View original document

The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.

November 1957

Number 11

Volume

Industrial Growth
of the Eighth District
iV lA N U F A C T U R IN G

A C T IV IT Y rose slightly faster in the Eighth Federal

tleserve District than in the nation from

1947 to 1954.

Specialization of

production in the district has changed little.
;

f c t n the St. Louis metropolitan area, manufacturing employment has in­
creased more slowly than in the nation, and the industrial pattern has changed
markedly.

Manufacturing employment has risen at a faster rate than in the

n«S|bn in Louisville, Memphis, Little Rock and most other areas, but has
failed to gain in Evansville or southern Illinois.
The growth of manufacturing has aided the rise in district income.

I ederal

Bank
St. L o u i s

Survey o f Current Conditions — p . 142




S u b s c r i p t i o n s to the Monthly Review are available to the public
without charge.

For information concerning bulk mailings to banks,

business organizations and educational institutions, write: Research
Department, Federal Reserve Bank of St. Louis, P. O. Box 442, St.
Louis 3, Missouri.
Articles or excerpts may be reprinted.
preciated.

A credit line would be ap­

Industrial Growth of the Eighth District
“Now, here, you see, it takes all the running
you can do, to keep in the same place. If you
want to get somewhere else, you must run at
least twice as fast as that!”
L e w is C ar r o ll,

Through the Looking-Glass

T h e ECONOM IC DEVELOPM ENT of an area
has somewhat the same aspect that Alice found in
Wonderland. To stand still is to fall behind as the
economic expansion of the nation proceeds. To “get
somewhere” requires a faster than national rate of
growth.
Economic development of many areas has been re­
lated in large part to the growth of manufacturing.
Areas where manufacturing employment has expand­
ed have generally also experienced gains in incomc.
Added employment opportunities in manufacturing
have afforded jobs for workers released from indus­
tries in which employment declined, such as farming
or mining, and for the normal additions to the labor
supply. Industrial growth, then, has become a major
means of obtaining the goal of higher income for
which so many strive. This article examines changes
in manufacturing in the Eighth Federal Reserve Dis­
trict revealed by the Censuses of Manufactures taken
in 1947 and 1954 and employment data for subsequent
years.1
1
Industrial grow th is indicated in a num ber o f w ays. Probably forem ost is
the increase in em ploym ent and payrolls in m anufacturing activities. A n oth er
measure is the value added by m anufacturing, w h ich indicates the relative e c o ­
n om ic im portance o f the various industries and geograph ic areas.
(V a lu e
add ed is derived by subtracting the cost o f m aterials, supplies and containers,
fu el, purchased electric energy, and contract w ork , from the value o f ship­
m en ts.)
T h e number and size o f m anufacturing plants are yet other ways
o f indicating the industrialization o f an area. T h e grow th o f m anufacturing
can also be indicated by the expenditures fo r plan t and equipm ent. H ow ever,
these data are not available fo r sm all geograph ic areas except fo r census years.
Trends indicated by the census data require som e qualifications. For one
thing, the long-term trend o f an area or industry m ay be different than that
indicated by com parison betw een census years w h ich fa ll in different phases
o f a business cycle. In 1954, fo r exam ple, m anufacturin g em ploym ent in
m any industries declin ed fro m 1953 levels, whereas in 1947 m anufacturin g
activity and em ploym ent were at a generally h igh and increasing le ve l. In
these industries the 1947-1954 trend w o u ld understate the real lon g-term rate
o f grow th . Com parisons o f trends in geograph ic areas are affected by the
differences in types o f industry and by the varying im pact o f cy clica l changes
on som e industries.
Secondly, because o f tw o changes in the scope, data obtained in the
1954 Census o f M anufactures are not strictly com parable w ith the 1947 census.
Processors and distributors o f fluid m ilk and other dairy products w ere cla s­
sified as nonm anufacturing in the 1947 census, but as m anufacturing in 1954.
In add ition, lo g g in g cam ps and contractors and sm all saw m ills and p lan in g
m ills were n ot includ ed in the 1947 census, but w ere in clu d ed in the 3954
census. W h ere necessary, the difference in coverage has been noted in this
article.




Manufacturing activity rose slightly faster
in the Eighth Federal Reserve District
than in the nation from 1947 to 1954.
In the Eighth Federal Reserve District manufac­
turing activity increased slightly faster from 1947 to
1954 than in the nation. As a result of this more rapid
growth, employment in district manufacturing estab­
lishments increased 11 per cent compared with 10
per cent in the nation, and payrolls rose 68 per cent,
compared with a national gain of 66 per cent. The
slightly faster rise in district manufacturing activity is
also indicated by the gain in the value added to goods
by the manufacturing process, which increased 63 per
cent from 1947 to 1954 compared with a gain of 57
per cent in the nation. The increase in value added by
manufacturing reflects a rise in both physical volume
of goods produced and the inflation in wages and
prices between the two years. The physical volume
of output from the district’s manufacturing plants
probably increased slightly more from 1947 to 1954
than the 27 per cent increase in the nation.

Distribution of Manufacturing
in the Eighth District, 1954

I I $999andunder
CZJ $1,000- $9,999
110,000- $19,999
|B| S20,000- 449,999
HH $50,000andover

Page 135

The faster growth of manufacturing activity here,
however, was accompanied by a less rapid increase in
the number of establishments than nationally.2 The
district also has a greater concentration of large plants
than nationally. In 1954, establishments employing
100 or more persons constituted 11 per cent of the
district total compared with 9 per cent in the nation.

Employment (thousands)......... . . .
Payroll ($ millions)..........
Value Added ($ millions). .. . . .
Establishments:
Total............ ...................... . . .
With twenty or
more employees............ . . .

Tobacco Manufactures
Leather and Leather Products
Lumber and Wood Products
Furniture and Fixtures
Chemicals and Products
Food and Kindred Products
Petroleum and Coal Products
Stone, Clay and Glass Products

MANUFACTURING INDICATORS
Eighth Federal Reserve District

Relative Specialization in Eighth District
Manufacturing, 1954

Total

United
States

1954

1947

Per cent
Increase

Per cent
Increase

722
2,529
5,121

651
1,506
3,140

11
68
63

66

57

12,872

11,318

14

20

4,171

4,045

3

9

10

Printing and Publishing
Apparel and Related Products
Pulp, Paper and Products
Fabricated Metal Products
Primary Metal Industries
Machinery Except Electrical
Electrical Machinery
Misc. Manufactures (incl. ordnance)
Rubber Products
Transportation Equipment
Instruments and Related Products
Textile Mill Products
.5

Specialization of production in the district
has changed little.

1.0

1.5

Ratio to United States

Every area earns its economic living by producing
goods or services for local consumption and for export
to other areas. By specialization in those activities in
which it is best suited by virtue of its human and
natural resources each area tends toward a higher
standard of living. Reflecting its comparative advan­
tage in other activities, primarily agriculture, the
Eighth District is still relatively less industrialized

Note:

than the nation. Although the district had an esti­
mated 6.6 per cent of the population of the United

with twenty or more employees decreased more rap­
idly in the district than in the nation.

States in 1954, its manufacturing establishments em­
ployed only 4.6 per cent of the workers in the nation
and in terms of value added produced 4.4 per cent
of the output.
As can be seen in the chart, within the manufactur­
ing sector a larger share of district plants produce
food, leather and tobacco products, lumber, furniture
and chemicals than in the nation.3 On the other hand,
the district has relatively fewer establishments, com­
pared to the nation, engaged in the production of
textiles, pulp, paper and rubber products, primary
metals, machinery and instruments.
From 1947 to 1954, little change occurred in the
type of manufacturing in the district, with specializa­
tion continuing primarily in nondurable goods pro­
duction. The largest shifts in emphasis were in lum2 Difference in coverage, as noted in Footnote 1, accounted for some of
the increase and, with considerable lumbering activity located in the district,
would tend to increase the district count more rapidly than in the nation.
However, the conclusion that the district lagged national growth in number
of manufacturing establishments is also indicated when comparison is made of
the number of establishments with twenty or more employees, which effectively
eliminates the bias introduced by different coverage of small logging camps
and sawmills in the two censuses.
3 Based on establishments with twenty or more employees.

Page 136



Based on proportion of district plants with 20 or more employees
in each industry compared to proportion of each industry in
United States.

ber and shoe plants.

The number of leather

and

leather product manufacturing establishments with
twenty or more employees decreased less rapidly in
the district from 1947 to 1954 than in the nation. On
the other hand, the number of lumber establishments

In some other industries the changes produced rel­
atively smaller shifts in specialization. The number
of large textile plants in the district increased from 56
to 70, while in the nation they decreased slightly. Pulp
and paper plants increased at a slightly more rapid
rate than for the nation. Large plants producing and
fabricating metals, electrical machinery and transpor­
tation equipment increased less rapidly from 1947 to
1954 in the district than in the nation. Other indus­
tries showed roughly similar changes as in the nation
between the two census dates, and hence showed lit­
tle change in the degree of specialization. However,
since 1954, the small increase in relative specialization
in pulp and paper and in chemicals has probably con­
tinued.
While the district as a whole showed primarily
minor changes in the structure of industry, particular
areas within the district have experienced marked
shifts in the types of manufacturing activity. Perhaps
one of the outstanding shifts has been the continued
migration of the apparel and shoe industry from St.
Louis to the smaller cities of the district.

Manufacturing Employment in United States
and District Metropolitan Areas
25.0

Millions

12.5
3 25

22 5

Donnell Aircraft Corporation, now the area’s largest
firm, increased from 3,300 in 1947 to 27,100 in 1957.
Two firms also produced aircraft parts for a time dur­
ing the Korean War, but subsequently withdrew.
Ordnance production also reflects the changing de­
fense needs. Employment in St. Louis area plants
increased sharply during the Korean period, reaching
a peak of 17,700 in August 1953. However, defense
requirements were reduced thereafter and currently
only about 5,900 are at work. Recent announcements
indicate that further cutbacks are planned, with pos­
sibly 1,500 to be laid off.
Automobile and parts production has also increased
substantially, with an additional assembly plant and
expansion of others occurring in the postwar years.
The importance of this industry will increase further
in 1959 when a newly announced automobile assem­
bly plant is to begin operation with 3,500 employees.

* Evansville area including Henderson County, Kentucky.

In the St. Louis metropolitan area, manufacturing
employment has increased more slowly than
in the nation, . . .
The St. Louis metropolitan area is one of the na­
tion’s older manufacturing centers which, in the post­
war period, has grown less rapidly than the rest of
the nation, continuing the trend evident throughout
the twentieth century. Manufacturing in the metro­
politan area, employing 274,000 in 1956 and account­
ing for about one-third of the district total, increased
only 5 per cent from 1947 compared with an advance
of 11 per cent for the nation. Furthermore, the gain
occurred from 1947 to 1953; since then total manu­
facturing employment has declined slightly. How­
ever, from 1947 to 1954, value added by manufactur­
ing rose at a faster pace than in the nation, reflecting
in large part the sharp advance in high-value aircraft
and ordnance items.
Defense requirements of the nation have had a ma­
jor impact on the area. Increased outlays for defense
equipment have resulted in sharp gains in output of
aircraft in the postwar period. Employment at M c­




Chemical production is relatively more important
in the St. Louis area than in the nation and has been
growing faster in St. Louis than in the rest of the
country. The specialization of the area in chemical
production is indicated by the larger share of em­
ployment and value added in manufacturing than in
the United States. St. Louis area chemical plants
employ 7.5 per cent of all manufacturing workers and
in 1954 contributed 11.2 per cent to the total value
added to goods by manufacturing compared with 4.9
and 7.9 per cent respectively in the nation. The faster
growth of chemicals is shown by value added which
rose 81 per cent from 1947 to 1954 compared with a
national gain of 71 per cent. St. Louis employment in
this industry increased from 17,000 in 1947 to 21,000
in 1953 and has since remained stable. However, com­
pletion this year of the new Atomic Energy Commis­
sion facilities located in St. Charles county and expan­
sions of existing plants will further augment the size
of this industry in the area.
Oil refining also increased substantially faster from
1947 to 1957 in the St. Louis area than in the nation.
Value added by St. Louis area refineries increased 72
per cent from 1947 to 1954, about 2% times the na­
tional gain, and from 1947 to 1957 capacity of the
area’s plants also increased more rapidly than na­
tionally. Currently, capacity of the St. Louis area re­
fineries constitutes 3M per cent of the national total.
St. Louis is a major center of brewing and meat
packing. But from 1947 to 1954 output in food man­
ufacturing grew at a slower pace than in the nation.
The value added by meat-products plants and grain
mills increased less rapidly than in the nation, but at
beverage plants it increased more.
Page 137

The primary metals industry also increased output
less rapidly than nationally despite a substantial jump
in steel ingot output. Steel production in the St. Louis
area increased from 728,000 tons in 1947 to 1,657,000
in 1956, a gain of 128 per cent compared with a 35
per cent gain nationally. Slower growth was also
made by the machinery industries. Some nonelectrical
machinery plants in the St. Louis area have been
closed and several electrical machinery firms have es­
tablished branch plants in other district cities.
As indicated earlier, lower wage rates in the small­
er cities of the district have attracted apparel and shoe
plants from higher wage areas. About 9,000 fewer
persons are now employed in these two industries in
the St. Louis metropolitan area than in 1947, as a re­
sult of the transfer of operations out of the area. D e­
spite this redistribution of manufacturing activity,
St. Louis remains a center of the shoe industry. In
1956 shoe firms in and around St. Louis produced 16
per cent of the national total. However, some rela­
tive decline has occurred since 1947-1948 when 19
per cent of national output came from this area.

LEATHER AND LEATHER PRODUCTS
NUMBER OF ESTABLISHMENTS
1947
Eighth District Total....................................................

256 250

St. Louis Metropolitan A re a .....................................

I l l 89

Remainder of District................................................

145161

1954

Change

— 6
1— 22
+16

Railroad equipment manufacturing in the St. Louis
area has declined as plants have been closed or have
shifted production to different types of goods. The
decline reflects primarily the reduced purchases of
railroad equipment in the postwar period accompany­
ing the general shift to other forms of transportation.
Nationally, output of railroad equipment in 1956 was
37 per cent below the 1947-49 average. The St. Louis
decline also has been affected by the shift of railroads
from purchasing equipment from other firms to pro­
ducing it in their own shops.

. . .and the industrial pattern has changed markedly.
As a result of the shifting pattern of manufacturing
activity in the St. Louis area, durable goods produc­
tion now constitutes a larger proportion of the total
than formerly. The number employed in durable
goods manufacturing rose from 48 per cent of the
total in 1947 to 57 J.r>er cent in 1956. Tn addition,7 JTproduction of certain nondurables such as chemicals and
petroleum products have gained while output of other
Page 138




Durable and Nondurable Manufacturing
Employment in the St. Louis
Metropolitan Area
Per Cent of Total
IOO

NONDURABLE

DURABLE

1947

1956

nondurable goods declined. These changes have fa­
vorably affected the flow of income, since those in­
dustries increasing in importance generally have had
higher than average wage rates. However, the gain
has not been without some costs, for durable goods
production is usually more variable than other types
and the demand for defense goods, such as aircraft
and ordnance, is subject to sharp and often unpredict­
able changes. Thus, the area has become potentially
less stable than before. However, since 1947 total
manufacturing employment in the St. Louis area has
shown about the same relative amount of fluctuation
as nationally.
An important trend in St. Louis’ industrial struc­
ture, not apparent from statistics, is the changing locus
of ownership and management. Mergers and acqui­
sitions in recent years have made branch plants of
many which were formerly owned or which had their
principal management in St. Louis. The effect of such
developments is not always unfavorable for St. Louis
employment and income, but in some cases opera­
tions have been stopped or curtailed after the change.
Manufacturing employment has risen at a faster
rate than in the nation in Louisville, . . .
Turning next to the remainder of the district, other
metropolitan areas, except Evansville, and most non­
metropolitan portions grew at a faster pace than na­
tionally.
Since 1947 manufacturing employment in the Louis­
ville metropolitan area has grown three times as fast
as in the nation and much more rapidly than in St.

Louis, Memphis, Evansville or Little Rock, the other
major industrial centers in the Eighth District. Tra­
ditionally a center of whiskey and cigarette produc­
tion, much o f the postwar growth in Louisville
resulted from the transfer of General Electric Com­
pany’s entire household appliance output to a new
plant in Louisville from locations in other cities. Last
year employment at this new plant averaged 15,000,
making up nearly two-thirds of the 24,000 added to
manufacturing employment in that area since 1947.
Tobacco manufacturing, which employed 9 per
cent o f the total work force in 1954, expanded sub­
stantially faster in Louisville than elsewhere in the
nation. Employment in that industry increased 33 per
cent from 1947 to 1954 while in the nation it fell by
15 per cent. Much the same story is told by value
added figures: a 362 per cent gain in Louisville com­
pared with a 54 per cent advance nationally. Chemi­
cal production, including the output of synthetic rub­
ber, and the output of transportation equipment also
have risen at a faster rate than nationally.
On the other hand, value added in the food, lum­
ber and furniture industries declined from 1947 to
1954. The drop in lumber and furniture plants prob­
ably reflects the trend toward location in lower wage
areas.
Ordnance production has varied considerably in the
Louisville area, following the general pattern of de­
fense needs. In 1953 as many as 10,000 were em­
ployed in ordnance plants, but by 1957 this had de­
clined to 1,900. Even this figure is to be reduced ao^
cording to plans announced recently.
W hile Louisville has experienced a more rapid than
national growth in manufacturing employment, the
total has fluctuated somewhat more than has the na­
tion’s. These swings reflect in large part the sharp
variations in the area’s output of ordnance, farm
equipment and household appliances in recent years.

products, furniture, lumber, paper, food and chemi­
cals and to a slight degree in nonelectrical machinery.
Despite the importance of some industries known
for their variability, manufacturing employment in
Memphis has shown relatively more stability than na­
tionally since 1947.

. . . Little Rock

. . .

Little Rock is a trade and governmental center
whose manufacturing employment has grown about
twice as fast as the nation. The increase in value
added by manufacturing also was somewhat faster
than for the nation from 1947 to 1954. Most of the
gain in manufacturing employment occurred from
1947 to 1951. Since 1951 employment at food, ap­
parel, metal and metal-working plants has increased
by about 600, offset however by reductions in chem­
icals, lumber and w ood products pl'ants.

. . . and most other areas,

. . .

The growth of inanufacturing was diffused through­
out a large part of the district. In 187 of the 363
Eighth Federal Reserve District counties manufactur­
ing employment rose at a faster pace from 1947 to
1954 than the national gain of 10 per cent. In 29
counties the increase was less rapid than nationally
and in 130 there were actual losses. Data were not
available on 17 counties.
Among the nonmetropolitan areas of the district
the fastest rise in manufacturing employment oc­
curred in Tennessee, with an increase of 49 per cent
from 1947 to 1954. As can be observed from the ac­
companying chart, the only major regions within the
district to show less growth than nationally were the
nonmetropolitan portions of Missouri and Illinois.

Change in Manufacturing Employment
in Nonmetropolitan District Areas
1947 - 1954

. . . Memphis, . . .

Per Cent Change

50 I—

Manufacturing employment in the Memphis metro­
politan area increased about twice as fast as in the
nation from 1947 to 1956. Over the period manufac­
turing employment rose from 38,000 to 46,000, a gain
of 21 per cent. Growth of employment occurred large­
ly in fabricated metals, rubber, paper and furniture
production, only partly offset by a drop in lumber mill
jobs.
Memphis area employment is relatively more spe­
cialized than the nation in the production of rubber




U.S:

TENN

MISS.

KY.

ARK.

IND.

MO.

ILL

- 10 1—
Percentage change is for total United States.

Page 139

Arkansas is a good example of the diverse forces at
work as industrial development proceeds. Manufac­
turing employment increased from 75,000 in 1947 to
about 88,000 in 1957, a gain of 17 per cent. The gain
resulted from increased employment in nearly all
major industry groups, which more than offset a loss
of 11,000 in lumber mill employment. Industrial
growth in Arkansas reflects the development of its
natural resources, such as bauxite and pulpwood, the
advantage of a large supply of low-cost labor and the
general rapid development of the Southwest.
The decline in the lumber output has resulted in
part from deterioration of saw timber resources and
the consequent disappearance of small logging op­
erations. In addition, technological improvements
have further reduced labor requirements. However,
in the future Arkansas lumber production should
benefit from improvements in forest management and
from technical progress in manufacturing processes.

. . . but has failed to gain in Evansville . . .
While most of the district developed industrially in
the postwar period, some areas have been conspicuous
for lack of growth. Evansville experienced only little
growth in manufacturing employment from 1947 to
1956, although value added to goods processed in its
plants rose at a faster pace than nationally from 1947
to 1954. The lack of growth in manufacturing em­
ployment resulted from offsetting changes, primarily
in refrigerators and automobile assembly. Refrigera­
tor plants employed an average of 13,500 persons in
1948, but only 8,500 in 1957. On the other hand, trans­
portation equipment plants employed about 2,600 in
1948 and 7,000 in 1957, of which 6,200 were in auto­
mobile assembly plants. A small loss in employment
in fabricated metals was about offset by the gain in
employment in food plants. As elsewhere, aircraft
production varied sharply in Evansville, with employ­
ment reaching a peak of 10,900 in October 1952 but
falling in recent months to 900.
Concentration in durable goods output has result­
ed in considerable instability in Evansville’s employ­
ment. For example, in 1954 manufacturing employ­
ment averaged 26 per cent less than in 1953.
The outlook for the area is mixed. The operation
of an aluminum plant now being built nearby will
afford jobs for many who live in Evansville. On the
other hand, Chrysler Corporation officials recently

Page 140



announced that the two assembly plants now employ­
ing about 5,000 will be closed in 1959 when opera­
tions are transferred to a plant to be built in the St.
Louis area.

. . . or southern Illinois.
Manufacturing employment in the Illinois portion
of the district has failed to grow in the postwar period.
From 1947 to 1954 employment declined 4 per cent,
with reductions occurring in nine of the 14 nonmetro­
politan areas. By 1956, however, recovery in some
areas was indicated by a 5 per cent rise in manufac­
turing employment covered by the state unemploy­
ment insurance law.
The loss from 1947 to 1954 stemmed from the clos­
ing of a number of plants in various areas, the rela­
tively small number of new plants added and the
impact of the 1954 recession on employment in exist­
ing plants.
While employment in southern Illinois has increased
somewhat in recent years, it has not been sufficient
to eliminate the substantial unemployment existing in
many of the areas. Five areas in southern Illinois
(Harrisburg, Herrin-Murphysboro-West Frankfort,
Litchfield, Mount Carmel-Olney, Mount Vernon) are
currently classified as having substantial labor sur­
pluses.

The growth of manufacturing has aided
the rise in district income.
The growth in district manufacturing activity since
1947 has been one of the factors in the rise in district
income. Much of the gain occurred in industries with
higher than average wage rates. Furthermore, the
shift of industries with lower than average wage rates
from metropolitan areas to smaller cities has added
to the economic base and augmented incomes of
smaller areas. Metropolitan areas, too, have gained
where loss of employment in low-wage industries has
been offset by gains in higher wage industries.
However, manufacturing employment has failed to
gain in recent years in some of the metropolitan areas.
And the overall increase in the district has not been
sufficient to stem out-migration from the district. Fur­
thermore, the economic stability of the district has
been potentially reduced by the increased importance
of durable and military goods production.
W il l ia m

H.

K ester

MANUFACTURING DATA FOR SELECTED METROPOLITAN AREAS
IN EIGHTH FEDERAL RESERVE DISTRICT, 1954
(EMPLOYEES IN THOUSANDS, VALUE ADDED BY MANUFACTURING IN MILLIONS OF DOLLARS)

Major Industry Group

Employees

St. Louis
Value Added

Louisville
Employees Value Added

Memphis
Employees Value Added

Evansville
Employees

Value Adde

All industries................................

251.8

$2,053.1

84.7

$ 845.0

41.8

$ 336.2

32.6

$ 238.2

Food and kindred products. . . .

34.2

316.0

14.0

157.3

7.4

53.7

4.2

39.8

Tobacco manufactures................

0.7

d

7.9

154.7

d

d

—

—

Textile mill products..................

2.5

12.5

0.7

4.0

d

—

—

Apparel and related products. .

15.0

69.6

2.3

8.2

0.8
1.6

6.2

0.7

Lumber and wood products........

1.8

9.2

4.9

24.9

4,8

28.1

0.3

1.7

Furniture and fixtures................

5.2

28.7

3.3

16.6

3.0

14.2

1.3

6.1

2.0

Pulp, paper and products..........

8.3

53.3

d

d

3.2

30.0

Printing and publishing..............

12.5

87.6

5.0

34.5

d

d

0.9

7.2

Chemicals and products............

18.9

230.8

11.7

164.1

3.5

37.0

1.0

11.4

—

—

Petroleum and coal products...

8.1

116.0

d

d

0.3

3.1

—

—

Rubber products..........................

0.5

d

*

d

3.9

d

—

—
—

Leather and leather goods........

11.0

47.6

0.2

0.6

—

9.1

90.0

0.2
2.1

0.6

Stone, clay, and glass products.

20.5

0.5

3.2

0.4

Primary metal industriesi............

165.0

0.5

2.8

0.3

1.7

—

Fabricated metal products..........

20.6
20.0

147.8

10.7

79.4

1.7

12.3

3.0

20.3

Machinery, except electrical. . . .

19.0

139.0

1J.7

102.3

4.5

34.2

10.0

79.6

Electrical machinery....................

15.9

118.7

1.7

14.5

0.6

7.5

Transportation equipment..........

28.2

270.1

2.4

d

2.4

28.7

Instruments and related products

2.3

17.3

d

d

d

d

Miscellaneous manufactures..........

18.0

124.3

4.5

d

0.8

3.3

—
8.9
—
0.7

2.6
—

—

58.1
—

4.7

d Withheld to avoid disclosing data for individual companies.
* Less than 50 employees.
Source:

1954 Census of Manufactures




Page 141

q

f

C U R R E N T

C

O

N

D

|T | O

N

S

Released for publication November 1

T H E generally sidewise movement of most eco­
nomic activities in the past several months has
created an increasingly widespread feeling that the
inflationary pressures which beset the economy for
the past two years, while not entirely out of view,
are receding. The persistence of this high-level lull
in business has also aroused an air of disquiet concern­
ing the nation’s economic future. No doubt the erratic
behavior of the stock market in October, following a
rather consistent decline since July, reflects some of
this apprehension.

The Council also estimates that defense spending
declined $300 million (annual rate) in the third
quarter. This factor together with a decline in the
value of American exports can be presumed to have
further softened the market for durable manufactures.

Estimates recently released by the Council of
Economic Advisers confirm this picture of proximate
overall stability during the third quarter. The value
of the nation’s output increased by $4.7 billion to an
unprecedented annual rate of $439 billion. However,
allowing for price changes, it is apparent that aggre­
gate business activity has not increased appreciably.
In fact, per capita disposable income is slightly below
year-ago rates after adjustment for price rises, indicat­
ing that the growth of real income has not kept pace
with the growth of population.

The level of employment remained high in Sep­
tember, in large measure because the declines which
affected manufacturing activity were offset by in­
creases in other parts of the economy. Consumers
increased their rate of spending on nondurable goods
and services by $4.5 billion. The rate of saving fell
as the increase iji consumption was greater than the
rise in disposable income. Other forces serving to
sustain the tempo of business activity were a $600
million increase (annual rate) in state and local gov­
ernment expenditures and an upturn in residential
building.

Although the overall level of business has con­
tinued prosperous, there have been substantial adjust­
ments taking place within the economy. Fortunately
for the nation’s economic health, these changes have
largely offset each other permitting the economy to
absorb them without breaking stride.
The total flow of spending for new plants and
equipment, which has provided such a strong stimulus
to the nation’s business for the past two years, ap­
pears to be leveling off. In one important sector,
new durable goods manufacturing capacity, outlays
actually declined about 2 per cent during the third
quarter, according to the estimates.
Consumer expenditures for durable goods, which
started to decline in the second quarter of the year,
continued down during the third quarter. Despite
increases in prices consumers are spending approxi­
mately 3 per cent less for durable goods now than
they were during the first quarter.
Page 142



In general, the level of demand for both consumer
and producer durable goods, although still exceeding­
ly robust, does not seem to have the depth and in­
tensity that characterized it but a short time ago.
Declines in factory employment, production, and
sales all reflect a somewhat weakened position.

Wholesale prices through the second week in Oc­
tober continue to reflect the slackening of inflation­
ary pressure referred to earlier in this article. The
wholesale price index was down from its August high
by about .7 of one per cent, although it was still
above year-ago figures. The consumer price index,
which typically lags its wholesale counterpart, in­
creased in September for the thirteenth consecutive
month, but the increment was the smallest since
November 1956.
In the Eighth District industrial production in Oc­
tober was up somewhat from September levels. Steel
production in the St. Louis area has been averaging
about 89 per cent of capacity, some 10 percentage
points above the September level, but below that of
a year ago. In addition district steel plants were
operating closer to capacity levels during October
than those of the nation at large.

Southern pine production and petroleum output in
Eighth District states were up slightly in October
from September rates and were approximately the
same as year-ago figures.
A decline in the number of cattle, calves and sheep
slaughtered in the St. Louis area between Septem­
ber and October more than offset an increase in hog
processing. The total number of animals processed
in October was about 8 per cent smaller than in Sep­
tember of this year or October 1956.
Employment during September in three major dis­
trict areas, St. Louis, Memphis, and Little Rock,
showed small monthly gains which were associated
with the reopening of schools and the expansion of
retail payrolls. The Evansville and Louisville areas,
however, experienced sizable drops in employment in
September when compared with August levels. About
90 per cent of the drop in Evansville resulted from
temporary layoffs in the automotive industry. These
workers were recalled in October. Unemployment in
Louisville in September was in part attributable to
labor management difficulties involving almost 3,000
workers, which were resolved October 24. A further
decline in employment came largely in ordnance,
chemicals, and fabricated metals and machinery.
Loans at Eighth District weekly reporting banks
rose $27 million or 2 per cent during the five weeks
ended October 23, somewhat less than seasonally.
The apparent weakness in the demand for credit
was occasioned primarily by two special situations in
the business category, rather than any marked con­
traction m activity generally. The principal factor was
the relatively modest expansion in advances to finance
the movement of cotton, partly the result of a later
than usual movement of cotton to market. After
the first week in October, a more normal pattern de­
veloped, and loans to commodity dealers expanded
$14 million during the two weeks ending October 23.
The second special factor holding the loan expansion




down was large net repayment ($8 million) by sales
finance companies, reportedly as these companies ob­
tained funds from other sources. Other types of busi­
nesses in the aggregate increased their indebtedness
about the normal amount for this time. Loans falling
in the category of “other,” chiefly consumer, rose at a
fairly rapid rate, whereas real estate financing in­
creased moderately.
The weekly reporting banks also increased their
holdings of investments $31 million during the five
weeks ended October 23. The bulk of the gain cen­
tered in short-term Federal Government securities,
although they added some municipal obligations to
their portfolios.
District farmers harvested near-record crops in
1957 despite retarded spring planting. October 1
estimates of both corn and soybeans are up from
those of September 1.

Generally favorable autumn

weather contributed to early maturity and harvesting,
permitting practically all the corn to escape frost
damage.
District cash farm income for the first eight months
of this year was about 4 per cent less than that for
the same months in 1956, and about 8 per cent above
that of 1955. The decline this year is due primarily
to reduced crop marketings in Arkansas, Mississippi
and Tennessee.

Nationally, cash receipts from farm

marketings for the first nine months of 1957 were
approximately the same as for the corresponding
months last year.
Farm real estate values continued to advance in
district states during the four months ending July 1,
1957.

The dollar value of farmland per acre in­

creased 4 per cent in Illinois, 3 per cent in Kentucky
and Mississippi (the national average), and 2 per cent
in Tennessee, Arkansas and Missouri during the
period.

Page 143

VARIOUS INDICATORS OF INDUSTRIAL ACTIVITY
Steel Ingot Rate, St. Louis area (Operating rate, per cent of capacity)...........................
Coal Production Index— 8th Dist. (Seasonally adjusted, 1 9 4 7 -4 9 = 1 0 0 )......................
Crude Oil Production— 8th Dist. (Daily average in thousands of bbls.).........................
Freight Interchanges at RRs— St. Louis (Thousands of cars— 25 railroads— Termi­
nal R. R. A ssn .).............................................................................. ....................................
Livestock Slaughter— St. Louis area (Thousands of head— weekly average).............
Lumber Production— S. Pine (Average weekly production— thousands of bd. ft.). . . .
Lumber Production— S. Hardwoods (Operating rate, per cent of capacity).............

S eco n d

Sept. 1957*
compared with
Aug. 1957 Sept. 1956
-0 -%
— 10%
— 6
— 3
+ 22
— 2

Sept.
1957
79
85.3 p
385.0
95.1
114.0
207.1
82

— 9
+18
— 5
— 4

— 6
— 10
— 1
— 16

* Percentage change is shown in each case. Figures for the steel ingot rate, Southern hardwood rate, and the coal
production index show the relative percentage change in production, not the change in index points or in percents of
capacity.
p Preliminary.

j

EIGHTH DISTRICT WEEKLY REPORTING MEMBER BANKS

BANK DEBITS1

(In millions of dollars)

Six Largest Centers:

Sept.
1957
(In
millions)

East St. Louis—
National Stock Yards,
111................................. $ 144.4
Evansville, In d ............
171.7
Little Rock, A rk.. . . .
206.8
Louisville, Ky...............
885.0
Memphis, Tenn.............
751.0
St. Louis, M o ..............
2,364.2

Sept. 1957
compared with
Sept.
Aug.
1956
1957

— 2%
— 9
4- 2
— 2
— 15
+ 3

Total— Six Largest
Centers.................... $4,523.1

Assets

Loans1...................................... . $ 1,668
880
Business and Agricultural. .
50
Security.................................
281
Real Estate.........................
Other (largely consumer). .
483
844
U.S. Gov’t. Securities.........
227
Other Securities....................
30
Loans to Banks....................
903
Cash Assets...........................
46
Other Assets...........................
Total Assets.................. . $3,718

+ 4%
+ 12

+ 11

+ 11
— 4
+ 8

2%

+ 6%

6%
10
3
2
3
6
4
7

+ 2
— 6

+ 12%
— 4
+ 5
+ 6
— 11
+ 10
— 26
— 17
+ 11
+ 8
+ 9
— 9
+ 13
+ 8

+J -

± M
5

Other Reporting Centers:
Alton, 111........................$
Cape Girardeau, M o .. .
El Dorado, A rk............
Fort Smith, A rk............
Greenville, Miss...........
Hannibal, Mo...............
Helena, Ark.................
Jackson, Tenn...............
Jefferson City, M o........
Owensboro, Ky.............
Paducah, K y.................
Pine Bluff, Ark.............
Quincy, 111...................
Sedalia, M o....................
Springfield, Mo.............
Texarkana, Ark.............

40.5
16.7
30.6
57.0
27.8
11.3
9.1
24.2
104.5
48.5
28.2
43.0
42.0
16.2
97.6
20.4

+
—
—
—
—
—
+
—

+ 3 — 9

+ 2

+

Total— 22 Centers. . $5,140.7

+

4%

2%

+

6%

Percentage Change
Jan. thru Aug.
Aug. ’ 57
1957
(In thousands Aug.
from
compared with
of dollars)
1957
Aug. ’ 56
1956
1955
Arkansas. . $ 23,795 — 9 %
— 18%
+ 12%
Illinois . . . 137,167 — 1
+
13
+ 5
Indiana . . .
87,685 + 1
+ 3
+ 2
Kentucky. . 28,116 — 2
—
6
+ 4
Mississippi. 26,163 — 23
— 17
+ 11
Missouri. .
78,053 — 1
i+ 1 2
+ 1
Tennessee.
28,455 — 1
— 4
+ 7
7 States . 409,434 — 3
- 0+ 8
— 4
8 th District1 168,717 — 6
+ 8
Source: State data from USDA preliminary es­
timates unless otherwise indicated.
1 Estimates for Eighth District revised based on
1954 Census of Agriculture.

1956

Sept.

Aug.

Sept.

171.7

180.1

161.8

1 Debits to demand deposit accounts of individuals,
partnerships and corporations and states and political
subdivisions.

DEPARTMENT STORES
Percentage of Accounts
and Notes Receivable
Outstanding Aug. 31, ’57,
collected during Sept.

Net Sales

9 mos. ’ 57
Sept. 1957
to same
Instal.
compared with
Aug. ’ 57
Sept., ’56 period ’56 Accounts
—
—
—
—
—
—
—
+
—
—
—
—
—

3%
2
10
3
7
5
6
4
1
3
10
7
5

+
+
—
—
—
—
—
—
+

1%
1
7
3
1
3
6
5
6
- 0- 0— 6
— 10

Manufacturing and Mining:
Food, liquor and tobacco............. $ + 9
Textiles, apparel and leather . . . .
— 6
Metals and metal products...........
— 5
Petroleum, coal,
chemicals and rubber................
—0—

Other..........................................

Trade Concerns:
Wholesale. . .
Retail.............

—0—

...................... ..+ 5
...................... ...+ 1

e,

1%

Seasonally Adjusted (1947-1949= 100)
1957

1%
1
2
4
1
1
5
5
2
2
4
2
— 3

+
—
—
—
+
—
—
+
+
—
+

15

Excluding
Instalment
Accounts
49
36
26

Quincy, 111. ......................
Evansville Area, Ind. . . .
18
47
Louisville Area, Ky., Ind.
Louisville (C ity)...........
Paducah, Ky.1 ..................
16
56
St. Louis Area, Mo., 111.
St. Louis (City) ...........
Springfield Area, Mo. .
32
12
Memphis Area, Tenn.
All Other Cities2 ................
1 In order to permit publication of figures for this city (or area), a special sample
has been constructed which is not confined exclusively to department stores. Figures
for any such nondepartment stores, however, are not used in computing the district
percentage changes or in computing department store indexes.
2 Fayetteville, Pine Bluff, Arkansas; Harrisburg, Mt. Vernon, Illinois; Vincennes,
Indiana; Danville, Hopkinsville, Mayfield, Owensboro, Kentucky; Chillicothe, Mis­
souri; Greenville, Mississippi; and Jackson, Tennessee.
Outstanding orders of reporting stores at the end of September 1957 were one
per cent less than on the corresponding date a year ago.




+ 1
+ 7
+ 27
>+ i
+ 2
— 10
+ 2
$ + 52

Principal Changes
in Commercial and Industrial Loans2
Net Change During
5 Weeks Ended
Business of Borrower
10-23-57

Liabilities and Capital
Commodity dealers...............................+ 2 1
Sales finance companies.......................— 8
Demand Deposits of Banks. . . $ 719
$ + 23
Public Utilities (including
+ 9
Other Demand Deposits......... 2,011
transportation)............................... ...+ 8
Time Deposits...........................
607
+ 4
Construction...................................... . — 4
Borrowings and Other L iab.. .
86
+13.
All
Other............................................
-0 Total Capital Accounts...........
295
+ 3
Total Liab. and Capital. . $3,718
$ + 52
Total............................................ $ + 21
1 Loans are adjusted to exclude loans to banks; the total is reported net; breakdowns are reported
gross.
2 Changes in business loans by industry classification from a sample of banks holding roughly 90%
of the total commercial and industrial loans outstanding at Eighth District weekly reporting member
banks.

INDEX OF BANK DEBITS— 22 Centers

8th F.R. District Total
Fort Smith Area, Ark.1

1957
$ + 27
+ 24

CASH FARM INCOME

Total— Other
Centers.................... $ 617.6

* 7 • ta d '*

Oct. 23,
1957

Change
from

CONSTRUCTION CONTRACTS AWARDED
IN EIGHTH FEDERAL RESERVE DISTRICT *
(Value of contracts in thousands of dollars)
Aug. 1957 July 1957 Aug. 1956
T otal..................$129,843
53,151
Residential.........
Nonresidential. .
50,963
Public Works
and Utilities . 25,729

$127,375
58,969
38,330

$107,332
43,408
36,431

30,076

27,493

* Based upon reports by F. W . Dodge Corpo­
ration.

INDEXES OF DEPARTMENT STORE SALES AND
8TH DISTRICT
Sept.
Aug.
1957
1957
Sales (daily average), unadjusted3..................131
119
Sales (daily average), seasonally adjusted3. . .129
131
Stocks, unadjusted4............................................ n.a.
135
Stocks, seasonally adjusted4 .............................n.a.
135
n.a. Not Available.
3 Daily average 1947-4 9= 100
4 End of Month average 1947-4 9= 100
Trading days: Sept. 1957— 24; August 1957— 27; Sept.

RETAIL FURNITURE STORES

STOCKS
July
1957
104
135
129
141

Sept.
1956
130
127
145
134

1956— 24.

Net Sales
Sept. 1957
compared with
Aug. ’57 Sept. ’ 56
8th Dist. Total1 ................................................................... — 12%
+ 1%
St. Louis Area.....................................................................
— 8
+ 4
Louisville A rea...................................................................
— 24
—• 9
Memphis A rea.....................................................................
— 25
— 5
Little Rock Area................................................................... — 19
+ 15
Springfield Area...................................................................
— 20
— 5
1 In addition to the following cities shown separately in ihe table, the total
includes stores in Blytheville, Fort Smith, Pine Bluff, Arkansas; Owensboro,
Kentucky; Greenwood, Mississippi; Evansville, Indiana, and Cape Girardeau,
Missouri.
Note: Figures shown are preliminary and subject to revision.