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Volume X X X I X
September 1957
Number 9
,
^ g p e d iv e Pulpwood Production
m^mRth District States
of uses and its markets are expanding. Eighth
P jaid ct States are sharing in this expansion.
re^odrce*; man support a still greater pulpwood output. Imst wyl be required, however, especially on the
'1
j[n w e^w ith other forest enterprises. Bankers
developing forest resources.
S u r r e y o/ CM rreytt Coytdtttoyts— p .
Current and Prospective Pulpwood Production
in Eighth District States
consumed, has more than doubled in use during the
past quarter-century.
-A - VISITOR from abroad is quickly impressed with
the "paper-mindedness" of Americans when he Rrst
buys a Sunday paper or sees the racks of artfully
packaged wares in a supermarket. The casual way
in which an American family uses hundreds of pounds
of paper products each year is in striking contrast to
practices in some countries where customers are ex
pected to bring their own wrapping paper to the
store. "Paper-mindedness" has stimulated a phe
nomenal increase in the consumption of pulpwood in
this country since the turn of the century. From less
than 2 million cords in 1899, the nation's use of pulp
wood grew to 7 million cords in 1930, and to nearly
36 million cords in 1956.
Paper, which requires over half of all wood pulp
PRODUCTION OF PAPER AND PAPERBOARD AND
WOOD PULP !N THE UN!TED STATES
M
iHions of Tons
Source:
United States Department of Commerce, Bureau of the Census,
/or
Series M 14A.
More versatile and better quality paper and multi
color printing have contributed to this expansion.
The most rapid increase in paper use has occurred
in the shipping and packaging industries. Waxcoated paper containers for milk and frozen foods
are examples of recent trends in the use of pulp
products for merchandising. Bulk materials, such
as sugar, Hour, cement and chemical fertilizer, are
now being shipped and stored in paper bags, where
as formerly burlap or cotton bags were used. The
introduction of waterproof paper, practical conveni
ence and better advertising possibilities are given as
some of the reasons for the shift to paper bags.
There has been a large increase in the use of tar
impregnated paper for wrapping pipe and other
items to retard corrosion. The use of sanitary and
tissue paper has also increased rapidly during the
past quarter-century.
The consumption of paperboard has been increas
ing even more rapidly than that of paper, trebling
during the past twenty-Rve years. Wooden boxes
have been replaced by shipping cartons made of
paperboard. Such cartons are lighter than wooden
boxes and can be folded for shipment and storage.
Moreover, they are suitable for automatic packaging
machines which are in general use at most manufac
turing plants.
Wood pulp products are of increasing importance
in the construction of perforated pulpboard, which
is used as accoustical tile, and the use of pulpboard
for insulating purposes has been growing very rapid
ly. Saturated felt, another pulp product used in
Boors and roofs, also has an expanding market.
Page 111
Estimated United States demand for paper and
board will total 43.8 million tons by 1965, according
to a comprehensive report,
Pape? and Board
recently published by the Com
mittee on Interstate and Foreign Commerce of the
85th Congress.* By these estimates, paper grade
wood pulp consumption for 1965 is expected to total
32.3 million tons, and dissolving pulp, used in rayon
and plastics, an additional 1.7 million tons. Total
wood pulp consumption would thus be 34 million
tons, 42 per cent greater than actual consumption in
1956.
Nearly 53 million cords of pulpwood would be
required, 47 per cent more than in 1956. Although
the consumption of waste paper and other Bbrous
materials is expected to increase, their rate of in
crease will probably be somewhat less than that of
pulpwood.
While the consumption of wood pulp for purposes
other than paper, paperboard and building materials
is small relative to total consumption, that going into
rayon and acetate has been growing rapidly.
Much of the expansion in markets for pulpwood
has been made possible by technological advances in
processing. A few years ago spruce and Sr were
the only trees that could be economically used. The
development of new processes has made it feasible
to use southern pines, western hemlock, Sr, jackpine
and many hardwoods. These new processes opened
up large new producing areas, including the Eighth
i
Report of the Committee on
Interstate and Foreign Commerce, 85th Congress, 1st Session, June 17, 1937.
The estimates are based upon stated assumptions regarding growth of popula
tion, gross national product and other relevant economic measures.
CONSUMPTION OF PULPWOOD !N THE UNtTED STATES
M
iHions of cords
District states. Growth of pulpwood production in
district states and the southeastern United States
began in the 1920 decade and has continued with
increasing tempo in the 1950's.
The spectacular increase in pulpwood production
during recent years in Eighth Federal Reserve Dis
trict States tends to belie the old adage, "Money
doesn't grow on trees." Located astride the divid
ing line between the Central Hardwood Forest region
and the Southern Forest, district states contain about
one-ninth of the nation s land area and one-sixth of
TABLE
1
TOTAL LAND AREA AND FOREST LAND
IN EIGHTH D!5TR!CT STATES, 1953
(iN THOUSANDS OF ACRES)
Fighth District
States
Iota!
Tota!
Forest
Land Area ^ Land Area"
Commercia!
Forest
Land Area"
NonC o m m erc ia l
Forest Land
Arka ns as..................
52,673
19 ,3 46
19 ,29 2
34
iNinois.......................
55,935
3 ,9 9 3
3 ,9 3 8
55
!n d i a n a .......... ..
36,205
4 ,1 0 3
4,045
58
Kentucky..................
39,864
1 1, 4 9 7
11,446
51
Mississippi.............
4 7 ,2 4 8
1 6 ,4 7 3
16,440
33
Missouri..................
69,226
15,177
1 5 ,0 6 4
113
T en n ess ee ...............
41,797
12,55 8
J^301
25J7
Tota).....................
3 42,950
8 3 ,1 4 7
8 2 ,5 2 6
621
United S t a t e s . .
2,974,726
647,686
484,340
163,346
its commercial forest land. When use of southern
pine for pulp began in the 1920's decade the pine
belt portion of the area was opened for production.
By 1940, total production of pulpwood in these states
exceeded a million cords per year (see Table 2).
Output doubled from 1940 to 1952 and continued to
grow through 1956 at the rate of about 250,000 cords
per year. The rate of increase during the sixteenyear period, 1940-1956, was slightly greater than
that of the nation.
More than half of the pulpwood produced in the
district states comes from Mississippi, about 30 per
cent from Arkansas and 10 per cent from Tennessee.
These states contain nearly 60 per cent of the dis
trict states' commercial forest land and a consider
ably greater share of the pine forest. The recent in
crease in use of hardwoods for pulp has made the
forests of the entire district states area potentially
valuable as a pulpwood source. Production of pulp
from hardwoods is increasing rapidly in Illinois,
Page 112
TABLE 2
PULPWOOD PRODUCTION, EIGHTH D!STR!CT STATES
(THOUSAND CORDS OF ALL PULPWOOD, !NCLUD!NG RESIDUES)
1956*
Tota!
Hardwoods
Arkansas............................................ ......................
1,075.2
1952 3
Softwoods
139.7
1940
Tota!
Softwoods
Tota!
Hardwoods
935.5
620.2
86.2
533.9
......................
80.1
80.0
0.1
45.0
45.0
....
!ndiana.............................................. ......................
22.0
22.0
0.0
12.0
12.0
....
Kentucky............................................ ......................
53.3
28.3
25.0
30.0
27.9
2.1
Mississippi....................................... ......................
2,135.7
938.0
1,197.8
1,867.3
482.3
1,385.0
2.4
1.4
1.0
12.0
8.5
486
3.5
Missouri............................................ ........................
630
......................
398.8
153.9
244.8
268.4
153.9
114.5
131
Io ta !.............................................. ......................
3,767.5
1,363.3
2,404.1
2,854.9
815.8
2,039.0
1,247
United States............................. ......................
35,1962
6,104
29,092
25,065
3,657
12,307'
21,408
N o /? D e ta il will not necessarily add to totals because of rounding.
1 Illinois, Indiana, Kentucky M
issouri—
Arkansas, Mississippi and Tennessee— 7936
2
No. j?04, Central States Forest Experiment Station, Columbus, Ohio, July, 1957.
So#//?, Southern Forest Experiment Station, New Orleans, La., August, 1957.
Report of the Committee on Interstate and Foreign Commerce, 85th Congress, 1957.
3
Rfv/fip, U. S. Department of Agriculture, Forest Service, 1955.
^ No records available. Estimated to be an insignificant amount.
3 Rf^or; <
?/
F e w / Rfj<7#rff
The American Forestry Association, 1947.
Indiana and Kentucky. Output almost doubled in
these states during the four years 1952 to 1956. Hard
woods are used almost exclusively in Indiana and Illinois, whereas Kentucky produces pulpwood from both
pine and hardwood.
Although not as large an income producer as cot
ton, hogs or soybeans in the district, pulpwood has
become an important source of income especially in
the southern district states. The value of pulpwood
delivered to concentration points in Mississippi and
Arkansas in 1955 was estimated at approximately
$50 million. This was approximately 5 per cent as
much as the combined sales of all crops and live
stock products in these two largely agricultural states.
In particular counties pulpwood is of much greater
relative importance than in the district as a whole.
In Union County, Arkansas, for example, the value
of pulpwood produced in 1954 was about equal to the
value of all crops and livestock products sold.
are favorable for pulpwood production. Rainfall is
generally adequate the year-around for rapid tree
growth and long warm summers provide an ample
growing season. New seedlings often spring up on
abandoned crop land and in openings where mature
trees have been harvested.
Although the average volume of standing timber
per acre is relatively low in this area, net annual
growth is above the national average (see Table 3).
TABLE 3
GROWTH, CUT AND VOLUME OF GROW!NG STOCK
PER ACRE OF COMMERGAL FOREST LAND, 1952.
Net Volume
Growing Stock
Jan. 1, 1953
(Cubic Feet
Per Acre)
(Cubic Feet
Per Acre)
29.7
19.7
609.7
34.3
9.6
774.5
34.4
12.9
751.8
31.9
14.2
684.4
43.6
Of further importance to the district states' econ
omy is A e inHuence of pulpwood production upon
the location of pulp and paper plants. There were
13 mills operating in district states in 1956; two more
are scheduled for completion in 1957; and at least
three more are planned.
Net Annua!
Cut
(Cubic Feet
Per Acre)
Eighth District States
Net Annua!
Growth
34.7
585.6
17.9
5.6
365.3
19.8
20.5
469.1
District State Average.
The soils, climate and topography of district states
29.6
18.6
564.5
United States Average.
29.3
22.2
1,029.1
Source: Basic data from
RfjoKff? Rff/ftp, September, 1955.
Page 113
Principal Types of Timber in Eighth District States
HE MAP OPPOSITE shows areas characterized by major forest types in the seven
states which include the Eighth Federal Reserve District.
Pine areas, which supply most of the district states pulpwood, are concentrated
in southern district states. Loblolly-shortleaf pine forest predominates in Mississippi,
excepting the Delta and river-bottom areas and the low coastal lands; in Arkansas,
particularly south of the Arkansas River; and in the eastern, Appalachian, sections of
Kentucky and Tennessee.
An area of longleaf-slash pine characterizes the coastal region of Mississippi.
White-red-jack pine forest occurs only in a very small area in eastern Tennessee.
Hardwood forests, which are becoming more important as a source of pulpwood,
are more extensive in these states than softwood types. The oak-hickory forest is typi
cal of most of Missouri, southern Illinois, considerable parts of Indiana both north and
south, the greater portion of Kentucky and the western two-thirds of Tennessee and
most of Northwestern Arkansas.
The second most extensive area of hardwoods is the swamp and bottom-land
forest. This type is found along the principal water courses with its greatest extent
in the Mississippi River Basin, which includes the Bootheel of Missouri and the Ar
kansas and Mississippi Deltas. A maple-birch-beech forest type covers a consider
able portion of southern Indiana.
This map is derived from one entitled Areas Characterized
Mo/or Forest
Types in the United States prepared by the United States Department of Agricul
ture, Forest Service, in 1949 and based on a national survey of forest resources. The
Forest Service deRnes the six types of timber areas shown on the map as follows:
LONGLEAF-SLASH PINE: Forests in which 25 per
cent or more of the stand is longleaf or slash pine,
singly or in combination.
LOBLOLLY-SHORTLEAF PINE: Forests in which
25 percent or more of the stand is loblolly pine, short
leaf pine, or other yellow pines, excepting longleaf or
slash, singly or in combination.
WHITE-RED-JACK PINE: Forests in which 50 per
cent or more of the stand is eastern white pine, red
pine or Jack pine, singly or in combination.
MAPLE-BIRCH-BEECH: (northern h ard w o o d s):
Forests in which 50 percent or more of the stand is
sugar maple, yellow birch, beech or basswood, singly
or in combination.
OAK-HICKORY: Forests in which 50 percent or more
of the stand is upland oaks, hickories, yellow poplar,
or gums, singly or in combination, except where long
leaf and/or slash pine comprises 25 percent, or where
loblolly, shortleaf, Virginia and/or pitch pine com
prises 25 percent, singly or in combination, in which
cases the stands would be classified respectively as
longleaf-slash pine or loblolly-shortleaf pine.
SWAMP AND BOTTOM-LAND FORESTS: Forests
on characteristically moist to wet sites primarily identi
fied by water tupelo, black gum, sweet gum, southern
cypress, ash, oak, pine, elm, cottonwood, and red
maple, making up 50 percent or more of the stand,
singly or in combination, except where longleaf and/or
slash pine comprises 25 percent, or where loblolly
and/or shortleaf pine comprises 25 percent, in which
cases the stands would be classified respectively as
longleaf-slash pine or loblolly-shortleaf pine.
The area not typed may have some timber, usually covering less than 10 per
cent of the land.
Page 114
M ap of Principal Types of Timber in Eighth District States
)
]
OAK-HtCKORY
t
!
SWAMPS and BOTTOM-LAND
M APLE-BtRCH -BEECH
]
!
1
LOBLOLLY-SHORTLEAF PtNE
!
LONGLEAF - SLASH P) NE
WHtTE-RED-JACK PtNE
]
]
L ess Than )0 % Timber
Page
us
Very favorable growing conditions here have ap
parently offset the effects of understocking. Further
more, growth rates in the district states exceed the
rate of cutting by a considerable margin. The annual
net cut was less than two-thirds of net growth in
1953, while for the same year the nation as a whole
cut approximately three-fourths of the growth. The
favorable ratio of growth rates to cutting in the
seven states should permit improvement in the tim
ber stands and provide the base for expanding output
in the future.
Unfortunately, the old growth of sawtimber is
about gone in the area. In 1953 the district states
had only about one-fourteenth of the nation s stand
ing sawtimber and the greater part of that was in
second growth stands. The current era of improve
ment in forests follows a long period in which timber
resources were drawn down. Lumber production in
the area was at its zenith during the first two decades
of this century, when "Cut and get out" was the policy
of most operators. A large per cent of the timber
that remained after the sawtimber harvests was un
marketable or of low value. Furthermore, inferior
trees were occupying space where high quality trees
could be growing and forest Sres often curtailed
natural restocking processes. Another factor in the
drain on timber resources in the past was the lack of
knowledge in erosion control methods which led to
abandonment of eroded farmland and the clearing
of new lands that, in many cases, were not topograph
ically suited to crop production.
...
One of the first major attempts to assure a perma
nent timber supply in the area was establishment of
the Ouachita National Forest in Arkansas in 1907.
Soon thereafter, a number of lumber companies began
to acquire second growth pine lands in the southern
district states after the old growth had been ex
hausted. Owners of the larger holdings were show
ing interest in scientific forest management by the
early thirties. More recently, substantial advances
have been made in the management of timber on
many smaller holdings.
In 1953, according to the
ResoMfce RetMeti),
pulp manufacturers were apparently doing the best
job of forest management of all the private ownership
groups in the nation.^ Almost two-fifths of the total
land area held by pulp manufacturers was in owner
ships on which some timber stand improvement work
2
Rfv/ftp, United States Department of Agriculture,
Forest Set vice, 1953, Chapter IX.
Page 116
was being done. By contrast, only about 3 per cent
of the land in farms was in units undergoing im
provement. The level of timber management prac
ticed by pulp manufacturers is especially high in the
South. Holdings of lumber manufacturers, other
wood manufacturers and other private investors fall
between these two extremes.
When land holdings were classified in the Tim&er
Resource RetMett; according to size, the quality of
timber management increased with each larger sizeclassiBcation. For the nation, only 2 per cent of the
area in holdings of less than 100 acres reported any
improvement work, as compared to 45 per cent of
the area in units of 50,000 acres or more.
...
0% ^
Small farm forest properties have long been recog
nized as the crux of the forest management problem
in the district states and in the nation. Low income
and inability to save or wait for capital to be
replenished have made it difficult for small farmers
to develop their woodlands. Tenants, who frequent
ly moved from place to place, were generally given
wide latitude in their use of timber resources with
unhappy results so far as good forestry practices are
concerned.
Fortunately, the problem of small farms is being
alleviated both in the district and in the nation. Total
number of farms has declined consistently since World
War II. With this decline has gone a persistent
growth in size of farms. The greatest increase in
average size of farms in the district states occurred in
Arkansas and Mississippi where farms were small and
a great concentration of sawtimber exists. These re
source changes in agriculture have resulted in more
efficient performance on farms. In turn higher in
comes have relieved some of the pressure to clear
land for crops which is better suited for timber.
Similarly, as farm incomes improve, pressure to cut
timber on farm land without leaving a good stock of
growing trees is reduced.
Good forest management pays. According to the
Missouri Conservation Commission, timberlands in
that state could produce five times as much timber
if they were properly managed.^ Furthermore, in
the case of the small landholders, most of the manage
ment work could be done by the owners without
the necessity for cash outlays. The United States
Forest Service has estimated that a moderate level
of management in Mississippi would eventually raise
3 Forfj/ F/rfj
Missouri Conservation Commission, 1951.
current annual growth in board feet by two-thirds.^
Such a level of management entails state-wide fire
protection, cutting practices which would maintain
full production capacity on land held by forest-product firms and public agencies, and cutting practices
on the rest of the forest land designed to improve
productivity.
The future prospects of the pulpwood industry are
of special concern to bankers located near forested
lands. Whether pulpwood production in the district
states gains 47 per cent with the estimated national
increase by 1965, or shows no gain, wiH make a sub
stantia! difference in the level of operations of many
banks in the forested areas.
A case study in 1954 points up the increase in re
turns from an individual farm woodlot that can be
attained by improving forest management practices.^
Using constant prices for calculating returns, net
gains from the ninety-two-acre woodlot on a farm in
Tippah County, Mississippi, over three decades could
be increased from $3,639 to $15,322 with the installa
tion of a planned forestry program.
Fortunately, the banker is not completely passive
in determining which of these alternatives is to be
experienced. Many forest owners need to be con
vinced of the importance of good woodland manage
ment. Small owners have been especially slow to
adopt practices designed to keep woodlands produc
tive. If bankers can encourage such owners to do a
better job substantial benefits may result.
Commercial bank lending for planting trees on
unstocked lands is probably out of the question. It
usually takes twelve to twenty years for newly plant
ed trees to reach the thinning stage for pulpwood in
the district states. This is obviously too long to be
an attractive credit business for banks. However,
k credit has many other uses in forest products
inesses. For example, loans to finance the pur
se of marketable timber or to manufacture forest
ducts are quite common.
Despite its excellent prospects in the district states
pulpwood is not likely to become the only product
marketed from most district forest lands. Good
quality saw logs still sell at a substantial premium
for lumber or veneer compared to the price paid for^
pulpwood. Pulpwood provides a market primarily ^
for smaller trees which must be thinned out in good;
forestry practice. The pulp market also provides an
outlet for slow-growing and cull trees that should be
eliminated from timber stands. Portions of trees? ^
that cannot be used for lumber or higher-priced
products may also be used for pulp.
1953 the Federal Reserve Act was amended to
mit national banks to make real estate loans
ired by first liens upon properly managed forest
:^s. J^efore the amendment timberland was not
n^{de^3 to be improved real property which could
tie d ^ ^ e c u rity . The change may facilitate forest
ly^ ^ n eh t in several ways and reduce the premattife A tf^ excessiv e cutting of timber which has
in .
^ r
n
i
l^ee^ $ucR a problem with farm woodlands.
In recent years, wastes from wood-working plants,
such as slabs and edgings from sawmills, have be<
used for making pulp.
Sawmills equipped wj
de-barkers and chippers can sell as a valuable ^
product waste material that they used to burn. W^od
residues chipped for pulp in 12 southern statesjin-^
creased from 126,000 cords in 1954 to 659,000 in lj&56, ^
j
,
or more than 3 per cent of total southern p u lp ^ d ^ ^ ^ ^
production. The use of wood residues fo^* [p%as^
been developed further in Arkansas than
^
southern state, supplying 13 per cent of th ^ ^ a te ^ ^ '
pulpwood production in 1956.
4
of Agriculture, Forest Service, 1951.
5 "The Covington Farm, A Case
December 1954.
'
^
United
^
F,
^^
Study in Planning and Financing Farm ^
'
**
r
^
are just one of many groups helping to
Hrogfo^e the capacity of district forests to supply
Rational markets for wood products. A greater outpu^ ohpulpwood as a result of development efforts
noYh§jtng made will mean not only increased income
rs of timber tracts but will enhance the
for establishing additional pulp and paper
in^the district. Careful management of forest
#es<Airdes( should thus yield widespread beneSts in
emplbym^nt and income.
CLIFTON B . LUTTRELL
A. J. MEICS
Page 117
OF CURRENT CONDtHONS
/or PM&Hc#fion S^pf^m&ar J
W H IL E THE AMERICAN ECONOMY continued
to give strong evidence of over all prosperity during
the past few months, a disquiet persists which has not
been dispelled by the most recently available statistics.
After allowing for the significant upward drift in
prices these figures indicate that the economy is
continuing its sidewise movement with most activi
ties changed but slightly when compared with the
recent past. To a public which has been conditioned
by the substantial rate of growth during 1955 and
1956, this loss of forward momentum has been the
subject of some greater impatience and concern than
the current high level of business vitality would seem
to warrant.
No doubt some of the anxiety regarding the nation's
economic future involves the existence of perceptible
soft spots. However, a conjuncture of offsetting
developments has served to maintain prosperity. These
include the rise in consumer outlays for nondurables
and services, the increased levels of government ex
penditures, and inventory accumulation.
During July the Federal Reserve Board index of
industrial production held steady at the June rate of
144 per cent. Total employment in nonagricultural
establishments was 52.8 million (seasonally adjusted)
in July, virtually unchanged from the revised June
figure. However, increased wage and salary disburse
ments in the trade and service industries, as well as
in government, were the basis for a slight 0.2 per
cent rise in personal income in July. The level of
unemployment, approximating 4 per cent of the labor
force, was little changed from a year ago. Continued
high levels of employment and income also seemed to
maintain consumers' spending as reHected in a 1 per
cent rise in retail sales. While it is clear that the
growth of general business activity has slowed to a
considerable extent, the continued increases in con
sumer prices and interest rates indicate that inflation
ary pressures have not entirely abated. The index of
consumer prices moved up % of 1 per cent during
July and the entire pattern of interest rates advanced
during August. However, even in this area the gen
Page 118
eral picture was alloyed by sporadic price declines
in individual commodities and some bearishness in
common stock prices.
This general picture of over all stability is also evi
dent in the Eighth District. Business at large changed
little during August as compared with July. Indivi
dual activities are manifesting some differences in
behavior and, although the order of magnitude of
month-to-month changes is modest in most cases, com
parisons with last year are sometimes quite revealing.
Steel production in the St. Louis area continued the
decline which began in April of this year. This con
traction in output has been interrupted only by the
brief upturn in July which was associated with a re
turn to normal operations after the Hood conditions
in June. Currently, steel plants in the St. Louis area
are operating at about 77 per cent of capacity and
production is down a substantial 18 per cent below
last year.
Livestock slaughtering in the St. Louis area was
also lower in August than in July with the bulk of the
decrease coming in hog and sheep processing.
Cross currents were apparent in the business pic
ture, however. Southern pine output was almost 12
per cent higher during August than it was in July,
and was up about 6 per cent when compared with
last year's Sgures. Freight car interchanges in the
St. Louis area in early August were 18 per cent
above July. Commercial failures in July were down
somewhat from June and considerably below the level
of a year ago. In general, business failures have been
at a somewhat lower rate in 1957 than in 1956.
The major district labor markets, like their national
counterparts, reflected both the overall stability of
business in the aggregate and minor shifts in indivi
dual activities. Total nonagricultural employment
evidenced a small seasonal drop, while manufactur
ing employment was off slightly more than usual in
July. Typically there were some differences among
reporting centers in the district. Unemployment de
clined from June to July throughout the district, but
was over year ago levels in Louisville, Little Rock and
Memphis.
Loans at Eighth District weekly reporting banks
expanded $50 million (about 3 per cent) during the
four we^ks ending August 21, somewhat more than
is usual fo^ the period. The strength was largely in
business borrowing. Perhaps a third of the increase,
however, was unrelated to the business situation,
arising from the reclassification of certain security
holdings into the category of loans to brokers and
dealers. Loans to commodity dealers rose sharply
in conjunction with the August 16th deadline for
Commodity Credit Corporation cotton payments,
which created large Rows of money through district
banks, especially at Memphis. Food and textile man
ufacturers added to loans, as did public utilities and
to a lesser extent construction contractors. Partially
offsetting these gains were net repayments of loans
by metal manufacturers, trade concerns and sales
Rnance companies. "Other" (largely consumer) loans
rose moderately in the four-week period.
Some of the changes in security holdings of report
ing member banks in the period were associated with
Treasury Bnancing. While certificate holdings in
creased following the pattern of the Treasury's August
1st refunding, the volume of Treasury notes declined.
Later in the month the Treasury's seasonally depleted
demand deposit balances were replenished by sales
of special 237-day bills, some of which were added to
bill holdings of the banks.
Developments in agriculture were seasonal in na
ture, with crops continuing to grow well, except for
some areas which received too much rainfall. Cotton
picking began in the southern part of the district in
the latter part of the month. Because of delayed
spring planting, com and soybeans are expected to
mature somewhat later than normal. United States
Department of Agriculture production estimates re
veal that output of cotton, com, and soybeans will be
substantially below 1956 volumes both for the nation
and for the Eighth District farms. The regional drop
is considerably more severe. The table below con
tains the estimates for the major district crops.
PRODUCTION OF SELECTED E!GHTH D!STR!CT CROPS
1956 AND AUGUST 1, 1957 ESTIMATES
Cotton__________
1956
Aug. 1,
1957 Per cent
Estimate Change
(Thousands 50-lb. Bales)
Arkansas.....................................
Illinois........................................
Indiana.......................................
Kentucky...................................
Mississippi................................
Missouri.....................................
Tennessee..................................
1,426
1,120
— 21%
—
1,609
448
552
—.
1,340
245
480
Total Eighth Dist. States
Total United States............
4 ,0 3 5
1 3,310
3 ,185
11,897
—
—
—
—
____________ Com______________
1956
Aug. 1,
1957
Estimate
(Thousand Bushels)
—
—
— 17
— 45
— 13
18,090
5 9 8 ,672
2 9 6 ,546
8 4 ,456
3 9,150
189,408
55,770
12,788
430,352
2 26,356
59,318
3 9,432
127,021
41,804
— 21
— 11
1,282,092
3,4 5 1 ,292
937,071
3,065,771
—
Change
_________ Soybeans__________
1956
Aug. 1,
1957
Estimate
Per cent
Change
(Thousand Bushels)
_________ All Hay
1956
Aug. 1,
1957
Per cent
Estimate Change
(Thousand Tons)
— 29%
— 28
— 24
— 30
+ 1
— 33
— 25
27,162
134,948
52,128
2,992
11,712
39,120
3,960
22,402
107,436
49,245
2,466
10,215
31,680
3,400
— 18%
— 20
— 6
— 18
— 13
— 19
— 14
— 27
— 11
272,022
455,869
226,844
428 ,3 5 6
— 17
— 6
949
4,998
2,723
2,431
908
3,523
1,754
1,017
4 ,717
2,662
2,320
95 2
3,990
1,767
+
—
—
—
+
+
+
7%
6
2
5
5
13
1
17,286
108,708
17,425
118,897
+
+
1
9
Page 119
VARtOUS tNDtCATORS OF )NDUSTR!AL ACTIVITY
%
Steel Ingot Rate, St. Louis area (Operating rate, per cent of capacity)
Coal Production Index— 8thD ist. (Seasonally adjusted, 1 9 4 7 -4 9 = 1 0 0 )
Crude Oil Production— 8th Dist. (Daily average in thousands of bbls.)
Freight Interchanges at RRs— St. Louis (Thousands of cars— 25 railroads— Termi
nal R .R .A ssn .)
Livestock Slaughter— St. Louis area (Thousands of head— weekly average)
Lumber Production— S. Pine (Average weekly production— thousands of bd. ft.)
Lumber Production— S. Hardwoods (Operating rate, per cent of capacity)
^ ^
July 1957*^
J^ 7
81
76.7 p
309.5
J ^ J* 1 9 5 7 July 1956
+14%
— 11%
— 21
— 11
— 13
— 19
99.7
99.3
201.7
74
+ 3
— 3
— 3
-} y 3
+ 3
+ 1
+ 2
— 20
capacity.
pPreliminary.
CASH FARM INCOME
July, 195? .^
1957
(In
Six Largest Centers:
millions)
East St. Louis—
National Stock Yards,
111................................... $ 155.2
Evansville, Ind..............
198.1
Little Rock, Ark.
212.9
Louisville, Ky................
936.5
Memphis, Tenn.
767.2
St. Louis, Mo.
2,559.1
Total— Six Largest
Centers......................$4,829.0
Other Reporting Centers:
Alton, 111.
$
40.8
ElDorado,Ark.'
.
Fort Smith, Ark.
Greenville, Miss...........
Hannibal, Mo.................
Helena, Ark.
Jackson, Tenn................
Jefferson City, Mo.........
Owensboro,Ky..............
Paducah,Ky.
Pine Bluff, Ark................
Quincy, 111.
Sedalia, Mo.
Springfield,Mo.
Texarkana, Ark.............
32.8
59.9
27.4
12.2
9.2
25.2
112.7
46.9
30.2
43.0
44.9
16.6
102.0
22.6
Total— Other
Centers
July
1956
1957
+ 12%
+ 10
+ 5
+ 11
+ 3
+ 10
+12%
+ 2
+ I
+ 7
+
7
+ 10%
+
9%
2%
+
:
^of donaM)^ 1957
Arkansas . $ 29,774
Illinois___ 118,739
Indiana
64,039
Kentucky
26,209
Mississippi
27,100
Missouri
81,315
Tennessee
25.968
7 States . 373,144
8th District t 169,538
STRUCT!ON CONTRACTS AWARDED
Percentage Change
Jan. thru June
June *57
1957
from
1956
1955
+ 15% — 18%
+ 15%
+ 10
+ 23
+ 1
+ 6
+ 4
+ 7
— 8
+ 3
+ 7
+ 28
— 19
+ 11
+ 15
+ 5
+ 4
— 4
+ 13
+ 5
+ 6
+ 3
+ 13
— 2
+ 12
+ 8
!N EiGHTH FEDERAL RESERVE DISTRICT*
June 1957 May 1957 June 1956
Total
Residential
and Utilities
$111,818
45,295
$156,559
64,841
49,984
$165,310
53,052
50,826
22,321
41,734
61,432
9%
+
+ 10
+12
+ 4
+ 5
+ 7
+ 5
+ 3
+ 2
+ ^
+ 4
EIGHTH D!STR!CT WEEKLY REPORTING MEMBER BANKS
+ 13
±*9
+ 26
+ 2
+ 10
— 3
+ 4
+ 6
7
+i2
+ 7
+ 5
+
E 4<.................
r//7
6
U.S. Gov't. Securities..........
$ 644.8
+ 13%
+10%
Total— 22 Centers. . . $5,473.8
+10%
+
INDEX OF BANK D EBIT S— 22 Centers
Seasonally Adjusted (1 9 4 7 -1 9 4 9 = 1 0 0 )
1957
9%
Total Assets.................
1956
I8&6
162L6
1 7 lll
I Debits to demand deposit accounts of individuals,
partnerships and corporations and states and political
Aug. 21,
1957
$1,672
881
65
279
473
841
223
28
841
42
$3,647
July 2:4,
1957
$ + 50
+ 34
+ 13
. $ 662
2,002
602
89
292
$3,647
+ 16
+ 27
— 13
5
$+ 6
— 3
+
+
- 03
2
— 1
+ 11
— 26
+
4 Weeks Ended
Other
.......
—2
—2
1
$ + 37
+
2
R etail...............
2
+
+ 1
+ 30
$ + 37
Another""
+2
T otal.................................................$ + 36
gross.
2 Changes in business loans by industry classification from a sample of banks holding roughly 90%
of the total commercial and industrial loans outstanding at Eighth District weekly reporting member
DEPARTMENT STORES
RETA!L FURNtTURE STORES
and Notes Receivable
Outstanding July 1, *57,
Net Sales
collected during June.
July, 1957
7 mos. '57
Excluding
compared with
to same
Instal.
Instalment
50%
- 0- %
16%
— 8%
+ 5%
S th F .R .D is tr ic tT o ta l....................................
—2
—2
39
+ 2
Fort Smith Area, A rk .i.................
— 2
13
43
+ 3
Little Rock Area, Ark......................................
+ 3
—5
+ 2
— 10
Quincy, 111............................................................
- 0— 1
— 16
EvansvilleA rea,Ind........................................
42
— 1
— 6
+ 3
15
— 6
— 2
— 4
+ 6
— 6
+ 10
Paducah, Ky.i
..............................................
16
59
— 13
+ 7
+ 1
— 3
— 11
+ 2
^ St.L ou is^ (C ity)^ .........................................
+ 4
+ 9
+ 3
— 1
15
35
-0 + 4
— 1
— 3
+ 4
All Other Cities1 In order to permit publication of figures for this city (or area), a special sample has been con
structed which is not confined exclusively to department stores. Figures for any such nondepartment
stores, however, are not used in computing the district percentage changes or in computing depart
ment store indexes.
2 Fayetteville, Pine Bluff, Arkansas; Harrisburg, Mt. Vemon, Illinois; Vincennes, Indiana; Dan
ville, Hopkinsville, Mayfield, Owensboro, Kentucky; Chillicothe, Missouri; Greenville, Mississippi;
and Jackson, Tennessee.
Outstanding orders of reporting stores at the end of July 1957, were 5 per cent higher than on
the corresponding date a year ago.
INDEXES OF SALES AND STOCKS-
-8T H DISTRICT
July
1957
104
135
June
1957
116
119
128
139
n.a.
3 Daily average 1 9 4 7 -4 9 = 1 0 0
4 End of Month average 1 9 4 7 -4 9 = 1 0 0
n.a. Not available.
http://fraser.stlouisfed.org/ Trading days: July, 1957- -26; June, 1957— 25; July, 1956— 25.
Federal Reserve Bank of St. Louis
May
1957
127
127
138
138
July
1956
104
135
128
139
Net Sales
July, 1957
8th ^Dist. T o ta H ........................
Little Rock A rea........................
June, '57
+ 7%
+ 18
— 9
+ 3
+ 4
+ 5
July, '56
+ 10%
+ 18
— 8
— 15
+ 6
+ 10
I In addition to the following cities shown separately
in the table, the total includes stores in Blytheville, Fort
Smith, Pine Bluff, Arkansas; Owensboro, Kentucky;
Greenwood, Mississippi; Evansville, Indiana, and Cape
