10
— 20
+ 3
+ 5 %

* Selected manufacturing firms.
L O A D S IN T E R C H A N G E D
M a y ,’ 52

A p r il/5 2

M a y /5 1

108,597

110,501

118,122

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
J u n e/52
J u n e/51
5 m o s .’ 52
5 mos. *51
28,872

33,735

551,620

585,167

Source: Terminal Railroad Association of St. Louis.
G O A L P R O D U C T IO N IN D E X
1935 -3 9 = 1 0 0
Unadjusted
Adjusted
M a y /5 2
108.0 P

A p r il/5 2
130.3

M a y /5 1

M a y /5 2

A p r il/5 2

M a y /5 1

131.2

104.9 P

200.4

127.4

P— Preliminary.
S H O E P R O D U C T IO N IN D E X
193 5 -3 9 = 1 0 0
Unadjusted
Adjusted
A p r ./5 2

M a r ./5 2

A p r .,’ 51

A p r ./5 2

M a r ./5 2

A p r ./5 1

145.4

154.0

137.0

143.0

151.0

134.3

The Crude O il Production table is omitted this month since complete
data are not available owing to conditions brought about by the strike in
the oil industry.




CONSTRUCTION
B U IL D IN G P E R M IT S
M onth of M ay
N ew Construction
(C ost in
thousands)

Number
1952
1951

Cost
1952
1951

Evansville.........
63
81 $
135 $
44
46
477
Little R ock.......
Louisville..........
173
235
1,230
M emphis............ 2,508 1,715
7,166*
355
337
4,062
St. Louis............

248
606
7,910* 99
5,211
3,468

M ay Totals....... 3,143 2,414 $13,070 $17,443
April Totals...... 2,634 2,469 $ 6,875 $ 6,042
*Includes Housing Projects.

Repairs, etc.

Num ber
1952 1951
122
211
83
231
348

107 $
307
258
301

Cost
1952
1951
65 $
165
99
174
722

182
148
132
381
850

1,011 1,056 $1,225 $1,693
897
831 $1,326 $2,014

strike. And domestic demand slackened even though
dealers offered customers price cuts and time pay­
ment plans.
In May, crude oil production dropped from the
level of previous months due to a nationwide strike
at refineries which resulted in the accumulation of
excessive stocks.
CONSTRUCTION

Total expenditures for new construction in the
nation rose to $2.75 billion for May, setting a new
record for the month. During the first five months
of 1952 new construction outlays totaled $11.9
billion, 3 per cent more than the total for the com­
parable period last year reflecting in part increased
construction costs. Residential construction activ­
ity was about the same as in May 1951. New
housing starts in the United States totaled 107,000
units in May, making a total of 455,000 for the year
to date, compared with 457,500 in the same period
last year. The cumulative volume of factory build­
ing was still substantially above last year despite
recent declines. However, most other types of pri­
vate non-residential building activity were below
year-ago levels. Public construction continued to
increase during May, bringing the total for the first
five months to $3.8 billion, 25 per cent more than
during the comparable period of 1951.
Because of the steel strike, building restrictions
on home construction and on building of amuse­
ment and recreation facilities, scheduled for relax­
ation on July 1, will be continued.
In the Eighth District construction contracts
awarded during May as reported by the F. W .
Dodge Corporation, totaled $112 million, a decrease
of 31 per cent from April. In the St. Louis territory
of the F. W . Dodge Corporation, residential con­
struction contracts for the first five months were
6.5 per cent larger than in the same period last
year. In the 37 states east of the Rockies they
were up only 0.5 per cent in the same period.
Large expansions of industrial and commercial
facilities announced during May in this district in­
clude an $8 million shopping center in the surburban
St. Louis area, a $21 million expansion of the InPage 94

TRADE
DEPARTM ENT

STOR ES
Stocks
on H and

N et Sales

M ay, 1952
5 m o s /5 2 M ay 3 1 /5 2
compared with to same comp, with
A p r .,’ 52 M a y ,"51 period '51 M ay 3 1 /5 1
8th F .R . District........... ..... + 7 %
F t. Smith, A r k .1............ ..... + 1 1
Little Rock, A r k ............ .....+ 6
Q uincy, 111........................ .....+ 1
Evansville, In d ............... .....+ 2 2
Louisville, K y .......................— 1
Paducah, K y ......................... + 9
St. Louis A r e a 1. 2.......... ..... + 5
Springfield, M o ....................+ 1 7
M em phis, Tenn....................+ 1 2
A ll Other Cities*........... ..... + 1 5

+ 8%
+10
+ 7
- 0+20
+ 9
+40
+ 6
+17
+ 7
+14

-0 -%
+ 2
+ 1
— 9
+ 2
+ 1
+34
- 0+ 7
+ 1
+ 3

— 12%
— 7
— 11
— 18
— 19
~ 3
...........
— 15
— 9
— 4
— 3

Stock
Turnover
Jan. 1 to
M ay 31,
1952 1951
1.50
1.42
1.50
1.49
1.31
1.59

1.35
1.34
1.29
1.37

1.21
1.53

L31

1.48
1.29 1.13
1.59 1.53
1.25
1.21
'F ayetteville, Pine B luff, A rkan sas; Harrisburg, M t. Vernon, Illinois;
Vincennes,
In d ian a;
Danville,
Hopkinsville,
Mayfield, K entucky;
Chilhcothe, M issou ri; Greenville, M ississippi; and Jackson, Tennessee.

1 In order to permit publication of figures for this city (or area), a
special sample has been constructed which is not confined exclusively
to department stores. ^ Figures for any such nondepartment stores,
however, are not used in computing' the district percentage changes or
in computing department store indexes.
2 Includes St. Louis,
ville, Illinois.

Clayton, Maplewood, M issouri; A lton and Belle­

Outstanding orders of reporting stores at the end of M ay, 1952, were
4 per cent smaller than on the corresponding date a year ago.
Percentage of accounts and notes receivable outstanding M ay 1, 1952,
collected during M a y , by cities:
Instalm ent E x cl. Instal.
Accounts
Accounts
Fort Smith............. °/
Little R ock.... 21
Louisville...... 2 1
M em phis......... 22
IN D E X E S

OF

50%
47
45
38

Instalment Excl. Instal.
Accounts
Accounts
Quincy..................
St. Louis.............
Other Cities......
8 th F .R . D ist...

20%
20
22
20

76%
52
51

D E P A R T M E N T STOR E SALES A N D STOCKS
8th Federal Reserve District
M ay, A p r., M ay,
M ay,
1952
1952 1952
1951

Sales (daily average), unadjusted*............................
Sales (daily average), seasonally adjusted3...........
Stocks, unadjusted4 ...........................................................
Stocks, seasonally adjusted4..........................................
3 D aily Average 1 9 4 7 -4 9 = 1 0 0 .
4 End of M onth Average 1 9 4 7 -4 9 = 1 0 0 .

106
102
124
124

101
98
122
114

89
99
118
111

102
98
140
140

S P E C IA L T Y STOR ES
Stocks
on H and

N et Sales

M ay, 1952
5 m o s /5 2 M ay 3 1 /5 2
compared with to same comp, with
A p r ./5 2 M a y /5 1 period *51 M ay 3 1 /5 1

Stock
Turnover
Jan. 1 to
M ay 31,
1952 1951

M en ’s Furnishings ......... + 7 %
— 4% — 2%
— 21%
.88
.81
Boots and Shoes.............. — 12
+ 5
+ 4
— 5
1.74 1.62
Percentage of accounts and notes receivable outstanding M ay 1, 1952,
collected during M a y :
M en ’s

Furnishings...................

45%

Boots and Shoes.......................

43%

Trading d a ys: M a y , 1952— 2 6 ; April, 1952— 2 6 ; M ay, 1951— 26.
R E T A IL F U R N IT U R E STO R ES
N et Sales
Inventories
Ratio
M a y , 1952
M ay, 1952
of
compared with
compared with
Collections
A p r ./5 2 M a y /5 1 A p r ./5 2 M a y /5 1 M a y /5 2 M a y /5 1
+ 19%
+ 20%
— 22%
17%
17%
— 5%
+14
+ 3
— 7
— 23
17
18
+16
+ 4
— 7
— 23
16
17
+16
— 2
+ 24
— 15
14
14
— 2
+23
+15
— 15
13
13
+35
+ 34
13
16
+ 1
— 27
+15
+ 34
+ 5
— 39
19
19
— 2
— 8
+27
+ 21
17
21
*
*
*
Fort Smith...... .
*
+23
+ 42
*N o t shown separately due to insufficient coverage, but included in
Eighth D istrict totals.
...
..
..
..
..
..
..
..

1 In addition to following cities, includes stores in Blytheville, Pine
B luff, Arkansas; Hopkinsville, Owensboro, K entucky; Greenwood, M is ­
sissippi; H annibal, M issou ri; and Evansville, Indiana.
2 Includes St. Louis, M issou ri; and A lton , Illinois.
3 Includes Louisville, K en tu c k y ; and N ew Albany, Indiana.
PERCENTAGE

D IS T R IB U T IO N

O F F U R N IT U R E SA LE S
M a y /5 2 A p r il/5 2 M a y /5 1

Cash Sales ...
Credit Sales ,

1 5%
85

17%
83

21 %

T otal Sales

100%

100%

100%

Page 95




79

diana Arsenal in the Louisville metropolitan area,
and a large iso-octyl alcohol plant at a W ood River,
Illinois, refinery. The Defense Department has re­
quested authorization by Congress of a $31 million
air base to be located at Jacksonville, Arkansas.
TRADE

Retail sales during May were firmer than in
previous months although results of reporting dis­
trict retail lines were varied. Thus, in comparison
with sales during April, women’s specialty stores
experienced a drop in volume, while department
stores gained more-than-seasonally. In comparison
with May 1951, sales were generally better this
year, men’s wear stores being the only reporting
line to experience a decline in sales volume. The
largest reported gain from both the previous month
and the comparable month of 1951 was registered
by furniture stores.
The success of seasonal promotions and the
suspension of instalment credit regulations con­
tributed, along with other favorable factors, to the
somewhat better picture of retail sales activity.
There were a few indications of increased con­
sumer buying at nondurable goods stores early in
the month. And after mid-May durable goods sales
improved noticeably.
At automobile dealers in both new and used cars,
sales activity quickened as more liberal credit terms
became available and as a result of seasonal trends.
Appliance dealers also indicated that sales during
May had improved over those earlier in the year and
a year ago. And in St. Louis department stores, the
only sizable decline in the major durable goods
divisions was registered in domestic floor coverings.
The immediate effect of suspension of credit
regulations on credit sales volume of reporting dis­
trict retailers was most noticeable at furniture
stores. At department stores the ratio of credit
sales to total sales stood at 55 per cent, fractionally
above both that a year ago, and in May 1950. At
reporting furniture stores credit sales accounted for
85 per cent of total sales in May in comparison with
83 per cent a month earlier and 79 per cent a year
ago.
The retail value of inventories held by reporting
district retailers on May 31 declined generally from
the level a month earlier. In comparison with those
held on May 31, 1951, women's specialty stores
reported higher inventories. In other reporting lines
inventories dropped below last year’s high levels.
Furniture stores reported inventories valued at
about one-fifth less than a year ago, men’s wear
stocks dropped about one-fifth and department
store stocks were down around one-eighth.

BANKING AND FINANCE

Deposits at district member banks were drawn
down $18 million in May, largely as a result of
net withdrawals by correspondent banks and the
Federal Government. An offsetting factor was an
increase in time deposits and demand deposits of
individuals and businesses.

During the first three weeks of June, as well as
in May, total loans at district member banks were
virtually unchanged. Business loans, seasonally
adjusted, however, were up slightly in June. Na­
tionally, total loans increased somewhat in the first
three weeks of June following a moderate rise in
May.
The money market continued fairly tight during
May and early June. During May, banks, both dis­
trictwise and nationally, reduced excess reserves
and increased borrowings. Starting the month
without much cushion, member banks in general
were drained of funds by a flow of currency into
circulation and, in the case of district banks, by a
loss of funds to other areas.

District banks commenced the month with a
limited amount of free funds. In addition, over
the month the.re was a flow of currency into cir­
culation and a net outflow of funds from the dis­
trict. The largest net outflow went to New York

D E B IT S T O D E P O S IT A C C O U N T S

District Banking Developments

El Dorado, Ark............ $ 32,233 $ 27,628 $ 26,450 + 17%
Fort Smith, Ark..........
46,166
43,379
44,382 + 6
6,999
7,463 7,346 — 6
Helena, Ark................. .
Little Rock, Ark..........
153,688
148,216
138,676 + 4
Pine Bluff, Ark............
35,586
36,552
27,681 — 3
Texarkana, Ark.*....... .
18,959
18,381
12,043 + 3
Alton, 111......................
30,998
28,613
28,291 + 8
E.St.L.-Nat.S.Y., 111...
122,120
126,046
131,407 — 3
Quincy, 111....................
36,417
33,405
35,274 + 9
140,633
139,439
138,141 + 1
Evansville, 111..............
Louisville, Ky..............
666,642
631,430
617,398 + 6
Owensboro, Ky............
37,488
39,864
41,028 — 6
Paducah, Ky................
43,621
42,912
22,705 + 2
Greenville, Miss...........
21,066
19,393
23,217 + 9
Cape Girardeau, Mo—
12,963
12,451
13,037 + 4
Hannibal, Mo...............
10,015
9,240
9,141 + 8
Jefferson City, Mo.......
52,282
56,482
49,785 — 8
St. Louis, Mo............... 1,807,501
1,846,494 1,800,110 — 2
Sedalia, Mo..................
11,473
11,376
10,596 + 1
Springfield, Mo............
67,965
68,202 68,877
-0 Jackson, Tenn..............
20,025
20,361
20,876 — 2
Memphis, Tenn............
547,285
554,759
609,163 — 1

Earning assets of Eighth District member banks
rose slightly during May. The increase centered
in net purchases of securities at larger banks. Loans
showed little change in the month as a moderate
contraction at larger banks was nearly matched by
an expansion at smaller banks, especially those
banks in centers under 15,000 population. The loan
contraction at the city banks was occasioned by a
seasonal decline in loans to businesses offset, in
large part, by an increase in most other types of
loans. Net repayments of business loans came
largely from manufacturers, trade concerns, com­
modity dealers, and public utilities. On the other
hand, sales finance companies and construction
firms increased their borrowings.

E IG H T H

D IS T R IC T

May, 1952
compared with
May, 1952 Apr., 1952 May, 1951 Apr.,*52 May,*51

(In thousands
of dollars)

M EM BER

BANK

ASSETS

Totals........................ $3,922,125 $3,922,086 $3,875,624

A ssets
1. Loans and Investm ents......................................

AND

L IA B IL IT IE S

BY

SELECTED

Large City Banks1

A pril, 1952 M ay, 1951
to
to
M ay, 1952 M ay, 1952 M a y , 1952

April, 1952 M a y , 1951
to
to
M ay, 1952 M ay, 1952 M a y , 1952

Smaller Banks2
Change fr o m :
A pril, 1952 M a y , 1951
to
to
M ay, 1952 M ay, 1952 M a y , 1952
1,770
656
913
201
496
238
258
17

+
+
+
—
—
—
—
—

7
9
3
5
16
8
8
1

+ 106
+ 39
+ 52
+ 15
+ 19
+ 12
+
7
— 10

3,291

+

+ 131

2f283
i --------

—

10

+ 115

+ 138
+ 30
+ 108
+ 54
+ 24
+ 30

2,506
587
1,919
497
71
217

— 10
— 13
+
3
+
3
+ 25
—
1

+
+
+
+
+
+

67
27
40
20
26
18

1,598
35
1,563
523
7
155

—
—
—
+
+

12
1
11
1
1
- 0-

+246

3,291

+

+ 131

2,283

— 10

+225
+ 67
+ 112
+ 46
+ 29
+ 15
+ 14
—
8

2,422
1,232
993
197
836
440
396
'
33

5,574

+

7

+246

8 . Total Capital A ccounts......................................

4,104
622
3,482
1,020
78
372

— 22
— 14
—
8
+
4
+ 26
—
1

9. T otal Liabilities and Capital A ccounts......

5,574

+

7

GROUPS

+ 119
+ 28
+ 60
+ 31
+ 10
+
3
+
7
+
2

+ 29
—
2
+ 26
+
5
— 21
— 15
—
6
—
1

Liabilities and Capital
5. Gross Demand D eposits.................................. .
a. Deposits of Banks........................................
b. Other Demand Deposits............................
6 . T im e Deposits .......................................................

1%

+ 22
— 11
+ 23
+ 10
—
5
—
7
+
2
- 0-

4,192
1,888
1,906
398
1,332
678
654
50

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 8.................................
3. Other Assets .........................................................

+

* These figures are for Texarkana, Arkansas, only. Total debits for banks
in Texarkana, Texas-Arkansas, including banks in the Eleventh Dis­
trict, amounted to $39,580.

A ll M em ber
( I n Millions of D ollars)

-0 -%

+ 22%
+ 4
— 5
+ 11
+ 29
+ 57
+ 10
— 7
+ 3
+ 2
+ 8
— 9
+ 92
— 9
— 1
+ 10
+ 5
-0 + 8
— 1
— 4
— 10

17

17

+
+
+
+
—
+

71
3
68
34
2
12

+ 115

1 Includes 13 St. Louis, 6 Louisville, 3 Mem phis, 3 Evansville, 4 L ittle Rock and 4 East St. Louis-N ational Stock Yards, Illinois, banks.
3 Includes all other Eighth District member banks. Som e of these banks are located in smaller urban centers, but the majority are rural area banks.
8 Includes vault cash, balances with other banks in the United States, and cash items reported in process of collection.




Page 96

City, with lesser outflows to Chicago, Detroit and
Cincinnati areas. On the other hand, trade was
more “ favorable” with the other areas of the
country, providing some offset to these drains.
Other partial offsets to the outflow of district bank
funds came from Treasury operations and an in­
crease in Federal Reserve float. T o meet the net
drain of funds bankers took two main actions. 1)
They drew on their balances at the Federal Reserve
Bank. As a result, excess reserves fell below
normal working levels. 2) They increased their
borrowings from both the Federal Reserve Bank
and others. At the end of the month discounts and
advances by the Federal Reserve Bank exceeded
total excess reserves of district member banks.
In the first three weeks of June, the flow of funds
reversed itself and total deposits rose rather sharply.
With the funds, the district’s weekly reporting
member banks purchased a sizable amount of short­
term Government securities, built up reserves at
the Federal Reserve Bank, and reduced borrowings.
Banking Developments Nationally
Total loans at all commercial banks increased
somewhat in May. Commercial loans continued to
decline, but at a less-than-seasonal rate. Largest
net repayments came from commodity dealers and
food manufacturers. Real estate, consumer and
security loans continued to rise.
The private money supply increased roughly $600
million in May due largely to the bank credit ex­
pansion. By comparison, in May of 1951 the money
supply of individuals and businesses increased only
about two-thirds this amount .

developed rapidly during early June aided by above
average temperatures. Crop growth, for the most
part, is more advanced than last year or the average
of recent years. Rains were needed in some local­
ities, particularly in southern Missouri and Arkan­
sas.
The cotton crop was up to a good stand in early
June after more than normal replantings. Chopping
was well advanced. Tobacco transplanting pro­
gressed rapidly late in May and early June, and by
mid-June 95 per cent of the acreage was planted,
thus getting the crop off to an early start. The dis­
trict corn crop was planted in good time and early
progress of the crop was satisfactory.
Farm Debt— Farm mortgage debt for the United
States increased 8 per cent in 1951, reaching $6.3
billion on January 1, 1952. This was one of the larg­
est percentage increases since 1920, and marks the
sixth year in which the debt has increased. Farm
mortgage debt now is about the same as in 1942 but
is considerably smaller than the peak recorded Jan­
uary, 1923. However, the ratio of debt to value is
much lower now since current values of property
are considerably higher than in 1942 or 1923.
In the district states of Illinois, Indiana and
Missouri, the percentage increase in farm mortgage
debt was slightly smaller than the national average.
The rate of increase in Arkansas and Tennessee
exceeded the national increase.
Total short-term or non-real estate farm debt
reached a new high ($7.3 billion) January 1, 1952,
an increase of 18 per cent during the year. The
increase of this type debt in 1951 for commercial
banks was 24 per cent.

Treasury Financing
The Treasury in the fiscal year through May
(eleven months) collected a record $58.1 billion
in cash operating receipts and spent nearly $61.0
billion. As a result, a cash deficit of $2.9 billion
was incurred. During June this deficit was probably
whittled down by quarterly tax payments. Thus,
the large cash surplus obtained last year disappeared
and was replaced by a small deficit in the current
fiscal year. In fiscal 1953, it is anticipated that the
deficit will be substantially larger than in fiscal 1952.
AGRICULTURE

AGRICULTURE
CASH

(I n thousands
of dollars)

A p r.,
1952

$384,514 —

AND

IN C O M E

compared with
M ar.,
A p r.,
1952
1951
+
—
—
—
+
—
—

19%
9
11
12
24
19
14

6% —

9%

, $ 30,110 + 3 %
, 142,903 — 8
.
78,701 — 6
.
24,900 + 4
18,501 — 22
,
67,296 — 3
.
22,103 — 15

R E C E IP T S

FARM

S H IP M E N T S

AT

1952
$

132,627
588,301
325,966
182,981
94,369
748,627
125,216

$2,198,087

N A T IO N A L

Receipts

Prospects for 1952 crops in the Eighth District
generally continued to be favorable through midJune. The June 1 estimate of district winter wheat
production was eleven million bushels higher, or
11 per cent, than a month earlier and 34 per cent
more than 1951 production. Spring sown crops
Page 97




compared with
1951
1950
+ 16%
— 2
— 1
+ 1
— 11
— 10
— 2

+ 58%
+ 14
+ 22
+ 6
+ 39
+ 19
+20

—

2%

+ 19%

STOCK

YARDS

Shipments

M ay, 1952
M a y ,'52 #
compared with
compared with
M a y ,*52 A p r .,*52 M a y ,*51
M a y ,’ 52 A p r .,’ 52 M a y ,’ 51
Cattle and calves.... 82,461
H o g s ............................264,066
Sheep........................... 64,292
Totals.....................410,819

+ 4%
— 10
+16

— 2%
— 21
+14

41,790
97,398
45,224

+ 20%
+10
+10

—

— 13%

184,412

+ 12%

4%

+ 68%
— 7
— 4
+

4%