Full text of Review (Federal Reserve Bank of St. Louis) : March 1949

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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