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Monthly Review
R E S E R V E
Volume X X X I

B A N K
Number 10

OCTOBER 1, 1949

New Credit For a Developing Agriculture
In the past fifty years many changes have taken
place in American agriculture— including changes
in farming techniques and marketing practices,
in size of farm, in amount of fixed and working
capital requirements. These changes have brought
about changed needs for farm credit, in amount,
in type and in terms. At the middle of the
twentieth century the types of loans and the
procedures involved in extending credit are con­
siderably different from those in existence at the
close of the nineteenth century. In addition, new
types of credit granting institutions have appeared.
It probably can be said fairly that farm credit
practices of many lending institutions have kept
pace with the needs resulting from the changes in
farming generally. But also it must be said that
a number of credit granting institutions have not
brought their lending techniques up to date with
recognized and existing practices of the more pro­
gressive institutions. In such cases the primary
results have been missed opportunities for sound
credit extension with attendant missed opportuni­
ties for earnings from such loans, and the rise of
competing lending institutions in those communi­
ties.
The average American farm today is a com­
mercial enterprise, appreciably larger and more
specialized than the essentially self-sufficient unit
of fifty years ago. Capital requirements, both fixed
and working, of the modern farm are substan­
tially heavier than those of the farm of 1900. Free
land is no longer available— the farm unit must be
purchased and the hired hand or tenant has to
command more funds to become an owner. Fre­
quently investment in machinery and livestock
exceeds that in land and buildings. Soil rebuilding.




in many cases an absolute necessity after years of
exploitation, requires substantial capital input.
Rural electrification has made it desirable to add
living and working comforts not possible a half
century ago. And, in addition, day to day need
for cash has increased with the growth in speciali­
zation and rise in operating costs.
A rise in capital requirements ordinarily means
a rise in demand for credit. This has been true
of agriculture in the past and, as it returns to a
more normal situation, it probably will be true in
the future. In other words, the total volume of
farm credit may be expected to increase materially
over the long pull ahead. And probably the rise
in production or operating credit will be greater
relatively than the increase in farm mortgage credit.
These are the two basic types of farm credit
extended— short-term or production credit which
is expected to be liquidated fully in one production
cycle as the farmer produces and markets his out­
put, and longer-term credit ordinarily secured by
a mortgage. The latter, of course, also has to
be liquidated out of income but over a longer period
of time than one production cycle.
PRODUCTION CREDIT

Farmers’ non-real estate loans (short-term credit
mostly) totaled over $6 billion at the beginning of
1949. Of this amount almost $1.2 billion repre­
sented Commodity Credit Corporation price sup­
port loans, which are not liabilities of farmers in
the usual sense. About $2.2 billion represented
both credits and loans from merchants, dealers,
finance companies, private lenders, etc. Much of
this was “convenience” credit.
The major institutional supplier of farm produc­
tion credit has been and still is the commercial

OUTSTANDING NON-REAL ESTATE LOANS TO FARMERS
HELO BY PRINCIPAL CREDIT INSTITUTIONS
U N ITE D

Billions
4

STATES, 1915-1948

of Dollars

1920

Billions of Dollars
4

1925

1930
PRODUCTION (
ASSOCIATION

1 COMMERCIAL BANKS

□

I FEDERAL INTERMEDIATE
I CREDIT BANKS

(

FARMERS HOME
ADMINISTRATION

bank. As of January, 1949, commercial banks held
more than $2 billion in outstanding non-real estate
loans to farmers. In addition, of course, the banks
held much of the loans guaranteed by the Com­
modity Credit Corporation. Of the 13,354 insured
banks in the United States, 12,301 reported having
loans to farmers as of January, 1947. While these
included both non-real and real estate loans, prac­
tically all of these banks had some farm production
credit extended. On the same date, only 141 of
the seven district states' 2,957 banks reported no
farm loans.
Credit extension to farmers thus is an important
and widespread commercial banking activity. In
this region it accounts for a substantial share of
bank earnings. In 1948, the banks in the seven
states of the Eighth District held almost $500
million in farm loans (of all types)—a figure which
represented more than one-fifth of their total loan
portfolio. Farm loans were just about twice as
important in bank loan portfolios in this area as
in the nation as a whole.
T O T A L F A R M L O A N S H E L D B Y C O M M E R C IA L B A N K S A N D
PE RC E N T O F FARM LO A N S TO T O T A L LOAN S,
1940 A N D 1948
(Thousands o f dollars)
1940
1948
% of T otal
% o f Total
Farm
Loans and
Farm
Loans and
Loans
Discounts
Loans
Discounts
21,397
33.6%
$
30,959
43.9%
Arkansas ......................... $
Illinois ...........................
99,580
10.3
114,300
19.5
Indiana ...........................
49,545
17.7
84,296
25.6
Kentucky .......................
37,577
17.1
69,682
25.8
Mississippi .....................
17,917
27.3
27,330
21.6
Missouri .........................
78,116
16.6
113,341
14.9
Tennessee .......................
60,472
23.7
54,743
31.2
E ighth D istrict S tates.
364,604
U . S. T otal..................... 1,628,562

Page 142



15.7
9.7

494,651
2,403,148

21.3
11.1

It should also be pointed out that the relative
importance of farm loans to the district's banks has
increased in the past few years. In 1940, farm
loans made up 16 per cent of total loans in banks
in the seven district states. In 1948, the figure was
21 per cent.
Government Credit Sources—An appreciable
amount of farm production credit is supplied by
Government credit agencies. In their present form
these are relative newcomers to the short-term
farm credit field. Government got into farm fi­
nance with the Federal Farm Loan Act of 1916.
After the severe post-World War I depression
which hit agriculture particularly hard, this Act
was amended in 1923. Ten years later the whole
Government farm finance organization was re­
vamped. That in existence today is essentially the
same as was created in the reorganization of the
1930’s.
Operating in the same field as the commercial
banks in making funds available for farm produc­
tion and operation are the Production Credit As­
sociations, cooperatives composed of farmer bor­
rowers who elect their own boards of directors
and appoint an executive officer, the secretarytreasurer. These Associations are scattered across
the nation. At mid-1948 they had $460 million out­
standing in loans— less than one-fifth of the amount
of bank-extended farm credit. The Associations
are supervised by twelve Production Credit Cor­
porations, one in each farm credit district. The
Corporations were created in 1933 and supplied
then and later with a total of $120 million in capital
in Government funds.
In 1944 a revolving fund program for returning
the funds to the Treasury was begun. The Govern­
ment Appropriations Act of 1949 required an addi­
tional $30 million to be returned during fiscal 1949.
As a result of these two actions the amount of
government capital outstanding has been reduced
to $46 million.
No interest is paid on these funds, and so, in
effect, earnings from them amount to a subsidy.
The Corporations in turn supply much of the initial
capital for the Associations and help them get
started. Neither the capital of the Corporations
nor of the Associations actually is used for lending
to farmers. It is mainly invested in securities to
provide income over and above that from other
sources. Some capital is available to the Associ­
ations from their members. Any borrower is re­
quired to purchase $5 in Association stock for
every $100 borrowed.
The chief sources of loanable funds for the As­
sociations are the Federal Intermediate Credit

Banks which lend to and discount paper for the
Associations. In turn this paper is used as security
behind annual issues of debentures of the Inter­
mediate Credit Banks. The debentures are obliga­
tions of all the Banks and are not Governmentguaranteed. The Bank discount rate cannot be
more than 1 per cent higher than the yield on the
immediately previous debenture issue, except with
the permission of the Governor of the Farm Credit
Administration. Since 1940 face rates have varied
from a high of 3.39 per cent to a low of 0.71 per
cent. That for 1948 was 1.53 per cent.
The Intermediate Credit Banks have the power
to lend to or discount paper for almost any type
of institution that makes short-term loans to farm­
ers. As originally set up in 1923 it was antici­
pated that they would work with commercial banks.
There were so many restrictions in the way of
banks’ borrowing from them, however, that they
were little used by the banks.
The Intermediate Credit Banks charged the As­
sociations a 2 per cent discount rate from the time
they were created until 1939, when rates were
reduced to X ^ per cent. The discount rate started
1
/
upward again in 1947 and by July 1, 1948 stood at
2 per cent throughout the country, except in the
Omaha and St. Louis districts, where the rates were
\xz and
/
per cent, respectively. The Omaha
rate went to 2 per cent last fall. Banks in two
districts have raised their rates to 2^4 per cent in
1949.
For some years, the rate of interest which the
Associations could charge farmers on loans dis­
counted at the Intermediate Credit Banks was
limited to not more than 3 per cent above the
discount rate of the Intermediate Credit Banks.
This regulation was amended June 1, 1948, per­
mitting the Banks to discount paper on which in­
terest charged borrowers was not more than 4
per cent above the discount rate. By June 30, 1949,
the interest margin had been increased above 3 per
cent in 290 Associations to meet higher operating
costs and accumulate resources more rapidly. Most
Associations also charge loan service fees which
represent costs of reviewing borrowers’ operations,
drawing up loan papers, searching lien records and
recording security instruments.
These fees
amounted to 0.33 per cent of loans during 1948.
Another Government agency in the production
credit field is the Farmers Home Administration
which in its original form began in 1918 with the
purpose of making Government loans to distressed
farmers. These activities were on a small scale
until the 1930’s. In 1946 such lending activities




were combined with the Farm Security Administra­
tion’s rehabilitation loan function.
COMPETITION BETWEEN COMMERCIAL BANKS
AND GOVERNMENT CREDIT AGENCIES

The commercial bank and the Production Credit
Association have tended to be directly competitive
for short-term farm loans. The Farmers Home Ad­
ministration lending program generally is regarded
as non-competitive with the banks, since it aims
at distress cases which most banks believe are in­
eligible for typical bank credit.
The PCA brought with it two major develop­
ments in short-term farm credit. While some com­
mercial banks had employed similar practices prior
to this time, the establishment of the PCA’s made
them nationwide in scope. Its secretary went out
to the farmer and almost literally brought farm
credit facilities to his front door. And in extending
credit a definite attempt was made to tailor both
advances and repayments to suit the particular type
of farm operation. In addition better farm credit
files were developed.
Progressive commercial bankers soon recognized
that these two developments were desirable and
moved to meet the new competition. In sections
where the bankers were active in farm credit the
banks maintained competitive positions. In other
areas they lost ground. On balance, however, the
commercial banks more than held their own. The
proportion of total non-real estate farm credit
supplied by the banks has grown, particularly in
recent years.
There are very natural reasons for this. Given
use of the newer techniques and procedures the
bank is in even better competitive position. The
farmer is used to dealing with the banker who
is conveniently located for him in most cases.
And many banks have been adding farm credit
specialists to their staffs. These men go out to
the farms and get first hand knowledge of the
operations and management character which are
vital in credit extension.
FARM MORTGAGE LOANS

T

Commercial banks are not equally important
in the farm real estate loan field. Currently, in
this district the banks hold about one-fifth of the
farm mortgage debt. On a national scale, at the
beginning of 1949, insured banks held about onesixth of the $5.1 billion in farm mortgage debt
PERCENT OF TO TA L FARM M ORTGAGE DEBT H ELD
B Y C O M M E R C I A L B A N K S , 1940-1948
1946
1940
1945
1947
...... 4.8
5.3
7.7
1 1 .6
7.6
...... 5.7
8.7
11.4
16.6
21.3
14.1
28.9
24.7
38.4
6 .6
Mississippi .............................. ...... 8 .1
7.7
1 1 .0
...... 8.3
12.5
16.1
11.3
19.3
24.1
31.7
Eighth D istrict S ta te s ...... ......
United States ....................... ......

8 .8
8 .1

1 1 .6

13.7

9.1

1 0 .8

18.2
14.3

1948
1 2 .1

13.5
23.8
43.3
1 1 .2

17.3
34.8
20.4
16.3

Page 143

HELD

FARM MORTGAGE DEBT
BY PRINC IPA L
L EN D ER
GROUPS
UNITED STATES,
1910*1948

Billions of Dollors

Billions of Dolkurs

outstanding. The principal lenders in this field are
life insurance companies, government credit sources
(each group with about $1 billion in farm mortgage
debt in 1949) and individuals and others (with
about $2 billion in 1949).
Farm real estate loans are an important source
of commercial bank earnings, however, and have
grown in importance over the past few years.
After the widespread difficulties with farm mort­
gages of the early depression years, many people
thought commercial banks would not again become
a significant source of farm mortgage credit. The
banks have increased their loan volume in this
field by almost 60 per cent in the past ten years,
despite the general downward trend in total farm
mortgage debt outstanding, off 22 per cent since
1940. Except for the Farmers Home Administra­
tion, commercial banks constituted the only impor­
tant lender group whose outstanding farm real
estate loans were substantially larger in total in
1949 than in 1940. Life insurance loans were up
just 5 per cent, those made by individuals and
others were down 10 per cent, and Federal Land
Bank and Federal Farm Mortgage Corporation
loans off 65 per cent, 1949 relative to 1940. As a
result, commercial banks in the United States in­
creased their share of the farm mortgage debt
outstanding from 8 per cent in 1940 to 17 per cent
in 1949. The gain at Eighth District banks was
even more striking— from 9 per cent to over 20
per cent.
Originally national banks were not permitted
Page 144




to make real estate loans. That provision was grad­
ually relaxed after 1913, and today national banks
may lend on improved real estate. If the loan is
amortized, it may be made for a longer period than
an unamortized one.
The creation of the Federal Land Banks in 1916
brought Government into the field of farm real
estate finance. Going through much the same
process of reorganization as Government short-term
farm credit institutions, the Land Banks today are
a major factor in financing farm real estate. Loan
volume has been declining since the 1937 peak of
almost $3 billion, however, and at the beginning of
1949 outstandings were below $900 million. Two
major factors account for this development: (1) The
general drop in farm mortgage debt as farmers used
high incomes to pay off debt, and (2) increased
competition.
The Farmers Home Administration also makes
long-term loans to farmers but again these are
mainly distress and rehabilitation cases not re­
garded as directly competitive by banks. Loans
are made up to 40 years in term.
Life insurance companies historically have been
a major source of farm mortgage loans, but their
total outstandings have s h o w n relatively little
change over the past several years— holding at
about $1 billion. About 40 per cent of farm real
estate loans are made by individuals and a host
of various types of financing agencies.
NEW LENDING PRACTICES

To meet the changed farm credit requirements
lending policies and procedures have had to be
changed—both in respect to short-term and long­
term farm credit. Longer-term loans, lower interest
rates, budgeted disbursements and amortized pay­
ments, variable payments and prepayments, closer
managerial supervision, better credit records and
many other developments have occurred. Generally
speaking, new techniques have been developed to
meet the needs; the problem has been mainly one of
getting the new techniques adopted on a widespread
scale. Progressive lending institutions have made
use of differing procedures and have done a good
job in meeting the farm credit needs of their com­
munities.
Long-Term Lending—The Farmers Home Ad­
ministration contributed to improved farm mort­
gage lending practices. This organization, originally
called the Farm Security Administration, was set
up in 1933 to help low income farm families and
included a tenant purchase plan. Local operations
are carried on by a county committee of three
farmers who make all tenant selections. Prior to
the granting of credit, the tenant, assisted by

trained technicians, has to work out a complete
farm and home management plan and agree to keep
a complete record of his business. Credit is then
extended both for the purchase of the farm and
for building up the soil. An optional variable pay­
ment plan is presented to borrowers, with payments
based on the amount of net cash income available
after necessary business expenses are deducted.
Those not electing the variable payment plan may
make as many and as large prepayments as they
wish. By the second plan, however, extra principal
payments do not place the borrower ahead of
schedule.
A second progressive step has been made by a
number of insurance companies and the Federal
Land Banks, which permit borrowers to build up
reserves for making later payments. This method
allows farmers to accumulate payments during high
income years for paying off or reducing debts and
to forego payments during low income periods.
Either the variable repayment system or the built
up reserve system seems superior to the regular
amortization plan. Farm income is irregular and
debts can be paid much more easily at one time than
at another. Regular amortization very well might
be supplemented by prepayment privileges for best
results both to lender and farmer.
Another area in which progress has been made is
in credit for land improvement. Many good native
soils have been depleted and now have low produc­
tivity. Others have been eroded and need erosion
controls, seeding and sodding as well as fertilizers.
Some land needs drainage. Other needs also are
pressing. The problem is particularly important in
the southern portion of the Eighth District where
soils have been cropped for a longer time without
attention. Much ground has suffered from soil ero­
sion and the other wastes of poor soil management.
Conventional farm mortgage lending techniques




ACRES
U N IT E D

are not suited very well to furnishing credit for a
soil rebuilding program or for shifts in type of farm
output over a period of time. A new technique has
been developed, however, that makes possible ade­
quate financing of such a program. It was origin­
ally developed at St. Joseph, Missouri, where the
local bankers and the county farm agent, with the
help of the agricultural economist of the Federal
Reserve Bank of St. Louis, worked out a program
that offers great promise.
The program consists of a series of steps. First,
a complete w a t e r and soil management plan is
drawn up for the farm. Both the banker and the
farmer rely on technically trained men for this job—
either a trained man already employed by the bank,
or a county agent or soil conservation technician.
Second, an appraisal system that recognizes im­
provements is established. Thus, instead of ap­
praising the farm unit before the program is begun
and holding that appraisal constant throughout the
life of the loan, the bank gives recognition to the
capital input and rise in productivity as the program
advances. Third, disbursement is made to the
farmer over the life of the improvement program
rather than in a lump sum. Scheduled improve­
ments thus are matched with scheduled disburse­
ments, in each case with supervision from the
technical man. Finally, repayments are scheduled
out of the increased production resulting from the
improvements— a substantial portion of that in­
crease going to liquidate the loan.
Such a loan thus is a modification of a conven­
tional farm mortgage. It is amortized but payments
are varied in anticipation of probable increased pro­
duction— a reasonably accurate estimate of this
usually can be made. Technical management is
tied in.
The advantages of this type of credit are obvious.
First, there is little danger that the burden of debt

PER
STATES,

FARM
1890- 1945

150

100

50

1890

1900

1910

1920

1930

1940
Page 145

will impair the productivity of the farm, and, inci­
dentally, impair the borrower’s ability to pay debts
and destroy the lender’s collateral. Second, it pro­
vides for gradual repayment in line with produc­
tion and income, thereby permitting the farmer to
enjoy a reasonable standard of living while repaying
the debt and a higher standard of living after the
debt is repaid.
Also important, the widespread acceptance of
balanced farming can have a tremendous effect upon
the local business life of any community. On the
basis of studies of balanced farm programs through­
out the Eighth Federal Reserve District, it can be
said safely that a sound balanced farm plan put into
operation on at least one-third of a county’s land
could bring the county, at average prices, about
$1 million yearly in new income. This would be
the same as acquiring a new factory which would
employ 480 workers at an average pay check of $40
a week. Progress of this sort for the rural com­
munity as well as for the individual farmer greatly
depends upon a new and flexible procedure for ex­
tending agricultural credit. The banker as well as
the farmer will find such a forward step profitable.
Short-Term Credit— In the non-real estate credit
field a number of commercial banks and the Pro­

duction Credit Associations have started using a
budgeted loan system. This type of loan usually
covers the farmer’s entire credit needs for the year.
The funds are disbursed to the farmer as needed
for carrying out farming operations and repaid as
c r o p s and livestock are marketed. Interest is
usually charged on each dollar borrowed for the
actual number of days it is outstanding. The farmer
thus saves by paying interest only on money ac­
tually used and the lender can spread his available
funds out to more customers. This type of loan is
generally made on one note with one chattel mort­
gage covering the entire amount to be disbursed to
a customer during the season.
Probably farm credit requirements will continue
to change in the future as they have in the past. In
most cases the problems involved probably will be
those of procedures and techniques rather than the
making of large additional volume available even
though total requirements seem likely to show some
increase over the future. In other words what is
and will be needed in the farm credit field is what
has been needed in the past— imagination and
willingness to fit the credit to the needs of the
borrower who has a sound proposition.
Clifton B. Luttrell

Survey of Current Conditions
In August and early September the national
economy continued to show signs of recovery from
the mid-year low, and prospects for a stable fourth
quarter are encouraging.
The Eighth District
economy was lagging a little, however, as a rela­
tively short cotton crop and a major railroad strike
apparently were offsetting other factors of strength.
In part the upturn from the low point reached
in mid-year is seasonal, just as the decline in many
individual industries probably was influenced by
seasonal factors. But the recovery also is receiving
additional impetus from nonseasonal forces. The
apparent resumption of inventory buying to rebuild
depleted stocks, for example, is providing a con­
siderable amount of upward pressure on the level
of operations in a number of industries.
The drive to replenish stocks in some lines has
resulted from the fact that consumers’ purchases
throughout the year held at a level somewhat
higher than was expected by most retailers and
manufacturers. Expenditures for furniture and
household equipment, for example, leveled off in
the first half of 1949 following the decline from an
Page 146




annual rate of $12.1 billion in the third quarter of
1948 to $10.4 billion in the fourth quarter. Through
June, 1949 these expenditures were virtually un­
changed from the rate in the fourth quarter of 1948.
Aggregate purchases of other durable goods, exclud­
ing automobiles which increased during these nine
months, also held steady. In the nondurable goods
lines, most of the decline in consumers’ expendi­
tures has been in outlays for clothing, shoes, food
and drink— where lower prices largely account for
the decrease in aggregate expenditures. Yet in the
face of continued demand at a relatively high level,
inventories underwent substantial liquidation. Now,
with income and expenditures continuing to be
maintained, stocks once more are being replaced,
and the resulting orders are reflecting in increased
output and employment at the manufacturing level.
In general, there is little likelihood that the re­
covery movement will fail to carry through the
fourth quarter— provided it is not interrupted by
work stoppages in major industries where collective
bargaining problems now exist. Even a brief cessa­
tion of operations in the steel industry would be

expected to have repercussions throughout the
nation’s economy, and a prolonged shutdown of
this basic industry would seriously threaten the
recovery trend.
The changed relationship between the American
dollar and principal currencies outside the United
States is not likely to have an appreciable effect
on the domestic economy during the remainder
of the year. Whatever effect it does have would be
expected to be deflationary. In principle, the deval­
uation of these currencies, relative to the dollar,
should result in lower raw material costs for those
manufacturers whose raw materials are largely
imported— for example, producers of woolen tex­
tiles, rubber and tin products. However, many com­
plicating factors are involved and in practice, prices
of such commodities may or may not decline auto­
matically as a result of devaluation. If they do
decline, the reduction may vary considerably— from
a small decrease to one equal to the full rate of re­
duction in the value of the producing country’s
currency. Whether, in the longer term future,
imports of raw materials and finished products from
foreign countries expand substantially will depend
upon many contingencies. In the main it will de­
pend upon the willingness and ability of American
consumers to absorb not only the present volume of
these products but an increased amount as well.
The principal effect, both in the near future and in
the longer run, is likely to result from a reduction
in foreign demand for goods produced in this coun­
try. As a result of devaluation, these goods become
relatively more expensive to foreign buyers then
competing goods produced in countries whose cur­
rencies were devalued.
EMPLOYMENT

Total employment in the nation in mid-August
was at the highest level since last October, climbing
to within 2 per cent of the figure for August, 1948.
The increase in August— the first in six years be­
tween July and August— reflected a relatively large
increase in nonagricultural employment that more
than offset a decline of 1 million in the number of
farm workers.
Although seasonal in character, the absolute
gain in nonagricultural employment in August
was three times as large as the increase between
July and August last year and was the largest
monthly gain since mid-1946. Adults as well as
younger persons were added to pay rolls, in contrast
to the gain in July which was due mainly to in­
creases in the lower age groups. Despite the sharp
increase in August, however, nonfarm employment
was about 3 per cent below the level of last August.




But the gap between employment this year and last
narrowed; in June it was 4 per cent below June, 1948
and in July 4.5 per cent. During the first eight
months it averaged 2 per cent less than in the same
period of 1948.
Agricultural employment declined seasonally in
August but continued higher than last year. Most
of the decline in August was among the selfemployed and unpaid family workers on the nation’s
farms.
In the five major district cities nonagricultural
employment increased slightly in August, according
to preliminary indications, after remaining fairly
stable between June and July. Compared with a
year earlier, employment in July in these cities was
off about 4 per cent as against a national decline of
5 per cent. Nonmanufacturing employment was off
less than nationally, while the percentage decrease
in manufacturing employment was about the same as
in the nation as a whole. Declines were largest in
Louisville and Evansville, on a percentage basis,
followed by those in Little Rock, Memphis and St.
Louis.
The number of persons involuntarily working
part time in the nation showed little change in
August from the two preceding months. However,
about two and one-fourth million persons worked
part time but wanted full-time jobs in August— or
about twice as many as in September, 1948. The
proportion of employees working less than 35 hours
a week (21 per cent) was about the same this
August as a year ago, although relatively fewer
persons were working more than 40 hours a week.
Unemployment declined in August for the first
time since March; the decrease was the first of any
size since last October. Largely seasonal, the re­
duction in unemployment rolls principally reflected
the withdrawal of teen-age and college-age persons
from the labor force, many of whom were in the
labor market only for the summer months. The
number of unemployed adult workers in August was
about the same as in July. A smaller percentage
of all workers in the labor force were unemployed
PRICES
W H O L E S A L E P R IC E S IN T H E U N IT E D S T A T E S
Bureau o f L abor
A u g .,’ 49 _
Statistics
com pared with
(1 9 2 6 = 1 0 0 )
A u g.,’49 July,’ 49 A u g .,’ 48
July,*49
A u g .,’48
A ll Com m odities...... 1S3.0
153.4
169.4
— 0 .3 %
— 9.7 %
Farm Products.... 162.3
165.8
191.1
— 2.1
— 15.1
F oods ................... 160.6
161.3
189.5
— 0.4
— 15.3
Other ................... 145.1
145.0
153.0
+ 0.1
— 5.2
R E T A IL F O O D P R IC E S
Bureau o f L abor
A u g. 15,’ 49
Statistics
A u g. 15, July 15,
A u g . 15,
com pared with
(1 9 3 5 -3 9 = 1 0 0 )
1949
1949
1948
July 15,’ 49 A u g . 1 5/4 8
U . S. (51 cities)....
2 0 2 .6
201.7
216.6
4- 0 .4 %
— 6.5 %
St. L o u is ............
210.6
206.8
225.3
+ 1 .8
— 6.5
L ittle R o ck ..........
201.6
196.8
212.4
+ 2.4
— 5.1
L ouisville ............
192.4
189.4
207.4
+ 1.6
— 7.2
Memphis ............
214.3
217.1
227.1
— 1.3
— 5.6

Page 147

in August than in July— 5.8 per cent as compared
with 6.4 per cent— but a larger proportion than in
August, 1948 when the unemployment rate was 3.1
per cent.
The volume of unemployment compensation
claims declined with the increase in employment.
Insured unemployment dropped about 15 per cent
between July and August both in the nation and in
the Eighth District states. Decreases in the district
states ranged from 10 per cent in Arkansas and
Illinois to 25 per cent in Indiana.
The number of claimants in August was still con­
siderably larger than last year. In the district states
the 70 per cent increase over last year was some­
what smaller than the national average of 80 per
cent. In Illinois and Indiana, the only district states
with a larger than national increase, more than twice
as many persons as a year earlier were collecting
compensation checks in August. The increase was
about 50 per cent in Tennessee, Mississippi and
Indiana, about 25 per cent in Arkansas and about
10 per cent in Missouri.
One reason the increase in claims was relatively
smaller in the district states is that the peak claims
load here was reached earlier than in the nation.
The claims load in all district states except Ken­
tucky and Illinois peaked in February and March
as compared with July for the nation as a whole.
June was the high month in Kentucky, while Illinois
reached its peak in July.
INDUSTRY

Industrial activity in the district in August was
at a slightly higher level than in July. The increase
reflects in part the longer work month in August
as well as some seasonal factors. Total manu­
facturing activity increased over July as did pro­
duction in the district’s coal and crude oil industries.
C O N S U M P T IO N O F E L E C T R IC IT Y
A ugust, 1949
A u g.,
A u g .,
N o. of
July,
com pared with
1948
1949
1949
(K .W .H .
Custom July,’ 49
A u g .,’48
K .W .H .
K .W .H . K .W .H .
in th o u s .)
ers*
— 1.2 %
+ 3.9%
9,094
8,753
9,201
Evansville .... 40
— 7.8
+ 1.9
5,065
5.159
5,596
L ittle R ock.. 35
— 1.3
+ 3.0
70,471
71,385
68,441
L ouisville .... 80
— 3.5
+ 53.2
5,129
3,347
5,315
M em phis ...... 31
— 20.9
— 1 1 .0
4,672
5,259
4.160
Pine B lu ff.... 26
+ 4.7
+ 11.5
89,593
80,369
85,594 R
St. L ou is......139
+ 7.3%
+ 1 .0 %
181,819 R
T otals ..... 351
183,606
171,178
* Selected industrial custom ers.
R — Revised.
L O A D S I N T E R C H A N G E D F O R 25 R A I L R O A D S A T ST. L O U I S
First N ’ ne Days
A u g ., ’49 July, ’49 A u g ., '48 Sept., ’ 49 Sept., ’ 48 8 mos. ’49 8 mos. ’ 48
105,285
102,544
118,930
28,921
32,711
837,984
961,605
S ou rce: Term inal R ailroad 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
A ugu st, 1949
compared with
A u g .,
A u g.,
July,
A ug.,
( I n thousands
July,
1949
1948
1949
1948
1949
o f bbls.)
72.6
82.2
Arkansas ................ 73.1
+ 1%
— 11%
178.6
177.9
+ 1
+ 2
Illinois .................... 181.9
+ 28
26.9
21.4
+ 2
Indiana .................. 27.4
— 9
— 1
K entucky .............. 23.0
23.3
25.2
- 0 -%
Total .................. 305.4
301.4
306.7
+ 1%

Page 148




Construction contracts awarded in August increased
over the July volume, and on-site construction
activity remained high.
Total electric power consumption by industries
in the district’s leading manufacturing centers in
August reached a peak for the year. Total con­
sumption was 7 per cent larger than in July and
1 per cent larger than in August, 1948, with in­
creases over July shown in four of the six reporting
cities. The largest gain, 53 per cent, was registered
in Memphis whereas there were decreases in Pine
Bluff and Little Rock. However, the gain in Mem­
phis largely reflects an increase from an unusually
low level in July. On a working day basis, con­
sumption in August, declining in each of the cities
except Memphis, was off 7 per cent from July for
the district as a whole. Relative to last year, slight
decreases in Memphis, Louisville, Evansville, and a
considerable decline in Pine Bluff were offset by
increases in consumption by industries in Little
Rock and St. Louis.
Manufacturing— Manufacturing output in August
in nearly all lines was larger than in the previous
month. Increases over July in aggregate output
were indicated in production of automobiles, beer,
chemicals, electric manufactures, food and kindred
products, iron and steel, lumber, machinery, metals
and metal products, rubber products, shoes, stone,
clay and glass products and transportation equip­
ment. In some parts of the district production of
food and kindred products and textiles was off
slightly.
Steel— The basic steel industry in the St. Louis
area in August operated at 71 per cent of capacity.
This was 7 points higher than in July and 3 points
above the rate in August, 1948. Operations during
the last three weeks of August were at a very high
level. According to trade reports demand in this
area continues to increase, being particularly good
at this time in certain lines such as roofing and
stovemaking. It is also reported that the backlog
of pig iron orders is at the highest level since April
and if continued may lead to a pick-up in pig iron
production. During July and August output was
held at a 500 ton per day rate— one-half of capacity.
Lumber— Basic lumber output in the district in
August increased considerably over July. While
production remained lower than year ago levels, the
decrease was less than in previous months. The
lumber market has continued to improve and pros­
pects for the fall appear good, particularly in the
softwood lines. Hardwood buying by furniture
makers has improved but is still not heavy. At a
recent furniture show fall buying was termed

“highly satisfactory”. Oak flooring continues to
move rapidly.
Reporting southern hardwood producers operated
at 71 per cent of capacity in August compared with
62 per cent in July and 103 per cent in August, 1948.
Southern pine operations in August were 8 per cent
higher than in July but 3 per cent lower than a year
ago.
Meat Packing— Meat packing operations in the
St. Louis area in August increased slightly from
the low point reached in July and were considerably
higher than in August, 1948, which was the low
month for last year. In August 376,000 animals were
slaughtered under Federal inspection compared with
355,000 in July and 310,000 a year ago. Killings of
cattle were 18 per cent higher than in July whereas
only slight gains were shown in hog, sheep and calf
slaughter. The year-to-year increase was largely
due to hog slaughter, which increased 55 per cent.
Whiskey— At the end of August, 18 of Kentucky’s
63 distilleries were in operation. This was three
more than a month ago and one less than a year
ago. In July production of whiskey in Kentucky
totaled only 2.8 million tax gallons. Although this
is in part a seasonal decline, it is less than half of
last year’s July output and about 1.5 million gallons
less than the June output. While whiskey stocks
are high and large quantities of bonded whiskey are
coming of age, only two major companies have
announced price reductions.
Shoe Production— Shoe output in the district
showed a year-to-year gain in July for the first time
in 1949, and preliminary reports indicate that output
in August also will exceed that of the previous year.
Several large companies have announced an all-time
high output for August. Increased orders received
by manufacturers in the last few months apparently
reflect the rebuilding of retail inventories for fall
sales. So far consumer buying has not shown the
same increase.
According to preliminary estimates production in
the district in July totaled 6.9 million pairs or about
3 per cent more than in July, 1948 and only one
per cent below the June total.
Oil
and Coal— Daily average crude oil production
in the district was up about 1 per cent in August
and equalled that in August a year ago. Slight gains
over July occurred in Arkansas, Illinois and Indiana
which offset a 1 per cent decline in Kentucky. On a
year-to-year basis substantial decreases occurred in
Arkansas and Kentucky which were offset by a 2
per cent increase in Illinois and a 28 per cent
increase in Indiana.
Coal production in the district states in August
totaled 7.1 million tons. This represented an in­




crease of 29 per cent from July when operations were
curtailed by the short work week during part of the
month and by vacations in the industry. August
was the first complete month of the three-day week.
Output was 31 per cent less than in August, 1948.
Year-to-year decreases ranged from 35 per cent in
Illinois to 20 per cent in western Kentucky. Com­
pared with production in July substantial increases
were registered in each state with Arkansas output
more than doubling the unusually low July pro­
duction.
The increase in the district during the month was
larger than seasonal. Daily average production rose
from 100 per cent of 1935-39 in July to 107 per cent
in August. Last year the adjusted index was at
162 per cent of 1935-39.
Construction— The total value of construction
authorized by building permits awarded in the
major district cities in August totaled $10.5 million,
a gain of 33 per cent over July and of 44 per cent
over a year ago. Awards increased in each reporting
city except Louisville during the month and except
in Little Rock were at a higher level than in August,
1948.
New construction increased 31 per cent in these
cities in August because of gains in nonresidential
awards which were more than double the July total
as against a 6 per cent decline in residential permits.
Total new construction authorized amounted to
$9.4 million which was evenly divided between resi­
dential and nonresidential building. Residential
awards were off in St. Louis, Louisville and Mem­
phis. These declines more than offset gains reported
in Little Rock and Evansville.
Construction contracts awarded in the Eighth
District were up 43 per cent in August and were
CONSTRUCTION
B U I L D I N G P E R M IT S
M on th o f A ugust
N ew Construction
N um ber
Cost
(C ost in
1949 1948 1949
1948
_____
thousands)
Evansville ..............
75
33 $ 640 $ 15S
Little R o ck ..........
90
86
584
559
Louisville .............. 164
230 1,685 1,360
Memphis ................. 2,480
681 4,692 2,407
St. L ouis .............. 271
334 1,773 1,742
A ugust Totals....3,080 1,364 $9,374 $6,223
July Totals ........1,863 1,527 $7,161 $6,804

Repairs, etc.
N um ber
Cost
1948
1949 1948 1949
131 $ 142 $; 89
96
128
278
274
224
69
86
90
111
207
223
160
186
325
304
532
457
971*
977 $1 ,094 $1,070
958
948 $ 709 $1,398

WHOLESALING
Line o f Com m odities
Data furnished by
Bureau o f Census,
U . S. Dept, o f Com m erce*
Drugs and Chem icals..........
Hardware ..............................
T obacco and its Products..

N et Sales
Stocks
A u g . 31, 1949
A u g ., 1949
com pared with
com pared with
July, 1949
A u g ., 1948 A u g . 31, 1948
— 15%
+ 12%
+ 4%
— 2
+ 70
— 3
+ 12
— 5
+ 11
+ 6
— 10
— 8
— 1
+ 1
— 8
+ 16
— 15
— 9%
+29%
— 6%

**Total A ll L ines.................
* Preliminary.
** Includes certain items n ot listed above.

Page 149

RETAIL TRADE
D E PA R TM E N T STORES
N et Sales
8

A ugu st, 1949
com pared with
July, ’ 49 A u g., ’ 48

Stocks
Stock
on Hand
Turnover
m os. ’ 49
to same A u g.31 ,’49
Jan. 1 to
period com p, with A ugust 31,
1948 Aug. 31,’ 48 1949
1948

8 th F . R . D istrict......+ 17%
— 4%
— 5%
— 10%
2.55
2.53
Ft. Sm ith, A rk ........... + 16
— 2
+ 2
— 22
2.61
2.37
L ittle R o d e , A rk ......... + 24
— 6
— 3
— 6
2 .6 6
2.71
Q u in cy, 111.................... + 10
— 3
— 5
— 5
2.19
2.29
— 10
— 12
— 24
2.31
2.35
E vansville, In d ............+ 11
Louisville, K y .............+ 16
— 3
— 4
—- 4
2.77
2.83
St. L ou is A rea 1 ........+ 19
— 4
— 6
— 13
2.53
2.52
St. L ou is, M o ......... + 21
— 4
— 7
— 13
2.54
2.54
E . St. Louis, 111.....— 3
— 2
— 4
.........................................
Springfield, M o ............+ 2
— 11
— 15
— 9
2.17
2.29
M em phis, T enn ........... + 18
— 3
— 1
— 5
2.64
2.50
*A11 other cities.......... + 5
— 6
— 4
— 12
2.05
2.03
*
E l D orad o, Fayetteville, Pine B luff, A r k .; Harrisburg, M t. Vernon,
111.: N ew A lbany, V incennes, I n d .; Danville, Hopkinsville, Mayfield,
Paducah, K y . ; Chillicothe, M o . ; Greenville, M is s .; and Jackson, Tenn.
1
Includes St. L ouis, M o .; A lton , Belleville, and East St. Louis, 111.
Outstanding orders o f reporting stores at the end of A ugu st, 1949,
were 24 per cent less than on the corresponding date a year ago.
Percentage of accounts and notes receivable outstanding A ugust 1 ,
1949, collected during A u gu st, by cities:
Instalm ent E x . In st.
Instalment E x. Inst.
A ccou n ts A ccou n ts
A ccoun ts Accounts
F ort S m it h ...............%
48%
Q u in cy ............. ... 21%
56%
...... 18
47
St. L ou is...............22
57
L ittle R o c k
Louisville ........ 23
48
O ther cities.......... 15
58
Mem phis ........ 23
42
8 th F. R . Dist.
21
52

IN D E X E S

OF

DEPARTM ENT
8 th

STORE

SALES

AND

STOCKS

Federal Reserve District

A u g.,
1949
Sales (daily average), u n ad ju sted 2..................... 280
Sales (daily average), seasonally adjusted 2.... 326
Stocks, unadjusted 3 ................................................ 287
Stocks, seasonally adjusted 3 ................................ 264
2 D aily A verage 1 9 3 5 -3 9 = 1 0 0 .
3 E nd o f M on th A verage 1 9 3 5 -3 9 = 1 0 0 .

July,
1949
254
325
278
268

June,
1949
283
314
280
280

A ug.,
1948
305
354
318
292

S P E C IA L T Y STO R ES
Stocks
on H and

N et Sales
8

A ugu st, 1949
com pared with
J uly,*49 A u g .,’ 48

Stock
Turnover

m os. ’49
to same A u g. 31,’49
Jan. 1 to
period com p, with
A ugu st 31,
1948
A u g. 31,’ 48 1949
1948

M en’ s F urnish in gs..— 12%
— 12%
— 3%
— 10%
1.71
1.77
B oots and Shoes.... + 8
— 2
— 2
+ 8
2.84
2.85
Percentage of accounts and notes receivable outstanding A ugust 1 ,
1949, collected during A u g u st:
B oots and Shoes................... 45%
M en’ s Furnishings................. 52%
Trading days : A ugust, 1949— 27 ; July, 1949— 25 ; A ugust, 1948— 26.

RETAIL FURNITURE STORES*
N et Sales
A ugu st, 1949
com pared with
July,*49 A u g .,’48

Inventories
A ugust, 1949
R atio of
compared with
Collections
July,’ 49 A u g .,’ 48 A u g.,’49 A u g .,*48

8 th

_
D ist. T o t a l 1 + 2 2 %
22%
26%
— 2%
— 16%
1%
— 8
30
33
+ 1
St. Louis A rea 2 + 3 4
— 15
— 8
St. L o u is .......... + 34
33
+ 1
— 15
30
—
1
18
+ 1
— 20
16
Louisville A rea 3 + 1 5
- 0 — 21
16
L ouisville ........+ 16
+ 1
17
—
+ 6
5
19
M em phis ........... .— 10
14
- 0 —
+ 23
4
24
L ittle R o c k ..........+ 24
— 6
19
1 In addition to follow in g cities, includes stores in Blytheville, F ort
Smith and Pine B lu ff, A rk a n sas; H opkinsville, O w ensboro, K en tu ck y;
G reenville, G reenw ood, M ississip p i; H annibal and Springfield, M issouri;
and E vansville, Indiana.
2 Includes St. L ou is, M is so u ri; and A lton , Illinois.
3 Includes Louisville, K e n tu ck y ; and N ew A lbany, Indiana.
* 39 stores reporting.

P E R C E N T A G E D I S T R IB U T IO N O F F U R N IT U R E SA L E S
A u g ., ’ 49
Cash Sales......................................... 12%
Credit Sales.................................... 8 8
T otal Sales................................... 100%

Page 150




July, *49
12%
88

100%

A u g., *48
14%
86
100%

60 per cent higher than a year ago. They were
valued at $89.8 million as compared with $62.6
million in July and $56 million in August, 1948.
Nonresidential construction accounted for most of
the increase in each case, totaling 62 per cent more
than in July and 86 per cent more than last August.
Residential contracts were slightly above the July
total and were about 12 per cent higher than in
August of last year,
TRADE

In August consumers in the Eighth District in­
creased their expenditures in department stores
more than seasonally. Total purchases were up 17
per cent during the month and daily average volume,
after allowance for seasonal influences, climbed to
326 per cent of 1935-1939. The increase in the
adjusted volume was not spectacular, but it marked
the second consecutive month in which sales in­
creased more than seasonally. In June, daily volume
was 314 per cent of that in 1935-1939; in July it
averaged 324 per cent. However, expenditures con­
tinued below last year’s volume— 4 per cent in terms
of total dollar outlays and 8 per cent on a daily
average basis, seasonally adjusted. As in previous
months this year, with the exception of February,
adjusted sales were larger than in 1947. In August,
1947 daily sales averaged 307 per cent of 1935-1939.
In the first eight months of 1949 dollar volume
totaled 5 per cent less than in the same period last
year. This rate of decline apparently continued in
September, judging by preliminary reports through
the middle of the month. Of the major trading
centers in the district, Fort Smith with a gain of
2 per cent showed the only year-to-date increase in
sales volume. In Memphis, Louisville and Little
Rock volume so far totals less than last year but by
a smaller percentage than that for the district as a
whole. In St. Louis, Evansville and Springfield
dollar sales have declined more than in the district
as a whole.
St. Louis stores reporting sales by departments
show few increases relative to last August in any
departments. Those increases which did occur were
largely in the minor departments. In the upstairs
store there were no volume gains in the major divi­
sions. However, sales of housefurnishings and small
wares were equal to last year’s volume. The largest
year-to-year decline occurred in the piece goods
and miscellaneous departments. Television sales
volume again showed the largest percentage gain,
totaling almost six times the volume of last year.
The silks, velvets and synthetic piece goods depart­
ment experienced the greatest decline with sales

volumes more than one-third less than in August,
1948.
Basement store divisions showed a relatively
better sales experience. Downstairs men’s and
boys’ wear gained 13 per cent over last August as
compared with a 14 per cent decline in the com­
parable division upstairs. Basement store shoe sales
were up 10 per cent in contrast to a decline in the
main store of 4 per cent in sales of women’s and
children’s shoes and 11 per cent in men’s and boys’
shoes.
The value of inventories held by reporting stores
on August 31 was 7 per cent larger than on July 31
but was 10 per cent less than on August 31, 1948.
The increase in the dollar value of inventories
during the month was slightly more than seasonal
but stbcks continued below the level of a year ago.
Seasonally adjusted inventories on August 31 were
264 per cent of the 1935-1939 average as against
268 per cent on July 31 and 292 per cent on August
31, 1948.
Department stores continued their cautious buy­
ing policy, although in some lines of currently scarce
merchandise orders are being placed to cover ex­
pected requirements in the early part of 1950. Out­
standing orders increased 4 per cent between July
and August— a smaller increase than last year but
larger than in August, 1947. In earlier years, orders
declined in August. Volume this year was off 24
per cent from that outstanding at the end of
August, 1948.
BANKING

During September commercial, industrial and
agricultural loans at the weekly reporting member
banks in the Eighth District extended their third
quarter gains, but remained substantially below the
level of the comparable period in 1948. Real estate
and “other” loans also continued to gain in Septem­
ber at the major city banks, and both of these
classes of loans were well above their totals a
year ago.
Business loans at reporting member banks in
this district normally show a fairly strong seasonal
movement— down in the first half of a year and up
in the second half. The movement this year differs
from the more typical behavior in that the upturn
came appreciably later and on its face has not been
as strong. The weaker upturn in 1949 apparently
reflects in large part the effect of Commodity Credit
Corporation price support loans which are included
in the “commercial, industrial and agricultural”
loan category when reported. While lack of avail­
able statistics, except at call dates, permits no




BANKING
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
Sept. 21,
Aug. 24,
Sept. 22,
(In thousands of dollars)
1949
1949
1948
Industrial advances under Sec. 13b........ $ ............... $ ..............
$ ..............
Other advances and rediscounts......... .......
5,804 +
556 — 14,112
U . S. Securities..............................................
927,041 — 35,086 — 252,385
Total earning assets..................................$ 932,845 $— 34,530 $— 266,497
3,044 $ + 97,527
Total reserves .......... ....................................... $ 756,618 $ +
Total deposits ................. ...............................
620,468 — 25,497 — 143,905
F. R . notes in circulation.......................... 1,067,972 +
2,920 — 23,236
Industrial commitments under Sec. 13b..$ ............... $ ................. $ .....
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
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
E IG H T H F E D E R A L R E S E R V E D IS T R IC T
(In Thousands of Dollars)
34 Banks Reporting
Sept. 21,
Aug. 24,
Assets
1949
1949
Gross commercial, industrial, and
a g r ic u lt u r a l loans and open
$ + 19,806
market paper ................. ................... $ 470,739
Gross loans to brokers and dealers
in securities ....................... ...............
6,651
+
77
Gross loans to others to purchase
and carry securities.......... .................
20,987
+
563
Gross real estate loans................. .
178,806
+
4,854
3,815
+
2,212
Gross loans to banks...........................
Gross other loans (largely con*
Sumer credit loans)..........................
214,593
+
8,083
895,591
+ 35,595
Total --------------------------- -------------- Iyess reserve for losses................
9,544
+
409
$ + 35,186
Net total loans....... .................. .......... $ 886,047
Treasury bills .......... ................
52,692
— 33,408
Certificates of indebtedness.................
249,223
+
8,910
Treasury notes
.......... ............ ..
44,411
+
2,879
U . S. bonds and guaranteed obliga­
778,171
+
53
tions ---------------------------------------------Other securities ................................
163,404
+
4,467
Total investments ........................J$l,287,901*
$— 17,099
Cash assets ...................... ...... ................
706,726
+ 16,941
25,314
—
780
Other assets .......... .......................... .
Total assets ---------------------------------- $2,905,988
$ + 34,248
Inabilities
Demand deposits of individuals,
partnerships, and corporations......$1,456,630
573,146
Interbank deposits ...............................
U . S. Government deposits.................
52,105
Other deposits ......................... ..............
127,356
Total demand deposits......................$2,209,237
485,560
Time deposits .......... ............................
Borrowings ..............................................
9,250
Other liabilities .....................................
21,677
Total capital accounts..........................
180,264
Total liabilities and capital ac­
counts ..............................................$2,905,988

Sept. 22,
1948
$— 94,931
+

60

— 8,349
+ 24,753
—
694
+ 15,593
— 63,568
+
2,275
$— 65,843
+
9,953
+12)8,738
— 55,169
+ 111,111
+ 19,714
$ + 2 14 ,3 47
— 51,527
+
906
$ + 97,883

$+
3,879
+ 22,099
+
7,970
— 6,188
$ + 27,760
—
823
+
3,300
+
3,281
+
730

$ + 15,168
+ 51,881
+
7,630
+
299
$ + 74,978
+ 10,784
+
1,690
+
4,191
+
6,240

$+

$+

34,248

97,883

’$— 46,706
$ + 24,179
•Demand deposits, adjusted......... -...$1,371,608
*
Other than interbank and government demand deposits, less cash
items on hand or in process of collection.

DEBITS TO DEPOSIT ACCOUNTS
A u g ., 1949
A u g .,
(I n thousands
A u g .,
July,
com pared with
1949
o f dollars)
1949
1948
July, ’49 A u g ., '48
23,355 $
20,806 $
E l D orado, A rk .....$
22,712 — 1 1 % — 8 %
36,749
F ort Smith, Ark...
35,781
37,013
+ 3
— 1
5,777
5,544
H elena, A rk ............
5,744 + 4
+ 1
108,766
108,795
L ittle R o ck , A rk...
111,592 - 0 — 3
22,248
24,093
Pine B luff, A rk .....
19,711 — 8
+ 13
9,786
Texarkana, A rk.*..
9,505
— 4
9,860 — 3
22,420
21,647
— 3
A lton, 111.................
23,151
+ 4
E .S t.L .-N a t.S .Y .,Ill. 113,014
105,403
116,719 + 7
— 3
Quincy, 111.............
26,540
27,398
27,759 — 3
— 4
Evansville, In d ......
117,919
118,525
109,037 — 1
+ 8
441,402
479,288
+ 2
468,502 + 9
30,147
26,299
Ow ensboro, K y .....
+ 15
27,258
+ 11
Paducah, K y ..........
12,483
12,605
— 4
13,177 + 1
Greenville, M iss.....
15,372
15,771
14,108 — 3
+ 9
Cape Girardeau, M o.
11,701
11,184
— 3
12,041 + 5
7,808
7,420
H annibal, M o ...... .
7,320 + 5
+ 7
52,087
75,505 — 10
Jefferson C ity, M o.
47,014
— 38
St. Louis. M o ....... 1,453,767
1,393,771
1,452,445 + 4
- 0 — 3
Sedalia, M o ........ ....
9,546
9,004
9,885 + 6
51,207
Springnield, M o .....
54,769
58,899 + 7
— 7
15,439
Jackson, T enn........
16,534
15,672 + 7
+ 6
426,315
399,077
407,786 + 7
M emphis, T enn......
+ 5
T otals .................$3,048,610 $2,915,471 $3,045,896 + 53& - 0 - %
* These figures are fo r Texarkana. Arkansas only.
Total debits for
banks in Texarkana, Texas-T exarkana, including banks in the E leventh
District, amounted to $21,988.

Page 151

precise adjustment for CCC loans, a rough adjust­
ment seems to indicate that the actual business
loans are behaving in typical seasonal fashion
nowadays— although as noted the upturn came later
this year, and from a lower level than held in 1948.
Particularly in the southern part of the district,
CCC loans on cotton account for a substantial
volume of commercial, industrial and agricultural
loans. Depending on the price situation, cotton
flows into the loan after it is picked, ginned and
compressed and comes out as it can be sold advan­
tageously— in other words at a price better than
the loan value plus charges. At the end of the
crop year such cotton as remains in the loan has
to be taken out or goes over to the CCC. In either
case the loan is liquidated.
Much of the 1948 cotton crop went into the loan
and at the final settlement date a substantial amount
remained there. These loans were liquidated and
pulled down loan totals at that time (August 1).
The crop is late this year and not much has gone
into loans held by district banks as yet. Conse­
quently loan totals over the third quarter this year
are not exactly comparable with those last year.
In summary then, when adjusted for the irregular
effect of CCC loans, business loans at Eighth Dis­
trict banks in August and September seem to be
showing the regular seasonal movement—not much
different from 1948 or 1947 in direction or magni­
tude. At the same time their volume is below 1948
since the upturn started from a lower level.
AGRICULTURE

As a result of unfavorable weather and increased
weevil infestation, prospects for the cotton crop in
the Eighth District states declined during the month
of August; the estimate as of September 1 was for
a crop one-fourth smaller than that of 1948. In
Mississippi the crop was expected to be 38 per cent
less, and the lint yield per acre 42 per cent less than
in 1948. Production in Arkansas is estimated at
1,600,000 bales, 382,000 bales less than last year.
This is a reduction of 19 per cent in production and
25 per cent in yield.
Thus the district cotton crop will be substantially
less than in 1948; with a lower support price in
prospect, income from cotton will decline even more.
The national crop plus carryover, however, will be
substantialy larger than a year ago, so that cotton
acreage quotas are almost certain and marketing
quotas are likely for the 1950 crop.
The national estimate was for a crop of 14,943,000
bales— 138,000 bales more than estimated on August
1, and 75,000 bales more than the total produced in
1948. The increase was accounted for largely by




the estimated 550,000 bale increase in the size of
the Texas crop. This increase would have raised the
total crop in prospect even higher had there not
been decreases in South Carolina and central states,
including decreases of 150,000 bales in Mississippi,
50,000 bales in Arkansas, and 25,000 bales in Ten­
nessee.
The index of prices received by farmers dropped
four paints to 245 from July 15 to August 15 (191014=100). The index of prices paid was 243, one
point lower than a month earlier. Lower prices for
meat animals, cotton and fruits caused the decline,
partially offset by higher prices for cottonseed, soy­
beans and eggs. The parity ratio declined to 101,
the lowest since December, 1941.
Cash farm receipts for the first three quarters of
1949 were estimated to be 11 per cent less than in
the same period of 1948. Receipts in August and
September were estimated to be 18 per cent less
than a year earlier. For the first seven months of
1949, farm income in three district states, Missis­
sippi, Arkansas and Kentucky, was running ahead
of the 1948 income. As the 1949 cotton and tobacco
crops are harvested, however, the 1949 income prob­
ably will fall below that of 1948.
The decline in farm income is not evenly spread
among producers. Income from food grains declined
35 per cent, but income from feed grains rose 10 per
cent for the first nine months. Income from meat
animals and dairy products went down 15 and 17 per
cent, respectively, but income from poultry and eggs
went down only 2 per cent, compared with the first
nine months of 1948. In the same period in 1949,
farmers have received 30 per cent less for oilbearing
crops, 15 per cent less for vegetables, 7 per cent less
for tobacco and about the same amount for fruits.
AGRICULTURE
C A SH F A R M IN C O M E
July, 1949
7 m os. total Jan. to July
com pared with
1949
( I n thousands
July,
June,
July,
com pared with
o f dollars)
1949
1949
1948
1949
1948^
1947
— 12%
$ 221,163
+28%
+30%
A rkansas ............ $ 22,900 + 1 1 %
Illinois ............... 146,187 + 1 2
— 24
942,425 — 7
— 6
Indiana ............... 80,289 + 2 0
— 26
487,012 — 15
— 10
K entucky .......... 37,934 + 2 2
— 5
266,950 + 3
— 13
M ississippi ........ 17,699 + 8
0 239,064 + 4 4
+47
M issouri ............
88,414 + 2 3
— 31
494,882 — 14
— 7
Tennessee .......... 30,605 + 9
— 8
209,508 — 9
— 8
T otals

............ $424,028

+16%

— 2 2%

$2,861,004

— 4%

— 3%

R E C E IP T S A N D S H IP M E N T S A T N A T I O N A L S T O C K Y A R D S
____________ Receipts__________
A u g ., 1949
A u g.,
com pared with
1P40
J u l y ,’49 A u g ., 48
Cattle and
calves
........154,238
H o g s ...............218,762
Sheep ............... 87,258
Totals .......... 460,258

+35%
+ 9
+22
+19%

+ 7%
+40
— 8
+17%

_______ Shipments__________
A u g ., 1949
com pared with
July, ’ 49 A u g ., *48

A u g.,
1949

58,256
81,315
35,750
175,321

+51%
— 8
+17
% 11%

+10%
+52
— 10
+20%