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Monthly Review
A

Volume X X X

N

M A Y 1, 1948

K

L

O

U

Number 5

The Potential Demand for Wood in the Eighth District
Throughout the Eighth District, civic, business
and agricultural leaders with the aid of govern­
mental bodies and private organizations are at­
tempting to devise means of attaining a better
balance between the agricultural and industrial
components of their local economies. Common to
almost all programs, whether advanced at the
regional, state or local level, is a plan for encourag­
ing the expansion of manufacturing industries.
The addition of new manufacturing plants as
such, regardless of their relationship to the dis­
trict’s resources, represents a desirable objective in
long-range community plans. It would, however,
seem even more desirable and economically sound
to develop new industries that are intimately related
to the natural resources at hand.
The forests of the Eighth District are among the
major resources with which nature has endowed
the people of this region. These timber stands
constitute the major source of raw material supply
for a large number of manufacturing plants now in
the district. The location of these plants was deter­
mined largely by the availability of an adequate
supply of timber.
The present wood-processing and converting in­
dustries are important to the region’s economy.
Are there possibilities for expanding or building
upon the present industry in the future? And if
such expansion is indicated to be possible, would
it be desirable in terms of the regional economy as
a whole?
An answer to these questions, from the point of
view of the district as a whole and of individual




This article attempts to appraise current and poten­
tial demand for wood in the Eighth District and con­
sider that demand against current and potential sup­
ply. It is a further development of the story begun in
the December, 1947 Review, “The Forest Resources of
the Eighth District,” and continued in the March, 1948
issue, “Wood Processing Industries in the Eighth
District.”
The major points developed in those articles were:
1. The Eighth District proper contains 54 million
acres of forest land—43 per cent of the district’s total
land area. In the full seven district states, forest land
area totals 86 million acres with sawtimber volume
estimated at 112 billion board feet.
2. Much of this forest land <37 per cent) is seedling,
sapling, poorly-stocked, or denuded. Other (20 per
cent) is in pole timber. Only 43 per cent is classed as
sawtimber stands. Two-thirds of this is hardwood and
past cutting practices have resulted in large quantities
of low-quality hardwoods.
3. Current growth of all timber just about balances
current drain from all sources, but sawtimber growth
is substantially (about one-third) less than drain.
4. Case studies indicate that good forestry manage­
ment practices can triple growth rates.
5. The district has a substantial wood-processing
industry in existence. It is, however, heavily weighted
on the timber basic industry side where value of out­
put per worker is smaller than in other wood-processing
industries.
6. Expansion of the district’s wood-using industry
could take place by (a) growing on the present pattern,
(b) expanding through new industries, (c) shifting
emphasis from basic to finished lumber production.

communities within the district, depends upon a
number of factors. It is obvious that capital and
labor are prerequisites. It is evident, too, that any
specific expansion should be preceded by a careful
analysis of the present and potential market for the
particular products to be manufactured. In addition

to these considerations, however, are the raw mate­
rial requirements, which essentially are for timber.
Thus the feasibility of an increase in manufacturing
activity dependent upon the forests for raw materials,
becomes a problem of improving that raw material
and relating its supply to potential demand.1
COMM ODITY DRAIN AND TIM BER GROW TH

In 1944, about 2.6 billion cubic feet of timber
were taken from the forests of the seven district
states for use or were lost by destruction. Just
what these 2.6 billion cubic feet of timber were
used for, no one knows precisely. An indication of
the general purposes for which timber was cut in
three states in 1944 can be obtained from figures
covering drain by commodities in Arkansas, Missis­
sippi, and Tennessee and shown in Table I. The
total drain in these three states represented 67 per
cent of total drain in all district states and sawtimber drain was equal to about 80 per cent of that
in seven states. The pattern of use in these states
probably is not precisely representative of the
seven-state area or of the Eighth District alone
since variations in the four remaining states might
change the relative importance of the amounts cut
for some of the minor uses. However, in general,
the pattern shown in the table is fairly representa­
tive of both the district states and the Eighth Dis­
trict proper.
The estimates of drain, by commodities, in
Arkansas, Mississippi, and Tennessee do not pur­
port to measure the amount of wood consumed in
these three states. Neither are the estimates of
drain referred to earlier for the district states to be
regarded as measures of wood consumption in the
seven states. A large part of the lumber sawed
in Arkansas, Mississippi, and Tennessee probably
was shipped to other district states or to points
outside this region. From 1940 to 1943, direct ship­
ments from these three states to markets outside
the district states averaged 1.3 billion board feet
annually. Thus, in any given area, the amount of
timber cut for commodities is not to be construed
as equivalent to wood requirements in that area.
1 Lum ber statistics are at best confusing for they are reported in terms
o f cubic feet, board feet, cords, posts, etc., and conversion from one to
another measure is difficult. They also are reported in terms of total
timber and sawtimber. C ubic feet is a fairly com m on denom inator and
total timber usually is expressed in cubic feet. Sawtijnber is expressed
in board feet, poles in cords, etc.
Difficulties in converting from one measure to another, stem from
many factors. F or example, a cord is a stack of w ood measuring 4 feet
by 4 feet by 8 feet. A cord of small stock has m ore cubic feet o f wood
than a cord of large stock simply because the pieces fit m ore closely
together. A lso, cubic feet on the stump processes into less cubic feet
because o f m anufacturing loss.
For rough conversion factors 1,055 board feet of sawtimber are equiva­
lent to about 204 cubic feet; a cord of fuel w ood to about 68 cubic
feet; and a cord o f pulpwood to about 83 cubic feet.

Page 58




TABLE

I

T IM B E R
REM OVED
FROM
C O M M E R C IA L
FORESTS
OF
A R K A N S A S , M I S S I S S I P P I A N D T E N N E S S E E B Y C U T T IN G
A N D D E S T R U C T I V E A G E N C I E S I N 1 94 4 1
A ll Tim ber 2
Sawtimber 3 Pole-sized Trees 4
(000,000 cu. ft.) (000,000 bd. ft.)
(000 cords)
T otal cut for Commodities 1,621
6,604
3,604
809 4,024
.............................
Lum ber ................................
Fuelwood ............................
310
790
2,057
Pulpwood ............................
118
351
617 *
Cross ties ............................
109
496
22
Fence posts .......................
24
59
168
Veneer ................................
58
258
6
Cooperage ............................
66
280
9
Other ....................................
124
343
704
L ost by Destructive A gencies 156
307
1,464
1 Com m odity drain for 1944 preliminary and subject to revision; drain
by destructive agencies estimated average per 10-year period 1934-1943.
2 Drain from all trees 5" diameter at breast height and larger, bark
not included.
3 Drain (lum ber-tally basis) from sawtimber trees; pines 9" d.b.h. and
larger; hardwoods and cypress 13" d.b.h. and larger.
4 Drain from trees below sawtimber size and not smaller than 5" d.b.h.
bark included.
S ource: Reappraisal P roject, Southern F orest Experim ent Station.

It also is difficult to arrive at a satisfactory esti­
mate of the total amount of wood actually required
in the district or in the district states for construc­
tion, industrial uses (that processed into finished
wood products or converted into pulp, chemicals,
etc.), fuelwood, and the like. Essential basic data
are lacking for statewide as well as county esti­
mates. U. S. Forest Service estimates of wood
requirements of the secondary wood processing
plants in the district states in 1940 totaled 2.3 bil­
lion board feet of sawtimber including lumber,
veneer, and logs and bolts.2 If demand for con­
struction, fuelwood, and all other requirements were
included, total wood requirements probably were
between 8 and 9 billion board feet, and in 1947
amounted to perhaps as much as 10 billion board
feet.3
Thus it appears that in the district states, under
present management practices and with demand at
even the estimated 1940 level, total annual require­
ments of sawtimber exceed annual growth. The
above also suggests that for the district states, total
demand, under present conditions, can be met only
at the expense of our timber land— by “ mining” or
over-cutting our timber— and by importing from
other parts of the country.
District States vs. Eighth District— While annual
timber growth in the district states is less than the
amount required e.ach year for all uses in these
states, timber growth in the Eighth District proper
apparently is equal to or is in excess of present con­
sumption requirements.
From 1940-43, the seven states combined imported
an average of 2.2 billion board feet of lumber, or
2 Lum ber used in m anufacture 1940.
3 Estimated on the basis o f available data and by adapting techniques
indicated in the U . S. Forest Service report on “ Potential Requirements
for Tim ber P roducts in the U nited States.”

Includes plants, except sawmills, w hose
major products are manufactured from
wood.
SOURCE: Compiled from most recently
published industrial directories for the
district states.

830 million board feet more than was exported.
But nearly 65 per cent of the imported lumber was
shipped into Illinois and Indiana and processed
largely in portions of these states outside the
Eighth District. On the other hand, almost 45 per
cent of the lumber shipped outside the district
states originated in Arkansas, which is entirely
within the Eighth District. An additional 37 per
cent of the lumber exported originated in Missis­
sippi where one-third of the forest land and 30
per cent of the state’s lumber production is in
the Eighth District. This would suggest that sub­
stantial amounts of lumber cut from sawtimber
trees are available in the district proper and might
be further processed here into finished goods.




PO TE N T IA L SUPPLY AND CONSUMPTION

An attempt to build up Eighth District industry
by curtailing shipments of district raw materials
to out-of-district plants is rather narrow region­
alism, however. Basically this type of regional
expansion is desirable only if it can stand on its
own feet— that is, if economic factors indicate that
existing industry should shift here. It would be
better to expand district industry on the basis of
expanding raw materials supply and expanding
markets.
Applications of better forest management prac­
tices could increase timber growth sufficiently to
take care of current wood requirements without
Page 59

depleting our resources and also to take care of
potential expansion of wood using industry.
The large volume of low quality hardwoods and
pole-sized trees in the district also represents a
source of supply for processing plants capable of
utilizing timber of this size and quality. The pole­
sized trees recommended for harvesting would be
those commonly pulped and not those which, if left
to maturity, ultimately would provide more valuable
products. Such plants might include those manufac­
turing wood specialty products; they might also in­
clude wood pulp mills. New products, some of which
are discussed later, also might be manufactured from
this type and quality of timber.
It should be noted, too, that there is ample room
for increasing the value of production, even under
present conditions of growth and drain, by improv­
ing the quality of goods now being manufactured.
Higher quality lumber, or better furniture, for ex­
ample, would mean larger income. Obviously all
86 million acres of timber in the district states or
the 53 million acres in the district proper will not
be transformed overnight into properly managed
timber. However, the trend in that direction is
developing in some parts of the area and if con­
tinued, would ultimately result in a large increase
in growth. A slow-down period in production, how­
ever, may be essential to effecting a successful con­
version in order to allow the building up of stock
or timber capital to a point where the growth or
interest can approach its potential.
If the minimum potential sawtimber growth per
acre (that was indicated in an earlier article to be
possible) were realized on the present commercial
forest acreage in the district states, annual saw­
timber growth could be increased from the current
6.2 billion board feet to more than 16 billion board
feet.* At that rate, annual growth would be almost
double the estimated total consumption require­
ments of wood in the district states in 1940 and
would support a total commodity cut nearly twice
as large as in 1944. If achieved in the three
states whose commodity drain is shown in Table I,
sawtimber growth would be increased from 4.6
billion board feet to more than 12 billion board feet
per year.
Under such conditions, the emphasis in develop­
ing new wood-using industries would be consider­
ably different than under present growth condi­
tions. At present the supply situation is more con­
ducive to the establishment of many small plants
4 See table in M onthly R eview , December*
potential grow th per acre for district states.

Page 60




1947,

for

estimates

of

than large industries. An increase in acreage put
under proper management would increase the prac­
ticability, if not the necessity, of developing indus­
tries with large raw material requirements.
TRENDS IN W O O D CONSUMPTION BY EXISTIN G
INDUSTRY

The future expansion of wood consumption will
be contingent not only upon the supply of timber;
other long-term trends will become increasingly
important. Some of these can be considered pri­
marily in terms of their effect on total timber drain
while other developments are essentially problems
influencing the industrial demand for wood.
The major expansion possibilities appear to be in
the increased use of veneer, pulpwood and lumber,
including in the latter the finished wood products
industries.
Lumber— In the manufacture of lumber there
appear to be greater income-producing opportuni­
ties in the improvement of quality than in the devel­
opment of new lumber manufacturing plants. In
1942 there were at least 6,800 operating sawmills in
the district counties— an average of 18 mills per
county and equivalent to more than one out of
every six sawmills in the United States. The pres­
ent number of mills in the entire district is not
known, but the total in Arkansas and the district
portions of Mississippi and Tennessee in 1946 was
6 per cent larger than in 1942, according to the
Bureau of the Census. The number of plants in
the Mississippi counties declined from 1,217 in
1942 to 981 in 1946, but in Arkansas they increased
from 1,439 to 1,736, and in the Tennessee counties
the number rose from 382 to 528. Lumber produc­
tion in Arkansas and in the district portion of Mis­
sissippi was smaller in 1946 than in 1942 but was
larger in the Tennessee counties. Data showing
the trend in the remainder of the district proper are
not available, but combined output in those four
states (Illinois, Indiana, Kentucky, and Missouri)
was 48 per cent larger than in 1942. Total U. S.
production was less than 1 per cent larger than in
1942.
At the present time lumber manufactured in this
district ends up in an amazing assortment of places
and products. It goes underground in mines and it
sails the seven seas. It is used to build new houses
and factories and to patch up old ones. Baseball
fans sit on it in Yankee Stadium and it helps get
base hits for the St. Louis Cardinals. In the form
of crates it carries Arkansas’ strawberries to market
and as cooperage it helps age Kentucky’s whiskey.
It is treated with preservatives and used for rail­

road ties and telephone poles. Acetic acid and
acetone are made from it and as wood flour it goes
into linoleum and explosives. In infancy children
play with toys made from the district’s lumber and,
having lived their lives, may be buried in caskets
manufactured in the region.
H ow much more lumber, produced in the district,
could be processed into finished goods in the dis­
trict is contingent upon a number of factors. One
consideration is the increased competition from
other materials.
The U. S. Forest Service has classified finished
wood products into two general groups, based on
the extent to which wood as a major raw material
has been displaced by other materials. W ood con­
tinues to be favored in the production of furniture,
handles, matches, toys, caskets, sporting goods,
radio cabinets, patterns, and similar items which
in total account for 80 per cent of the lumber used
in the manufactured wood products industries. The
second group includes items in which wood has
been replaced to a large extent by metals and other
materials. These are refrigerators, motor vehicles,
trunks, agricultural equipment, cigar boxes, and
the like, which account for the remaining 20 per
cent of the lumber used in finished wood products.
Obviously, the competitive position of wood as
a raw material is significant and plans for the de­
velopment of new industries must take it into
account. However, in the district proper even
those industries in the first group above are rela­
tively underdeveloped in terms of timber supply
and the volume of lumber produced in the district.
Lumber requirements of manufactured wood
products plants vary considerably, depending on
the scale and type of operation. As a community
industrial development, a plant which provides a
large market for local timber is more attrac­
tive than a small plant. But where timber and
lumber are available and are not being utilized to
the fullest advantage, even the possibilities of a
small processing plant should not be overlooked.
For example, a small plant employing only two
or three men in the manufacture of 500 screen
doors and 5,000 window sash per year would pro­
vide a market for upwards of 30,000 board feet of
lumber per year.5 At the present average rate of
sawtimber growth in the district states, a plant of
even this size could absorb the annual growth from
8 W o o d requirements and em ploym ent figures used in this section were
furnished b y the F orest E conom ics Section o f T V A and are based on a
survey of w ood-u sing industries in the Tennessee V alley R egion in 1946.
E ach is an average based on four or m ore establishments.




400 acres of sawtimber or from eight or more aver­
age farm woodlots.
A plant manufacturing handle blanks at the rate
of 150,000 blanks annually would require the aver­
age annual growth from 3,000 acres of sawtimber
in the district states, or all the sawtimber growth
from upwards of sixty farm woodlots.
The economic effects of a larger scale operation
would be spread over a wider area. A furniture
manufacturing plant employing 160 workers and
with an annual production of 13,000 bedroom suites
and 50,000 upholstered chairs would require about
2 million board feet of lumber. At the present
average rate of sawtimber growth, 27,000 acres of
sawtimber could be utilized to supply this factory
with lumber. In Mississippi, where average growth
is the most rapid of the district states, it would re­
quire only 17,000 acres but in Missouri, where aver­
age sawtimber growth per acre is lowest, it would
take the annual growth from 95,000 acres. For the
district states as a whole, the sawtimber on perhaps
500- farm woodlots could be cropped each year to
meet the wood requirements of a plant this size.
All of these illustrations are based on averages
which, except by chance, would not be applicable
to any specific community. In some localities, for
example, the broad economic effects of a furniture
plant of this size would be spread over a much
smaller area than in other communities.
But
while they are not universal in their application,
these examples indicate the extent to which the
income of an entire community, including that of
farm woodlot owners, could be affected by an
industrial development based on timber resources.
Veneer—Veneer is wood that is cut into sheets.
These may be used singly, as in the manufacture of
baskets and boxes, or glued to other pieces of
wood to form an exterior surface, as in the case of
furniture. When glued together in several thick­
nesses, it becomes plywood, a material that has a
wide variety of uses industrially and in construc­
tion. Nationally, production of plywood is centered
on the W est Coast. A number of mills are located
in the district states but the supply of logs suitable
for the production of veneer is not large relative to
demand. However, the industry might be devel­
oped in this area as the quality of lumber improves
with better management practices.
Pulp— The location of a paper pulp mill is deter­
mined primarily by the availability of an adequate
supply of pulpwood and water. In this district
there is a large supply of pulpwood, and in recent
Page 61

years several pulping plants have been established.
However, the present timber stand, particularly
in Arkansas, is believed to be capable of supporting
a sizable addition to current capacity. This possi­
bility is enhanced by the development of a new
technique in paper making which the National
Bureau of Standards estimates may increase by as
much as 75 per cent the amount of hardwoods used
in the manufacture of wood pulp. In view of the
relatively large supply of pulp-sized hardwoods in
this region, the commercial application of this proc­
ess may prove beneficial to this district.
As a community industrial development project,
a wood pulp mill has one major disadvantage—the
large capital requirements for a modern mill. Few
if any communities in the pulpwood areas of the
district could promote a pulp mill in the way other
types of wood-using industries could be sponsored.
However, local groups in such areas might well call
attention of the industry to their natural resource
advantages. The importance of a pulp mill, in
terms of wood consumption, is evidenced by the
fact that the average sulphate mill in the South
requires upwards of 180,000 cords of pulpwood
per year.
Other Lines— Some of the present sources of tim­
ber drain listed in Table I, which involve little or
no manufacturing, appear to be faced with a long­
term declining trend. Fuel wood, the second largest
source of demand for timber in the district, may be
one such case. On a national basis the consumption
of fuel wood decreased steadily from 1941 through
1945. This decline is attributed by the U. S. Forest
Service to a scarcity of labor for woodcutting and to
the migration of farm population from agriculture
into other industries.6 But other data (which may
be imperfect) point to a long term declining trend.
Future demand probably will be reduced by in­
creased competition from other fuels, such as
butane gas, and by the further extension of
electric power lines into rural areas. A decline
in fuel wood consumption would be more important
in terms of timber drain than in its effect upon
industrial activity since little if any processing in
the accepted sense of the word is involved in the
production of fuel wood. Also, the effect on the
timber stand would be gradual and probably not
apparent in any one year.
Similarly, the amount of wood taken from the
forests for fence posts probably will show little if
any significant increase above present levels. Com­
6 “ Potential Requirements for Tim ber Products in the U nited States,”
U . S. Forest Service.

Page 62




petition from steel plus a greater use of treated
posts probably will hold consumption to approxi­
mately the present amount. As in the case of fuel
wood, the effect in terms of industrial activity
would be negligible since most fence posts are cut
by woodlot owners and used primarily on the farm
from which they were cut.
The remaining commodity classifications shown in
the table involve varying degrees of manufacturing
or processing. The outlook for some of the indus­
tries represented, as indicated by present trends,
suggests that at best the future level of consump­
tion will be only slightly higher than at present and
possibly may be below present levels.
One of these is the cooperage industry. Nation­
ally, wood consumption in the cooperage industry
declined steadily during the thirty years prior to
1939. In 1939 it was 64 per cent less than in 1909
and 50 per cent smaller than in 1929. Although
requirements increased in the late 1930’s, in part as
a result of the repeal of prohibition, the industry
used considerably less wood at the peak of the
1930’s than in previous years. Competition from
paperboard and other materials has been and is an
important reason for a slackening in the produc­
tion of the cooperage industry. Present develop­
ments in the container field indicate increasing
competition can be expected. Most of the com­
petitive products, of course, use wood as a raw
material, so that the decline of the cooperage in­
dustry does not necessarily imply an absolute de­
crease in demand for wood.
The cross tie industry is in the peculiar position
of constricting its market as it improves the quality
of its output. Development of wood preservative
processes has lengthened the average life of a cross
tie, properly laid, to 25 to 30 years as compared
with 6 to 10 years for untreated ties. In 1943 about
17 per cent of the cross ties on Class I railroads
were untreated and the replacement of these ties
constitutes a sizable future market. From 19291943, annual replacement averaged 129 ties per
mile and in 1942 it was 148 per mile. The replace­
ment rate is expected to decline to about 135 per
mile in the near future and eventually to about 120
per mile as the number of treated ties in use
increases.7 Since the demand for ties is determined
largely by the mileage of track operated, which is
not likely to increase substantially, and by the
average life of treated ties, the future timber drain
from this source is not likely to increase appreci­
ably.
7 “ Potential Requirements for Tim ber Products in the U nited States,”
U . S. Forest Service.

NEW USES FOR W O O D

Throughout the preceding discussion little atten­
tion has been devoted to important new uses for
wood and for wood waste that have been developed
in recent years. Many of the products of the labora­
tories have been demonstrated to be physically or
chemically feasible. However, in more cases than
not, costs have yet to be lowered to a point where
production can be undertaken on a profitable basis.
Also, a number of these products admittedly have
limited uses. Many are special-purpose products
with a restricted market under present conditions.
Still they offer possibilities for future demand.
Among the new materials are such products as
impreg, a laminated wood product that has been
impregnated with resin-forming chemicals, dried
and cured. It resembles natural wood, is much
harder and has a higher degree of moisture resist­
ance than natural wood. It is believed to have
commercial application in window frames, doors
and interior wall panels. By replacing the curing
treatment in the process with hot pressing at vary­
ing pressures, a product called compreg is pro­
duced. During the war this material was used for
airplane propellors and other aircraft parts and it
' is thought to have potential uses in furniture.
However, production costs are high.
Considerable progress has been made in the de­
velopment of products made from wood wastes,
which are potentially the basis for a number of
new industries. The U. S. Forest Service has esti­
mated that a total of 89 million tons of wood waste
a year results from normal operations of logging
camps, sawmills, planing mills, millwork plants,
and the like. Not all this waste would be available
for converting into other products but a consider­
able amount could and probably would be collected
for utilization if outlets for the waste were avail­
able. In the case of the average furniture plant
discussed above, about 35 per cent of the annual
wood requirements result in waste. One-half of
the waste in this plant is burned, one-fourth is sold
and one-fourth remains unused. About 25 per cent
of the wood bought by the handle blank factory
ends up as waste but in this case utilization is
higher— 50 per cent being burned and the remainder
sold.
W ood wastes can be converted into a number of
products. For example, one ton of dry sawdust can
be converted into 1,100 pounds of high protein
stockfeed. White pine sawdust and shavings are
ground into wood flour, a material with a fineness
approaching that of wheat flour and which is used




largely as a filler in inlaid linoleum. It is used also
in the manufacture of dynamite and other explosives
and as a filler in plastics it is found in phonograph
records, radio dials, knobs and many other items of
everyday use.
Chips and sawdust also can be converted into
sugar which in turn can be fermented and manu­
factured into ethyl alcohol. Alcohol also can be
obtained by fermentation of the waste liquor dis­
charged at pulp mills in the sulfite pulping process.
In Europe this is standard practice at many sulfite
mills. Waste sulfite liquor also can be treated with
an alkali to obtain synthetic vanillin. However,
one day's operation of the sulfite mills in the U. S.
produces enough waste liquor to meet the nation’s
vanilla consumption requirements of one year.
Molasses made from practically any species of
wood may prove to have a profitable future. At
the present time the process requires a plant with a
capacity of at least 30 to 50 tons of waste wood
per day. However, the Forest Products Laboratory
is conducting experiments designed to lower these
requirements to 5 to 10 tons daily. Utilizing chip
and/ or sawdust, this process may provide a profit­
able outlet for waste materials from many small
sawmills or other woodworking plants.
Many of the experimental uses of waste material
are based on the utilization of lignin, the binding
agent that cements the cellulose fibers together in
wood.
For example, it is possible to convert
lignin into crude oil, hand lotions, hair tonic, and
fertilizer. Many of these dramatic uses as yet are
impractical. However, for a number of years lignin
contained in wood chips has provided the basis for
the wallboard industry in the U. S. The Masonite
process of converting chips into wallboard is essen­
tially a means of utilizing the lignin in natural
wood. Recently a new process for manufacturing
wallboard from wood has been developed and is
considered by many people in the industry to offer
real opportunities for promotion.
While there is considerable glamour to some of
the products mentioned above and others that have
been developed on an experimental basis, most of
these are yet to be produced on a basis that would
justify the capital investment that would be re­
quired. However, there are newly developed prod­
ucts that appear to offer real possibilities for prac­
tical commercial operations. One of these is the
cross-laminated flooring developed by the engineers
at the T.V.A. in cooperation with other research
organizations.
This flooring is produced on a continuous strip
basis, utilizing the low-grade wood for the center
Page 63

and bottom layers and high-grade wood for the top
surface. In T V A ’s pilot plant work, all three grades
were obtained from stand improvement cuttings, by
selective grading of the thin strips produced from
such log-grade hardwood trees or logs. Final con­
clusions with respect to some of the production
problems have yet to be reached. Pilot plant opera­
tion indicate that this product can be manufactured
on a profitable basis. A commercial tryout demon­
strated the need for mechanical improvements in
the gluing machine, and production attempts were
stopped pending such improvements. Developed
as a means of utilizing the large quantity of lowquality hardwoods in the T V A region, the process
might be well adapted to the Eighth District. Such
a plant would provide a market for a large amount
of timber growing in the district which normally is
not merchantable. By providing such a market it
would increase the income of woodlot and other
timberland owners and at the same time would pro­
vide added industrial employment. In addition, by
offering a profitable incentive to clear low-quality
timber from the woods, it would also tend to in­
crease the value of the area’s timber stand.
CONCLUSIONS AND SUMMARY

The evidence indicates that in terms of timber
supply there are opportunities for a considerable
increase in the industrial utilization of timber
grown in the Eighth District. However, there are
several fundamental principles that should be given
careful consideration in evaluating the merit or
desirability of any proposal to increase the indus­
trial demand for timber in this region. These evolve
directly from the close relationship between indus­
trial consumption of timber and the whole com­
plicated problem of maintaining and preserving or
increasing the quality as well as the quantity of
one of our basic natural resources.
First, any addition to the wood-processing or
wood-using industrial capacity should be based on
an expectation of long-term operations, not on a
desire for quick profits which too often results in
an irresponsible policy of overcutting or “ mining”
of timber rather than in “ cropping” the forests.
New wood-using plants should provide a market
for the types and quality of timber we now have in
the district and in specific localities, as well as a
market for the quality of timber we might have in
the future. It would seem highly desirable for the
district as a whole and particularly for individual
localities that future expansion of the woodprocessing industry be directed at least in part
toward greater use of low-quality hardwood trees.
Page 64




New industries should be related to the present
pattern of timberland ownership. Most of the acre­
age classed as forest land is in the form of small
woodlots owned by individual land owners. This
condition should be taken into consideration not
only as a factor that may influence the availability
of raw material for a processing plant, but also be­
cause a well-located plant could provide woodlot
owners with an added incentive to properly man­
age their timber. W ood-using industries, both new
and established, should prepare themselves to sell
forest management to timberland owners and wood
suppliers alike.
Further expansion should be consistent with the
present and potential level of labor skills in the
community. Some types of wood-processing opera­
tions, notably those employed in the manufacture
of furniture, require highly-skilled craftsmen, while
other plants, particularly those in the basic lumber
industries, have somewhat lower-average require­
ments. In many parts of the district highly-skilled
wood workers are not available. However, the
wartime experience of industry demonstrated the
adaptability and versatility of labor and suggests
the possibility of a fairly rapid development of
many labor skills not now conceded to workers in
this region.
W ith few exceptions, industry in this area typi­
cally is on a relatively small scale. Large opera­
tions are confined principally to the industrial cen­
ters of the district where necessary capital, labor
and other requirements are available on a suf­
ficiently large scale. In small communities, how­
ever, where capital and labor are less plentiful, but
where an ample supply of timber is at hand, atten­
tion might well be given to the establishment of
wood-processing plants as a means of utilizing not
only the available financial and labor supply, but
also the timber resources of the communities. In
so doing, income not only would be increased
through added industrial employment, but also by
the additional income provided to the suppliers of
the raw material.
All these factors and perhaps more should enter
into the question of the feasibility and desirability
of expanding the industrial uses of wood in the
’ district. In general these principles are directed
toward the objective of developing the industry in
a manner that will provide new and steady em­
ployment for district workers and a stable market
for the region’s timber. However, in no case
should expansion occur at the expense of the basic
forest resources.
W eldon A. Stein

Retail Credit Survey

DISTRIBUTION OF SALES
NINE TRADE LINES
EIGHTH

This article summarizes the results of the sixth
annual Retail Credit Survey in the Eighth Federal
Reserve District. The Survey results on a national
basis will be available later in a publication pre­
pared by the staff of the Board of Governors. Addi­
tional copies of this article or copies of the national
results may be obtained from this bank upon
request.
Fot the 1947 district Survey, reports were
obtained from 455 retail outlets in nine trade lines.
Sales volume of respondents in 1947 approximated
$430 million. Reporters furnished data on total
sales, sales by type of transaction, inventories,
markups, receivables (open account and instal­
ment), instalment paper sold and bad debt losses.
All respondents included in the Survey grant some
credit. Stores selling only for cash automatically
are excluded from the Survey.
Coverage for the district Survey differs in one
major respect from that for the nationwide Survey.
Many of the nationwide chain stores report data in
consolidated form directly to the Board of Gover­
nors and these data cannot be allocated to the vari­
ous Federal Reserve districts. District respondents
thus consist mainly of independent retailers and
regional chains.
Sales— The nine trade lines covered by the Sur­
vey, in combination, had 10 per cent more sales (in
terms of dollars) in 1947 than in 1946. There were,
however, substantial differences in sales gains
among the different lines. Automobile dealers and
household appliance stores, as might be expected,
registered the largest sales increases. The backlog
of consumer demand for goods sold by these types
of retailers remains heavy, and sales were (and
continue to be) limited by supplies available.
Am ong the other durable goods lines, the increase
in sales of furniture stores approximated the aver­
age for the nine lines combined. Furniture store
sales were at a high level, but the gains came earlier
than in other durables lines so that 1947 represented
but a moderate increase over the already large
volume of 1946. Hardware store sales gains were
slightly above average. Automobile tire and acces­
sory stores showed a 6 per cent decrease, mainly
due, it is reported, to the increased supply of new
cars which lessened demand for accessories for
older models. Jewelry store sales also were off,
reflecting a movement back toward a more normal




AUTOMOBILE

FEDERAL

R ESERVE

DISTRICT,

1947

IN

AND 1946

100

DEALERS

AUTO TIRE AND
ACCESSORY STORES

DEPARTMENT

STORES

FURNITURE

STORES

HARDWARE

STORES

wmmmmam

HOUSEHOLD APPLIANCE
STORES

JEW ELR Y

mmmmMk

mmvmm

STORES

MEN'S CLOTHING S

:s

WOMEN'S APPAREL

0
■

I

CASH

B86M

25
cred h t

50

75

100

in s t a l m e n t

relation of jewelry sales to total sales. During the
war years and immediately thereafter, with many
items in short supply, high purchasing power
tended to focus on luxury goods. That situation
gradually has become better adjusted.
The chart shows the composition of sales by type
of transaction for each trade line in 1946 and 1947.
The general pattern is for a relative shrinkage in
cash sales and for relative growth in credit sales as
proportions of total sales. And this relative move­
ment is fairly uniform throughout all lines covered
by the Survey, even though actual proportions differ
appreciably from line to line.
Cash sales increased absolutely at only three
trade lines—automobile dealers, household appli­
ance stores, and hardware stores. Open credit sales
in the durable lines were up in dollar volume at all
lines except automobile tire and accessory stores.
With instalment credit restriction first eased and
then eliminated in 1947, instalment sales increased
in all lines. ,
Among the various lines, open credit sales ac­
counted for more than half of total sales in 1947
at auto accessory, women’s apparel and men’s wear
stores. Furniture store and auto dealers showed
Page 65

the smallest proportions of such sales— 16.6 per
cent and 18.9 per cent, respectively, of total sales.
In instalment sales relative to total sales, furni­
ture stores stood out well ahead of any other line—
60 per cent of total sales being made on the instal­
ment plan. In several lines—men’s clothing,
women’s apparel, hardware, and department stores
— the dollar volume of instalment sales was rela­
tively small in comparison to total store volume
but nevertheless recorded gains relative to total
store volume.

DEPARTM ENT

Receivables— Total receivables at the close of
1947 were up substantially from the close of 1946
for all trade lines covered by the Survey. Gains
ranged from 23 per cent at hardware stores to 82
per cent at appliance dealers. The easing of credit
terms in most lines is indicated by the fact that the
rise in receivables outstripped the gain in sales on
credit percentagewise at all surveyed lines except
automobile dealers and hardware stores.
The table shows that the ratios of receivables to
total sales (cash and credit) rose at all lines except
auto dealers in 1947. The most pronounced in­
creases in these ratios occurred at furniture and
jewelry stores in the durables lines and women’s
wear shops in the nondurables lines.
Bad Debt Losses—The ratio of uncollectable
credit accounts to total credit sales increased gen­
erally throughout the nine lines of trade but still
were quite small. Bad debt losses showed the larg­
est increases at men’s clothing, women’s apparel,
and jewelry stores. At the end of the year about
Yd, per cent of all credit sales of jewelry stores were
reported as being uncollectable in comparison with
about ^2 per cent at women’s apparel and men’s
clothing shops.
Bad debt losses on open credit accounts gained
appreciably more at men’s wear and department
stores than at other stores, but were only Ys per
cent of sales in each case. W omen’s apparel stores,
which have the largest proportion of open credit
sales to total sales, reported that slightly less than
per cent were counted bad debt losses. At jew­
elry and furniture stores, although open credit sales

STORES
Stocks
Stock
N et Sales
on H and
____________
T urnover
M arch, 1948
3 mos. Mar. 31,’ 48
com pared with
1948 com p, with Jan. 1, to
Feb.,
M arch, to same Mar. 31,
M arch 31,
1948
1947
1948
1947 period ’ 47 1947
.94
+
10%
.94
Ft. Smith, A rk..
+42%
+ 6%
+ 19%
.97
1.07
+23
+ 19
.,+ 3 8
+ 6
.86
.97
+49
+43
+ 10
+ 7
.86
+18
+30
.77
+49
+63
+25
1.02
1.06
+ 14
+ 19
+44
.96
.91
+ 10
+35
+ 7
+ 9
.97
.91
+35
+ 8
+ 6
+ 9
+23
+39
+45
Springfield, M o. ..
+51
+ 17
+
2
0
.75
.83
+ 8
M emphis, Tenn. ..
+38
+ 3
+ 18
.86
1.00
+ 11
*A11 other cities....
.68
+49
+ 15
+35
.82
+ 6
8th F . R . District..
+39
+ 14
.93
+ 14
.95
+ 9
*E1 D orado, Fayetteville, Pine B luff, A r k .; H arrisburg, Jacksonville,
M t. V ernon, 111.; N ew A lbany, Vincennes, I n d .; Danville, H opkinsville,
Mayfield, Paducah, K y . ; Chillicothe, M o .; and Jackson, Tenn.
1 Includes St. Louis, M o., East St. Louis, A lton and BelleviHe, 111.
T rading d a ys:
M arch,
1948— 2 7 ;
February,
1948— 2 4 ;
M arch,
1947— 26.
Outstanding orders o f reporting stores at the end o f M arch, 1948,
were 11 per cent less than on the corresponding date a year ago.
Percentage of accounts and notes receivable outstanding M arch 1,
1948, collected during M arch, by cities:
Instalment E xcl. Insta.
A ccounts
A ccoun ts
F ort Sm ith.............. %
49%
L ittle R o ck ...... 27
55
Louisville ........ 26
50
M em phis .......... 31
48
IN D E X E S

Instalment E xcl. Instal.
A ccounts
A ccoun ts
Quincy ............ ...29%
59%
St. L o u is.......... ...36
55
Other cities .... 25
59
8th F. R . Dist. 32
53

OF

D E PA R TM E N T STORE SALES A N D STOCKS
8th Federal Reserve District
Mar. Feb. Jan.
Mar.
1948 1948 1948
1947
.... 318
258
239
288
318
307
291
294
.
319
298
265
279
329
331
309
288
J D aily A verage 1 9 3 5 -3 9= 1 0 0.
i End of M onth Average 1935-39 = 100.

increased relative to total sales, the ratio of bad
debt losses on open credit accounts declined in the
year.
Ratios of bad debt loss on instalment sales to
total instalment sales increased in all but hardware
stores where there was no change from the end of
1946. Furniture stores reported a little more than
^2 per cent of instalment accounts were listed as
bad debt losses, a fractional increase over 1946.
The largest increases in this ratio were shown in
lines of trade where relatively small amounts of
instalment credit were granted. At reporting
women’s apparel and men’s clothing stores, 4 per
cent and 2 per cent, respectively, of instalment
accounts were listed as bad debt losses.
Alfred C. Kearschner

S U M M A R Y D A T A 1947 R E T A I L C R E D I T S U R V E Y S H O W I N G S A L E S , I N V E N T O R I E S , A N D R E C E I V A B L E S
B Y K I N D O F B U S IN E S S — E I G H T H F E D E R A L R E S E R V E D I S T R I C T

K ind of Business
A utom obile Dealers .......................
A u to Tire and A ccessory Stores..
Departm ent Stores ..........................
Furniture Stores ..............................
H ardware Stores ..............................
H ousehold A ppliance Stores........
Jewelry Stores ..................................
W om en ’ s A pparel Stores..............
M en’s C lothing Stores.............. .

Page 66




Total
Net
Sales
+ 54.5%
— 6.2
+ 3.9
+ 10.0
+ 13.2
+ 3 2 .8
— 5.3
— 0.7
+ 6.6

1947 Compared with 1946
Cash and
Open
C .O .D .
Instalment D ec. 31
Credit
Inventories
Sales
Sales
Sales
+ 5 6 .6 %
— 19.9
— 4.7
— 14.9
+ 4.9
+ 14.2
— 19.9
— 11.1
— 5.8

+ 3 6 .0 %
— 5.4
+ 1 1 .7
+ 1 0 .6
+ 2 3 .0
+ 3 2 .4
+ 6.3
+ 8.0
+ 2 1 .5

+ 7 2 .7 %
+ 9 8 .3
+ 4 1 .7
+ 2 3 .6
+ 8 0 .6
+ 6 8 .5
+ 14.6
+ 1 8 .8
+ 3 6 .0

+ 3 5 .7 %
+ 2 8 .3
+ 2.0
+ 2 0 .6
+ 1 3 .5
+ 5 4 .8
— 4.4
+ 8.3
+ 14.0

R atio of
T otal N et Sales
to Inventories
1947
1946
10.9
4.0
4.9
2.9
3.6
4.2
1.3
5.2
4.8

9.5
5.6
4.8
3.1
3.6
4.7
1.3
5.7
5.2

R atio o f Receivables
to T otal N et Sales
Open Credit
Instalment
1947
1946
1947
1946
1.75%
6.43
9.26
5.43
5.35
3.74
8.33
14.34
10.57

2.33%
5.57
7.55
4.54
5.16
2.75
5.32
10.23
8.55

0.92%
2.83
2.17
22.21
0.81
8.15
12.53
0.73
0.17

0.90%
0.84
1.43
15.92
0.52
5.94
6.97
0.53
0.14

Survey of Current Conditions
Recently published estimates of anticipated plant
and equipment expenditures by American business
indicate considerable strength in this part of the
economy for the balance of 1948. According to a
survey by the Securities and Exchange Commission
and the Department of Commerce, industry in this
country (excluding agriculture) expects to invest
about $18.7 billion in new plant and equipment in
1948. Expenditures at this rate would be 15 per
cent larger than actual outlays in 1947, the all-time
record (but slightly below the very high rate of
fourth quarter, 1947), and even when adjusted for
the difference in price level would be at or above the
1947 level and larger than in 1929 or 1941, the pre­
war peak years.
While these estimates are based on expected ex­
penditures, and thus are subject to change as
general business sentiment changes, they are sig­
nificant in several respects. In view of the fact that
this survey was made prior to the call for an
increased defense program, which has increased the
pressure for preparedness expenditures, these esti­
mates indicate that businessmen generally have
S P E C IA L T Y STO R ES
Stocks on
Stock
____________N et Sales
H and
T urnover
Mar. 1948
3 mos.
compared with
1948
Mar. 3 1 /4 8
Jan. 1, to
Feb.
M arch to same com p, with
Mar. 31,
1948
1947 period *47 Mar. 3 1 /4 7 < 1948
1947
M e n ’ s Furnishings + 7 6 %
+ 3%
— 1%
+23%
.71
.84
B o o ts and Shoes
+95
+32
+19
+ 8
1.03
.97
Percentage of accounts and notes receivable outstanding M arch 1,
1948, collected during M a rch :
M e n ’ s Furnishings ................. 55%
B oots and Shoes....................... 46%
T rading d a y s:
M arch,
1948— 2 7 ;
February,
1948— 2 4 ;
M arch,
1947— 26.

,

R E T A I L F U R N I T U R E S T O R E S **
N et Sales
Inventories
R atio
March, 1948
M arch 31, 1948
of
compared with
compared with
Collections
F e b .’48 M ar.’ 47 F eb.’ 48 M a r.’ 47 M ar.’ 48 M a r.’ 47
S t. L ouis A rea1.... + 3 2 %
+37%
— 18%
+22%
39%
41%
St. Louis .......... + 3 2
+38
— 18
+22
40
41
Louisville A rea2 .. + 2 7
+22
— 2
+16
19
27
Louisville
........ + 2 3
+28
— 4
+ 9
16
25
M emphis ............... + 9 4
— 13
+ 4
+44
20
25
Little R o c k ............ + 2 3
-0 +10
— 5
24
31
-8th Dist. T otal3.... + 3 3
+24
— 5
+17
30
35
* N ot shown separately due to insufficient coverage, but included in
E ighth D istrict totals.
1 Includes St. Louis, M issou ri; East St. Louis and A lton, Illinois.
2 Includes Louisville, K en tu ck y; and N ew A lbany, Indiana.
3 In addition to above cities, includes stores in Blytheville, F ort
S m ith ,'a n d Pine B luff, A rkansas; Hopkinsville, O w ensboro, K en tu ck y;
sGreenville, G reenw ood, M ississippi; Springfield, M issou ri; and Evansville,
Indiana.
* * 4 6 stores reporting.
PERCENTAGE

D IS T R IB U T IO N

O F F U R N IT U R E SA LE S*
Mar. ’ 48
Feb. ’ 48
Mar. ’47
‘Cash Sales ....................................................
14%
16%
21%
C redit Sales ..................................................
86
84
79
T otal Sales ................................................ 100
100
100
*L ast m onth, figures appearing in the second tw o colum ns were in­
co rrectly reported. They should have read: Cash Sales, Jan., ’ 48— 17% ,
F e b ., ’ 47— 2 3 % ; Credit Sales, Jan., ’ 48— 8 3 % ; F eb ., ’47— 7 7% .




considerable confidence in the capacity of consumer
demand to support production and profits at a high
level during the remainder of the year.
These estimates also have significance in terms
of production costs, prices, and profits. A large
part of the $18.7 billion is expected to be spent for
new machinery and other equipment. In 1947,
purchase of these production goods amounted to
$10.9 billion, or two-thirds of the total. The addi­
tion of new equipment should tend to increase pro­
duction efficiency and to offset increased labor and
other costs. In many instances the installation of
modern machines also should result in an actual
reduction in unit labor requirements.
EM PLOYM EN T

Employment in the Eighth District increased
slightly between February and March, after trend­
ing downward during the preceding two months.
However, the increase in March, which lifted
employment to a level approximately the same as
in January and 2 per cent higher than a year ago,
was less than seasonal. At the same time, the
total number of man-hours worked was substantially
higher in March than in February, when adverse
weather, and fuel oil and gas shortages resulted in
more temporary layoffs and a shorter average work
week.
The number of persons unemployed in March was
somewhat smaller than in February and was about
the same as a year ago. During the past year, the
composition of the unemployed segment of the labor
force has changed. The number of unemployed
veterans has decreased and the number of unem­
ployed women has increased. The average length
of time that individuals were seeking work was
about nine weeks in March, 1948, which was con­
siderably less than a year ago.
The fact that current employment is larger than
a year ago, while the level of unemployment shows
little change, is accounted for by an increase in the
total labor force. It should be noted that during
the past year the expansion in the number of women
in the labor force was larger than would be ex­
pected from the increase in population. This would
indicate that many women who gave up their jobs
after the war apparently are returning to the labor
force due to economic necessity and to an increased
demand for their services.
Page 67

The labor market is expected to become increas­
ingly tight during the spring and summer months
in the Eighth District as well as in the nation.
However, this district apparently has a larger sup­
ply of labor relative to prospective demand than
does the nation as a whole. Employment increases
are forecast for most of the major industries, with
the largest gains expected in agriculture and con­
struction. Although the only serious general labor
shortage probably will be in farm workers, spot
shortages may develop elsewhere and the recruit­
ment of workers may become increasingly difficult.
Total employment in the St. Louis Metropolitan
Area remained stable between January and March,
1948. Employment in service and finance, insur­
ance, and real estate increased. Construction, pub­
lic utilities, and manufacturing employment held
steady, while Government employment declined.
In manufacturing lines, increases in durable goods
industries were offset by decreases in nondurable
goods industries. The transportation equipment
industry showed a large gain and the food industry
a large decline during the two months. During the
next few months, employment increases are forecast
for construction, manufacturing, public utilities,
trade, and service.
Currently, about 8,000 more workers are em­
ployed in St. Louis than a year ago, with 5,000 of
this increase due to gains in the manufacturing
industries. Employment in durable goods manu­
facturing dropped by 1,000 during the year as
decreases in both electrical and nonelectrical
machinery and in basic and finished lumber prod­
ucts more than offset increases in transportation
equipment and in primary and fabricated metal
products. In the nondurable goods industries, the
increase is estimated at 6,000 workers with the prin­
cipal gains occurring in food, chemicals, textiles and
apparel, and leather industries. Paper was the
only nondurable goods industry to show a decline.
All nonmanufacturing employment except Govern­
ment increased during the year. Construction,
trade, finance, insurance, and real estate showed

increases ranging from one to two thousand per­
sons, while the public utilities and service indus­
tries had relatively minor gains.
The long-term trend in manufacturing employ­
ment in the district states is indicated by figures
published recently by the Bureau of Labor Statis­
tics. In the seven states, about three-quarters of a
million more people were employed in manufactur­
ing industries in 1946 than in 1939. Most of the
gain occurred in the durable goods industries which
increased 58 per cent as compared with 24 per cent
in the nondurable goods industries. Total manu­
facturing employment increased 41 per cent in the
district states and 43 per cent in the United States
between 1939 and 1946. Kentucky, Mississippi, and
Tennessee had the largest percentage increases in
the district.
INDUSTRY

Over-all industrial activity in the Eighth District
in March was at a somewhat higher level than in
February. In some lines the gains reflected pri­
marily the longer work month. In others, increases
on a daily average basis were registered, while in
still others absolute declines took place. Com­
pared with March of last year, however, most parts
of the industrial economy operated at a higher level.
Production of coal*(because of the strike) was con­
siderably less than in February. Oil ouput also was
smaller. Scheduled operations in the steel industry
remained the same and lumber production increased
slightly. Manufacturing plants averaged about the
same rate of operations as in the previous month,
while large gains were indicated in construction ac­
tivity. During the first quarter of 1948, industrial
activity in this district apparently averaged 5 to 10
per cent higher than in the first three months of
1947.
Total consumption of electric power in the dis­
trict's industrial centers in March was 14 per cent
larger than in February and 16 per cent above
March, 1947. Gains over the previous year were
registered in all reporting cities and, except for

INDUSTRY
C O N S U M P T IO N O F E L E C T R IC IT Y
M ar.,
F eb.,
Mar.,
Mar., ’ 48,
(K .W .H .
N o. o f Cus- 1948
1948
1947 Compared with
in thous.)
tomers* K .W .H . K .W .H . K .W .H . Feb., ’ 48
Mar., ’ 47
9,490
8,048
8,088 R
+ 1 8 % + 17%
Evansville ........ 40
Little R o c k ...... 35
4,044
4,368
3,071 R
—
7 4 -3 2
Louisville ........ 80
70,793
61,418
63,079 R
4 . 15 4 12
M emphis .......... 31
5,407
5,190
5,291
+ 4
4 2
Pine B lu f f........ 24
6,071
4,677
1,076
+ 30 + 4 6 4
St. L o u i s .......... 99
76,548
67,267
68,207 R
+ 14 + 12
Totals .......... 309
172,353
150,968
148,812 R
+ 14% + 16%
* Selected industrial customers.
R — Revised.

Page 68




C R U D E O IL P R O D U C T IO N
(I n thousands
o f bbls.)
M ar., ’ 48
Arkansas ................. 86.8
Illinois ..................... 170.0
Indiana ................... 17.7
K entucky ............. . 25.1
T otal ................... 299.6

F eb., ’ 48
87.3
174.1
18.2
26.0
305.6

M ar., '47
80.4
191.7
17.7
27.1
316.8

M arch, 1948,
com pared with
F eb., ’ 48 Mar.. ’ 47
— 1%
+ 8%
— 2
— 11
— 3
- 0 — 3
— 7
— 2%
— 5%

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
First N ine D ays
M ar., *48 F eb., ’ 48 M ar., *47 A p r., ’48 A p r., *47 3 mos. *48 3 mos. *47
125; 361
116,736
142,714 ' " 34,892
39,966 ‘ 362,820
389,983
S ou rce: Term inal Railroad A ssociation of St. L ouis.

Little* Rock, all cities showed a month-to-month
increase. However, on a daily average basis, power
consumption by industries in March was nearly 6
per cent less than in February but was 6 per cent
higher than a year ago. In the first three months of
1948, industrial power consumption was 12 per cent
above that of the same period of last year.
Manufacturing— March operations in most manu­
facturing plants were scheduled at about the same
rate as in February. Aggregate output was gener­
ally higher, but it was due in a number of cases to
the longer work month. On a daily average basis,
production of automobiles, lumber, whiskey, and
rubber products showed increases over the previous
month, whereas a lower rate of operations was
indicated in the manufacture of chemicals, electrical
equipment, food products, metals and metal prod­
ucts, stone, clay and glass products, and transporta­
tion equipment. In terms of total output for the
month, increases were indicated in all the above
mentioned industries.
Steel— Operations of the basic steel industry in
the St. Louis area in March were scheduled at 65
per cent of capacity, the same as in the previous
month but substantially less than the 77 per cent of
capacity operations scheduled in March, 1947. Op­
erations of the open hearth furnaces in this area
were relatively unaffected by the loss of coal pro­
duction. In the first three months of 1948, steel op­
erations averaged 69 per cent of capacity, about the
same as in the first quarter of last year.
Lumber— Production of lumber was at a higher
level than in February but below that in March,
1947. Average weekly production at southern pine
mills increased 12 per cent in the month but was 8
per cent less than a year ago. Reporting southern
hardwood mill operations at 78 per cent of capacity
were unchanged from February, and only fraction­
ally less than a year ago.
Whiskey—At the end of March, 53 of Kentucky’s
63 distilleries were in operation, 8 more than at the
end of February but 5 less than at the same time last
year. Reflecting the possibility of a re-application of
restrictions on grain usage, the Kentucky distilling
industry has increased output considerably and
trade reports indicate that, if the present production
rate continues, it could result in overproduction in
terms of present prices and demand. In February,
production of whiskey totaled 7 million tax gallons,
more than two and one-half times larger than in the
previous month but 36 per cent less than in Febru­
ary, 1947. According to trade reports, consumption
of whiskey has decreased sharply recently.




Meat Packing-—Meat packing operations in the
St. Louis area in March on a daily average basis
were at about the same level as in February, but
total Federally inspected slaughter increastd about
22 per cent. In the nation, total meat slaughter de­
creased about 2 per cent. In the area, there were
486.000 animals slaughtered under Federal inspec­
tion as compared with 400,000 in February and
347.000 in March, 1947. The largest gains over Feb­
ruary were indicated in the slaughter of calves and
sheep, which increased 58 and 37 per cent, respec­
tively. The large March slaughter brought the first
quarter total to 1.4 million animals, 15 per cent more
than in 1947 but nearly 20 per cent less than in the
seasonally high fourth quarter of 1947.
Shoes— District shoe production remained at a
high level in February. On a daily basis, produc­
tion was about the same as in January, although
aggregate production was about 4 per cent less.
According to preliminary estimates, output in
February totaled 8.4 million pairs as compared with
8.7 million pairs in January and 7.6 million pairs in
February of last year. Trade reports indicate that
fall prices of the lower grade lines are scheduled to
remain at about present levels, due in large part to
the recovery in hide prices plus the possibility of
increased Army and Navy orders. However, mak­
ers of the better grade women's shoes have indi­
cated that prices will be lowered somewhat as a
result of considerable consumer resistance to pres­
ent price levels.
Mining and Oil— Daily average production of
crude oil in the district in March declined during the
month. The 300,000 barrel daily average production
was 5 per cent less than in March, 1947. In all pro­
ducing district states, output decreased slightly dur­
ing the month and, except in Arkansas, was less than
a year ago. In the first quarter, production aver­
aged 303,000 barrels per day, 4 per cent less than
in the first three months of 1947 and slightly less
than in the fourth quarter of last year.
With U.M.W. mines not operating a good part
of the time, coal production in the district in March
dropped to 7.3 million tons as compared with 10.5
million tons in February and 11.4 million tons a
CONSTRUCTION
B U IL D IN G P E R M IT S
(M o n th o f M arch)
N ew Construction
Repairs, etc.
Cost
N um ber
C ost
(C ost in
N um ber
1948
1947
1948 1947 1948 1947
thousands)
1948
1947
Evansville .............
94
80
82 $ 867 $ 285
110 $ 80 $ 77
581
530
182
233
104
64
.... 100
105
1,072
987
107
109
61
44
Memphis ...............1,177
656
4,998
1,613
186
196
147
180
St. Louis
267
.... 232
266
2,049
1,444
225
379
372
Mar. T otals.............1,793 1,254 $9.5671 $4,859
836
825 $819 $737
Feb. T otals........ .... 951 1,031 $4,372 $2,720
440
585 $526 $688

Page 69

year ago. Daily average production was 42 per
cent below that of the previous month as compared
with a decrease of 30 per cent in aggregate produc­
tion.
Construction— The value of building permits
awarded in the major district cities in March, total­
ing $10.4 million, was more than double the Febru­
ary total and 86 per cent larger than in March,
1947. The largest increase over February occurred
in Evansville, although Louisville, Memphis, and
St. Louis also registered substantial gains. All the
reporting cities showed gains over last year, with
increases ranging from 186 per cent in Memphis to
15 per cent in Louisville.
The value of new construction permits totaled
$9.6 million or 92 per cent of all awards. More
than one-half ($5.5 million) was for residential
buildings, which increased 171 per cent over the
previous month and 119 per cent over March of last
year, with substantial month-to-month gains re­
ported in all the cities.
Measured in terms of dwelling units, Memphis
again led the district cities with a total of 490 fam­
ily units. Permits issued in Louisville provided
for 136 new dwellings; in Little Rock 72 new
units were authorized, and Evansville permits were
issued for 42 new dwellings. In St. Louis City, 83
W H O LE SA LIN G
Stocks
N et Sales
Lines of Commodities
Mar. 31, 1948
March, 1948
Data furnished by
compared with
com pared with
Bureau of Census,
Mar., 1947 Mar. 31, 1947
U . S. Dept, of Comm erce*
F eb., 1948
— %
— 35%
A utom otive Supplies ....................... 4 -1 1 %
—
D rugs and Chemicals..................... -4-13
+ 1
—
+ 18
D ry Goods .................................... .... + 3 1
+12
- 0 Groceries ........................................ .... + 3 5
+26
+ 10
H ardware ...................................... .... + 9
—
+38
P lum bing Supplies ......................... + 3 9
+ 8
+ 18
T ob a cco and its P rodu cts.......... .... + 1 5
+ 10
+ 18
M iscellaneous ................................ .... 4 - 9
+ 16%
+ 12%
** T otal all lines........................... .... + 1 5 %
* Preliminary.
**Includes certain items not listed above.

PRICES
W H O L E S A L E P R I C E S IN T H E U N IT E D S T A T E S
Bureau o f L abor
Mar., ’ 48 com p, with
Statistics
M ar., ’ 48 Feb., ’ 48 M ar., ’ 47 Feb., ’ 48
Mar., ’47
(1926 = 100)
+ 0.4%
160.8 R 149.5
A ll Comm odities. , 161.4
4 - 8.0%
182.6
+ 0.4
186.0
185.3
Farm Products.
4 - 1.9
167.6
+
0.8
172.4
F ood s ................ .... 173.8
4 - 3.7
Other ................ .... 147.7
147.5 R
4-12.7
131.1
-f- 0.1
R — Revised.
C O N S U M E R P R IC E IN D E X
Bureau o f Labor
Mar. 15, Mar. 15, ’ 48, Comp, with
Statistics
Mar. 15, D ec. 15,
1947 Dec. 15, ’ 47 Mar. 15, ’ 47
1948
1947
(1935-39 = 100)
4-6.8%
156.3
— 0.1%
Unite'd States ..... 166.9
167.0
4-7.7
167.9
155.8
— 0.1
St. L ou is ........ .. 167.8
4-8.6
158.8
— 0.6
M em phis ........... 172.4
173.5
R E T A I L F O O D P R IC E S
Bureau o f Labor
Statistics
Mar. 15,
Feb. 15,
M ar. 15, Mar. 15, ’48, Comp, with
1948
1948
1947
Feb. 15, ’48 Mar. 15, ’47
(1935-39 = 100)
4 -6.8 %
204.7
189.5
— 1.2%
U .S . (51 cities)..... 202.3
212.8
4-6.0
St. L ouis ..... .. 210.9
198.9
— 0.9
206.1
4-6.8
Little R ock .... 203.8
190.8
— 1.1
198.0
+ 5 .4
Louisville ........ 193.9
183.9
— 2.1
M em phis ......... 219.9
224.5
4-7.2
205.1
— 2.0

Page 70




additional family units were provided, and in the
county most of the 245 permits issued for new con­
struction were for single residential dwellings.
TRADE

Sales volume in many reporting retail lines in the
district in March increased more than seasonally
from February but comparisons with a year ago
were mixed. The value of durable goods sales
generally was larger than in February and showed
gains over a year ago. Department stores also reg­
istered increases over both a month and a year
earlier. Most nondurables stores showed March
sales substantially higher than in the previous
month but in a few lines sales were less than in the
same month last year.
March sales volume at reporting department
stores in the district and in the nation as a whole
was larger than in the previous month and in the
comparable month a year ago. Seasonally adjusted
sales volume in March in this district was 318 per
cent of the 1935-39 average as compared with 294
per cent in March, 1947. On the basis of prelimi­
nary reports in April the year-to-year gain of 9
per cent apparently will be maintained.
The gain over a year ago at district department
stores was due primarily to a large increase in sales
of homefurnishings, particularly mattresses, floor
coverings, and major appliances. The dollar vol­
ume of apparel and other nondurable goods sold
during the month was slightly larger than in
March, 1947, but the gains were somewhat
smaller than those registered in heavy goods—
despite the fact that March volume this year
included Easter buying. It should be noted also
that the rate of increase over last year in total sales
volume was larger in the basement store divisions
than in the main store divisions. In some lines,
notably women’s and misses’ apparel, increases
over last year occurred in the basement stores while
upstairs, where prices are higher, sales of apparel
fell below March, 1947. In the main stores as well
as in basement divisions, sales of women’s and
misses’ accessories increased considerably more
than sales of apparel as compared with last year.
The percentage increase in sales of inexpensive
dresses, blouses, skirts and sportswear was con­
siderably larger than the increase in sales of suits,
coats and better dresses.
Department stores apparently have adopted a
rather cautious outlook with respect to the future
level of their sales. This is being demonstrated by
a decline in volume of outstanding orders. Since
the latter part of January, outstanding orders have

declined in comparison with the same period in
1947. At the end of March, they were 11 per cent
below March, 1947. In January, they were 2 per
cent larger than a year earlier, and in February
were only 3 per cent less than a year ago. It should
be noted, however, that in the first quarter of 1947
the volume of ©utstanding orders was at a high
level, and declined fairly sharply in the second
quarter. On a seasonally adjusted basis department
store inventories at the end of March, 1948, were
below the February level, the first time in six months
that stocks have failed (on an adjusted basis) to
exceed the preceding month.
The dollar volume of sales at district apparel
stores in March increased substantially over Febru­
ary and was slightly above March, 1947. At women’s
specialty stores, sales gained 47 per cent over the
previous month and were 4 per cent above the com­
parable month a year ago. Men’s store sales, 76 per
cent larger than in February, were 3 per cent over
March, 1947. Inventories at both types of stores at
the end of March showed little change from Febru­
ary, but were up 17 per cent and 23 per cent, respec­
tively, at women’s specialty and men’s wear stores
as compared with March, 1947.
Furniture sales at reporting stores increased 33
per cent over February and were 24 per cent greater
than in March, 1947. An increasing number of lines
were featured in special sales promotions in the
first quarter of 1947, indicating that in some lines
supplies are beginning to catch up with demand.
Furniture store inventories on March 31, 1948 were
about one-sixth greater than at the end of March,
1947, in terms of dollar value.

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 ST. L O U IS
Change
Mar. 24,
A pr. 21,
1948
1948
(I n thousands o f dollars)
Industrial advances under Sec. 13b..
11,658 $— '2J 26
— 10,867
U . S. securities..............
T otal earning assets..
...$1,137,689 $— 12,987
Total reserves ..............
Total deposits ..............

$4-30,998
4-19,855
— 8,155

Industrial commitments under Sec. 13b..$

- 0 -

580

from
Apr. 23,
1947
$
..........
— 1,460
-1-18,966
$— 17,506
$4-40,471
4-56,779
4- 6,598
$— 3,060

P R IN C IP A L A SSET 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 BAN K S
E IG H T H F E D E R A L R E S E R V E D IS T R IC T
Change from
Apr. 23,
(I n thousands of dollars)
A pr. 21,
Mar. 24,
1947
Assets
1948
1948
T otal loans and investments........ ........ $2,018,936 $— 23,818 $— 49,350
(Comm ercial, industrial, and agri­
cultural loans, open market paper)..
540,223 — 27,841 +
97,145
Loans to brokers and dealers in se­
curities ....................................................
5.575 —
1,448 —
1,336
Other loans to purchase and carry
30,181
securities ..................................................
29,415
40
23,402
Real Estate loans.......................................
146,359
23
Loans to banks...........................................
2,560
936
496
42,549
Other loans ...............................................
190,906
6,408
Total loans .............................................
915,038
132,515
22,322
Treasury bills ...........................................
39,076
1,038
10,645
4,888
Certificates of indebtedness...................
112,909 + 15,222 +
Treasury notes .........................................
82,642
70,405
3,521
U. S. Bonds including guaranteed
obligations .............................................
724,434 4485 — 118,410
Other securities ......................................... 144,837
1,024
3,037 +
Total investments ....................... :....... 1,103,898
1,496 — 181,865
Cash Assets ................................................
725,137 + 32,072 +
42,464
Other Assets .............................................
25,008
686
1,315
Total Assets .......................................... .$2,769,081 $ +
9,569 $— 6,200

+

Liabilities
Demand deposits— total............................$2,103,065
Individuals, partnerships, and co r­
porations ............................................. 1,386,967
550,286
Interbank demand deposits..............
U. S. Government deposits...............
41,454
Other demand deposits.......................
124,358
Defriand deposits— adjusted* .............. 1,305,142
Tim e Deposits ...........................................
474,807
Borrowings ...............................................
5,000
Other liabilities .........................................
14,859
Total capital accounts..............................
171,350
Total liabilities and capital accounts $2,769,081

$+

12,223

4.

28,701
15,819
2,313
2,972
12,515
1,193
3,000
1,638
791
+
$ 4. 9,569
4-

$— 14,983

4—
—
4+
4—
—
4$—

45,111
58,630
17,003
15,539
33,095
8,676
6,900
1,364
8,371
6,200

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

BANKING AND FINANCE

Commercial, industrial, and agricultural loans at
weekly reporting member banks in this district
declined $32 million from mid-March to mid-April,
continuing the downward movement of the past
five weeks. The decline for the weekly reporting
banks in this district conforms to the moderately
downward trend of such loans throughout the nation
from mid-January to date. Business loans in this
district on April 14, however, were $103 million
ahead of a year ago.
Real estate loans for the same group of 34 banks
also showed a slight decrease, $125,000, from
March, but were up $24 million over a year earlier.
“ Other loans” , largely consumer credit, rose almost
$2 million for the month and were $38 million over
April 16, 1947. As compared with a year ago, total
loans were ahead $134 million, even after a decline
of $30 million in the month.




DEBITS TO DEPO SIT ACCOUNTS
(In thousands
of dollars

Mar.
1948

Feb.
1948

Mar.
1947

E l Dorado, A rk .......$
20,994 $
17,619 $
17,862
F ort Smith, A rk .....
39,680
31,167
34,945
Helena, A rk. ............
7,747
6,545
7,076
Little R ock, A rk .....
121,419
98,420
111,513
Pine Bluff, A rk .......
23,067
18,546
22,778
Texarkana, A rk.-T ex.
10,660
7,863
8,932
A lton, 111.............:......
25,691
20,008
21,085
E .S t.L .-N a t.S .Y ., 111. 110,945
92,620
102,100
Quincy, 111. ..............
29,868
26,444
26,844
Evansville, In d .........
108,691
90,413
88,379
Louisville, K y ...........
507,579
441,851
441,854
O wensboro, K y . ...»
25,973
25,928
26,870
Paducah, K y ..............
15,081
12,946
13,595
Greenville, M iss........
18,418
15,643
17,951
Cape Girardeau, M o..
10,679
9,254
9,514
Hannibal, M o ............
7,332
6,167
7,500
Jefferson City, M o...
39,609
44,565
34,858
St. Louis, M o ......... 1,576,993 1,273,459 1,336,105
Sedalia, M o. ............
6,365
8,621
9,329
Springfield, M o .........
53,126
46,482
50,077
Jackson, Tenn. ........
16,831
14,410
15,370
Memphis, T enn.........
544,488
440,062
473,511

M ar. ’ 48 com p, with
Feb. ’ 48 M ar. ’47
4 -1 9 %
4-27
4 -18
4-23
4 -2 4
4 -36
4-28

4-20

4-13

4-20

4-15
- 04 -16
4 -18
4-15
4 -19

—11

4 -2 4
— 26
4 -1 4
4 -17
4 -24
4 -2 1 %

4 -1 8 %

4.14
4- 9
4* 9

4- 1
4 -19

4-22
4- 9

4 -H
4-23
4-15
— 3

+ 11
3
12
2

+
+
—
+
+
—
+

14
18
32

6
+ 10
+ 15
+15%

Page 71

Total investments continued to run below the
preceding year, a movement in evidence since the
first week in June, 1946. As of April 14, 1948, total
investments of weekly reporting member banks
were $17 million below the preceding month and
$170 million below April 16, 1947. While the de­
crease from a year ago has been greater in dollar
volume in the long-term Treasury bonds ($107 mil­
lion as compared with $64 million for bills, certifi­
cates and notes combined) the change in the shorter
term securities has been greater relatively (44 per
cent compared to 13 per cent).
Earning assets, as a result of these two diverse
movements ($134 million increase in loans and $170
million decrease in investments), decreased $36
million for the year. The effect on bank earnings of
this decline in earning assets is in part offset by the
higher rate of return obtained on loans as compared
with investments.
Reflecting the contraction that has taken place in
bank earning assets, total demand deposits were
$40 million less than on April 16, 1947. The in­
creases in demand deposits of individuals, partner­
ships, and corporations of $27 million and in “ other”
demand deposits of $14 million were more than
offset by decreases in U. S. Government and inter­
bank deposits. Interbank deposits were reduced
during the year by $59 million and U. S. Govern­
ment deposits by $22 million. Time deposits were
$9 million ahead of mid-April, 1947.
AGRICULTURE

Substantial shifts will be made by farmers in
Eighth District states in wheat, oats, soybean and
tobacco acreages during 1948 if they are able to
carry out their March 1 plans. These plans called
for increases over last year of 19 and 14 per cent,
respectively, in wheat and oats acreages, and for
substantial reductions in soybean and tobacco acre­
ages. The table gives these and other comparisons.
The increased wheat acreage may be attributed
to the encouragement given farmers by last year’s
high prices. Oats acreage increases were scheduled
in order to renew feed stocks left low or depleted
by the short 1947 corn crop. The gain over last
year also reflects the fact that 1947 plantings of oats
were held down because of weather. Fields for the
additional oats will be provided for by the reduc­
tion in soybean acreage noted above. However,
unfavorable weather during the latter part of March
and the first two weeks of April has limited field
work. As a result, some of the intended oats acre­
age probably again will be planted to soybeans or
corn.
As shown by the table, contemplated tobacco
Page 72




P R O S P E C T IV E

P L A N T IN G S

Indicated A creage
United
States
Corn..................................
W heat..............................
Oats..................................
Soybeans.........................
T o b a cco ...........................
B arley...............................
R y e ...................................
Potatoes...........................
H a y ...................................
R ice ..................................

1948

1948 Indicated A creage
compared with 1947

8th D istrict
States

United
States

(Thousand A cres)
86,131
26,216
78,437
6,309
45,709
8,716
11,659
6,630
1,328
454
12,660
289
3,726
633
2,162
158
74,215
13,658
1,666
360

8th District
States

(P ercent Change)
*0 - %
4 -2 %
4- 1
4-19
4- 8
4*14
— 10
— 10
— 12
— 7
4- 5
4 -1
4- 1
4 -4
4 -1
— 8
— 1
— 2
— 1
- 0 -

S ou rce: B A E , Crop Production, M arch, 1948.

acreage has been reduced less in district states than
nationally. This reflects the fact that burley tobacco
acreage (predominant in district states tobacco
growing regions) was reduced only 2 per cent com­
pared with reductions up to 26 per cent in acreages
of other types.
For all crops combined, weather permitting, a
slightly larger acreage will be seeded in the 1948
crop year than in 1947, both in the district states
and for the United States as a whole.
Prospective winter wheat production in the
United States, according to latest estimates, is
expected to be nearly one-fifth less than the 1947
record crop, but in district states a substantial in­
crease is expected. On both a regional and national
basis, this would be a good harvest—23 and 25 per
cent, respectively, above the average crops for the
ten years, 1937-46.
The wheat crop in each of the three important
district states is expected to be substantially higher
than in 1947, ranging from a 25 per cent increase in
Missouri to 11 per cent in Indiana and 8 per cent in
Illinois. If this crop is realized, Eighth District
states will produce 14 per cent of the nation’s winter
wheat in 1948, compared with 9 per cent in 1947.
AGRICULTURE
CASH FA R M

IN C O M E

F eb. *48
com p, with
( I n thousands
o f dollars)

F eb.,
1948

.. 115,370
.. 63,336
K entucky ...... .. 28,097
33,852
Mississippi ....
65,337
Tennessee ...... .. 30,046
..$372,870
R E C E IP T S A N D

Jan.,
1948
4 -4 4 %
— 33
— 23
— 66
4-39
— 22
— 39
— 29%

12 month total M arch to Feb.

Feb.,
*47*'48 com p, witl
’ 45-'46
1947
’ 47-’ 48
’ 46-'47
« 0 -% $ 501,198 4 - 9 %
4 -6 3 %
— 11
4-54
1,882,980 4-25
- 0 4-55
1,090,276 4-25
— 38
4-35
525,723 4-13
4-12
4-46
486,146 4-68
— 10
1,077,779 4-18
4-51
— 19
4-45
481,874 4-15
— 10% $6,045,976 4 -2 3 %
4 -5 1 %

S H IP M E N T S A T N A T I O N A L

STOCK

YARDS

_________R eceipts_________ ________Shipments
Mar. Mar.*48 com p, with Mar. Mar.*48 com p, with
Feb. ’48 Mar. '47
1948 Feb. *48 Mar. ’ 47
1948
26,004 4 - 34% — 55%
Cattle and calves...... 90,715 — 31% — 34%
4 - 21
4-37
66,332
H o g s ........................... 241,330 4-17
4-36
— 50
6,822 4-195
Sheep .............. .......... 39,692 4 -36
-f.25
— 47
1,802 4 - 16
H orses ..................... .
1,802 4-16
— 47
100,960 4 - 2 9% — 18%
T otals .....................373,539 4- 1% 4 - 7 %