Full text of Review (Federal Reserve Bank of St. Louis) : June 1, 1948

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Monthly Review
D

E

Volume X X X

R'

JUNE 1, 1948

Number 6

Farm Woodlot Management in the Eighth District
Increased growth rates in Eighth District forests,
or even maintenance of present production, depend
almost entirely upon what private owners do with
their forest land. Nine-tenths of the district forest
land is privately owned.
Most of the privately-owned forests (nearly 75
per cent) are in tracts of 500 acres or less, and
their owners represent 99 per cent of all owners
of forest lands.1 About three-fourths of these private
owners are farmers. For the entire country there
are about 3,250,000 farmers who own woodlots
which in the aggregate account for slightly more
than half of all privately owned forests in the
United States. In the Eighth District, farmers own
slightly less than half the privately owned forests.
Since the great bulk of forest land is held in
small tracts, and since there are a great number
of owners, the problem of furthering proper wood­
land management obviously becomes one of con­
siderable magnitude. And it is not too surprising
that progress has been slow. In this district 70
out of every 100 acres of private forest are man­
aged so that limited or no means of reproduction
is left on land when timber is cut. Much of this
poorly managed timber land is in small tracts.
For farm woodlots the proportion is 80 out of every
100 acres, an unfavorable comparison for farm

1 T h e Forest Service uses a catch-all classification for all holdings of
5,000 acres or less.
O n a national scale there are 4,250,000 owners
(99 per cent of all ow ners) in this class and they hold three-fourths o f
all forest land, both public and private, in the United States. A ctually,
98 per cent o f these holdings are less than 500 acres each, 86 per cent
are less than 100 acres each, and 70 per cent less than 50 acres each.
The average size w oodlot for the whole class is only 62 acres. R . E.
M cA rd le, U . S. Forest Service, Based on Reappraisal R eports, M im eo.,
O ct. 20, 1947.




woodlot management with other private manage­
ment, which is itself farr from good on the average.
Poor and destructive cutting practices are fol­
lowed on 94 per cent of the farm woodland in Mis­
souri, and on not much less in Indiana, Illinois and
Arkansas. Even in Kentucky and Mississippi,
where fair to good cutting practices are most prev­
alent, such practices are existent on less than half
the farm woodland.
PURPOSES OF MANAGEMENT

The record indicates that good management on
farm woodlots (in fact, on small woodlands as a
whole) is the exception rather than the rule. And,
as is often the case, lack of good management is
an expensive luxury, for the woodlot owner and
for the economy as a whole. In this district par­
ticularly, where per capita income is substantially
lower than the national average, poor management
is an item that can be ill afforded.
One major purpose for proper woodlot manage­
ment was noted above. T o increase our forests’
yields— in fact, to maintain our present output
and insure future timber supplies— it is vital to
have good management practices much more wide­
spread. Dovetailing into this is the purpose of
obtaining optimum output from our land. T o do
this, all land should produce the maximum output
commensurate with soil capabilities. Soils on steep
and rocky slopes are best adapted to timber. Thus
good land use in the Eighth District dictates that
considerable acreages remain forested in order to
prevent soil erosion and flooding of lowlands and
to permit the owner to realize the largest return
from the land over an extended period.

In this district, 43 per cent of the land resources
are classified as forest land. Only a small propor­
tion of this land should be cleared for cropland.
To compensate for the limited acreage that would
produce more in crops, there are thousands of acres
of cleared land that would produce more in timber.
For example, in 83 Eighth District counties be­
tween 15 and 30 per cent of farm land was classed
as idle or waste land in the Agricultural Census of
1945. A substantial proportion of this land could
produce timber. Farmers are not properly utilizing
their land resources when cutting practices on four
out of five acres of timber prevent adequate pro­
duction and restocking, and additional acreage is
allowed to remain in waste land.
In general, the roughest land should remain in
timber. Land in the next grade also should remain
in woods, unless pasture is needed in the farm
operation. If such land has been cleared and pas­
ture is not needed, reforestation may be advisable.

CHARACTER OF TIMBER CUTTING
PRACTICES ON FARM LANDS
EIGHTH

DISTRICT

STATES
pe r c e rr
OF CUTTING

PER CENT
OF CUTTING

0 ________ 20

80

100

Considerable reforestation also would be advisable
in some areas to prevent soil blowing. The best
land ordinarily should be cleared for row crops if
largest returns are to be realized.
Another purpose of proper farm woodlot man­
agement is to furnish employment in the off-season
and thereby increase farm incomes. Considerable
numbers of farmers in this district are underem­
ployed seasonally and this fact is reflected by low
incomes. As pointed out in the June, 1947, issue
of this Review, per capita farm income in 70 district
counties was less than $300 in 1944. The bulk of
these same 70 counties had 40 to 85 per cent of
land in timber. Records indicate that returns for
labor spent in harvesting and managing a woodlot
properly compare favorably with returns from alter­
native enterprises in the locality. Good woods
management not only puts land to better use, but
also utilizes labor which normally is idle a part
of the year. Any income derived in this manner
adds to farm and community income.
Still another reason for woods management is
to supply the farm with more wood products such
as posts, lumber and fuel wood, thereby reducing
cash farm expenses. About one-fifth of the timber
drain in the three southern district states is in the
form of fuel wood and fence posts.

DISTRICT
STATES

FACTORS IN W OODS MANAGEMENT
KENTUCKY

MISSISSIPPI

TENNESSEE

ARKANSAS

ILLINOIS

INDIANA

MISSOURI
20

'

40'

“

"

60

80

100

' Cutting that leaves land with limited or no me*-ms of re­
production,, often causes deterk>rattkm of species and poor
stocking.
1 First steps in improving stand, leaving reasonable stock of
desirable, marketable specves.
* GOOD CUTTIWG~-“ according to accepted management prac­
tices, that leaves well-stocked, vigorous stand of deskablc
species.
Source: Preliminary Data, Reappraisal of the Forest Situa­
tion, U. S. Forest Service.

Page 74




It is easy to talk about the need for and profit­
ability of good woodlot management. It is not
so easy to get such practices adopted on a wide
scale. There are a number of reasons for this dif­
ficulty. Generally speaking, educational agencies
promoting good forestry practices and technical
foresters simply have been too few in number to
reach the many woodlot owners that need to be
convinced. Also, those advocating good manage­
ment all too often have stressed the advantages
for posterity rather than correct land use and in­
come possibilities for current owners. Partly this
has been because of general economic conditions and
partly because we had until recently so much virgin
forest that returns from good management were not
commensurate with effort over the short run. In
addition there are a number of other problems that
make timber owners skeptical of the value of good
management. Finally, sheer human inertia has
acted to retard the campaigns.
Today more and more people, outside the tech­
nical forestry groups, are beginning to see the
need for good management of our forests, and edu­

cational programs are being presented in an in­
creasingly convincing manner. These need to be
continued and expanded along the theme that sound
forestry practices are necessary and that such prac­
tices will pay.
Time Necessary to Obtain Return— The question
of the time necessary to obtain return for good
management is one that should be clearly under­
stood. Trees do not grow overnight and it takes
many years to grow a merchantable sawlog from a
seedling. Many of the large trees in the few re­
maining stands of virgin timber in the district are
150 years old and older. Individuals hardly can be
expected to plant trees if a century and a half is
required before a return can be realized.
The return for good management might be pre­
sented as a minimum-maximum proposition. Noted
already is the fact that thousands of acres of dis­
trict farmland is waste or idle land producing noth­
ing. Much of this land could and should be
reforested. The process of reforestation costs little,
if anything; in many states seedlings are supplied
free and technical advice comes with them. Labor
m connection with planting seedlings is not great
and for the most part would come in the off season.
Under optimum conditions one man can set 1,000
seedlings (the number usually allocated to one
acre) in a day. An inexperienced worker prob­
ably can set 500 to 600 seedlings a day. Since
seedlings should be planted in early spring as soon
as frost is out of the ground, reforestation usually
would not interfere with regular spring farm work.
Thus, even though it takes relatively long to
grow trees, investment of labor and money in such
a project is relatively small. And where reforesta­
tion takes place on wr
aste or idle land, it costs
nothing in terms of displacing income-producing
uses. As the trees mature, value is added to the
land, which can be realized if the farm is sold or
when the trees mature for whatever use they are
to be put. This might be called the minimum
return for good management practices.
Between this minimum and the maximum (gained
from intensive management and good marketing)
there are many possibilities for return. Growth
rates vary for different kinds of trees and different
kinds of growing conditions. Markets also vary.
Current income possibilities thus vary with these
factors.
Obviously with 38 million acres of farm wood­
lots in the seven district states alone, there are
many opportunities for income realization from
good timber management in a much shorter period




of time than is necessary to grow a tree from seed­
ling to sawlog. Thousands of acres of these wood­
lots now contain considerable growth of trees five
to ten inches in diameter, some of which can be
cut as sawlogs within five to 20 years. However,
timber products other than sawlogs may be pro­
duced. In the South, poles and piling can be pro­
duced in 25 to 40 years from seedlings. Pulpwood
can be raised in 20 years, and even less time is
necessary to grow fence posts, coal mine props or
Christmas trees.
Thus by varying species or by varying products
produced, income can be realized much earlier.
Thinning cuts in the form of poles, pulpwood and
fence posts often liquidate costs of development
and pay taxes and other cash costs, the saw timber
left to mature being the margin of profit.
Fire Control and Grazing— In several areas of
the Eighth District, particularly in parts of the
Ozarks and mid-South, a serious deterrence to good
timber management is the danger from fires, most
of which are deliberately started. For instance,
burning of open range in the Ozarks is believed
to improve early pasture, and in the South, woods
are burned to control boll weevil. Incendiarism
in other sections of the district also is a cause of
many uncontrolled fires.
Any owner who desires to practice good forestry
is handicapped by actions of such individuals. Fire
not only destroys sawtimber, but, even worse, it
destroys young growing stock, making restocking
much slower and increasing the proportion of defec­
tive trees. Destroying leaves and organic matter
reduces the productivity of forest soils, causing
slower growth and increasing hazards of erosion.
Burning timber to drive out game is not only un­
sportsmanlike in the first place, but also destroys
game and the means w'herebv such game will be
able to obtain food.
Actually, much of the burning to destroy boll
weevil is wasted as studies indicate that boll weevil
hibernate wT
ithin 150 feet of the cotton field. De­
stroying cotton stalks in early fall does more good
than burning. Similarly, good pasture and good
timber seldom are found in the same place. Grass
in wroodland is usually a sign of understocking. A
better practice would be to have one acre of good
open pasture and to leave woods ungrazed since one
acre of good pasture will support as much live­
stock as 10 to 50 acres of woods pasture.2 Yet,
half the farm woods acreage was grazed in the
2 M anaging
M ay, 1947.

the

Small F orest,

Farm ers

Bulletin

No.

1989,

U SD A ,

Page 75

Eighth District in 1944, according to the Census
of Agriculture, varying from 72 per cent in Missouri
to 26 per cent in Kentucky and Tennessee. In
Illinois, Indiana, Arkansas and Mississippi, the
proportion grazed in each of the states was 53, 43,
43, and 41 per cent, respectively.
In a good many areas residents must be con­
vinced that burning woodland causes damage in
excess of any benefits derived. In some instances,
this can be done by education; in others, more
stringent laws and better enforcement of existing
laws may be necessary for a period of years before
people can see the benefits of woods management.
In like manner, the problem of over-grazing would
be alleviated by greater emphasis on pasture im­
provement and returns that are realized from prop­
erly handled pasture. Individual farmers can pro­
tect themselves to some extent by building fire
lanes or surrounding their woods with pasture or
cultivated fields.
S T A T E A L L O T M E N T S F O R F IR E P R O T E C T IO N
F I S C A L Y E A R 1948 1
Allotm ent Proportion
State and
T otal funds
per acre of
o f forest
private funds
budgeted (Stnte, com m ercial
receiving
budgeted
Federal and private) forest land protection
Arkansas ............ $ 582,728
$ 737,5 1
$0,037
5 5%
Mississippi ..........
499,561
693,127
0.044
40
Tennessee _____
153,400
257,112
0.022
45
Illinois ................
56,603
75,636
0.023
45
89,020
155,040
0.046
46
Indiana .................
Kentucky .......
207,212
279,378
0.024
14
Missouri ...............
239,158
______ 349,458
0.019________ 19
District States....$l,827,682
$2,547,282
$0,030
3 6%
1 H earin gs on D epartm ent o f A gricultural A ppropriation B ill f o r 1949,
Part 1, p. 476.

Eighth District states are making progress in
developing fire detection and fire protection. There
is, however, considerable variation among them
as to funds allotted for fire protection and propor­
tion of the forest area covered. Indiana, with a
relatively small forest acreage and only 15 per cent
of the state in timber, allotted 4.6 cents per acre
of commercial forest land for fire protection. Arkan­
sas, with the third highest allotment per acre
budgeted for fire control, was giving some protec­
tion to a considerably higher proportion of forest
land than other district states. Less than 2 cents
per acre of commercial forest land was budgeted
for fire control in Missouri, a smaller amount than
any of the other district states. However, a smaller
proportion of forest acreage was given protection in
Kentucky than in other district states.
Timber Stealing— “ Grandmawing,” as it some­
times is known, or timber stealing, is of sufficient
magnitude in some acres of the district to be a
major factor in poor management. Absentee own­
ers in these areas usually find that trees seldom are
left to grow large enough for sawlogs. In such
areas, good management generally requires many
Page 76




years of no cuts or very small ones and usually
only those with outside capital can afford to wait.
New laws designed to give timber owners addi­
tional protection, such as the Missouri Forest Crop
Law, have been passed, but as long as residents of
such communities do not have profitable employ­
ment, they will continue hauling timber to market
which they cut “ at grandma’s.”
Labor Requirements— On most farms in district
states, there is enough surplus labor to take care
of woodland management. In most instances, the
necessary reforestation can be accomplished and in
many instances labor is available for harvesting.
Time necessary for management varies, but onefourth day per acre is one figure used. The South­
ern Forest Experiment Station at New Orleans
uses 8 days, or 25 minutes per acre per year, as the
labor requirement for operating 200 acres, exclusive
of cutting and skidding.
If the owner harvests his own timber, consider­
ably more labor will be necessary. The Southern
Forest Experiment Station estimated that on a high
quality 200-acre pine stand, 137 man days were
necessary per year for cutting and skidding, nearly
five months employment for one man. On the
“ Farm Forestry Forty” at Crossett, Arkansas, two
months labor was utilized on the 40-acre tract, if
the operator did all work, including delivery to the
mill. The amount of labor necessary and the acre­
age necessary to keep one man busy throughout the
year varies, of course, with the volume of timber
on the land and the rate of growth.
Forest Credit— Shortage of capital is another
problem that often is important in lack of good
timber management. The individual landowner not
only has investment in land, but in addition has
capital invested in timber including original cost
of seedlings and labor to plant them, fire protec­
tion, taxes, fences, harvesting and interest for a
number of years. Forest credit to cover these capi­
tal expenditures presents problems not encountered
with the usual farm loan such as length of time
for a tree to mature, fire hazard, and existing
lending policies.
The matter of forest credit will be discussed
in greater detail in a future Review article. H ow­
ever, in this connection it might be well to point
out that costs of developing farm woodlots often
can be paid from income of other farming opera­
tions and that credit for such improvement can be
tied in with the over-all plan of farm, soil and
woodland improvement. Frequently, these costs
can be reduced by free seedlings, PM A payments

for reforestation and free technical advice. Thus
with little cash expenditure requiring relatively
little subsidization from other farming operations,
better use will be made of land, and eventually
cash returns will be obtained from timber.
GETTING A FARM FO RESTRY PROGRAM
UNDER W A Y

The farmer, with assistance from the county
agent, the soil conservation technicians or univer­
sity extension specialists, should plan his farming
operation so as to fit a forestry program into his
over-all farm program. A technical forester is
helpful but not essential in getting such a general
program under way on a farm.
In the second stage of woodland management,
extending over a period of ten years or more, a
few simple forestry practices should be followed.
Among these are (a) protective measures including
prevention of fire and overgrazing, (b) improveT
ment and harvest cutting each year, and (c) refor­
estation if needed.3
Here technical# assistance is more useful, and
probably will be requested, but such assistance will
be in minimum amount. Each farmer can take
steps to keep fire and livestock out of the timber.
He may want some technical advice in planning
fire lanes and other protective measures. Owners
with no forestry training for the first few years can
pick out and remove vines, shrubs, or obviously
defective trees, but assistance here is helpful in
spotting wolf, weed, diseased or insect infected
trees and recognizing which species should be re­
tained or removed. Reforestation, if any is needed,
should be undertaken in this stage. Several agen­
cies are available to advise on method and time of
planting, species that are adapted, where to obtain
seedlings and available financial assistance.

estimate how much can be cut and still maintain or
increase growing stock.
In the third stage, final production and market­
ing, more technical knowledge becomes necessary.
This means not only technical knowledge on how
to manage timber production intensively, but also
knowledge on how to market the products to realize
maximum income. Such assistance would involve
consideration of whether to produce sawlogs or
some other product, where to sell the product, and
whether further processing should be undertaken.
Most state, federal or university agencies can
handle requests for information in the second stage
of forestry management and to some extent, assist­
ance at the third level. However, these agencies
frequently do not have sufficient personnel to give
this type assistance to an individual. There are
private and state technicians in some areas who can
give this detailed technical assistance on a fee basis.
Technical assistance available to woodlot owners
will be discussed more fully in the July Review.
SELLING TIM BER

Marketing is equally as important as production
in profitable timber management. All too fre­
quently potential return from a hundred years’ pro­
duction of timber is reduced through unwise sales.
Such marketing not only gives the owner a low
return for past decades of growth, but the destruc­
tive cutting also retards growth for coming decades.
Yet clear cutting with a lump sum price has been
the characteristic method of marketing rather than
the exception. The timber owner, however, is not
wholly to blame for this situation as timber buyers
and saw mill operators usually have preferred buy­
ing all timber on a particular piece of ground.
Their experience in gaging amount of timber
usually gives them a bargaining advantage.

Nearly all the above forestry practices can be
begun without technical assistance, and can be
continued with a minimum amount of assistance.
According to the state extension forester in Mis­
sissippi, one half-day spent with a farmer is suffi­
cient to teach him how to select trees for improve­
ment, weeding or thinning cuts. Similarly, the
chairman of the Forestry Department at the Uni­
versity of Missouri states that in about eight hours
time a person can be trained sufficiently to make
reasonably accurate estimates as to volume and
growth. Thus in a very short time, a woodland
owner can learn to select trees for cutting and can

The first thing that a prospective timber seller
should do is to determine how much timber he has
to sell. Example after example could be cited o f
financial losses to timber owners because they
lacked information on quantity and value of timber
on their land. In one instance, a small forest owner
in Tennessee was offered $1,800 for all timber on a
tract of land, but with assistance of a forester
marked $5,000 worth of timber for cutting and still
had strong, vigorous trees left for future growth.
In another case, a southern Indiana farmer accepted
$5 for a walnut tree standing in his yard. The
buyer in turn took it to Louisville where he sold
the butt log alone as a veneer log for $100.4

3 J. F. Preston.
U S D A , July, 1947,

4 Managing the Small F orest, Farm ers Bulletin N o. 1989, U S D A , and
W oodland M anagem ent, J. A . H all, Bulletin N o. 213, Ohio State U .




The

Farm

W oodland,

Soil

Conservation

Service,

Page 77

T o prevent this type of situation, the owner may
consult the local farm district or extension forester
if he cannot make reasonably good estimates him­
self. If services of none of these technicians are
available and if the amount of timber warrants, a
commercial forester should be employed to cruise
and mark trees. An effort should be made to get
as many timber buyers as possible to bid on the
timber.
Using Off-Season Labor— A farmer, having a few
idle days through the winter, should consider cut­
ting the timber himself and possibly skidding and
delivering the timber to the saw mill. Usually, good
wages and often a nice profit can be made from this
operation. Of course, if extra equipment is re­
quired, careful calculations of these extra costs are
necessary.
One study concerning pine timber indicates that
on the average a tree 15 inches in diameter with
standing timber at $5 per thousand board feet
would be worth $0.80 on the stump, but cut and
delivered to the mill would be worth $2.40. Sim­
ilarly, with pulpwood worth $1 per cord in standing
timber, a 10 inch tree w7
ould be worth $0.13, but cut
and delivered would be worth $0.72.5
In a hardwood operation, timber worth $5 on the
stump is estimated as worth $20 delivered as logs
to the mill. A profit of 31 per cent is figured, on
the average, for cutting and delivering. Thus, if
a farmer would perform these operations himself,
he could earn $8.80 for his labor in cutting, skid­
ding, and hauling (providing he could do the work
as efficiently as the operators), and also take a
$6.20 profit.6
The owner might consider setting up his own
mill and sawing rough lumber if volume permits. A
good example of this type of operation can be found
in Conway County, Arkansas. On 130 acres of ex­
cellent second growth hardwood timber, the opera­
tors selectively cut timber during the winter
months. When weather permits, logs are skidded
to the saw mill at the edge of the woods. Good
labor return and profits are made from sale of rough
lumber and on slack days slabs are cut into fuel
wood and sold in nearby towns for enough to pay
good wages for this operation.
Several points should be investigated before an
attempt is made to sell converted products. First,
the demand for and value of various products should
5 R . H . W estveld, U niversity of M issouri.
6 Preston, T h e Farm

Page 78




W oodland.

be learned. Second, definite arrangements should
be made with timber users to purchase the products.
Third, products should be produced having highest
value commensurate with good forestry. Fourth,
if the sale is on a stumpage basis, a contract signed
by both parties should state clearly what timber
is to be cut, and what methods are to be used,
length of time for the operation, fire protection
measures for remaining growing stock, and price
to be paid for various products cut. Fifth, if con­
verted products are sold, such as poles, ties, pulp,
sawlogs and the like, bids should be received for
each product. Products for sale might be adver­
tised to attract more bidders, and the owner should
shop around and talk to any *neighbors who have
sold timber recently and compare values for vari­
ous products. Sixth, and one of the most impor­
tant points to be investigated before any cutting*
is done, specifications as to length and size should
be obtained from timber users. For example, if a
mill needs 16 foot logs, it may not pay any more
for a 15 foot, 6 inch log than for a 10 foot log.
T oo often careless cutting and bucking reduce ma­
terially the market value of the product.
Finding a Buyer— Owners in some areas in the
Eighth District are handicapped by having only one
or perhaps no immediately available sawmill at
which timber can be sold. This is particularly
unfortunate when available operators buy only on a
lump sum basis.
The need for an expanding market is evident and
desirable in many areas. Timber buyers first of
all must be convinced that in the long run they
will be better off buying selectively so that volume
in the future can be maintained. In the Southeast,
foresters from the T V A as well as other organiza­
tions are spending considerable time with sawmill
operators explaining the value of cutting on this
basis.
A different method for expanding the market for
a timber owner has been undertaken in Indiana by
the Department of Forestry at Purdue University.
About four times a year a timber marketing bulle­
tin is published, patterned after a similar one pub­
lished in New York. Timber owners contemplating
selling can send in details on the amount and kind
of stumpage for sale. These listings are assembled
and sent out to veneer mills, sawmills, mines,
basket companies and other wood users. Such
users are able to travel farther than they ordinarily
would to bid on a particular tract of timber fulfilling
their requirements. Thus an individual farmer may
be brought in contact with several buyers who

ordinarily might not have been contacted. In all
states, advice on where to contact various buyers
usually can be obtained from district foresters,
farm foresters or those working in national forests.
Another type of marketing service has been un­
dertaken in a southeastern Illinois county where
Producers Supply, a branch of the local county
Farm Bureau, recently has become one of six timber
buyers for a feltwood plant. This organization
agrees to sell pulp or sawtimber for any farmer
provided good cutting practices are followed. A
fee is deducted for bookkeeping and selling charges,
but the farmer does the cutting and hauling and, in
addition, receives as much as $0.50 a cord more for
stumpage than other buyers are paying. If volume
permits, a permanent type cooperative is to be es­
tablished to perform this service. This type of
organization should be of use particularly in areas
where tracts are small. The cooperative, under
proper management, by assembling various types of
products, should be able to attract more buyers than
when only small amounts of a product are available.
RETURNS FROM FARM W O O D L O TS

In many instances, forestry income can be had
simply by using otherwise idle labor on land that
previously contributed nothing to farm income. In­
come derived in this manner above actual cash
costs incurred is profit, but many w^oodland owners
desire specific information on returns that can be
obtained from a stand of timber.
Any estimate of income from timber is subject to
wide variations, such as variations in rate of
growth and volume of timber per acre. Aside from
variations in physical production per acre, there
are even wider fluctuations in values. However,
even in depressions good timber has a good pur­
chasing power. High prices such as prevail now
lead to heavy cuts. Despite the fact that current
cutting may be too heavy, it is difficult to object
to cutting a 12 inch tree (if adequate young stock
is left for future growth) in 1948 which may be
worth more than a 16 inch tree in 15 or 20 years.
Actually, somewhat heavier cuts are justified in
periods of high prices, for thinning and improving
operations can be more profitable when less de­
sirable species and grades have a market value.
W ide variation in prices also can be found at any
particular time from one locality to another and
in the same locality as a result of variations in
accessibility. In one area, certain wood users may
be willing to pay a premium price for a particular
type product, but in another area the same product
may have to be sold for a lower price because no




specialized processor operates there. Thus the
average figures used here conceal many differences.
Records from the Norris-Doxey farm forestry
projects give an indication of returns that are
being obtained from forests. These forests for the
most part were under good management and they
probably wrere better than average woodlands. In
1947, the net returns (stumpage value) on 13,531
farms representing a million and a half acres of
timber were $4.05 per acre, or $472 per farm. This
cut represented more than one year’s growth on
most of the farms, but in most instances cuts were
made according to accepted practices and young
stock was left to mature.
RETU RN S FROM FARM W O O D LO TS
N O R R IS -D O X E Y F A R M F O R E S T R Y R E C O R D S 1
A cres o f farm
Farm s woodland under
Products
Year
reporting management _____ cut /a cre _____ ______ N et value_____
*
^
^
Cords
Per farm Per acre
1943
148
15,506
200
0.51
$260
$2.47
1944
509
49,155
197
0.54
320
3.31
1945
441
44,126
451
1.12
485
4.85
1947
13,531
1,576,888
319
......2
472
4.05
1 1943-45 data from Preston, The Farm W oodland,
1947 data adapted from R eport Fiscal Year 1947, N orris-D oxey Farm
W oodland.
2 Included in board feet.

Another study of 89 midwestern farm woods in
the hardwood areas for the ten years, 1935-44, in­
dicates that annual net profits of $3.42 per acre
were made after paying labor, taxes and interest
on the investment.7 Such returns, however, could
have been made only on good stands under very
good management.
Examples mentioned only give returns after rea­
sonably good stands are established and the ques­
tion remains what can be expected over a long
period of time, starting with cleared land. An
answer to such a question becomes rather specula­
tive, but estimates can be made for average rates
and time necessary for growth. Values can be esti­
mated also, but probably are subject to greater^
variations. For example, land planted in short-leaf
pine produces a pulp crop in 25 years; in 40 years,
poles could be cut; and in 70 years, the remaining
saw logs could be cut. By starting with 1,000
trees per acre, thinning cuts of fence posts, pulp
and poles can be made to help liquidate develop­
ment costs and yet leave a full stand of timber to
develop into sawlogs. Average values as shown in
the table (next page) have been applied to average
production rates. As a result, stumpage value of
short-leaf pine would average $4.27 per year for the
70 years. It must be noted, however, that in the
example cited, three-fourths of the value was ob7
Indiana E conom ic
N o. 9, June, 1947.

C ouncil,

A

Suggested

Forest

Policy,

Bulletin

Page 79

E S T IM A T E D

Y IE L D S

OF

SOFTW OOD

AND

HARDW OOD1

N um ber o f years
A verage value
A verage value
Species, chief uses and average values 2_________________ _________ required to produce 8____________ produced per acre 4
produced per year
----,—
1st cut 2nd cut 3rd cut
1st cut 2nd cut 3rd cut
1.

I^oblolly pine

20
40
70

30

.........................................................................

35

..........................................................................

25
40
70
5
25

6
35

Y ellow poplar
pulpw ood or mine props ( $ 1 .5 0 /c d ) ..................................................
logs < $1 2 .0 0 /M .bd .ft.) ..........................................................................

20
70

30

Northern red oak
pulpwood* m ine props, acid w ood and ties ( $ 1 .5 0 /c d .) ............
logs ($ 8 .0 0 /M . bd. f t . ) ..........................................................................

40
80

80

Cottonw ood
pulpw ood ($ 1 .5 0 /c d .) ............................................................................
logs ($ 4 .0 0 /M .b d .ft.) ............................................................................

15
40

20

logs ($ 1 5 .0 0 /M .b d .ft.)
2.

4.

5.

6.

$30

4
37
225

27

7
50

25
7

12
30

70

10
300

37

27
80

5

8
100

30

Shortleaf pine
logs ($ 15 *0 0 /M .b d .ft.)

3.

$ 7
50
300

70

70

$ 71
$5.63
J
6*1

::i

$4.27

Jack pine

25

21

$2.64

!.!}

$5.11

$1.40
30 )

$4.20

1 A verage yield for sites recommended for various species.
2 F uelw ood, stakes, and posts not included.
Values differ widely am ong areas, e.g., in some areas hardw ood pulp is valueless except for fuel.
Values are below an expected long-tim e average stumpage value.
3 Cuts can be made m ore frequently under intensive management.
4 F uelw ood, stakes, and posts not included.
Spacing 6x6 ft. and 80 per cent stirvival assumed. H igh er values can be obtained from veneer logs,
cooperage stock o r other specialized products.
S ou rce: A dapted from T ree Planting, by L. S. M inkler and A . G. Chapman, Farm ers’ Bulletin N o. 1994, U S D A .

tained in the 70th year, when saw logs were cut.
Under intensive management cuts could be made
more frequently than indicated and some of the sawlogs could be cut before the 70th year. Loblolly
pine grows at a slightly faster rate and would gross
$5.63 per year. Additional income could be earned
by the operator doing all or part of the harvesting
and hauling.
The amounts given are gross amounts from which
costs must be deducted. In the case of shortleaf
pine, costs would be approximately as follow s:
1,000 seedlings $2.50, planting (hired labor) $6.00,
fire protection and taxes at 10 cents per year per
acre for 70 years $7.00. The total cost would be
$15.50, or $0.22 per acre per year, leaving a net
return of $4.05 for shortleaf pine per year before
carrying charges are deducted.

practically every community. This operation has
the additional advantage of a quick turnover and
offers an opportunity for utilizing considerable
labor for one or two months in harvesting and sell­
ing trees. If all trees are sold as Christmas trees,
a higher return per year may be obtained. For
example, on one farm in Ohio, net income per acre
with all labor hired was $142 for a 16 year period,
or $8.88 per acre per year, giving a yield of 7.8 per
cent on investment.8
While the periods of time involved in the above
examples are extensive, it should be noted that
they cover the stage from seedling to saw log. And
as was pointed out earlier, if land brings in no
current income without trees, the fact that it takes
a long time to grow trees should not make refor­
estation unattractive on that land.

Hardwoods as a rule grow slower than pine.
However, yellow poplar not only is fast growing
but also has a high value. The returns per year
for the 70 years are higher for yellow poplar than
for shortleaf pine, but earlier cuts of poplar usually
are worth less than pine. Cottonwood, a bottom­
land hardwood, grows rapidly, maturing in 40 years,
and even though the value per unit is relatively low,
the return per year compares favorably with other
species. Oaks grow at the slowest rate, making
returns per year low, but the value given is prob­
ably conservative in relation to pine.

Labor Returns— Labor in woods often comes at
times when there is little alternative opportunity
for employment. Even so, labor returns for work­
ing in woods compare favorably with other enter­
prises. Summaries of Norris-Doxey farm forest
projects indicated that for 89 farms in the oakhickory region, from 1940-45 labor returns ranged
from $0.26 to $1.35 an hour.9 In the South, farmers
can earn from $0.70 to $1.00 an hour for off-season
labor by harvesting and hauling timber products.
In the same areas, labor returns for work On cotton
were $0.27 an hour.1
0

Christmas trees from jack pine are listed in the
table as a subsidiary operation as there are oppor­
tunities for limited market for Christmas trees in

8 T r e e Planting, Farm ers Bulletin No. 1994, U S D A .
9 P reston, The Farm W oodland.
10 A . W . N elson, C hief Forester, Flintkote Company, M ississippi
B anker, M arch 1948.

Page 80




SUMMARY AND CONCLUSIONS

1. Farm woodlots represent the bulk of privatelyowned forest land. Virtually all of these are in
small holdings. Ninety-nine per cent of the wood­
lot owners have less than 500 acres of woods and
70 per cent have less than 50 acres of each.
2. Four of every five acres of farm woodland in
the Eighth District are under poor management.
The proportion varies from 94 per cent in Missouri
to 56 per cent in Kentucky.
3. Good timber management should be followed
to put land unsuited to pasture and crops to best
use, increase farm income, utilize underemployed
farm labor, and produce products for home use.
4. Getting a good timber management program
under way requires little technical assistance in
the early stages. A few hours’ instruction are suf­
ficient to inform an owner how to mark trees to
save or cut for initial improvement cuts.
5. Putting timber land under good management
increases the value of the land and adds to income.
Except on tracts wT
here timber already is matured,
however, it takes time to produce additions to in­
come. That time varies with the degree of maturity
of the trees, the species and growing conditions.
Thousands of acres of farm woodland already have
trees five to ten inches in diameter representing 25
to 50 years of growth. Growing time from seed­
ling to market also varies with type of market.
Pulp wood can be cut after 20 years, poles in 25
to 40 years, and saw logs in 50 years or more.
6. The returns from farm woodlots vary with
age, species and volume of timber. Records from
13,531 farms in Norris-Doxey projects in 1947 indi­
cated an annual net return of $4 per acre. Shortleaf
pine land from seedling to sawlog stage wrould net

$4 per acre per year under average conditions over a
period of 70 years. Under intensive management
more frequent cuts could be made and higher net
income realized.
7. Factors operating to curb good management
include indiscriminate burning of timber and timber
stealing. Legislation and more enforcement would
help alleviate the latter condition. On the positive
side, good management should be induced by the
fact that labor for it is available on most farms.
Only 25 minutes to two hours work per acre per
year is necessary to handle properly the average
farm woodlot. Harvesting and delivering timber
products from a well-stocked holding will require
more time (about three-fourths day per acre) but
might triple return from that land.
8. Labor returns for work in midwestern hard­
wood areas ranged from $0.26 to $1.35 per hour
from 1940 to 1945, according to Norris-Doxey
records. In well-stocked pine stands, returns
ranged from $0.70 to $1.00 per hour; in the same
year, work in cotton returned $0.27 per hour.
9. A century of timber growth is often wasted
in unwise marketing. Owners should know amount
and value of timber before selling stumpage. The
market for timber can be widened by advertising,
contacting foresters, making use of timber market­
ing bulletins or by using a forest cooperative.
10. Considerable capital is necessary in wood­
land development, the lack of which often is a
limiting factor in good management. However,
income from other farm operations can defray most
expenses of farm woodlot development.
Donald L. Henry

Survey of Current Conditions
Inflationary forces apparently continue to domi­
nate the outlook in the national economy. In some
segments of the economy there are indications that
expansionary pressures are diminishing but, with
new forces coming into being to supplement pres­
sures still evident, the inflation potential remains
great.
In the past few months our economy has con­




tinued to operate near capacity levels. Employment
has remained close to 60 million and the number
of unemployed workers has leveled off at about the
practical minimum. Consumer income and expen­
ditures continue on a high level and business out­
lays for new plant and equipment are large.
Domestic requirements plus overseas demand
have resulted in a flow of goods from our factories
Page 81

twice as large, in terms of physical volume of pro­
duction, as in 1935-39. In only two of the six broad
groups of durable goods industries covered by the
Federal Reserve Board's index of industrial pro­
duction was the physical volume of production in
the first three months of 1948 less than in the
corresponding period last year. And in these broad
groups the declines were concentrated in very few
particular lines. In the nondurable goods indus­
tries production in the first quarter was less than
last year in only three major groups—alcoholic
beverages, tobacco, and rubber products.
New construction activity, in terms of dollar
value of work put in place, was 32 per cent larger
through April than in the same four months of 1947,
with privately financed residential construction
totaling almost 60 per cent larger than last year.
An estimated 257,000 new permanent dwelling units
were started during these four months— a gain of
25 per cent over last year— despite steadily rising
construction costs.
How far into the future the present trends will
continue cannot be measured with assurance but it
appears unlikely that 1948 will witness a sharp
reversal of the present direction. Perhaps the
greatest danger spot in the domestic scene centers
around the price structure. As indicated above, the
total demand for goods has been and is now at a
very high level and, except in scattered lines, pro­
duction is still below demand. Until fairly re­
cently, consumers’ income generally kept pace with
rising prices. However, there has been an increas­
ing amount of consumer buying financed on credit,
one of the signs of growing pressure on consumers’
income and at the same time an additional source
of inflationary pressure on prices. Additional fac­
tors such as the reduction in income taxes and a
gradual increase in military expenditures and for­
eign shipments are expected to provide further
pressure for higher prices.
In part offsetting these inflationary forces is the
prospect that lower prices for some farm products
may result from a possible decline in foreign ship­
ments of food, reflecting increased agricultural out­
put abroad. Such price reductions as have occurred
as the result of management decisions (steel and
electrical equipment, for example) have been scat­
tered and not on a base sufficient to effect a material
contraction in consumers’ costs. Still they repre­
sent a constructive approach.




EM PLOYM EN T

Employment in the Eighth District in April in­
creased for the second consecutive month follow­
ing the large seasonal declines between December
and February. Gains in construction and agricul­
tural employment were primarily responsible for
the April increase. Total manufacturing employ­
ment remained fairly stable, although there were
fluctuations in the component industries. Further
increases in total employment are expected during
the summer and early fall months when it is antici­
pated that the all-time peak employment of last
summer will be surpassed.
Future employment increases should be attained
with less difficulty in this district than in the coun­
try as a whole, since the unemployed portion of
the labor force is slightly larger in this district
than in the nation. In the major district labor
market areas, persons equivalent to 5 per cent of
the labor force were looking for work in March,
1948 as compared with the national average of
4 per cent. In the remainder of the district, the
unemployment rate probably is slightly higher than
in these major areas.
These ratios are, of course, much smaller than
those in prewar days. In the United States the
unemployment ratio was 15 per cent in 1940. A m on g
the district urban areas, comparable figures for
March, 1940 and 1948, are: for the St. Louis area,
15 and 5 per cent; for Louisville, 14 and 5 per cent;
for Memphis, 14 and 4 per cent; for Evansville, 16
and 4 per cent; and for Little Rock, 18 and 6 per
cent.
In the St. Louis area, March, 1948 employ­
ment of 690,000 was approximately 1 per cent
higher than a year ago and 33 per cent more than
in 1940. Future employment increases are fore­
cast (based on employers’ estimates) for construc­
tion, manufacturing, public utilities, trade and serv­
ice. In the Louisville area, the employment figure
of 197,000 also was approximately 1 per cent higher
than in March, 1947 and 26 per cent higher than in
1940. Major increases are forecast during the next
few months in the construction and food industries.
The supply of labor is generally adequate, except
for a few skilled occupations.
In the Memphis area, employment in March was
171,000 or approximately the same as a year ago,
but one-third higher than in 1940. Increases are
expected in manufacturing employment as the
result of hiring in newly-established industries and
expansion in the older firms. The supply of labor
is reported to be large, but shortages of qualified

stenographers, clerical workers, and skilled machine
tool operators exist.
Employment in the Evansville area totaled 87,500
in March and was 7 per cent higher than a year
earlier and 40 per cent larger than in 1940. A con­
tinuing high level of employment is forecast with
the major gains expected in food, nonelectrical
machinery, and fabricated metal products. The
March, 1948 employment of 71,000 in the Little
Rock area was 4 per cent higher than a year ago
and 48 per cent higher than in 1940. Future employ­
ment expansion is forecast principally for the
manufacturing and construction industries.
INDUSTRY

Mixed trends characterized Eighth District indus­
trial activity in April. Operations increased in some
of the basic industries— for example steel, lumber,
coal mining, and crude o il; however, manufacturing
activity generally showed some decline during the
month. In most instances the curtailment resulted
from coal shortages at manufacturing plants in this
area or from materials and parts shortages which
in turn reflected coal shortages in other areas. April,
1948 output, however, was larger than in April,
1947.
Total consumption of electric power by industries
in the major district cities was 6 per cent below that
of March, although nearly 7 per cent higher than
last year. On a daily average basis power consump­
tion also was below that of the previous month for
the major cities combined, although Memphis and
Little Rock consumption was above March on both
a total and a daily average basis. Daily consump­
tion decreased in St. Louis, Pine Bluff and Evans­
ville. In the latter city the decline was due mainly
to curtailed production resulting from strikes in the
meat packing and refrigerator plants. Much of the
St. Louis decrease was traceable, directly or indi­
rectly, to shutdowns due to shortages of coal.
Manufacturing—While total manufacturing out­
put was lower than in the previous month, de­
creases were not uniform and operations in some
plants were increased. The shortage of coal was
felt more keenly in April than in March and was
particularly noticeable in certain industries. Opera­
tions were at a lower level in the electrical equip­
ment, automobile, iron and steel products, machin­
ery, metals and metal products, rubber products,
stone, clay, and glass products and textile indus­
tries. Gains were indicated in the production of
chemicals, transportation equipment and in the
meat packing industry.
Steel— In April, scheduled operations in the basic




steel industry in the St. Louis area were at the
highest level since last December. Production ap­
parently was not affected by the coal miners’ strike
which resulted in a sharp decline in steel output
elsewhere in the country. In this area operations
were scheduled at 80 per cent of capacity as com­
pared with 65 per cent in the previous month and
66 per cent a year ago.
Lumber— Reflecting more favorable weather con­
ditions in April than in previous months, operations
in the district’s lumber industry moved upward
during the month and were at a higher level than
a year ago. Reporting southern hardwood produc­
ers* operated at 81 per cent of capacity as com­
pared with 78 per cent in March and 75 per cent in
April, 1947. Average weekly production of south­
ern pine mills increased 7 per cent over the previous
month and 2 per cent over a year ago.
Whiskey— Operating Kentucky distilleries con­
tinued production on a large scale in April. At the
end of x\pril, 48 of the 63 distilleries were in opera­
tion, five less than in March and seven fewer than
a year ago. During March, production of whiskey
in Kentucky totaled 10.3 million tax gallons, a 43
per cent increase over the previous month but about
10 per cent below that of March, 1947. The amount
of whiskey in storage now is higher than it has been
for some years. In part this reflects large produc­
tion volume, but the increase in storage stocks also
has resulted from a reduction in consumer demand,
reflecting resistance to present prices.
Meat Packing— Production in some of the meat
packing plants in the St. Louis area was curtailed
by the packinghouse workers strike, but the loss in
output was more than offset by increased operations
in plants not affected by the walkout. The number
IN DU STRY
C O N S U M P T IO N O F E L E C T R I C I T Y
N o. o f A p r.,
M ar.,
A p r.,
A pr., 1948
(K .W .H .
Custom- 1948
1948
1947
Compared with
in thous.)
ers* K .W .H .
K .W .H . K .W .H .
M a r.,’ 48 A p r.,’ 47
Bvajisville ........ 40
8,421
9,490
8,916 R
— 11% —
6%
kittle R o ck ..... 35
4,156
4,044
3,455
+
3
+ 20
Louisville ........ 80
67,940
70,793
59,968 R
— 4
4 - 13
Memphis .......... 31
5,773
5,407
5,328
+
7
+ 8
Pine B luff........ 24
4,983
6,071
1,112
— 18
+348
St. L ouis.......... 99
70,992
76,548
73,538 R
—
7
—
3
Totals ..........309
162,265
172,353
152,317
—
6%
+
7%
*Selected industrial custom ers.
R — Revised.
L O A D S I N T E R C H A N G E D F O R 25 R A I L R O A D S A T ST. L O U I S
First N ine Days
A pr., ’ 48 Mar., *48 A pr., ’ 47 M ay, ’ 48 M ay, ’ 47 4 m os.’ 48 4 m os.’ 47
121,57l ‘ '125,361
129,668 “
36,994
38,342 “ 484,391' 519,651
S ource: Terminal Railroad A ssociation o f St. Louis.
C RU D E O IL P R O D U C T IO N — D A IL Y A V E R A G E
(I n thousands
A p r., 1948
of bbls.)
com pared with
A p r., ’ 48
M ar., ’ 48
A p r., ’ 47
M ar., ’ 48
A pr., ’ 47
Arkansas .......... .... 87.9
86.8
80.4
+ 1%
+ 9%
Illinois .....................172.8
170.0
185.5
+ 2
— 7
Indiana ................... 19.0
17.7
18.3
+ 7
+ 4
Kentucky ...........
24.5
25.1
25.7
— 2
— 5
T otal .................. 304.2
299.6
309.8
+ 2%
— 2%

Page 83

of animals slaughtered under Federal inspection in
the St. Louis area was 17 per cent larger than in
March and was the largest since last December.
Nationally, Federally-inspected slaughter in April
was 8 per cent less than in the previous month and
14 per cent smaller than a year ago. Slaughter
(Federally-inspected) in the St. Louis area totaled
570,000 animals as compared with 486,000 in March
and 402,000 in April, 1947. Slaughter of calves and
sheep during the month increased more relative to
April levels than the gain in cattle and hog killings.
In each category except cattle the number of ani­
mals killed was greater than in April, 1947, with
increases ranging from 26 per cent for calves to
88 per cent for sheep.
Shoe Production— Shoe production in the Eighth
District in March reached a new peak, according to
preliminary estimates, totaling 9.6 million pairs.
At this level, output was 3 per cent larger than the
previous high of 9.3 million pairs in October, 1947
and was well ahead of the 8.4 million pairs in Feb­
ruary and 8.1 million pairs in March, 1947. On a
daily average basis, however, production was
slightly less than in February. In the first three
months, output of shoes in this district was about 7
per cent larger than in the first quarter last year;
nationally, production increased about 5 per cent.
Average wholesale prices of shoes declined slightly
during the first quarter, but one of the district’s
large manufacturers recently announced price in­
creases on fall lines averaging about ten cents per
pair and partially offsetting reductions posted in
March.
Mining and Oil— Daily average production of
crude oil in the district increased slightly in April
but continued to lag behind last year’s output.
Production of 304,000 barrels per day averaged 2
per cent larger than in March but was 2 per cent
less than the rate in April, 1947. Month-to-month
increases accrued in all producing areas except Ken­
tucky; in Arkansas and Indiana, daily average pro­
duction was larger than a year ago.
CONSTRUCTION
B U I L D I N G P E R M IT S
(M on th of A p ril)
N ew Construction
(C ost in
N um ber
Cost
thousands)
1948
1947
1948
1947
Evansville .... ...
50
45 $1,091 $ 114
I»ittle R ock... ... 100
116
810
615
Louisville ..... ... 188
234
1,375
1,673
M em phis ....... ...1,156
846
3,380
2,401
St. L ou is......... ... 302
305
1,755
2,444
A p r. Totals... ...1,796 1,546 $8,411 $7,247
M ar. Totals... ...1,793 1,254 $9,567 $4,859

Page 84




Repair:5, etc.
Number
Cost
1948 1947
1948
1947
109 $
201
99 $ 69
347
182
232
106
108
92
107
55
224
198
179
151
366
280
423
338
1,246
861 $1,040 $719
836
825 $ 819 $737

Coal production approached a normal rate, fol­
lowing the return of the United Mine Workers to
the pits in April. Output for the month totaled
7.8 million tons as compared wT 7.3 million tons
ith
in March and 7.8 million tons in April of last year
when production also was down for a time due to
the work stoppage following the mine disaster in
Illinois. In Illinois and Western Kentucky, gains
over March offset decreases in the other district
coal mining areas. Compared with last year, better
than average gains were registered in Missouri,
Arkansas, and Western Kentucky.
Construction—The value of building permits
issued in the major district cities in April totaled
$9.5 million. Although this was 9 per cent less than
last month’s total, it was nearly 19 per cent larger
than in April last year and was the highest total
for that month since this bank’s records began in
1939. The value of permits was up, April over
March, in Little Rock, Evansville and Louisville,
but these gains were offset by declines in St. Louis
and Memphis. St. Louis and Louisville registered
decreases relative to April of last year.
Permits for new construction totaled $8.4 million,
of which $5 million represented residential con­
struction. The value of total new construction per­
mits was behind that of the previous month but w^as
considerably higher than a year ago. The largest
gains over March in new residential construction
occurred in St. Louis and Louisville; in St. Louis,
Memphis, Evansville and Louisville residential
awards were larger than a year ago.
In terms of dwelling units authorized for con­
struction, the total in the reporting cities was
slightly larger than in March. In Memphis, 540
new family units were authorized, the largest num­
ber of any of the reporting cities. In Louisville,
permits were issued for 116 new dwelling units; in
Little Rock, 62 new units; in Evansville, 42 new
units; and in St. Louis City, 123 additional dwell­
ing units were authorized.
TRADE

During April, dollar sales of most reporting retail
lines were lower than in March. The durable lines
in general showed higher sales. While nondurable
stores registered lower sales volume, the move­
ment was primarily seasonal and reflected the
earlier Easter date this year, which tended to con­
centrate pre-Easter apparel buying in March. On
a seasonally adjusted basis, for example, depart­
ment store sales in this district in April reached a
new peak.
Measured against April, 1947, sales performance

varied among lines, but again the difference in tim­
ing of the Easter dates accounted for most declines
which were registered. Thus while men’s and
women’s apparel shops showed less dollar volume
this April than last, on a seasonally adjusted basis
there was little change.
Reports of some consumer resistance to high
priced items continue. Mainly this seems to reflect
unwillingness to take goods at high prices if lower
priced items are available, and willingness to accept
lower quality items on the basis of price. As a
result, secondary lines priced at less than the firstline goods are appearing on the market in increas­
ing quantities and are being featured in sales pro­
motion programs. H ow much effect this develop­
ment will have on prices of more expensive brandname merchandise in the next few months remains
to be seen. If consumer income continues to in­
crease, the effect is likely to be negligible. Other­
wise there may be some pressure on the higher
priced lines.
At reporting department stores, April sales vol­
ume was down slightly from March but was 10
per cent greater than in April, 1947. Seasonally
adjusted daily average sales were at the highest
point on record. In April, the adjusted index was
at 343 per cent of the 1935-39 average in compari­
son to the previous high of 339 per cent reached in
November, 1947. In those stores reporting by de­
partments the largest volume gains, percentagewise,
were registered in homefurnishings divisions.
Larger-than-store-average increases also occurred
in certain inexpensive ready-to-wear and accessory
lines. Sales of men’s wear, both in the main store
and basements, declined generally from the volume
last year. At the end of April, the total value of
outstanding orders was 24 per cent down from
March, 1948 and was 13 per cent less than on
the comparable date in 1947. With the exception
of a slight drop in the seasonally adjusted index
of month-end stocks in March, 1948, there has been
an upward trend in evidence since September, 1947.
At the end of April, the seasonally adjusted index
peaked at 331 per cent of the 1935-39 average. In­
ventories on April 30 in terms of value were slightly
under those at the end of the previous month and
were 15 per cent larger than a year ago.
Dollar sales volume at women’s specialty and
men’s wear stores was smaller than in March and
in April, 1947. The early Easter plus unfavorable
weather tended to limit apparel sales in April. In
a number of women’s specialty stores, extensive
markdowns have been made in order to stimulate




TRADE
DEPARTMENT STORES

Stocks
on Hand
4 m os.'48
A pril, 1948
to same A pr. 30,’48
com pared with
period com p, with
M a r./4 8 A p r.,*47
1947 A pr. 3 0 /4 7
N et Sales

Stock
Turnover
Jan. 1 to
A pril 30,
1948
1947

1.30
1.24
F t. Smith, A rk ..............— 1%
4 - 2%
4- 5%
4 -1 6 %
1.34
1.48
kittle R ock, A rk......... -f- 4
4 -16
4 -8
4-20
1.18
1.38
Quincy, 111..................... — 6
4 -1
4 -5
4-43
1.10
1.17
Evansville, In d .............. — 8
4-27
4 -29
4-24
1.40
1.49
Louisville, K y ................ 4 - 1
4-13
-j-14
4-21
1.29
1.25
St. Louis Area 1............ — 3
4- 7
4- 9
4 -8
1.29
1.25
St. Louis, M o ........... — 4
4- 7
4- 8
-j- 8
4- 7
4-26
-----E. St. L ouis, 111.....4 -18
1.22
1*09
Springfield, M o ..............4-13
4-11
4- 9
4-37
1.36
1.18
Memphis, T enn..............— 3
4 -9
4 -5
4-16
1.18
.97
*A11 other cities............ - f - l l
4 -10
4- 8
-j-37
1.26
1.31
8th F. R . D istrict........— 1
4 -10
4 -9
-fl 5
*EI D orado, Fayetteville, Pine B luff, A r k .; H arrisburg, Jacksonville,
M t. Vernon, 111.; N ew A lbany, V incennes, I n d .; Danville, H op kins­
ville, Mayfield, Paducah, K y . ; Chillicothe, M o .; and Jackson, Tenn.
1 Includes St. Louis, M o ., A lton , East St. Louis and Belleville, 111.
Trading d a ys: A pril, 1948— 2 6 ; M arch, 1948— 2 7 ; A pril, 1947— 26.
O utstanding orders o f reporting stores at the end o f A pril, 1948,
were 13 per cent less than on the corresponding date a year ago.
Percentage o f accounts and notes receivable outstanding A pril 1, 1948,
collected during A pril, b y citie s :
E xclud ing
E xcluding
Instalm ent Instalm ent
Instalm ent Instalm ent
A ccou n ts A ccou n ts
A ccoun ts A ccoun ts
F ort Smith..............%
kittle R o ck ...... 25
Louisville ........ 26
Memphis ........ 29
IN D E X E S

OF

49%
50
50
47

Q uincy .................. 2 8%
St. Iyouis............ 25
Other cities....... 24
8th F .R . D ist. 26

6 5%
55
50
52

D E P A R T M E N T STO R E SALES A N D STOCKS
8th Federal Reserve District
April, M arch, F eb., A pril,
t 1948
1948,
1948
1947

Sales (daily average), U nadjusted 2..................... 326
Sales (daily average), Seasonally adjusted 3....343
Stocks, Unadjusted 8 ................................................331
Stocks, Seasonally adjusted 3.................................. 331
3 Daily Average 1935-39= 100.
3 End o f M onth A verage 1935-39= 100.

318
318
319 298
329

258
297
307
306
281
331
281

S P E C IA L T Y STO R E S
Stocks on
Stock
N et Sales
H and
Turnover
4 mos.
A pril, 1948
1948 A pr. 30, 1948
com pared with
to same com p, with
Jan. 1, to
M arch,
A pril,
period
A pril 30,
A pril 30,
1948
1947
1947
1947
1948
1947
M en’s Furnishings..— 20%
— 10%
— 3%
4 -3 1 %
.92
B oots and Shoes......— 24
— 4
4 -12
-4-21
1.36
Percentage o f accounts and notes receivable outstanding A pril 1,
collected during A p ril:
M en’ s Furnishings ............... 3 5%
B oots and Shoes.....................
Trading d a ys: A pril, 1948— 2 6 ; M arch, 1948— 2 7 ; A pril, 1947—
R E T A I L F U R N I T U R E S T O R E S **
N et Sales
Inventories

>

1,14
1.38
1948,
46%
26.

?>S§

April, 1948
A pril, 1948
com pared with
com pared with , Collections
M a r.,’ 48
A p r.,’ 47 M a r.,’ 48 A p r.,*47A p r.,’ 48 A p r.,*47
St. L ouis A r e a 1.. 4 - 2 %
4 -1 8 %
4 - 1% - 0 - %
3 9%
47%
St. L ou is............ 4 - 1
4 -19
4 -1
- 0 41
47
Louisville A r e a 2.. 4-31
4 -40
— 5
41 3
20
30
Louisville .......... 4 -29
4-38
— 5
4- 3
18
29
Memphis ............... 4-11
4-23
4- 3
4 -39
23
22
Little R ock ............ 4-21
4- 1
— 1
— 5
25
34
F ort Smith............ — 6
— 3
— 2
4-37
30
37
8th District T o t a l 8 4 - 9
4 -17
- 0 4- 5
30
38
*N ot shown separately due to insufficient coverage, but included in
Eighth District totals.
1 Includes St. L ouis, M isso u ri; East St. L ouis and A lton , Illinois.
2 Includes L ouisville, K e n tu ck y ; and N ew A lbany, Indiana.
8 In addition to above cities, includes stores in Blytheville, and Pine
Bluff, A rkansas; H opkinsville, O w ensboro, K e n tu ck y ; Greenville, Green­
w ood, M ississippi; H annibal and Springfield, M issouri; and Evansville,
Indiana.
** 44 stores reporting.
PERCENTAGE

D IS T R IB U T IO N

Cash Sales ................................................
Credit Sales .............................................
T otal Sales ...........................................

O F F U R N IT U R E SA L E S
A p r.,*48
M a r.,’ 48
A p r.,*47
14%
86
100

14%
86
100

2 0%
80
100

Page 85

BANKING
P R IN C IP A L ASSETS A N D L IA B IL IT IE S
F E D E R A L R E S E R V E B A N K O F ST. L O U I S
Change from
M ay 19,
M ay 21,
A pr. 21,
1948
1948
1947
(In thousands of dollars)
$
$ ....
Industrial advances under Sec. 13b... ....
11,992
+
334
Other advances and rediscounts...........
4 - 7,029
— 5,554
.... 1,109,684
— 16,347
T otal earning assets............................. .... $1,121,676 $— 16,013
$ 4 - 1,475
T otal reserves ..........................................
$ 651,166
T otal deposits .......................................... ., ,
690,368
P. R . notes in circulation........................... 1,078,884

$— 3,709
— 13,351
— 5,392

$4-42,710
4-41,431
4 - 4,328

Industrial commitments under Sec. 1 olb..$

$ - 0 -

$— 1,620

580

P R IN C IP A L ASSETS A N D L IA B IL IT IE S
W E E K L Y R E P O R T IN G M E M B E R BAN K S
E IG H T H F E D E R A L R E S E R V E D IS T R IC T
Change from
M ay 21,
(In thousands of dollars)
M av 19,
A pril 21,
1947
Assets
1948
1948
T otal loans and investments.................. .$2,043,181 $4- 24,245 $ +
3,149
(Com m ercial, industrial, and agri­
4 - 94,698
cultural loans, open market paper )
— 19,997
520,226
Loans to brokers and dealers in
—
417
securities .............. ..................................
5,815
4240
Other loans to purchase and carry
4 - 1, 121
— 27,417
securities ..................................................
30,536
4 - 22,633
Real Instate loans.......................................
4 . 1,126
147,485
—
961
Loans to banks...........................................
—
1,090
1,470
4 - 44,124
Other loans ...............................................
195,576
4 - 4,670
4-132,660
Total loans .............................................
— 13,930
901,108
4 - 33,179
Treasury bills .............................................
4 - 8,782
47,858
124,744
4 - 21,175
4 - 11,835
Certificates of indebtedness.....................
— 54,962
Treasury notes ...........................................
4 - 3,418
86,060
U . S. Bonds including guaranteed
— 129,916
obligations ................................................
736,899
4 - 12,465
4 - 1,013
4 - 1,675
Other securities .........................................
146,512
— 129,511
Total investments ................................ 1,142,073
4 . 38,175
4 - 23,430
Cash Assets ................................................
722,202
— 2,935
—
245
Other Assets .............................................
25,714
4706
T otal Assets ......................................... $2,791,097 $4 - 22,016 $ 4 - 26,334
Liabilities
Demand deposits— total ......................... $2,120,916
Individuals, partnerships, and co r­
porations ............................................. 1,422,825
525,351
interbank demand deposits.................
51,322
IT. S. Government deposits.................
121,418
Other demand deposits..........................
Demand deposits— adjusted* ................. 1,329,074
475,061
Tim e Deposits ...........................................
4,600
Borrowings ..................................................
17,325
Other liabilities .........................................
173,195
Total capital accounts..............................
Total liabilities and capital ac­
counts .................................................. $2,791,097

$ 4 - 17,851

$4 -

7,998

4 - 35,858

4 - 54,116

— 24,935
4 - 9,868
— 2,940
4 - 23,932
4254
—
400
4 - 2,466
4 - 1,845

—
—
444.
444-

$ 4 - 22,016

55,188
1,404

10,474
28,007
6,544
700
903
10,189

$ + 26,334

*O ther than interbank and Governm ent deposits, less cash items on
hand or in process of collection.

DEBITS TO DEPO SIT ACCOUNTS
A pr.,
A pr.,
M ar.,
(I n thousands
1947
1948
1948
of dollars)
20,994 $
16,542
ICl D orado, A rk .......:S 21,701 $
37,135
39,680
32,035
F ort Smith, A rk .....
6,952
7,747
6,019
Helena, A rk. .........
121,419
105,781
Little R ock, A rk ...... 120,298
21,176
22,388
23,067
Pine B luff, A rk .......
10,660
9,899
Texarkana, A rk.-T ex.
10,244
19,405
A lton , 111....................
23,848
25,691
K .S t.L .-N a t.S .Y ., 111. 106,651
110,945
103,808
28,882
29,868
25,431
Q uincy, 111. .............
86,471
106,350
108,691
ICvansville, In d .........
468,733
427,958
507,579
Louisville, K y ..........
23,061
26,400
O w ensboro, K y .........
25,973
14,354
15,081
13,276
Paducah, K y ..............
13,476
17,631
18,418
Greenville, M iss.......
Cape Girardeau, M o.
11,243
10,679
9,089
7,332
Hannibal, M o ............
7,345
6,650
Jefferson City, M o.
41,986
39,609
47,747
St. Louis, M o ........... 1,441,441 1,576,993 1,292,960
9,818
6,365
Sedalia, M o ................
9,395
Springfield, M o .........
54,851
53,126
49,436
Tackson, Tenn..........
17,172
14,987
16,831
Mem phis, T enn.........
472,361
430,609
544,488
Totals ................... $■5,067,784 $3,321,236 $2,765,211

Page 86




A p r.,’ 48 comp, with
M ar.,’ 4 8 A pr., 47
4 -31 %
4 - 3%
— 6
4-16
4-16
— 10
4-14
—
1
— 3
4- 6
— 4
4- 3
— 7
4-23
— 4
+ 3
— 3
+ 14
— 2
4-23
4-10
— 8
4-14
4- 2
— 5
4- 8
+31
— 4
+24
4- 5
+ 10
- 0 — 12
4- 6
— 9
+ 11
4-54
4- 5
+11
+ 3
+15
4- 2
— 13
+10
— 8%
+11%

sales, particularly in some seasonal lines, where
merchandise has moved slowly. Inventories in
terms of dollar value at the end of April were up
slightly in men’s stores but wT
ere off 8 per cent
from March 31 at women’s specialty stores. Both
types of apparel stores reported larger inventories
than on April 30, 1947.
Furniture store sales volume in April was 9
per cent larger than in March and 17 per cent
greater than in April, 1947. The value of inven­
tories on April 30, 1948 showT little change from
ed
the preceding month and were 5 per cent over the
same date last year.
BANKING AND FINANCE

As of May 12, total deposits of weekly reporting"
banks in the Eighth District wrere $2.2 billion, up
$6 million from the April 14 level and about the
same amount from the comparable date a year
earlier. Demand deposits of individuals, partner­
ships and corporations showed gains of $17 million
and $51 million over a month and a year ago,,
“ other” demand deposits had increases of $1 million
and $14 million, and time deposits continued their
steady growth. Government balances were up for
the month but below a year earlier. The major off­
set to the total deposit growth in the city banks
was a substantial decrease in interbank balances, a
fairly usual occurrence at this time of year.
In the week of May 12, total loans of the report
ing banks showed a gain over the previous week
tor the first time since mid-January. Business loans
continued their downward trend and wrere off $22
million from mid-April but $96 million ahead of a
year earlier. The drop in commercial, industrial
and agricultural loans at the weekly reporting banks
in this district is partly seasonal. The decrease in
this district, however, has been greater percentage­
wise so far this year than in the nation.
At the same time, it should be noted that loan
behavior of the weekly reporting banks is not fully
representative now of loan behavior at all banks.
On April 28, 1948, the latest date estimates are
available for all commercial banks in the United
States, central reserve and reserve city banks’ total
loans were off $359 million from December 31,
1947 while all other member banks’ total loans were
up $749 million and nonmembers’ $315 million.
Real estate loans in the district’s weekly report­
ing banks have remained nearly constant at $147
million since the end of January in contrast to a
growth of approximately 5 per cent in such loans
reported weekly by banks in leading cities. “ Other” '

loans, largely consumer credit loans, were $195
million at mid-May, $8 million and $44 million over
the preceding month and year ago, respectively.

AGRICULTURE

C ASH F A R M IN C O M E

Total investments for the weekly reporting banks
were $140 million below mid-May, 1947. A $143
million decline in U. S. Government obligations was
offset only in small part by a $2 million increase in
“ other” securities.
Interest Rates— Interest rates charged on new
commercial and industrial loans in 19 cities showed
a marked rise in the first fifteen days of March com­
pared with December, 1947. The average rate was
2.46 per cent as against 2.22 per cent.
The increase in the average rate figure for eleven
southern and western cities, of which St. Louis is
one, was from 2.61 per cent to 2.83 per cent; slightly
less percentagewise than the increase for northern
and eastern cities and for New York City alone.
Long-term rates, for business loans over one year,
averaged 2.35 per cent in March, 1948 and 1.99 per
cent in December, 1947. The increase in term loan
rates occurred in all geographic areas.

M arch, ’ 48
com p, with
(In thousands
of dollars)

M arch,
1948

Arkansas .......... $ 26,125
Illinois ............ 121,130
Indiana ............
70,805
Kentucky ........
23,107
Mississippi .....
34,759
Missouri ..........
60,119
Tennessee ........
30,477
Totals

..........$366,522

R E C E IP T S A N D

Feb.,
1948
— 2 9%
4- 5
4-12
— 18
4- 3
— 8
+ 1
— 2%

— 8%

S H IP M E N T S A T

$ 497,684
1,861,800
1,088,879
523,599
487,649
1,071,449
483,174

................ 432,566

N A T IO N A L

+19%

4 -6 3 %
4-52
4-55
4-36
+46
+51
+44

+19%

+50%

STOCK

YARDS

Shipments
A p r., A p r.,’48 com p, with
1948
M ar.,’ 48 A p r.,*47

*-—13%
+30
+86
— 10

+16%

+18%
4-19
4-21
4- 8
4-51
+14
+16

$6,014,234

Receipts
A p r.,’ 48 com p, with
M a r.,’ 48 A p r.,’47

Cattle and calves.. 111,725 + 2 3 %
H ogs ....................... 264,311 + 1 0
Sheep ..................... 54,803 + 3 8
Horses ..................
1,727 — 4

’ 47-’ 48 com p, with
*46-’ 47 ’ 45-’46

*47-’ 48

— 12%
— IS
— 2
— 8
4 -5
— 10
+ 4

A pril,
1948

Totals

12 mo. total, A pril to March

M arch,
1947

45,789*
96,008
18,654
1,727

+ 72%
+ 45
+173
— 4

162,178

+

— 15%
+99
+52
— 10

61%

+40%

PRICES

AGRICULTURE
W H O L E S A L E P R IC E S IN T H E U N IT E D S T A T E S

Preparation of seed beds and planting of spring
sown crops in the district progressed rapidly during
the latter part of April and the first part of May,
but weather during the middle of May wT gen­
as
erally too wet for farm operations. Most of the
cotton in the mid-South was planted by May 15
with considerable acreage up to good stands. Chop­
ping was progressing rapidly in district states.
Transplanting tobacco was under way in Tennessee
and Kentucky.
Substantial corn acreages were
planted by mid-May.
Winter wheat prospects in district states con­
tinued favorable. For the nation as a whole the
crop was estimated on May 1 at 845 million bushels,
which will be the third largest crop in history—
exceeded only in 1946 and 1947. The above esti­
mate, coming within two months of the harvest
season, was only 2 per cent, or 15 million bushels,
lower than the estimate on April 1, due mostly to
shorter crops in western Kansas, Oklahoma and
Texas.

Bureau o f L abor
Statistics
(1926 = 100)

A p r., '48 com p, with
A p r., *48 M a r .,’ 48 A p r., *47 M ar., *48
A p r .,’ 47

A ll Commodities ..... 162.7
Farm Products .... 186.7

161.4
186.0

147.7
177.0
162.4
131.8




0 .8 %
0.4
1.7
0.5

+ 1 0 .2 %
+ 5.5
+ 8.9
+ 12.7

R E T A IL F O O D P R IC E S
Bureau of L abor
Statistics
A pr. 15, M ar. 15,
A pr. 15,
A pr. 15,’ 48 com p, with
(1 93 5 -3 9= 1 0 0)
1948
1948
1947
Mar. 15/4 8
A pr. 15/4 7
U .S. (51 cities)..
St. L ou is..........
Little R o ck .....
Louisville ........
Memphis ..........

207.9
213.6
206.4
198.2
222.2

202.3
210.9
203.8
193.9
219.9

188.0
195.2
193.0
183.6
204.6'

+ 1 0 .6 %
+ 9.4
+ 6.9
+ 8.0
+ 8.6

+ 2 .8 %
+ 1 .3
+ 1 .3
+ 2 .2
+ 1 .0

W H O LE SA LIN G

N et Sales
Lines o f Commodities
A pr., 1948
Data furnished by Bureau of Census,
com pared with
M ar., 1948
A pr., .1947
U . S. Dept, o f Commerce*
Drugs and Chemicals.................. .....
D ry Goods ................................... .....

— 3%
—

9

—

Prices of most agricultural products continued
edging upward in April from their February slump.
Prices of cotton, soybeans and beef cattle were
among those sharing in the increase, while prices
of hogs, oranges, hay, and milk experienced some
decrease. The index of prices received by farmers

+
+
+
+

1

.....

4 -1 4

Plum bing Supplies ......................
T ob a cco and its P rodu cts......... .....
Miscellaneous ............................... ....

+ 1
— 7

*Total all lines..
+ 1?
* Preliminary.
**Includes certain items not listed above.

3%
4
- 0 +15
+45
- 0 +18

___<

+
+

+ 10%

Stocks
A pr. 30, 1948
com p, with
A p r. 30, 1947

.

+ 7
— 8
+ 19

----

+ 17
+ 8

+ 9%

P age 87

rose 3 per cent, to 291, for the month ending April
15. This was within 5 per cent of the record figure
reached in January, 1948. The index of prices paid
was 249 on April 15, about 1 per cent higher than
a month earlier. As a result, the ratio of prices
received to prices paid widened from 115 to 117
during the month.
Cash farm income in the first five months of
1948 totaled about $10.3 billion, slightly higher than
for the same period in 1947. Income from live­
stock totaled $6.6 billion, practically the same as in
1947, and income from crops was $3.7 billion, up
6 per cent from 1947. For the remainder of 1948,
income may fall below the 1947 level, due partly to
the smaller wheat crop expectation. In addition,
feed grain prices may be lower than last year. Sup­
plies probably will be somewhat larger, and demand
smaller, due to fewer livestock on farms. Another
factor tending to affect food prices is a decrease
from 1947 in food exports amounting to 15 to 20
per cent if present foreign crop prospects are real­
ized. Cotton prices, however, have strengthened
as a result of the European Aid Program.

Page 88




The index of farm real estate values in March,
1948 reached 170 per cent of the 1910-14 average,
equalling the post-World W ar I peak in 1920.
The ratio of net returns per acre to land value to­
day, however, is more favorable than at the peak
in 1920. Land values in Kentucky and Tennessee
in March were 32 and 29 per cent, respectively,
higher than the 1920 peak. Values in Mississippi,
Arkansas and Indiana were also higher than in
1920, but in Illinois were 6 per cent lower and in
Missouri 31 per cent lower. Despite the relatively
low level of Missouri land values, the percentage
increase in that state has been greater following
W orld W ar II than after the first world war.
Land values increased at a slower rate (7 per
cent) in 1947 than a year earlier (12 per cent).
Among Eighth District states the rise in farm real
estate values during 1947 was greatest (10 per
cent) in Arkansas and Mississippi, and almost as
large (9 per cent) in Indiana. In Kentucky, where
land values have shown the greatest combined war
and postwar gain of any district state, prices failed
to rise and values in Missouri increased but 3 per
cent.