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Monthli) Review
ATLANTA, GEORGIA, JULY, 1957
Jn%isJssue:
Bank Lending Reflects an Active Economy
S e a s o n a l S w i n g s in Electric
District Business
SixthDitfridStatistics:
Power
Highlights
Condition of 27 Member Banks in Leading Cities
Debits to Individual
Demand Deposit Accounts
Department Store Sales and
Inventories
Instalment Cash Loans
SixthViSrid"Indexes:
Retail Furniture Store
Operations
Wholesale Sales and
Inventories
Construction
Cotton
Contracts
Consumption
Department Store Sales and Stocks
Electric Power Production
Furniture Store Sales and Stocks
Manufacturing
Employment
Manufacturing
Payrolls
Nontarm
Petroleum
Employment
Production
Turnover of Demand Deposits
j?^af^m$ade0fata
DISTRICT BUSINESS HIGHLIGHTS
Total nonfarm employment and factory payrolls rose to record highs, although weakness
still exists in some manufacturing industries. Consumers quickened their rate of spending.
Higher prices and larger output helped the farm economy. Bankers continued to expand
their loans, and as reserve positions of member banks tightened, their borrowings from the
Federal Reserve Bank of Atlanta were the highest this year.
Nonfarm employment advanced slightly to a new record in May as nonmanufacturing employment advanced further.
Factory payrolls increased further in May to about last December's high.
Textile activity/ as measured by cotton consumption, increased slightly in May,
but was still relatively low.
Steel operations were reduced somewhat in late May and June, but the operating
rate still exceeds that for the nation.
Crude oil output dropped slightly in May, reflecting a further cutback in allowable
production.
Construction contracts awarded in the first five months of this year were substantially above those a year ago.
Total spending, as measured by seasonally adjusted bank debits, established
a new all-time record during May.
Department store sales in June, seasonally adjusted, approached the all-time
high set last summer.
New car registrations, through April, continued to show a more favorable trend
than in the nation.
Furniture store sales, seasonally adjusted, declined during May to the level of
May 1956.
Consumer credit outstanding at commercial banks moved upward in May for
the sixth consecutive month and continued to grow more rapidly than in 1956.
Consumer savings rose more than seasonally during May.
Crop and pasture growth was favored by the weather except in Louisiana.
Livestock production exceeds that at this time last year, principally because
more beef is being marketed.
Farm prices of vegetables, beef, hogs, and broilers were above those of last year;
prices of cotton, oranges, and eggs were lower.
Cash receipts from farm marketings topped receipts of last year because livestock
product sales increased and prices improved.
Total loans at member banks, seasonally adjusted, rose somewhat during May;
all states except Alabama shared in the increase.
Business loans at banks in leading cities increased during June principally because
of borrowings by sales finance companies and metals firms.
Deposits at member banks, after seasonal adjustment, declined somewhat in
May, but according to preliminary data rose during June.
Interest rates on short-term business loans made by banks in Atlanta and New
Orleans increased slightly between March and June.
Privately held demand deposits and currency, after seasonal adjustment, declined in May for the first time this year.
Borrowings from the Federal Reserve Bank of Atlanta in June averaged
slightly more than in May, the previous high month of 1957.
•2•
Bank Lending Reflects an Active Economy
Figures on bank loans are more up-to-date than many
other economic data. Analysts frequently use them, therefore, as a clue to what is happening in business. Bank
loan data for this spring, along with other indicators, tell
us that businesses are no longer building up their stocks.
Rather they seem to be unloading their shelves. Further
weakness showed up in the building industry. Consumers
and governments, however, spent more than at any time
in the post-Korean War period. Adding it all up, we find
that total business activity must have advanced, although
more slowly than in late 1956.
Loan data for the Sixth District show that business activity is strong in our area. Loans at member banks were
35 million dollars, or one percent, higher on May 29,
1957, than on December 26, 1956; only two other Federal
Reserve Districts bettered the District rate of increase
through April this year. In May 1957, moreover, these
loans in our District were 9 percent above last May.
The rise in loans varied widely among banks. Smaller
banks and those located outside leading cities generally
enjoyed the greatest gains. Country member banks expanded their loans 12 percent from last May. This was
twice the rate of increase at reserve city banks and onehalf again larger than the gain at member banks in leading
cities. Nonmember banks probably expanded their loans
at about the same rate as country members.
During a business boom, banks in the money market
centers usually feel the impact of credit policy before
those outside, especially those in the smaller communities.
It is not surprising, therefore, at this stage of the boom,
that banks in smaller cities are enjoying a greater rate
of expansion, not only of loans but also of deposits.
In an area of rapid development such as this District,
one would expect growth to be greater in places other
than the older, more established banking centers. Such
was the case this year. At Orlando, Florida, loans, deposits, and bank debits increased sharply. Several other
Florida and Southern Louisiana cities also registered larger
gains in loans than Atlanta, Nashville, and Birmingham.
To understand economic conditions, it is more important to find out how much various types of borrowers
received than how different banks fared. We have figures
of this type for March 14, 1957. They show that businesses owed District member banks 9 million dollars more
than at the end of 1956. No other class of borrowers
showed such a large gain; security loans rose 4 million
dollars and real-estate loans 3 million. Loans to consumers
and farmers declined.
Business gets almost 50 percent of all loans. In the
term business we include manufacturers, wholesalers,
retailers, sales finance companies, automobile dealers,
electric companies, building contractors, and many others.
How much do these firms borrow? Why do they borrow? The answers to these questions depend on how good
business is, how much money the firm already has, and
other similar factors. Some borrow to finance purchases
of materials that go into a finished product, which they
sell and get paid for some time hence. Others borrow to
build up stocks, to expand their plant and equipment, or
for other reasons.
This spring, the changes in loans reflected, in part,
changes in inventories. Some businessmen, piling up merchandise, turned to banks for financing help; others, unloading their shelves, often used the money from the sale
of the goods to repay their loans.
Inventory Changes Affect Bank Lending
In the nation's textile field, mill inventories changed little,
whereas last year they rose substantially. Since mill
owners, therefore, needed less credit this year, bank loans
to textile, apparel, and leather firms rose less than a year
ago at banks in leading cities, for which we have the
most complete information on business loans. At 22
banks in leading District cities, textile loans since the
end of 1956 likewise increased less than in early 1956.
Textile workers in the District have been putting in
increasingly fewer hours since December; also, the number
of textile workers is down this year, although less so
percentagewise than in 1956. Trade papers report a pickup in textiles, but it is confirmed only by a slight rise in
seasonally adjusted use of cotton by District mills in
May; the May figure, however, is below that of last year.
In another important District industry—lumbering—
stacks were higher. For the first four months of 1957,
inventories of Southern pine in the District rose 9 percent;
they had declined in 1956. This year's inventory accumulation helps explain why unclassified manufacturing and
mining loans went up; that group is heavily loaded with
lumber loans. Further weakness in lumbering is revealed
by greater cuts in employment in lumber and furniture
this year than in 1956.
Pulp and paper manufacturers borrow infrequently
from District banks. This year, those who did borrow
probably did so largely to finance inventories. National
stocks of pulp and paper continued to rise more than
seasonally through April.
Lending to metal firms, that generally added to their
stocks, has also been buoyant. At banks in leading
cities, metal loans advanced much like those in the
nation. This year's increase in the District is just about as
high as the exceptionally large gain in 1956. At that
time prospects of a steel strike encouraged inventory
stocking, and business investment in plant and equipment
was rising more rapidly than now. Many persons anticipated the recent price hike in steel, which may have
stimulated inventory building. The 1957 advance in
loans also reflects the continued vigorous expansion in
plant and equipment.
• 3•
LENDING AT DISTRICT BANKS
In the first half of 1 9 5 7 , the growth in loans and
deposits at all member banks in the District outpaced that in the nation.
Lending fluctuated at high levels at member banks
in large cities of the District, but rose steadily in
small cities. Consumer credit a t all commercial banks
also grew.
INSTALMENT
CREDIT
LOANS
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SMALL CITIES
(Under 50,000 pop.)
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Business loans at member banks in leading cities increased less than they usually do at this time of year.
Million %
1
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- LOANS
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Leading Cities
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BUSINESS
y*r
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Trade Loan Strength
Deceptive
Trade concerns gave a big boost to District business
lending. They usually borrow about one-fourth of the
total dollar amount lent to business. Borrowings by
wholesalers and retailers at leading banks rose almost as
much this year as last. In contrast, trade loans in the
nation have not measured up to the rise of 1956 or 1955;
the pattern has instead been more like that in 1954.
The strength suggested by District loan figures is
not evident in other trade statistics. Retailers, who accounted for most of the loan increase, saw little change
in the trend of their sales from last year. Yet, their stocks
did not seem to increase enough to explain the increase in
loans. Stocks at department stores in the first quarter of
1957 probably went up only slightly more than seasonally.
We know that the strength in trade loans lies partly
in the fact that some national firms shifted from money
market centers to large District banks for their financing.
Many of these firms began using their lines of credit
here simply because credit policy and other factors had
made it more difficult for them to secure credit from
their usual suppliers.
«
Rising Consumer
SECURITY
...
Gains Less Than Seasonal
Total business lending increased less in the District this
spring from December than in previous years. Growth in
credit extended to manufacturing and mining firms combined was the weakest of all by far. It increased only 8
million dollars through June 26 at banks in leading cities,
compared with a gain of 30 million in 1955 and in 1956.
This year's smaller rise was largely because of a sharp
drop in food, liquor, and tobacco borrowing.
Public utilities, on the other hand, apparently went
to the banks often. They increased their borrowings 6
million dollars this year; last year they reduced them.
Nationally, the increase was somewhat larger than in 1956.
Sales finance companies also borrowed far more from
District banks this year than in 1956. This reflected
automobile dealers' needs for funds to carry near-record
numbers of new cars. Sales finance companies traditionally
furnish a large proportion of dealers' "floor-planning."
From time to time, however, they shift from banks to
other lenders. In January, they repaid their bank loans
with the proceeds of commercial paper sold in the market.
After going back to the banks in March and April, they
once again sold commercial paper to trim their bank
debts, only to return to the banks in June. How much
bank credit is available largely causes such ups and downs
in borrowings of sales finance companies.
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1956
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Credit
Consumer credit boosted total bank lending considerably.
Instalment credit alone had increased 39 million dollars at
all commercial banks in the District by the end of May.
This increase compared with only 19 million in the first
five months of 1956. The gain through April somewhat
• 4 •
exceeded the national rate. That gains in automobile
loans were especially high is not surprising, since new car
registrations in the District are 7 percent ahead of 1956.
In the nation they are little changed from last year. The
smaller District banks that have become increasingly
aggressive in their instalment lending accounted for much
of this growth.
In the District, awards for residential building were
holding up better than in the entire country. In line with
this development, real-estate loans on residential property,
other than farmland, held stable between December 31
and March 14; the nation experienced a decline.
Farmers apparently were less active borrowers this
spring than last. Farm production loans at all District
member banks rose only 4 million dollars between the
end of 1956 and March 14, a somewhat less than
seasonal rise. From a year ago, production loans are
actually down, but are likely to show a rise when data
covering the planting season are out.
Also, farmers in the District probably relied less on
nonbank credit; in the nation they did just that. Life
insurance companies and Federal Land Banks, for example, made fewer loans than last year. Farmers had to
pay, on the average, higher interest rates than they did
last year, 5% percent compared with 4 % in 1956. For
this reason, some have probably not been too eager to
refinance their mortgage debt to get operating capital.
Others must have borrowed less because they took part
in the acreage reserve of the Soil Bank program. For all
District states, some 21 percent of the allotted cotton
acreage was pledged to the Soil Bank.
Participation in the Soil Bank is by no means the only
reason why farmers borrowed less. In some areas farmers
are leaving the farm; hence such loans are fewer. Farm
loans outstanding at member banks are below year-ago
totals in many sectors: The peanut belt of Georgia and
Alabama; the sugar cane areas of Louisiana; the flatwoods of Georgia and Florida; and the Piedmont of
Georgia and Alabama.
Supply of Credit
How were District banks able to turn in such an impressive
record of meeting their customers' needs? For one thing,
they were able to retain their deposits. Since December,
total deposits at member banks have risen almost steadily.
By the end of May, they were 6 percent above those of
May 1956. Nationally, the increase through April was
only 3 percent. Secondly, banks apparently gained a
sizable amount from other areas, since the rise in deposits
roughly matched the increase in loans and investments.
The Treasury, for example, spent more in the District
than it collected here. Some banks whose reserve positions
were pinched were temporarily accommodated at the
discount window of the Federal Reserve Bank of Atlanta.
Not only were banks able to make more loans but also,
unlike banks throughout the nation, they added somewhat
to their holdings of investments, mainly United States
Government issues. Again, the increase was not uniform
for all classes of banks. Country banks expanded their
holdings more than enough to offset a sizable reduction
at reserve city banks. The growth at nonmember banks
equaled that of country banks.
Will the Rise Continue?
What course will total loans take in the last half of
this year? If the seasonal pattern holds, they will rise.
How much they will rise depends on the pace of activity
in many fields. Perhaps much of the upward trend in
loans in the District and the declining trend elsewhere
reflect only the lesser importance of durable goods
industries here. The durable goods area has been one of
the major soft spots. Thus, if stock cutbacks are over,
loans to finance inventories will expand relatively more
in the nation than in the District.
The consumer may decide to step up his buying of
cars and other durables and give loans a boost. So far this
year, he has not increased his spending as much as his
income has gone up. Yet, of all the influences on loans,
credit policy may well be the most important. It will
probably continue to have a deciding impact on some
industries and home and business construction. Unless
credit policy is changed, therefore, the present loan pattern
is unlikely to change dramatically.
HARRY BRANDT
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Bank Announcements
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On June 21 the Englewood Bank, Englewood, Florida,
opened for business as a nonmembet bank, remitting at
par for checks drawn on it when received from the
Federal Reserve Bank. Officers are William L. Hart,
President; J. T. Sheppard, Vice President; Edward J.
Bramlage, Cashier; and Mrs. Margaret E. Leach, Assistant Cashier. Capital stock totals $100,000 and surplus and undivided profits $45,000.
On July 1 the Merchants and Planters Bank, Newport,
Tennessee, began to remit at par. The bank's officers
are J. B. Ruble, President; Carl B. Mims, Cashier and
Vice-President; J. M. Stooksbury, Executive VicePresident; T. I. Magill and Mrs. Nelle Williams, Assistant Cashiers. Capital totals $125,000 and surplus
and undivided profits $454,000.
Another nonmember bank going on the par list
July 1 was the Community State Bank of Starke, Starke,
Florida. Officers of this bank are S. D. Clarke, Chairman of the Board; Charley E. Johns, President; and
William S. Terry, Cashier. Its capital totals $100,000
and surplus and undivided profits $45,000.
On July 6, The Bank of Stone Mountain, Stone Mountain, Georgia, opened for business as a nonmember,
par-remitting bank. C. Arthur Drew is President; Dr.
/ . Rufus Evans is Vice President; and Robert L.
Maughon is Cashier. Capital amounts to $100,000,
and surplus and undivided profits to $25,000.
• 5•
Seasonal Swings in Electric Power
Bankers, businessmen, and economists are continually
looking for signs of economic changes. They learn from
accounting systems what is happening in individual
firms, but such precise accounts for the general economy
are not available. To measure overall changes, they must
appraise changes in various economic indicators.
One piece of the puzzle that helps give shape to the
picture is output of electric energy. For a number of
years, the Federal Reserve Bank of Atlanta has published
monthly indexes of electric energy generated in an average day by privately and publicly owned utilities in
Sixth District states. These data are based on production
figures published by the Federal Power Commission,
which in turn are derived from reports of generating
plants that produce most of our electric power. Energy
generated by private industry for its own use, making
up 14 percent of the total in 1956, is not included.
The index of electric power is now more valuable as
an economic indicator than it was in the past. Beginning
with this issue of the Monthly Review, it is being published on a seasonally adjusted basis. Heretofore, we
showed only the unadjusted figures.
Most of us are aware that we have been using more
and more electric power in recent years. That production
increased rapidly, therefore, is not surprising. During any
year, output fluctuates rather widely because demand
changes with the seasons. However, it would be a mistake to try to find out underlying trends in the industry by
looking at changes during any one season. Neither can
we assume that changes for any one year are typical for
all years. To bring the basic trend into focus, or to seasonally adjust the series, we use data for several years to
continually review expected seasonal changes based on
historical data. The chart illustrates the change in the
seasonal pattern since 1950.
In 1950, electric utilities in the Sixth Federal Reserve
District expected their output to be highest in winter,
when longer nights mean increased lighting demands.
Also, cold weather increases the demand for heating
in some areas where electricity is used for that purpose.
Since 1950, summer demands have risen so sharply that
the production peak now occurs in August. The increased
use of air conditioning, principally by commercial establishments, explains this radical shift in the seasonal swing.
Having adjusted for such expected changes, we derive the smooth line shown in the chart below along
with the unadjusted data. In view of the recent rapid
and much publicized economic development of this region,
we are not surprised to see the strong upward trend.
Electric Power Production
Sixth District States
Seasonal Adjustment Factors for
Electric Power Production
Sixth District States
determine the average variation in production associated
with the seasons. The actual change is then adjusted to
eliminate seasonal influences. In recent years, for example,
electric power production increased, on the average, about
3 percent from May to June. By subtracting this change
from the actual change in June, we are able to determine
the more fundamental movement.
With electricity being so widely used on an increasing
scale, production is affected by many new developments.
Since seasonal fluctuations may also change, it is wise to
Since commercial and industrial establishments are the
heaviest users of electric power, the increases in electric
output have reflected in large part the industrial expansion
in this area. Residential consumers, also important users
of power, have increased their demand as they acquired
new homes and put to use the wider range of new home
appliances available today. In recent years the Atomic
Energy Commission has had to have more electric energy
because of its sharply expanded program. Largely met by
the Tennessee Valley Authority, this additional demand
had marked effects on output in Tennessee and Alabama.
We see that the value of figures on electric power
production is enhanced by seasonal adjustment. We also
see from a brief look at the numerous factors affecting
power output that this adjustment is only a starting
point in determining economic developments. More basic
movements, once determined, usually raise still further
questions, and finding the answers is an intriguing as
well as informative process.
PHILIP WEBSTER
• 6*
Sixth District Statistics
Wholesale Sales and Inventories 4
Instalment Cash Loans
No. of
Lenders
Lender
Federal credit unions .
State credit unions . .
Industrial banks
. . .
Industrial loan companies
Small loan companies .
. .
. .
. .
. .
. .
.
.
.
.
.
.
.
36
15
6
12
23
39
Percent Change
Outstandings
Volume
May 1957 from
May 1957 from
April
May
April
May
1957
1956
1957
1956
+25
+28
—17
—7
+20
+11
+21
+23
—26
—6
+5
—0
+2
+5
—1
—1
+1
+1
+15
+24
+3
+2
+16
+12
Condition of 2 7 Member Banks in Leading Cities
No. of
Type of Wholesaler
Firms
Grocery, confectionery, meats . . 33
Edible farm products . . . .
7
Drugs, chems., allied prods. . . 12
Drugs
6
Percent Change
Sales
May 1957 from
April
May
No. of
1957
1956
Firms
—3
+2
32
+39
+9
—3
+2
9
—5
+1
Tobacco
5
+11
+0
24
48
+1
+11
+4
+15
47
—0
—6
20
—13
+15
15
+3
+26
Paper, allied products . . . .
Automotive
Machinery: equip. & supplies
Industrial
Inventories
May 1957 from
April
May
1957
1956
+0
—4
—1
—4
*Based on information submitted by wholesalers participating in the Monthly Wholesale
Trade Report issued by the Bureau of the Census.
(In Thousands of Dollars)
Percent Change
June 19,1957, from
June 19
1957
May 22
1957
June 20
1956
May 22
1957
June 20
1956
Loans and investments—
Total
3,367,926
3,369,691
3,342,521
Loans—Net
1,895,307 1,881,612 1,770,950
+1
Item
1,915,485
1,799,593
1,037,094 1,034,934
954,187
+0
+9
35,617
—0
+13
1,929,401
.
.
.
.
.
.
.
.
40,146
40,295
50,893
173,356
15,688
612,224
1,472,619
51,166
172,806
16,914
599,370
1,488,079
401,011
767,422
304,186
482,847
52,954
427,425
758,633
302,021
477,341
51,769
520,228
738,698
312,645
520,274
51,069
—6
+1
275,925
2,252,629
762,306
101,332
680,186
50,750
255,824
2,279,197
752,340
79,620
641,431
58,687
270,216
2,380,738
638,904
111,857
668,100
71,000
+8
—1
+1
+27
+6
—14
—1
ii
Loans—Gross
Commercial, industrial,
and agricultural loans
Loans to brokers and
dealers in securities
Other loans for purchasing or carrying
securities
Real estate loans . .
Loans to banks . . . .
Other loans
Investments—Total . .
Bills, certificates,
and notes
U.S. bonds
Other securities . . . .
Reserve with F. R. Bank .
Cash in vault
Balances with domestic
banks
Demand deposits adjusted
Time deposits
U. S. Gov't deposits . .
Deposits of domestic banks
Borrowings . . . . . .
—0
+1
+1
+0
—1
+2
—1
a
+7
+7
Place
ALABAMA
Birmingham
Mobile
Montgomery
FLORIDA
Jacksonville
Miami Area
Miami
Orlando
+2
+8
+1
+10
St. Ptrsbg-Tampa Area .
St. Petersburg . . .
—2
—9
+7
+15
+3
+8
Tampa
GEORGIA
Atlanta**
Augusta
Columbus
Macon
+6
+8
+10
+4
—2
—1
+1
+4
+9
—11
—10
—6
—1
+1
+3
—7
—11
—1
Rome**
Savannah
LOUISIANA
Baton Rouge
New Orleans
MISSISSIPPI
Jackson
Meridian**
TENNESSEE
—8
+8
+3
+13
+1
+5
+9
—1
+2
—2
+0
—2
+14
—5
+0
+1
—4
+3
—6
—3
—2
+16
—5
—2
—3
—5
+3
+7
—6
+2
—5
+19
—9
+2
—29
Inventories
May 31,1957 from
April 30
May 31
1957
1956
—6
+2
—5
—1
—6
—7
—6
+7
—2
+14
+1
+6
—3
+10
—10
—11
—1
+2
—8
—5
—20
+4
—5
—7
—5
—8
—9
+9
+36
+4
—2
—5
—2
+3
—0
+3
+3
—4
+4
Bristol-KingsportJohnson City** .
—1
+1
+1
—5
+3
+4
+4
+1
+2
+2
+4
+1
—0
+9
+1
—1
—1
+3
+4
+3
+2
—6
+4
Chattanooga
Knoxville
Nashville
DISTRICT
.
•Reporting stores account for over 90 percent of total District department store sales.
* * I n order to permit publication of figures for this city, a special sample has been constructed that is not confined exclusively to department stores. Figures for non-department
stores, however, are not used in computing the District percent changes.
April 1957
+17
. . .
+24
. . . .
+17
. . .
+1
+10
May 1956
+0
+13
—1
+1
+5
Debits to Individual Demand Deposit Accounts
(In Thousands of Dollars)
—23
+4
—3
—7
+4
Bristol (Tenn. & Va.)** .
.
Item
Total sales
Cash sales
Instalment and other credit sales
. .
Accounts receivable, end of the month .
Collections during month
+2
Percent Change
5 Months
1957 from
1956
+1
+1
+9
—9
+6
—0
+11
Percent Change
May 1957 from
-+172
Department Store Sales and Inventories*
Sales
May 1957 from
April
May
1957
1956
+7
+2
+5
+5
+6
+4
+12
—13
+1
+8
+13
+0
+1
+14
Retail Furniture Store Operations
Percent Change
I Hay 1957 from
May
.
.
.
.
.
.
.
5 Months
May 1957 from
1956
1956
1956
April
1957
36,240
718,028
24,870
32,583
270,528
142,114
41,634
32,422
652,306
24,707
30,392
277,624
126,440
38,922
38,031
670,157
23,751
30,888
252,519
138,655
42,056
+12
+10
+1
+7
—3
+12
+7
+5
+5
+7
+2
—1
648,738
718,441
1,113,262
161,944
81,621
154,662
317,598
100,732
617,037
748,783
1,173,801
161,364
80,908
157,511
309,594
106,787
578,736
605,324
949,026
136,820
73,877
130,067
277,518
96,194
+5
—4
—5
+0
+1
—2
+3
—6
+12
+19
+17
+18
+10
+19
+14
+5
+6
+18
+18
+22
+13
+19
+16
+10
56,472
1,629,389
87,364
19,568
101,273
8,558
44,881
16,177
102,268
15,291
40,691
183,852
23,186
54,892
1,627,646
83,918
18,508
93,818
8,261
45,484
15,122
99,147
14,472
39,561
177,476
22,040
53,236
1,518,627
93,556
16,865
99,112
7,456
45,958
15,261
107,067
14,918
38,838
154,272
24,497
+3
+6
+0
+7
+4
—7
+ 6 +16
+8
+2
+ 4 +15
—1 —2
+7
+6
+3
—4
+6
+3
+3
+5
+ 4 +19
+5
—5
+6
+5
—5
+10
—2
+19
+5
+1
—2
+8
+0
+22
+4
66,297
199,571
79,711
1,363,405
62,695
180,363
75,319
1,272,165
63,173
165,773
75,196
1,227,226
+6
+11
+6
+7
+5
+20
+6
+11
+12
+15
+8
+11
30,668
207,204
36,580
20,050
29,036
198,826
33,641
18,653
29,114
191,315
35,131
16,753
+6
+4
+9
+7
+5
+8
+4
+20
+8
+2
+4
+11
38,146
274,685
38,052
66,920
162,580
598,358
43,867
277,660
35,927
67,932
161,652
580,265
33,436
263,536
35,266
59,868
159,530
568,089
—13 +14
—1
+4
+6
+8
—1 +12
+1
+2
+3
+5
+17
+4
+4
+8
+0
+6
8,507,400
8,246,846
7,777,612
+3
+9
+9
197,181,000 192,628,000 185,584,000
+2
+6
+7
1957
ALABAMA
Anniston . . . .
Birmingham .
Dothan
Gadsden . .
Mobile
. .
Montgomery .
Tuscaloosa* .
FLORIDA
Jacksonville .
Miami
. .
Greater Miami*
Orlando . .
Pensacola
St. Petersburg
Tampa
. .
West Palm Beach*
GEORGIA
Albany
. . . .
Atlanta .
Augusta .
Brunswick
Columbus
Elberton .
Gainesville*
Griffin* .
Macon . .
Newnan .
Rome*
Savannah .
Valdosta .
LOUISIANA
Alexandria* .
Baton Rouge
Lake Charles
.
New Orleans .
MISSISSIPPI
Hattiesburg . .
Jackson . .
Meridian . . . .
Vicksburg
. .
TENNESSEE
Bristol* . . . .
Chattanooga . .
Johnson City* .
Kingsport* .
Knoxville .
Nashville . . . .
SIXTH DISTRICT
32 Cities . . .
UNITED STATES
344 Cities . .
May
April
1957
* Not included in Sixth District totals.
• 7 •
—5
+"/
—5
+8
+6
+9
+20
+7
—0
Sixth District Indexes
Nonfarm
Employment
SEASONALLY ADJUSTED
District Total
. .
Alabama . .
. .
Florida . . .
. .
Georgia . . .
. .
Louisiana
. .
Mississippi
. .
Tennessee . .
. .
UNADJUSTED
District Total
. .
Alabama . .
. .
Florida . . .
. .
Georgia . . .
. .
Louisiana . .
. .
Mississippi . .
. .
Tennessee . .
. .
1 9 4 7 - 4 9 = 100
Manufacturing
Manufacturing
Employment
Payrolls
April
1957
March
1957
April
1956
April
1957
March
1957
April
1956
April
1957
March
1957
April
1956
134
122
171
131
131
125
120
134
122
170
130
130
125
120
130r
119r
159r
129r
126r
124r
120
120
111
172
122
102
125
118
119
110
169
122
102
124
118
120r
112r
159r
123
102r
125r
120r
192
177
266
192
173
209
189
190r
178
258r
192r
173
210
188
184r
170r
236r
187r
166r
201r
185r
135
122
176
130
130
124
120
134
122
178
129
129
123
119
130r
119r
164r
128r
125r
124r
120
120
111
175
121
100
123
118
121
111
177
122
100
123
118
120r
111
162r
123r
lOOr
124r
120r
192
177
271
192
168
207
187
192r
178
276r
192r
168
204
188
184r
170r
240r
187r
161r
199r
183r
May
1957
333
501
377
242
277
230
April
1957
338
337
193
442
397
213
May
1956
383
35?
326r
693
394
251
Furniture Store
Sales*/**
May
1957
April
1957
May
1956
106p
116p
112p
106p
117p
89p
87p
112r
108
121
106
132r
92
91
106
113
111
109
114
86
90
lllp
119p
114p
112p
123p
103p
93p
98
100
105
94
120r
83
82
111
115
113
116
120
99
9/
Other District Indexes
Department Store Sales and Stocks**
Adjusted
Unadjusted
May
April
May
May
April
May
1957
1957
1956
1957
1957
1956
DISTRICT SALES* . . . 153p
146
149r
150p
149
146r
Atlantai . . . . . .
160
144
148
152
143
140
Baton Rouge
151
132
132
155
142
136
Birmingham
132
121
125
125
123
119
Chattanooga
131
130
129
134
134
132
Jackson
117
106r
116r
116
lllr
115r
Jacksonville
126
124
125
136
125
135
Knoxville
146
142
143
150
151
147
Macon
142
140
151
138
144
147
Miami Area
222
211
195
213
220
187
Nashville
134
142
129
145
149
140
New Orleans
138
125
146
129
133
137
St. Ptrsbg-Tampa Area . 168
151
157
148
156
138
Tampa City
133
123
132
127
124
125
DISTRICT STOCKS* . . .
168
173
161r
169
180
163r
iTo permit publication of figures for this city, a special sample has been constructed
that is not confined exclusively to department stores. Figures for non-department stores,
however, are not used in computing the District index.
*For Sixth District area only. Other totals for entire six states.
**Daily average basis.
Sources: Nonfarm and mfg. emp. and payrolls, state depts. of labor; cotton consumption,
U. S. Bureau Census; construction contracts, F. W. Dodge Corp.; furn. sales, dept. store
sales, turnover of dem. dep., FRB Atlanta; petrol, prod., U. S. Bureau of Mines; elec.
power prod., Fed. Power Comm. All indexes calculated by this Bank.
Construction
Contracts
May
1957
Adjusted
April
1957
Residential
Other
Petrol, prod, in Coastal
Louisiana and Mississippi** .
Cotton consumption** . . .
Turnover of demand deposits* . .
.
Outside 10 leading cities . .
Elec. power prod., total**
Mfg. emp. by type
192
195r
88
84
23.4
22.5
25.5
25.1
19.3
18.0
March
April
1957
1957
. 297
298
.
.
Fabricated metals . . . .
.
Food
Lbr., wood prod., furn. & fix. .
Paper and allied prod. . . .
.
Textiles
.
.
r Revised
p Preliminary
168
172
134
131
172
166
117
116
81
80
163
161
107
106
91
90r
208
206
n.a. Not available
Unadjusted
April
1957
340
326
351
May
1956
May
1957
n.a.
n.a.
n.a.
164r
96
22.3
24.0
18.8
April
1956
287
189
198r
89
86
22.5
22.7
24.1
24.5
18.3
18.0
April
March
1957
1957
284
298
166r
134r
162r
114r
86r
162r
109r
94
190r
170
135
172
113
81
161
108
90
214
172
135
170
115r
81
161
107
90
214
May
1956
380
334
415
162r
97
21.4
22.7
17.9
April
1956
275
168r
135r
161r
lllr
86r
161r
109r
94
194r
YORK
[^r^PHILADELPHIA
cftfie
UnitedStates
O Reserve Bank Cities
• Branch Bank Cities
mm District Boundaries
—— Branch Territory Boundaries
X Board of Governors of the Federal Reserve System
"^WASHINGTON
RICHMOND
ATLANTA, GEORGIA, OCTOBER, 1957
ln%isJssue:
M e a t Packing—an Industrial Challenge
District Building Holding Up
District Business Highlights
SixtfiDi&idStatistics:
Condition of 27 Member Banks in Leading Cities
Debits to Individual Demand Deposit Accounts
Department Store Sales and Inventories
Instalment Cash Loans
Retail Furniture Store Operations
Wholesale Sales and Inventories
SfytHV&rid"Indexes:
Construction Contracts
I
Cotton Consumption
Department Store Sales and Stocks
Electric Power Production
Furniture Store Sales and Stocks
Manufacturing Employment
Manufacturing
Payrolls
Nontarm Employment
Petroleum Production
Turnover of Demand Deposits
imtti
DISTRICT BUSINESS HIGHLIGHTS
Total employment is still at an advanced level, but there is reduced activity in some
lines of manufacturing. Construction remains strong, but consumer spending, although
high, lacks some of the vigor of recent months. Farmers are benefiting from fall harvests
and rising livestock output. Bankers are lending more, but have reduced their investments;
their borrowings from the Federal Reserve Bank of Atlanta have edged higher.
Nonfarm employment, seasonally adjusted, declined slightly in August as a
result of a decline in manufacturing. Nonmanufacturing employment continued
upward.
Manufacturing payrolls were unchanged in August as higher average weekly
earnings offset a drop in employment.
Electric power production, seasonally adjusted, dropped slightly in July following
a two-month increase.
Steel mill operations declined in August and September.
Crude oil production in Coastal Louisiana and Mississippi dropped during August
to the lowest point since last October.
Cotton consumption, seasonally adjusted, remained at a reduced level in August.
Construction contract awards in July were slightly below a year ago, but the
total for the first seven months was well above the comparable period last year.
Spending by check, as measured by seasonally adjusted bank debits, during
August slipped slightly from the all-time record set the previous month.
Furniture store sales during August, seasonally adjusted, continued to drop.
Department store sales declined in September.
New car registrations through July continued above 1956 totals in this District
because of gains in Florida and Louisiana.
Credit terms on new automobiles financed by commercial banks were slightly
more liberal in August as the 1957 model cleanup moved into full swing.
Consumer credit outstanding at commercial banks moved higher during August
for the tenth consecutive month.
Gasoline tax collections during August, seasonally adjusted, moved strongly
ahead of year-ago figures.
Bank loans to retailers showed a stronger than seasonal increase during September.
Consumer prices edged upward during August for the twelfth consecutive month
as most types of goods cost more.
Harvesting operations during September were slowed by rains, but pastures
were improved and fall crop seedings were helped.
Crop output is being held below a year ago because of reduced acreages and
lower yields of some crops.
Livestock production has increased and is substantially greater than last year's
output.
Farm prices of peanuts and chickens are less than those last year; prices of cotton,
corn, rice, beef cattle, hogs, eggs, and milk are higher.
Farm employment rose somewhat less than seasonally and totaled less than that
last year.
Total loans at member banks, after seasonal adjustment, continued to rise in
August with all states except Tennessee sharing in the increase.
Total deposits at member banks, after seasonal adjustment, decreased substantially during August; but according to preliminary data rose during September.
Member bank investments decreased slightly during August reflecting declines in
Treasury notes and U. S. bonds.
Interest rates on short-term business loans made by banks in Atlanta and New
Orleans during September increased slightly from the June level.
Member bank borrowings from the Federal Reserve Bank of Atlanta in September averaged slightly higher than in June, the previous peak of 1957.
• 2 •
Meat Packing—an Industrial Challenge
Converting District steers, cows, or hogs from "on the
hoof" to "drawn and quartered" is becoming a more and
more important task for District meat packers. For one
thing, farmers are producing a large volume of meat for
slaughter. Beef output in District states, for example, has
doubled in the last ten years. Local markets served by
packers are also growing. We now have 3.4 million more
people in District states than ten years ago, and on the
average each of the 19.4 million persons now in the area
has 65 percent more income to spend. This increased
spending power alone is significant for the meat industry
because consumers with high incomes eat more meat,
seek better quality meat, and want more services like
packaging and processing. Meeting consumers' new needs
and desires, therefore, is a challenge for the District's
livestock industry.
Because meat packers transform meat on the hoof into
ready-to-use cuts and distribute them to retail outlets
they are a vital economic link between producers and consumers. When they perform their economic function effectively, they not only help themselves but the producers and
consumers as well. To perform effectively, however, a local
packer may have to answer some tough questions: Can I
depend on my supply of raw materials? Should I seek
wider markets? Should I invest more in my plant? How
can I obtain the funds I need? Frequently a local packer
must have help with those problems: He may need technical aid from engineers, architects, and the like; he may
need training in management skills; he may need a loan.
Bankers not only want to make loans that are profitable
and safe, they also want to strengthen the income base of
the areas they serve. In the case of the meat packing industry the entire local economy may profit from the wages
and other income generated by a financially strong and
progressive packing plant; also, a local packing plant
affords a desirable market for the livestock producers the
banker may have financed. Bankers, therefore, are interested in knowing more about the industry's scope,
progress, and problems, and how to meet the packers'
request for credit.
A Large and Growing Industry
The District's meat packing industry is no infant. Oneeighth, or 392, of the nation's commercial slaughtering
plants are in District states, according to a USDA survey
in 1955. Most District plants, however, are small with
annual production ranging between 300,000 and 2 million
pounds of meat per plant. Some local firms kill from
1,000 to 1,500 animals each week, but for many the weekly kill is as low as 50 head. Relatively few animals are
slaughtered by the region's numerous individual butchers.
Meat packing plants in District states are widely dispersed because they process locally grown meats and
serve local markets. In the nation's eastern corn belt, on
the other hand, packing plants are concentrated near
major terminal livestock markets where supplies of livestock and consumer markets are large. Again in contrast
to the packing industry elsewhere, only a small part of the
District's slaughter is Federally inspected for sanitation,
disease, and general wholesomeness. Meat is Federally
inspected at 29 plants in District states, or 7 percent of
the total, whereas 14 percent of the nation's plants provide
the service. Only meat that is Federally inspected can be
legally shipped across state lines, but most District packers
sell within their states.
LIVESTOCK SLAUGHTERING PLANTS1
Sixth District States
March 1 , 1955
ilncludes all plants with an annual output of 300,000 pounds, live weight, or more.
Source: A.M.S., USDA.
Meat packers create considerable income for the District. Meat products sold by wholesale packers—numbering 225 in District states, according to the 1954 Census of
Manufactures—brought them about 483 million dollars in
1954. Fifteen percent of the total, or 72 million dollars, was
value added by manufacture. According to that measure,
meat packing is a fairly important manufacturing industry;
it outranks the tobacco manufacturing, leather and leather
goods and electrical machinery industries.
Wholesale packers employed 14,000 workers in 1954;
the work force for the leather and leather products industry also totaled 14,000, that for tobacco manufacturing
9,000, and that for electrical machinery 7,000. Individual
plants in the meat packing industry, however, are usually
small. In 1954 only 17 plants had 250 workers or more;
three-fourths of the plants employed fewer than 50 persons. The wage bill for all plants in 1954 totaled about
50 million dollars—double the sum for 1947. Higher
wages caused most of the gain: wages rose 85 percent;
total man-hours rose 21 percent.
Capital expenditures by District meat packing firms
also were sizable in recent years. They totaled 6.5 million dollars in 1954, or 54 percent more than in 1947.
• 3 •
Meanwhile some local firms are investing more funds for
improving their plants or they are planning such investments.
Sources of Supplies
The future of the District's meat packing industry will
depend not only upon better management and new capital
investment but also upon some important factors beyond
packers' control, notably supplies of raw materials.
Growth in local livestock supplies has favored our packers in recent years. Total red meat production in District
states rose from 2.7 billion pounds to 3.9 billion pounds
between 1949 and 1956. This was a significant gain, since
the number of livestock farms actually declined in the
period. The gain occurred principally because beef producers sharply increased their output; the beef cattle inventory, for example, rose from 4 million head in 1949
to 7.6 million head in 1956. Pork producers, on the other
hand, did not increase their output much in the period.
Numbers of hogs and pigs on farms actually declined
from 6.4 million head to 5.6 million head, but marketings
rose slightly—from 1.4 billion pounds to 1.5 billion
pounds. Sheep and Iamb output long negligible in the
District totaled 29 million pounds in 1956, or 41 percent
more than output in 1949.
Some District states produce more livestock than is
commercially slaughtered within their bounds. Alabama,
Louisiana, and Mississippi, for example, have surpluses
of beef. In 1956 Alabama farmers produced 213 million
more pounds of beef than local packers slaughtered. The
surplus, however, was mostly poor quality animals that
sold as stockers or feeders for shipment to other states.
Local beef supplies are smaller than local commercial
slaughter in Florida, Georgia, and Tennessee.
Beef production is greatest in southern Louisiana and
Florida, central Alabama, and central and eastern Tennessee. Output of hogs is large in central Tennessee, north
and south Alabama and south Georgia. Since dairy farms
are scattered over the District, cull dairy cows are available in many places.
Consumer
Demand
Many District packers find the growth in their markets
outpacing their local supply of raw materials. In other
words, there are more people to be fed, they have larger
incomes, and their habits of meat consumption have
changed. The District's population is growing at an
average rate of 2.2 percent a year, and many of its people
are migrating to urban areas. Meanwhile in all District
states these people are getting larger incomes. In Alabama,
personal income increased from 282 dollars per capita in
1940 to 1,229 dollars in 1956. Meat packers' wealthiest
District markets, of course, are in Florida where 22 percent of the families had 4,000 dollars or more income in
1950. Families in that group accounted for 17 percent
of the total in Alabama and Georgia, and for only 10
percent in Mississippi.
Gains in personal incomes, as well as the distribution of
incomes, are important to the meat packing industry. High
income families eat more meat, especially beef and lamb,
than do the lower income groups. Families in the South
with incomes of 10,000 dollars or more in 1950, for
instance, ate 5.82 pounds of meat in a week, whereas
those with less than 1,000 dollars income ate only 1.61
pounds, according to a study by the USDA. Only threefourths of the southern households in the 2,000-3,000
dollar income bracket use beef, whereas all those in the
8,000-9,000 dollar class eat beef. Also, people in southern
cities eat more beef than people on farms.
Problems
Meat packers striving to serve the growing District market,
however, have some serious obstacles to overcome. An
important one for some local packers is the short supply of
livestock available. They cannot easily enlarge their businesses if they must depend on distant supplies because
when they have to haul animals great distances their costs
mount fast and their competitive advantage decreases.
Fees for hauling are a major item in such costs, and livestock's perishable nature and its tendency to shrink in
weight also push costs up. In areas of short supplies a
further complication arises if there are too many livestock
markets because it is costly to assemble and haul a few
livestock from numerous sales barns.
Too frequently the supply of locally produced meat
available to packers is low in grade. Three-fourths of the
cattle sold for beef at five Georgia markets in 1954
and 1955, for example, were graded as commercial, utility,
and cutter, according to a study by the Georgia Agricultural Experiment Station. These animals were primarily
mixed and dairy types. Cattle classed as beef type, however, did not grade much higher. Until more top quality
cattle is available locally, packers will have trouble making
much progress in their merchandising programs.
Larger supplies of livestock and better quality animals
depend in turn on the region's feed supplies. While these
supplies have increased, they are not exceptionally large.
Increased livestock output in the past was possible
largely because farmers grew feed on acres they formerly
planted to cash crops; also, much feed was freed for livestock when the numbers of mules on farms decreased. As
farmers achieve better crop yields, of course, more of
them can afford to feed their animals well enough to produce a higher grade of meat. At the same time they must
have enough feed to support their growing livestock inventories. Until the region's feed base is more productive,
therefore, progress in the livestock industry will be
limited and packers' competitive position will be impaired.
Marketing problems also confront District meat packers. They find, for example, that their marketing channels
have decreased. Chain stores now handle much of the retail meat trade that used to flow through independent retail
food stores. Chain store operators not only buy through
central offices but they usually seek Federally inspected
meat that grades good or choice.
The most serious problems for local packers often are
internal. Rising labor costs, for example, plague some
plants, especially those in large cities. Others find that
they must add new truck routes, build new plants, replace
obsolete equipment or otherwise remodel their plants so
they can sell in a larger market or achieve better quality
or lower unit costs. All these cost money, which often is an
• 4•
obstacle for small firms. A packer, for example, may
invest in plant and equipment and then find that the larger
business he creates calls for more operating capital to
handle his increased inventories and accounts receivable.
Some local packers meet their needs for capital from their
own funds, but many must obtain credit.
Bank Credit
Some of the funds local packers need to adjust their businesses are being supplied by bankers. District bankers
make operating loans to meat packers to finance their inventories, for example. From the packers' point of view,
the most desirable arrangement for an operating loan is a
line of credit providing about six months maturity on the
notes. A packer with such financing assured has the necessary flexibility for increasing his inventory when prices
are low. He also has confidence that he can buy for inventory when prices rise, as did hog prices last year.
When establishing lines of credit for meat packers,
bankers size up packers' ability to control their trade
credit. If a packer's accounts receivable fail to turn
over fast enough—seven to ten days—his operating capital is diminished, his buying for inventory hampered, and
his financial position weakened. Since these risks can be
controlled at well-managed packing plants, however,
banks may willingly make justifiable operating loans.
Because bankers specialize in short-term loans, meat
packers cannot depend heavily on bank credit for remodeling or enlarging their buildings. Too often, for example,
packers will need large sums which they should logically
repay over ten or fifteen years from their profits. With
terms too short, their payments may be so large that they
have to tap their operating capital to make them. Such a
policy long followed would cramp a business because the
plant expansion would increase the need for operating
capital, yet less and less operating capital would be available. Nevertheless, meat packers who seek relatively small
loans and who are able to repay them within Hvo years
will often find banks willing lenders.
In the years ahead there will be fewer small firms in the
District's meat packing industry, although small firms will
not disappear entirely because some people demand the
type of products they distribute. As the region's supplies of
quality livestock gradually increase, national packers probably will curtail their shipments of top-grade meats into
the District. They likely will put more emphasis on slaughtering at points inside District states. Meanwhile some
local packers will expand, obtain Federal inspection, and
compete more effectively with the large national firms.
Consumers ultimately will be better served and our farm
economy strengthened.
ARTHUR H. KANTNER
District Building Holding Up
Stop for a moment to think of the many different structures you see in an average day, and you will realize how
varied the character of the construction industry is. The
house or apartment you left this morning, the school
your children attend, the highway or street over which
you traveled to work, the factory or office building in
which you work—all represent different types of construction activity. Since the need for new houses, schools,
highways, factories, and office buildings may be different
at different times, it is not surprising that some types of
construction decline while others increase. Such has been
the case recently, although overall construction activity
has held pretty steady at a high level.
building, therefore, although accounting for the remaining 40 percent and being the single most important component of the total, does not necessarily reflect the course
of total construction. Since March, however, seasonally adjusted housing starts have increased, indicating the decline
in home building of the last two years may be ended.
Higher costs this year have inflated the dollar value of
total construction activity. If we ignore the effects of these
higher costs, we find that the construction industry is not
setting records this year. Instead, it has been traveling on
a plateau about 2 percent below the peak reached in
1955. By other historical standards, however, this is a
very high plateau.
Record Being Set in Nation
Construction workers throughout the nation have been
building at a record rate so far this year. If they continue
to maintain the pace set in the first eight months, by the
end of the year they will have put in place new construction valued at nearly 47 billion dollars. This will top any
previous year's total.
Having heard so much about a decline in home building
over the last two years or so, you may be startled to
read that construction workers are setting new records.
It is true that home builders have been putting up fewer
houses, but other construction contractors have been
building more office buildings, factories, schools, hospitals,
and highways. These other contractors account for over
60 percent of the nation's total construction. Home
District Activity High and Rising
The national estimates are based largely on building permits issued and construction contracts awarded at some
previous time, with proper allowance for delays in starting
construction and for varying periods of actual construction. Although we do not have District data on the
value of construction being put in place each month comparable to those for the nation, we can see how our area
is faring by looking at building permits and contracts
awarded. These indicate that District construction activity
is holding up somewhat better than in the nation.
Take home building first. The number of houses and
apartments authorized by building officials has been
trending downward since early 1955, less so in the District
than in the nation. The first five months of this year, the
• 5•
tion employment was above a year earlier in each of the
first seven months this year, continuing the upward trend
of the preceding three years.
Activity in your own state, whether it be Alabama, Florida, Georgia, Louisiana, Mississippi, or Tennessee, probably looks different to you, for none of these states fits the
overall District picture precisely. Some are doing better,
some not as well. This is revealed by employment figures
for individual states shown in the accompanying chart.
CONSTRUCTION EMPLOYMENT
Sixth District States
1954-57, Unadjusted
^
1954*100
1
.
h
^ ^ ^ Total
1954
i
—
1
1
1955
1956
[
•
J
ff All Takes Money
~i
\«
r ^
120
11
F,a
NyJ
120
100
1*
—M30
1 1
y
1
1957
—140
Alo.^
\r
1
&
/ -
11
7
HO
i
1954
1955
1956
i
I_J
1957
1954
1955
1956
1957
latest period for which comparable figures are available,
is no exception. This means, of course, that home building has been less of a drag on overall construction activity
in this District than it has in the nation. This conclusion
is further supported by the dollar value of contracts
awarded for residential construction. In the first seven
months of this year, District awards totaled substantially
above the comparable period of last year, whereas national
totals were slightly lower.
It may seem inconsistent to say the number of houses
authorized by building permits is lower while the value of
residential contract awards is higher. This is explained in
part by the fact that builders are putting up bigger
houses and costs are higher. Other problems complicate
the comparison of data on building permits and contract
awards, but both series show that District residential
construction is doing better than national activity.
Contracts awarded for non-residential construction
have also been running ahead of last year, although the
cumulative total through July was just about matching the
nation's year-to-year gain. From this we can infer that
District contractors at least are matching nation-wide
gains in building offices, factories, schools, highways, and
other types of non-residential construction.
Our conclusion that overall construction in the District
is very high and has been trending higher is supported by
figures on employment in the industry. District construc-
Large industrial projects such as are being developed in
the District are part of a nation-wide boom in business
investment that has reached another new record this year.
Back in 1954, business men spent about 27 billion
dollars to build plants and to equip them, and they
have spent larger and larger amounts in each succeeding year. If current plans materialize, they will spend
over 37 billion dollars this year.
You can well imagine the enormous demand for money
to carry out this investment program. This, however, is
only part of the increased demand for money we have
heard so much about recently. At the same time that the
investment program has expanded, businessmen have
needed more credit to carry larger inventories. Individuals
also have incurred more debt to buy automobiles, appliances, furniture, and other consumer goods. Likewise,
state and local governments have borrowed more money
to finance schools, roads, sewers, and other public projects. The Federal Government's need for borrowed money
has also continued high.
With businessmen, consumers, and governments all
competing for funds in relatively short supply, interest
rates have increased sharply since mid-1955. These included rates on conventional home financing, which were
free to rise in response to changing market conditions. Because rates allowed on home mortgages guaranteed by the
Veterans Administration or insured by the Federal Housing Administration were relatively low, investment in
these mortgages became less and less attractive.
The resulting inability of home builders to obtain adequate financing under VA and FHA programs undoubtedly was a major factor explaining the decline in homebuilding after mid-1955. Actually, the decline was limited
to houses started under VA and FHA programs. Housing
starts with conventional financing arrangements have
remained high.
Last December and again this August the Federal
Housing Administration increased the maximum rate it
will allow on mortgages it insures, but interest rates on
alternative lending opportunities also rose further during
the same period. Many observers, therefore, doubt that
the home builders' ability to compete for funds in a tight
money marked has been improved very much.
As important as the home financing problem has been,
the decline in home building after mid-1955 probably also
reflected other changes in the housing market. Considering
all aspects of demand and supply, some decline from
1955's near-record volume was to have been expected.
PHILIP M. WEBSTER
•6•
Sixth District Statistics
Instalment Cash Loans
Condition of 27 Member Banks in Leading Cities
tin Thousands of Dollars)
Percent Change
No. of
Lender
Lenders
Federal credit unions . . . .
^1
State credit unions
15
Industrial banks
6
Industrial loan companies . . .
10
Small loan companies . . . .
31
Commercial banks
38
Volume
August 1957 from
July
August
1957
1956
+8
+2
—13
+4
—2
-9
Outstanding
August 1957 from
July
August
1957
1956
+17
+34
—14
+3
+17
+5
+?
+4
+0
+0
+2
+0
+
18
+29
-1
+4
+18
+12
Wholesale Sales and Inventories*
Percent Change
Sales
Inventories
August 1957 from
August 1957 from
*
July August
No. of
July August
1957
1956
Firms
1957
1956
+9
—7
23
+6
+0
+18
+46
8
+4
—11
+1
+10
+9
+11
—7
—1
8
+5
+12
+46
—21
+11
+21
+7
+8
88
—1
+1
No. of
Type of Wholesaler
Firms
Grocery, confectionery, meats . . 29
Ed.b.e farm products
11
Drugs, chems., allied prods. . . .
7
Drugs
5
Tobacco
9
Dry goods, apparel
8
Paper, allied products
24
Automotive
91
Electrical, electronic &
appliance goods
20
—4
—8
Hardware
9
+6
—3
Plumbing & heating goods . . .
17
+2
+8
Lumber construction materials . . 6
+10
+3
Machinery; equip. & supplies
Industrial
28
—8
+4
* Based on information submitted by wholesalers participating in
Trade Report issued by the Bureau of the Census.
14
9
16
+3
+3
—0
—3
—2
+3
23
—1
+4
the Monthly Wholesale
Retail Furniture Store Operations
Percent Change
August 1957 from
July 1957
August 1956
+9
—4
+6
+6
+9
—5
+1
. —2
+4
—2
Item
Total sales
Cash sales
Instalment and other credit sales
Accounts receivable, end of the month
Collections during month
Department Store Sales and Inventories*
Place
ALABAMA
, Birmingham
. . .
Mobile
Montgomery . . .
FLORIDA
Jacksonville
. . .
Miami Area . . . .
Miami Downtown .
Orlando
St. Ptrsbg-Tampa Area
St. Petersburg . .
Tampa . . . .
GEORGIA
Atlanta** . . . .
Augusta
Columbus . . . .
Macon
Rome"
Savannah . . . .
LOUISIANA . . . .
Baton Rouge . . .
New Orleans Area
.
New Orleans
Downtown
__
"
Sales
August 1957 from
July
August
1957
1956
+12
+4
+16
+5
+9
+5
+15
—3
+8
+8
+15
+5
+9
+11
+10
—1
+16
+15
+1
+10
—1
+12
+3
+8
+22
+4
+24
+5
+21
+5
+16
—2
+19
+3
+21
+9
+11
_n
+22
+7
+17
+13
+23
+5
. . +24
11
Percent Change
8 Months
1957 from
1956
+2
+3
+8
—8
+7
+1
+11
+0
+8
+5
+9
+1
+1
+4
—4
—7
—2
—1
—2
+7
+15
+7
Inventories^
August 31,1957, from
July 31,
August 3 1 ,
1957
1956
+7
—3
+7
+0
+2
—3
—3
+3
—7
+12
..
—14
—13
+10
+7
+1
+4
+19
+17
..
—12
+6
+1
—0
+1
+6
+26
+3
9
MISSISSIPPI . . . .
+11
+2
_o
+9
-10
Jackson
+13
_i_o
_2
+8
—12
Meridian** . . . .
+8
+5
—1
TENNESSEE . . . .
+16
+1
+2
+5
+1.
T
Bristol (Tenn.
&Va.)*»
. . . +30
+5
+3
+16
—1
Bristol-Kingsport*
Johnson City**
. +31
+6
+1
+9
—7
Chattanooga • . . + 1 6
+0
+1
Knoxville . . . .
+12
+1
—1
+9
+5
Nashville . . . .
+17
+1
+6
+4
+1
DISTRICT
Tl5
+5
+4
+5
+1
•Reporting stores account for over 90 percent of total District department store sales.
**In order to permit publication of figures for this city, a special sample has been
constructed that is not confined exclusively to department stores. Figures for nondepartment stores, however, are not used In computing the District percent changes.
Item
Loans and investments . .
Loans—Net
Loans—Gross
Commercial, industrial,
and agricultural loans .
Loans to brokers and
dealers In securities
.
Other loans lor purchasing
or carrying securities .
Real estate loans . . .
Loans to banks . . . .
Other loans
Investments—Total . . .
Bills, certificates, notes .
U.S. bonds
Other securities
. . .
Reserve with F. R. Bank . .
Cash in vault
Balances, domestic banks
.
Demand deposits adjusted .
Time deposits
U. S. Gcv't deposits . . .
Deposits of domestic banks .
Borrowings
•Over one hundred percent.
Sept. 18
1957
3,424,751
1,942,181
1,975,838
Aug. 21
1957
3,429,750
1,921,983
1,955,614
Sept. 19
1956
3,343,341
1,803,024
1,832,055
1,043,551 1,032,360
Percent Change
Sept. 18,1957 from
Aug. 21
Sept. 19
1957
1956
—0
+2
+1
+8
+1
+8
981,662
+1
39,631
35,348
37,481
+12
+6
+6
49,365
175,824
29,049
638,418
1,482,570
407,949
771,896
302,725
468,635
53,505
273,933
2,236,497
781,752
74,074
736,777
49,300
47,864
173,921
29,571
636,550
1,507,767
435,569
769,493
302,705
485,373
52,319
271,259
2,269,907
774,879
101,388
697,581
58,250
52,930
165,118
32,525
562,339
1,540,317
508,731
722,966
308,620
509,430
51,414
261,936
2,350,369
667,061
97,005
715,923
11,000
+3
+1
—2
+0
—2
—6
+0
+0
—3
+2
+1
—1
+1
—27
+6
—15
—7
+6
—11
+14
—4
—20
+7
—2
—8
+4
+5
—5
+17
—24
+3
*
Debits to Individual Demand Deposit Accounts
(In Thousands cf Dollars)
August
1957
July
1957
Percent Change
Aug. 1957 from
August
July
Aug. 1957 from
1956 1957 1956
1956
ALABAMA
Anniston . . . .
36,796
35,371
35,877
Birmingham . . .
728,720
744,992
608,406
Dothan . . . .
25,308
24,139
22,872
Gadsden . . . .
32,507
32,006
29,106
Mcbi.e
. . . .
253,337
264,033
253,566
Montgomery . . .
143,704
131,422
132,113
Selma* . . . .
21,984
19,444
20,188
Tuscaloosa* . . .
42,494
42,471
39,503
FLORIDA
Daytona Beach* .
49,342
55,474
46,531
Gainesville* . . .
32,722
32,533
29,253
Jacksonville . . .
617,527
623,355
591,532
Lake.and* . . .
56,992
58,589
48,777
Miami
647,071
716,674
588,560
Greater Miami*
.
991,525
1,109,316
904,835
Orlando . . . .
146,945
167,926
121,698
Pensacola . . .
88,588
86,709
78,991
St. Petersburg . .
139,021
160,894
122,656
Tampa
. . . .
276,683
301,924
256,S00
West Palm Beach*.
85,345
95,869
76,619
GEORGIA
Albany
. . . .
59,018
53,906
51,304
Athens* . . . . .
31,589
36,588
29,469
Atlanta . . . .
1,646,576
1,720,141
1,581,137
Augusta . . . .
86,089
84,308
88,415
Brunswick . . .
19,918
19,640
19,427
Columbus . . . .
98,218
97,915
101,447
Elberton . . . .
8,379
8,088
8,001
Gainesville* . . .
47,319
49,099
46,792
Griffin* . . . .
16,846
15,817
14,904
LaGrange* . . .
19,323
19,871
16,844
Macon
106,245
102,638
104,915
Mar.etU* . . .
25,832
25,501
23,550
Newnan . . . .
14,935
15,981
14,369
Rome* . . . .
36,776
40,403
37,734
Savannah . . . .
173,069
176,325
152,811
Valdosta . . . .
29,135
31,519
48,040
LOUISIANA
Alexandria* . . .
71,153
66,971
66,694
Baton Rouge. . .
198,124
190,595
168,949
Lafayette* . . .
51,554
53,618
46,002
Lake Charles. . .
88,494
80,520
72,492
New Orleans . . .
1,301,498
1,329,785
1,223,004
MISSISSIPPI
Biloxi-Gulfport* .
39,809
40,113
37,916
Hatllesburg . . .
31,790
31,088
28,310
Jackson . . . .
192,943
205,536
205,533
Laurel* . . . .
23,473
23,154
19,474
Meridian . . . .
37,570
36,502
36,725
Natchez* . . . .
20,475
20,187
19,223
Vicksburg
. . .
19,063
20,376
17,342
TENNESSEE
Bristol* . . . .
36,840
34,961
33,487
Chattanooga. . .
274,923
291,009
266,075
Johnson City* . .
39,075
36,718
37,103
Kingsport* . . .
68,783
70,262
62.290
Knoxville. . . .
190,882
173,700
159,892
Nashville . . . .
639,037
643,465
586,635
SIXTH DISTRICT
32 Cities . . . .
8,352,113
8,602,482
7,777,100
UNITED STATES
344 Cities „ . . 190,539,000 200,572,000 183,819,000
* Not Included in Sixth District totals. "
+4
—2
+5
+2
—4
+9
+13
+ 0
+3
+20
+11
+12
—0
+9
+9
+ 8
—5
+11
+6
+8
+13
+6
+4
+1
—11
+1
—1
—3
—10
—11
—13
+2
—14
—8
—11
+6
+12
+4
+17
+10
+10
+21
+12
+13
+8
+11
+16
+9
+6
+14
+16
+16
+22
+13
+19
+14
+ u
+9
—14
—4
+2
+1
+0
+4
—4
+7
—3
+4
+1
—7
—9
—2
—Q
+15
+7
+4
—3
+3
—3
+5
+1
+13
+15
+1
+10
+4
—3
+13
—39
+6
+9
+6
—6
+8
—1
+17
+4
+4
+6
---2
+9
+9
+0
+20
--£
+ 6 + 7
+ 4 +17
—4 + 1 2
+10 +22
—2
+6
+7
+13
+13
+9
+10
—1
+2
—6
+1
+3
+1
—h
+5
+12
—£
+21
+2
+7
+10
+6
+9
--0
+9
+4
+4
+11
+5
—6
+6
—2
+10
—1
+10
+3
+5
+10
+19
+9
+12
+4
+4
+9
+4
+7
+7
+9
—3
—5
T
T
T
T
•
+4
"
+7
"
Sixth District Indexes
Nonfarm
Employment
SEASONALLY ADJUSTED
District Total
Alabama
Florida
Georgia
Louisiana
Mississippi
Tennessee
UNADJUSTED
District Total
Alabama
Florida
Georgia
Louisiana
Mississippi
Tennessee
July
1957
June
1957
135
123
180
130
130
124
119
135
123
177
129
131
123
120r
133
122
170
129
130
123
119
133
123
171
129
131
123
120r
1947-49=100
Manufacturing
Manufacturing
Employment
Payrolls
July
1956
June
1957
July
1956
June
1957
131r
117r
166r
129r
127r
124
121r
121
114
178
122
101
126
117
121
114
177r
123
103
124r
118
120r
105
161r
124r
103r
125
121r
201
186
286
197
173
219
189
198
185
280
196r
173r
211
187r
190r
167r
257r
191
169r
206
185r
129r
116r
156r
129r
128r
124
120
119
111
167
120
100
124
116
120
112
172
120
102
124r
117
117r
103r
152r
121
102r
124
120r
193
182
261
189
175
215
187
194
183
272r
192r
173r
209r
187r
183r
163r
234r
184r
171r
202
183r
Department Store Sales and Stocks**
Adjusted
Unadjusted
August
July
Auqust
August
July
August
1957
1957
1956
1957
1957
1956
DISTRICT SALES* . . . 165p
168r
157r
149p
134r
142r
Atlantai
159
162
151
154
129
147
Baton Rouge
155
149r
137
141
125r
125
Birmingham
136
145
130
124
112
118
Chattanooga
142
141
142r
128
114
128r
Jackson
124
133
124r
114
105
114r
Jacksonville
137p
134
130
122p
110
115
Knoxville
153
157
152
141
130
140
Macort
156
155
152r
142
124
138r
M'amiArea
241p
253
218r
196p
187
176r
Nashville
156
159r
155
139
124r
138
New Orleans
160p
158r
153r
149p
126r
143r
St. Ptrsbg-Tampa Area . 163
172
149r
134
138
122
Tampa City
135
138
126r
118
119
109
DISTRICT STOCKS* . . . 172
171
170r
168
160
166
iTo permit publication of figures for this city, a special sample has been constructed
that is not confined exclusively to department stores. Figures for non*department stores,
however, are not used in computing the District index.
•For Sixth District area only. Other totals for entire six states.
•"•Daily average basis.
Sources: Nonfarm and mfg. emp. and payrolls, state depts. of labor; cotton consumption, U. S. Bureau Census; construction contracts, F. W. Dodge Corp.; furn. sales,
dept. store sales, turnover of dem. dep.r FRB Atlanta; petrol, prod., U. S. Bureau of
Mines; elec. power prod., Fed. Power Comm. All Indexes calculated by this Bank.
wti^ffi^^ay*
July
1957
July
1957
July
1956
tmm'.i. Mw-M'tw^.ti^ itjji^jj^jp^i^^^pitii. M j^ns) m \V">
vim^ym&^sf&^^wwf.iW"
Construction
Contracts
Aug.
1957
July
1957
Aug,
1956
341
328
328
302
271
147
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
416
330
271
282
236
250
Furniture Store
Sales*/**
Aug.
1957
July
1957
Aug.
1956
108p
125p
114
105p
134p
75
81p
114r
131r
124r
106r
139r
83
85r
112
123
115
112
142
101
83
112p
131p
114
112p
134p
73
89p
107r
115r
114r
105r
133r
78
83r
117
129
115
119
142
99
91
Other District Indexes
August
1957
Adjusted
July August
1957 1956
Construction contracts*
Residential
Other
Petrol, prod, in Coastal
Louisiana and Mississippi**
Cotton consumption** . . .
Turnover of demand deposits*
10 leading cities
Outside 10 leading cities .
. 162
172r
161
. n.a.
87
91
. 24.1
24.9
22.5
26.9
27.3
24.9
. 18.8
19.6
17.9
July
June
July
1957
1957 1956
. . 298
310
288
Elec. power prod., total**
Mfg. emp. by type
Apparel
Chemicals
Fabricated metals
. . . .
Food
Lbr., wood prod., furn. & fix. .
Paper and allied prod. . . .
Primary metals
Textiles
Trans, equip
r Revised
p Preliminary
165
136
186
118
80
156
108
89
235
n.a. Not
171r
136
179
117
80
163
107r
90
231r
available
169
136
171
114
84
166
82
93
202
Unadjusted
July Auqust
August
1957
1957 1956
n.a.
309
316
n.a.
310
311
n.a.
308
319
162
n.a.
22.4
24.2
17.9
July
1957
303
172r
70
23.9
25.9
18.8
June
1957
307
161
93
20.9
22.4
17.0
July
1956
293
162
130
176
114
80
155
106
88
228
165r
131
173
115
80
161
107
89
224
166
130
162
110
84
164
81
92
196
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This document contains internal or confidential information and has
been removed.
Author(s): Federal Reserve Bank of Atlanta
Title: The 6-F Messenger
Date: May 1958
Page Numbers: 1-8
@FedFRASER