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Frederick L. Beming Monthly Review Volume X X X I MARCH, 1949 Number 3 Income Growth in the Eighth District The Eighth Federal Reserve District is an eco nomically underdeveloped area. As a result it is a region of low income and below the national aver age living standard. In fact, with one possible ex ception, per capita income in the Eighth District is smaller than in any other Federal Reserve District. yond. In the war period the growth here reflected mainly the effects of the war boom and not so much district effort. Retention of wartime gains and fur ther increases, however, have been due largely to efforts on the part of individuals, groups and com munities within the region. The factors behind this situation have been many and varied. Perhaps the basic ones have been failure to utilize fully the natural resources at hand, lack of capital, surplus population which makes for small per person shares in the total income produced, lack of industry— especially the types in which worker productivity is high— educa tion and health deficiencies, lack of skill for non farm pursuits, and inadequate markets. Various articles in this Review have pointed out the nature of the district's problems and have stressed the efforts that are being devoted to raise income in various sections of the region. A better balanced and more productive agriculture, further industrialization, wiser and fuller use of the dis trict's own resources, such as her forests, are among the things that make for higher income. These factors react upon themselves and are both causes and results of low income levels. Lack of capital, surplus population, education and health deficiences lead to low productivity and lack of skills, which result in inadequate markets and low levels of industrialization. In 1947, per capita income in the Eighth District proper was under $1,000— but 75 per cent of the national average. And within the district, some areas had incomes per person far below the district average. In a sense, because of the circular cause and effect of the factors making for low income, the dis trict's problem might be said to involve lifting itself by its bootstraps. T o some extent it has been doing just that. Prior to W orld W ar II, per capita in come in the district was well below $400—about 70 per cent of the national average. District income per person grew rapidly during the war years and be The problems are mainly ones for local areas and not for the district as a unit to solve. No blue print can be handed down to the people of the dis trict for over-all district development with any great expectation that it can or will be followed. Major district problems can be delineated but the solutions to those problems call for individual and local community action. S M A L L -A R E A IN C O M E E S T IM A T E S In an attempt to aid in marking out some of the geographic areas where income lags behind even the relatively low district average, the Federal Reserve Bank of St. Louis has begun a research project looking toward the development of data that will serve as small area equivalents of national and state income series. Figures on national income have been available for some time and are widely used to gauge the performance of our national economy. Income estimates provide the most com prehensive data we have to measure progress in economic growth of a region. The U. S. Depart ment of Commerce publishes an annual series of income payments by states, and some private organ izations have attempted to measure income for smaller areas. Most of these data, however, have limited usefulness for analysis of current economic change in regions that do not coincide with state lines. Part III of this article presents income estimates for various regions within the states of Arkansas and Missouri. These are the first results of the small-area income study being conducted by this bank. The figures are based on and tie in with the Department of Commerce series of state income payments. Data from the Department of Com merce, from Arkansas and Missouri state depart ments, and from the two state universities have been used to derive the estimates. In time it is hoped to extend the small-area estimates to that section of the district lying east of the Mississippi River. These data should be useful for a variety of pur poses. A more precise measurement of income for the various areas of the district facilitates marketing analysis. It shows regional variations in income levels and thus highlights the problem of increasing income in relatively poor regions. It provides a time series to gauge the economic growth of each region in relation to the district and the nation as a whole. W ith other data available for local areas, it should permit the construction of accounts by which the flow of income through the various regions and industrial segments of the district economy can be traced. The estimates presented for areas of Arkansas and Missouri are personal income payment esti mates. They measure income received by indi viduals from their economic activities and from governmental agencies. They do not cover cor porate profits as such but only the share of cor porate profits that is paid to individuals (dividends). They do not show investment but they do include the return on investment to individuals. They com prise income received in the form o f : (1) labor income— wages and salaries. (2) entrepreneurial income— proprietor’s income, representing the net income of unincorpor ated businesses (including farms). (3) property income— dividends, interest, net rents and royalties. Page 34 (4) other income— veterans' pensions, work men's compensation, social insurance bene fits, relief payments, and similar govern mental transfers. These income estimates are essentially an aggre gate of monetary payments for current productive services of employed resources— labor, enterprise, capital— as well as governmental transfer payments. In a highly developed economy the great majority of all productive activities are evaluated in the market and reflected in money payments for serv ices rendered. Monetary income totals therefore give a reasonably complete picture of the com munity’s welfare. Yet in regions where the market is less developed, as in many rural areas, the rela tive importance of the household as a source of income in kind has remained substantial. Hence, monetary income totals tend to exaggerate the upward movement in the supply of goods to con sumers of metropolitan centers as compared with income recipients in rural areas where family pro duction is still important. A comparison of income in two regions at different stages of industrializa tion must therefore consider the differing impor tance of the market sphere in the total provision of goods to consumers. Some account of this problem has been taken by including in the income estimates the value of products grown and consumed on farms. Further adjustments for income and con sumption in kind would be desirable but are difficult and have not been attempted in this study. The data presented here are subject to some margin of error which is, however, in no case large enough to impair their usefulness for purposes of economic analysis. The estimates are published in the hope that they will contribute to a better under standing of recent economic changes in the Eighth District. Their sources and reliability are explained in detailed technical notes which also contain addi tional tables on Arkansas and Missouri incomes and expenditures by areas for selected years 1939-47. These technical notes are available on request. I. IN C O M E IN D IS T R IC T S T A T E S As noted earlier, income per person in the Eighth District runs far below the national average. Per capita income in five of the seven district states also is below that for the nation. And in the two states where per capita income is higher than the national average— Illinois and Indiana— income in the Eighth District portions of the states is well below the state average and below the national average. Chart L The fact that district per capita income in 1947 was but 75 per cent of that for the United States gives some measure of the gap that must be closed to bring district income and living standards up to the levels of other sections. That gap varies in magnitude among the district states. In Missis sippi and Arkansas per capita income in 1947 was just about half the nationwide average. In Missouri it was about 90 per cent of that of the nation. INCOME COMPONENTS - ( 9 4 7 Percent Percent Tables I and II show district state income figures for 1947 both in absolute terms and relative to the national average. In that year the district states contained 18 per cent of the nation's population but received only 16 per cent of the nation’s income. In large measure this reflects significant differences between the income structure of the district states and the nation. Chart I highlights these structural differences. 8th DIST. While for the nation as a whole labor income amounted to 63 per cent of all income payments in 1947, this component was considerably smaller in most district states. For all district states, entre preneurial returns made up 23 per cent of total income, as compared with 20 per cent for the nation. Property income is of less relative significance for the district, amounting to 9 per cent of 1947 income payments as compared with 11 per cent for the nation. “ Other” income, comprising governmental transfer payments, made up 6 per cent of the national income but amounted to as much as 10 per cent of the total in the relatively low-income states of Arkansas and Mississippi. Arkansas 629 498 91 140 1,358 1,913 710 KY, MISS. MO. TENN- PROPERTY U. S. IN C O M E The income estimates presented in this study are in terms of “ current” dollars. They reflect the inflationary tendencies in the general level of prices over the period from 1939 to 1947, as well as changes in “ real income” . Yet even after adjusting for this price inflation, the gain in “ real per capita income,, remains impressive, amounting to 63 per cent for the district states as compared with 53 per cent for the nation. In terms of “ constant” 1939 dollars, per capita “ real income” more than doubled in Mis sissippi and came close to this record in Arkansas and Tennessee, reflecting the great gains of the Middle South in recent years. Per capita income represents total income of a region divided by its population. Gains in per PE R C A P IT A Illinois 9,065 2,333 1,458 780 13,636 8,397 1,624 IND. IN C O M E sissippi and Tennessee, per capita income more than tripled. TABLE (M illion s o f D ollars) D istrict States L a b or In com e.....................................19,069 Entrepreneurial I n c o m e ................. 7,044 Property I n c o m e .............................. 2,984 Other Incom e.................................... 2,080 T otal I n c o m e ............................31,177 Population (T hou sands) .............. 26,016 Per Capital Incom e (D o lla r s )...... 1,198 IL L m frai"'"1""1"- □»'«- While district income is low as compared with the nation, it is growing at a faster rate. Chart II pictures the trend of district income over the last decade. Per capita income in the district states increased by 161 per cent, as compared with 145 per cent for the nation. In two district states, Mis- TOTAL AND ARK. LABOR I IN C O M E Indiana 3,096 1,173 428 239 4,936 3,835 1,287 PAYM ENTS K entucky 1,275 673 222 194 2,364 2,781 850 1947 Mississippi 578 570 92 142 1,382 2,097 659 Missouri 2,804 1,058 466 343 4,671 3,903 1,197 Tennessee 1,622 739 227 242 2,830 3,090 916 119,075 38,709 19,907 12,043 189,734 143,415 1,323 T A B L E II TOTAL AND PER C A P IT A D istrict States L a b or In com e..................................... 16.01 Entrepreneurial I n c o m e ................. 18.20 P roperty I n c o m e ............................. 34.99 O ther I n c o m e .................................. 17.27 T otal I n c o m e ............................ 16.43 Population ......................................... 18.14 Per Capita In com e.......................... 90.55 IN C O M E Arkansas .53 1.29 .46 1.16 .72 1.33 53.67 PAYM ENTS Illinois 7.61 6.03 7.32 6.48 7.19 5.86 122.75 AS Indiana 2.60 3.03 2.15 1.98 2.60 2.67 97.28 PER CENT K en tu cky 1.07 1.74 1.12 1.61 1.24 1.94 64.25 OP N A T IO N A L Mississippi .49 1.47 .46 1.18 .73 1.46 49.81 IN C O M E Missouri 2.35 2.73 2.34 2.85 2.46 2.72 90.48 1947 Tennessee 1.36 1.91 1.14 2.01 1.49 2.16 69.24 U nited States 100.00 100.00 100.00 100.00 100.00 100.00 100.00 Page 35 capita income, therefore, result from two distinct factors, changes in total income and changes in population. The relative importance of those two factors is shown in Chart II. Total income of district states increased from 1939 to 1947 at just about the national rate but population increased at a smaller rate. It is this difference in relative population growth which explains the large district gain in per capita income. In 1947, about 10 per cent more people lived in the United States than a decade ago. Arkansas, Kentucky, and Mississippi in 1947 all had less people living within their state lines than in 1939. Population growth in the district states as a whole was less than that for the nation. It was the net out-migration from the district between 1940 and 1947, people moving in search of greater opportunities in other areas, which permitted the remaining population to receive a larger share of the total product and thus to increase its per capita income. Heavy out-migration is an undesirable way to raise per capita income in the Eighth District— for it means people moving away instead of producing more goods. Most people are not particuIarly interested in moving— labor is far less mobile than capital, and out-migration tends to take from a region its more vigorous and ambitious people— those which a region can ill-afford to lose. Some of the district states showed a relative growth of total income that is greater than national-average growth. Similarly, some areas within states show percentage increases in total income that exceed the averages. In the interest of regional development it would appear of special importance to understand the reasons for a relative growth of total, as distinguished from per capita, income. Above average growth in total income would indicate those areas where workers have found new opportunities within the district, obviating their search for higher income elsewhere. Total income growth results from gains in the various income components. The contribution of each of these components to recent income gains may provide better understanding of the reasons for different rates of income growth within the district. The relative contribution of income components to total income growth is shown in Table III. Labor TA BLE III O F IN C O M E C O M P O N E N T S T O R E L A T IV E IN C O M E G R O W T H 1947 Compared W ith 1939 Arkansas Illinois Indiana K entucky Mississippi M issouri Tennessee U nited States 4 . 8 5.6% + 1 0 6 .0 % + 1 1 9 .1 % ’+ 96.2%" + 8 8.3% + 92.9% + 1 2 9 .2 % + 1 0 6 .5 % + 67.8 + 30.5 + 51,8 + 55.7 + 92.2 4 - 39.0 + 64.9 + 39.3 + 10.3 + 11.0 + 14.7 + 14.5 + 12.4 + 11 .2 + 16.1 + 12.4 + 20.5 + 8.5 + 6.8 + 15.4 + 24.1 + 11.9 + 21.6 + 10.3 + 1 8 4 .2 % + 1 5 8 ,0 % + 1 9 2 .4 % + 1 8 1 .8 % + 2 1 7 ,0 % + 1 5 5 .0 % ' + 2 3 1 .8 % + 1 6 5 .8 % C O N T R IB U T IO N D istrict States L a b or In com e................................ -4-105.3% Entrepreneurial I n c o p ie ............ + 43.3 P roperty I n c o m e .......................... + 13.2 Other In com e................................ + 11.4 Total Incom e G row th........ + 1 7 3 .2 % Page 36 income (wages and salaries) was the largest single item accounting for income growth from 1939 to 1947 in all district states except Mississippi where farm income is of dominant importance. These gains in labor income resulted from increased employment combined with rising wage rates. The significance of wages and salaries in determining total income growth is obvious for industrial areas where payrolls form the largest source of community income. Thus, it is not surprising to find that in the highly industrialized states of Illinois and Indiana the growth of labor income alone was sufficient to more than double total income payments, though it should be emphasized again that state-wide totals are not characteristic of the district portions of those states. It deserves special attention, however, where labor income has contributed greatly to total income growth in less highly industrialized states. Tennessee showed a total income growth of 232 per cent from 1939 to 1947. Of this the labor income contribution was almost 130 per cent, larger than in any other district state and indicative of its rapid industrial growth. Payrolls in Tennessee more than tripled from 1939 to 1947, and it is this factor which largely explains the outstanding performance of Tennessee in terms of total income growth. That state increased its share of aggregate national income from 1.2 per cent in 1939 to 1.5 per cent in 1947. Entrepreneurial income considerably improved its relative position for the nation as a whole, rising from 16 per cent of the total in 1939 to over 20 per cent in 1947. Profits usually fluctuate more widely than other types of income in response to changes in general economic conditions. Also, prices of farm products were exceptionally low in 1939 in relation to prices of most other products. Many of the recent relative gains in district income, therefore, reflect only the general improvements in entrepreneurial returns for the country as a whole. These have been of particular significance for this district because of its heavy reliance on farm income, This point needs special emphasis. W hile entrepreneurial income has contributed greatly to the growth of total district income, its rate of increase within the district actually has been slower than for the country as a whole. Entrepreneurial income for the United States in 1947 was 253 per cent larger CHART II. TOTAL AND PER CAPITA INCOME TREND 1939-1947 PAYMENTS (1939=100) INDIANA KENTUCKY M ISSO U R I TENNESSEE CONTINENTAL 350 350 A __________________1_________________ 300 ) , 200 200 jr s - ..... .. - / 100 100 1939 f i. 1 944 ........... ■ 1947 - 1939 TO T A L INCOME POPULATION PER CA P IT A INCOME 1944 Page 37 than in 1939, yet the district states showed an improvement of only 236 per cent. An outstanding exception again was Tennessee where entrepreneu rial income almost quadrupled from 1939 to 1947. These figures would indicate the extent to which the recent district income growth was due to gen eral nationwide shifts in production and prices. They also point to possibilities of further regional development through increased productivity of the district’s farms and industries. Property and “ other” income play a smaller role than labor and entrepreneurial income in the total income structure. For the United States as a whole, these two components contributed 23 points to the total income growth of 166 per cent from 1939 to 1947, as compared with 25 points out of 173 per cent for the district states. Important differences be tween the states, however, should be noted. Gov ernmental transfer payments alone contributed more heavily to the income growth of the Middle South than to the other sections of the district. Thus, there is a striking contrast between the rela tive contribution of various income components to national income growth and to the increase of income payments in Mississippi. “ Other” income contributed but 10 points of the national growth of 166 per cent but 24 points of the Mississippi in crease of 217 per cent. This should not be inter preted to mean that the absolute amount of govern mental transfer payments was unusually large in Mississippi, for residents of Mississippi received in 1947 only 1.2 per cent of all transfer payments though constituting 1.5 per cent of the country's population. Rather it points up the relative influ ence of even small individual payments, such as veterans’ pensions and social insurance benefits, in a state of low per capita income. All relative income gains over the base year 1939 must be considered in the light of the special fac tors affecting income in the base year. Some of the district gains reflect a very low starting level, and the fact that district income still runs well below the national average emphasizes the distance still to go in order to reach a more satisfactory income position. These problems are brought out in the more detailed study of Arkansas and Mis souri, the former a district state with low per capita income but impressive gains over the last decade, the latter a state close to the national average in terms of per capita income but showing a slower rate of growth. Page 38 II. A R K A N S A S A N D M IS S O U R I IN C O M E In 1947, per capita income in Arkansas was only 54 per cent of the national average in contrast to 90 per cent for Missouri. Between 1939 and 1947, however, Arkansas improved its income position considerably, whereas Missouri held about the same. Already noted is the fact that population out migration has a major effect on per capita income, and Arkansas lost population after 1939 while Mis souri gained— although the increase was less than the national average. More important for an under standing of shifts in total income, however, is an analysis of the income structure of the two states as shown in Table IV. The difference in structure of income is striking for 1947. Labor income was substantially less important and farm income more important in Arkansas than in Missouri. Property income in Missouri was more important and “ other” income less important than in Arkansas. The contrast is between a state that is relatively little industrialized (Arkansas) and one in which economic activity is more mature (Missouri). The pattern of income by industrial source bears out this contrast. But the contrast was even more striking in 1939. From 1939 to 1947, Arkansas labor income rose 186 per cent as against 154 per cent in Missouri, indi cating the relatively more rapid growth of industry in Arkansas. In 1939 almost all of entrepreneurial income in Arkansas was farm income; in 1947 pro prietors’ nonfarm income was almost as large as farm income, pointing to growth through diversifi cation. The relatively more important part played by “ other” income in Arkansas in 1947 testifies to the continued low income level of the state, how ever, and is a challenge to further development of Arkansas resources toward more productive em ployment. The differences in the industrial structure of the two states also may be highlighted with reference to their population ratios. In 1947, theae ratios were 2.7 per cent for Missouri and 1.3 per cent for Arkansas; that is to say, 2.7 and 1.3 per cent of the United States population were living in these two states. For Missouri, income shares of most indus tries were in rather close agreement with the popu lation ratio, indicating that the industrial structure of the state approximated the distribution of indus tries for the country as a whole. Thus, residents of Missouri received from each major industry a share of the national total which corresponded roughly with the population ratio of 2.7 per cent, the industry ratios ranging from 1.7 per cent for heavy manufacturing to 3 per cent for transporta tion and utilities. In Arkansas, on the other hand, the industry ratios show a much wider deviation from the population ratio, ranging from 0.1 per cent for heavy manufacturing to 1.9 per cent for agri culture. Residents of Arkansas thus rely much more heavily on one industry, agriculture, to main tain their income. During the war and postwar years, this very fact contributed to Arkansas' rapid income growth because of the relative improvements in farm income for the nation as a whole. In the long-run, however, it may point to a continued vulnerability of the Arkansas economy and the need for further industrial diversification. On the expenditure side, the differences between the Arkansas and Missouri accounts are much less pronounced. Recipients of higher incomes pay progressively higher income taxes, and the largest single difference refers therefore to the share of Federal taxes, amounting to 6 per cent and 9 per cent, respectively, of the total income of Arkansas and Missouri residents. State taxes, on the other hand, are levied more often with only indirect re gard to the income of the taxpayer, e.g., sales taxes, and tend to take a larger share of total income in low-income states. These amounted to 1.4 per cent in Arkansas as compared with 0.9 per cent in Missouri. These figures bear out the well-known fact that the people of low-income states have to make a relatively greater effort to maintain their state and local governments. Recipients of higher income also have a some what larger margin to save. The 1947 share of personal savings out of total income amounted to 5 per cent in Missouri as compared with 4 per cent in Arkansas. A note should be added here about the interpretation of “ savings” in national income accounting. Personal saving is essentially a residual item, indicating what is left after consumption expenditures and taxes have been deducted from personal income. It, therefore, reflects any improve ment in the “ net worth” position of individual con sumers, whether resulting from a reduction of their debt or an addition to their assets, and any increase in “ savings” may be due to larger debt payments as well as to an accumulation of liquid assets. As low-income recipients save less and pay less in taxes, they spend a somewhat larger share of their income on consumption. In 1947, this share amounted to 88 per cent in Arkansas as compared with 85 per cent in Missouri. An interesting differ ence, however, should be noted with respect to the so-called “ outstate balance” . Consumers do not necessarily spend their income in their state of residence. Thus, in 1947, the people of Arkansas spent a net balance equal to 6 per cent of their income outside their home state, largely in trade centers like Memphis, which draws buyers from throughout eastern Arkansas, Springfield, to which some counties of northern Arkansas are tributary, and Tulsa, with its trade area extending to north western Arkansas. Missouri stores, on the other hand, sold on balance more to customers from other states than Missouri residents themselves spent outside their home state, so that Missouri showed in 1947 a favorable “ outstate balance” equal to 2 per cent of Missouri income (the negative sign for this item in the Missouri portion of Table IV indicates the favorable balance). This, of course, reflects the importance of St. Louis and Kansas City as trade centers for a large area beyond the Missouri state line. Differences in the “ outstate balance” call for considerable care in the interpreta tion of the data given for the several consumption categories listed in Table IV. Thus, the relatively large share of total income spent on clothing and accessories in Missouri reflects no extravagance on T A B L E IV P E R S O N A L IN C O M E A N D E X P E N D IT U R E , (A m ou nts in m illions of dollars) B y T yp e of P aym ent: L abor Incom e..................... Entrepreneurial I n c o m e : Farm ................................ IN C O M E Arkansas Pet. A m ount 46.3 20.1 16.6 6.7 10.3 438.0 620.3 465.9 342.6 ....... ....................1,358.3 ..1,358.3 100.0 4,671.3 24.1 4.2 0.9 8.7 6.1 31.2 16.9 7.9 493.7 157.5 350.9 514.1 361.4 1,632.7 629.8 531.2 Other Incom e T otal Incom e B y Industrial S ou rce: Mminfc a ctu rin g : “ H ea v y ” * M anufa 57.3 .... 12.0 .... 118.4 .... 82.2 .... 423.9 ... 229.0 .... 107.9 ....1,358.3 100.0 Total Incom e 4,671.3 " H e a v y ” m anufacturing industries consist of metals and E X P E N D IT U R E Missouri Arkansas Pet. A m ount Pet. A m ount 85.0 3.972.2 88.4 Consum ption ..................................... 1,200.7 29.$ 1,393.6 34.3 F o o d and T o b a cco ..................... . 465.3 15.3 717.2 10.7 C lothing and A ccessories.......... 146.0 9.4 1.9 86.5 1.6 Personal Care ................... ........ .. 21.8 13.3 7.1 332.5 4.8 H ou sin g .......................................... 65.1 10.0 12.3 575.4 11.1 H ousehold Operations .............. 151.2 7.3 M edical Care and Death E x 5.5 258.6 3.9 penses *........................................ 53.4 100.0 3.7 171.5 1.9 Financial and L egal Services.... 25.8 5.2 241.8 8.9 Transportation ............................ 120.4 4.0 188.2 3.6 Recreation ....................................... 49.2 Private E ducation and R e 0.9 41.2 10.6 0.3 search ............................... , ........ 3,4 3.4 R eligious and W elfare A ctiv 59.1 1.3 0.8 7.5 ities ............................................. 10.3 - 93.4 2.0 6.5 11.0 Outstate Balance ..................... .. 88.8 7.7 10.3 7.6 479.1 Taxes .................................................. 103.9 34.9 6.2 9.4 437.1 Federal ........................................ . 84.3 13.5 0.9 1.4 42.0 State ................................................ 19.6 11.4 4.0 _ _ 4£ 220.0 Personal Saving .............................. 53.7 100.0 100.0 1,358.3 100.0 4.671.3 their products, machinery and transportation equipment, chemicals and allied products. Missouri Pet. A m ount 2,804.5 60.0 272.7 225.6 90.6 .... .... .... 1947 Page 39 the part of Missouri residents but rather the extent to which fashion merchandise is bought in Missouri trade centers by out-of-state customers. State income and expenditure patterns and their trend over the last decade also can be summarized with reference to the population ratio. In 1939, 1.5 per cent of the United States population lived in Arkansas but accounted for only 0.68 per cent of national income and expenditure. By 1947, the population ratio had dropped to 1.3 per cent, but Arkansas residents earned and spent 0.72 per cent of the national income. Thus, a smaller Arkansas population played a larger role in the national economy. Missouri just maintained its relative per capita income position within the nation. III. A R E A IN C O M E D IF F E R E N C E S Just as national income aggregates tend to aver age out significant variations between different districts and states of the nation, so do state income estimates conceal wide fluctuations among different income areas within the state. Many areas of Missouri have much more in common with the Arkansas income structure than the above discus sion of the statewide totals would suggest, for all income data referring to Missouri as a whole are influenced by the heavy weight of the two metro politan centers, St. Louis and Kansas City. To indicate the wide differences of income for the various regions within Arkansas and Missouri, estimates of income payments have been prepared for 47 income areas within these two district states. The areas consist of from one to six contiguous counties and are marked on the maps. They are identified by the name of the largest community within the area which in many, though not all, cases also is the industrial and trade center of the region. Areas have been defined as such in an attempt to combine counties with similar sources of income so they can be grouped together for a study of income patterns and resource develop ment. The boundaries of these income areas are arbitrary to the extent that they are dependent on administrative state and county lines. Thus, the data shown for St. Louis do not include the Illinois portions of the Greater St. Louis metropolitan area. Whenever possible, areas have been defined to be not only homogeneous with respect to their prin cipal sources of income but also to be of approxi mately equal size in order to facilitate income com parisons. It should be noted that in each case the per capita income estimate would change somewhat with a different area definition as per capita income is an average of income payments to all residents of Page 40 the area, an average likely to change with any shift in the number and composition of income recipients covered. A breakdown of state totals by income areas also reveals important differences between the Eighth and Tenth District portions of Missouri state totals. While Missouri per capita income for the state as a whole amounted to $1,197 in 1947, the Eighth Dis trict portion had an average of only $1,144 as com pared with $1,356 in the Tenth District portion of the state. T o put it somewhat differently, while 75 per cent of all Missouri residents lived within the Eighth District in 1947, they received only 72 per cent of Missouri income payments. The reasons for this disparity are the relative prevalence of urban centers as well as the inclusion of the richest agri cultural areas of the state in the western tier of Missouri counties which lie in the Tenth District. Income Structure— When all Arkansas and Mis souri income areas are ranked in accordance with the size of their per capita income in 1947, only two areas, the metropolitan centers of St. Louis and Kansas City, had a per capita income above the national average of $1,323. These areas, which con tained 43 per cent of the state's people, received 69 per cent of the state’s payrolls. Labor income made up about three-fourths of total income payments. Several areas in 1947 had a per capita income below the national average but above $1,000. All these areas are in Missouri except one, Little Rock. An important difference in the income structure of the areas should be noted, however. Little Rock is a metropolitan center where payrolls made up 71 per cent of total income in 1947. In this area, 10 per cent of the Arkansas population received 22 per cent of Arkansas labor income. Most of the Missouri areas in this category owed their high per capita income to the fact that relatively large farm returns accrued to a relatively sparse population. Thus, in Missouri areas 16, 18, 19, 20, 22, 28 and 29, primarily livestock regions, 15 per cent of the Missouri population received 40 per cent of all Missouri farm income in 1947. There are several distinct income patterns in areas where per capita income ranges from $800 to $999. Missouri areas 17, 21, 23 and 24, all in the northern part of the state, have an economic struc ture quite similar to the high farm income areas just mentioned, yet have not quite the same out standing productivity. Missouri area 7, the “ bootheel” , contains some of the richest cotton land in the country; in 1947, residents of this area received 46 per cent of their income in the form of entre preneurial farm returns, the highest percentage in INCOM E PER CAPITA INCOME P A Y M E N T S - 1947 (DOLLARS) TOTAL INCOME (1939 = 100) M ISSOURI MISSOURI U S $1323 MO. $1197 U.S. 269 MO. 255 ARK. $710 I ARK. 284 I |Under 600 l8y M IS S O U R I 1 ST LOUIS 11 W EST P L A IN S 2 JEFFERSON CITY 12 LEBANON 3 WASHINGTON 13 MONET 4 CAPE GIRARDEAU 14 SP R IN G FIE LD 5 FLAT RIVER 15 BO LIVAR 6 POPLAR BLUFF 16 S E D A L IA 7 C A R U T H ER SV ILLE 17 COLUM BIA 8 THAYER 18 M EXIC O 9 SA L EM 19 MOBERLY 10 R O L L A 2 0 H A N N IB A L Name refers fo largest city in area. E 3 7 0 0 - 799 in n 2 2 0 - 2 3 9 8 0 0 -8 9 9 g jg 2 4 0 -2 5 9 RSS 9 0 0 - 9 9 9 E SS 2 6 0 - 2 7 9 1000-1199 E gg 2 8 0 - 2 9 9 1200 and over H 21 22 23 24 25 26 27 28 29 K IR K S V IL L E M A RSH A LL C H IL L IC O T H E TRENTON JO PLIN NEVADA KANSAS CITY ST. JO SEPH M A R Y V IL L E any part of either state. Arkansas area 1, in the northwest corner of the state, owes its relatively high per capita income to the heavy reliance on poultry production and truck farming. In this area, 4 per cent of the Arkansas population received |Under 200 Eg} 2 0 0 -2 1 9 [~P1 6 0 0 - 699 1 2 3 4 5 6 7 8 9 10 30 0 and over A R K A N SA S F A Y E T T E V IL L E II L IT T L E ROCK H ARRISON 12 P IN E BLUFF 13 STUTTGART MOUNTAIN HOME 14 H E L E N A PARAG O U LD 15 T E X A R K A N A FORT SM ITH 16 EL DORADO R U S S E L L V IL L E 17 C RO SSETT B A T E S V IL L E 18 Me GEHEE JONESBORO M ENA HOT SP R IN G S 8 per cent of entrepreneurial farm income in 1947. Missouri areas 14 and 25, on the other hand, repre sent a more urban pattern, with payrolls accounting in 1947 for more than half of all income payments in the industrial regions of Springfield and Joplin. Page 41 entrepreneurial farm income in areas 4, 13 and 14. Per capita income of these areas, however, was low because of their relatively high population density. Industrial areas in the $700 bracket in 1947 were Fort Smith and El Dorado, labor income in both amounting to about 60 per cent of total income pay ments. The same percentage of income in the form of payrolls, largely originating in trade and service industries, prevailed in the tourist center, Hot Springs. An important farm area in the $700 bracket was Jonesboro, including Mississippi county, for many years the leading cotton county of the United States. In this area, 40 per cent of all income pay ments took the form of entrepreneurial farm income in 1947, and one-tenth of the Arkansas population received here in 1947 more than one-fifth of Arkan sas farm income, reflecting the productivity of the Cotton Delta. Its relatively low per capita income, as compared with some Missouri areas, was due to the heavier population pressure of the Arkansas Delta counties. Another rural area in the same income bracket was Poplar Bluff, including several Missouri counties of the Mississippi lowlands, where 3 per cent of the Missouri population received 7 per cent of Missouri farm income in 1947. In the lowest income bracket, under $600, were Missouri area 8 and Arkansas areas 3, 6, 17, and 18. Here again, a distinction should be made between areas of low productivity per acre and areas of low per capita income because of population pressure. Missouri area 8 as well as Arkansas areas 3 and 6 fall under the first category, being regions of sparse settlement in the Ozark and Ouachita Mountains with few opportunities for productive employment, where governmental transfer payments play a prom inent part in maintaining minimum standards. Arkansas areas 17 and 18, on the other hand, are regions of considerable economic activity, reflected in the relative rise of labor and farm income com ponents in the Southern Delta counties. Per capita income was low, however, as total community out put was shared by a rapidly growing population. It should be noted that per capita income in these areas was only one-third that of the large metropolitan centers. Two distinct income areas may be distinguished within the $600 range. On the one hand, there are the Missouri areas 9-13 and the Arkansas areas 2, 7, 9, making up a large part of the Ozark counties north and south of the state line, as well as parts of the Ouachita Mountain region. In these areas aver age productivity is low, and much of the land is wooded. All these areas have in common a rela tively high dependence on governmental transfer payments. In 1947 these accounted for more than 20 per cent of total income in some Missouri coun ties. On the other hand, in the Arkansas areas 4, and 12-15, productive employment provided the dominant source of income in 1947, consisting largely of labor income in areas 12 and 15, and of Income Trends— While Arkansas per capita in come is lower than that of Missouri, it is growing at a faster rate, and this fact is emphasized by the income trends of the individual areas. A map show ing these income trends is almost the opposite of a map showing current per capita income. While most areas of high per capita income are in Mis souri, many areas showing more than average gains are in Arkansas. Partly, this reflects the low income of most Arkansas areas in the base year and the long way to go in order to reach a more satisfactory income position. But it also shows the special efforts made to accomplish this goal and the con comitant shifts in income structure. TABLE V A R K A N S A S IN C O M E Area 1 2 3 4 S 6 7 8 9 10 11 12 13 14 15 16 17 18 Name of Largest City T otal Incom e________ ___________ Population___________ M illions P er Cent 1947 as P er Cent 1947 as D istri Per Cent of D istri Per Cent bution of 1939 D ollars Thousands bution o f 1939 70.7 Fayetteville ...... .. 32.2 Harrison ............ .. 25.8 M ountain H om e .. 59.9 Paragould .......... Fort Smith ........ „ 115.2 54.0 Russellville ........ 59.9 Batesville .......... 149.0 Jonesboro .......... 42.2 Mena ................... 80.0 H ot Springs ..... 196.9 Little R ock ..... 86.9 Pine B luff ........ 68.2 Stuttgart ............ 99.6 Helena ................. 58.7 Texarkana ........ 86.1 IJl D orado ........ 43.8 Crossett ............ 30.1 MeGehee ............ 1,358.3 Arkansas ........ Page 42 P A Y M E N T S , B Y A R E A S , 1947 5.2 2.4 1.9 4.4 8.5 4.0 4.4 11.0 3.1 5.9 14.5 6.4 5.0 7.3 4.3 6.3 3.2 2.2 100.0 327 268 253 274 295 247 263 303 238 310 310 299 260 282 261 272 262 269 284 82.1 51.1 44.2 90.1 146.7 91.8 95.2 201.8 69.4 108.7 195.7 137.1 107.1 150.0 93.6 112.9 73.9 61.6 1,913.0 4.3 2.7 2.3 4.7 7.7 4.8 5.0 10.6 3.6 5.7 10.2 7.2 5.6 7.8 4.9 5.9 3.8 3.2 100.0 90 82 83 91 92 80 93 106 83 105 126 113 95 100 93 102 100 113 99 Per Capita In com e_____ Per Cent 1942 as o f State P er Cent D ollars A verage of 1939 862 628 585 655 785 588 629 738 608 737 1,006 634 636 664 628 762 588 488 710 121 88 82 92 111 83 89 104 86 104 142 89 90 94 88 107 83 69 100 365 327 305 302 322 306 282 286 290 296 246 265 273 284 282 266 260 236 289 Per Capita Sales T a x Per Cent o f State A verage Dollars 14.10 7.53 4.54 7.63 10.70 7.24 8.05 9.57 7.94 11.28 18.05 7.26 8.41 7.79 9.49 10.53 5.91 5.25 9.71 145 78 47 79 110 75 83 99 82 116 186 75 87 80 98 108 61 54 100 Per Capita Bank Deposits Per Cent o f State D ollars Average 434 283 220 307 473 255 287 318 241 353 537 341 354 239 361 459 237 164 348 125 81 63 88 136 73 82 91 69 102 154 98 102 69 104 132 68 47 100 In 1947, there were four areas in Arkansas where total income more than tripled since 1939. Areas 1 and 8 owed their gains largely to improvements in farm income. In areas 10 and 11, payrolls more than tripled. The lead of Fayetteville is even more impressive in terms of per capita income, for the area, in spite of its large income gains, actually lost 10 per cent of its resident population during the last decade. A very much larger income thus accrued to a smaller number of recipients, increas ing per capita income by 265 per cent. Areas 8, 10, 11 had population gains, and per capita income therefore increased at a somewhat smaller rate. Population in Little Rock advanced by 26 per cent, more than in any other area of the two district states, leading to a more moderate growth in per capita income. Total income gains of 180 to 199 per cent were recorded for three other areas in Arkansas and on^ area in Missouri. Arkansas areas 5 and 12 tripled payrolls, indicative of the industrial growth in Fort Smith and Pine Bluff. An interesting difference in terms of per capita income for these two areas should be noted, however. Fort Smith lost ,8 per cent of its population and therefore more than tripled its per capita income. Pine Bluff gained 13 per cent in population and thus showed a more modest per capita income gain. Arkansas area 14 and Missouri area 7 more than tripled farm income, reflecting, just as Arkansas area 8 mentioned above, the great gains of the Cotton Delta. Leading all other Missouri areas in terms of total income growth from 1939 to 1947 was St. Louis, largely reflecting a gain in payrolls of 177 per cent. Because St. Louis also recorded the largest popula tion gain within the state— 16 per cent over 1939— its per capita income growth was more moder ate. Similar total income gains, resulting largely from payroll advances, were shown for Kansas City. A smaller industrial area with the same rate of payroll growth was El Dorado. Most other areas in this category of total income gains, ranging from 160 to 179 per cent, owed their growth mainly to improvements in entrepreneurial income, farm and nonfarm. This held true for Missouri areas 3, 6 and 25 and Arkansas areas 2, 7 and 13. Special mention should be made, however, of Arkansas areas 15, 17 and 18 along the southern state line, all of which showed very substantial payroll gains. Attention is also called again to the different impact of population shifts. Thus, Arkansas areas 2 and 18 showed the same advance in terms of total in come growth. But area 2 lost 12 per cent of its population while area 18 gained 13 per cent over the same period, leading to widely different movements of per capita income, which advanced 227 per cent in the Ozark counties but only 136 per cent in the Southern Delta. The remaining areas, most of them in Missouri, showed less than average gains in total income over the last decade. In Arkansas, only areas 3, 6 and 9 increased by less than 160 per cent; all three are in the forest areas of the Ozark and Ouachita Mountains where population losses up to 20 per cent led to sizable per capita gains in spite of a slower growth in total income payments. In Missouri, most rural areas lost population and therefore re corded relatively high per capita income. Areas 10 TABLE VI M I S S O U R I I N C O M E P A Y M E N T S , B Y A R E A S , 1947 Area N am e of la r g e s t C ity T otal Incom e __________ P o p u la tio n _________ M illions P er Cent 1947 as P er Cent 1947 as D istri Per Cent of D istri Per Cent o f 1939 Thousands D ollars bution bution of 1939 Per Capita Incom e______ Per Cent 1947 as o f State P er Cent Dollars A verage o f 1939 Per Capita Per Capita Sales T a x B ank Deposits Per Cent P er Cent o f State o f State A verage Dollars A verage D ollars St. L ou is ......... ...1,937.8 68.6 Jefferson C ity ... 72.0 W ashington ..... ... 59.4 Cape Girardeau. ... ... 55.8 Flat R iver ....... 97.5 Poplar B lu ff ...... Caruthersville .... 121.0 Thayer .............. 23.2 Salem .................. 32.5 R olla .................. 46.8 W est Plains ..... ... 35.9 L ebanon ........... ... 34.7 M onett ............. ... Springfield ........ .. 111.2 36.2 B olivar .............. ... Sedalia .............. ... 100.7 65.4 Columbia ......... ... 65.7 M ex ico ............. ... M oberly ........... ... 62.9 H annibal ........... ., 69.6 35.6 K irksville ......... ... M arshall ........... ... 100.0 Chillicothe ....... T renton .............. 37.6 41.5 1.5 1.5 1.3 1.2 2.0 2.6 0.5 0.5 0.7 1.0 0.8 0.7 2.4 0.8 2.1 1.4 1.4 1.3 1.5 0.8 2.1 1.3 0.8 276 227 266 221 256 260 281 216 211 208 228 220 222 251 193 223 214 240 206 235 183 204 194 174 1,295.0 67.1 78.4 72.6 69.5 123.7 136.6 38.2 37,1 53.5 77.7 52.0 52.7 118.6 50.7 99.9 73.8 61.7 61.3 64.4 43.3 94.4 60.9 46.1 33.2 1.7 2.0 1.9 1.8 3.2 3.5 1.0 1.0 1.4 2.0 1.3 1.3 3.0 1.3 2.5 1.9 1.6 1.6 1.6 1.1 2.4 1.5 1.2 116 96 100 94 94 103 104 86 81 104 91 92 90 104 85 94 95 95 87 92 84 89 87 85 1,496 1,023 918 819 806 788 885 577 625 607 603 694 658 937 714 1,008 886 1,065 1,027 1,081 822 1,058 968 818 125 85 77 68 67 66 74 48 52 51 50 58 55 78 60 84 74 89 86 90 69 88 81 68 237 236 265 23.4 271 253 270 251 259 200 251 238 246 243 228 236 225 254 237 256 218 229 222 206 18.14 13.26 11.06 10.39 8.84 9.61 9.48 5.78 5.21 9.00 6.44 8.09 6.98 14.99 7.45 10.09 11.78 10.49 10.49 10.62 9.23 9.57 9.92 9.49 128 94 78 73 62 68 67 41 37 64 46 57 49 106 53 71 83 74 74 75 65 68 70 67 1,097 592 455 557 312 304 284 170 281 302 328 343 324 523 400 519 532 505 579 545 494 606 547 526 137 74 57 70 39 38 36 21 35 38 41 43 41 65 50 65 67 63 72 68 62 76 68 66 8th D istrict M issouri..3,351.1 10th D istrict M is so u ri..!,320.2 71.7 28.3 253 260 2,929.2 973.8 75.0 25.0 103 106 1.144 1,356 96 113 246 246 13.53 16.00 96 113 730 1,006 91 126 100.0 255 3,903.0 100.0 104 1,197 100 246 14.15 100 799 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 M issouri ....... ...4,671.3 100 Page 43 and 14 were the only ones in this category to have population gains. Springfield showed a large in crease in entrepreneurial income, reflecting its role as a trade center for the Ozarks, but lagged in pay roll growth. Similarly, Rolla, after a very rapid development in wartime around Fort Leonard W ood, evidenced a more gradual rate of increase in the immediate post-war years. Other Economic Data— Income payments as a measure of economic activity get their significance for purposes of economic analysis from their rela tion to other economic data. Income is spent by the income recipients; the rate and direction of these expenditures in turn become an important factor in the determination of the size and composition of future income payments. Sources available at the present time do not permit the tracing of this income flow through the local community. Some of these relations, however, can be shown by local data on retail sales and bank deposits. Sales in a given area depend on community in come as well as the spending habits of the income recipients. Where people buy most of their needs within the area, the correlation of sales and income will be high. Where residents of a given income area spend much of their income outside, sales will be low in relation to income. Where transients and visitors from outside spend part of their income earned in other areas, sales will be high in relation to the income recorded for a given area. For the state as a whole, these relations were brought out by the size of the so-called “ outstate balance” . Within the state, these relations can be shown by the per cent of income which is collected as sales tax in the different income areas of the state. For Arkansas as a whole, the per capita sales tax amounted to 1.37 per cent of per capita income in 1947. For Little Rock, the trade center of the state, this figure ran to 1.79 per cent. In Fayette ville, with large expenditures of students and tour Page 44 ists, it was 1.64 per cent. In Hot Springs, resort place of the nation, the sales tax ratio amounted to 1.53 per cent. In Mountain Home, on the other hand, only 0.78 per cent of the per capita income was collected as sales tax, indicative of an area with no major urban trade center. For Missouri as a whole, the per capita sales tax amounted to 1.18 per cent of the per capita income in 1947. The sales tax ratio was 1.60 per cent in Springfield which serves as trade center for a wide region extending into Arkansas. It was as low as 0.83 per cent in Salem, an Ozark area with few trade facilities. Per capita sales differ more widely among income areas than per capita income. Per capita income tends to be high in urban centers, but per capita sales in such areas may be even higher because of nonresident customers. Per capita income is rela tively low in rural regions where per capita sales may be even lower because the residents of rural areas are likely to shop outside their home com munity. Deposits have a less direct relation to income than do sales. While retail sales tend to reflect shifts in consumer income rather immediately, bank de posits at any given time and place are determined by a great number of factors, such as income pay ments, gross business returns, liquidity preferences, and the degree to which depositors leave their funds with banks inside or outside their area of residence. As with sales, deposits are likely to be high in rela tion to income where banks receive funds from non resident customers, while deposits will be relatively low where income recipients transfer part of their funds to banks located in other areas. These rela tions can be described in terms of a ratio of per capita deposits to per capita income. Thus, in 1947, this ratio was 82 per cent in Kansas City as com pared with 26 per cent in Mountain Home, high lighting the difference between a metropolitan bank ing center and an Ozark county. Werner Hochwald. Survey of Current Conditions Recent developments in the national economy give rise to many questions with respect to the out look for the remainder of the year. The downward trend in employment since last fall and the rise in unemployment probably are responsible for most of the doubts about the future. One of the impor tant problems resulting from the decline in employ ment concerns the impact this trend may have on the income and purchasing power of a large seg ment of the consuming public. Part of the employment decline has been sea sonal. Part has represented cutbacks incidental to model change-overs and other temporary factors. However, the rate of decrease this year, especially since October, was larger than that experienced last year or in 1946. The reductions in employment have not resulted in a corresponding increase in unemployment since some of the people who were in the labor force have withdrawn. Nevertheless, early in January about 2.7 million workers were unemployed and according to the Bureau of Labor Statistics, the number in creased to about 3 million by mid-February. The effects of the layoffs in recent months are showing up in income estimates. W age and salary payments received by the nations* workers were estimated at $137.3 billion in December on a sea sonally adjusted annual basis— a decline of $700 mil lion from the November peak and $200 million below the October level. Most of the decrease was in wage and salaries paid by manufacturing and other commodity producing industries. The aggregate income received by employees not only declined absolutely but it also represented a fractionally smaller part of total personal income in December than in the previous two months. While this decline in wage and salary receipts, the first since early in 1948, is significant to those whose income is measured by the statistics, in terms of total income the decline in December still leaves employee income, and total personal income, at a high level. W age and salary receipts in that month were approximately $10 billion larger than in December 1947, on an annual basis, while total personal income was at a new peak of $220.8 billion— some $13 billion larger than at the end of the previous year. With income at these levels it is not reasonable to expect that consumers' expenditures will be cur tailed for a lack of income. This would seem par ticularly true in view of the fact that in December total personal income was 6.3 per cent larger and wage and salary receipts were 7.8 per cent larger than a year earlier while consumers' prices averaged only 2.6 per cent higher than in December 1947. The tightening up in the economy may produce results that are beneficial in the long run. As long as a seller's market prevails, neither labor nor man agement feels under pressure to exert maximum effort to reduce costs— particularly when any in crease can be passed on to the consumer in the form of higher prices. But as a buyer's market is approached, and competition becomes more severe, attitudes tend to change. Thus an indirect result of the adjustments that are taking place may be lower prices to the consumer which in turn may stimulate demand in those lines where price resist ance is keen and sales have been lagging. EM PLOYM ENT The most significant development in both the Eighth District and the national labor market be tween December and January was the sharp increase in the number of unemployed persons-—one of the largest increases since the end of the war. Although unemployment normally increases during this period due to seasonal reductions in employment, the in crease this year was larger than can be accounted for by this factor. A drop in nonagricultural employment between December and January, the primary reason for the unemployment increase, was about twice as large as would be expected nor mally. Nonseasonal cutbacks in production appear to be as much responsible for the decline in employ ment and the increase in unemployment as were the usual seasonal declines in the trade, manufac turing, service and construction industries and government. Prices W H O L E S A L E P R I C E S IN T H E U N I T E D S T A T E S Bureau of Labor Jan., 49 com p, with Statistics Jan., 48 Jan., *48 D ec., 48 Jan., ’ 49> D e c., ’ 48 (1 92 6 = 10 0 ) — 3.0% — 1.0% 165.6 162.2 A ll Commodities.. .... 160.6 — 13.4 — 2.7 177.3 199.2 Farm Products .... 172.5 — 7.8 — 2.6 170.2 179.9 165.8 F oods .............. -0 4 - 3.2 148.1 .... 152.9 152.8 R E T A IL F O O D Bureau of L abor Jan. 15, Statistics (1 9 3 5 -3 9 = 100) 1949 U . S. (51 cities).. ..204.8 St. L ou is.......... ..212.4 Little R o ck ...... ..199.8 Louisville ...........193.9 Memphis .......... ..217.1 D ec. 15, 1948 205.0 212.2 201.6 196.6 217.9 Jan. 15, 1948 2 0 9 .7 " 217.2 211.4 200.1 230.7 Jan. 15, ’ 49, com p, with Jan. 15, ’48 D ec. 15, ’48 — 2.3% -0 - % — 2.2 + 0.1 — 5.5 — 0.9 — 3.1 — 1.4 — 5.9 — 0.4 Page 45 On the brighter side of the picture, January employment was still higher than it was a year ago. Nationally, about half a million more people were working in nonagricultural pursuits in January 1949 than in January, 1948. In St. Louis, about 5.000 more people were employed this year than last. Despite the increase in employment from a year ago, unemployment in January also was higher than a year earlier because of an increase in the labor force. A slightly larger proportion of the popula tion was in the labor force in January, 1949 than in January, 1948 because of the unusually large number of women who entered the labor force dur ing the year. Yet the number of unemployed men has increased proportionately more than the num ber of unemployed women. In January, 4.7 per cent of the men in the labor force were looking for work as compared with 3.8 per cent of the women. Although total employment was higher in January than a year earlier, the number of persons working full time (35 hours or more) decreased. Nationally, about one million fewer persons were working full time in January, 1949 than in January, 1948. Actual figures on the number of unemployed are sometimes misleading because of changes in the size of the labor force. A more revealing compari son is the proportion of the labor force which is unemployed. Thus in January, 1949, 4.4 per cent of the labor force was unemployed as compared with 4.0 per cent in the first quarter of 1948, 3.5 per cent in January, 1948, 1.3 per cent in 1944, 14 per cent in January, 1941, and 25 per cent in 1933. In the St. Louis area, total employment de creased about 9,000 between November and Janu ary as compared with a 7,000 decrease in the com parable period of last year. Nonmanufacturing em ployment generally followed the usual seasonal pat tern. In the manufacturing industries, a larger than seasonal decline of 2,500 occurred from November to January, with most of the drop taking place since mid-December. O f the twenty industries which comprise the total manufacturing industry, nine declined, five increased and six showed no change between November and January. The major em ployment declines occurred in the food, fabricated metals, and nonelectrical machinery industries. The major employment increases occurred in the leather and transportation equipment industries. Despite the decline since November in the St. Louis area, more people were working in January, 1949 than; in January, 1948. In the manufacturing industries about 1,000 more people were employed. The increase in manufacturing was due primarily to Page 46 an exceptionally large increase in the transportation equipment industry. The only other industry with a sizable increase was the primary metals industry. The major declines from a year ago were in the leather, fabricated metals, and nonelectrical and electrical machinery industries. In the Louisville area, the Division of Employ ment Security reports that in January there was the most severe drop in employment since the end of the war. A decrease in manufacturing employment, principally in the furniture, fabricated metais, non electrical machinery and lumber and wood products industries, was reported to be due more to a lack of demand than to seasonal influences. The decline in nonmanufacturing industries, however, was pri marily seasonal. Total employment in the Louis ville area is still slightly higher than a year ago, although manufacturing employment is somewhat lower. In the Evansville area employment in manufac turing declined between November and January as a result of cutbacks in the refrigerator and auto mobile industries. The employment reduction in automobiles, however, was due to a model change over and the workers are expected to be recalled in the near future. Nonmanufacturing employment also declined, principally because of seasonal factors. Unemployment compensation claims in January, 1949 averaged half again as large as a year earlier. Nonagricultural emplpyment in the Little Rock area declined by approximately 2,000 between November and January, principally as the result of reductions in construction and retail trade. Slight losses occurred in the manufacturing, public utili ties, and service industries. January employment was about 1,000 below that of a year earlier, with the major declines in the construction and public utilities industries. Manufacturing and government employment was about the same as a year ago, while retail trade and service employment increased slightly. Unemployment in January, 1949, was about 10 per cent higher than in January, 1948, as the result of employment reductions, which were offset to a limited degree by workers leaving the labor market. INDUSTRY Industrial activity in the district declined in Jan uary with the decrease apparently slightly more than seasonal. The general level, however, and that of most lines apparently averaged higher than in the corresponding month a year earlier. Manufacturing activity was relatively unchanged during the month when allowance is made for sea- sonal factors. Crude oil production increased, re gaining the levels attained late in 1948. Coal mines in the district operated at a lower level than in December and production was smaller than in January last year. Poor weather conditions cur tailed construction in most parts of the district and contracts let for new work declined sharply in value. Manufacturing— Manufacturing industries gener ally held operations at about the December level although most of the plants that cut back schedules at the close of the year continued to operate at a reduced pace. Some increase was indicated in the chemical, machinery and food industries. Retooling operations closed some of the district's automobile plants. The refrigerator industry continued to work at appreciably reduced schedules, as did manufac turers of stoves. Industrial power consumption in the reporting district cities was off less than 1 per cent from December and totaled 9 per cent larger than in January last year. The only substantial increase from December was in Memphis. In St. Louis con sumption was fractionally larger during the month, while in the other cities there were declines rang ing from about 1 per cent in Little Rock to 8 per cent in Pine Bluff. Steel— Basic steel operations in the St. Louis area were scheduled at 72 per cent of capacity in January or slightly below the December rate of 76 per cent. In January last year operations were at 77 per cent of capacity. The lowered rate was due to main tenance shutdowns of several of the district's open hearth furnaces. According to trade reports there have been scattered cancellations of orders for strip steel, but so far tonnage involved is very small. Lumber— Basic lumber production in January was at a slightly higher level than in the previous month or in January a year ago, although heavy rains in the south hampered logging operations and transportation. However, the usual winter decline in buying made it possible for orders to be filled and still hold stocks at a high level. At the end of December, unsold stocks on hand, as reported by southern pine producers, were 68 per cent higher than a year ago. Reports indicate that southern pine operators plan to install more kilns during the next few months and buyers can expect more kilndried lumber in the near future. Hardwood pro ducers report that slow buying at the winter furni ture shows was reflected in a decrease in manu facturers’ orders. Reporting southern hardwood producers oper ated at 80 per cent of capacity as compared with 76 per cent in December and in January a year ago. Average weekly output of southern pine producers increased 3 per cent over December and was 5 per cent above January, 1948. Whiskey—At the close of January, 41 of Ken tucky's 63 distilleries were in operation. This is the same number as a month ago but considerably more than the 24 producing at the same time a year ago, when operations were influenced by the volun tary allocation of grain. Production continues at a high rate with distillers taking advantage of the plentiful supply and low prices of corn. Although stocks are accumulating at a rapid rate, retail prices remain firm. Whiskey production in Kentucky in December totaled 9.1 million tax gallons, a 20 per cent increase over November output. In December, 1947, pro duction totaled less than one-half million tax gal lons, due to the grain allocations. Meat Packing—Operations in the meat packing industry continued below year ago levels in Janu ary, as measured by the number of animals slaugh tered under Federal inspection in the East St. Louis area. The year-to-year decline of 11 per cent was the largest since September. Nationally, slaughter was 3 per cent smaller than in January, 1948. The decline from December in the district also was larger than the national decrease— 19 per cent as compared with 11 per cent nationally. A total of 448,000 animals were slaughtered under Federal inspection in this area in January. In December the total was 553,000 and in January last year it was 505,000. Percentagewise, the largest INDUSTRY C O N S U M P T IO N O P E L E C T R I C I T Y Jan., D ec., Jan., 1949 N o. of Jan., 1948 1948 C om pared with (K .W .H . Custom* 1949 K .W .H . K .W .H . D e c .,*48 Jan .,*48 in thous.) ers* K .W .H . Evansville .... 40 — 6 .8 % — 5.2% 8,392 9,000 8,851 R 4,927 4,964 4,345 0.7 + 1 3 .4 L ittle R ock.. 35 63,672 R 70,832 72fU 6 — 1.8 4 - 11.2 Louisville .... 80 5,372 + 1 3 .9 6,698 5,883 4 -24.7 Memphis 31 Z 7.7 6,150 6,350 6,662 — 3.1 Pine Bluff.*.* 26 76,703 R 4 - 0.8 83,068 St. L ou is......139 83,738 4 - 9.2 165,293 R Totals ......351 180,737 181,713 4 - 9 .3 % * 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 S T . L O U I S F irst N ine D ays Jan.,’ 49 D e c.ff48 Jan.,’ 48 F e b .,*49 F e b .,*48 1 m o.M9 1 m o /4 8 108,055 114,207 120,723 32,339 33,341 108,055 114,207 S ou rce: Terminal R ailroad A ssociation o f St. Louis. CRUDE O IL (I n thousands o fb b ls .) Jan., 1949 .... 24.2 Kentucky ......... P R O D U C T IO N — D A IL Y Jan., 1948 ~87l 171.3 17.7 26.7 “30315 AVERAGE Jan., 1949 com pared with Jan., D e c., 1948 1948 4-13% — 5 % •0 -0 -01T H 4- 5 4 -37 —10 + 3% Page 47 declines were in the slaughter of calves and sheep. Cattle slaughter was 18 per cent smaller than in December and 24 per cent below last January. H og killings were down 16 per cent from December and 8 per cent less than a year ago. Shoes— Preliminary estimates indicate that shoe production in the district in December dropped below output of a year earlier for the fourth con secutive month. The decline in December, however, was smaller than in any of the previous months. Production was estimated at 8.2 million pairs as compared with 6.6 million in November and 8.3 million in December, 1947. Petroleum and Coal—Daily average production of crude oil in the district in January increased 3 per cent above December output, resuming the higher level established in September, October and November of last year. Output also was higher than a year ago. Daily production in January aver aged 311,000 barrels compared with 301,000 barrels in December, and 303,000 barrels in January, 1948. The gain over the previous month directly reflects a 13 per cent gain in production of Arkansas wells since output in the other district states remained unchanged. The year-to-year increase was trace able to a 37 per cent increase in Indiana along with a 10 per cent gain in output in Illinois. Coal production in the district in January was fractionally higher than in the previous month whereas national output was up 4 per cent. Eighth District mines produced 10 million tons in January compared with 9.9 million tons in December and 11.3 million tons in January, 1948. Increases of 3 per cent in Indiana and 1 per cent in Illinois and WHOLESALING "L in es o f Com m odities D ata turnished by Bureau o f Census U . S. Dept, of C om m erce* T o b a cco and its Products.. N et Sales Jan., 1949 com pared with D e c., 1948 Jan., 1948 4 -1 0 % — 32% — 8 — 16 — 19 — 5 — 22 — 3 + 1 — 6 — 14% — 8% **T otal all lines............ ...... * Prelim inary. ** Includes certain items n ot listed above. TRADE Stocks Jan., 31, 1949 compared with Jan. 31, 1948 ....% -0 - 420 4" 8 -0 • + 7% CONSTRUCTION B U I L D I N G P E R M IT S M onth o f January N ew Construction Repairs, etc. N umber Cost C ost JNumDer (C o st in 1949 1948 1949 1948 1948 1949 1948 1949 thousands) f 45 58 $ 241 $ 112 Evansville .... 7 “ l8 88 80 785 71 28 Little R ock ... . 68 537 338 70 75 Louisville ..... . 115 2,730 1,248 607 M em phis ....... , 471 ___ 256 923 816 202 St. L o u i s ....... . 115 445 '442 $ 640 $ 572 Jan. Totals .. 707 1,008 $2,723 $5,087 501 440 $ 745 $ 774 D ec. Totals .. 763 1,339 $3,961 $7,569 Page 48 Missouri just barely offset decreases of 2 per cent and 5 per cent in Kentucky and Arkansas, respec tively. Compared with last year, production was off 36 per cent in Arkansas, 27 per cent in Ken tucky, 9 per cent in Illinois and 2 per cent in Indiana. In Missouri, output was 4 per cent larger than a year earlier. Construction— Construction contracts awarded in the district declined in January in both residential and nonresidential sectors. Although this was the first time since 1946 that contracts declined be tween December and January, prior to the war the normal trend was downward in this period. The dollar value of contracts awarded in January was $31.3 million according to the F. W . Dodge reports. This was 27 per cent below the December total of $42.5 million and 33 per cent below a year ago when contracts were valued at $46.3 million. Residential construction awards in January totaled $8.8 million, compared with $13.7 million in December and $15.5 million in January of last year, decreases of 36 per cent and 43 per cent, respectively. These represented larger decreases percentagewise than nonresidential construction, which was off 22 per cent from December and 27 per cent from a year ago. In the reporting district cities, building permits awarded in January declined considerably. The dollar value totaled $3.4 million, a decrease of 29 per cent compared with the previous month and 41 per cent below the total in January, 1948. On a month-to-month basis the value of permits declined in all the reporting cities except Evansville, where they were more than double the value reported in December. Retail sales volume in many parts o f the district as in the nation was affected by continuing bad weather during January. As a result volume dropped more than seasonally from the previous month. Department store sales were spotty throughout the nation with weather causing fairly sharp swings in volume from week to week. Inten sive general sales promotions and special clearances plus traditional “ January white sales” helped to off set the decline due to weather. Durable goods retailers, also hampered by ad verse weather conditions, advanced into January some “ inventory reduction sales” normally held in February. Apparently the February sales were held also in a number of instances. Furniture store and appliance retail executives report that while Janu ary sales were somewhat low in comparison with the previous month and year ago, volume was not disappointing in view of weather conditions and a noticeable return to “ normal” shopping habits. W hile some importance was given to credit regula tions as a limiting factor in sales volume, the con sensus was that prevailing price levels were more of a contributing factor. A t Eighth District reporting department stores the dollar volume of sales in January declined 56 per cent from December and was 5 per cent less than in January, 1948. The greater-than-seasonal decline from the previous month and lessened volume in comparison with a year ago was attrib uted almost wholly to extremely adverse weather conditions in the latter half of the month. A t those St. Louis department stores reporting sales by departments the decline was shown to be general throughout most of the divisions. Sales of women's and misses' ready-to-wear accessories and apparel in the main store declined 12 per cent and 3 per cent, respectively; in the basement store sales volume of comparable departments averaged slightly larger than in January 1948. Upstairs men's and boys’ divisions reported sales totaling 5 per cent less than in January last year. The decline was smaller, however, than in the comparable basement division where a loss of 9 per cent in dollar sales from a year ago was registered. Despite “ white sales” , volume in the main store piece goods and household textiles divisions was 2 per cent under January, 1948 volume while the like divisions in the basement were unchanged from the same period. Main store sales of housefurnishings declined 15 per cent. This compares with a 4 per cent gain in basement housefurnishings divisions. BANKING For the first seven weeks of 1949, total loans of weekly reporting member banks declined $16 mil lion, the same dollar decline as in the corresponding period in 1948. This decline was the net result of a drop of $21 million in business and agricultural loans, a $4 million gain in “ other” loans (largely consumer credit loans), and a $1 million expansion in real estate loans. W hile the decrease in total loans was similar to that in 1948, the decline in busi ness and agricultural loans was greater and the expansion in real estate loans was less. The growth in “ other” loans was unchanged from that of 1948. C hange in L oan V olum es 34 W eek ly R eportin g E ighth D istrict M em ber Banks (I n M illions o f D olla rs) First Seven First Seven W eeks 1949 W eeks 1948 Business and A gricultural L oa n s .............................. — 20.7 — 12.6 R eal E state L oa n s......................................................... + 1 .3 + 3 .2 “ O ther” (con sum er) L oa n s....................................... 4- 4.0 -4- 4.1 Loans to B a n k s . ........................................................... 4 - 0.1 — 10.0 Loans on Securities....................................................... — 0-7 — 0-2 T otal ........................................................................ — 16.0 — 15.5 TRADE DEPARTM ENT STORES Stocks on H and N et Sales Jan.., 1949 com pared with D e c .,’48 Jan .,’48 ...— 62% S tock Turnover m os. Jan. 31, ’ 49 Jan. 1, to to same com p, with Jan. 31, period Jan.31,’ 48 1949 1948 4% .28 • .31 + 1% ........ % 2 .27 .32 + 9 14 +20 .20 .29 9 .21 .26 -f 8 ..... 2 .30 .32 + 4 9 — 13 .29 .30 — 8 — 13 .29 .30 — 16 •••* — 30 -0 .18 .24 +10 — 11 .31 .25 + 3 — 4 .19 .21 — 5 ...— 56 — 7 .28 .29 * HI D orado, Fayetteville, Pine B luff, A r k .; H arrisburg, M t. V ernon , 111.; N ew A lbaiiy, V incennes, I n d .; Danville, H opkinsville, Mayfield, Paducah, K y . ; Chillicothe, M o .; Greenville, M is s .; and Jackson, Tenn. 1 Includes St. L ouis, M o ., A lton , Belleville, and E ast St. L ouis, 111. Outstanding orders o f reporting stores at the end o f January, 1949, were 39 per cent less than on the corresponding date a year ago. Percentage o f accounts and notes receivable outstanding January 1, 1949, collected during January, by cities: Quincy, 111............ ———61 ,..— 61 Evansville, Ind. Louisville, K y ....... § t. Louis A r e a K ...— 51 ...— 60 ...— 65 ,...— 57 — — — _ — — Instalm ent E x . Inst. A ccou n ts A ccou n ts 45% F ort Smith.............. % Little R o ck ...... 19 45 Louisville ........ 23 49 Memphis ........ 26 49 IN D E X E S OF Instalm ent E x. Inst. A ccoun ts A ccoun ts Q u in cy .............. ^6% St. L ou is...,....... 19 54 Other cities....... 18 51 8th F . R . D ist. 21 51 D E P A R TM E N T STORE SALES 8th Federal Reserve D istrict Sales (daily average), U nadjusted 2................... Sales (daily average), Seasonally a d ju ste d 2.... Stocks, U n ad ju sted 3 ............................................. Stocks, Seasonally a d ju ste d 8................................ 2 Daily A verage 1 9 3 5 -3 9= 1 0 0. 8 End of M onth A verage 1935-39 = 100. S P E C IA L T Y STOCKS Jan.,* 1949 D e c., 1948 N o v ., :1948 238 290 260 303 517 338 276 329 404 321 347 r 325 Jan., 1948 239 291 265 309 STORES Stocks on H and N et Sales Jan., 48 com pared with D e c .,'48 Jan.,’ 48 AND m os. to same period Jan. 31, ’ 49 com p, with J an .3 1 /4 8 S tock T urnover Jan. 1, to Jan. 31, 1949 1948 M en’s Furnishings1— 5 8% + 3% ........% -{-1 1 % .23 .25 B oots and Shoes..— 47 — 3 ........ 4- 6 .30 .32 Percentage o f accounts and notes receivable outstanding January 1, 1949, collected during January: M en’s Furnishings......... ......... 4 9% B oots and Shoes..................... 4 7 % Trading d a ys: January, 1949— 2 5 ; Decem ber, 1948— 2 6 ; January, 1948— 26. R E T A IL F U R N IT U R E STORES * N et Sales Inventories Jan., 1949 com pared with D e c .,’ 48 Jan .,’ 48 Jan., 1949 com pared with D e c .,’48 Jan .,’48 R atio o f Collections Jan.,’49 Jan.,*48 — 2 6% St. L ouis Areia a — 56% +12% — 3% 28% 21% St.- Louis .... .. — 56 — 26 — 3 + 12 28 21 — 25 Louisville Area 2 — 52 — 15 -0 16 18 — 25 Louisville .... . . — 52 — 15 -0 16 18 — 4 — 3 .. — 59 — 3 16 18 — 9 — 7 Little R o c k .....i,. . — 39 — 1 23 US — 18 — 7 8th Dist. T otal ®— 51 + 7 24 21 1 Includes St; L ou is, M isso u ri; E ast St. L ou is and A lton, Illinois. 2 Includes Louisville, K entucky. 8 In addition to above cities, includes stores in Blytheville, F ort Smith, and Pine B luff, A rkansas; H opkinsville, O w ensboro, K e n tu ck y ; Green ville, Greenwood, M ississippi; H annibal and Springfield, M issou ri; and Evansville, Indiana. : * 37 stores reporting. PERCENTAGE D IS T R IB U T IO N Jan., ’ 49 Cash Smiles ..................... .......... ........ .. Credit Sales ......................................... OF F U R N IT U R E D e c., ’ 48 SALES Jan., *48 19% 81 19% 81 17% 83 T otal Sales .............. ...................... 100% 100% 100% Page 49 It should be pointed out that the decline in busi ness and agricultural loans is not large percentage wise. In the first seven weeks of 1948 the drop was 2 per cent; in 1949, 3 per cent. Business and agricultural loans on February 16, 1949, were $16 million over February 18, 1948. BANKING P R IN C IP A L A SSE T S A N D L IA B IL IT IE S F E D E R A L R E S E R V E B A N K O F S T. L O U I S Change from Feb. 16, Jan. 19, Feb. 18, (I n thousands of dollars) 1949 1949 1948 Industrial advances under Sec. 13b........$ ............... $ ................. $ ................ Other advances and rediscounts............... 9,237 — 1,108 — 8,458 U. S. Securities...................................... ....... 1,205,308 + 4,686 4 - 72,045 T otal earning assets.................................. $1,214,545 $ 4- 3,578 $4- 63,587 T otal reserves ................................................$ 750,555 $— 8,003 $4-106,760 T otal deposits ................................................ 847,090 4 - 6,776 4-160,112 F. R . notes in circulation.................» ........ 1,110,383 — 20,206 4 - 1,332 Industrial com m itm ents under Sec. 13b..$ ............... $ ................. $— P R IN C IP A L A SSE T S A N D L IA B IL IT IE S W E E K L Y R E P O R T IN G M E M B E R B AN K S E IG H T H F E D E R A L R E S E R V E D IS T R IC T (I n Thousands o f D ollars) 34 Banks R eporting Change Assets Feb. 16,'49 Jan. 19/49 Gross com m ercial, industrial and agri cultural loans and open market 8,282 paper ......................................................$ 611,136 $— Gross loans to brokers and dealers in securities .......................................... 5,551 — 96 G ross loans to others to purchase — 286 and carry securities............................ 21,612 Gross real estate loans................... . 161,054 4199 1,245 — 15 Gross loans to b a n k s ............ ............... Gross other loans (largely co n — 326 213,449 sumer credit lo a n s)........................... T otal .......................................... $— 8,806* 9 Less reserve for losses.... 8,797 $— Treasury bills . 55,068 10,850 Certificates o f i 31,965 Treasury notes 55,009 4- 1,060 El* ... 690,043 4- 5,692 585 ...$1,136,184 $— 36,648 — ... 828,186 36,803 Cash assets Other assets 24,046 4- 486 $— 81,762 Dem and 580 from Feb. 18/48 $4- 39,723 4 - 16,056 4-101,054 — 36,474 — 70,622 — 11,129 $— i (U 5 4 - 92,844 — 1,018 $+130,434 Liabilities deposits of i .-$1,463,181 Interbank deposits ......................... TJ. S. Governm ent deposits......... Other deposits .................................. T otal demand deposits............. Tim e deposits ................................. B orrow in gs ........................................ Other liabilities ................................ T otal capital accounts.................... T otal liabilities and capital counts ........................................ ... 174,983 c...$2,993,215 Dem and ...$1,387,524 deposits, ad justed**...... 68,076 $—— 47,228 — 77,886 4- 36,064 4- 4,575 $— 84,475 4- 2,518 1,000 230 4+ 965 $4- 50,746 4 - 26,443 4 - 43,998 4 - 13,012 $4-134,199 4 - 1,151 — 10,350 4158 4 - 5,276 $— 81,762 $4-130,434 $— 32,696 $4- 57,584 * Comparative data not available due to change in method reporting. ** Other than interbank and governm ent demand deposits, less cash items on hand or in process o f collection. DEBITS TO DEPOSIT ACCOUNTS Jan., (I n thousands D ec., Jan., Jan.,’ 49 com p, with 1948 Dec., '48 Jan., '48 . o f dollars) 1949 1948 22,844 $ E l D orado, A rk .....$ 24,586 $ 21,162 — 7% 4- 8 % F ort Smith, A rk... 39,239 42,952 40,362 — 9 3 H elena, A rk ............ 10,309 10,460 8,749 — 1 4- 18 4- 6 Little R ock , A rk... 121,551 137,013 114,363 — 11 4- 1 29,546 Pine B luff, A rk ..... 36,146 29,223 — 18 Texarkana, A rk.*.. 10,511 10,605 10,207 — 1 4- 3 A lton, 111................. 23,530 26,863 25,363 — 12 7 __ 18 E . St. L .-N a t. S. Y.,111. 105,194 132,753 128,607 — 21 — 12 Quincy, 111............... 27,855 31,673 31,736 — 12 — 113,316 Evansville, In d ...... 6 121,055 120,997 — 6 __ 8 474,295 L ouisville, K y ........ 595,056 517,043 — 20 3 1,659 - (3 Ow ensboro, K y ..... 33,058 31,568 — 4 — Paducah, K y .......... 14,163 12 17,751 16,016 — 20 24,818 Greenville, M iss..... 30,389 20,925 — 18 4- 19 12,807 Cape Girardeau, M o. 12,172 11,721 4- S 4- 9 7,215 8,462 H annibal, M o ........ 13 8,265 — 15 78,141 Jefferson City, M o. 43,590 52,612 4-79 4- 49 St. Louis, M o ....... 1,501,013 1,780,001 1,493,243 — 16 4- 1 9,094 12 Sedalia, M o . .......... 11,067 10,317 — 18 — 50,973 Springfield. M o ...... 58,400 56,964 — 13 11 17,856 20,601 Jackson, T enn........ 17,589 — 13 4- 2 556,460 Memphis, T en n ...... 674,742 529,146 — 18 4- 5 Totals .................$3,282,389 $3,859,395 $3,296,178 — 15% -0-% * These figures are for Texarkana, Arkansas, only. Total debits for banks in Texarkana, Texas-Arkansas, including banks in the Eleventh D istrict amounted to $26,330. Page 50 of Total loans at all district member banks at the end of January, the latest date for which data are available were down $10 million from the 1948 year-end figure. Total loans for small rural banks declined in January for the first time since Novem ber, 1947. The slight decline in total loans at the smaller banks in January and the somewhat greater decline in business and agricultural loans at the weekly reporting banks, noted above, reflect the uncertainty of bankers and businessmen in this district as to the general business outlook for the immediate future. The district reporting member banks' holdings of U. S. Government securities have expanded $18 million since the close of 1948 reflecting changed appraisal of the Government security market, pref erences for investments as against loans, and a smaller Treasury surplus which holds down the Treasury debt retirement program. The percentage distribution of Governments in reporting member banks as between bills, certificates, notes and bonds has changed but little despite the significant shift in investment appraisal of long-term securities in the past three and one-half months. The principal changes since October 27, 1948 are toward some what smaller proportions of bonds, notes and bills and an expansion in the percentage of certificates. In terms of total deposits, the change from the year-end is slightly down— $44 million— for the seven weeks of 1949. By comparison with the $206 million drop in the first seven weeks of 1948, the decline thus far in 1949 is moderate. It should be weighed, however, in terms of the reduced Treasury debt retirement program which cannot bring the same force to bear on the level of deposits this year. A G R IC U L T U R E The decline in agricultural prices in January and the first part of February, although not as spec tacular as the break in prices early in 1948, never theless carried prices of several farm commodities to new postwar lows. The Bureau of Labor Sta tistics index of farm product prices on February 8 was 7 per cent lower than a month earlier and 11 per cent lower than a year earlier. Grains were 13 per cent lower, and livestock was 10 per cent lower than a month earlier, while they were 29 per cent and 9 per cent lower, respectively, than a year earlier. Spot market price quotations of corn, barley, cot tonseed oil, lard and tallow dipped to new postwar lows, and on February 8 were below levels that prevailed prior to initial price decontrol in June, 1946. Prices of hogs and steers were lowest since October, 1946 and the May contract of Number 2 Hard Winter Wheat (Kansas City) sold for $1.94 per bushel compared with a low of $2.22 during the market break of February, 1948. Net farm income of farm operators in 1948 was two per cent or $400 million less than in 1947, rep resenting the first decline in ten years. The $17.4 billion net income, however, was very high by any prewar standard. W ith continued softening of farm prices, and relatively inflexible farm costs, further declines in net farm income in 1949 are expected. Equities of farmers increased $6.2 billion during 1948. However, two-thirds of this increase repre sented further increases in the value of land. Changes during the year which deserve the most careful attention took place on the “ claims” side of the balance sheet. Total real and non-real estate debt at the beginning of 1949, exclusive of Commod ity Credit Corporation loans, was $10.1 billion, $300 million more than any year since 1940. Debts of farmers, exclusive of C. C. C. loans, increased $1.2 billion in 1948, the largest increase since the re versal of the downward trend in farm indebtedness in 1946. Of this increase, $898 million represented additions to short-term debt. Farm mortgage debt increased $258 million in 1948, the third year in which increases have occurred. The rate of increase in farm real estate debt during 1948 also exceeded the rate of increase in the two preceding years. It should be remem bered, however, that total farm mortgage indebted ness in 1949 is only half what it was in 1922. On the other hand, if data as to assets and claims of only those in debt were available, the proprietors’ equities probably would show up as much thinner. Deposits and currency in the hands of farmers apparently declined for the first time since before the war. Although the decline was small and was offset partially by increased holdings of savings bonds, it probably marked the turning point in growth of liquid financial holdings of farmers. Rea sons (other than a narrower profit margin) for this decrease are shown in the balance sheet . Assets of farmers in machinery and motor vehicles increased $2.8 billion during the year, and additions to the value of household equipment were more than onehalf billion dollars. The physical volume of crops was greater on January 1, 1949, than a year earlier, but the value was less. The reverse was true in the case of livestock; numbers were fewer but their value was higher. FARM B A L A N C E S H E E T O F A G R IC U L T U R E : P R E L IM IN A R Y E S T I M A T E S F O R J A N U A R Y 1, 1949, A N D C O M P A R I S O N W I T H E S T I M A T E S F O R J A N U A R Y I, 1948 1 Item ASSETS P n v c t / '5 i l Jan. 1, 1949 (Prelim inary estim ates) M illion dollars Jan. 1, 1948 (B alance sheet) M illion dollars Change 1948 to 1949 M illion dollars $ 62,813 $4,087 13,451 9,174 8,830 5,415 1,149 2,826 — 330 585 15,600 4,745 1,916 $121,944 — 400 255 209 $8,381 REAL AN D N O N -R E A L E S T A T E U N IT E D S T A T E S Billions of DEBT J A N U A R Y I, 1 9 4 0 -1 9 4 9 * OollGrs a c fiA tc • R eal estate ......................................$ 66,900 N on-real esta te: L ivestock ....................................... 14,600 Machinery and m otor vehicles 12,600 Crops, stored on and off farms 2 8,500 H ousehold equipm en t3.............. 6,000 Deposits and currency................... 15,200 United States savings bonds........ 5,000 Investm ents in cooperatives.......... 2,125 T otal ....................................... $130,325 C L A IM S L iabilities: Real estate m ortgages..................... 5,140 N on-real estate d eb t: T o principal institutions: E xclud ing loans held or guaranteed by Com m odity Credit C orporation ............ 2,800 Loans held or guaranteed by C om m odity Credit C or poration ................................ 1,120 T o o th e rs 4 ..................................... 2,200 Total ....................................... 11,260 P roprietors' equities ............................ 119,065 T otal ....................................... $130,325 4,882 258 2,302 498 81 1,800 9,065 112,879 $121,944 1,039 400 2,195 6,186 $8,381 1 The margin o f error of the estimates varies with the items. 2 Includes all crops held on farms and crops held in bonded warehouses as security for Com m odity Credit C orporation loans. 3 Estimates valuation for i*40 plus purchases minus depreciation. 4 Tentative. Includes individuals, merchants, dealers, and other misc. lenders. (S o u rce : U . S. Departm ent o f Agriculture, Bureau of Agricultural E conom ics.) 1943 1940 * 1 949 D A T A * * EXCLUDES SOURCE : 1946 1949 PRELIMINARY C.CC. LOANS U.S.O.A., BAE. Page 51