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

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Monthly Review
Volume X X IX

SEPTEM BER 1, 1947

Number 9

Factors in United States Foreign Trade
Foreign trade has always been important to the
United States, but aside from those directly en­
gaged in exporting and importing, relatively few
people in this country were interested in the sub­
ject until recently. W orld W ar II and the postwar
period, however, by highlighting the tremendous
powers and responsibilities of the United States
in international affairs, plus the fact that the
world’s need for United States production raised
our exports to unprecedented levels, has served to
focus considerably more attention on our interna­
tional trade position and prospects.
The Eighth District has a stake in foreign trade
greater than is generally realized. Exactly how
many dollars worth of goods produced in this area
are shipped abroad cannot be determined from
present statistics. Nor can we measure our import
volume accurately. Exports generally are accred­
ited to the port of clearance rather than the point
of origin. Similarly, most imports are cleared
through brokers located in port cities and arrive
in this district as domestic shipments. Informed
opinion, however, suggests that district foreign
trade is sizable. It is estimated that exports from
the St. Louis area in 1947 will total about $100
million. In the Memphis area total foreign trade
volume (exports plus imports) has been estimated
at about $50 million annually.
] Particularly in the case of certain raw materials,
producers in this district have a very real interest
in foreign trade. For example, foreign demand for
U. S. cotton normally accounts for a large part of
our output and about 30 per cent of the cotton
produced in this country is grown in this district.
A similar situation has existed with respect to




certain types of tobacco. Intensive efforts are now
under way to develop foreign markets for burlev
tobacco (the most important type grown here)
which has not been exported in large quantities
in the past. Lumber exports from district states,
while relatively small, accounted for 7 per cent of
all lumber distributed from these states in 1932.
The ratio declined to 5 per cent in 1936 and to 3 per
cent in 1938, but even in the latter year almost 10
per cent of Kentucky’s lumber was exported.
A large variety of items manufactured in this
district are sold abroad. In the St. Louis area, for
example, they range from seeds to street cars, and
include chemicals, apparel, shoes, motors, iron
products, and piston rings.
Since the end of the war, interest in developing
foreign outlets for district goods has been stimu­
lated in some district cities. In Memphis, for ex­
ample, the Foreign Trade Council in conjunction
with the Memphis International Center organized
an Export-Import Clinic. Through this channel
considerable interest has developed and from 50 to
70 persons have enrolled at the clinic annually.
Of particular significance and perhaps illustrative
of the growing interest of the Midwest in interna­
tional affairs is the fact that in October the ThirtyFourth National Foreign Trade Convention is to
be held in St. Louis. In this area a number of
organizations function in the promotion of exportimpor,t trade. Included are the Foreign Trade Bu­
reau of the St. Louis Chamber of Commerce, the
Export Managers’ Club which sponsors an annual
Institute in Foreign Trade, and the St. Louis Re­
gional Inter-American Center.

Admittedly, the potential volume of goods produced in this district and sold abroad is far from
realization. A t the present time many manufactur­
ers, unable to meet their domestic demand, are
disinterested in cultivating foreign markets. What
often is unrealized is that export volume could
provide a cushion for sales when domestic demand
falls off. Thus, it would seem to be desirable, from
the long-term point of view, for manufacturers to
devote at least a small percentage of their output
to gaining a foothold in selected foreign markets.
The needs of other countries are almost without
limit and when their domestic economies reach a
more normal level, these nations can provide a sub­
stantial outlet for many types of goods produced
in the United States and in the Eighth District.
P R IN C IP L E S O F IN T E R N A T IO N A L T R A D E

Trade between nations stems basically from:
(1) differences in climate and natural resources,
(2) differences in stages of economic development,
and (3) differences in customs, traditions and
wants. These differences, either singly or in com­
bination, make it advantageous for certain nations
and regions to specialize in those goods and serv­
ices which they are best fitted to produce. For
example, since countries in the temperate zone
cannot grow tropical products except under artifi­
cial conditions it is less expensive to buy them
from other countries. The United States enjoys a
strong competitive position in those products in
which labor-saving machinery can be used advan­
tageously. Custom and tradition also influence the
type of economic activity. Skill and an established
reputation for certain products tend to perpetuate
certain types of production— for example, Persian
rugs, Swiss watches and French wines.
The advantages of international and inter­
regional trade are obvious. Such trade enables
countries to have many commodities they could
not have otherwise because they cannot be pro­
duced at home or if they can, only at high cost.
More important, however, is the fact that inter­
national trade makes it possible for nations to spe­
cialize in those goods which they can produce most
efficiently. Their surplus over domestic require­
ments can be sold abroad and the proceeds used to
purchase those goods which cannot be produced as
efficiently at home. By spending time and utilizing
resources in doing those things which can be done
best, total output is increased. Thus trade between
countries, by promoting and making possible spe­
cialization and more efficient production, tends to
increase the total supply of goods available for conPage 98




sumption and to raise the standard of living in all
countries.
Any discussion of international trade at the pres­
ent time should make clear the distinction between
the immediate (and relatively short-run future)
situation and the longer-run future. Currently we
have a “ favorable” trade balance— we export more
than we import. This excess of exports is paid for
in part by foreigners, either through drawing down
their gold or dollar assets or through the use of
credits extended them by the United States Govern­
ment or other sources. Additional exports, in con­
nection with the war or postwar relief, have been
given by us to the recipients.
A '‘favorable” trade balance means that our net
production is larger than our net consumption. The
income from production of all goods and services
is thus higher than our net consumption and in
the short-run this excess provides stimulation for
domestic business activity.
In the long-run, however, a “ favorable” balance
cannot be maintained unless we grant ever-increas­
ing credit or give our goods away abroad. Other
nations, if they pay for our goods which they buy,
must sell an equivalent amount of their production
to us. At a time like the present when most areas
outside the United States have not the productive
capacity to meet their own basic needs, it is desir­
able and probably necessary for us to help them
meet those needs by lending or giving aid adequate
in kind and quantity to assist them to re-establish
their production. In the long-run it is not desirable
artificially to maintain high production here by ex­
porting more than we import.
T H E V O L U M E OF U. S. F O R E IG N T R A D E

International trade involves considerably more
than buying and selling raw materials or manufac­
tured products. In addition to the exchange of
physical goods, nations also buy and sell services
which, with other types of so-called intangibles,
are as much a part of foreign trade as the sale of
commodities. Such items as freight and shipping
services, tourist trade, and interest and dividend
payments to foreign holders of securities all are a
part of a nation’s trade volume. Thus, trade
volume has to be measured not only in terms of the
value of merchandise we sell to or buy from people
in other countries but also must take into account
the value of services exchanged.
Last year our exports of goods and services,
including Lend-Lease, U N RRA and private relief
shipments, amounted to $15.3 billion. W e exported
$9.7 billion worth of merchandise, of which approxi­
mately $8 billion was on a cash purchase basis. Ex­
cept for the war years of 1943 to 1945, export vol.-

ume last year was at the highest level in the history
of the country. In the first six months of 1947 mer­
chandise shipments out of the country were 62
per cent larger, on a dollar basis, than in the cor­
responding period last year.
The magnitude of our export trade can be appre­
ciated better when the current rate is compared
with the value of shipments in the interwar period.
From 1920 to 1929 our sales of goods and services
abroad averaged $6.6 billion annually; merchan­
dise exports alone averaged $5 billion each year.
The worldwide economic collapse in the early
1930’s resulted in a sharp decline in foreign pur­
chases of United States products and in the next
ten years we were able to sell to other countries
an average of only $3.7 billion worth of goods and
services each year. Merchandise exports during
that period dropped to an average of $2.6 billion
annually.
W ith the outbreak of war in Europe in 1939, the
demand for products of our industries and farms
increased sharply. In 1940 and 1941 our total ex­
ports returned to a $6 billion a year level, and ship­
ments of goods averaged $4.6 billion. Following
Pearl Harbor and the beginning of our active par­
ticipation in W orld W ar II, the dollar value of
total exports, including lend-lease, spurted upward—
from $6.9 billion in 1941 to a peak of $21.2 billion
in 1944. In that year alone we shipped more goods,
on a dollar basis, than in the entire period from
1935 to 1939.
The end of the war in 1945 and the cessation of
lend-lease led to a decline in exports. In 1945, we
shipped abroad goods valued at $9.8 billion, while
total exports, including services, amounted to $16.1
billion. A further reduction occurred in 1946 but
late in that year, stimulated by dollar credits re­
sulting from United States loans to some coun­
tries plus a large foreign aid program and with
an increased supply of manufactured goods avail­
able for export, our merchandise sales abroad in
December reached the $1 billion a month level.
In the first half of 1947 such merchandise exports
averaged $1.3 billion monthly.
At the same time that the outflow of goods and
services from the United States is at the highest
peacetime level, our purchases of goods from other
countries are higher than in any year except 1920.
Last year we bought from abroad goods valued at
$4.9 billion.
The current level of imports, too, can best
be brought into perspective by comparison with our
purchases abroad in the past. From 1920 to 1929
we bought goods abroad valued at an average of




almost $4 billion each year. In the 1930’s the
annual rate dropped to $2.1 billion. However, the
decline in imports was not as great as the decrease
in volume of merchandise exports. Thus, in that
decade our purchases from abroad averaged 82 per
cent of the value of goods shipped out of the coun­
try as compared with 79 per cent in the 1920-1929
period.
Immediately prior to W orld War II the dollar
value of imports increased to about $3 billion a
year in 1940-1941 and during the war years (19421945) a further gain occurred, with purchases
averaging $3.5 billion a year. Relative to ex­
ports, however, our imports declined in each
of those two periods, averaging barely 31 per
cent of the value of merchandise shipped out of the
country during the war. Last year the balance
improved slightly but imports still totaled only
about half the value of goods sold to other
countries.
Types of'G ood s Traded—Although the size of
our foreign trade volume is impressive when meas­
ured in terms of dollar value, its importance to
our economy is more accurately expressed, in the
case of exports, by relating our shipments abroad
to the value of goods and services produced in the
United States. It is this relationship, too, that is
of utmost significance currently, and promises to
become more vital if this country places in oper­
ation a tremendous program of foreign lending or
outright aid.
Last year, as noted, the value of goods and serv­
ices sold abroad amounted to $15.3 billion, in­
cluding lend-lease, U N RRA and private relief
shipments. This sum was almost $3 billion more
than was spent in the United States in 1946 for
producers’ durable equipment and almost double
the amount spent for all new privately financed
construction. Merchandise exports alone were
larger in value than expenditures for new private
construction. Even during the 1930’s and in 19401941 our sales abroad were as large, dollarwise, as
our expenditures for private construction.
Nevertheless, large as it is on a value basis, the
nation’s exports represent a relatively small por­
tion of the goods and services we produce. In
1946, for example, when exports were larger than
in any previous peacetime year, only 7.5 per cent
of the $204 billion of goods and services produced
in the United States was exported. While the per­
centage was larger than in any year since 1929’
with the exception of the war period, it was at
approximately the level of the 1920’s. From 1930
Page 99'

to 1939 we exported about 4.8 per cent of our pro­
duction and in 1940-1941 about 5.3 per cent. During
the war, when shipments increased precipitately,
their value averaged 8.8 per cent of the gross na­
tional product, reaching a peak in 1943 and 1944
of about 10 per cent.
Although the aggregate value of the goods and
services we produce and sell abroad is relatively
small in terms of the total output in the United
States, the foreign market for some specific raw
materials and finished products is of sizable im­
portance to a given industry. For example, a large
part of the raw cotton produced in this country is
exported. In the ten years prior to the war an
average of 48 per cent of the cotton grown in the
United States was sold abroad. In that period
about 30 per cent of our tobacco output was ex­
ported. In 1939, one-third of the lubricating oil
produced in this country, 12 per cent of the kero­
sene, 14 per cent of the tin plate and terne plate and
16 per cent of the completed motor trucks, busses
and chassis manufactured in the United States were
sold to consumers in other countries. Thus, even
in the so-called normal prewar years, shipments out
of the country represented a substantial part of
total sales for these industries.
Since W orld W ar II, many producers have been
called upon to ship abroad an even larger propor­
tion of their output than was exported prior to the
war. The needs of all the war-ravaged countries
throughout the world are enormous, not only for
food and clothing but for capital equipment neces­
sary for the economic restoration of their econo­
mies. Since the productive capacity of the United
States constitutes the primary source of most of
these goods, this nation’s farms and factories are
diverting larger-than-normal proportions of their
output to other countries.
On a dollar value basis, finished manufactured
goods accounted for 52 per cent of total exports
of merchandise in 1946. Next most important on
that basis were foodstuffs which represented 23
per cent of our out-bound shipments. Crude mate­
rials made up 15 per cent, semi-manufactures 9 per
cent and military equipment 1 per cent of the value
of exports that year.
Through May, 1947, finished manufactured goods
accounted for an even larger part of the dollar
value of merchandise exports, totaling 61 per cent
of our shipments. Foodstuffs (crude and manu­
factured) declined in importance as compared with
the full year 1946, amounting to 17 per cent of the
total. Crude materials also declined in the first
Page 100




part of 1947, relative to total shipments, but still
made up 11 per cent of the total, while semi­
manufactured goods increased to 11 per cent of
all exports. When allowance is made for the
higher price level in 1947 the increase in value of
manufactured goods sold abroad becomes less sig­
nificant while the decrease in food shipments is
traiislatable into an actual reduction in the quan­
tity of food transported.
Imports of crude materials normally account for
the largest part of the goods bought abroad and
in 1946 expanded more than any other group.
Last year 36 per cent of our imports were in this
classification; in 1936-1938 they represented 31
per cent of the total. Raw wool, furs, rubber and
silk were important items in 1946, although price
increases accounted for a substantial part of the
gain over prewar years. Foodstuffs, chiefly coffee,
sugar and fruits, nuts and vegetables, represented
27 per cent of our 1946 imports. Semi-manufactured goods, primarily non-ferrous metals and dia­
monds, made up 19 per cent while finished manu­
factured goods accounted for 18 per cent of the
total— slightly less in each case than in 1936-1938.
Geographical Distribution— Prior to the war, 21
per cent of our exports, on a dollar basis, went to
the western countries of continental Europe, 19
per cent were sent to the Far East and 17 per cent
were shipped to the United Kingdom. Almost as
important customers as the United Kingdom at
that time were the American Republics, which took
16 per cent of our exports, and Canada, which ac­
counted for 15 per cent. Of the remainder, Africa
and the Near East bought 5 per cent, Central
Eastern countries of Europe 2 per cent, Russia 2
per cent, with the' other 3 per cent distributed
among the rest of the nations of the world.
In 1946, trade with all the major geographical
areas was considerably larger than the volume
prior to the war, even exclusive of Lend-Lease
and relief shipments. However, a definite shift
occurred in the relative importance of a number of
areas, particularly in the distribution of cashpurchase exports.
While Canada, the American Republics and
Africa and the Near East bought a larger per­
centage of our cash-purchase exports in 1946 than
in 1936-1938, the United Kingdom declined in im­
portance as compared with prewar volume. These
changes resulted directly from the effects of W orld
W ar II. Our imports from Western Hemisphere
countries, Africa and the Near East, as well as from
Russia, were larger in 1946 than before the war,
relative to total imports.

F IN A N C IN G F O R E IG N T R A D E

A nation’s ability to buy foreign goods depends
upon its ability to obtain balances in foreign coun­
tries. Other countries can build up dollar balances
in the United States by selling us their goods and
services or by borrowing from us. Or looking at it
in another way, the United States can sell its goods
and services abroad only to the extent: (1) that
it purchases (imports) foreign goods and services,
and (2) that it supplies dollars through foreign
loans. It should be noted, however, that foreign
loans obligate the borrowers to make interest and
principal payments to the lender, e.g. the United
States. These payments cannot be made, however,
unless the United States buys enough foreign goods
and services to supply the necessary dollars.
Ultimately, then, credit extended to foreign coun­
tries will turn out to be gifts unless the lending
nation is willing to accept goods in payment.
United States Balance of International Payments
— Merchandise imports and exports do not have to
balance during a particular period, but a nation’s
total outpayments and inpayments must balance
if all merchandise, service and credit transactions
are included. The balance of international pay­
ments of the United States is therefore a record o f :
(1) dollars supplied to foreign countries through
purchases of their goods (imports) and services
and through credits extended; and (2) the use of
dollars by foreign countries for the purchase of
U. S. goods (exports) and services and credit
extended to U. S. borrowers.

The following charts show the major sources
and uses of dollar balances from 1919 to 1946.
Merchandise imports, payment for foreign shipping
services, tourist expenditures abroad, personal re­
mittances to foreign countries by United States
residents and new loans and investments in for­
eign countries have been the major sources of
dollars made available to foreign countries. These
dollars have been used by foreigners mainly to
purchase United States goods (exports), to pay
for United States shipping services, and to pay
interest and dividends to United States lenders and
owners of foreign investments.
Perhaps the most striking feature revealed is
the wide fluctuations in total sources and uses of
dollar balances engendered by periods of depression
and prosperity in the domestic economy. These
fluctuations are due both to changes in the physical
volume of imports and exports and to changes in
the prices at which they are valued. There
was a sharp decline in dollars supplied foreigners
in 1921, in 1930-1932 and in 1937. The drop was
especially severe in the early thirties when dollars
made available to foreigners dropped from $7.4
billion in 1929 to $2.4 billion in 1932— a decrease of
68 per cent in three years. Dollars required to
meet debt service payments to the United States
remained fixed at about $900 million, resulting in
a drop of dollars available for other purposes from
$6.5 billion in 1929 to $1.5 billion in 1932, a de­
cline of 77 per cent. Dollars used by foreigners to

SUPPLY AND USE OF DOLLARS, 1919-1946
D O LLA R S

SUPPLIED

BY MAJOR SO U R C E S

(PAYM ENTS

TO

FOREIGN

1919 - 1946*

DOLLARS

USED
(RECEIPTS

COUNTRIES)

BY

MAJOR

FROM

SOURCES

FOREIGN

1919 -1946*

COUNTRIES)

BILLIONS OK
OOLLARS

1919

1922

1925

1928

1931

•EXCLUDES UNILATERAL
TRANSFERS
THROUGH
NO PAYMENT IS TO BE MAOtL, 1940-1946
SOURCE • DEPARTMENT

OF




COMMERCE

1934

1937

LEND-LEASE,

1940

U.N.RR.A,

ETC

1943
FOR

1946
*HJCH

1943
•EXCLUDES
NO PAYMENT

tS

TO

SOURCE DEPARTMENT

BE
Of

TRANSFERS
THROUGH
MA0E. 1940 -1946

LEND-LEASE.

UNRRA,

ETC.

FOR

1946
WHtCW

COMMERCE

Page 101

buy United States goods and services also varied
widely, decreasing during periods of depression
and increasing during periods of good business.
The short depression in 1937-1938 brought a sharp
drop in dollars made available to foreigners but had
little effect on dollars used for purchases in the
United States.
The wartime pattern was dominated by the huge
transfers of goods to Allied nations under lendlease. Most of our imports, however, were for
cash so that the United States had a net cash
deficit from its international trade— the first time
in many years. The deficit was met by a loss of
gold and by an increase in foreign-owned, short­
term dollar balances in the United States. Since
V-J Day the pattern has changed. Lend-lease aid
was stopped and the unprecedented volume of
United States exports has been financed largely by
various types of credit extended foreign countries
or by outright gift.
The Dollar Shortage— During the war there was
a tremendous demand for American goods and a
major part of United States exports were lendlease shipments which did not require cash pay­
ment. Lend-lease was terminated soon after hos­
tilities ceased but the need for American goods
continued acute. The war-involved areas were
and still are in dire need of food and the necessi­
ties of life, and of raw materials, machinery and
other products essential for the restoration and
rehabilitation of their economies. In addition, there
was and is a tremendous pent-up demand every­
where for goods not freely available since before
the war.
The chief source of supply for these goods is
the United States. Hence the desire for dollars is
great but the ability to command them is very
limited. Productive capacities of the war-devas­
tated nations are too limited and depleted to
supply domestic needs, and even if home con­
sumption were held to a minimum there is little
available for exports. Thus it has been impossible
for many foreign countries to build up their dollar
balances through exports.
Gold and dollar balances held by foreigners rep­
resent another source of purchasing power for
United States goods. These have increased sharply
since the 1930’s and have been pointed to as con­
stituting plenty of foreign purchasing power for
United States -goods. Actually they represent a
limited means of meeting the need for foreign
Page 102




goods and services. First, they are not distributed
among the nations according to need for assistance.
In general, the countries least affected by the war
and therefore least in need of assistance have been
the ones which are able to maintain or increase their
exports to the United States and build up their
dollar balances. Second, a sizable part of the
balances owned by the nations requiring assistance
represents reserves which are required to main­
tain currency stability and hence are not avail­
able for meeting current import balances. Finally,
the increase in prices and in the money volume of
transactions makes it necessary for foreign coun­
tries to maintain larger working dollar balances.
Actually prices have risen further than have for­
eign owned dollar balances so that the real pur­
chasing power of these balances has declined.
It must be recognized, therefore, that a large
part of these gold and dollar balances are not
available for the purchase of needed foreign goods
and services. Neither are most of these countries
strong enough financially to obtain credit in the
private capital markets. Hence many of them
are in a dilemma— they cannot build up their pro­
ductive and export capacity without essential raw
materials, machinery and equipment and they can­
not purchase the latter without building up their
exports of goods and services.
T o meet this need and provide financial re­
sources, the Allied countries, mainly the United
States, have provided an unprecedented volume of
relief grants and credits for the rehabilitation and
reconstruction of war-devastated areas. The In­
ternational Bank for Reconstruction and Develop­
ment was organized primarily to supply long-term
credit for reconstruction. The International Mone­
tary Fund was designed to supply scarce curren­
cies to meet temporary shortages and thus to help
stabilize foreign exchange rates, reduce the risk
of international transactions and promote an ex­
pansion in foreign trade.
The United States especially has supplied
financial assistance in a number of ways. This
nation’s contribution to U N RRA was almost
$3 billion. More than $1 billion of civilian supplies
was made available to liberated and occupied areas
by the War and Navy Departments. Lend-lease
“ pipe line” credits for civilian-type goods supplied
to war-torn countries since V-J Day total more than
$1 billion. Another form of assistance has been

the transfer of vast stock piles of surplus property
located overseas. Through June, 1947, such trans­
fers amounted to approximately $1.6 billion and over
three-fourths of it represented credits extended for­
eign governments. Congress authorized the $3,750
million loan to Great Britain and a grant of $520 mil­
lion for rehabilitation to the Philippines. The lend­
ing power of the Export-Import Bank was in­
creased and its credit authorizations since V-J Day
for reconstruction purposes are well in excess of
$2 billion. Thus in 1946 foreign credits supplied
about 20 per cent of all the dollars used by for­
eigners.
THE IMMEDIATE OUTLOOK
While the United States has sent a huge volume
of goods abroad, so far in the postwar period the
need for continued exports is still great. And not
only is the need for our products large, but Secre­
tary Marshall has pointed out that such exports
can be and must be used to implement our for­
eign policy. Since, in at least the short-run future,
our exports will continue to outrun our imports,
the problem of financing the favorable trade bal­
ance will continue.
It should be recognized that certain conditions
will be essential to the success of the Marshall
policy. Foreign countries in need of financial aid
must make every effort to put their own econo­
mies in order. Their budgets must be balanced as
soon as possible and their currencies stabilized to
facilitate trade and production. There must be a
sincere desire to work together to carry out the
plan. Finally, a freer exchange of goods will be
necessary both to promote specialization and more
efficient production.
In addition to the financing problems, implemen­
tation of the Marshall policy poses other serious
questions for this nation. W e have been shipping
out of the country substantially more of our re­
sources, in terms of materials, man hours of labor,
and capital, than we have added to our wealth as
a result of imports. The basic economic consider­
ation involved in the current foreign trade ques­
tion thus becomes a problem of determining the
impact of the Marshall policy on our domestic
economy and the current physical limitations on
our ability to export. In other words, how many
of what kinds of goods can this country divert to
export channels, given the present high level of
domestic demand and current productive capacity?
Also, under these conditions, what effect will an
expansion of exports have on fiscal policy, prices,




employment, wage rates and other phases of our
internal economy?
For the answers to these questions and for
policy recommendations based thereon, President
Truman in June created three committees. One
group, under the direction of Secretary of the
Interior Krug, is composed of technical experts
whose function is to appraise the resources avail­
able for an expanded export program. A second
technical group under the direction of the Council
of Economic Advisors has as its objective the
problem of evaluating the impact of our foreign
program upon our economy. The third committee,
directed by Secretary of Commerce Harriman, is
composed of nineteen members drawn from the
fields of labor, business, agriculture, finance, edu­
cation, and research institutions. This is a policyrecommending group whose conclusions are to be
based on the technical findings of the first two
committees. The reports of these groups will be
available early this fall.
CONCLUSIONS
Past experience demonstrates clearly: (1) that
the volume of foreign trade and the volume of do­
mestic production and employment are closely
interrelated, and (2) that in general, the volume
of United States exports largely depends on the
volume of imports.
Both exports and imports and goods and services
drop sharply during depression and expand during
prosperity. The decreased buying power during
depression is soon reflected in a declining demand
for foreign goods and a decrease in United States
imports. A decrease in imports diminishes the
supply of dollars available to foreigners and forces
them to buy less United States goods, resulting in
a decline in exports and a still smaller volume of
production in the export industries. Because of
the dominant position of the United States, sta­
bility in the world economy will depend in no
small degree upon economic stability in this nation.
It is, therefore, of utmost importance that we do
everything possible to maintain a stable economy.
If the United States is to maintain something
near its present volume of exports, the course to
be followed is clear. Since 1919, imports of for­
eign goods and services have supplied nearly 90
per cent of the dollars made available to foreign­
ers for the purchase of United States exports of
goods and services. This source of dollar ex­
change dropped sharply relative to exports in the
war and is still low in the postwar period because
war-devastated countries do not have productive
capacity to supply their own essential needs and
a surplus for export. A substantial increase in
Page 103

United States imports, assuming a willingness to
buy foreign goods, must await economic rehabili­
tation and reconstruction.
When the other nations of the world are in
position to sell us more goods, however, we must
either admit the goods to our markets or be pre­
pared for a decline in our exports unless we are
willing to extend foreign credits increasingly and
indefinitely. And past history shows that the latter
course is one that leads to serious repercussions.
The United States failed to realize the implica­
tions of its position as a great creditor nation after
W orld W ar I. New barriers were raised against
imports, making it practically impossible for for­
eign nations to service their debts. Widespread

defaults and repudiations occurred, disrupting in­
ternational trade and straining international rela­
tions. In addition, when we finally cut off our
foreign credit extension, our exports dropped pre­
cipitously thus injuring many lines of activity here.
If we do not repeat the mistakes of the inter­
war period, if we extend credit and other foreign
aid now as a means of getting the world back on
its feet, and if we then attempt to hold a high level
of exports by being willing to import an equivalent
amount of goods and services, the foreign trade of
this nation will flourish, and as it flourishes, this
area should be able to increase the volume of its
goods going into foreign markets.
Clay J. Anderson and Weldon A. Stein

Survey of Current Conditions
During recent months a number of apparently
contradictory trends have developed in the do­
mestic economy. On the surface some of these
might be interpreted as indicating that a reces­
sion pattern is in the formative stage. Others
can be pointed to as indicating continued and per­
haps accelerated expansion. On the weak side,
slight but fairly widespread declines have occurred
in industrial output and factory employment; the
value of goods shipped into distribution channels
decreased monthly from February through May,
although the trend was reversed in June; retail
trade volume, adjusted for seasonal factors, has
drifted downward since February although little
change occurred in the second quarter; inventory
accumulation, which was at an annual rate of $2.7
billion in the first quarter, was down to $1.5
billion in the June quarter, and in June the value
of exports declined in total and in a number of
important commodities.
In contrast to the above, and currently offsetting
the adverse picture created by the decline in pro­
duction, are several factors of basic strength. More
people are at work than ever before in the history of
the country. In June and through July, civilian
employment exceeded 60 million. Goods and serv­
ices produced in the second quarter were valued
at $226 billion, an increase of $4 billion over the
first three months. Personal income in June was
at a new peak of $193 billion and in that quarter
was at an annual rate of nearly $192 billion. Con­
sumers’ expenditures as well as producers’ invest­
ment in capital equipment were higher in the
second quarter, partly reflecting higher prices and,
in part, despite them.
Page 104




At the moment the indicators of strength and
weakness just about cancel each other out. This
means that very short-run future developments
are likely to point the way the economy goes and
probably what happens in the price field will be
the major determining factor. Neither individual
consumers nor the buyers of capital equipment can
continue indefinitely to withstand the pressure of
rising prices for the goods they purchase. The
upward trend of corporate profits, despite increased
wages and other costs and larger deductions for
various types of special reserves as well as accele­
rated depreciation reserves, suggests the possi­
bility that industry will be able to adjust to higher
costs of equipment for a longer period than con­
sumers will be able to meet their rising costs.
EMPLOYMENT
July, 1947, was the second consecutive month in
which civilian employment in the United States
was in excess of 60 million. Eighth District civil­
ian employment reached a peacetime high in July,
but was still somewhat below the wartime peak.
Most of the increase in employment in the United
States in the past two months has been seasonal,
including many part-time and summer workers.
The various Employment Service offices in the
district states have forecast employment increases
in the major district areas for the remainder of
the year. In St. Louis, employment increases are
forecast for thirteen of the seventeen manufactur­
ing industries, with stable employment predicted
for the remaining four. Construction, trade, and
service also are expected to increase employment.
Small increases in both manufacturing and non­
manufacturing employment are expected in Louis­

ville, with the most significant expansions in fab­
ricated metal products and food. A relatively large
employment gain is forecast for Memphis as sev­
eral new manufacturing plants are expected to be
staffed the latter part of the year. In Evansville,
an employment increase is anticipated due to prob­
able gains in the nonelectrical machinery and food
industries and in Little Rock because of the addi­
tional workers needed in apparel, furniture, and
instrument manufacturing and in lumber mills and
construction. These forecasts are based on em­
ployer reports. The increases are contingent, of
course, upon a number of factors such as con­
tinued demand, adequate supply of materials and
peaceful labor-management relations.
In July, 1947, employment in the St. Louis area
exceeded 700,000 for the second time in its history.
Current employment is at the highest level it has
ever been with the exception of the one month of
July, 1943, when the wartime peak was reached. St.
Louis now has 150,000 more people working than
during 1940 and only 6,000 fewer than at the war
peak.
INDUSTRY

The high level of industrial activity which pre­
vailed in this district in May and June was not
maintained in July. Slight declines occurred in
maufacturing output as well as in oil production.
Construction activity increased slightly although
the value of building permits awarded was lower
than in June.
Industries in St. Louis, Little Rock and Mem­
phis used less electric power in July than in the
previous month. These declines more than offset
increases in Evansville, Pine Bluff and Louisville,
resulting in a decrease of 3 per cent in total con­
sumption.
Manufacturing—The decline in manufacturing
operations in July reflected, in part, shortages of
materials. This was particularly true of the dis­
trict’s automobile assembly plants. In addition,
some production was lost as a direct or indirect
result of scattered labor disturbances. Output in
other instances was curtailed when operations were
suspended and all employees were granted vaca­
tions at one time.
The St. Louis steel industry continued to oper­
ate at about 65 per cent of capacity in July. While
output was unchanged from the June level, the
industry’s operations were substantially ahead of
July last year when they were scheduled at 29
per cent of capacity.
Production of whiskey in Kentucky declined in
June and was less than in any month since N o­
vember, 1946. Output in June amounted to 5.5




million tax gallons as compared with 8.3 million
tax gallons in May. In the first six months, produc­
tion averaged 9.9 million gallons monthly; last year
in the corresponding period output averaged 5.3
million gallons. Whiskey stocks are building up
in many distilleries due to a decrease in consump­
tion, according to trade reports. Consumer reac­
tion to currently high prices for bonded whiskies
is credited by some sources with price cutting
that has occurred in scattered areas. At the end
of July only 21 distilleries were operating in Ken­
tucky as compared with 25 a month earlier and
26 at the end of July, 1946. Part of the decline is
seasonal, resulting from water shortages in some
localities in the summer months.
District shoe production in June was at the
lowest level this year. In that month an estimated
7.3 million pairs were produced, a decline of 6
per cent from May and 8 per cent less than in
June, 1946. In the first half of the year, produc­
tion averaged 7.9 million pairs monthly or slightly
more than the average of 7.6 million pairs manu­
factured through June last year.
Meatpacking operations in the St. Louis area
declined slightly in July. The number of animals
slaughtered under Federal inspection totaled 465,000 as compared with 473,000 in June and 488,000
in July, 1946. The slaughter of cattle, calves and
sheep increased over June but the number of hogs
killed dropped from 279,000 to 243,000 in July.
Petroleum—After increasing in May and June,
the daily average production of crude oil in the
district dropped to the lowest level this year.
INDUSTRY
C O N S U M P T IO N
(K .W .H .
in thous.)

N o. o f
Cus­
tomers*
....
....

35
80

, , 22
.... 99
.... 307
Totals
•Selected industrial
R — Revised.

July,
1947
K .W .H .
9,176
3,716
56,635
3,762
5,867
65,734
144,890
customers.

O F E L E C T R IC IT Y

June,
1947
K .W .H ,

July, 1947
July,
1946
Compared with
K .W .H . Ju n e/47
J u ly /4 6

8,779
3,830
56,329
5,448
4,388
70,803
149,577

7,359
+ 4%
3,442
— 3
56,230R
4,195
— 31
1,382
67,017R ± 3?
139,625R
3%

4-

25%

t ?

10
4*325

—

— 2
4-

4%

L O A D S I N T E R C H A N G E D F O R 25 R A I L R O A D S A T S T . L O U I S
July, *47

June, *47

First N ine D ays
July, *46 A u g ., *47 A u g . *46

7 mos. *47 7 m os. *46

114,412
119,120
125,825
35,153
38,770
885,142
S ou rce: Terminal Railroad A ssociation o f St. Louis.

843,792

C RU D E O IL P R O D U C T IO N — D A IL Y A V E R A G E
(I n thousands
o f bbls.)
Arkansas

July, *47

......
..........181.3

Kentucky

...... .......... 26.2

June, *47

July, *46

81.2
187.9
17.7
25.9
312.7

79.5
209.1
18.9
31.4
338.9

July, *47 com p, with
June, *47
July, *46
— 0%
— 4
-0 -

4- 1
— 2%

4- 2%

—
—
—
—

13
6
17
10%

Page 105

TRADE

Ft. Smith, A rk..
Little R ock , A rk ......
Q uincy, 111..................
Evansville, In d .........
Louisville, K y ...........
St. Louis, M o .......
E- St. Louis, 111...
Springfield, M o .........
M emphis, T en n .........
* A 11 other cities........
8th F. R. D istrict.....

D E PA R TM E N T STORES
Stocks
Net Sales
on H and
July, 1947
7 m os.’ 47 July 31/4 7
com pared with
to same comp, with
June,’ 47 J uly,’46 p e r io d ’ 46 July 3 1 /4 6
— 19%
— 12%
— 13%
— 22%
— 8
— 7
— 1
— 15
__ 4
— 8
- 1- 6
4-15
— 12
— 7
4-10
4-15
— 12
4- 7
4-11
4- 4
4 -12
4- 5
4- 1
4-11
4-10
4- 5
4- 2
4- 9
— 2
4-88
4-94
—
1
+20
4- 4
4- 4
— 2
— 8
4- 4
4- 2
— 13
4- 4
4-19
4- 5
— 4
4- 6
4- 3
4- 8

Stock
Turnover
Jan. 1, to
July 31,
1947
1946
2.27
2.96
2.68
3.36
2.53
3.10
2.42
2.07
3.67
2.70
2.23
2.99
2.23
2.99
3*27
3.32
3.15
3.15

2.27
2.46
2.24
2.35

*E1 D orado, Fayetteville, Pine B luff, A r k .; A lton, Harrisburg, Jack­
sonville, M t. V ernon, 111.; N ew A lbany, Vincennes, I n d .; Danville,
H opkinsville, M ayfield, Paducah, K y . ; Chillicothe, M o .; and Jackson,
Tenn.
1 Includes St. Louis, M o., East St. Louis and Belleville, 111.
Trading d a ys: July, 1947— 2 6 ; June, 1947— 2 5 ; July, 1946
— 26.
O utstanding orders of reporting stores at the end of July,
1947, were 49 per cent less than on the corresponding date a
year ago.
Percentage of accounts and notes receivable outstanding July
1, 1947, collected during July, by cities:
Instalm ent
A ccou n ts
Fort Smith.............. %
Little R ock .... 28
Louisville ...... 31
Memphis ........ 34

E xcl. Instal.
Instalment
A ccoun ts
A ccounts
50%
Q uincy ................34%
56
St. L ou is........ ...35
52
Other cities...... ...28
47
8th F .R . Dist. 33

E xcl. Instal.
Accounts
64%
60
57
56

IN D E X E S OF D E P A R T M E N T STO R E SALES AN D STOCKS
8th Federal Reserve District
June,
July,
1947
1947
269
Sales (daily average), U nadjusted 2............ 249
299
Sales (daily average), Seasonally adjusted 2 320
267
Stocks, U nadjusted 3 ......................................... 256
267
Stocks, Seasonally adjusted 3............................ 246
2 Daily A verage 1 9 3 5 -3 9= 1 0 0.
3 End of M onth A verage 1935-39 = 100.

M ay,
1947
315
321
272
272

July,
1946
234
300
240
231

S P E C IA L T Y STO R ES
Stocks
Stock
Net Sales
on Hand
Turnover
July,’ 47
7 mos. ’4 7 “July 31/4 7 Jan. 1, to
compared with
to same com p, with
July 31,
Ju n e/47 July,’46 period ’46 July 31/4 6 1947
1946
M en’ s Furnishings...... — 30%
-4- 9 %
4 - 6%
-|-35%
2.06
3.88
B oots and Shoes........ — 16
-f- 5
4- 5
4-59
2.64
4.92
Percentage of accounts and notes receivable outstanding July 1, 1947,
collected during J u ly :
M en’ s Furnishings ..................... 51%
B oots and Shoes......................... 45%
Trading da ys: July, 1947— 2 6 ; June, 1947— 2 5; July, 1946— 26.
R E T A IL F U R N IT U R E STO RES
N et Sales

Inventories

July, 1947,
com pared with
June,
July,
1947
1946

July, 1947,
compared with
June,
July,
1947
1946

R atio of
Collections
July, July,
1947
1946

St. Louis A rea 1 ......... ... — 6 %
4 - 4 % — 2 % 4 -5 9 % 46% 42%
— 5
— 2
4-59
48
42
St. Louis ................
4- 5
— 6
28
24
4 -12
4-21
Louisville Area 2 ......... . , — 22
— 19
4 -1 1
— 7
4-19
27
Louisville ..................
24
- 13
—
1
22
28
Memphis ...................... ... 4 -12
4-23
— 20
— 6
36
- 0 4-26
29
L ittle R o ck ....................
*
*
*
*
— 19
Springfield
.................. ... — 17
— 3
4-40
35
37
8th District T otal 3..... — 8
4- 3
*N ot shown separately due to insufficient coverage, but included in
Eighth District totals.
in c lu d e s St. L ouis, M issou ri; E ast St. Louis and A lton, Illinois,
in c lu d e s Louisville, K en tu ck y ; and N ew A lbany, Indiana.
3In addition to above cities, includes stores in Blytheville, Fort Smith
and Pine Bluff, A rkansas; H enderson, Hopkinsville, Owensboro, K en­
tucky, Greenville, Greenwood, M ississippi; Hannibal, M issouri; and
Evansville, Indiana.
PERCENTAGE

D IS T R IB U T IO N

OF

July, 1947
Cash Sales .........................................
Credit Sales .......................................
Total Sales .....................................

Page 106




2 0%
80
100

F U R N IT U R E
June, 3947
19%
81
100

SALES

July, 1946
26%
74
100

Daily production in July averaged 306,000 barrels,
or 2 per cent less than in June and 10 per cent
less than a year ago. Output in Kentucky in­
creased slightly and in Arkansas and Indiana was
at about the same level as in June. In Illinois,
however, daily output was 4 per cent less than in
June.
Each state except Arkansas reported a
smaller daily rate than in July, 1946.
Construction— The value of building permits
awarded in the major district cities declined in
July, for nonresidential as well as residential
building. Totaling $8.3 million as compared with
$10.3 million in June, permits declined in Louis­
ville, Memphis, and Little Rock. In St. Louis the
value of awards rose fractionally and in Evans­
ville a sharp increase occurred.
TRADE
Eighth District department stores continued to
register very high sales in July. The July sea­
sonally adjusted index of such sales was 318 per
cent of the 1935-39 average.
Sales volume at
reporting stores in July wras off slightly, 4 per
cent, from June, but this decline was less than
seasonal. Volume was 6 per cent over July, 1946,
volume.
A substantial part of the increase in dollar
volume over the past year reflects price increases,
both direct and indirect. The Bureau of Labor
Statistics consumer price index rose to a new high
during June, standing at 157.1 compared with the
previous peak of 156.3 reached in mid-March of
this year.
No significant pickup in inventories had devel­
oped by July but they seem likely to build up dur­
ing the next few months, partly a seasonal move­
ment but partly an absolute increase. In terms
of value, department store inventories at the end
of July, 1947, were 3 per cent less than on June
30, 1947, but were 3 per cent more than at the
end of July, 1946. Many stores have been under­
ordering in view of anticipated needs, but with
veterans’ leave bonds becoming payable and with
consumer credit regulation being terminated No­
vember 1, stores seem likely to build up their stocks
CONSTRUCTION
B U I L D I N G P E R M IT S
(M on th of July)
New Construction

Repairs, etc.

(C ost in
N umber
thousands)
1947
1946
Evansville ..... ... 103
40
L ittle R ock .... .... 132
133
Louisville ...... ... 216
248
, 833
580
241
196

Number
Cost
1947
1946 1947 1946
$ 734 $
50 133 152
916
659 221
156
1,168
928
98
73
2,299
3,104 173 215
1,984
1,277 353 318

Cost
1947
1946
$
93 $
45
364
127
65
64
169
124
504
545

July Totals .... ....1,525
June Totals ....1,691

$7,101
$9,384

$1,194
$ 904

1.197
1,177

$6,018
$5,057

978
862

914
960

$ 906
$1,388

in anticipation of increased sales. Outstanding
orders currently are running at approximately onehalf the volume of the comparable period last year.
Dollar sales at women’s stores are still in large
volume but are running slightly below the level of
the comparable period in 1946. Sales volume at
men’s wear stores in July was 30 per cent less than
in June, but was 19 per cent over the volume of
July, 1946. During July, reporting furniture store
sales were 8 per cent smaller than in the previous
month but 3 per cent more than in July, 1946.
Sales of major appliances still are limited by
shortages, as are sales of some medium-priced lines
of furniture.
BANKING AND FINANCE
Total assets of Eighth District weekly reporting
member banks gained $40 million during the last
four weeks, reversing, at least temporarily, the
generally downward trend which had prevailed.
The gain in reporting bank resources was due
primarily to loan expansion, the volume of invest­
ments showing little change.
There were no
Treasury marketable security redemptions for
cash during the last month. Since the rate of such
redemptions is much slower now than when the
Treasury was using large Victory Loan balances to
retire debt, commercial bank loan policy will prob­
ably be the major influence on bank resources and
the money supply in future months.
Loans of district reporting banks continued to
expand in the past month, reflecting principally a
seasonal gain in commercial, industrial and agri­
cultural loans. Business loans in this district
usually reach a low around midyear and then rise
gradually during the latter part of the year. Com­
mercial, industrial and agricultural loans of district
reporting banks were up $20 million during the
last four weeks, most of the increase being ac­
counted for by the larger* reporting banks in St.
Louis, although some gain was registered in most
of the reporting centers. Reflecting the continued
high level of activity in urban property, real estate
loans gained $2 million, which is about the same
WHOLESALING
Lines of Commodities
Data furnished by
Bureau o f Census,
U. S. D ept, of Comm erce*
A utom otive S u p p lie s ........................ ........
D rugs and Chem icals..................... .........
D ry G oods ..................................................
Groceries ............................................. ........
H ardware ........................................... ,
T ob a cco and its Products...............
Miscellaneous ..................................... ........
........

Net Sales

4- 8%
4-10
4- 2
4-10
— 3
4- 3
4- 3

•Preliminary*
**Includes certain lines not listed above.




Stocks

July 31, 1947
July, 1947
com pared with
com pared with
July 31, 1946
June, ’ 47
July, *46
- * 9%
4-19
— 15
4-20
4-39
-0 *
— 1
4- 4

.... %
4-23
4-22
4-51
4-28
4-50
434

PRICES
W H O L E S A L E P R IC E S IN T H E U N IT E D S T A T E S
Bureau of Labor
Statistics
July, ’47 com pared with
(1 9 2 6 = 1 0 0 )
July, ’ 47 June, *47 July, ’ 46
June, *47
July, *46
A ll Commodities .... 150.8
Farm Products.... 181.4
Foods .....................167.1
Other ....................133.8

148.0R.
177.9
161.8
132.0

124.7
157.0
140.2
109.5

4*1.9 %
-4-2.0
4-3.3
4-1.4

4-20.9
4-15.5
4-19.2
4-22.2

C O N S U M E R P R IC E IN D E X
Bureau o f Labor
Statistics
June 15,
(1935-39) = 100) 1947
United States ........157.1
St. Louis ............ ..155.6
Memphis ............ ..160.6
*N ot available.

M a y 15,
1947

June 15,
1946

155.8
154.5
*

133.3
131.2
134.5

.
June 1 5/4 7 Comp, with
M ay 1 5/4 7 June 1 5/46
4 -1 %
4-1*

4 -1 8 %
4-19
4-19

J T A IL F O O D P R I C E S
Bureau o f Labor
Statistics
July 15,
(1935-39 = 100) 1947
U . S. (51 cities).. 193.1
St. L o u is .......... 200.9
Little R ock ...... 193.6
Louisville ........ 185.4
Memphis .......... 210.1

June 15,
1947
190.5
196.8
189.8
183.4
205.1

. 1 %
July 15/4 7 Comp, with
July 15,
June 1 5/4 7 July 15/46
1946
4 -1 7 %
165.7
4 - 1%
4 -18
169.7
4* 2
4-22
159.3
4- 2
4-19
155.2
4- 1
4-20
174.6
4- 2

BANKING
C H A N G E S IN P R I N C I P A L A S S E T S A N D L I A B I L I T I E S
F E D E R A L R E S E R V E B A N K O F S T. L O U I S
Change from
A ug. 21,
July 23,
A u g. 20,
1946
1947
1947
(I n thousands of dollars)
$
............
Industrial advances under Sec. 13b......$ ............... $
4 7,098
4 - 13,835
23,778
Other advances and rediscounts............
4 - 39,171
4 - 12,802

618,829
Total reserves .............................................
675,024
T otal deposits .............................................
F. R . notes in circulation.......................... 1,075,759
Industrial commitments under Sec. 13b

580

4 - 26,637

4 - 46,269

4 - 3,523
4 - 26,233
4- 3,941

—
411
4 - 29,548
4 - 15,575

4

180

—

3,460

P R IN C IP A L A S S E T S A N D L IA B IL IT IE S
W E E K L Y R E P O R T IN G M E M B E R B A N K S
(I n Thousands o f D ollars)
A u g. 20,
1947

Change from
A ug. 21,
July 23,
1946
1947

Assets
T otal loans and investments............. ....... $2,038,815 $ + 24,514 $— 126,169
(Comm ercial, industrial, and agricul­
tural loans, open market p a p e r).......... . 452,498 4 20,345 4-108,341
Loans to brokers and dealers in se709 —
5,635
5,144 —
Other loans to purchase and carry se*
51,092 4- 2,815 — 41,202
133,575 4- 2,902 4- 33,957
Real estate loans.............................................
1,290
3,942 4 - 1,886 4
Loans to banks...............................................
163,340 4 - 2,156 4 - 27,353
Other loans ......................................................
4-124,104
809,591
T otal loans ..................................................
4 - 29,395
3,863 — 10,544
9,178
Treasury bills ................................................
90,269 4- 3,388 — 105,275
Certificates o f indebtedness.........................
1,541 — 96,059
134,730
Treasury notes ...............................................
U . S. bonds including guaranteed obliga8,894 — 34,481
845,774
3,914
6,029 —
149,273 4
Other securities .............................................
4,881 — 250,273
Total investments .................................... 1,229,224
696,281 4 - 14,620 4 - 27,215
Cash assets ..................................................... .
785
24,507 4 - 1,176 —
Other assets ....................................................
Total assets ............................................... $2,759,603 $4 40,310 $— 99,739

—

Liabilities
Demand deposits— total .............................. $2,088,823 $4 28,127 $— 137,986
Individuals, partnerships, and corpora1,376,998 4
8,527 4 - 93,495
Interbank demand deposits.....................
561,991
1,314 — 49,779
U. S. Government deposits.....................
33,705 4 11,637 — 199,274
Other demand deposits........................
116,129 4 - 9,277 4 - 17,572
Demand deposits— adjusted* ..................... 1,316,924 4 - 18,567 4 - 96,783
471,675
258 4 24,161
Tim e deposits ............. .................................
18,660 4 10,140 4
6,860
Other liabilities .............................................
15,522 4 - 1,405 —
201
T otal capital accounts..................................
164,923 4 896 4 - 7,427
Total liabilities and capital accounts...... $2,759,603 $ 4- 40,310 $— 99.739
* Other than interbank and Governm ent deposits, less cash items on
hand or in process o f collection.

Page 107

as the average monthly increase during the last
year. The major part of the increase in loans on
real estate was in St. Louis reporting banks, al­
though there were slight increases at the other
district reporting centers. The high level of con­
sumer expenditures, a part of which was by means
of instalment purchases, resulted in some further
expansion of consumer loans.
AGRICULTURE

Discouraging reports of prospective corn pro­
duction, prospects of a smaller tobacco crop than
last year, even though it promises to exceed the
ten year average, and optimistic reports of indi­
cated cotton production highlight the agricultural
situation in the Eighth District as the time of
harvest approaches.
Unfavorable dry weather, particularly in the
Corn Belt, caused a 330 million bushel reduction
in estimated national corn production between July
IS and August IS. The crop was forecast at 2,440
million bushels on this latter date.
The August 1 estimated corn crop in district
states was 18 per cent less than last year compared
with a 19 per cent decrease nationally. The August
15 estimate for Missouri, however, is 36 per cent
less than last year and for Illinois 30 per cent less
compared with 16 and 21 per cent decreases respec­
tively forecast two weeks earlier. August 1 corn
production estimates for Indiana, Arkansas, Ken­
tucky and Tennessee were 25, 11, 10 and 3 per cent
less than last year. Indicated production in Mis­
sissippi is 4 per cent above last year.
Cotton production in the four important district
cotton producing states is estimated to be 32 per
cent above last year's crop and 2 per cent above
the ten year (1936-45) average. Due to a smaller
increase in acreage in the district, prospective cot-

ton output here does not exceed 1946 production
as much as in the United States as a whole. Yield
in district states is expected to be 18 per cent above
last year compared with an increase of 15 per cent
for the United States.
P R O S P E C T I V E C O T T O N P R O D U C T I O N — 1947
E IG H T H D IS T R IC T S T A T E S
A u g. 1
A u g. 1
indicated indicated
production lint yield
1947 production and yield com p, with
(thousand (pounds _________ 1946
A v . 1936-45
bales)
per acre) Production Y ield Production Yield
Arkansas ........ 1,640
387
+28%
+ 7%
+18%
+19%
Mississippi ...... 1,600
324
+53
4-43
— 10
— 2
550
401
+ 6
0
4- 4
4-14
Tennessee ........
M issouri ..........
375
415
4-22
— 12
4 - '3
— 5
T otal .......... 4,165
3 7 9 (A v .) 4-32
4-18
4- 2
4 -8
United States..l 1,844
271
4-37
4-15
— 4
4 -8
S ou rce: U . S. D . A . C otton Production, A u g. 1, 1947.

Lower prospective tobacco yields in addition to
smaller acreages tha:n in 1946 iiidifc&te a produc­
tion in district states 17 per cent less than last
year’s crop. The prospective yield in district states
is 7 per cent less than last year compared with a 6
per cent decrease for the nation. This indicated
yield in district states, however, is 20 per cent
above the ten year (1936-45) average compared
with a 14 per cent increase for the United States.
P R O S P E C T I V E T O B A C C O P R O D U C T I O N — 1947
E IG H T H D IS T R IC T STA TE S
A u g. 1
A u g. 1
indicated
indicated
production
yield
1947 production and yield com p, with
(thousand (p o u n d s __________ 1946
A v . 1936-45
pounds)
per acre)
P roduction Yield P roduction Yield
K entucky .. 420,235
1,135
— 17%
-^ ~ 7 %
4 -2 5 %
4 -2 1 %
Tennessee .. 143,400
1,182
— 16
— 9
+33
+20
Indiana ......
12,460
1,246
— 8
— 4
+23
+25
Missouri ....
5,600
1,000
— 25
— 11
— 3
+ 1
T otal ...... 581,695
l,1 4 7 (A v .) — 17
— 7
+26'
+20
U . S ..............2,126,477
1,111
— 8
— 6
+37
+14
S ource: U . S. D . A . Crop Production, A ug. 1, 1947.

Prices of agricultural commodities on July 15
reached 276 per cent of 1909-14 prices, 5 points
higher than a month earlier. Since prices paid
remained the same, the parity ratio widened from
117 to 119. Present reports indicate that little
softening of agricultural prices can be expected
for the remainder of the year.

DEBITS TO DEPO SIT ACCOUNTS

(I n thousands
of dollars)

July,
1947

June,
1947

July,
1946

18,497 $
17,825 $
15,249
E l D orado, A rk ....... $
30,610
32,481
31,887
F ort Smith, A rk ....
4,363
4,861
5,271
Helena, A rk ..............
102,321
93,179
99,523
L ittle R ock , A rk ....
18,099
18,895
20,953
Pine B luff, A rk ......
8,722
8,751
8,351
Texarkana, A rk .-T ex
18,211
21,912
21,981
A lton. I ll....................
110,541
107,018
87,363
E .S tI* .-N a t.S .Y .,Ill.
25,013
26,405
20,736
Quincy, 111................
100,392
90,867
85,181
Evansville, In d .........
423,000
456,711
398,948
Louisville, K y . ........
20,942
20,814
23,071
O w ensboro, K y ........
12,757
15,370
11,464
Paducah, K y .............
12,492
12,673
Greenville, M iss........
12,925
9,260
8,626
8,353
Cape Girardeau, Mo.
7,033
6,552
6,359
H annibal, M o ............
41,543
Jefferson City, M o...
36,217
42,575
St. L ouis, M o ......... 1,346,458 1,340,059 1,261,606
9,589
Sedalia, M o. ............
8,709
9,844
54,320
Springfield, M o ........
53,823
52,759
Jackson, T enn...........
14,189
14,632
13,095
Mem phis, T enn........
338,654
361,383
361,632
Totals

................... $2,733,959 $2,766,727 $2,583,209

Page 108




AGRICULTURE

July,’ 47 comp, with
June, 47 July, 46
+ 4%
— 2
g
— 3
+ 11
+ 5
- 0+ 3
+ 6
+10
— 7
+ 1
— 17
— 1
+ 7
+ 7
+ 15
- 0— 3
+ 1
— 3
— 6

+21%
+ 4
+ 11
+ 7
+16
- 0+20
+27
+27
+18
+ 6
— 9
+11
— 3
+11
+ 11
— 2
+ 7
+10
+ 3
+ 8
— 6

— 1%

+

__

6%

C A S H F A R M IN C O M E

(I n thousands
June,
o f dollars)
1947
Arkansas .......... $ 22,115
Illinois ............. 128,031
Indiana ...........
76,829
Kentucky .........
31,087
Mississippi .....
16,514
M issouri ...........
75,700
Tennessee .......
36,105
T otal ............$386,381

June, ’ 47,
com p, with
M ay,
June,

1947
— 4%

— 10
— 1
+19
— 4
+ 9
+27
+ 1%

1946
+31%
+94
+66
+54
+31
+68
+50
+67%

12 mo. total July to June
’46-’47 com p, with

’46-’47 ’45-’46
,44-,45
$ 472,147 + 5 1 % + 3 2 %
1,725,793 + 4 4
+55
968,098 + 3 6
+46
497,492 + 3 0
+18
292,726 — 13
— 18
1,006,628 + 4 5
+42
443,625 + 3 3
+27
$5,406,509 + 3 6 % + 3 6 %

R E C E IP T S A N D S H IP M E N T S A T N A T IO N A L S T O C K Y A R D S
__________ Receipts___________ ________ Shipments______ _
July, ’47
July, *47
July,
com p, with
July,
com p, with

1947

June, ’47 July, *46

Cattle and Calves.,172,875
H ogs ....................... 219,188
Sheep ..................... 91,530
H orses .................
1,151

+ 3%
— 9
— 31
+25

—
+
—
—

28%
14
37
85

T otal ................... 484,744

— 10%

— 17%

1947
82,072
78,554
30,738
1,151

June, ’ 47 July, *46
+ 3%
+ 5
— 62
+25

192,515 — 19%

—
+
—
—

46%
14
51
85

— 34%