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Monthly Review L O U I S R E S E R V E Volume X X X I V c lia litL OCTOBER, 1952 oJ& idtrict INCOME IN 195 1 Number 10 to district residents amounted to $12.5 billion, or $1,180 per capita, in 1951, as production and prices moved up under the im petus of expanding demand. Total district income increased 32 per cent since 1947, reflecting a four-year period of growth in the civilian economy, overshadowed by a new defense effort. Over this same period, district per capita buying power in real terms advanced 7 per cent despite higher taxes and price increases. Agriculture provided a somewhat smaller share of total district income but retained its importance as a leading source of district exports. Manufac turing showed the largest expansion of all district industries, especially in defense-connected lines. Government payments reflected large increases in Federal employment. Trade and service income benefited from high levels of economic activity. Per capita income presented a wide variation among district areas, ranging from over $2,000 in St* Louis to less than $500 in some of the hill sections Growth of total income since 1947 fol lowed a more uniform pattern, with most areas approximating the national rate of expansion Here, too, however, the rate of growth varied, ranging from less than 10 per cent in some areas to more than 100 per cent in parts of western Kentucky. Closer study of these variations empha sizes the role of the local community in regional and national development. . . $ Income payments to district residents amounted to $12.5 billion, or $1,180 per capita, in 1951, . . . PAYM EN TS to individuals in 1951 INCOME increased throughout the United States as pro duction and prices moved up under the impetus of expanding demand. Total income payments in the nation rose from $218 billion in 1950 to $243 billion in 1951— an increase of 12 per cent. Eighth District income rose from $11 billion to $12.5 billion— an increase of 13 per cent. An upsurge in farm income and defense activities was the primary factor in the income expansion. For the country as a whole, per capita income (total income payments divided by total popu lation) expanded 10 per cent from 1950 to 1951 and reached the record level of $1,584. Growth in per capita income usually lags behind total income growth because of concurrent increases in popu lation. District per capita income increased to $1,180 or 74 per cent of the national average, as compared with 73 per cent in 1950. This district gain continues the tendency, evident over the past decade, for district per capita income to catch up with the national average. It reflects not only above-nationalaverage gains in total income but also below-average gains in population. In 1951, 10.6 million people lived in the Eighth District, 0.9 per cent more than in 1950. This compares with a population gain of 1.4 per cent for the country as a whole. As the birth rate in the Eighth District is higher than in the na tion, the smaller population growth means that, on balance, people still leave the Eighth District in their search for economic opportunities. . . . as production and prices moved up under the impetus of expanding demand• Higher 1951 income payments in the United States reflected both the higher level of production HIS A R T IC L E continues the series of re ports on Eighth District income payments which have been published annually in the October issue of the M o n t h l y R e v i e w . It presents estimates of 1951 total and per cap ita income payments for 99 district income areas. These small areas have been redefined to correspond more closely with the state eco nomic areas used by the Bureau of Census. Eighth District income estimates are based on state income payments data developed by the National Income Division of the United States Department of Commerce. The Bank wishes to acknowledge the help of many Federal and State agencies in the preparation of these estimates. T Page 132 and higher prices. Industrial production was 10 per cent above 1950. Farm production was about equal to the previous high in 1949. Marketings of live stock and products were the highest since the end of the war. The tobacco crop was the largest in several years. Industrial activity in the Eighth District during 1951 kept up with the national trend. Farm pro duction, though larger than in 1950 and an important factor in raising total district income, was held down somewhat as a result of floods and adverse weather. District cotton output showed a gain of 21 per cent, far short of the 53 per cent increase recorded for the nation. Corn production was off 8 per cent, compared with a 4 per cent decline nationally. Prices of all commodities at wholesale, which had advanced rapidly in the rush of buying after June, 1950, were in 1951 at a level 11 per cent above the preceding year. Consumer prices had also risen at a rapid rate following the Korean outbreak and were in 1951 about 8 per cent above the 1950 level. Higher income, therefore, stemmed from higher prices as well as from gains in real output; any evaluation of 1951 income data must distinguish these two factors. Demand for 1951 district output expanded in most sectors of the economy. Federal expenditures for national defense and related purposes more than doubled in 1951 though the direct impact of pro curement contracts on this region’s industries was somewhat less pronounced than was true for the nation as a whole. In non-Federal sectors, both expansive and contractive forces were at work. Expanding influences were the record expenditures for producers' durable equipment as well as in creased outlays for private industrial building and defense construction. Moderating influences, espe cially in the latter part of the year, were large con sumer savings, higher income taxes, changes in the business inventory situation, as well as smaller private outlays for residential construction. Under lying this reduced urgency of consumer and busi ness demand was growing confidence in the nation’s productive capacity to meet military and civilian needs plus an expectation of more stable prices. All these forces combined to mark 1951 as a year of transition from strong inflationary trends to rela tive economic stability at high levels of activity. Demand for district output was made effective by funds originating in current income, in past savings, and in credit extension. Current income in 1951 was, as usual, the largest single source of funds to buy the goods and services produced by the income recipients of the district, in a self-perpetuating flow of money and income between individuals, areas, and industries. As outlined in the May, 1952, issue of this R e v i e w , borrowing from banks and other lenders supplied vital additions to current income as a source of district funds, highlighting the important role of financial institutions, particu larly the commercial banks, in the process of creat ing income. T ota l d is tr ict in c o m e in c r e a s e d 32 p e r c e n t s i n c e 19479 . . . Income data for 1951 present a most impressive demonstration of the growth of our economy. In 1947, which can be taken as a year fully reflecting postwar demobilization, Gross National Product, at constant (1951) prices, was 50 per cent above 1939. Thereafter, up to Korea, there was further expansion, despite the 1949 recession. And since Korea— with a defense program far short of total war—we have reached a new high in national pro duction of goods and services. The most striking fact is that Gross National Product in 1951, in real terms at constant prices (1951 price level) exceeded even that of the peak year of 1944 by nearly 13 billion dollars. Clearly this country has grown in economic size and strength. In dollar terms, Eighth District income increased 32 per cent since 1947, compared with 31 per cent for the country as a whole. The apparent similarity of district and national movements covers up wide differences in the rate of growth within the Eighth District. Kentucky surged ahead by 43 per cent while Mississippi lagged behind with a growth of only 20 per cent. These variations are even more striking for smaller areas (map, page 141). In any comparison of growth rates over time, the selection of a single year as the base may be somewhat misleading for areas depending largely on a single crop or industry. Thus, Mississippi could show a more favorable rate of growth if a poor cotton year would have been selected instead of 1947 as the base year. The data do show beyond doubt, however, significant variations in the growth rate of individual states, during the war and in the postwar period. During the war, the entire midSouth benefited from marked improvements in farm prices and large Federal expenditures. In the postwar years, the movements have been much more selective, showing the most consistent gains of total income in areas of rapid industrialization. • . • r e fle c t i n g a fo u r - y e a r p e r io d o f g r o w th in t h e civ ilia n e c o n o m y 9 o v e r s h a d o w e d b y a n ew d e f e n s e e ffo r t . Over this four-year period, national output has increased at an impressive rate. This national growth has been accomplished with the help of Eighth District producers, but it also emphasizes that “ it takes all the running,, each area “ can do, to keep in the same place” as far as its relative position to the national economy is concerned. While the country raised civilian output to record levels and added substantially to its capital equip ment, it more than doubled its defense expenditures. Federal outlays for national security in 1951 were 178 per cent above 1947. The impact of this mobili zation effort on the district economy has been described in the July, 1952, issue of this R e v i e w . Its most dramatic aspect is the district’s role in the expansion of atomic energy which has led to a more than twofold increase of income payments in the area of Paducah. O v er th is sa m e p e r io d 9 d is tr ict p e r ca p ita b u y in g p o w e r in r e a l te r m s a d v a n ce d 7 p e r c e n t . . . A national population gain of 7 per cent, a record expansion of new plant and equipment, a more than twofold increase in the flow of arms, and a large amount of foreign aid, all were accomplished with out lowering living standards. Per capita personal income in current dollars advanced 25 per cent from 1947 to 1951, and real disposable (after taxes) in come advanced 7 per cent. • . . d e s p it e h ig h e r tax es . . . Per capita buying power in real terms, or per cap ita real disposable income, is growing at a slower rate than total dollar income for several reasons. First, population is increasing at a fast rate so that the total national income must be shared by more people. Second, taxes are higher. Individual in come taxes have increased 35 per cent over the last four years. This factor was of special importance in 1951 when personal income after taxes was rising at a much slower rate than income before taxes. 1951 INCOME PAYMENTS TO DISTRICT RESIDENTS A M O U N TE D TO $ 1 2 .5 BILLION, OR $ 1 ,1 8 0 PER CAPITA W a g es and Salaries (M illions of D o lla rs)...... Proprietors Incom e (M illions of D o lla rs)......... Property Incom e (M illions of D ollars).............. Other Incom e (M illions of D o lla r s ).................. Total Incom e (M illions of D o lla r s)....... . Per Capita Incom e (D o lla r s )............................ Percent of U . S. Per Capita Incom e........... United States $162,639 40,938 25,650 13,720 242,947 1,584 1 0 0% Eighth District $ 7,192 3,231 1,185 889 12,497 1,180 74% Arkansas $ 887 607 111 165 1,770 926 58% Illinois $ 927 422 251 110 1,710 1,281 81% Indiana $ 501 215 68 48 832 1,169 74% Kentucky $1,281 414 172 128 1,995 1,278 81% Mississippi $ 258 361 46 76 741 708 45% Missouri $2,691 958 453 280 4,382 1,443 91% Tennessee $ 647 254 84 82 1,067 1,082 68% Page 133 Total district income increased 32 per cent since 1947 . 1947 = 100 1948 109 113 115 116 108 109 116 114 103 A rk ansas 1ST R IO T — — KENTUC KY— — — 1949 106 106 105 103 106 108 92 110 101 1950 117 117 115 115 119 118 107 121 115 1951 131 132 129 127 134 143 120 134 129 M IS S IS S IP P I • — — • reflecting a four-year period of growth in the national economy. 1947 = 100 M eat Anim als.. Tobacco 1948 103 102 107 100 103 101 1949 94 91 96 85 86 91 1950 107 108 117 98 111 110 1951 117 124 133 122 111 109 103 104 101 113 101 98 90 104 108 96 109 112 104 119 105 113 107 105 139 118 104 91 99 110 101 95 92 97 97 104 100 96 100 108 101 102 97 101 110 104 104 99 100 124 113 96 158 126 102 94 122 109 84 143 137 103 94 113 100 75 134 85 104 97 131 103 73 122 130 113 108 117 Over this same period district buying power in real terms advanced 7 per cent. 1947 = 100 Per Capita In co m e: In current dollars before taxes.. 7*W--- ----19 4 7 REAL IN C O M E 1948 — *- 1949 DOLLAR 1950 1948 " 1949 ' 1950 1951 108 110 101 102 103 106 97 99 112 114 104 106 125 125 107 107 7§5 I N C O M E ----------- , . . and price increases. Third, prices are higher. The average American has paid part of the cost of defense mobilization through taxes, and he has paid part of the cost through inflation. Consumers’ prices increased 16 per cent from 1947 to 1951, lowering per capita buy ing power in real terms by about 14 per cent. Most of this inflation occurred in the early part of the period, when the pent-up postwar demand became effective, and again in the months following the outbreak of hostilities in Korea. During the latter Page 134 part of 1951, the major share of the defense burden was borne by higher taxes rather than price increases. It should be realized, of course, that these data represent averages and obscure the differential impact of inflation on personal income. Some in comes have increased faster than prices, while others have seriously lagged behind. Among the latter group, many fixed income recipients, such as pen sioners, may be worse off now than in 1947. Agriculture provided a somewhat smaller share of total district income | (Total 1 , Income * 1 io o ) 1 JP ijjj 1947 1951 | Total Income 1951 1947 United States. 100 100 100 D istrict.............. 100 100 100 Arkansas.......... 100 100 100 100 Indiana............. 100 K entucky......... 100 M ississippi...... 100 100 100 100 M issouri........... Tennessee......... 100 100 (T o ta l Incom e = 100) M anufacturing Government Payrolls Agriculture 1951 1947 8 10 16 18 28 25 13 12 13 15 12 17 46 40 12 12 17 14 1951 15 16 18 14 14 18 19 15 17 1947 15 15 17 14 13 16 17 15 16 1951 24 19 11 21 27 19 8 21 17 1947 23 17 10 19 24 18 7 20 14 Trade and Service 1947 1951 26 26 26 26 25 24 30 29 26 26 24 22 21 23 27 28 29 26 Unclassified 1951 1947 27 26 23 24 22 20 22 26 20 22 29 25 10 9 24 26 26 24 . . . but retained its importance as a leading source of district exports. (United States > 100) Total Income 1951 1947 TOTAL INCOME AGRICULTURE E 2 2 1947 United States. 100.00 D istrict.............. 5.14 .73 Arkansas.......... .70 Indiana.............. .34 Kentucky......... .82 Mississippi...... .31 1.80 M issouri........... Tennessee......... .44 Agriculture 1947 1951 100.00 100.00 9.33 10.79 100.00 5.10 .74 .73 .33 .75 .33 1.77 .45 2.38 1.19 .56 1.32 1.62 2.91 .81 2.11 .86 .51 1.33 1.58 2 .18 .76 (U n ited States— 1 00) Manufacturing Payrolls 1951 1947 100.00 100.00 3.97 3.78 .33 .31 .62 .60 .39 .35 .63 .58 .10 .10 1.59 1.57 .31 .27 Government 1951 1947 100.00 100.00 5.39 5.36 .85 .87 .72 .64 .32 .30 .81 .97 .39 .40 1.72 1.76 .50 .50 Trade and Service 1947 1951 100.00 100.00 5.24 5.07 .69 .69 .79 .81 .33 .35 .6 8 .71 .27 .27 1.82 1.97 .44 .49 Unclassified 1951 1947 100.00 100.00 4.37 4.56 .59 .58 .57 .73 .25 .2 8 .87 .7 2 .11 .11 1.57 1.73 .41 .41 Manufacturing showed the largest expansion of all district industries. (1947 • 100) (1947 = 100) United Total Income States..... 131 Arkansas ........ ... Illinois ........... . ... Indiana ............. Kentucky ............ Mississippi ...... ... M issouri .......... .... MANUFACTURING PAYROLLS Agriculture 129 127 143 120 134 Tennessee ........ 102 118 115 140 114 101 104 136 109 Agriculture provided a somewhat smaller share o f total district incom e . . • Variations among areas in total income growth result from differences in the rate of change for each income source, as well as differences in the relative importance of each income source for these areas. In conformity with past experience, agriculture as a leading district industry was of major impor tance in altering the geographic distribution of na tional and district income from 1950 to 1951. The increase of 17 per cent in district farm income Government 137 138 134 122 146 165 134 135 136 M anufacturing Payrolls 138 145 145 143 153 150 135 140 159 Trade and Service Unclass 128 135 133 130 127 138 133 106 135 118 134 163 133 131 123 139 115 136 stemmed from a high, but not record, volume of production and from increased prices for farm prod ucts marketed. In both production and prices, the largest relative gains were from livestock. Numer ous special factors, however, caused variations. These included flood losses in Missouri and a below-national growth in cotton production on the negative side, a record tobacco crop on the positive side. Farm income was disappointing, therefore, in Missouri and the Delta; it was above average in Kentucky, Indiana, and Illinois. On balance, Eighth Page 135 District income, a large share of which is attributa ble to agriculture directly and indirectly, benefited from the national upsurge of farm production and prices. As farm expenses increased even faster than gross income, the indirect benefits, accruing to labor and other services bought by farmers, were larger than the direct benefits accruing to farm operators in the form of net income. Though income from agriculture made a major contribution to total district income growth in 1951, it formed a smaller share of the total. Over the last four years, the share of agriculture in total district income decreased from 18 to 16 per cent. The decline in the relative importance of agriculture as a source of income is the universal experience of all countries as they move toward higher produc tivity through industrialization of the economy. In the primitive community, agriculture provides the main source of income; with the growth of other industries agriculture loses in relative, though by no means in absolute, importance. This shift does not imply any decline in farm per capita incom e; on the contrary, the very fact that new industries de velop and offer employment opportunities to former farm workers also leads to higher per capita income of those who remain on the farm and raise farm productivity by applying new farm techniques. Be cause of a continued decline in the number of peo ple living on farms, their average income per capita reached a new high in 1951, even though their total income did not. • . . b u t r e ta in e d its im p o r ta n c e as a le a d in g s o u r c e o f d is tr ict e x p o r ts . As the relative importance of agriculture in the nation has declined even faster than in the district, the district’s share of national farm income has in creased from 9.3 per cent in 1947 to 10.8 per cent in 1951, with the result that agriculture continues to provide the largest volume of net exports for the district. It is noteworthy that the share of national farm output has increased over the last four years in all district states except in Kentucky where, in spite of a record tobacco crop, the construction of new industrial facilities has led to the relative de cline of agriculture from 17 per cent of total Ken tucky income in 1947 to 12 per cent in 1951. In most district areas, however, agriculture remains the major source of extra-district funds, and dis trict income as a whole will continue to be quite sensitive to shifts in the price and volume of national farm output. As pointed out often in this R e v ie w , maintenance and growth of district income Page 136 will thus depend to a large extent on the readiness of district farmers to adapt their output to changing requirements of the nation and their ability to increase farm productivity. It is, therefore, of par ticular significance that district farm income has increased by 18 per cent over 1947 while national farm income has grown by only 2 per cent over the same period. M a n u fa ctu rin g s h o w e d t h e la r g e s t ex p a n sio n o f all d is tr ict in d u str ies . • . The relative decline of agriculture as a source of total district income has been compensated by a relative gain of manufacturing which increased its share from 17 per cent in 1947 to 19 per cent in 1951. Over this period, payrolls of district manufacturers have increased by 45 per cent, compared with 38 per cent for the nation. This somewhat faster rate of district manufacturing growth has raised the dis trict share of national payrolls from 3.8 per cent in 1947 to 4.0 per cent in 1951. Within the district, increases range from 35 per cent in Mississippi to 59 per cent in Tennessee. The importance of manu facturing as a key factor in raising district income has been stressed often in the M o n t h l y R e v i e w ; more detailed data on the growth of district manu facturing over the last decade were presented in the October, 1951, issue. • . . e s p e c ia lly in d e fe n s e - c o n n e c t e d lin es. Since the outbreak in Korea, variations in the industrial composition of manufacturing have been a key factor in differences among industrial areas. Nationally, the average payroll growth of 38 per cent over 1947 ranged among industries from 8 per cent in leather and shoes to 88 per cent for ships and planes. Within the district, the major expansion was correspondingly in defense-connected lines. Chemicals increased rapidly in western Kentucky. Expansion of oil refineries benefited southern Ar kansas and southern Illinois. Stone, clay, and glass products lifted manufacturing payrolls in eastern Missouri and southern Indiana. Steel, machinery, and transportation equipment increased in the St. Louis Metropolitan Area as well as along the Ohio River. In this connection it should be noted that Ken tucky shows the largest expansion of unclassified industries. This category includes construction and, therefore, reflects the spectacular expansion of plant construction for defense-supporting activities in several areas of western Kentucky. Government payments reflected large increases in Federal em ployment. Government income payments to district resi dents increased 38 per cent since 1947, as compared with 37 per cent for the country as a whole, raising the share of government as a direct source of in- * come to 16 per cent of total income payments. The recent rise in government payments was the com posite of very large increases in Federal civilian payrolls and in military pay, a moderate increase in state and local government payrolls, little change in the volume of government interest payments to individuals, and, in 1951, a sharp drop in national service life insurance dividend payments. Because of the concentration of Federal military and civilian establishments in certain areas, 1951 increases averaging one-half in military payrolls and one-third in Federal civilian payrolls had an uneven impact on district income. The largest rela tive gain— 65 per cent over 1947—again registered in western Kentucky where the reactivation and ex pansion of several large military camps added to the impetus already provided by industrial activi ties. Other large gains in Federal payrolls accrued to areas in eastern Missouri, Arkansas, and south ern Indiana. Trade and service incom e benefited from high levels o f econom ic activity• Income stemming from the trade and service in dustries of the district increased 33 per cent over 1947, compared with 28 per cent for the country as a whole. The relative share of this income source remained 26 per cent of total income payments, in the district as well as for the country as a whole. The relative stability of this component reflects the extent to which trade and service activities depend on other income sources. Income received in other industries enables residents of an area to spend their income in retail stores and service establish ments where in turn the money spent generates new income in a self-perpetuating income flow. This in no way detracts from the basic importance of the trade and service industries for each area; it only emphasizes the point that these activities are pri marily dependent on other local income rather than outside funds, and, therefore, usually follow rather than lead general income movements. It also ex plains why knowledge of local income data is of special interest to sales managers. Some trade and service activities, however, may become important independent sources of outside funds by selling their services to those residing out side the area. Export activities are carried on in any trade center which attracts wholesale or retail customers from other areas. The traditional role of Memphis as a trade center for the mid-South has been stressed often and explains the importance of trade income in the district portion of Tennessee. At the same time, any such export activity becomes quite sensitive to income shifts in the broader region served; the slower increase of Tennessee trade and service income since 1947, therefore, reflects and accentuates the relatively poor showing of Delta cotton throughout the mid-South in 1951. Educational, financial, and professional services are exported whenever they attract clients from more distant parts. So do amusement and recrea tional services which become tourist attractions. Though the Eighth District on balance is a net importer of services, some district areas have devel oped their service industries to the extent that they have become sizable sources of extra-district funds. In Missouri, for instance, the relative importance of trade and service income reflects the significance of St. Louis as a major trade center as well as the development of resort facilities in the Ozarks. Per capita incom e presented a wide variation among district areas . . . National and district income averages conceal wide variations among smaller areas within the dis trict. These smaller areas can be defined in a num ber of ways depending upon the purpose the income estimates are designed to serve. Thus the inter ests of the following users are somewhat different. The sales manager is interested in trade areas which comprise a number of different industries ex changing their goods and services in the market center. The citizen and the public administrator are interested in political units, their fiscal capaci ties and needs. The banker and businessman who have to make investment decisions are interested in the pattern and potential of income by specific in dustries. As these different purposes are served best by homogeneous production areas, the Eighth District has been divided into 99 income areas to segregate sections with substantially similar indus trial structures. Many essential data are available only by counties, and the area boundaries, there fore, had to follow county lines. Income areas thus comprise a number of contiguous counties with similar production characteristics or, in urban places, a single county. Small production areas can be readily combined into larger trade areas. The new income areas are described in the table on page 138. Each area is identified by the name of the largest community within its boundaries; where several cities o v e r 10,000 population are found in the same area, all appear in the name, except in the case of metropolitan areas. The Page 137 EIGHTH DISTRICT INCOM E AREAS Area 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 N am e Chillicothe .............. Kirksville ................ Hannibal ................ Marshall .................. M oberly-M exico .. Columbia-Fulton .. Eldorado Springs.. Sedalia ..................... Jefferson C ity......... W ashington ........... St. L ouis.................. D eSoto ..................... Cape Girardeau .... Eldon ....................... Rolla .......................... M onett ..................... Springfield .............. Bolivar ..................... W e s t Plains.............. Salem ....................... Flat River................ Poplar B lu ff........... Sikeston ................... Counties M IS S O U R I ..Caldw ell, D aviess, Grundy, Harrison, Livingston, M ercer...... ..A d air, Chariton, Linn, M acon, Putnam, Schuyler, Sullivan.. ..C lark, K n o x , Lew is, Marion, Scotland, Shelby............................ .. Carroll, Lafayette, R ay, Saline.............................................................. ..Audrain, Lincoln, M onroe, Pike, R alls, Randolph....................... ..B oone, Callaway, How ard, M ontgom ery........................................... ..Cedar, Dade, St. Clair.................................. ................................................. ..Cooper, H enry, Johnson, Pettis................................................................ ..C ole, Moniteau, O sage................................................................................. ..Franklin, Gasconade, W arren..................................................................... ..S t. Charles, St. Louis, St. Louis C ity............................. .................. ..Jefferson, St. Genevieve............................................................................... ..Bollinger, Cape Girardeau, Perry............................................................ ..B enton, Camden, Hickory, Maries, Miller, M organ.................. ..Craw ford, Laclede, Phelps, Pulaski, W ashin gton....................... ..B arry, Lawrence, Ozark, Stone, Taney.............................................. .. Greene ................................................................................................................... ..Christian, Dallas, Polk, W ebster........... .................................................. ..D ou glas, H ow ell, Texas, W rig h t............................................................ ..C arter, D ent, Oregon, Reynolds, Ripley, Shannon, W ayn e.... ..Iron , M adison, St. Francois..................................................................... ..Butler, Scott, Stoddard................................................................................. ..D unklin, Mississippi, N ew Madrid, Pemiscot................................... T o ta l................................................................................. N o. of Counties 1950 Population Population Per Square M ile 6 7 6 4 6 4 3 4 3 3 3 2 3 6 5 5 1 4 4 7 3 3 4 72,203 98,055 74,180 83,487 97,069 95,160 30,469 88,944 57,605 56,054 1,292,979 49,244 64,306 53,692 77,210 73,642 104,823 53,938 70,189 64,914 55,114 104,012 152,948 23 23 26 31 27 38 18 32 41 30 1,116 42 38 15 22 22 155 23 20 12 37 53 72 96 2 ,970,237 51 ..A dam s ............................................................................... ..Brow n, Calhoun, Jersey, Pike.............................. ..Greene, M organ, Scott............................................. ..M acoupin, M ontgom ery............................................. ..Effingham , F ayette...................................................... ..M onroe, Randolph......................................................... ..M adison, St. Clair...................................................... ..B ond, Clinton, W ashin gton................................... ..Jefferson, M arion........................................................... ..C lay, H am ilton, Jasper, Richland, W ayn e.... ..Edw ards, Gallatin, W h ite ........................................ ..Crawford, Lawrence, W a b a s h ...................... ........ ..Franklin, Perry, Saline, W illiam son.................. ..Jackson, Johnson, U nion .......................................... ..Alexander, Hardin, M assac, Pope, Pulaski.. T o ta l.................................... ........ 1 4 3 2 2 2 2 3 2 5 3 3 4 3 5 44 64,690 51,449 61,665 76,670 46,257 44,955 388,302 51,211 77,592 79,789 39,809 56,327 152,410 67,353 60,858 1,319,337 75 29 45 49 39 46 277 35 67 32 38 54 90 50 49 64 IN D IA N A ..Gibson, Posey...................................................................................................................... ..Vanderburgh .......... ........................................................................................................... ..P ike, Spencer, W arrick................................................................................................ ..D aviess, Greene, K n o x , Sullivan................ ............................................................ ..Law rence ...................................................................... ...................................................... ..Craw ford, D ubois, H arrison, M artin, O range, Perry, W ashington.. ..Clark, F loyd........................................................................................................................ ..Jackson, Jefferson, Scott, Switzerland................................................................ T otal .................................................... ................................... ........ 2 1 3 4 1 7 2 _4 24 50,538 160,422 52,696 121,730 34,346 112,376 92,285 68,968 693,361 55 666 47 62 75 39 173 53 74 4 1 4 3 5 4 3 1 7 8 4 3 71,184 57,241 38,054 92,156 59,285 50,941 71,083 484,615 99,826 93,646 87,267 82,897 52 123 29 56 29 41 58 1,292 52 52 41 65 9 6 2 122,563 87,708 62,524 64 1,560,990 39 47 107 70 2 7 5 3 3 5 4 3 2 2 5 1 3 5 4 1 3 6 3 8 88,055 78,643 49,972 81,466 48,469 128,477 127,739 107,417 129,559 86,929 86,104 196,685 64,711 53,244 99,077 76,075 64,540 110,710 111,507 120,132 1,909,511 IL L IN O IS 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 Q uincy ....................................................... Jerseyville .................................................. Jacksonville ............................................. Litchfield .................................................. Effingham ................................................ Chester ....................................................... East St. Louis....................................... . Greenville .................................................. M ount V e m on -C en tralia.................. Olney ......................................................... Carmi ......................................................... M ount C a rm e l............................ ........... W . Frankfort-Harrisburg-M arion.. Carbondale ................................................ Cairo ............................................................ 39 40 41 Princeton .................................... E v a n sv ille .......... ........................ Boon ville .................................... Vincennes-W ashington ...... Bedford ...................................... Tell C ity............................. ........ N ew Albany-Jeffersonville... Seymour ..................................... 42 43 44 45 46 52 53 54 55 56 57 58 59 Henderson ........ Owensboro ........ Princeton .......... Madisonville ..... H orse Cave....... Campbellsviile . Fort K n o x .......... Louisville .......... Danville .......... * Frankfort ......... H op k in sv ille..... Bow ling Green . M o n tice llo .......... 60 61 Mayfield Paducah 47 48 49 50 51 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76 79 80 81 Fayetteville ......... Harrison ................ M ountain H om e.. C o n w a y .................. Bates ville .............. W y n n e .................. Jonesboro .............. Helena .................. Blytheville ........... Fort Sm ith........... Russellville ......... Little R ock........... S tu ttg a rt................ M ena , H o t S p rin g s................ Pine B luff..................... McGehee ..................... Texarkana ................... E l Dorado-Cam den.. C ro sse tt.......................... Page 138 KENTUCKY ..H enderson, M cL ea n , U nion, W ebster............................................................................. ..D aviess ......................................................................................................................................... «... ..Caldwell, Crittenden, Livingston, L y o n ......................................................................... ..H opk in s, Muhlenberg, O hio.................................................................................................. ..Breckinridge, Butler, Edmonson, Grayson, H ancock.................................. .......... ..G reen, H art, Larue, T aylor............................................................................................... ..B ullitt, H ardin, M eade............................................................................................................ ..Jefferson ............................................................................................................................................ ..Anderson, Boyle, Marion, Mercer, Nelson, Spencer, W ashington.................. ..Carroll, Franklin, Gallatin, H enry, Oldham , O wen, Shelby, Trim ble......... ..Christian, L ogan, Todd, T rig g ...................................................................... .................... ..B arren, Simpson, W arren...... ................................................................................................ ..A dair, Allen, Casey, Clinton, Cumberland, Metcalfe, M onroe, Russell, W a y n e ................................................... ................................................................................ ..Ballard, Calloway, Carlisle, Fulton, Graves, H ickm an........................................ ..M cC racken, M a rs h a ll...........................................................................................- ................... T o ta l...................................................................... ..................................... AR KAN SAS ..Benton, W ashin gton....................................................................................................... ..B oone, Carroll, M adison, Marion, New ton, Searcy, V a n Buren...... ..B axter, Cleburne, Fulton, Izard, Stone.................................,................ ......... ..C onw ay, Faulkner, W h ite ........................................................................................ ..Independence, Randolph, Sharp..................................................................... ......... ..C ross, Jackson, M onroe, Poinsett, W ood ru ff.................................................. ..Clay, Craighead, Greene, Lawrence..................................................................... ..L ee, Phillips, St. Francis....................................................................................... . ..Crittenden, Mississippi............................... .................................................................. .. Crawford, Sebastian....................................................................................................... ..Franklin, Johnson, Logan, Pope, Y e ll................................................................ ..Pulaski ................................. ................................................................................................ ..Arkansas, Lonoke, Prairie........................................................................................ ..M ontgom ery, Pike, Polk, Scott, Sevier.............................................................. ..Garland, H o t Spring, Perry, Saline....................................... ............................. ..Jefferson ............................................................................................................................... ..C hicot, Desha, L in c o ln ............................................................................................... ..H em pstead, H ow ard, Lafayette, Little River, M iller, N evada........... ..Colum bia, Ouachita, U nion...................................................................................... ..A sh ley, Bradley, Calhoun, Clark, Cleveland, Dallas, D rew , G ran tT o ta l................................................................................................ 75 48 16 17 36 24 40 50 55 84 77 23 252 26 14 38 86 33 30 44 21 36 areas have been redefined to facilitate integration with Census economic areas. The table also shows the 1950 population of each area and its population density, a first and readily available index of wide differences in the industrialization and urbanization of the Eighth District. There are two areas with a population density of over 1,000 per square mile— St. Louis and Louisville. Evansville and Memphis follow with over 600 each. East St. Louis and Little Rock surpass 250. In the 150 class appear New Albany, the Indiana segment of the Louisville Metropolitan Area, and Springfield, the latest addition to the Census category of metropolitan areas in the Eighth District. There follow some urban areas with a population density around 100 which are not now classed as m a j o r metropolitan centers, such as Owensboro, Paducah, Jackson, Greenville, Pine Bluff, Fort Smith, Bedford and Quincy. In this same class of population density are some areas which have not grown around a focal trade center but have their population s p r e a d more evenly throughout a section of rich mineral or soil re sources, such as the coal mining region of southern Illinois (Area 36) or the Delta sections of Arkansas (Area 70), Mississippi (Area 91) and Missouri (Area 23). On the other end of the scale are in come areas with a population density below 20 in the forest and lake sections of the Ozarks (Areas 14, 19, 20, 63, 64, 75) as well as the low-fertility Redbeds Plains of Missouri (Area 7), all areas without any urban population center. This wide range of population density suggests caution in the comparison of income data computed for areas of widely divergent industry and popula tion patterns. In the rural economy of low popula tion density, many transactions of the urban com munity either do not occur at all or do not appear A rea Nam e as money income. There are few bus drivers and parking attendants in the Ozarks, nor is the lunch prepared by the farm wife entered as a service transaction in the books. As the community devel ops toward a more complex exchange economy, the former farm worker spends a growing part of his time and income for getting to the job, eating out, and other expenses of urban life. The metropolitan area then includes many items in the income ac counts which should perhaps be classified as “ cost” rather than “ net income;” people living in these areas are not quite as well off as income statistics make them appear nor are rural folks quite as poor as income data may suggest. Yet while income payments thus inevitably somewhat overstate the differentials between areas of a different social structure, they still show, if properly interpreted, remarkable differences in welfare and real income among district areas. Few would claim that all dif ferences in per capita incomes can be accounted for by parking fees and lunch checks. . . . ranging from over $2,000 in St. Louis . . . As district per capita income trails behind the nation, few areas within the district show an income above the national average ($1,584). The list of these “ above par” areas has grown, however, ris ing from four in 1950 to six in 1951. As always, St. Louis is at the top of the list with a per capita income of $2,045 in 1951, followed by Louisville ($1,953), Evansville ($1,744), Paducah ($1,699), East St. Louis ($1,605), and Fort Knox ($1,587). The newcomers are the non-metropolitan areas of Kentucky which show the— perhaps temporary— influence of large construction payrolls at high wage rates. In the next group, approaching the national aver age, are Memphis ($1,376) and Little Rock ($1,339) Counties N o. of Counties 1950 Population Population Per Square M ile TENNESSEE 82 83 84 85 86 87 88 89 D yersburg ..... H um boldt ....... Paris ................. M emphis .......... Brownsville ... Jackson ........... . Lexington ..... Savannah ....... D yer, Lake, O bion............................................... ........................ Crockett, Gibson............................................................................ H enry, W eakley............................................................................... Shelby .................................................................................. ............ Fayette, Hardeman, H ayw ood, Lauderdale, Tipton.. Madison .......................................................... : ................................. Carroll, Chester, Henderson, M cN airy............................ . Benton, Decatur, H ardin........... ............................................... T o ta l............................................................... 90 91 92 93 94 95 96 97 98 99 Greenville ...... Greenwood ..... C larksdale....... Grenada ......... H olly Springs K osciusko .... O xford ........... Corinth ........... T u p e lo .............. Columbus ...... W ashington .................................................................................... Bolivar, Hum phreys, Leflore, Sunflower....................... Coahoma, Quitman, Tallahatchie, Tunica..................... Carroll, Grenada, H olm es, Yalobusha............................ Benton, D eSoto, Marshall, Panola, Tate..... ............... Attala, Choctaw, M ontgom ery, W ebster, W inston.. Calhoun, Lafayette, Pontotoc, U nion............................. Alcorn, Itawam ba, Prentiss, Tippah, Tishom ingo.... Chickasaw, Lee, M onroe............ ............................................ Clay, Lowndes, Noxubee, Oktibbeha.............................. T o ta l........................................................... 3 2 2 1 5 1 4 3 21 74,184 64,756 51,790 482,393 131,887 60,128 75,265 37,845 978,248 60 74 44 642 47 107 38 28 91 1 4 4 4 5 5 4 5 3 4 39 70,504 193,963 127,396 82,821 107,780 85,969 81,423 97,250 93,731 100,200 1,041,037 97 74 61 35 40 34 37 43 54 48 49 363 10,472,721 54 M IS S IS S IP P I Page 139 PER CAPITA IN 1951 VARIED WIDELY among metropolitan areas of the mid-South, Quincy ($1,484) and Owensboro ($1,409) among minor urban areas with high-wage industries and a pros perous agricultural “ hinterland,” Jefferson City ($1,355) as a center of state government and high farm income, El Dorado-Camden ($1,291) and Mt. Vernon-Centralia ($1,276) among oil producers. . . . to less than $500 in som e of the hill sections. A t the other end of the scale are areas with less than 40 per cent of national per capita income. Here Page 140 INCOME AMONG DI ST RI CT AREAS are the forest areas of the Ozarks and the Ouachitas (Areas 20 and 75), the hilly sections of the Kentucky Highland Rim (Areas 51 and 59), the sandy soils of the eroded Fall Line Hills in Tennes see (Area 89), and wide stretches in northern Mis sissippi (Areas 93, 94, 95, and 97) where population density is still relatively high for the traditional farming of cotton. Within this latter region, how ever, some of the most outstanding livestock and dairy enterprises in the South can be found which may set an example for further diversification. GROWTH S I NC E 1947 OF FOLLOWED TOTAL THE INCOME NATIONAL RATE UNDER 1 1 1 ! 85% To 85% 941 9 5 % To 104% 105% To 114% 1 1 5 % AND OVER U N IT ED S T A T E S - 100% EIGHTH DI ST RI CT - 1 0 1 % G row th o f to ta l in c o m e s i n c e 1947 fo llo w e d a m o r e u n ifo r m p a tte r n 9 . . . As should be expected, variations in per capita income are much larger than variations in total income growth. Per capita income reflects the wide differences in the social structure and industrial composition of communities discussed above. In^ come changes over time within each community follow the general rise in prices and growth of pop ulation; only where the latter deviates from the general trend because of migration, or where the industrial composition of an area undergoes funda mental shifts, do income changes deviate from the norm. Sixty-five out of 99 district income areas, therefore, have increased their total income since 1947 within the narrow range of 20 to 34 per cent. • . . w ith m o s t a rea s a p p ro x im a tin g th e n a tio n a l ra te o f ex p a n sio n . As prices rise and consumers behave in a rather uniform pattern throughout the country, income ex pansion followed national trends closely. Just as the district as a whole showed a rise since 1947 Page 141 within one percentage point of the national rate, so did SO areas out of 99 move within a range of 5 per cent on either side of it. This uniformity under lines the close economic ties of the district with the rest of the nation. The dominant forces shap ing the district economy, such as the present defense effort, are of national extent and influence. It also emphasizes a point made before in connection with Eighth District development, that success will de pend on full recognition of this regional inter dependence in a national and world economy. Here too9 however, the rate o f growth varied • . • Local variations from the national norm occur for several reasons. First, population may shift; areas with in-migration obviously grow faster than those from which people move away because of a lack of opportunities. Second, certain areas may undergo rapid shifts in their industrial structure; new industries pay out larger incomes for more productive employment. In such a case of area development, the impact of industrial change is most likely accentuated by the in-migration of new workers as well as the multiplication of market transactions which go with urbanization and have been discussed above. Population and industrial change are thus closely related factors in bringing a b o u t income variations among areas. Third, changes in the national demand for goods and resultant shifts in the price structure may benefit some areas over others; thus, a relative increase in farm over industrial prices changes the “ terms of trade” in favor of rural areas, an important fac tor in the better income showing of this district over the last decade. Fourth, output in some indus tries may change without major shifts in “ inputs” due to more favorable conditions of production, such as the weather, a factor of special importance in agriculture which explains the volatility of this income source by district areas. W hile this last factor is of major importance in explaining local variations from one year to the next, it is of minor significance for long-range trends when shifts in national demand and resultant changes in price and production patterns by industries and areas will account for the geographic redistribution of income. . . . ranging from less than 10 per cent in som e areas . . . Three district areas, in the Arkansas uplands (Area 72) and the Mississippi coastal plain (Areas 94 and 95), lagged behind the national rate of growth as much as 20 per cent, their total income Page 142 remaining almost stationary since 1947. In all three cases a considerable amount of out-migration occurred, so that per capita income of these areas increased in spite of the lagging t o t a l income growth. As the map on page 141 indicates, there are 32 more rural areas in the district where in come— and population— growth trailed the nation to a smaller, yet noticeable extent* The population losses of many district areas over the last decade have often been pointed up as indicative of a dearth of economic opportunities for the people living in these areas. It also needs emphasis, however, that, with the growing labor productivity of agriculture, there is a universal trend from the farm to the city; many of the dis trict population movements, therefore, only reflect the well-known fact that the Eighth District de pends heavily as a way of life upon agriculture which is undergoing profound technical changes at the present time. It is this very mobility of the district labor force, among areas and industries, which contributes most to the strength of the dis trict and national economy. There remains, how ever, for each local area the challenge to employ for its own best advantage, within the broader framework of the district and national economy, its people and their skills, its natural resources, its community facilities. . . . to m ore than 100 per cent in parts o f western Kentucky. Seven district areas exceeded the national rate of income growth by more than 15 per cent. Some of these were relatively small areas (such as Areas 12 and 43) where the impact of the national con struction boom and defense effort on established local industries had a large effect. Other areas (Areas 48 and 53) saw the start of new chemical and metal industries. Fayetteville (Area 62) bene fited from the expansion of broiler production in northwestern Arkansas. El Dorado (Area 80) ad vanced as a major oil center. Paducah (Area 61) set the pace for a new industrial frontier with chem ical developments around Calvert City and a huge atomic plant. Six more areas paced the national advance by more than 5 points. Among the latter were three metropolitan areas growing with the defense effort (Areas 11, 54, and 73), a minor urban area with a large government arsenal (Area 77), an Ozark section with new recreational facilities (Area 64), and the area around Fort Leonard W ood (Area 15). All these areas have in common the rapid expan sion of existing plants including government facili ties or the establishment of new industries in re sponse to national demand. T w o factors should be kept in mind when interpreting income advances. First, the relative importance of any given income expansion depends on the size of the area. Thus, the same addition to factory payrolls may hardly be noticed in St. Louis (Area 11) but greatly influ ence the rate of growth in De Soto (Area 12). Sec ond, high income may be accompanied by shifts in the market and social structure which customarily go with industrial change. Where income advances reflect only the fuller use of existing capacity and skills, the social shifts may be minor. Yet there are limits to any expansion of this kind. Sooner or later, further expansion will depend on new people, new plants, and new community facilities. Profound adjustments are then needed, and impressive dollar income gains reflect a complex mixture of real gains and social costs. T o double community in come within four years has been a painful experi ence to many residents of Paducah, though it has also represented a major contribution to the na tional defense effort. C lo ser stu d y o f in c o m e v a ria tio n s e m p h a s is e s t h e r o l e o f t h e lo c a l c o m m u n ity in r e g io n a l a n d n a tion a l d e v e lo p m e n t . The September issue of this R eview has described the geographic landscape of the Eighth District which determines the basic natural resources avail able to each local area. District soils, minerals, and flowing waters provided rich opportunities for eco nomic development in the past and will continue to do so in the future. The fullest utilization of these opportunities will depend on man and his work, as they take shape in each area. Not each area can or should become a metro politan center of industrial activities. Yet each area can respond to the challenge of a national market and the demands made by a great country. In some areas, this may take the form of local services for military installations and industrial establishments of the Federal government. At the present time, it is this type of economic activity which has led to the most spectacular local income advances. In other areas, suitable locations may be found for national business firms wishing to invest in local skills and facilities. In all areas, initiative of the local banking and business com munity will be called upon to facilitate the most effective contribution of local resources to the na tional economy. W erner H o c h w a i ^d Third-Quarter Retail Sate and Outlook in the Eighth District R eta il sa les in th e E ighth D istrict fa lt e r e d d u r in g t h e th ir d q u a r te r b u t r e c o v e r e d 9 a n d t h e o u t look, is f o r s o m e fu r t h e r im p r o v e m e n t. It is not difficult to account for the dip in con sumer spending noted above. The reasons for it have been headlined in the papers and pointed out IK E a flying kite that dips and then resumes its in weekly and monthly trade reports: the reper I soaring, Eighth District retail sales, after im cussions of the steel strike, the truck tie-up in St. proving during the first half of 1952, faltered a bit Louis, the limiting effects of prolonged hot weather early in the third quarter, then rose somewhat generally over the district, and so on. Likewise, the higher. And the outlook for the important last quar rapid pickup in sales has paralleled a rapid recovery ter of the year is that they will range from steady at of business after termination of the steel strike and present levels to slightly better. the break in the drouth. By mid-August most lines surveyed reported a favorable rate of sales. And if The above is a capsule summary of the trade department store sales are taken as an indication, trends and prospects at mid-August reported to this retail sales were even better at mid-September. Bank by over one hundred retailers engaged in six different trade lines and operating in six district T ak ing a c c o u n t o f ( 1 ) u p w a rd tr e n d s in sa le s 9 states. Like many capsules, however, this summary e x cep t in a u to m o b ile s 9 . . . must be used according to directions for best re One of the reasons for a certain amount of opti sults. For example, there were many ifs, ands, and mism regarding this year's sales outlook is the fact buts qualifying expectations as to the future and that in the Eighth District consumer buying during the outlook is varied between the trade lines. L Page 143 the first half of 1952 totaled about the same as in 1951. In fact, a surprising number of retailers ex perienced sales that topped those of a year ago— “ surprising” when it is recalled that the first half of 1951 included a period during which sales were given extra impetus by the second wave of Korean W ar scare-buying. Retailers’ reports in the survey generally showed improvement from the first to the second quarter. Or, to put it another way, the trend of total retail sales in the district appears to have followed the noticeable (though irregular) increase in seasonally adjusted total retail sales nationally over the first six months of the year. The upward trend in sales suggests some moder ation in the “ cautious” buying which characterized sales during much of 1951 following the second scare-buying wave. Except in areas where local economic conditions had been disturbed by labor disputes, retailers were almost unanimous in their mid-August reports pointing to continued high levels of income and employment as factors tending to overcome the conservative attitude of consumers. Breaking down the survey reports on sales as between durables and nondurables, however, it was found that durable goods sales were less favorable. The most pronounced weakness was in automobile sales. Interest in automobiles being what it is, most persons probably followed what was going on at the Detroit and outlying auto assembly lines and at the dealer level during the first half year. In the first place, defense needs reduced the amount of materials available and cut back dealers’ stocks on some lines of autos which were reportedly in demand. At the same time, in contrast to this situ ation, other makes of cars were apparently selling rather slowly so that even the threat of the steel strike failed to send many more buyers to show rooms. Thus, there was the paradox of dealers with customers but no cars, and dealers with cars but no customers— a good market and a spotty one, side by side— to a much greater extent than might have been expected.Over-all, automobile dealers reported that sales were considerably below those in 1951 during the first three months of the year, with some pickup in the second quarter. As to other durables, furniture and appliance stores during the first quarter reported a volume that compared favorably with that in 1951. They had even better experience in the second quarter as the threat of a steel strike increased sales slightly and the extremely hot weather during June greatly increased sales of electric refrigerators and cooling equipment. Page 144 Consumer credit regulations were reported to have influenced the level of sales of all durables. But there were signs of a pickup in sales of appli ances and furniture even before the suspension of Regulation W . On balance, it appeared that automobile sales set a rather spotty pattern while other durables showed strength, but largely due to special influences. Following the decline early in the third quarter, retail sales generally improved. Auto sales were an exception partly owing to the delayed impact of the steel strike. More than five out of six automobile dealers surveyed reported sales running below a year ago as of mid-August. But women’s apparel store sales continued above year-ago levels and about two-thirds of the men’s wear stores surveyed reported sales as much as one-tenth larger than in 1951. Likewise, a majority of department stores surveyed reported a sales level at mid-August as much as one-seventh larger than a year ago. . • . ( 2 ) custom er preference fo r medium-priced lines, . • . Thus far the performance of sales has been summed up in terms of the kinds of goods sold and over-all sales levels. The survey also asked certain questions designed to show how consumers had reacted to various price levels and how widely they tended to open their purse strings at each purchase. It also sought to find out whether they were turn ing more to credit or relying more heavily on cash. Furniture stores, men’s wear stores and women’s apparel stores indicated that consumer preference was centered on medium-priced lines. Department stores also reported that consumers preferred medi um-priced lines, but noted that several basement departments had been enjoying a more favorable sales level than had comparable upstairs depart ments. Appliance stores reported consumer demand was mostly for medium-priced lines but there was more than a little interest shown in several higherpriced items. Supporting the fairly general middle-of-the-road customer preference as to prices, the average sale at mid-August at men’s wear, women’s specialty and furniture stores was about the same as a year ago. Similarly, the majority of department stores surveyed reported an average sale about equal to that a year ago, although there were indications that some stores experienced a smaller average sale this year than in 1951. On the other hand, more appliance dealers reported an increase in their aver age sale than reported a decrease. . . . ( 3 ) somewhat easier credit terms9 . . . More than half of the appliance dealers surveyed indicated that credit sales were somewhat higher than they considered normal; most of the others reported the ratio of credit sales to total sales at about its normal level. At mid-August the majority of automobile dealers and furniture stores reported credit sales about normal. Department store executives were evenly divided in their opinion— half of them reported credit sales above normal while the other half considered them normal. At women’s specialty stores credit sales Wire considered about normal while at men’s wear stores they were a little high. Notwithstanding the mixed nature of retailers* reports on the volume of their credit sales, the easing of credit terms after suspension of Regu lation W early in May made it possible for many more millions of dollars of consumer demand for goods and services to be expressed effectively. Total consumer credit increased sharply, particularly in the instalment credit field, and durable goods sales profited. The gain should continue and the some what easier credit terms should be considered a plus factor in the outlook for total retail sales in the district over the remaining months of the year. . . . and ( 4 ) improved inventory positions9 . . • At mid-1951 retailers were in the unfavorable position of holding extremely high inventories in the face of diminishing consumer purchases. But at the middle of the third quarter in 1952 there were relatively few retailers who considered their inven tories out of line with sales. Department store, women’s specialty store and appliance store executives indicated that current inventory at mid-August was about in line with sales. At men’s wear and furniture stores, however, there were a few who thought that their inventory was perhaps a bit too heavy. Little difficulty was encountered in maintaining fa sufficient supply of most merchandise. Production o f automobiles and other durables, already cut back, was further limited by the steel strike. But few real shortages, other than of automobiles, had developed in the durables lines at mid-August. A year ago, retailers, faced with heavy inventories and slow sales, sharply slashed their buying. But at mid-August, 1952, most retailers surveyed indi cated their outstanding orders were at normal levels in view of current sales. At department stores the volume of orders at mid-August was about equal to two months’ sales, while at men’s wear stores orders-volume averaged about four months’ sales. Appliance store orders were predominantly re ported as being about equal to last year and aver aged about two months’ sales. Women’s specialty store orders-volume, equal to or smaller than in 1951, represented less than two months’ sales. Fur niture store orders-volume, equivalent to about two months’ sales, were reported as equal to or smaller than those in 1951. In addition to the improved inventory position of dealers, the better-balanced “ inventory position” of consumers should not be overlooked. The stock of goods in consumers’ cupboards, garages, kitchens, and so on that resulted from the scare-buying that took place immediately after Korea has now had two years in which to be absorbed and re-adjusted to normal. The second scare-buying wave early in 1951 has had better than a year and a half to do so. Also consumers have had the same amount of time to re-build or to add to their liquid-saving holdings. . . . retailers look fo r little change in prices over the remainder o f 1952 . . . Retailers’ cost prices were not expected to show much change during the remainder of 1952 from their mid-August levels. Furniture store and appli ance store executives do not expect to pay higher prices for their merchandise except for items in which the higher prices allowed on iron and steel will significantly change their suppliers’ costs. More department store executives thought their buying prices might advance slightly than thought they would decline. Men’s wear stores expected prices to remain at about the same level or possibly decline slightly. Regardless of how they felt about their buying prices, there were relatively few who anticipated any increase in their selling prices. Again, the ex ceptions were items reflecting the higher steel and iron prices. These were expected to advance slightly in price. . . . and for sales volum e to follow the patterns established so far this year— lagging auto sales9 . • • Automobile dealers saw little chance of improve ment in their sales level during the remainder of 1952. Lack of production was the factor most often advanced. (It should be noted that this survey was made well ahead of recent predictions of a record fourth-quarter output.) However, there was some opinion that along with the lack of new autos there was also an absence of buyers. Consumer resistance to the price of new autos was also mentioned as a limiting factor. About half of the dealers did not expect much change in consumer resistance to price; the remainder anticipated growing resistance to the level of prices. The dealers expected substan Page 145 tial changes in the styling and engineering of new models, which will probably be unveiled by manu facturers before the end of the year. But there was little feeling that a completely new low price auto would be added to their line. Other factors men tioned by reporting auto dealers that would tend to hold back volume were the effects of the drouth, crop failures, and local economic conditions in various parts of the district. . . . not much change in furniture and appliance sales9 . . . Relatively little opinion existed that furniture and appliance sales would drop during the last half of 1952. Continued high level of consumers’ dis posable income and improved dealer (and con sumer) inventory pictures were expected to pro duce a favorable volume of sales. On the other hand, in some areas local unemployment and crop failures due to the drouth were expected to hold down the level of sales. . . . anil better volumes in department stores? women’ s specialty and men’ s ivear stores. Continued high levels of income, the prospect of few inventory problems and the fact that consumers apparently are not as “ cautious” as last year were advanced by department stores, women's specialty and men’s wear stores as reasons for increased sales volume over the rest of this year. Some concern was expressed by department store executives that other lines of trade might cut into department stores’ share of consumer spending as “ good buys” were sought. At men’s wear stores lagging sales last year were cited as one reason why sales in the last half of 1952 should hold up well. At women’s specialty shops changing styles were expected to hold volume at favorable levels. At all three lines, however, it was brought out that increased efforts to maintain sales would be made. Store expansion, opening of branch stores and modernization were cited as factors. Survey of Current Conditions TIXJSINESS activity in the Eighth District recovered quickly during August and early Septem ber from the effects of the steel strike. In addition, some lines of business activity which have been otherwise depressed in the past months increased output to meet a growing volume of orders. Indus trial output snapped back to pre-strike levels and employment increased as most workers returned to their jobs. Construction activity continued at its rapid pace despite some minor curtailments result ing from lack of steel supplies. Department store sales throughout the district gained more than sea sonally from July to August and nearly recovered (seasonally adjusted basis) to the level of June when sales were stimulated by hot weather. Busi ness loans, reflecting the upswing in activity, like wise increased more than seasonally during August and early September and consumer loans, as in Page 146 recent months, continued to rise rather sharply. Prospects for farm production improved during August and the first half of September with the rains which fell throughout the district. In the nation also, economic activity recovered rapidly during August. Industrial production, as measured by the Federal Reserve Board index, increased from 193 per cent of the 1935-39 average for July to 215 per cent for August, approximately equal to the April level but still 3 per cent below the 1952 peak reached last February. Durable goods production, hit hardest by the steel strike, jumped 18 per cent from July to August but was still 7 per cent below its March, 1952, peak. Steel mill operations increased rapidly in August and con tinued at 100 per cent of capacity in the first three weeks of September. August operations averaged 92 per cent of capacity. Automobile output was curtailed in July and early August but increased rapidly thereafter and was close to pre-strike levels by the end of the month. Total output for August was about 298,000 cars and trucks, and September output of more than 550,000 vehicles was indicated by production rates in the first three weeks of the month. Nondurable manufactures also picked up in August due in part to resumption of work after many plant-wide vacations in textiles and some other industries. The textile industry, with reduced inventories, increased its output to meet the larger volume of orders received recently. The general level of wholesale commodity prices advanced slightly in the first three weeks of August but declined in the following three weeks. Most of the decline was due to lower farm products and processed food prices. Consumer prices, on the other hand, advanced slightly to another all-time high. As of August 15 the national average for consumer prices was 191.1 per cent of the 1935-39 average, an increase of 0.2 per cent in the month and an increase of 3 per cent in the past year. Empl oyment Nonfarm employment in the nation r o s e by almost 900,000 in the month ending mid-August to reach a total of 46.9 million persons. And it con tinued to expand so that by the latter part of the month the number of people claiming unemploy ment insurance benefits dropped to a postwar low for August. Manufacturing employment increased by 700,000 in the month ended August 15 as the effects of the steel strike faded and food processing W H O LE SA LE PRICES IN THE UNITED STATES Bureau of Labor Statistics (1 9 4 7 -4 9 = 1 0 0 ) A u g .,*52 A ll Commodities......... 1 1 2 . 1 ' Farm Products... 109.9 F oods............ ......... .... 110.5 O ther...................... .....112.9 J u ly /5 2 A u g ./5 1 111.8 110.2 110.0 112.6 113.7 110.4 111.2 114.9 A u gu st, 1952 compared with J u ly /5 2 A u g ./5 1 - 0 0 0 0 -% - — — — — 2% 1 1 2 and s o f t goods industries expanded seasonally. However, mining employment was down 50,000 and factory employment was 120,000 below August, 1951, levels, reflecting in part the delay in recalling some workers idled by the 55-day steel strike. The largest increases over twelve months ago were in government, finance, and trade employment. Unemployment, reflecting the revival of business activity, dropped from 1.9 million persons in July to 1.6 million in August. This level, 2.5 per cent of the civilian labor force, was only slightly higher than the record peacetime low of August, 1951. In the Eighth District, unemployment continued to decline during August. Unemployment insur ance benefits paid in seven district states for the week ended September 6 were off (117,000 fewer payments) from the level of payments six weeks earlier when they were at a peak for the year. In Louisville total nonagricultural employment increased slightly from July as manufacturing and construction activity expanded. Part of the increase in manufacturing employment resulted from sea sonal increases as well as returns to plants affected by steel supplies. Employment in whiskey dis tilleries and chemical process plants dropped in August and limited the over-all increase. In Evansville, employment increased from July to August and was substantially larger than in August, 1951. Total manufacturing employment was about 7,000 workers greater this year than last, but nonmanufacturing employment was down slightly. Most of the increase was at the refrig erator plants which also have defense contracts, and at metal fabricating plants. In addition to the recovery in plants affected by the steel strike, employment in many other plants increased from July to August in St. Louis. Paper products, apparel, and shoe manufacturing plants increased employment, but chemical plants were using fewer workers in August. In nonmanufac turing, construction employment decreased and retail trade employment declined seasonally. CONSUM ER PRICE INDEX* Bureau of Labor Statistics ( 1 9 3 5 -3 9 = 1 0 0 ) A u g . 15, 1952 July 15, 1952 A u g . 15, 1951 191.1 190.8 185.5 U nited States.......... * N ew series. A u gu st 15, 1952 compared with J u ly l5 ,’ 52 A u g. 1 5 /5 1 - 0 -% + 3 % RETAIL FOOD * Bureau of Labor Statistics A u g . 15, ( 1 9 3 5 -3 9 = 1 0 0 ) 1952 U . S. (51 cities).............. 235.5 St. L o u is........................249.0 Little R ock................... 233.6 Louisville.................. ....224.4 M em phis........................ 243.7 * N ew series. July 15, 1952 234.9 248.6 230.4 2 21 .2 236.8 A u gu st 15, 1952 A u g . 15, compared with 1951 J u ly l5 , ’ 52 A u g. 1 5 /5 1 227.0 - 0 -% +4% 237.2 - 0 + 5 222.9 + 1 + 5 214.8 + 1 + 4 234.7 + 3 + 4 Industry In the district, as nationally, industry gained pre-strike output levels in August and early Sep tember. Manufacturing. A return to the high level of industrial activity was shown in August by the volume of use of industrial electric power. At the six reporting cities in the district, industrial con sumption of electric energy, on a daily average Page 147 basis, increased 7 per cent over July and was slightly better than August, 1951. All of the report ing cities showed improvement from July to August except Little Rock (see table) where a slight de crease was recorded. However, in comparison with 1951, Little Rock, Memphis, and Pine Bluff showed declines in use of industrial power. Major reasons for the declines were reductions in stone and con crete manufacture at Little Rock, in paper and paper products manufacture at Memphis, and in chemical output at Pine Bluff. Improvement in output at refrigerator plants, which a l s o have defense contracts, largely ac counted for a 19 per cent daily average gain in use of industrial power at Evansville over a year ago. The steel ingot production rate reached in August was the highest rate for any month this year, 99 per cent of capacity, compared with 62 per cent a month earlier. The rate was down in the first week of September due to the Labor Day holiday and furnace maintenance problems, but was at more than capacity rates in the following two weeks. CONSUMPTION OF ELECTRICITY D aily A u g ., 1952 ( K .W .H . K .W . H . in thous.) 886 Evansville..... 477 Little Rock... ........ 3,806 Louisville...... 1,251 M em phis....... ........ 345 Pine B luff..... 4,790 St. Louis........ ........ Average * A u g ., 1951 K .W .H . 747 531 3,750 1,290 439 July, 1952 K .W . I I . 835 480 3,717 1,121 321 4,354 10,828 * Selected manufacturing firms. LOADS 4,723 11,480 INTERCHANGED FOR 2 5 A J ST. LOUIS August, 1952 compared with A u g .,5 1 J u ly /52 + 19% + 6% — 1 — 10 + 2 + 1 — 3 + 12 — 22 + 7 + 1 + 10 + 7% + 1% RAILROADS First Nine D ays A u g . / 52 J u ly /5 2 A u g ./5 1 Sept.’ 52 S e p t./51 8 mos> *52 114,211 108,461 117,952 31,341 30,315 873,059 Source: Terminal Railroad Association of St. Louis. 8 mos. *51 937,319 C O AL PRODUCTION INDEX 1 9 3 5 -3 9 -1 0 0 _______________ Unadjusted_________‘ _______________Adjusted______________ A u g ., ’ 52 J u ly ,’ 52 A u g . , ’ 51 A u g . , ’ 52 J u ly ,’ 52 A u g . , ’ 51 112.4 P 92.0 P P— Preliminary. 144.1 113.5 P 104.5 P 145.6 CRUDE OIL PRODUCTION D aily Average ( I n thousands A u g ., o fb b ls .) 1952 Arkansas........................ 76.1 Illinois............................. 166.5 Indiana........................... 33.3 K entucky....................... 32.8 T otal........................... 308.8 July, 1952 76.6 165.1 32.5 33.5 A u g ., 1951 76.7 165.4 32.0 30.6 August, 1952 compared with J u ly /5 2 A u g ./5 1 — 1% — 1% + 1 + 1 + 2 4* 4 + 2 + 7 307.7 304.7 -0 -% + 1% SH OE PRODUCTION INDEX 19 3 5 -3 9 = 1 0 0 _____________Unadjusted_____________ ______________ Adjusted_____________ July, ’ 52 June, *52 July, ’ 51 July, ’ 52 June, ’ 52 July, ’ 51 121.3 140.9 106.9 126.4 136.8 111.4 Page 148 Lumber production generally showed improve ment in August. Average weekly production of Southern pine was 2 per cent above that of July. Southern hardwood producers operated at a rate 12 per cent higher. This latter rate was still slightly below that of August, 1951, while Southern pine operations were at about the same level. Accord ing to trade reports the market is being supported by steady demand. Because of large accumulated stocks, whiskey production continued at a low level in August, with only 12 of Kentucky’s distilleries in operation at month’s end* The shoe and leather goods business continued to improve, according to trade reports. Tanners’ inventories are described as moderate and hides and skins supplies adequate through 1952 to meet current needs. According to reported use of indus trial power, Eighth District manufacturing in Au gust was slightly better than that a year ago. Livestock slaughter in the St. Louis area was markedly above that of July, but below comparable weeks in August, 1951. W ork stoppages and em bargoes on hogs affected local output. Mining. Coal production showed a 34 per cent gain in August over July, in district states, as mar kets improved with the first start of laying in domestic stocks for winter and also reflecting some preparation on the part of consumers for a possible coal strike. Crude oil production in district producing states continued at levels of previous months and of a year earlier. Constructi on Expenditures for construction in the nation dur ing August increased seasonally to a record $3.2 billion, an increase of 11 per cent from August, 1951, and an increase of 2 per cent from the previous month. However, the physical volume of construc tion put in place during August was about the same as last year. The higher expenditures this year re sulted in large part from higher labor costs and con tinued high prices of materials which have pushed total construction costs up about 5 per cent in the past year. The seasonal increase from July to Au gust occurred despite the prolonged steel strike which was expected by some to have a more serious effect on the volume of construction. New housing starts in August throughout the United States totaled 99,000 units, down 5 per cent from July but 11 per cent over August, 1951. The decrease from July was mostly in privately owned housing construction. Effective September 16 the Board of Governors of the Federal Reserve System, with the concurrence of the Housing and Home Finance Administrator, suspended Regulation X on real estate construction credit, both residential and nonresidential. Terms of conventional real estate construction mortgage credit are now fixed by borrowers and lenders within limits set by state laws and certain Federal laws other than Regula tion X. Suspension of Regulation X restrictions on conventional mortgage credit was dictated by the 1952 amendments to the Defense Production Act. These amendments required the relaxation of down payment percentages on residential struc tures to no more than 5 per cent whenever the rate of new housing starts fell below 1.2 million units (seasonally adjusted annual rate) for three con secutive months. At the same time Regulation X was suspended, F H A and V A loan terms were eased. For F H A loans, down payments will run from 5 per cent to 20 per cent where they had ranged from 5 to 40. In the case of V A loans, the maximum down pay ment required will not exceed 5 per cent in any case. Previously they had gone as high as 35 per cent. In addition to the stimulation to housing con struction by the easier terms for F H A insured mortgages and V A guaranteed home loans, impetus to other segments of the construction industry will be given by the high level of plant and equipment expenditures being planned for the last half of 1952. United States corporations plan to spend a total of $14.3 billion on new plants, compared with $13.2 billion for the first half of the year. Public construction expenditures are also increasing under the stimulus of the defense program. Military and naval facilities are being expanded at a rapid rate and the Atomic Energy Commission has re cently announced several large additional construc tion programs. In this district t o t a l construction contracts awarded during August were $88 million, bring- BUILDING PERMITS M onth of Au gust, 1952 N ew Construction_______ Num ber Cost (C o st in 1952 1951 1952 1951 thousands) 86 86 !& 182 $ 185 Evansville......... 534 480 53 59 L ittle R ock...... 1,283 236 1,778 Louisville.......... ... 207 2,228 4,907 2,495 M em phis............ 320 3,208 2,874 St. L ou is............ A u g . T otals...... ....3,023 2,923 $10,114 $ 7,812 July Totals............2,588 2,672 $26,540 * $12,949 * St. Louis H ou sin g Authority project. _______ Repairs, etc. Num ber Cost 1952 1951 1952 1951 105 98 $: 134 $ 72 136 185 227 126 183 93 93 101 186 190 130 209 451 781 286 256 878 868 $1,084 $1 ,212 925 824 $2,036 $1 ,207 ing the total for the first eight months to $801 million. Total contracts awarded so far this year, however, do not match the same period last year when the Atomic Energy Commission project at Paducah was started. In this district, excluding the Paducah AEC project, contracts awarded for manufacturing plants, public works and utilities facilities, and residential building have been larger so far this year than last. Contracts awarded for commercial building have been about the same as in the same period last year. Residential con struction contracts awarded have increased in Louisville and Memphis, but have decreased in Lit tle Rock. The decrease in Little Rock was prima rily due to the start of a public housing project early in 1951. In St. Louis and Evansville, the number of dwell ing units included in the contracts awarded in the first eight months are nearly the same as last year. In St. Louis the dollar value of residential contracts is 7 per cent ahead of last year but only slightly greater in Evansville. TOTAL. RESIDENTIAL CONSTRUCTION CONTRACTS AW ARDED FIRST EIGHT MONTHS Metropolitan Area Dwelling U n its 1952 1951 St. Louis ........................................... 8,507 Louisville ....................................... 3,111 M emphis ............................................. 5,046 Little Rock ...................................... 496 Evansville .......................................... 590 Source: F . W . D odge Corporation. 8,516 2,446 3,595 1,187 588 Valuation (in thousands) 1952 1951 $105,423 43,015 40,308 4,982 5,796 $98,610 28.558 28,016 10,652 5,745 In six of the ten areas in this district which have been certified as critical defense housing areas, the percentage of units started (for sale and rental combined) to total units approved for private con struction under provisions of P u b l i c Law 139 ranged from 40 to over 80 per cent as of August 20. In one case—Knob Noster, Missouri—-started units amounted to 21 per cent of the number of units approved, and in another— Milan, Tennessee, re ports on the status of defense housing were not available at August 20 as the area had been certi fied as critical less than 90 days before. At the remaining two areas virtually nothing had been done. In Camden-Shumaker, Arkansas, only 2 of the 500 units approved had been started, and in Pine Bluff, Arkansas, none of the 340 units approved had been started. In Paducah, builders had applied for construction of only 76 of the 485 programmed sales units as of August 20 despite the removal of restrictions on price. However, applications for rental housing exceeded the planned number. Else where applications outnumbered the programmed units for both sales and rental housing. Page 149 TR A D E DEPARTMENT STORES N et Sales A u g ., 1952 8 m os.,’ 52 compared with to same J u ly /5 2 A u g ./5 1 period *51 Stocks Stock on H and Turnover A u g . 3 1 /5 2 Jan. 1 to comp, with August 31, A u g. 3 1 /5 1 1952 1951 8 th F .R . D istrict + 2 3 % P + 3 % P + 2 % P — 11% 2.41 2 .12 F t. Smith, A r k .l... + 1 8 -0 + 1 — 10 2.24 2 .10 Little R ock, Ark... + 2 4 + 7 + 4 — 10 2.37 2 .02 - 0 -P — 6P — 15 2.43 2 .16 Q uincy, 111............... + 2 3 P Evansville, In d ....... + 3 6 +15 + 5 — 24 2.28 1.93 + 6 + 4 — 2 2.51 2.41 Louisville, K y ........ + 1 7 Paducah, K y ........... + 1 6 +18 +30 ................................................ St. Louis A rea l 2.. + 2 6 + 2 + 1 — 15 2.40 2 .04 Springfield, M o ..... + 1 6 + 1 + 4 — 5 2.14 1.86 + 1 + 3 — 2 2.50 2 .37 M em phis, Tenn..... + 2 0 A ll Other Cities*.. + 1 4 + 9 + 6 — 5 2.07 1.95 ! I n 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 com puting department store indexes. 2Includes St. Louis, Clayton, Maplewood, M issouri; Alton and B elle ville, Illinois. * Fayetteville, Pine B luff, A rkan sa s; Harrisburg, M t. Vernon, Illinois; Vincennes, Ind ian a; Danville, Hopkinsville, Mayfield, K entucky; Chillicothe, M issou ri; Greenville, M ississippi; and Jackson, Tennessee. O U T S T A N D I N G O R D E R S of reporting stores at the end of Au gust, 1952, were 28 per cent larger than on the corresponding date a year ago. P E R C E N T A G E O F A C C O U N T S A N D N O T E S R E C E IV A B L E O utstanding A u gu st 1, 1952, collected during A ugust 45% 45 47 36 Quincy ......... St. Louis .... Other Cities 8th F .R . D ist. 18 % P 19 14 18P 60% P 51 51 47P IN D E X E S O F D E P A R T M E N T STOR E SALES A N D STOCKS 8th Federal Reserve District Aug. June Aug. July 1951 1952 1952 1952 81 103 95 98 P Sales (daily average), unadjusted3.................. 98P 106 111 110P 99 118 135 . 126P 112 139 125 129P 120 8D aily average 1947-49== 100. 4End of M onth average 1947-49 = 100. SPECIALTY STORES Stock Stocks Turnover N et Sales on H and A u g ., 1952 8 m o s ./5 2 A u g . 3 1 /5 2 Jan. 1 to compared with to same comp, with August 31, J u ly /5 2 A u g ./5 1 period *51 A u g. 3 1 /5 1 1952 1951 M en ’s Furnishings + 1 9 % B oots and S h o e s ..+ 1 5 + 10% + 5 - 0- % + 2 — 17% + 1 1.41 2.72 1.22 2.59 P E R C E N T A G E O F A C C O U N T S A N D N O T E S R E C E IV A B L E Outstanding A u g . 1, 1952, collected during A u g u st: M en ’ s Furnishings....................................4 3 % Boots and Shoes................ 3 5 % Trading d a y s: A u g ., 1952— 2 6 ; July, 1952— 2 6 ; A u g ., 1951— 27. RETAIL FURNITURE STORES N et Sales Inventories A u gu st, 1952 compared with J u ly /5 2 A u g ./5 1 A u gust, 1952 compared with J u ly /5 2 A u g ./5 1 — 6% - 0 -% — 2 + 2 — 2 + 2 — 12 - 0— 10 - 0— 1 — 16 — 1 + 5 — 3 — 1 * * Ratio of Collections A u g ./5 2 A u g ./5 1 23% 27% — 4% + 11% 58 64 + 16 — 7 61 67 + 16 — 7 13 15 — 3 + 17 — 3 12 13 Louisville............ . + 20 13 + 15 15 + 11 17 + 23 + 8 20 16 — 13 17 Springfield................. — 4 * * + 2 Fort Sm ith................ — 6 * N o t shown separately due to insufficient coverage, but included in Eighth District totals. 1 In addition to following cities, includes stores in Blytheville, Pine B luff, A rkansas; Hopkinsville, Owensboro. K entucky; Greenwood, M ississippi; Hannibal, M isso u ri; and Evansville, Indiana. 2 Includes St. Louis, M issou ri; and Alton, Illinois. 3 Includes Louisville, K en tu c k y ; and N ew Albany, Indiana. PERCENTAGE O F F U R N IT U R E SA L E S A u g ./5 2 J u ly /52 A u g ./5 1 Cash S a le s ........................................................................ 15% 16% 14% Credit S a le s ..................................................................... 85 84 86 T otal D IS T R IB U T IO N Sales.............................................................. 100% Page 150 STATUS OF DEFENSE HOUSING EIGHTH FEDERAL RESERVE DISTRICT A U G U ST 2 0 , 1 9 5 2 * ________________ N um ber of D welling U nits________________ Critical Defense Programmed Approved Started Completed H ousing Areas Rental Sales Rental Sales Rental Sales Rental Sales M ilan, Tenn................ 80 20 N o t Reported Camp Breckenridge, K y ................. 175 50 168 50 127 39 22 6 F ort Campbell, K y ................................ 625 0 575 0 491 0 123 0 Fort K n ox, K y ........ 131 75 131 75 52 31 0 0 Paducah, K y ............... 515 485 515 76 313 76 25 76 Fort Leonard W o o d , M o ............... 150 100 64 100 36 35 4 11 K nob N oster, M o ..... 212 88 209 85 58 5 0 0 Benton-Bauxite, A r k .............................. 250 0 249 0 163 0 27 0 Camden-Shumaker, A r k .............................. 250 250 250 250 2 0 0 0 Pine B luff, A rk ........ 340 0 340 0 0 0 0 0 •Programmed for private construction under Public L a w 139. Source: M o n t h l y S t a T i s t i c a i , R e v i e w , H ousing and H om e Finance A gency. Instalment Excl. Instal. Accounts Accounts Instalm ent E xcl. Instal. Accounts Accounts Fort Smith ........... ^ Little Rock.... 17 Louisville ...... 19 M em phis ....... 19 In terms of completed units, the private defense housing program had provided about 300 dwelling units at all ten critical areas in the district as of August 20, two-thirds being rental units and onethird on an ownership basis. 100% ' 10 0 % Tr a de Retail sales during August showed varying re sults. Traditional promotions apparently proved most successful for nondurables retailers. “ White sales” at durable goods stores were somewhat below expectations. There were apparently fewer con sumers waiting for the August “ white sales” of major appliances after the heavier-than-normal buy ing of major appliances during the summer’s recordbreaking heat wave. And there was little indication that fear of shortages as a result of the steel strike had brought about any noticeable increase in buy ing. At automobile dealers, with already low stocks and light deliveries from the manufacturers, sales were at a slow pace. Department store sales throughout the district during August gained more than seasonally from July and were somewhat above those in August, 1951. Sales were only slightly higher than a year ago during the first half of the month but they picked up during the last half. The more-thanW H O LE SA LE TRADE Line of Commodities_________ D ata furnished by Bureau of Census U .S . D ept, of Commerce* N et Sales A u gu st, 1952 compared with July, ’ 52 A u g ./5 1 Autom otive Supplies ...................+ 2 % + 4 % D rugs and Chemicals ................ + 17 — 8 D ry Goods ..................................... + 86 + 6 Groceries ...........................................— 4 — 1 Hardware ........................................ — 9 — 15 Tobacco and its Products ...... — 6 + 4 Miscellaneous ................................. + 17 +13 * * Total A ll Lines ..............+ 13 % — 5% * Preliminary. **Includes certain items not listed above. Stocks A u gust 31, 1952 compared with A u gu st 31, 1951 + 2% + 17 —22 —1 — 15 + 7 — 17 -1 6 % seasonal gain from July placed adjusted daily sales at 110 per cent of the 1947-49 average. They were 99 per cent in July. Preliminary reports through mid-September indicated that the cumulative gain in sales for the first eight months this year will be maintained in the month. St. Louis area women’s specialty store sales vol ume during August was about two-thirds larger than in July and was one-sixth larger than in August, 1951. Sales at men’s wear stores through out the district were reported almost one-fifth above those in July and about one-tenth larger than a year ago. Furniture store sales at reporting stores in the district totaled 11 per cent larger than in July but were 4 per cent below those a year ago. Inventories held by reporting retail lines on August 31 were generally below those a year ago. In comparison with those held on July 31 increased inventories were reported by department stores, women’s specialty stores, and men’s wear stores. Furniture store inventories were about at the same level as a month earlier. Outstanding orders at department stores on August 31 averaged slightly higher than a month earlier and were almost one-fourth larger than a year ago. B a n k i n g and Finanee During August and early September the money market remained tight. Reflecting the pressure, banks, both districtwise and nationally, sold short term securities and continued to borrow heavily. Consumer loans continued to rise rather sharply; both real estate and business loans were up mod erately. Banking—During August and early September district member banks’ lending and investment policies continued to be conditioned significantly by tight reserve positions. At the end of July excess reserves of member banks were below normal. In addition, over the six-week period, district banks, particularly the larger city banks, were drained of funds as the result of an outflow of payments to other areas, reflecting a net import of goods and services into the district. The heaviest outflow of funds went to the Chicago and New York areas. District banks were also called upon to meet a large demand for currency, centering in the week before Labor Day. A partial offset to these drains was provided by n e t Treasury expenditures in the period. To meet the drain of funds, district banks, espe cially in the larger cities, sold short-term Govern ment securities. Over the six weeks, weekly report ing banks reduced their Treasury bill holdings $26 million, certificate holdings $18 million and their note holdings $7 million. In addition, banks in creased their already substantial borrowings. As a result, borrowings reached their highest level in recent years and were above excess re s e r v e s throughout the period. Despite the tightness of reserve positions mem ber banks expanded their loans during August and early September. The expansion, however, was moderate and centered in the larger city banks. Business loans were up. The gain at Memphis was substantial and was offset only in part by a decline at Louisville; other reporting centers had small increases. Outstanding loans to consumers continued to rise rather sharply although the vol ume of new loans made was down somewhat from the high levels of June and July. Greatest expan sion, as in July, was in repair and modernization loans. Real estate loans continued to climb. Nationally, as well as in the district, reserve positions of banks were tight during August and early September. This condition coupled with an increase in loan volume, as business loans rose about seasonally and consumer and real estate loans ex panded, caused the banks to liquidate a substantial ESTIMATED CONSUMER IN S T A L M E N T CREDIT EIGH TH D IS T R IC T COMMERCIA L BANKS Millions of Dollars____________________________ Millions of Potlors REGULATION W SUSPENDED i / REGULATION W IMPOSED I |1 1I -J -u -; i i i 1950 1951 1952 Page 151 amount of short-term Government securities and to maintain their borrowings from the Reserve Banks at a high level. its branches was 557,000 in August, off 1 per cent from July and the smallest amount for any month this year. Checks Cashed— Both amount and number of checks written in August were down from the high level of July. Debits to deposit accounts at 22 cities in the district were $3.6 billion in August, down 11 per cent from July and 5 per cent from August a year ago. Sharpest declines from the previous month were at banks in Springfield (Missouri), St. Louis, and Evansville. The daily average number of checks cleared through the Federal Reserve Bank of St. Louis and Nationally, as in the district, debits were in smaller volume during August. In leading cities outside New York, debits to deposit accounts were $81.5 billion, 9 per cent less than in July and 3 per cent less than in August, 1951. Business Loans— The gain in business loans noted at district banks in August and early September continued a trend in evidence for several months. Normally business loans in the district expand in the fall of the year, the upswing starting at about mid-year. This year from June 25 through Septem ber 10, business loans at weekly reporting banks rose $44 million. The gain— sharpest at Memphis and St. Louis member banks— compared with a rise of $15 million in the corresponding period last year. DEBITS TO DEPOSIT ACCOUNTS Au gust, 1952 A u g ., (I n thousands A u g ., July, compared with 1952 1952 of dollars) 1951 E l Dorado, A rk .... ,$ 25,937 $ 24,339 $ 27,993 + 7% 7% 45,112 Fort Smith, Ark.., 47,912 43,418 — 6 + 4 Helena, A rk ........... 6,189 6,700 6,517 — 8 5 Little Rock, A rk .. 130,664 146,166 135,708 — 11 4 Pine Bluff, A rk.... 35,648 38,161 29,653 — 7 + 20 Texarkana, A rk .*, 17,984 14,271 — 5 18,954 + 26 Alton , 111................. 31,021 32,743 29,355 — 5 + 6 E .S t .L .-N a t .S .Y ., 111... 118,865 130,332 145,908 — 9 19 Q uincy, 111................... 33,437 34,138 33,207 — 2 + 1 Evansville, In d .......... 130,072 154,518 150,096 — 16 13 Louisville, K y ............ 659,788 684,681 678,887 — 4 3 Owensboro, K y ......... 37,328 35,060 41,139 + 6 9 Paducah, K y ............ ... 42,113 42,391 26,296 — 1 + 60 Greenville, M iss......... 18,393 19,083 19,723 — 4 7 Cape Girardeau, Mo. 12,068 13,233 12,494 — 9 3 Hannibal, M o ............. 9,199 10,462 9,534 — 12 4 Jefferson City, M o... . . 52,115 54,515 49,425 — 4 + 5 St. Louis, M o ............. . 1,654,776 1,956,287 1,775,148 — 15 7 Sedalia, M o ................. 11,008 11,430 10,635 — 4 + 4 Springfield, M o .......... 61,455 70,695 73,406 — 13 16 Jackson, Tenn........... 19,870 19,924 19,667 - 0 1 T . 483,157 526,738 491,795 — 8 2 T otals............................. $3,636,199 $4,078,462 $3,824,275 — 1 1 % — 5% * These figures are for Texarkana, Arkansas, only. Total debits for banks in Texarkana, Texas-Arkansas, including banks in the Eleventh District, amounted to $38,897. _ _ Not only was the expansion in business loans larger than usual, but the pattern of expansion was different this year. The bulk of the rise is usually occasioned at this time of year by an expansion of loans to food manufacturers and commodity dealers. However, this year these borrowers accounted for only a third of the total business loan expansion. Also in contrast to last year, loans to metal manu facturers were down somewhat. The greater-thanseasonal gain this year was primarily the result of an increase in outstanding loans, to sales finance companies, manufacturers of textile, apparel and leather goods, wholesale concerns and contractors. _ _ _ _ EIGHTH DISTRICT MEMBER BANK A SSETS AND LIABILITIES BY SELECTED G ROUPS A ll Member (I n Millions of Dollars) Assets 1. Loans and Investm ents................................... a. Loans ................................................................... b. U .S . Government Obligations................ c. Other Securities............................................... 2. Reserves and Other Cash Balances........... a. Reserves with the F .R . B ank.................. Change fro m : July, 1952 A u g ., 1951 to to A u g ., 1952 A u g ., 1952 A u g ., 1952 $4,305 1,938 1,961 406 $— + — + 12 10 28 6 + + + 33 15 18 + + + + 3 — B ala n ces3.............................. 1,369 714 655 3. Other A ssets............................................................ 53 4. Total A sse ts............................................................. b. Other Cash Large City Banks 1 Smaller Banks 2 Change fr o m : July, 1952 A u g ., 1951 to to A u g ., 1952 A u g ., 1952 A u g.,,1952 Change fro m : July, 1952 A u g ., 1951 to to A u g ., 1952 A u g ., 1952 A u g .,,1952 $2,506 1,270 1,032 204 $— + + 16 8 29 5 70 37 33 842 465 377 + + + 25 17 8 10 33 + 1 $ + 291 + 142 + 100 + 49 — $ + 109 + 44 + 53 + 12 $ + 182 + 98 + 47 + 37 $1,799 668 929 202 $+ + + + 4 2 1 1 + + + 42 23 19 527 249 278 + — 8 2 10 + 2 20 + 2 $ + 125 $+ + + 88 2 86 + + + + 28 14 14 — 12 $5,727 $+ 24 $+351 $3,381 $+ 10 $+226 Gross Dem and D eposits................................... a. Deposits of B a n k s ........................................ b. Other Demand D eposits............................ $4,184 635 3,549 $— — — 2 1 1 $+205 + 12 + 193 $2,540 598 1,942 $— 12 2 10 $ + 117 + 10 + 107 $1,644 37 1,607 6. Tim e D e p o sits....................................................... 1,037 + 6 + 56 500 + 2 + 20 537 + 4 + 36 7. Borrowings and Other Liab ilities.............. 130 + 17 + 76 122 + 19 + 78 8 — 2 — 2 8. 9. Total Capital Accounts................................... Total Liabilities and Capital Accounts.... 376 $5,727 + $+ 3 24 + 14 $ + 351 219 $3,381 + 1 10 + 11 $ + 226 157 $2,346 + 2 14 $2,346 $+ 14 $+ + + 10 1 9 Liabilities and Capital 5. — — $+ $+ 3 + $ + 125 1 Includes 13 St. Louis, 6 Louisville, 3 Memphis, 3 Evansville, 4 Little R ock and 4 East St. L ouis-N ational Stock Yards, Illinois, banks. 2 Includes all other Eighth District member banks. Some of these banks are located in smaller urban centers, but the m ajority are rural area banks. 3 Includes vault cash, balances with other banks in the United States, and cash items reported in process of collection. Page 152 Agriculture occurred in Missouri, the current crop is a third larger than the 1951 crop. Prospects for district agricultural production im proved during August and the first half of Septem ber. Sufficient moisture had fallen over most of the district to permit considerable improvement in the condition of pastures and late hay crops in particu lar, as well as the corn, soybean, tobacco and cotton crops. However, fall plowing and progress of fallsown crops was slowed in some areas due to lack of adequate rainfall. Nationally, crop conditions improved also. The volume of all crop production is third largest on record and only slightly less than the second largest crop. Nationally, the corn, soybean, rice, hay, and tobacco crops improved during August. On the other hand, and in contrast with the brighter pros pects for the Eighth District cotton crop, the esti mate of cotton production on September 1, for the nation as a whole was 6 per cent less than the August 1 estimate, as a result of serious drouth losses in Texas and Oklahoma. Expected production of major crops produced in the Eighth District equaled or exceeded the August estimates with the exception of rice. Prospects for district rice production declined during the month. Estimated corn production September 1 was 18 million bushels higher than a month earlier, a 2 per cent increase and within 3 per cent of 1951 produc tion. The oats crop also turned out to be somewhat larger than earlier estimates indicated. Soybeans—The September estimate of soybean production was 7 million bushels or 8 per cent larger than the August estimate. B e t t e r prospects in Arkansas, Illinois, and Missouri, accounted for the bulk of the increase. A further decline in soybean production is expected in Kentucky, the crop now being estimated to be 40 per cent smaller than the 1951 crop. Some of the decrease can be attributed to a larger portion of the crop being harvested for hay. ESTIMATED PRODUCTION FOR MAJOR CROPS EIGHTH DISTRICT SEPTEMBER 1. 1 9 5 2 (in thousands) E st. Production Sept. 1, 1952 C o m ( b u . ) ...................................... 353,370 W heat ( b u .).................................... 52,754 O ats ( b u .) ........................................ 43,018 Soybeans ( b u .) ............................... 85,391 Rice (b a g s )...................................... 10,250 Cotton (b a les)............................... 3,340 Burley tobacco (lb s .)................ 196,993 Source: Adapted from C r o p P r o d u c t i o n , Per Cent Change from 1951 — 3% +30 + 3 + 4 + 6 — 1 — 1 U SD A, Per Cent Change from A u g . 1, 1952 + 2% - 0 + 2 + 8 — 1 + 8 +13 September, 1952. Tobacco— The tobacco crop improved materially in August. Expected burley production on Septem ber 1 was 13 per cent higher than the August esti mate and only 1 per cent less than the large 1951 crop. Conditions improved to a lesser extent in dark air-cured tobacco, but the estimate of dark fire-cured tobacco remained the same. Harvesting of the crop proceeded rapidly and by mid-September an esti mated two-thirds of the crop had been cut. Cotton— Estimated district cotton production in September was 236,000 bales or 8 per cent larger than a month earlier. Increases over a month earlier were expected in Arkansas, Mississippi and Tennes see. A l t h o u g h no increase during the month Hay—Although the 1952 hay crop will be smaller in all district states than in 1951, some encourage ment was received during the month in states hard est hit by drouth. Rains were beneficial for late hay crops, lespedeza in particular. Pasture conditions— particularly in Missouri— on September 1, also were improved considerably over the August condition. ESTIMATED HAY PRODUCTION AND PASTURE CONDITION, EIGHTH DISTRICT STATES. SEPTEMBER 1. 1 9 5 2 A ll H a y Production. 1952 (Thousands Sept., Per Cent Change of tons) 1952 from A u g ., 1952 Arkansas— ................... 895 +11% Illinois........................... 4,426 - 0Indiana........................... 2,457 — 1 Kentucky....................... 2,051 + 6 724 — 4 Mississippi................... M issouri......................... 3,821 + 5 Tennessee...................... 1,147 +20 United States...............102,417 + 3 Source: C r o p P r o d u c t i o n , U S D A . Pasture Condition Per Cent of Normal Sept., 1952 A u g ., 1953 50% 35% 75 79 70 73 52 49 50 45 76 55 48 30 70 69 Agricultural prices remained unchanged between July 15 and August 15. Prices paid by farmers, however, went up one point, but the parity ratio remained unchanged at 103. Prices of poultry, dairy products, hogs and small grains were higher at the end of this period but were offset by declines in prices of cattle, calves, and truck crops. CASH FARM INCOME (In thousands July, of dollars) 1952 Arkansas___________$ 28,971 Illinois........................ 197,703 Indiana....................... 104,955 K entucky................... 37,263 M ississippi................. 18,040 M issouri..................... 96,076 Tennessee.................. 31,946 Totals..................... $514,954 July, 1952 7 month total Jan. to July compared with 1952 June, July, compared with 1952 1951 1952 1951 1950 + 8% + 4% $ 216,615 + 1 2 % + 4 2 % +45 — 2 1,073,600 — 2 +13 +40 + 6 582,068 — 2 +17 +15 — 6 282,104 — 3 + 7 — 22 — 6 157,270 — 2 +37 +28 — 17 536,108 — 12 + 9 — 6 + 3 __ 221,630 + 1 + 18 + 28% — 3% $3,069,395 — 3 % + 1 5 % RECEIPTS AND SHIPMENTS AT NATIONAL STOCK YARDS Cattle and calves.... H o g s............................ Sheep........................... Totals...................... __________ Receipts__________ ___________Shipments_________ A u gu st, *52 A u gu st, *52 A u g ., compared with A u g ., compared with 1952 July,*52 A u g .,*51 1952 130,014 + 3 % — 7% 64,521 , + 2 0 % — 15% 180,844 >— 18 — 31 60,137 — 24 — 36 72,119 + 1 1 — 1 47,581 + 1 5 — 3 382,977 — 7 % — 20% 172,239 — 1 % — 24% Page 153 July,*52 A u g
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