Full text of Review (Federal Reserve Bank of St. Louis) : November 1, 1947

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Monthly Review
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Volume X X IX

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NOVEMBER 1, 1947

Number 11

Surplus War Plant Disposal
U nder the pressure o f w artim e needs, m anufac­
turing facilities costin g m ore than $1.4 billion w ere
con structed in the E ighth D istrict b y the Federal
G overnm ent and b y private industry. A p p ro x i­
m ately $690 m illion w a s spent fo r buildings and
$721 m illion fo r equipm ent. T h ese plants, togeth er
w ith oth er establishm ents in the district, prod u ced
about $7 billion w orth o f material, supplies and
equipm ent for the arm ed forces, and their op eration
meant a substantial increase in incom e, com pared
w ith prew ar levels, to the p eople w h o w orked in
them and to the com m unities in w h ich th ey w ere
located.
E arly in the w ar period, h ow ever, it w as rec­
ogn ized that these econ om ic benefits w ere o f a
h igh ly tem porary character, b ein g su bject to cu r­
tailm ent w h en w ar su pply con tracts w ere at an end.
T h is m eant that if the w artim e con stru ction pro­
gram was to p roduce long-term advantages fo r the
district, m eans w ou ld have to be discovered to
utilize these facilities in postw ar industrial opera­
tions w h erever possible. T o achieve this goal, m ost
o f the w ar plants w ou ld have to be con verted to the
p rod u ction o f peacetim e g ood s under private ow n er­
ship o r con tin u ed in operation by the G overnm ent.
In m any o f the new plants and in m uch o f the
m an ufactu rin g capacity added to old plants in the
district, adaptability to the product on o f p ostw ar
civilian-type g o o d s w as fairly clear at the tim e o f
con stru ction . H ow ev er, a large num ber o f p rojects
had to be special purpose in character, designed
solely fo r the m anufacture o f w ar good s. A dap ta­
bility to private business operations after the w ar
in these cases was far from clear.




In general, it w as to be anticipated that physical
con version to peacetim e p rod u ction w ou ld be less
difficult fo r privately-financed facilities than for
those built b y G overnm ent. T h is resulted chiefly
from the fact that private capital tended to flow on ly
into facilities fo r w hich p ostw ar uses cou ld be pre­
dicted. W h e re v e r d ou bt existed as to their co n ­
vertibility, w ar plants w ere con structed b y the G o v ­
ernm ent. In addition, m ost G overn m en t-bu ilt p r o j­
ects w ere large, in term s o f capital investm ent and
physical size, and con sequ en tly if attractive at all
to private industry, cou ld be utilized on ly b y co m ­
panies en gaged in large-scale industrial operation s.
Y e t, if w artim e incom e gains, or a substantial p o r­
tion o f them , w ere to be preserved, it was essential
that these plants be adapted to private industrial
operation s prim arily because it w as these facilities
w h ich a ccou n ted for the bulk o f the benefits received
b y district com m unities as a result o f the w ar p ro ­
duction program .
T h is is the story o f the extent to w hich these
publicly-fin anced w ar plants have been con verted to
peacetim e uses, and o f the part they are p la yin g in
the p ostw ar e con om y o f the district. It is con cern ed
prim arily w ith the present utilization o f w ar-built
plant space— not w ith projects w hich involved on ly
the installation o f equipm ent.
C H A R A C T E R IS T IC S O F D IS T R IC T W A R P L A N T S

It is difficult to draw a w ord picture o f what
m igh t be regarded as a “ typical* w ar plant. F a cili­
ties con stru cted durin g the w ar years varied co n ­
siderably— in term s o f capital investm ent, e m p lo y ­
m ent, physical size and types o f product. In gen ­

eral, how ever, p rojects financed by the G overn m en t
tended to have certain com m on characteristics.
Sim ilarly, new plants built w ith private capital had
d istinguishing earmarks w h ich tended to differen ti­
ate them from p ublicly-fin anced facilities.
In term s o f num ber o f plants, m ost o f the indu s­
trial facilities authorized fo r con stru ction in the
district prior to the end o f 1944 in v olv ed on ly a
small capital investm ent. F ifty -eig h t per cent of
the authorizations for structures w ere estim ated to
cost less than $50,000 each, and their com bin ed
cost represented barely 1 per cent o f the total exp en ­
ditures for structures. A t the oth er extrem e w ere
large p rojects for w h ich structures w ere estim ated
to cost m ore than $1 m illion each. A lth ou g h they
constituted on ly 12 per cent o f the num ber o f stru c­
ture authorizations, in the a ggregate th ey accou n ted
for nearly 95 per cent o f the funds authorized to be
spent for buildings.
Industrial facilities built b y the G overn m en t usu­
ally involved large capital outlays, and these are the
facilities ordinarily called to mind w hen one thinks
of “ war plants” . A total o f 82 plants w ere financed
w h olly or largely w ith public funds and the total
authorizations am ounted to $1.2 billion. A p p r o x i­
m ately $638 m illion or 53 per cent w as for structure
while $566 m illion or 47 per cent represented equip­
ment costs. O b viou sly, individual p rojects built by
the G overnm ent usually involved a substantially
larger investm ent both in plant and equipm ent than
did the average facility con structed b y private co m ­
panies. T h u s, the largest authorization fo r a
facility built b y private industry w as for $11.5 m il­
lion. O f the 82 G overnm ent plants authorized, 33
w ere estim ated to cost that m uch or m ore, and the
largest public authorization, fo r the St. L ou is O rd ­
nance plant, actually am ounted to m ore than $130
m illion.
N ot on ly w as the p ublic investm ent in district
w ar plants large in total dollar value, but it w as
concentrated in strictly w ar g ood s m anufacturing
capacity. T w en ty-sev en o f the 82 p u blicly-bu ilt
plants w ere in the ordnance industry. O f these 27
facilities, w h ose a ggregate cost to the G overn m en t
approxim ated $844 m illion, 20 w ere strictly m uni­
tions m anufacturing plants, 4 p rod u ced clo se ly re­
lated chem icals, w hile on ly 3 m anufactured other
types o f ordnance materiel. A d d ition a l large sum s
were expended in the chem ical, non ferrou s metals
and aircraft industries. T og e th e r w ith the ordnance
plants, these facilities a ccou n ted for $1.1 billion or
93 per cent o f all G overnm ent expenditures and 80
per cent o f the estim ated com bin ed co s t o f public
and private plants built in the district.
Page 122




In contrast,

the am ount o f private capital invested in these
industries am ounted on ly to som e $75 m illion.
In addition to the G overn m en t-bu ilt p rojects that
in v olv ed new plant as w ell as equipm ent, som e p u b ­
lic capital was used to finance equipm ent installed
in existin g privately-ow n ed facilities or in new
structures built during the w ar b y private industry.
E qu ipm en t used under such an arrangem ent ord i­
narily was designed to m anufacture g o o d s not to o
different from the op eratin g com p a n y's cu stom ary
produ ct. W h ile the p ublic a gen cy held title to the
m achine, the w artim e operator w as given a priority
in the event he w anted to b uy the equipm ent at the
end o f the war. P rojects o f that type constituted
no particular disposal problem and w ere n ot in­
cluded in this study. A ltog eth er, a total o f 77 co m ­
panies operated equipm ent co stin g $37 m illion
b ou g h t b y the G overn m en t under this or similar
arrangem ents. O ne-third o f the equipm ent, on a
value basis, was installed in oil refineries. A n addi­
tional 17 per cent w as specialized ordnance equip­
m ent and the rem ainder w as distributed fairly gen ­
erally am on g other industries.
Plants built b y the G overn m en t usually w ere new7
plants, not expansions o f e xistin g facilities. It is
evident, o f course, that a differentiation betw een
n ew and expanded facilities becom es largely a m at­
ter o f definition. A s used in this study, structures
built b y the G overnm ent on or adjacen t to the site
occu p ied by an existin g m an ufactu rin g com pa n y
w ere regarded as plant expansions.
Structures
built b y the G overnm ent on sites w here no facilities
existed b efore w ere considered n ew plants. O n the
basis o f such classifications, 49 o f the 82 p u b liclyfinanced plants w ere new establishm ents w hile 33
w ere expansions o f existin g facilities.
It is difficult to determ ine from the available
sources o f inform ation w hether authorizations for
privately-financed plant and equipm ent represented
new plant facilities or expansions o f establishm ents
in operation prior to the war. It w ou ld appear,
how ever, that m ost o f the structures that w ere
financed privately represented capacity added to
established com panies.
G overn m en t funds, as w ell as those advanced by
private industry, tended to flow into facilities
located in or near the established industrial centers
in the district. A lm o st 80 per cent o f all public
investm ent was in plants located in the industrial
areas o f St. Lou is, L ou isville, E vansville, M em phis,
and L ittle R ock , and 55 plants or 67 per cent o f the
82 G overn m en t-con stru cted facilities w ere built in
these areas. T h e bulk o f private capital investm ent
also concentrated in these centers, reflecting the
fact that the preponderance o f private funds was

invested in a relatively few plants located in the
larger cities. A p p rox im a tely 80 per cent o f the
funds origin atin g in private sources w ent into facili­
ties located in the district's m a jor industrial areas.
E M P L O Y M E N T IN D IS T R IC T W A R P L A N T S

T h e w artim e econ om ic gains, m easured in term s
o f em p loym en t and incom e, that accrued to the dis­
trict as a result o f the operation o f w ar plants w ere
substantial. A t its peak, total nonagricultural em ­
p loym en t in the five m a jor industrial areas o f St.
I^ouis, L ou isville, E vansville, M em phis and L ittle
R o ck w as 35 per cent larger than early in 1940.
M ost o f the gain was in m anufacturing industries
w h ich , at their w artim e peak, em p loyed tw ice as
m any w orkers as in early 1940.
T h e im portance o f w ar plant operations is indi­
cated b y the fact that in D ecem ber, 1943, when
aggregate em p loym en t in these industries reached
its highest level, a total o f 294,000 w orkers w ere
em p loyed in the prod u ction o f ordnance m aterial,
aircraft, ships, and sim ilar w ar good s. It is esti­
m ated that app roxim ately 45 per cent o f all m anu­
factu rin g w orkers at that tim e w ere em p loyed in
strictly w ar g ood s prod u ction w hile a substantial
p ortion o f the rem aining 55 per cent w ere indirectly
en gaged in the m anufacture o f such items.
W h a t the wrar plants meant in term s o f incom e
to the district is su ggested b y D epartm ent o f C om ­
m erce estim ates. In the district states, payrolls in
the w ar m anufacturing industries (ch em icals, ord ­
nance, rubber, m achinery, iron and steel, and sim ­
ilar h ea v y -g ood s industries) increased from $1.3
billion in 1940 to $4.5 billion in 1944. T h ese p ay­
rolls reached their peak o f im portance, relative to
total incom e in the district states, in 1943 w hen they
represented from 3.2 per cent o f total incom e in
A rkansas to as m uch as 32.9 per cent in Indiana.
T h e vuln erability o f w ar plant em ploym en t and
payrolls, on ce the w ar w as at an end, becam e ap­
parent early in 1944 w hen cutbacks in ordnance p ro ­
d uction occu rred. B y the end o f that year em p loy­
m ent in the district w ar plants was 13 per cent less
than at the D ecem ber, 1943 peak, and b y the last
quarter o f 1945 these plants em p loyed less than onethird as m any w orkers as at the w artim e peak.
A g g reg a te payrolls o f all w ar m anufacturing indus­
tries in the district states in the fourth quarter o f
1945 d rop ped to $2.9 billion, a decline o f 35 per cent
from the 1944 level. W h ile payrolls in these states
declined less than in the rem ainder o f the nation,
the loss o f incom e w as significant and focu sed atten­
tion on the need to d evelop uses fo r district war
plants in the p ostw ar period.




T H E D IS P O S A L P R O B L E M

W ith the end o f the w ar cam e cutbacks in p ro ­
du ction and em p loym en t in the district w ar plants,
m arking the end o f one phase and the begin n in g
o f another in the econ om ic developm en t o f the
region . It w as apparent that the preservation o f
e co n o m ic gains w h ich originated in the w artim e
operation o f district w ar plants w as in large part
con tin gen t u pon (1 ) the extent to w hich facilities
cou ld be con verted to peacetim e operations b y pri­
vate industry, and (2 ) the level of operations m ain­
tained in those plants w h ich w ere to be retained by
the G overnm ent.
D ifferen ces in the types o f problem s in volved in
the con v ersion o f facilities to peacetim e uses largely
w ere related to differences in ow nership o f the
plants. In general, those plants privately built and
ow n ed con stitu ted n o particular problem . A s in­
dicated elsew here, private industry, in m ost cases,
financed facilities that w ere closely related to their
norm al operations. Furtherm ore, they w ere usually
facilities capable o f p rod u cin g g ood s for w hich
civilian m arkets w ere predictable. C onsequently,
their transition to peacetim e operation w as a cco m ­
plished w ith relative ease, and th ey have continued
to play a part in the district’s econ om ic d evelop ­
ment.
In the case o f p u b licly-ow n ed plants, h ow ever, a
num ber o f problem s w ere inherent in their con v er­
sion to peacetim e utilization. M an y o f these p ro b ­
lem s cou ld be settled o n ly in term s o f public p olicy.
F o r exam ple, w h ich plants cou ld be released for
possible private use and w hich facilities should be
retained on a stan dby basis? I f declared surplus
to probable G overnm ent needs, should the facilities
be sold intact, plant and equipm ent, or w ou ld the
public interest be served best b y d isposin g o f the
com pon en ts separately? I f it appeared likely that
a given facility should be retained on a standby
basis, or perhaps operated at a reduced level, could
a portion o f the plant be leased to private indus­
tries?
O n ce the initial step w as taken, that is, a par­
ticular plant was declared w h o lly or partly surplus
to anticipated G overn m en t requirem ents, there still
rem ained the problem o f disposin g o f the facility to
private industry. W h ile the m echanics o f this p ro ­
gram are o f no particular con cern here, it is w orth
n otin g that p rop erty ow n ed b y a G overnm ent
agen cy, fo r exam ple, the W a r D epartm ent o r the
D efen se Plant C orporation, m ight be declared sur­
plus b y the a gen cy and (1 ) sold or leased direct to
private indu stry ; (2 ) transferred to another public
agen cy ; or (3 ) turned o v e r to the W a r A ssets
A dm in istration fo r disposal.
Page 123

C harged w ith the resp on sibility o f return in g as
m any as possible o f the G overn m en t-bu ilt facilities
to p rod u ctive use under private business operation s,
th e W a r A ssets A dm inistration , su ccessors in early
1946 to the W a r A ssets C orp oration w h ich w as a
subsidiary o f the R econ stru ction F inance Corpora^
tion, faced a num ber o f technical difficulties. A s
p ointed ou t earlier, m ost o f the district w a r plants
w ere large and required large-scale industrial opera­
tion s fo r efficient use. M a n y w ere d esign ed fo r
m unitions p rod u ction and w ere not adaptable to
private business.
S om e w ere h igh ly inefficient
plants, w hen ju d g ed b y peacetim e standards. T h ese
and other problem s tended to n arrow the field o f
possible civilian uses fo r surplus plants. In addi­
tion, the W a r A ssets A dm in istration was required
to dispose o f facilities in a m anner that w ou ld p ro ­
m ote com petition, a factor o f particular significance
with respect to the alum inum industry plants and
synthetic rubber facilities in this district.
P R E S E N T S T A T U S O F D IS T R IC T W A R P L A N T S

It is difficult to measure, w ith any precision,
progress o f the surplus p rop erty disposal p rogram
either in term s o f original cost o f these facilities or
the financial return to the G overn m en t from the
sale or lease o f property. In som e cases the equip­
m ent was sold with the plant and in oth er instances
it was rem oved and sold under the general p rop erty
disposal program . T h e industrial facilities in som e
plants have been retained b y the o w n in g a gen cy
w hile all or part o f the n on -op era tin g p ortion s have
been declared surplus. Som e p rop erty has been
transferred to local govern m en ts at a 100 per cen t
discount. In short, there are num erous variations
on the disposal them e, m aking it virtu ally im possi­
ble to arrive at a precise estim ate o f the total dollar
value o f prop erty disposed of.
A s sh ow n in the a ccom p a n yin g table, 64 o f the
82 industrial facilities built b y the G overn m en t o r in
w hich p ublic funds accou n ted fo r the bulk o f total
P R E SE N T ST A T U S O P IN D U S T R IA L W A R P L A N T S B U IL T
IN E I G H T H D I S T R I C T W I T H P U B L I C F U N D S , 1940-19441
(C ost Figures in Millions o f D ollars)
Surplus— N o t
N ot
Total
S o ld *
Leased
Disposed of
Surplus
No-. Cost
Industry
N o. Cost N o. Cost N o. Cost
N o. Cost
38 $323
9 $143
Total ............ 82 $1,201
18 $502
17 $233
843
7
Ordnance ...... 27
3
43
4
134
176
490
13
9
107
19
4
Chemicals ....
88
5
2
9
1
Petroleum ....
7 "l
2
21
Iron and Steel
1
l
13
8
Nonferrous
Metals ...... 12
5
105
21
3
7
3
7
70
1
M achinery .... 10
36
7
14
1
2
1
5
15
1
Aircraft ........
8
65
7
64
1
1
Shipbuilding..
13
3
3
13
*
Other ............
9
2
1
3
1
1
"S
* Based on expenditures for projects costin g $25,000 or m ore authorized
between mid-1940 and D ecem ber 31, 1944, as reported by the W a r P ro ­
duction Board. Excludes projects involving equipment only which in
the aggregate amounted to $37 million.
2 Includes 5 plants sold for salvage, 4 facilities sold at 100 per cent
discounts to local or state governm ents and 2 plants partly sold.
* Less than $1 million.

....„

tt
>
.... M#

Page 124




.... ...

...

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

expenditures have been declared surplus. In clu ded
are plants ran gin g in size from the $150,000 plant
built fo r M ines E qu ipm en t C om p an y in St. L o u is to
the $67 m illion W e ld o n S p rin g O rdn an ce plant.
H ow ever, the facilities at the lo w er end o f the cost
scale represent b y far the b u lk o f the n u m ber o f
surplus p la n ts; m any o f the large p ro je cts continue
under the con trol o f the G overn m en t. T h is is evi­
denced b y the fact that w h ile a bou t 78 per cent o f
the num ber o f publicly-fin anced plants have been
declared surplus, these facilities represent less than
t>0 per cent o f the total p ublic investm ent in all dis­
trict w ar plants in w h ich the structures w ere built
largely b y the G overn m en t.
O f the 64 plants declared surplus as o f early O c to ­
ber, 47 or three-fourths have been disposed of,
either entirely or in part. T h e aggregate original
cost to the G overnm ent o f these 47 facilities was
$466 m illion, equal to tw o-th ird s o f the author­
ized cost o f all surplus p u b lic plants and to alm ost
40 per cent o f the $1.2 billion invested b y the G o v ­
ernm ent in the d istrict’s industrial facilities. T h irty eight o f the plants disposed o f have been sold and
nine have been leased to private com panies.
H ow ever, n ot all the plants classified as sold have
been or w ill be con verted into civilian prod u ction .
F ive establishm ents, co m p le te ly unattractive to pri­
vate industry, have been sold fo r salvage. P ortion s
o f tw o oth er ordnance plants, one at Jacksonville,
A rkansas, and on e at Crab O rch ard Lake, Illinois,
are op eratin g under the m ultiple ten ancy plan and
not all the facilities in these plants have been
adapted to private industry as yet.
A t the present tim e, 17 surplus plants have n ot
been disposed of. In som e, the equipm ent has been
rem oved but the structures are available fo r use.
S om e are used as storeh ou ses b y the W a r A ssets
A dm in istration . In a few instances n egotiation s for
sale o f the p rop erty are b ein g con d u cted w ith som e
likelih ood o f success, and som e plants are b ein g
operated, under an interim lease arrangem ent, b y
the w artim e operator.
O rdnance Facilities— T h e largest total invest­
m ent in a single industry w as in the plants co n ­
structed to m anufacture m unitions and oth er ord ­
nance m aterial. A total o f 27 facilities o f this type
w ere built b y the G overn m en t at an aggregate au­
th orized cost o f $844 m illion. F ou rteen o f these
plants have been declared surplus and all but four
o f the surplus plants have been d isposed of.
T h e p ostw ar stories o f these plants provid e dra­
m atic exam ples o f con v ersion possibilities.
F or
exam ple, the A rkansas O rdn an ce P lant at Jackson ­
ville has been sold in parcels to a n u m ber o f small

com panies and oth er organ ization s. In addition to
m an ufactu rin g establishm ents w hich have b o u g h t
p ortion s o f the plant and are p rod u cin g furniture,
chem icals, air con d ition in g equipm ent, processed
animal hair used in brushes, cloth in g, and cushions,
space has been sold to a laundry and d ry-clea n in g
establishm ent and to the state h igh w ay departm ent.
B ut the m ost strik in g use o f part o f the facilities is
that p ortion sold to the A rkansas A ssocia tio n fo r
C rippled Children.
U sin g the infirm ary o f the
plant, this A ssocia tion has established a 65-bed
hospital for the treatm ent and care o f crippled ch il­
dren.
U tilities in the plant area occu p ied b y the new
firms are furnished b y com panies w h ich have
b ou g h t the telephone and oth er utilities equipm ent
in the p roject. T h e use o f this plant is an excellen t
exam ple o f the effectiveness o f the m ultiple-ten ancy
plan, and m igh t p rovid e experience fo r oth er co m ­
m unities seekin g to d evelop uses for large warplant
facilities n ow stan din g idle.
T h is type o f plan also is b ein g put into operation
in the Illin ois O rdn ance P lant at Crab O rch ard
Lake. O perated d u rin g the w ar b y the S herw inW illia m s D efen se C orporation, this plant p rodu ced
shells and bom bs. T o o large for a single industry to
utilize, it has been divided into parcels for sale to
sm aller enterprises.
T h ere are eigh t com panies
now in o r plan nin g to operate in the buildings, in­
clu d in g m anufacturers o f electrical equipm ent, gar­
m ents, furniture, and radion ics equipm ent.
O th er ordn an ce plants have been sold or leased
to single occu pan ts.
T h e E vansville O rdnance
Plant, after the rem oval o f all equipm ent, w as sold
to the R oy a l C row n B o ttlin g C om pany. T h e to r­
p edo m an ufactu rin g plant in St. L ou is, operated
during the w ar b y the A m erica n Can C om pan y, has
been leased b y that com p a n y and is used fo r the
m anufacture o f containers. In E l D orad o, A rkansas,
the large O zark O rdn an ce plant w hich prod u ced
am m onia and am m onium nitrate has been leased b y
its w artim e operator, the L io n O il C om pan y, and
n ow em p loys m ore than 500 w orkers in the p ro d u c­
tion o f these chem icals fo r peacetim e use. W in g fo o t
H om es, In c., a su bsidiary o f G ood yea r T ire and
R u b b er C om pan y, has leased the plant operated
d u rin g the w a r b y W a lw o r th C om pan y in E ast
St. L ou is and is en gaged in the p rod u ction o f pre­
fabricated houses.
N ot all the ordn an ce plants have fou n d uses in
peacetim e industries. T h ree o f these— at M ayfield
and Paducah, K en tu ck y , and M illington , T en n essee
— have been sold fbr off-site rem oval. T h e A to m ic
E n ergy C om m ission has purchased a substantial




part o f the steam gen eratin g equipm ent at the K e n ­
tu ck y O rdn an ce W o rk s , P aducah. A fourth plant,
G u lf O rdn an ce in M ississippi, has been transferred
to the State and no industrial use is anticipated.
O f the fo u r rem ain in g surplus ordnance plants,
on e appears to o ffer possibilities fo r private indus­
trial use. T h is is the Standard Steel S pring plant at
M adison, Illin ois, curren tly used as a w arehouse
b y the W a r A ssets A dm in istration . H ow ev er, it is
large and w ou ld be usable o n ly b y a large-scale,
h eavy equipm ent industry. In addition, the m anu­
factu rin g facility con stru cted on the Scullin Steel
C om pan y site in St. L o u is has lim ited industrial
possibilities. W h ile capable o f b ein g adapted to
civilian p rod u ction , it con sists o f h igh -cost units
built to p rod u ce special purpose products, w hich
are n ot particularly attractive to private industry
as th ey stand tod ay. T h e oth er tw o rem aining
surplus ordn an ce plants not disposed o f are the
W e ld o n S prin g plant (a w artim e T N T p rod u cer)
near St. L o u is and the S outhw estern P ro v in g
G rounds at H o p e , A rkansas.
N either o f these
facilities seem s to be adaptable to private industrial
use alth ou gh in the latter case there is som e p ossi­
b ility that the city o f H o p e m ay be able to buy
certain o f the facilities fo r potential developm ent.
T h irteen ordn an ce plants have been retained b y
the G overn m en t, in their entirety or in large part.
T h ese plants had an a ggregate authorized cost o f
$490 m illion and represented 58 per cent o f total
G overn m en t expenditures fo r ordnance facilities.
Som e o f these plants bein g held b y the G overnm ent
are operatin g, but at greatly reduced levels as
com pared w ith the w ar years. In clu ded are the
Indiana O rdn an ce plant, operated b y du Pont, and
the G ood yea r-operated H o o sie r O rdnance W o rk s,
both located at C harlestow n, Indiana. T h ese tw o
facilities have been com bin ed into the Indiana
A rsenal w h ich is on a standby basis, em p loyin g
som e 400 w orkers engaged chiefly in re-sacking
p ow d er and in general m aintenance.
C om bined
peak em p loym en t durin g the w ar w as 18,400. T h e
N avy O rdn an ce plant at L ou isv ille is operatin g on
a lim ited basis, e m p lo y in g 200 w orkers as com pared
w ith 4,000 at the w ar peak. T h e Chem ical W arfare
plant at M on santo, Illin ois, operated b y M onsanto
C hem ical C om pan y, is in p rod u ction under a lease
arrangem ent, and em p loys abou t half as m any
w orkers as d u rin g the war. A t P ine B luff, Arkansas,
the W a r D epartm en t has continued lim ited opera­
tions at the arsenal and in addition has leased p or­
tions o f the plant to private industries w hich are
en gaged in the m anufacture o f chem icals, paper
bags, and p re-fabricated houses. A portion o f the
W o lf Creek O rdn an ce plant in T en n essee has been
Page 125

sold to U .S. R u bb er C om p an y and is b ein g used
in the m anufacture o f sportsw ear shoes.
A n interestin g tw ist to the w ar plant story is
b ein g p rovided b y the M issou ri O rdn an ce plant at
Louisiana, M issou ri. W ith d ra w n from surplus in
mid-1947 and transferred to the U .S. Bureau o f M ines,
portion s o f the plant are b ein g integrated w ith new
facilities in w hich experim ental w ork, u sin g Germ an
p rocesses, w ill be con d u cted in the p rod u ction o f
synthetic gasoline and oth er b y -p rod u cts from lo w grade coal. A p p rox im a tely 300 persons w ill be
em ployed w hen the plant is in operation . T h e re­
m ainder o f the facility is b ein g held as standby
equipm ent.
T h e huge St. L ou is O rdnance plant is b ein g used
by the W a r D epartm ent as a R ecord s A dm in istra­
tion Center w ith som e 9,900 w orkers em p loyed, as
com pared w ith 34,000 at the peak o f the war. T h e
N avy O rdnan ce plant at C am den, A rkansas, is used
as a storage depot, em p loy in g 500 w orkers. T h e
four rem aining facilities, the A rm or P iercin g Core
plant in St. L ou is, Jefferson P ro v in g G rounds in
Indiana, M aum elle O rdn a n ce at M arche, A rkansas,
and O h io R iver O rdn an ce at H enderson, K en tu cky,
are idle except for necessary m aintenance activities.
O ne ordnance plant, not included in this tabula­
tion and a p ortion o f w h ose capacity expansion
origin ally was financed b y the B ritish govern m en t,
is the W estern C artridge D ivision o f O lin In d u s­
tries, Inc., at E ast A lton , Illin ois.
P rior to the
entry o f the U nited States into the w ar, this co m ­
pan y’s facilities fo r the p rod u ction o f “ ball p o w d e r”
were expanded con siderably, the additions b ein g
financed in part b y the B ritish gov ern m en t and in
part by the com pan y. A fte r Pearl H arbor, and the
diversion o f all ou tput to the U .S. govern m en t,
W estern C artridge purchased from the B ritish the
p rodu ction line financed b y that govern m en t.
C hem icals— T h e Federal G overn m en t’s invest­
m ent in new chem ical p rod u cin g plants in the dis­
trict was next in size to the expenditures fo r o rd ­
nance facilities. H ow ev er, total p ublic financing o f
chem ical plants am ounted to on ly $107 m illion or
about on e-eigh th the investm ent in ordnance plants.
N ine chem ical plants w ere built en tirely o r largely
b y the G overnm ent. E ach has been or sh ortly w ill
be declared surplus and four, w ith an aggregate cost
o f $19 m illion, have been sold and are in operation.
H ow ever, the tw o largest p ublic plants, both located
in L ou isville, the d u P on t neoprene plant and the
Carbide and C arbon C hem ical C orporation plant
have n ot been disposed of.
T h ese tw o facilities w ere a m on g the six plants
built in this d istrict to m anufacture syn th etic rubPage 126




ber or basic chem icals used in its p rod u ction . F ou r
o f the plants w ere located in L ou isv ille, the tw o
already m entioned togeth er w ith the N ational S yn ­
thetic R u bb er C om pan y plant and the G ood rich
plant. D isp osition o f these units, and o f the tw o
basic chem ical plants located in M em phis, operated
b y Q uaker Oats C hem ical C om p an y and Southern
A c id and Sulphur C om pany, h inged prim arily on
p u b lic p o licy w ith respect to the volu m e o f syn ­
thetic ru bber capacity to be m aintained in peace­
tim e, and secon d on the e co n o m ic efficiency o f the
plants.
O f the fou r synth etic ru bber plants located in
L ou isv ille o n ly one, the G ood rich plant, ha? been
sold. B ou gh t b y the w artim e operator, this plant
has con tin u ed to operate, alth ou gh the future level
o f p rod u ction is dependent upon the G overn m en t
program w ith respect to purchases o f synth etic ru b­
ber. T h is plant cost $11 m illion and p rod u ced 8
per cent o f the n ation’s ou tput durin g the war. T h e
d u P on t plant is b ein g operated under an interim
lease arrangem ent and em ploys abou t 1,500 w orkers
as .com pared w ith a w ar peak o f 2,200. Final d is­
p osition o f this plant has n ot been determ ined.
W h e n it was offered fo r sale, the du P on t C om pan y
subm itted a bid o f $13.2 m illion fo r this $43 m illion
plant, but so far the G overn m en t has n ot a ccepted
the offer.
T h e tw o oth er L ou isv ille ru b ber plants, one op er­
ated d urin g the w ar b y the C arbide and C arbon
C hem ical C orporation and the oth er b y the N ational
Syn th etic R u bb er C om pan y, have n ot been disposed
o f and are inactive. E ach is a high cost plant and
the form er, w h ich is regarded as obsolete, has been
offered fo r sale on a piecem eal basis. T h e w artim e
op era tor o f the plant subm itted a bid for the
m achinery but n o offers w ere received for the stru c­
ture w hen the bids w ere opened in O ctober. T h e
N ational Syn th etic R u b b er plant, not yet actually
declared surplus but soon exp ected to be, w as in
operation until m id-1947. D isp osition o f this plant
is undeterm ined. It is anticipated that w hen de­
clared surplus it w ill be offered fo r sale but on a
standby basis.
T h e tw o plants in M em phis w h ose basic output
was used in the p rod u ction o f synth etic rubber have
been sold and are in operation. T h e Q uaker O ats
C om p an y b ou g h t the furfural plant it operated dur­
in g the w ar and n o w em ploys app roxim ately 100
w orkers. A n expansion program n o w under w ay
is expected to increase p rod u ction b y 50 per cent.
P resent capacity is 24 m illion poun ds per year.
Furfural is m anufactured from cotton seed hulls,
rice and oat hulls, and corn cobs, the latter b ein g
collected th rou g h ou t the m idw est and delivered to

the M em phis plant w here the price curren tly ranges
from $6 to $11 per ton . T h e H eyd en C hem ical
C om pan y b ou g h t the facilities operated b y Southern
A cid and Sulphur C om p an y in M em phis and re­
cen tly ann ou n ced plans to expand con siderably the
p rod u ctive cap acity o f the plant. P rin cipal p rod ­
ucts are phenol, caustic soda and related chem icals.
In addition to the a b ove plants the G overnm ent
also built facilities fo r the N ational C arbon C om ­
pany, In c., in L ou isv ille fo r the prod u ction o f indus­
trial gases. T h is plant, n ow bein g operated b y the
com pa n y, is exp ected to be declared surplus sh ortly.
A small industrial gas plant operated b y the H u m k o
C om pan y in M em ph is w as b ou g h t b y that com pan y
and curren tly is in produ ction . P u blicly-fin an ced
facilities intended fo r operation b y the C hem ical
Pulp D ivision o f the B u ck eye C otton O il C om pan y
in M em phis, but never com pleted, are expected to
be sold fo r off-site rem oval.
N on ferrou s M etals In d u stry— n ly sligh tly less
-O
im portant than the chem icals industry, in term s o f
public w artim e investm ent, was the nonferrou s
metals industry in w h ich G overn m en t funds tota l­
ing $105 m illion w ere invested in this district. T h e
principal facilities built w ere th ose for the p ro d u c­
tion o f alum inum and th ey w ere located in A rkansas.
In clu ded w ere the alum ina plant at B au xite and the
alum inum sm eltin g plant at Jones M ill, built at an
aggregate cost o f alm ost $70 m illion, and operated
d urin g the w ar b y the A lu m in u m C om pan y o f
A m erica. A n oth er alum ina p rocessin g plant co st­
ing $12.9 m illion was built in East St. L ou is on land
leased from the A lum in u m C om pany. In addition
w ere tw o alum inum fabricatin g plants in L ou isv ille
built at a cost o f alm ost $9 m illion and operated
b y R ey n old s M etals C om pany. In M em phis, co n ­
struction was begun on a third fabricating plant to
be operated b y this com pany, but the p ro je ct w as
never com pleted.
T h e A rkansas plants, representing the bulk o f the
G overn m en t’s investm ent in the industry in this dis­
trict, have been leased fo r five years b y R eyn old s
M etals C om pan y. L ess than 50 per cent o f the p ro­
ductive facilities are b ein g operated and a p p rox i­
m ately 1,000 w orkers are em p loyed in the tw o
plants. T h e in com p leted electric p ow er gen eratin g
plant, built to furnish p o w e r to the Jones M ill plant,
was b ou g h t b y A rkansas P o w e r and L ig h t C o m ­
pany and m ore than $8 m illion is b ein g spent b y the
com pan y to com plete the plant. T h e p rocessin g
plant at E ast St. L ou is, fo r w h ich n o civilian use
w as practical, w as sold for salvage and is b ein g dis­
m antled.
O ne o f the t w o fab rica tin g plants in L ou isv ille
is in operation , h avin g been b ou g h t b y R eyn old s




M etals, and is used in the m anufacture o f alum inum
ware. T h e second plant, also operated b y R eyn old s
during the war and until the close o f 1946, at pres­
ent is held in standby, pending its final disposition.
O ffered for sale early this year, the plant has at­
tracted no buyers alth ou gh the R ey n old s C om pany
offered to lease the facilities under various p ro p o ­
sals. A ll bids w ere rejected and final disposal has
not been made.
In addition to the alum inum plants, the G ov ern ­
m ent also con structed facilities for the refining o f
zinc. T w o a d join in g plants w ere built in M on san to
and Fairm ount C ity, Illinois, and w ere operated b y
A m erican Zinc, L ea d & Sm eltin g C om p an y. T h ese
plants have not been declared surplus but continue
to be operated b y A m erican Z in c under a lease
arrangem ent. A lead refinery fo r th e m illin g o f
crude ores, built in F rederick tow n , M issouri, and
operated by a subsidiary o f N ational L ead C om ­
pany, was declared surplus and is in operation under
an interim lease b y the w artim e operator.
A ircraft In du stry— T h e rem aining m a jor facilities
financed publicly w ere th ose fo r the p rodu ction o f
aircraft. E ight facilities, in v o lv in g a total author­
ized cost o f $65 m illion, w ere built b y the G overn ­
ment. Seven have been disposed of, fou r through
cash sales and three as a result o f 100 per cent dis­
count sales to local com m unities.
T h e R epu blic A v ia tio n plant at E vansville and
the C u rtiss-W righ t plant at L ou isv ille w ere pur­
chased b y International H arvester C om pany. T h e
E vansville plant, w here, at the w a r’s peak, 7,900
w orkers w ere em p loyed in the p rod u ction o f P-47
airplanes, has been con verted to the m anufacture
o f farm and h om e freezers, refrigerators and c o o l­
ers, with 2,200 em p loyees on the payroll.
The
L ou isville plant m anufactures tractors fo r use in
sm all-scale farm in g operations. T h e first units w ere
turned out in M ay, 1947, b arely one year after the
plant was purchased from the G overnm ent. C ur­
rent produ ction rate is 100 tractors per day, to be
increased to 50,000 a year in 1948. M ore than 3,400
w orkers are em p loy ed in the plant as com pared
w ith w artim e em p loym en t o f 4,400.
T h e aircraft assem bly plant in M em phis, operated
b y Fisher B o d y D ivision o f General M otors C or­
poration during the w ar, w as b ou g h t b y the K im ­
b erly Clark C orp oration to be used in the m anu­
facture o f K leen ex and oth er paper and cotton
products. B uilt at a cost o f $4.8 m illion, this plant
em ployed 7,100 w orkers during the w ar p ea k ; cur­
rent em ploym en t is abou t 1,400.
In St. L ou is, m ost o f the $25 m illion Curti'ssW rig h t plant has been sold to the C ity o f St. L ou is
Paige 127

for use in con ju n ction w ith the m unicipal airport.
Part o f the m an ufactu rin g facilities have been
leased by the city to M cD on n ell A ircraft C om pany
w hich is en gaged in p rod u cin g jet-propelled planes
for the N avy.
T h ree aircraft m odification centers, located at
Evansville, L ou isv ille and M em phis, have been
transferred to the respective cities and are b ein g
used as airport facilities.
T h e o n ly district aircraft plant not disposed o f
is the M cD on n ell A ircra ft plant in M em phis. T h is
establishm ent, built at an authorized cost of $1.1
m illion w as declared surplus in A u gu st, 1946 and
currently is used as a w arehouse by the W A A .
O th er In du strial F acilities— O f the rem aining
plants in w h ich p u b lic funds w ere invested, five are
o f particular interest due to their wartim e and cu r­
rent im portan ce to district com m unities.
T w o petroleum refineries in El D orado, Arkansas,
operated durin g the w ar b y R oot Petroleum C om ­
pany and the L io n O il C om pany, have continued in
operation. T h e form er w as bought b y the wartim e
operator and em p loys as m any w orkers n ow as
during the w ar, w hile the L ion O il plant has been
leased b y the w artim e operator.
T h e steel m an ufacturin g facilities built by the
G overnm ent at Granite C ity, Illinois, and operated
b y the Granite C ity Steel C om pany have been leased
fo r five years b y the com pany. T hese facilities
con sist chiefly o f three open-hearth furnaces with a
rated capacity o f about 300,000 tons o f steel ingots
per year. A ls o at Granite C ity, Illinois, is a pig iron
and cok e plant operated b y K oppers U nited C om ­
pany. R ecen tly these facilities w ere bough t by the
M issou ri-Illin ois Furnaces, Inc., after having been
operated since the w ar b y the K op pers Com pany.
D u e to the fact that m anufacturers in this area
depend on this plant for a large part o f their p ig
iron supply, con siderable interest developed in the
offerin g o f the facilities fo r sale.
T h e m a jor electrical equipm ent plant built in the
district d urin g the w ar w as the E m erson E lectric
plant in St. L ou is. C onstru cted at a total cost o f
$15 m illion, the plant w as large, em p loyin g 10,600
w orkers at the w ar peak engaged prim arily in the
prod u ction o f flexible gun turrets. E arly in 1946
the E m erson C om pany leased m ost o f the plant for
5 years and has centralized all its production in
the plant. C urrently, em ploym en t is estimated at
about 4,30Q w orkers.
CONCLUSIONS
T h e progress o f the surplus w ar plant disposal
program m a y be m easured in terms o f financial re­
Page 128




turn to the G overn m en t o r b y the con trib u tion the
program has m ade to the su ccessfu l con version o f
these w ar plants to peacetim e industrial uses. H o w ­
ever, dollar return from the sale o f plants is of
little significance, in part because it m ust be related
to w ar-inflated con stru ction cost figures w hich
m easured inadequately the value o f the plants.
M ore basic is the fact that w hen these plants were
built, the need for their p rodu cts w as urgent. It
is unrealistic and unfair to exp ect that w hen the
very existen ce o f the cou n try is at stake, serious
attention w ill be d evoted to co n stru ctin g w ar plants
with both their w artim e and p ossible p ostw ar uses
in m ind. T h u s it is inevitable that w hen sold to
private industry, the financial return to the G overn ­
m ent w ill be small in term s o f cost.
In sofa r as the E ighth D istrict and individual com ­
m unities w ithin the D istrict are con cern ed, the
con version yardstick is o f prim ary im portance. M ost
o f the surplus G overn m en t-bu ilt facilities that are
readily adaptable to peacetim e uses already have
been b o u g h t or leased b y private industry.
It sh ould be noted that m uch o f the successful
disposition o f w ar plants resulted from the fact that
econ om ic con d ition s gen erally w ere favorable to the
disposal program . It is im probable that m any of
the facilities sold o r leased to private industry w ou ld
have been b ou g h t o r leased under con dition s o f
low er dem and fo r civilian g o o d s.
O f the m a jor plants that rem ain to be disposed
of, few appear to be attractive to private com panies.
In som e instances th ey are integrated w ith pri­
v a tely-ow n ed plants and thus are usable on ly by
the com panies on w h ose sites th ey are located.
O thers are inefficient, b y peacetim e standards, or
are special purpose plants.
S om e o f the plants
retained b y the G overnm ent m igh t be adaptable to
peacetim e uses but the m a jority are ordn an ce facili­
ties w ith fe w con version possibilities.
W h ile a substantial num ber o f the w ar plants
have been sold o r leased to private indu stry and
som e, retained b y the G overn m en t, are in p rod u c­
tion, their aggregate im portance, in term s o f e m p lo y ­
m ent and incom e, is a great deal less than at the
war peak. In 24 o f the m a jor n ew plants built in
the district, and fo r w h ich data are available, peak
w artim e em ploym en t w as about 155,000. C urrently,
less than 22,000 w orkers are em p loyed in these
establishm ents, o f w h ich abou t 45 per cent are in
n onm anufacturing em ploym ent. T h u s w hile som e
o f the loss o f em p loym en t and incom e has been
recovered as a result o f the con v ersion o f w ar plants
to peacetim e uses, additional increases are lik ely to
be slight.
W e ld o n A . Stein

Survey of Current Conditions
Inflationary forces w h ich steadily are gain in g in
strength dom inate the short-run econ om ic ou tlook.
E m p loym en t and p rod u ction are high n ow and are
expected to con tin ue h igh in com in g m onths.
N evertheless, dem and is increasing relative to sup­
ply as incom e rises and private credit expands
sharply. A s a result, prices are likely to continue to
m ove generally upw ard from current levels to new
peaks.
T h rou g h m ost o f the postw ar period the econ om y
has operated under con d ition s o f full em ploym en t
at a high w a ge level. B ecause o f this fact, con ­
sum ers as a grou p have had a record am ount o f
incom e w ith w h ich th ey have endeavored to
b u y g ood s and satisfy other wants.
B usiness
incom e and expenditures also have been large, and
these, too, have been reflected in produ ction , em p loy ­
m ent and prices. A further im portant factor in the
d om estic econ om ic situation is that volu m e o f co n ­
struction a ctivity has been high. In the first nine
m onths o f 1947, con stru ction activity (in term s o f
d ollars) w as ov er 30 per cent h igher than in the
com parable p eriod last year.
In addition to d om estic dem and, shipm ents o f
g o o d s abroad also have played a part in h old in g a
high level o f econ om ic activity.
H ow ever, as
indicated in the K r u g C om m ittee report and else­
w here, exports represent a small p rop ortion o f our
total ou tput and even should there be som e co n ­
traction in exports, no substantial deflationary forces
w ou ld be set in m otion soon. D om estic dem and,
in m ost instances, apparently w ou ld absorb the
good s n ow b ein g exported, w ith insignificant
changes resu ltin g in the price structure. T h e m a jor
exception to this broad statem ent w ou ld be farm
products.
A recent develop m en t o f considerable im portance
in add in g strength to the inflationary m ovem ent is
the sharp rise in private credit.
W h ile private
credit expansion has occu rred th rou gh ou t m uch o f
the p ostw ar period, until recen tly it was m ore than
offset b y con traction o f the public debt. C urrently,
w ith public debt retirem ent at a slow er rate, expan­
sion o f private credit is add in g appreciably to the
m on ey supply. L oa n s to business and on real estate
have risen sharply. C onsum er credit also has gained
considerably, even w ith con trols in force, and
elim ination o f the con trols as o f N ovem b er 1 p ro b ­
ably w ill g ive im petus to credit expansion in this
field.
T h e a bove should n ot be taken to mean that
con su m er purch asing w ill contin ue indefinitely at
any price level. S oon er or later the num ber o f b u y ­




ers priced out o f the m arket plus th ose w h o refuse
to bu y w ill increase to a poin t w h ere total dem and
will be affected. H o w e v e r, there is n o eviden ce that
w e have reached o r even approach ed that p oin t as
yet.
A n d unfortu n ately as m aladjustm ent piles
upon m aladjustm ent, the inevitable correction takes
on a m ore and m ore severe potential.
EMPLOYMENT
T h e em ploym ent situation in Septem ber, 1947
was very favorab le fo r b oth the nation as a w h ole
and the E ighth D istrict, N ation ally, m ore civilians
were w orkin g than ever b efore, the average w eek ly
factory w age was at its highest level, unem ploym en t
was at a m inim um , and few er people collected u nem ­
ploym ent com pen sation than in any m on th since
V -J D ay. In the E igh th D istrict, iionagricultural
em ploym ent w as at a peacetim e high, several im ­
portant labor disputes w ere settled, and the dem and
for and supply o f labor w ere fairly w ell balanced.
T h e district’ s m oderate lab or surplus, w h ich e x ­
isted during the sum m er m onths, had dim inished
b y Septem ber w ith the w ith draw al o f vacation
workers. A lth ou gh u n em ploym en t in. Septem ber
was on ly sligh tly a b o v e w hat m igh t be considered
minimum , y o u n g persons w ith n o w o r k experience
and older and handicapped w orkers w ere still hav­
ing difficulty finding jo b s.
N onagricultural em p loym en t in the St. L o u is area
during Septem ber, 1947 was at its highest level
since the w ar peak o f 1943. A n em p loym en t in­
crease o f alm ost 2,000 betw een J uly and Septem ber,
1947 was the net result o f gains in m anufacturing,
construction, and trade em p loym en t and decreases
in m ining, service, and G overn m en t em ploym en t.
INDUSTRY
C O N S U M P T IO N O F E L E C T R I C I T Y
Sept.
A u g.
Sept.
Sept. 1947
fK .W .H . N o. o f Cus- 1947
1947
1946
Compared with
in thous.)
tomers* K .W .H .
K .W .H . K .W .H .. A u g /4 7
S ept/46
Evansville ...... 40
9,101
9,473
7,369
— 4%
-4 -2 4 %
Little R ock .... 35
4,783
4.706R
3,611
4 -2
4 - 33
52,780
53,291
55.528R —
1
—
5
Louisville ____ 80
Memphis _____
31
5,113
5,306
4,840
—
4
4* 6 ,
Pine Bluff ...... 22
6,240
6,450
1,171
—
3
-4-433 '
St. L ouis ___ 99
65,457
70,917
64,400R —
8
4* 2
Totals .......... 3 0 /
143,474
150,143R 136.919R —
4%
4 - 5%:
^Selected industrial customers.
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
First N ine Days
S ept/47
A u g /4 7
S e p t/4 6 Oct.*47 O c t/4 6 9 mos. *47 9 m os. *46
116,342
122,223
118,870
36,380
38,186 1,123,707 1,096,365
Source: Terminal Railroad A ssociation o f St. Louis.
C R U D E O IL P R O D U C T IO N — D A IL Y A V E R A G E
(I n thousands
Sept., ’ 47 com p, with
of bbls.)
Sept., *47 A u g ., ’ 47 Sept., ’ 46
A u g., *47
Sept., *46
78.6
Arkansas .......... .. .. 82.1
81.7
4 4%
‘ 4- 1%
- 0 — 16
174.0
205.8
...173.7
— 8
19.3
17.1
.. 17.8
-4 4
— 18
31.1
25.2
Kentucky .............. ... 25.5
4- 1
— 11
- 0 334.8
298.0
.299.1

Page 129

INDUSTRY

TRADE
DEPARTM ENT

STORES

_______N et Sales____________
Sept.,’47
9 mos. ’47
com pared with
to same
Auer/47
S ept/46
period ’46
F t. Smith, A rk .....+ 2 6 %
Little R ock, A rk. ..+ 2 4
Q u in cy, 111........ ......4-24
Evansville, In d .....— 3
Louisville, K y .......+ 2 6
St. Louis A rea1....-j-25
St. Louis, M o ...+ 2 6
E . St. Louis, 111.-4-14
Springfield, M o .....4*12
M em phis, Tenn.....-|-19
*A11 other cities....4-18
8th F .R . District..-f-22

Stock
Stocks
on Hand
Turnover
Sept. 3 0/4 7
Jan. 1 to
comp, with
Sept. 30
Sept. 3 0/4 6 1947
1946

— 2%
— 12%
— 20%
2.99
4- 5
— 2
— 7
3.53
— 7
- 0 3.28
4- 2
4-28
4-17
— 7
2.75
4-18
— 4
4 -1 0
3.53
— 2
4-16
4- 9
2.95
4-14
— 2
2.95
4- 7
4-98
4-93
4-22
2.97
+ 4
4- 2
3.15
4- 8
+ 1
+ 1
4-18
2.93
+ 17
4- 5
4-12
- 0 3.09
+ ^
Pine B luff, A r k .; A lton, Harrisburg,

3.58
4.20
3.98
3.01
4.48
3.71
3.71
4.10
4.11
3.88
3.90

kinsville, M ayfield, Paducah, K y . ; Chillieothe, M o .; and Jackson, Tenn.
1 Includes St. L ouis, M o., East St. L ouis and Belleville, 111.
T rading d a ys: Sept., 1947— 25; A u g ., 1947— 26; Sept., 1946- 24.
Outstanding orders o f reporting stores at the end of September, 1947,
were 29 per cent less than on the corresponding date a year ago.
Percentage of accounts and notes receivable outstanding September 1,
1947, collected during September by cities:
E xcluding
E xcluding
Instalm ent Instalment
Instalment Instalment
A ccoun ts A ccoun ts
Acf'O’ints A ccounts
F ort Smith............%
53%
65%
Q uincy .......... ....35%
L ittle R ock.... 31
53
St. L ouis............37
55
Other cities.... 31
59
L ouisville ...... 35
52
M em phis ...... 38
49
t h F .R . Dist.
36
53
IN D E X E S

OF

D E P A R T M E N T STO R E SALES A N D STOCKS
E ighth Federal Reserve District
Sept., A u g., July,
Sept.,
1947
1947
1947
1946
Sales (daily average), U nadjusted3..............
340
204
249
316
Sales (daily average), Seasonally adjusted2 337
307
320
313
Stocks, U nadjusted3 ......................................... 273
273
257
266
Stocks, Seasonally adjusted3............ .
246
250
247
240
8 D aily A verage 1935-39 = 100.
8 End of M onth A verage 1 9 3 5 -3 9 = 100.
S P E C IA L T Y STO R ES

Stocks
Stock
N et S^les
Turnover
on H nnd
Sept., ’47
9 m os.’ 47 Sept. 3 0/4 7 Jan. 1 to
com pared with
to same com p, with
Sept. 30
A u g .,’ 47 Se^t..’ 46 period ’ 46 Sent. 3 0/4 6 1947
1946
4 -9 %
4 -2 %
4 -2 5 %
2.61
4.53
M en’ s Furnishings........ 4 -4 4 %
4 .2 0
4- 6
4-21
3.48
5.84
B oots and S hoes.......... 4-25
Percentage o f accounts and notes receivable outstanding September 1,
1947, collected during S eptem ber:
M en’ s Furnishings ................. 54%
B oots and Shoes..................... 47%
T rading d a ys: Sept., 1947— 2 5 ; A u g ., 1947— 2 6 ; Sept., 1946— 24.
R E T A IL F U R N IT U R E STO RES
N et SMes
Inventories
Ratio of
Sept. 1947
Sept. 1947
Collections
compared with
com pared with
A u g /4 7 S en t/4 6 A u g /4 7 Ser>t/46 S ept/47 Sept/46
58%
+43%
72%
St. L ouis A
+20%
....4 -2 2 %
+ 1%
57
+43
74
St. Louis
....4-21
+ 17
+ 1
i
27
26
Louisville A:
+65
....4-28
+ 3
25
- 0 24
....+ 3 3
+67
- 0 L ouisville
34
23
M emphis ....
+ 12
+23
— 24
36
30
— 4
....+ 1 1
+ 3
— 5
*
*
*
*
....+ 3 0
+ 5
42
+18
45
al3+ 1 9
+20
+ 1
separately due to insufficient coverage, but included in
totals.
1 Includes St. Louis, M issou ri; East St. Louis and A lton, Illinois.
* Includes Louisville, K entucky ; and N ew A lbany, Indiana.
8 In addition to above cities, includes stores in Blytheville, F ort Smith
and Pine Bluff, A rkansas; Henderson, Hopkinsville, Owensboro, Ken­
tu ck y ; Greenville, Greenwood, M ississippi; Hannibal, M issouri; and
Evansville, Indiana.

_

PERCENTAGE

D IS T R IB U T IO N

O F F U R N IT U R E SALE S
Se*>t. 1947 A ug. 1947 Sept. 1946
Cash Sales ................................................... 7 7 7 7 %
19%
23%
Credit Sales ................................................. ...... 83
81
77
T otal Sales .................................................. ..100
100
100

Page 130




Industrial activity in the E ighth D istrict in Sep­
tem ber was at about the sam e level as in A u gu st
and was up som ew h at o v e r S eptem ber o f last year.
Industrial p o w e r con su m p tion in the m a jor dis­
trict cities in Septem ber w as 4 per cent less than
during the p reviou s m onth. L ittle R o ck w as the
on ly city in w h ich a gain o ver A u g u st was regis­
tered and this gain w as slight.
M an u factu rin g— A lth o u g h som ew h at affected by
seasonal factors and b y a shorter w ork m onth, the
general trend o f m an ufactu rin g a ctivity in Septem ­
ber was not greatly different from that o f A u gu st
and earlier. Increases in the m onth w ere indicated
in w hiskey produ ction , fo o d processin g, m achinery,
chem icals, and meat p ackin g operations, w hile the
output o f lum ber, autom obiles, and n onferrous
metals declined.
Scheduled operations o f the steel industry in the
St. L ou is area fo r S eptem ber w ere at 63 per cent
o f capacity, sligh tly less than the 65 per cent o f the
previous m onth.
A t the close o f Septem ber there w ere 38 K e n ­
tu ck y w h isk ey distilleries in operation. T h is co m ­
pares with 21 in operation at the end o f A u gu st, and
31 in p rod u ction on Septem ber 30, 1946. T o ta l
w h isk ey p rod u ction in A u g u st w as 3.8 m illion ga l­
lons, 10 per cent b e lo w that in July. A lth ou gh this
was the low est p rod u ction o f any m onth o f 1947, it
is in line w ith norm al seasonal perform ance.
M eat p ackin g operation s at St. L ou is in S eptem ­
ber w ere con siderably a bove the previous m onth.
T h e total num ber o f anim als slaughtered under
Federal inspection in the St. L ou is area in S eptem ­
ber was 433 m illion com pared to 393 m illion slaugh­
tered last m onth. S laughter o f calves and sheep
was about the sam e as last m onth but cattle
slaughter increased about 15 per cent and slaughter
o f hogs was 30 per cent above A u gu st.
C on stru ction — B u ildin g perm its tota lin g $10.6
m illion w ere issued in the leadin g district cities in
Septem ber. T h is was 27 per cent above the previ­
ous m onth and the highest m on th ly total in 1947.

CONSTRUCTION
B U IL D IN G P E R M IT S
(M on th o f Septem ber)
Ren'urs, etc.
NeiV Construction
Cost
N um ber
Cost
Num ber
(C ost in
1946
1947
1946 1947 1946
1946
1947
thousands)
1947
52 $ 571
51 $ 569 $
95
95 112 $
Evansville ..... .... 127
202
191
64
1,606
300 334 150
L ittle R ock....
114
70
55
77
206
1,126
1,306
75
L ouisville .....
232
150
159
Memphis ........ .... 881
996 168 156,
554
3,101
349
1.699
244
2.0*6
St. L ouis ...... .... 296
l.Sft'O 312 299
Sept. Totals .. ... 1,650 1,119 $8,468 $4,197 984 794 $2,171 $1,327
A ug. Totals.... ....1,543 1,405 $7,108 $5,039 933 889 $1,242 $1,446

V alu e o f perm its in all the district cities except
E vansville and L ou isv ille was h igher in Septem ber,
1947 than for the same m onth o f last year, and all
cities excep t L ou isv ille registered increases over the
previou s m onth.
TRADE

P R IC E S

Septem ber sales volu m e at rep ortin g departm ent
stores in the E ighth D istrict w as 22 per cent greater
than in A u gu st and 12 per cent above volu m e in
Septem ber, 1946. P relim inary reports indicate that
the year-to-date gain o f 6 per cent p rob ab ly w ill
be m aintained d urin g O ctob er. O n a seasonally ad­
justed basis, the index o f sales in Septem ber at
reportin g stores reached a new peak o f 337 per cent
of the 1935-39 average. T h e previous high o f 330
per cent cam e in A u gu st, 1946. T h is current rise in
sales volu m e largely reflects further price increases,
but to som e extent reflects purchases b y veterans
with p roceeds o f term inal leave bonds.
In term s o f value, inventories o f rep ortin g depart­
m ent stores at the end o f Septem ber show ed little
change from both the previous m onth and the same
date in 1946. L a rge inventories and general unbal­
ance in them , reported b y departm ent stores earlier
in the year, have been adjusted in recent m onths.
Stocks n ow bear a m ore norm al relationship to
anticipated sales in m ost lines o f m erchandise. T h is
not on ly reflects relatively cautious b u y in g policies
o f m any stores, but also the fact that replacem ent o f
inventories again has b ecom e som ew h at o f a p rob ­
lem. M an y stores w h ich had ordered on ly a small
percentage o f anticipated sales in the first part o f
the year d iscovered upon re-en terin g the m arket at
a later date, that prices in num erous lines o f g ood s
have m oved sharply higher and g ood s w ere diffi­
cult to obtain. C onsequ en tly, ou tstan din g orders
recen tly have risen in volu m e. M u ch o f the in­
crease, h ow ever, seem s to be due to com m itm ents
to purchase g ood s fo r the holiday season.
A t rep ortin g w om en ’s apparel stores, volu m e o f
sales durin g Septem ber was 57 per cent greater than
in A u gu st, and 14 per cent h igher than in S eptem ­
ber, 1946. B ecause o f the con troversy over style
W H O L E S A L IN G
Lines o f Com m odities
N et Sales
Stocks
Sept., 1947
Data furnished by
Sept., 1947
compared with
compared with
Bureau o f Census,
Sept., *46 Sent., 1946
IT. S. Dent, o f Comm erce*
A u g., '47
Autom otive Supplies .......................... .. 4 -1 2 %
%
4 -13 %
+ 16
.. 4-22
D ry Goods ............................................. .. 4-22
4- 1
4-10
4-14
4- 9
4-24
4-19
.. 4 - 4
Plumbing Supplies .............................. .. 4-37
4-57
4-13
T obacco and its Products................. . * 4 - 7
- 0 4-44
- 0 4-15
4- 4
4 -n
* Preliminary.
**Tncludes certain items not listed above.




....

,.

..
..

changes in w om en ’s apparel, stores have been cau­
tious in their b u yin g policies. Inven tories at the
end o f Septem ber show ed little change (in dollars)
from those at the end o f A u gu st and w ere 14 per
cent less than on Septem ber 30, 1946.

_ 6

W H O L E S A L E P R I C E S IN
Bureau of L abor
Statistics
(1926 = 100)
Sept.,*47 A u g .,*47
A ll Commodities.— 157.4
153.6
Farm Products.... 186.4
181.7
Foods ................... 179.3
172.3
Other ................ .. 138.2
136.0

TH E

U N IT E D

Sept.,’ 46
124.0
154.3
131.9
112.2

STATES
Compared
with
Sept.,’ 46
-4-26.9%
4-20.8
4-35.9
4-23.2

Sept.,’ 47
A u g .,’47
+ 2 .5 %
4-2.6
4-4.1
4-1.6

R E T A IL F O O D P R IC E S
Bureau o f Labor
Statistics
A u g. 15,
July 15,
A u g. 15, A u g. 15/47 Comp, with
(1935-39 = 100)
1947
1947 _
1946
July 15,’ 47 A u g. 1 5/4 6
U . S. (51 cities).. 196.5
193.1
171.2
4- 2%
4 -1 5 %
St. L ouis.......... 205.0
200.9
175.5
4- 2
4-17
Little R ock ........ 195.1
193.6
167.8
4- 1
4-16
Louisville ....... 189.7
185.4
163.1
-i- 2
4-16
Memphis
......- 213.5
210.1
187.5
4- 2
4-14
C O N SU M E R P R IC E IN D E X
Data on the local consum er price index will be available for Memphis
and St. Louis only on a quarterly basis. This inform ation has been pub­
lished on a m onthly basis for St. L ouis, heretofore. Quarterly figures
will be published in the next issue.

B A N K IN G
C H A N G E S IN P R IN C IP A L A S S E T S A N D L I A B I L I T I E 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 from
O ct. 22,
O ct. 23,
Sept. 24,
1947
(I n thousands o f dollars)
1946
1947
Industrial advances under Sec. 13b....$ ...............
$ ............
$
Other advances and rediscounts...
4- 5,116 4- *” 4” l24
—
37,102 4 - 67,041
— $ 31,986 4 -$ 62,917
699,544
Total deposits ................................... ... ,
F. R . notes in circulation................ ....... 1,121,840
Industrial commitments under Sec. 13b

580

—
—
—

24,601
34,459
20,848
-

0

-

444-

_

34,598
60,015
33,098
3,460

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 B A N K S
(I n Thousands of D ollars)
Change from
O ct. 22,
Sept. 24,
O ct. 23,
Assets
1947
1947
1946
T otal loans and investments........ *
......... $2,143,539 4~$
77,1534~$ 1,705
__
Commercial, industrial, and agricultural loans, open market paper........
556,539 4 81,30$ 4 - 150,990
Loans to brokers and dealers in se­
curities ......................... ............................
5,459 4217 —
2,435
Other loans to purchase and carry
securities ........................ ................. .......
51,125 —
309 —
30,526
Real estate loans.........................................
137,016 4 1,272 4- 30,304
Loans to banks...........................................
3,956 -j477 4 .351
Other loans ..................................................
174,869 -j6,467 4 - 30,403
928,964 4 89,429 4 - 179,087
Total loans ..................... .......................
Treasury bills ...........................................
15,408 4 “
7,294 —
12,847
Certificates of indebtedness.................... .
84,981 —•
6,859 —
53,642
Treasury notes ......................................... .
115,798 —
21,915 —
95,177
U . S. bonds including guaranteed
obligations ........................... ......... ....... .
848,303 -f13,788 ■
— 20,854
Other securities .......... .................... .........
150,085 —
4,584 4 5,138
Total investments ........ ........................ 1,214,575 —
12,276 — 177,382
Cash assets .......- ...................................
786,581 - f
80,158 4 - 79,403
Other assets ........................................ .......
24,666 4 558 -j1,069
T otal assets ................................... ......... $2,954,786 — $157,869
j—
82,177
Demand deposits-—totai ................
$2,287,341 4 “$161,306 4 -$ 51,832
Individuals, partnerships, and corporations ............................................ .1,455,279 4 58,006 4" 128,241
Interbank demand deposits................. 674,405 -j94,824 4 U. S. Governm ent deposits.................
44,210 4 ^,023 —
Other demand deposits....................... .. JJ^.447 4M 5 3 -j- 14>19<J
Demand deposits—adjusted* ................. ' 2 ’ H ?
4"
Time deposits ................................................................... 4 “**
'o 2 t
Borrow ings ......... ........................... ............
10,375 —
5,355
■
825
0?h e? liabilities ........... .................... .
15,925 - f
256 +
1,109
T otal capital accounts........................... ~..
166,981 4573 46,937
Total liabilities and capital accounts....$2,954,786 4-$157,869 + $ 82,177
♦Other than interbank and Governm ent deposits,less cash items on
hand or in process o f collection.

Page 131

B A N K IN G A N D FIN A N C E

A G R IC U L T U R E

A sharp rise in private credit highlighted changes
in the con d ition o f district reportin g m em ber banks
durin g the four-w eek period ending O ctober 15.
T h e expansion in loans raised deposits o f the city
banks w h ich also gained additional funds from their
cou n try correspon dents.
T ota l loans o f rep ortin g m em ber banks rose $71
m illion durin g the fou r-w eek period, all types o f
loans and all rep ortin g centers registering some in­
crease.

L oa n s to consum ers registered a very sharp

gain in the fou r-w eek period, “ other loans” (m ostly
consum er loan s) b ein g up $6 m illion as com pared
to an average m on th ly rise for the past year of $2.5
m illion.

R eal estate loans continued to rise also,

but at a dim inished rate, the gain o f $1.4 m illion
b ein g substantially b e lo w the average m onthly in­
crease o f $2.5 m illion durin g the past year.
In vestm ents of rep ortin g m em ber banks co n ­
tinued to decline as securities were liquidated to
m eet the risin g dem and for loans and W a r L oan
deposit w ithdraw als. A decrease of $33 m illion in
investm ents from Septem ber 17 to O ctober 15,
brou gh t rep ortin g bank security holdings $172 m il­
lion b elow the total o f a year ago. T h e liquidation
con sisted largely o f sh ort term issues and tended to
lengthen the average m aturity o f the investm ent
p ortfolio.
D u rin g the fou r-w eek period, deposits o f district
w eekly rep ortin g banks registered an increase o f
$155 m illion, b rin g in g the total to $2.8 billion— a
gain o f $77 m illion over a year ago. T h e sharp rise
in dem and deposits was due largely to the expan­
sion in business and agricultural loans and to the
b uilding up o f cou n try bank balances.

Cash farm incom e in the U nited States in 1947
will establish an all-tim e record. P resent indica­
tions are that gross farm in com e w ill be $34.3 b il­
lion, 19 per cent m ore than in 1946. P rodu ction
expenses this year have been but 16 per cent higher
than in 1946. N et incom e thus is forecast at $18
billion, 20 per cent h igher than a year earlier. Prices
for n ext yea r’s crops are exp ected to rem ain high.
W h e th e r or not farm incom e in 1948 w ill be higher
than in 1947, h ow ever, w ill depend largely on the
level o f crop and livestock p rodu ction .
Prices o f grains, especially wheat, continued to
dom inate the agricultural m arket new s in O ctober.
D ecem ber wheat m oved w ell a bove $3.00 in the
m onth. T ra d in g in n ext y ea r’s futures also was
stron g as a result o f continued reports o f dry
w eather in the southw estern w heat belt, w here
planting already is delayed due to lack o f m oisture.
T h e crop report based on O cto b e r 1 estim ates
ga ve virtu ally no further encou ragem ent fo r larger
grain supplies for the co m in g year. T h e corn crop
w as estim ated on O cto b e r 1 at 2,459 m illion bushels,
an increase o f on ly 56 m illion bushels from the esti­
mate a m onth earlier. T h is increase was largely
offset b y low er-th an -exp ected supplies o f corn on
hand from the 1946 crop.
T h e forecast for cotton p rod u ction likew ise was
disappointing. T o ta l p rod u ction for the nation is
n ow estim ated at 11,508,000 bales, w hich is 341,000
bales, or 3 per cent, less than was anticipated on
Septem ber 1. In E ighth D istrict states, the O cto b e r 1
estim ate was 6 per cent b e lo w that o f a m onth
earlier.
T o b a c c o p rod u ction estim ates w ere the same in
O ctob er as in Septem ber.
A G R IC U L T U R E

D E B IT S T O D E P O S IT ACC O U N TS
(I n thousands
o f dollars)

Sept.,
1947

A u g.,
1947

Sept.,
1946

15,329
18,278 $
17,785 $
E l D orado, A rk .......$
31,118
32,344
37,226
F ort Smith, A rk ...5,969
7,600
5,191
Helena, A rk ...............
103,751
97,141
Little R ock, A rk .....
121,009
24,399
18,950
Pine Bluff, A rk .......
26,828
8,961
Texarkana, A rk.-T ex.
10,884
8,407
16,824
A lton , 111....................
21,216
22,079
63,680
118,379
108,291
E .S t.L .-N a t.S .Y .,Ill.
20,949
24,092
Q u in cy, III.................
25,790
76,833
95,073
92,042
Evansville, 111...... ..
379,015
401,996
Louisville, K y ..........
427.781
20,046
20,242
O w ensboro, K y. ......
22,113
13,890
Paducah, K y ..............
11,445
12,474
17,709
Greenville, M i s s . __
11,344
14,210
Cape Giardeau, M o....
9,329
8,908
8,061
6,878
6,614
H annibal, M o ............
7,087
45,798
33,950
Jefferson City, M o.
43,983
St. Louis, M o ........ 1,355,116 1,214,503 1,214,001
9,692
8,614
Sedalia, M o ....... .
9,719
Springfield, M o ........
59,820
54,211
52,014
Jackson, Tenn. ......
14,338
13,578
16,455
M em phis, Tenn........
3*8,437
423;395
368,731
T otals

...................$2,889,543 $2,552,236 $2,510,136

Page 132




CASH

Sept., ’ 47 com p, with
A u g., *47 Sept., ’46
4 - 3%
15
4-46
4-25
•4-42
4-29
4- 4
4- 9

4 -19%

4-20
4-27
4-17

4-10
4-21
4-31

4-86

4-56
4- 5
4* 3
4-30
4-12
- 04-10
4-15
4-25

4-23
4-24
4-13
4- 9
4-21
4-25
4-16
4- 7
— 4
4-12
4-13
4-15
4-21
4-15

4-13

4-15

4- ?
4- 3

4- 6

4-10
4-11

(I n thousands
A u g.,
1947
o f dollars)
Arkansas ......
Illinois .......... .... 131,926
Indiana ........ .... 97,718
K entucky ...... .... 31,631
Mississippi ... ... 13,598
M issouri ...... .... 86,352
Tennessee
.... 27,240
Totals ....... $405,759
R E C E IP T S

AND

FARM

IN C O M E

A u g., *47,
com p, with
A u g.,
J «iy .
1947
1946
— 24%
- 0 -%
— 29
4-18
— 17
4 -H
— 18
4- 5
— 2
4- 2
— 18
4-17
—. 9
4-12
—21 % 4 -1 3 %

12

m onth total, Sept. to A ug.,
'4 6-’ 47 com p, with
’45-’46
’44-'4S
»46-*47
4 -32 %
$ 472,015 4 -48 %
4-57
1,762,759 4-38
4-49
989,176 4-27
4-20
501,738 4-25
— 18
292,012 — 14
4-42
1,027,994 4-40
448,862 4-33
4-26
4 -37 %
$5,494,556 4 -3 1 %

S H IP M E N T S A T N A T IO N A L

Sept.
1947
Cattle and calves.,220,907
H ogs ........... .........177,266
H orses ...................
852
Totals ....... .........482,236

Receipts
Sept.’ 47 com p, with
A u g .’ 47 Ser>t.’46
4 -3 9 %
4 - 61%
4-1317
4- 2
—
1
4 - 27
— 2
—
83
4 -1 6 %
4 - 119%

STOCK

YARDS

Shipments
Sept. Sept.’ 47 com p, with
1947 Aucr.*47 Sept. 46
96,265 4 -5 0 % — 12%
4-611
41,428 — 38
— 46
21,019 — 45
— 83
852 — 2
159,564 — 6%
- 0 -% j