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p r o p e r t y of
T h e C o m m i t t e e on the H i s t o r y 0
t he F e d e r a l R e s s r v e sys t e m
FEDERAL RESERVE BANK OF ATLANTA
1949
Main Floor Entrance to Ban\ Building
Federal Reserve Ban\ of Atlanta
Atlanta, Georgia
Thirty-fifth AnnualKepmt
FEDERAL RESERVE BANK
OF ATLANTA
for the
yearSnded “December31,1949
FED ER A L RESERVE BAN K
OF A T L A N T A
February 28, 1950
To the Member Barits of the
Sixth Federal Reserve District:
It is a pleasure to present to you the Thirty-fifth Annual Report of
the Federal Reserve Bank of Atlanta. I take the opportunity to
acknowledge the splendid co-operation that the member banks gave
us in discharging our responsibilities during 1949. The Report is
designed to serve as a means of furnishing you with information
regarding our activities and as a handbook for your guidance in
communicating with us on any of our operating procedures.
Although its name identifies it with the city of Atlanta, I wish to
emphasize that our institution truly represents the District in its en
tirety. We welcome the opportunity to serve the member banks,
wherever they may be located.
In behalf of our entire organization, I extend a cordial personal in
vitation to all bankers in the District to visit with us and to observe
our operations.
Very truly yours,
W . S. M c L a r i n , Jr .,
President
TABLE OF CONTENTS
PAGE
R eview of Banking D evelopments ...................................... 9
Business Background..................................................................10
Member Bank Financial C on d ition ...................................... 14
Changes in Membership in the Sixth D istr ic t......................16
Growth in Par Banking.............................................................18
R eview of Bank O pe r a t io n s ..................................................21
Capital Stock Issues..................................................................22
Discount and C redit.................................................................. 24
Currency and C o i n .................................................................. 24
Check Clearing and C ollection ............................................26
Custodian and Fiscal Agent for the
Commodity Credit C orporation .......................................27
Custodian and Fiscal Agent for the
Reconstruction Finance Corporation................................. 29
Consumer Instalment C r e d it..................................................29
Fiscal Agency and Securities..................................................31
Bank E xam in ation .................................................................. 33
Legal A ffa ir s ............................................................................. 35
Bank and Public Relations....................................................... 36
Operations Survey Service....................................................... 38
Research D ep artm en t.............................................................38
P e rso n n e l...................................................................................40
Appointments, Elections, and Official Staff Changes . . 42
D irectors and O f f i c e r s ........................................................45
Financial and V olume R e po r t s ............................................ 53
SIXTH
FEDERAL
RESERVE
DISTRICT
YEAR OF P R O G R E S S
by
Member Banks of the
District
The member banks in the Sixth District ended 1949 in a highly liquid
financial condition and with satisfactory earnings. Substantial gains
were reported in total resources, with the volume of loans and of investments in United States Government obligations increasing mod
erately. Total deposits rose only slightly; gains in demand deposits
barely offsetting decreases in time deposits. In spite of slightly larger
dividend payments for 1949 over 1948, the banks added substan
tially to their capital structures.
These results were achieved on the basis of a business background
that was characterized by general weakening tendencies as the year
opened and by a strong upsurge of activity as the year closed. Al'
though changes in deposits, loans, and investments corresponded
generally with the changes in business activity, they also responded
to actions of the monetary, credit, and fiscal authorities.
Business Background
The year began on a general note of pessimism and apprehension.
Declining prices seemed to be in prospect, for the monthly in
dexes of price movements had been dropping since the preceding au
tumn. Industrial production had weakened in December 1948 from
its postwar peak in October and November. The volume of bank
10
loans had been dropping, and consumer credit outstandings took a
disconcerting dip in January. There were fears that the familiar
chain-reaction series of depression steps was beginning to appear: a
stoppage of consumer buying, factory shutdowns, widespread unemployment, diminishment of purchasing power, business failures,
price collapse, and eventual stagnation.
W hat seemed to give reality to these depression fears was the gen
eral expectation that some measure of postwar downward adjustment
in business was inevitable. It was reasoned that as prices got too
high, consumers would quit buying, and many observers believed that
prices had reached the point where just such reaction was in order.
There was apprehension that private construction would decline so
rapidly that planned public construction could not make up the gap.
There was fear that the steel, automobile, and housing industries, the
three principal supports to a high level of production, would neces
sarily experience a sharp contraction as the year developed. Some
were skeptical of the ability of the Government to maintain its pricesupport commitments on agricultural production.
Through the first half of the year, these expectations of contrac
tion in the economy were supported by actual developments in nu
merous sectors of the District economy. Textiles, lumber, and paper,
which represent the principal manufacturing industries of the region,
were in a decided slump. Decreases in manufacturing employment,
accordingly, were quite pronounced. By July such employment for
the District was down 9 percent from the corresponding month of
1948. Alabama showed a decline of 13 percent and Tennessee re
ported one of 11 percent. This growing unemployment had a very
sobering effect upon business sentiment.
In spite of declining manufacturing activity and growing unem
ployment, retail sales activity in the first half of the year held fairly
close to that of the corresponding period of 1948. There were marked
declines in sales of furniture, household appliances, and jewelry. But
these were offset by increases in sales of automobiles, food, drugs,
and motor fuel. Yielding to fears of further business recession, how
ever, many businessmen sharply reduced their inventories. W ith or
11
ders from the distributors falling off, manufacturers reduced their
output accordingly.
Banking activity in the District reflected these deflationary devel
opments. Business loans at the commercial banks contracted in vol
ume. This contraction in large measure reflected the lower dollar
volume of inventories, lower prices, decreased sales volume of some
distributors, and direct pressure by loan officers upon borrowers to
reduce inventories. Deposits, too, declined from the high level of the
preceding autumn, thus furthering anxiety about the depth and
length of the downward swing of the business cycle.
W hat was happening to business activity in the District was
largely occurring throughout the country. Employment, consumer
buying, industrial production, construction, and other indicators of
business activity were still at high levels but generally below those of
1948. A gradual and orderly decline appeared to be taking place.
The decline was orderly because of a number of cushioning fac
tors. Government spending continued at a very high rate, notably
for veterans1 benefits and European economic and armament aid.
Holdings of liquid assets remained extraordinarily high. Farm price
supports prevented any substantial decline in prices of the major
crops. Unemployment compensation payments bolstered the pur
chasing power of those who became unemployed. Price concessions
and new vigor in sales promotions tended to maintain retail selling.
Consumer demand for new automobiles kept the automobile indus
try operating at a record rate of production.
Federal Reserve authorities recognized the moderate weakening in
the business outlook that faced the country in the early months of
1949. From a policy of restraining inflation, which governed their
actions in 1948, System authorities changed to a policy of assuring
credit and monetary ease.
The change in policy was followed by a series of actions in the
monetary and credit field. Restrictions on the use of consumer instal
ment credit were modified by successive steps in March and in April.
Margin requirements on listed-security trading and borrowing were
reduced on March 30, 1949. In addition, on June 28, 1949, came
12
the announcement from the Federal Open Market Committee of a
change in policy. This announcement implied a program of easier
money conditions and a continuance of the high liquidity that characterized the country’s banking system. Implementing the new program was the series of actions, extending from May to September,
by which member bank reserve requirements were reduced 4 per
centage points on net demand deposits and 2Yi percentage points on
time deposits.
Whatever may have been the principal contributing factors, the
month of July marked a turning point in the economy of the District
and the nation. The forces of expansion gained a slight margin of
strength over the forces of contraction. Economic activity entered an
expansionary phase which continued for the remainder of the year,
except for extensive labor stoppages in the steel and coal industries.
The change in the District was impressive. In midsummer, textile
mills generally called back their laid-off workers. They increased the
number of hours worked and added extra shifts. The iron and steel
industries in the Birmingham area began operating on an expanded
scale. The lumber and paper industries also experienced renewed
activity.
By the end of the year, the textile mills were operating at near
capacity levels, and the heavy industries of the area were at work
on a large volume of accumulated orders. Retail trade was also flour
ishing, with notable gains occurring in the sales of furniture stores,
household appliance stores, and jewelry stores. A brisk Christmas
trade enabled the department stores to end the year with only a slight
loss in sales volume compared with that of the preceding year. Con
struction activity was generally at boom levels. Residential construc
tion in key areas of the District, in fact, had broken all previous rec
ords. Although the employment situation at the close of the year had
shown marked improvement over the situation at midyear, manufac
turing employment was still considerably below that of the end of
1948. In short, District business had weathered the 1949 recession
with a minimum of damage and confidently looked forward to a con
tinuation of the recovery into the first half of 1950.
13
Businessmen of the District were in position to face the developments of 1950 with a good measure of confidence. The upsurge in
manufacturing activity was expected to carry well into the new year,
responding to the added stimulus of the distribution of National
Service Life Insurance dividends. Retail sales offered every prospect
of continuing at satisfactory levels for some months.
In contrast to the recovery in business was the loss in agriculture.
Prices of agricultural products were generally lower and costs of
production were higher. The cotton crop proved to be a disappoint
ment; in the District states cotton production was off 26 percent.
Cotton production in Mississippi was down 38 percent; in Alabama,
28 percent; and in Georgia, 15 percent. Chiefly responsible for these
declines were the ravages of the boll weevil. The damage was some
what spotty, however; some farmers produced almost normal crops
and other near-by farmers experienced almost total failures. Most of
the country banks in the cotton sections, as a consequence, had some
1949 cotton-crop loans to carry over into the 1950 crop year.
A t the beginning of 1950, the outlook for District agriculture was
not too unfavorable. Farmers had the assurance that the agricultural
price-support program would be continued for the year. A t the same
time, they faced the prospect of coping with new acreage controls
intended to curtail the production of peanuts, tobacco, and cotton.
They realized that as far as cotton was concerned, the acreage con
trols might not mean much loss in production from 1949. If the boll
weevil damage of 1949 is not repeated in 1950, cotton production
for the new year may easily show a gain. Because of rising costs of
operation and the prospect of moderately declining prices, however,
farm income of the District was generally expected to decline in
1950.
Member Banh Financial Condition
The member banks of the District shared in the general recovery
movement that took place in the second half of the year. Replenish
ment of inventories and accelerated business activity led to an active
demand for loans. Instalment loans, particularly for automobile pur
14
chases, expanded in volume. The reductions in reserve requirements
permitted the banks to increase their investments in Government securities. Consequently, at the end of the year the banks found themselves in a financial position very little different from that at the beginning of the year.
Assets and liabilities were moderately larger. Total assets, in fact,
reached $6,118 million, an all-time high. Loans and discounts rose
from $1,546 million to $1,611 million, representing 26.3 percent of
total assets at the end of the year as compared with 25.5 percent at
the end of 1948. Holdings of United States Government obligations
increased from $2,255 million to $2,372 million or from 37.1 per-
SIX TH D I S T R IC T BANK DE POSITS
END OF YEAR FIGURES*
B IL L IO N S
194 0
- X - I9 4 9
OF DOLLARS
1941
F IG U R E S
1942
FO R
(EXCLUSIVE OF INTERBANK)
1943
N O N M EM BER
1944
1945
1946
1947
1948
1949
B A N K S E S T IM A T E D
cent to 38.8 percent of total assets. Total deposits amounted to $5,712 million, against $5,698 million at the end of 1948. Demand de
posits were $4,633 million, a gain of $27 million for the year, and
time deposits were $1,078 million, a decrease of $13 million. Total
operating earnings amounted to $146 million, compared with $137
15
million in 1948, a gain of 6 percent. Interest on United States Government obligations accounted for 25.3 percent of the total and interest on loans accounted for 47.2 percent. Net operating earnings
were $54 million, compared with $50 million for 1948. Net profits
after all charges, including taxes on net income, amounted to $34
million for 1949, against $27 million for 1948, a gain of 25.9
percent.
Moderate increases in dividend payments were made. Cash divi'
dends declared on stock were 8 percent higher for the year, amount"
ing to $11.7 million, against $10.8 million for 1948.
The capital position of the member banks was further improved.
Total capital accounts rose to $363 million from $339 million, a gain
of 7 percent. Capital stock accounts were increased by $2.2 million,
surplus accounts by $11.6 million, profits accounts by $6.1 million,
and other capital accounts by $4.3 million.
Changes in Membership in the Sixth District
The Sixth District had a net gain of five members during the year
1949, representing six admissions and one loss through merger of
two members. Total membership at the close of the year was 351,
consisting of 281 national banks and 70 state banks.
The increase in membership came through the admission of five
state banks and the conversion of one nonmember state bank into a
national bank. The five new state bank members are identified as
follows:
Deposits
Date of
December 31,
Admission
1949
J\[ame
January 3
Central State Bank
January 10
Childersburg State
Bank
16
o f Ban\
Location
1949
Calera,
$ 757,859
Alabama
Childersburg,
1,159,014
Alabama
July 5
The Peachtree Trust
Company
December 27 Alabama City Bank
of Gadsden, Alabama
December 27 Washington Loan
and Banking Company
Atlanta,
Georgia
$ 1,134,212
Gadsden,
Alabama
3,262,830
Washington,
Georgia
2,841,284
The nonmember state bank that converted into a national bank
was The Richland Bank, Pulaski, Tennessee. On January 3, 1949,
it became the First National Bank of Pulaski. This bank on Decem*
ber 31, 1949, had deposits of $3,463,688.
Two other member banks exchanged state charters for national
charters, thus involving no change in membership. The DeKalb State
Bank, Doraville, Georgia, became the DeKalb National Bank of
Brookhaven on January 21, 1949. It had deposits of $1,229,688 at
the end of the year. The Lake Charles Bank and Trust Company,
Lake Charles, Louisiana, became the Gulf National Bank at Lake
Charles on February 1, 1949. On December 31, 1949, its deposits
amounted to $13,731,619.
The only loss in membership in 1949 came through the merger
of the Capital National Bank in Jackson with the Jackson-State
National Bank on February 22, 1949, under the title of the First
National Bank of Jackson, Jackson, Mississippi. The new institution
had deposits of $64,233,962 on December 31, 1949.
On July 1, 1949, the Farmers and Merchants Bank, “Inc.,” Brewton, Alabama, a member bank, and the Citizens Bank, a nonmember
bank, merged under the title, Citisens-Farmers & Merchants Bank,
Brewton, Alabama. This member bank had deposits of $3,560,211
on December 31, 1949.
The First Savings & Trust Company of Tampa, Tampa, Florida,
changed its name to the Marine Bank & Trust Company, Tampa,
Florida, effective July 1, 1949. This state bank member had deposits
of $11,550,608 on December 31, 1949.
17
Growth in Par Banhing
A further growth in the number of par banks took place in 1949.
A t the end of the year, there were 1,191 banks in the District, of
which 576 were on the Par List. The number includes 281 national
ra
SIXTH DIST RICT PAR AND NONPAR BANKS
NONPAR
PAR
nl-rn.?
1940 1941 1942 1943 1944 1945 1946 1947 1948 1949
banks, 70 state member banks, and 225 state nonmember banks.
There was a gain of five in the total number of banks in the District
and a gain of twenty in the number on the Par List.
Nonmember state banks added to the Par List in 1949 were the
following:
A labama
Peoples Exchange Bank
Watkins Banking Company
Peoples Bank of Frisco City
Citizens Bank
Monroe County Bank
18
Beatrice
Faunsdale
Frisco City
Geneva
Monroeville
Peterman State Bank
Canebrake Loan & Trust Co.
Planters & Merchants Bank
Farmers & Merchants Bank
F lorida
Citizens Bank of Clermont
First Bank of Clewiston
Peoples State Bank of Groveland
Tallahassee State Bank
Bank of Zephyrhills
G eorgia
Citizens Bank of DeKalb
Citizens Bank
Bank of Toccoa
Peterman
Uniontown
Uniontown
Waterloo
Clermont
Clewiston
Groveland
Tallahassee
Zephyrhills
Avondale Estates
Hapeville
Toccoa
Although the number of banks in the District on the Par List
has shown a consistent growth in recent years, the District still has
more nonpar banks than any other Federal Reserve District. Six
of the Districts, in fact, have all banks on the Par List, namely, the
Districts of Boston, New York, Philadelphia, Cleveland, Chicago,
and San Francisco. The Minneapolis District has almost as many
nonpar banks as does the Atlanta District. The St. Louis District
has 337 nonpar banks; the Richmond District, about 200; the Dal
las District, about 100; and the Kansas City District, only 9.
19
Jacksonville Branch
Federal Reserve Ban\
of Atlanta
SIXTH
FEDERAL
RESERVE
OPERATING
DISTRICT
ACTIVITIES
of the
Federal Reserve Bank
of Atlanta
Activities for the year were governed by the Bank’s statutory
authority. This authority embraces three principal categories of func
tions. One category is related to banks and banking, in which fall
such services as the holding of deposits of member banks, the safe
keeping of securities, the supplying of currency and coin, and the
offering of discount and credit facilities. A second category comprises
the work performed by the Bank as fiscal agent, depositary, and cus
todian for the United States Treasury and other Government units.
The third category includes the activities of the Bank in carrying
out the credit policies and general supervisory powers of the Board of
Governors of the Federal Reserve System and associated authorities.
Some of these responsibilities are regulatory in nature. Others are
essentially service activities. These responsibilities were discharged
on the basis of the utmost co-operation and good will on the part of
all concerned. The varied nature of this work is described in the
following sections.
Capital Stock Issues
A t the close of the year, the paid-in capital stock of the Bank, owned
wholly by the member banks, amounted to $8.2 million, the largest
22
amount since the founding of the Bank. During the year, capital
stock amounting to $23,550 was issued to new member banks, and
other member banks acquired additional capital amounting to $342/
100.
In accordance with the Federal Reserve Act, the Bank pays divi
dends out of its earnings to the member banks. Such dividends are
limited to 6 percent per annum on the paid-in capital stock. Accruals
during the year amounted to $485,448, compared with $465,488
during 1948. Although dividends are thus distributed by the Fed
eral Reserve Banks, the Banks are not operated for the purpose of
making a profit. On the contrary, they are essentially service organ
izations and derive no income from principal service functions to
member banks, such as the clearing and collection of checks and the
supplying of currency and coin. The income which accrues to the
Federal Reserve Banks is now derived primarily from their holdings
of Government securities.
23
Discount and Credit
Sections 10b and 13 of the Federal Reserve Act govern the lending
powers of the Federal Reserve Banks. Under the regulations of the
Board of Governors of the Federal Reserve System, a Federal Re
serve Bank may make advances to member banks on their promissory
notes secured by United States securities, eligible paper, or other ac
ceptable assets and rediscount eligible paper. The Banks are also au
thorized to extend credit to established industrial and commercial
businesses, including banks, by direct loans or commitments or in
conjunction with member banks or other financial institutions. These
powers enable the Federal Reserve System to safeguard the strength
and stability of the dual banking system as it has developed in the
United States.
Commercial banks in recent years have maintained a high degree
of liquidity with more than ample resources. They have not had to
use the discount and credit facilities of the Federal Reserve Banks to
any great degree. During 1949, for example, this Bank made only
203 advances, accommodating 37 member banks to the extent of
$265 million. The peak of member bank borrowing was reached on
March 23, when $17.9 million was outstanding. This amount had
declined to $30,000 at the end of the year.
Currency and Coin
The amount of Federal Reserve notes which the Bank put into cir
culation declined slightly during the year. The total of these notes
in actual circulation on the last business day of the year was $1,291
million, compared with $1,329 million for the corresponding day of
1948, a net decrease of $38 million for the year.
The volume of currency and coin handled by the main office and
branches changed moderately from that of the previous year. Re'
ceipts of currency and coin from commercial banks amounted to
$1,456 million, a decrease of $9 million from the preceding year.
Payments of currency and coin to banks amounted to $1,158 mil'
24
lion, an increase of $20 million over those payments of 1948. The
number of pieces of currency received and counted during 1949 was
261 million, one million more than the number during 1948. The
number of pieces of coin received and counted was 297 million, an
increase of 44 million pieces.
An important task of the Currency and Coin Department is that
of sorting currency received by the Bank. Three principal purposes
are served in this operation.
One purpose is to sort the currency according to its condition.
Bills fit for further circulation are separated from those that are un
fit. This separation is designed to keep the currency in circulation
free of badly worn or soiled bills. It can be accomplished only
by careful scrutiny of the currency coming into the Bank. Currency
determined to be unfit for further circulation and subsequently re
deemed during the year amounted to $514 million.
A second objective in currency sorting is to withdraw from circu
lation in the Sixth District the notes of other Federal Reserve Banks.
The Federal Reserve Act provides that no Federal Reserve Bank
may pay out notes issued through another Reserve Bank, under pen
alty of a tax of 10 percent of the face value of the notes so paid out.
Accordingly, the notes of the other eleven Federal Reserve Banks
are sorted out and are either returned to the Bank of issue or, if unfit
for further circulation, are sent to the Treasurer of the United States
to be retired. Notes of other Federal Reserve Banks received and
sorted out by the department during the year amounted to $503
million.
The third objective of currency sorting is to detect counterfeit
currency. Counterfeiting took a decided spurt during 1949. The
number of counterfeits received and detected by the currency han
dlers at the head office and branches far exceeded the number of such
notes received in any previous year. The currency sorters detected
a total of 873 counterfeit notes, which amounted to $11,523. Coun
terfeit notes in the denomination of $10 were the most frequently
encountered. Currency is sorted in such a manner that the identity
25
of the depositor can usually be determined. During the year, only 29
counterfeits could not be traced to the depositor. On these notes the
Bank experienced a loss of $330.
Chech Clearing and Collection
The most noteworthy development in check clearing and collection
activity was the continued expansion in the volume of work handled.
The total number of checks cleared during 1949 was 131,235,000.
The number cleared in 1948, which marked the previous high in
volume, was 122,097,000.
The Bank continues its efforts to expedite the prompt payment of
all checks cleared. It utilizes air mail and air express services in all
instances where such services will reduce the collection time and fa
cilitate the handling of checks by the receiving banks.
Another step towards faster collection of checks has been taken
with the development of the uniform routing symbol on checks of
par remitting banks. The plan for the use of this symbol was first
presented to the banks in 1945 through the co-operation of the Amer
ican Bankers Association and the Federal Reserve Banks.
The uniform symbol is in the form of a fraction which is designed
to be shown in the upper right corner of a bank check. Use of
this symbol permits faster sorting and greater efficiency in handling
checks through the Federal Reserve System.
Studies of the percentage of par checks in circulation bearing the
uniform symbol reveal a consistent growth. The initial survey at
the end of 1946 indicated that 25 percent of such checks bore the
symbol. In December of 1949 the percentage had grown to 67. The
latest survey indicated that 74 percent of all par checks payable in
the Sixth District had the routing symbol printed in the recom
mended location. This percentage was the highest of any Federal
Reserve District except those served by the Federal Reserve Banks
of Boston and New York.
26
Custodian and Fiscal Agent
for the Commodity Credit Corporation
In accordance with a continuing arrangement with the Commodity
Credit Corporation, the Bank performed extensive custodian and
fiscal agency services for the Corporation. The Corporation, first es
tablished in 1933 under a Delaware charter, was granted a Federal
charter effective July 1, 1948. It functions primarily in the execution
of the agricultural price-support policies of the United States Gov
ernment. It has chosen to use the facilities of the Federal Reserve
Banks and branches in handling cash transactions and in servicing
and safekeeping commodity loan notes.
The transactions handled by the Bank for the Corporation origi
nate with the three field offices which the Corporation maintains in
the Sixth District. These offices are the New Orleans Cotton Office,
the Atlanta Area Fiscal Office, and the GFA (Georgia, Florida, Ala
bama) Peanut Association at Camilla, Georgia.
The CCC Custodian Department is maintained for handling these
transactions at the head office. The work volume varies in accord
ance with crop and price movements, and personnel requirements
are affected accordingly. A t the high point of activity, the depart
ment employed 56 people; at the low point, it employed 31 people.
W ith respect to its CCC Custodian operations, the department
began the year with holdings of 1948 cotton-crop loans in the face
amount of $112 million, secured by 709,570 bales of cotton. Re
ceipts of additional notes, during the remainder of the 1948 program
year, increased the total of notes received to a face amount of $152
million, supported by 988,167 bales of cotton. A total of $122 mil
lion in certificates of interest was issued to bank lending agents, who
preferred the notes in lieu of cash payment.
A major new task was that of handling the moving of 269,770
bales of cotton, necessitated by a shortage of storage space at the
original warehouses. This movement of cotton involved the recording
of additional cash disbursements on the individual notes covering
transportation and handling charges.
27
The cotton producers’ loans under the 1948 cotton-loan program
matured on July 31, 1949. Of the 988,167 bales taken into the loan
program, repayments totaled only 145,215 bales, or 14.6 percent of
the total. Practically all of the remainder, or 842,952 bales, were
liquidated by pooling and transferring the notes to the regional office
at New Orleans.
Considerable activity in the form of transfers and purchases of
certificates of interest accompanied the servicing of the 1948 pro
gram. On the July 29, 1949, maturity date, the Bank disbursed to
certificate holders $49.3 million, representing principal and interest
on all outstanding certificates.
Activity in connection with the 1949 cotton program promises to
be substantially less than that with the 1948 program. The first of
ferings for the new program were received on August 29, 1949.
By the end of the year, the total face amount of notes received
amounted to $35 million, supported by 232,162 bales of cotton. Un
der the new program, co-operative association loans were received
for the first time. It was necessary to install an entirely new and sep
arate procedure for handling such loans, thus materially increasing
the work load of the department. All loan advances were made
promptly on the date set by the New Orleans Cotton Office. Certifi
cates of interest in the amount of $29 million were issued upon re
quest of lenders who preferred the investment in lieu of cash pay
ment.
The Bank and its branches also handled an extensive volume of
work for the Atlanta Area Fiscal Office. The CCC Custodian De
partment of the Bank in 1949 paid 12,045 drafts in the amount of
$7.7 million. These drafts were drawn by authorized representatives
of the Department of Agriculture in connection with the Irish potato,
sweet potato, corn, wheat, barley, oats, soybean, and cottonseed
purchase programs and the farm storage facilities loan program.
When received from banks, such drafts were handled in the same
manner as transit check cash letters.
The agency operations at the head office were supplemented by
operations at three of the branch offices of the Bank. The Nashville
28
Branch serviced receipts and disbursements in connection with the
Corporation’s wool program. The New Orleans Branch handled dis
bursements and collections for the Corporation’s New Orleans of
fice. The Jacksonville Branch functioned disbursements and receipts
in connection with the 1949 peanut program.
Service for the GFA Peanut Association is limited in scope. Indi
vidual commercial banks serve as fiscal agents for the Commodity
Credit Corporation in connection with the peanut-loan program.
Debits and credits arising from this relationship, however, are even
tually cleared through the Federal Reserve Bank as fiscal agent and
custodian. A t the end of each day, these transactions are credited or
debited to the account of the Treasurer of the United States for the
account of the Commodity Credit Corporation.
x .
Custodian and Fiscal Agent
for the Reconstruction Finance Corporation
No change in the relationship between the Bank and the Recon
struction Finance Corporation occurred during the year. The Bank
continued to accept deposits from the loan agencies of the Corpora
tion for credit to its account with the Treasurer of the United States.
It issued Treasury checks for the account of the Corporation upon
receipt of properly authorized disbursement schedules.
Service of certain loans by the Bank was continued for which the
accounting responsibility had not been transferred to the loan agencies.The Bank continued to hold in safekeeping for the RFC nego
tiable securities, notes, mortgages, and related supporting documents.
Consumer Instalment Credit
On June 30, 1949, the Bank discontinued its consumer instalment
credit department. The department had been established the pre
vious September to administer the consumer instalment credit regu
lations in the District under the direction of the Board of Governors
of the Federal Reserve System. Discontinuance of the department
coincided with the lapse of the temporary provision in the Congres
sional Joint Resolution of August 1948, which had provided for the
regulations. A t the peak of its activity, the department employed
ten field investigators and five clerical assistants. It registered 12,454
instalment credit grantors and conducted 4,923 compliance checks.
Charged as it is by statute with important responsibility for main
taining suitable national credit and monetary conditions, the Federal
Reserve System has recognized the utility of consumer credit con
trols as an adjunct to its other monetary and credit powers. Greater
economic stability is the objective of such controls. When produc
tion is at its maximum, requirement of higher down payments and
shorter maturities may help to relieve pressure toward higher prices.
When production is declining, lower down payments and longer ma
turities may encourage the revival of consumer buying.
This flexibility of application of the consumer instalment credit
controls was availed of by the Board of Governors during the early
part of 1949. W ith the appearance of deflationary tendencies in the
economy, the Board promptly modified its restrictions. Effective
March 7, 1949, Regulation W was amended to permit maturities of
twenty-one months instead of fifteen or eighteen months as originally
required on instalment credit obligations. Effective April 27, 1949,
it again amended the Regulation, extending the maturities to twenty'
four months, reducing down payments to 10 percent on listed arti
cles other than automobiles, and raising the exemption amount to
$100 on individual articles.
W ith the termination of the regulation of consumer instalment
credit and with the recovery movement that began in the economy
in midyear, the volume of such credit expanded rapidly. This credit
rose from $9.1 billion at the end of June, when consumer credit
controls were permitted to lapse, to $10.9 billion at the end of 1949.
Much of the new volume of instalment credit was being extended
on a basis which many regarded as unsound.
When the question of an extension beyond June 30, 1949, of
the authority to regulate consumer instalment credit was being con'
sidered by the Congress, the Board of Governors recommended such
30
an extension. While there are differences of opinion as to the desirability of this authority, by and large the revival of consumer credit
regulation in August 1948 was accepted by businessmen and bankers
of the Sixth District with little or no protest. They recognized that
the restrictions offered a rallying point for holding the extension of
credit on a sound basis, and many have regretted the subsequent
termination.
Fiscal Agency and Securities
Operations for the Fiscal Agency and Security functions were nearly
the same in volume as in 1948, with the exception of the process
ing of issues of Armed Forces Leave Bonds and the redemption of
United States Savings Bonds. The issuance of leave bonds was trans
ferred from the Armed Forces Finance Officers to the Treasury De
partment in Washington. Savings bond redemptions, Series A-E,
amounted to $248 million and to 4,231,933 pieces. The face value
of such bonds redeemed was 31 percent less than that of 1948 and
45 percent less than that of 1947. A t the end of the year, there were
1,293 authorized paying agents.
Issues of United States Savings Bonds of all series amounted to
2,133,937 pieces with a maturity value of $284 million. Compared
with the preceding year, there was a slight increase in the number
of pieces and a decrease of approximately 18 percent in the maturity
value. Approximately 72 percent, or $205 million, of the amount
issued was handled by issuing agents. A t the end of the year, there
were 1,343 authorized issuing agents.
Savings bonds can be reissued only by the Federal Reserve Banks
or the Treasury Department. Reissues are effected to correct errors
that might cause the owners difficulty in redeeming the bonds at or
before maturity. Reissues are also made to eliminate the names of
deceased co-owners, to distribute estates, and to show changes in
names of co-owners and beneficiaries. The head office and branches
processed 198,252 pieces with a maturity value of $39 million. The
number of pieces processed represented an increase of 6 percent over
the number processed in 1948.
31
New Treasury issues handled by the head office and branches
totaled $1,214 million, consisting of 52,905 pieces. The Treasury
Department exercised the call privilege on five issues of bonds. Eight
issues of certificates of indebtedness and one issue of Treasury notes
became due during the year. The holders of all issues, called and ma
tured, were granted the privilege of exchange. W ith the exception
of the weekly offerings of Treasury bills, the Treasury did not have
a cash offering of marketable securities. The total amount of bills
allotted by the Atlanta and New Orleans offices was $417 million.
Facilities were installed at the Birmingham, Jacksonville, and Nash
ville Branches to issue bills beginning January 1, 1950.
The Bank and its branches act as custodians of securities for mem
ber banks and as custodians of securities deposited for municipal
and governmental purposes, such as holders of collateral for public
moneys and bankruptcy funds, and collateral for penal or perform
ance bonds of the Forestry Service or the Commissioner of Internal
Revenue. On December 31, 1949, there were 796 banks in the Dis
trict which were qualified as depositaries of public moneys under the
provisions of Treasury Department Circular No. 92, for the purpose
of maintaining Treasury Tax and Loan Accounts, formerly known
as W ar Loan Deposit Accounts.
As a service to the general public, the Federal Reserve Banks are
authorized to hold United States Savings Bonds in custody for indi
viduals. On December 31, 1949, the Bank and its branches held
260,513 pieces with a maturity value of $28 million.
This Bank serves as fiscal agent of the Treasury in the exchange,
transfer, and redemption of Treasury issues. During the year 42,338
bonds were processed for exchange or transfer, amounting to $1,215
million. There were received for redemption 63,008 pieces, amount
ing to $996 million.
The volume of coupons paid, representing coupons forwarded for
payment and clipped from direct United States Government obliga
tions, was 7 percent lower than for 1948. The Treasury Department
has issued certificates of indebtedness without coupons for the past
few years and this practice has reduced the volume of coupons. Cou
32
pons paid, including those clipped from bonds of agencies and instrumentalities of the United States, amounted to approximately $30
million and were in excess of 535,000 pieces.
An important service performed for member banks by the Bank
was the purchase and sale, including the clearance, of United States
Government securities in the open market. During 1949 this Bank
handled 6,634 such transactions, representing $1,383 million in ma
turity value. This service was performed without charge to the
banks, except for the small fee which the Treasury Department
charged for transferring securities by wire.
The United States Treasury Department announced a change ef
fective January 1, 1950, for the reporting and depositing of income
tax withheld and employer’s tax and employee’s tax on wages paid
pursuant to the Federal Insurance Contributions Act. The change
in procedure will result in material savings to the Treasury Depart
ment. The retirement as of February 28, 1950, of the 2 percent de
positary bonds, second series, will effect a saving of approximately a
million dollars a year. Operating savings will accrue, too, from the
use of a punch-card form of receipt that can be processed on tabu
lating machines.
All banks and trust companies, formerly qualified as depositaries
for Federal taxes, will be required to requalify as depositaries for
Federal taxes under the terms of the new Treasury Department Cir
cular No. 848. Banks which are also qualified as special depositaries
of public moneys under the terms of Department Circular No. 92
may accept tax payments from employers and make payment to the
Reserve Bank by credit in the Treasury Tax and Loan Account.
Banh Examination
All state member banks in the District, including their trust depart
ments, were examined at least once during the year 1949. The exam
inations were conducted in accordance with established procedures
as to scope. A summary of these examinations and investigations is
presented in the following tabulation:
33
Independent
Examinations
State member ban k s.....................
Membership examinations of
state b a n k s................................
Holding company affiliates . .
Applications for membership
by new state bank organizations
Applications to organize
national b a n k s...........................
Applications to exercise trust
powers by national banks .
Joint Examinations
'With State or
Federal Agencies
1949
1948
1949
1948
. 36
29
34
33
. 2
. 0
3
0
0
1
3
1
. 1
0
2
1
0
0
3
5
0
o
2
. 0
40 43
34
39
There was one development of interest with regard to bank examinations. It involved a change in the terminology and, to some
extent, in the procedure observed by the three Federal supervisory
agencies with regard to classification of assets and appraisal of in
vestment securities. As of July 15, the captions of the classification
units, namely, II, III, and IV were abandoned and the captions Sub
standard, Doubtful, and Loss, respectively, were adopted.
The designations for appraisal of investment securities were not
changed, but new procedures were outlined.
Group I securities are defined as marketable obligations in which
the investment characteristics are not distinctly or predominantly
speculative. This group includes general market obligations in the
four highest grades, and unrated securities of equivalent value.
Neither appreciation nor depreciation in Group I securities is to be
taken into account in figuring net sound capital of the bank.
Group II securities are defined as those in which the investment
characteristics are distinctly or predominantly speculative. This
group includes general market obligations, in grades below the four
highest, and unrated securities of equivalent value. Under the re
34
vised procedure, securities in Group II are to be valued at the market price and 50 percent of the net depreciation is to be deducted in
computing the net sound capital of the bank.
The revised procedure did not effect any changes in the classification and appraisal of securities in Group III and Group IV. Group
III consists of securities in default. Group IV consists of stocks.
Bankers generally have welcomed the changes. To a good many
of them, the Roman numeral captions II, III, and IV were not as
impressive or meaningful as the captions Substandard, Doubtful,
and Loss. For purposes of discussions with the management of the
affairs of the bank under examination, the examiners have found the
revised procedure a significant improvement over the old procedure.
Legal Affairs
The Bank was involved in a minimum of litigation. It was made a
party defendant in two cases, and answers were prepared and filed
by the legal staff. One of the cases was a suit to quiet title to a parcel of real estate in Florida in which the Bank formerly had an inter
est. The other case was an action in the United States District Court
in Mississippi to determine ownership of the proceeds of a collection
item handled by the New Orleans Branch. The Bank was also indi
rectly involved in a suit in South Carolina in the State Court. The
question in this case was whether a certain remittance made by a
South Carolina bank for a check forwarded by this Bank for collec
tion constituted a final payment of the check under the laws of South
Carolina.
Prior to the enactment of Chapter 94 of the Public Acts of Ten
nessee, 1949, the legal staff participated in numerous discussions with
representatives of the Tennessee Bankers Association, the Treasurer
and the Attorney General of Tennessee concerning this law. The
Act authorizes the Bank and certain commercial banks in Tennessee
to hold in safekeeping securities pledged to the State Treasurer.
Numerous written and oral opinions were rendered by the legal
35
staff on operating and administrative problems. Among such prob
lems were those concerning the admission of new banks to member
ship in the System, amendments to charters of state member banks,
and the granting of trust powers to national banks. The staff also
prepared, analyzed, and passed upon numerous contracts, docu
ments, and leases of real estate in which the Bank and its branches
were interested.
Banh and Public Relations
The Bank continued its program of cultivating closer relationships
with bankers throughout the District and of participating actively
in the promotion of the economic progress of the region. The provi
sion of improved and expanded services to member banks was the
paramount objective of the program.
Representatives of the Bank and its branches made a special ef
fort to meet and talk with officers of every commercial bank in the
District. They wished to obtain personal assurance that the Bank was
giving the best possible service to its member banks. They solicited
suggestions for improvement of the Bank’s facilities and services.
They developed information regarding the views and attitudes of the
commercial bankers on bank problems, both local and national. W ith
the exception of a few unincorporated banks and small savings banks,
every bank in the District was visited by these representatives, and
many banks were visited more than once. The number of such visits
totaled 1,522 for the year, 634 of which were to member banks and
888 to nonmember banks.
In furtherance of the program, representatives of the Bank en
deavored to attend all of the principal banker gatherings in the Dis
trict. All of the annual State Bankers Associations Conventions
were thus attended, namely, those of the Alabama Bankers Asso
ciation at Montgomery on May 13-14, the Florida Bankers Asso
ciation at Miami on April 9-12, the Georgia Bankers Association at
Augusta on April 13-15, the Louisiana Bankers Association at Bi
loxi on April 24-26, the Mississippi Bankers Association at Biloxi
on May 17-18, and the Tennessee Bankers Association Convention
36
at Nashville on May 1041. Officers of the Bank were also in attend
ance at a substantial number of the group meetings of the Bankers
Associations of the six states and at the various meetings of the Pub
lic Relations Committee of the Alabama Bankers Association.
The Bank through its branches served as co-sponsor of a number
of meetings held throughout the District. Sponsored by the Alabama
Bankers Association, with the assistance of the Birmingham Branch,
the Third Alabama Bankers Study Conference was held at the Uni
versity of Alabama, Tuscaloosa, August 7-10.
Through the agricultural economists in its Research Department
and other representatives, the Bank actively co-operated in organiz
ing and promoting banker-farmer meetings. These meetings were
worked out jointly with the agricultural committees of the various
state bankers associations and the extension services of the state ag
ricultural colleges. The purpose of these meetings was to acquaint
bankers with the problems of a changing agriculture so that they
might facilitate desirable shifts from less economic to a more eco
nomic use of agricultural resources.
All together, twenty-one such banker-farmer meetings were held,
and, of course, the discussion themes varied with local problems. In
Alabama, the meetings were at Tuscaloosa, Anniston, Huntsville,
and Auburn. The primary objective of these meetings was to em
phasize the production of higher corn yields per acre. In Florida,
four group meetings were held—two at Gainesville and one each at
Greenwood and Ona. In these meetings, the primary theme was im
provement in pasturage and forestry practices.
Meetings in Georgia, at Tifton and Athens, were held for the
purpose of conducting farm credit schools. In Louisiana, the meet
ings at DeRidder, Franklinton, and Opelousas were concerned with
forestry practices. In Mississippi, the conferences at Union, Poplarville, and Wesson were also devoted to forestry matters. And finally,
in Tennessee, the five meetings at Athens, Carthage, Johnson City,
Nashville, and Tullahoma were devoted to general agricultural
problems.
The bank and public relations program included other activities
37
designed to promote public understanding of the purposes, policies,
and operations of the Federal Reserve System. Representatives of
the Bank made numerous speeches and informal talks, before audi"
ences aggregating 7,500 people. Various luncheon meetings were
held at the Bank and its branches, at which banking problems were
considered. Tours of the Bank and branches were conducted for
bankers, businessmen, and college and high school students.
Operations Suruey Seroice
In keeping with its primary role as a service institution, the Bank has
inaugurated a new survey service. It now offers, without cost to its
members, a complete survey and analysis of bank operating procedures and methods. Such surveys include a thorough study of service
charges and internal operations of the smaller banks. A detailed cost
analysis is made of each operation, enabling the bank to compare its
own costs with those of a typical bank of like size. Analysis is also
made of service charges, and studies are made of systems, machines,
and banking forms.
The Federal Reserve Bank’s analyst made surveys of twenty "four
individual commercial banks. These surveys proved to be of great
value; most banks recognize the worth of a cost analysis and a knowl"
edge of current developments in operational matters. The larger
banks are able to keep abreast through their own trained personnel,
but the smaller banks, working under limitations of both time and
personnel, are not always in a position to make the needed studies.
The Federal Reserve Bank is always happy to assist the smaller
banks that are limited in this respect. Upon request of a member
bank, the service is available as promptly as the working schedule
of the analyst permits.
Research Department
The Federal Reserve System has the statutory function of regulat"
ing the supply, availability, and cost of credit to the end that agricul'
38
ture, commerce, and industry may be provided with a favorable
climate within which to develop. The Board of Governors and the
officers of the twelve Federal Reserve Banks must accordingly have
at their disposal information as complete as possible on the condition
of the commercial banks and of all major segments of the business
economy. The provision of this data is the major function of the
Research Departments of the Reserve Banks and of the Board’s
Division of Research and Statistics.
In addition to assembling statistical data, the Research Departments study the economic problems of their respective Districts and
make their findings public for the guidance of bankers and busi
nessmen in policy formation. They also serve as centers of economic
information for member banks and for the general public.
The work of the Research Department of the Bank followed this
general pattern. The department carried on the routine collection of
banking and business statistics and handled special surveys or calls
for information received from the Board of Governors. Statistical
reports were received regularly from some 1,427 reporters, including
banks, department stores, retail furniture stores, household appliance
stores, jewelry stores, and grantors of consumer credit.
The department issued 45,143 copies of releases during the year.
These included two weekly releases, fifteen monthly releases, five
annual releases, and four other releases appearing at irregular intervals.These releases were sent to a total of 5,256 addressees, of which
1,427 were reporters, 2,271 were member banks, and 1,558 were in
the miscellaneous category.
The work of the department in agricultural development was
especially noteworthy. An account of this activity is presented in the
section devoted to Bank and Public Relations activities.
In addition to the issuance of its various releases, the department
issued two monthly publications, the Monthly Review and the
Bankers Farm Bulletin. The Monthly Review now has a mailing
list of 8,500 and circulates in every state of the Union and in many
foreign countries. The Bankers Farm Bulletin appeared for the first
time in January 1949 and at the close of the year had a mailing list
39
of approximately 2,500. In 1949, the Bank issued 101,500 copies of
the Monthly Review and 26,500 copies of the Bankers Farm
Bulletin.
The department maintains a research library with some 6,600
books catalogued, 616 of which were added in 1949. In addition to
the regularly catalogued volumes, there are thousands of pamphlets
and releases, arranged by subject in vertical files. The library sub'
scribes to over 200 periodicals and to 20 daily newspapers and
answers hundreds of requests for information from within and out"
side the Bank during the course of the year. Many of these requests
come from member banks who also have the privilege of drawing
books from the library.
Although the Research Department exists mainly to serve the
needs of the Bank and the Board of Governors, it is also meant to
serve the member banks. They should look upon it as their own and
should feel free to call upon it for whatever services it can perform.
Personnel
In seeking to improve the quality of its service functions, the Bank
gives particular attention to employee efficiency. Special attention
was given to improvement in standards and to employee training.
The decline in total employment that has been underway since
the end of the greatly expanded activity characteristic of the war
years continued. A t the end of 1949, the total number of employees
at the head office and branches was 953, the lowest number since
the all'time high of 1,685 reached in July 1944. During the course of
the year, there was a net reduction of 75 in the total number of
employees; separations numbered 214 and additions, 139. The
annual rate of net turnover was reduced to 21.6 percent. There were
140 employees, which is 14.7 percent of the total, who had been in
the service of the Bank more than twenty years and of this number,
38 employees, or 4 percent of the total number of employees, had
been with the Bank for thirty years or more.
The Retirement System of the Federal Reserve Banks is an
40
important factor in the personnel program. In May 1949, the rules
and regulations governing retirement were amended to provide wider
benefits. Also, the retirement allowances paid to those employees
who had reached the age of sixty or more at the time of retirement
and whose retirement was effective before the rule changes in May
were recalculated under the revised rules and were increased
accordingly.
Salary scales are reviewed periodically to keep them in line with
the scale of salaries paid by leading employers at the head office and
branch cities. On the basis of a salary survey made by the Personnel
Department, the minimums and maximums of salary grades were
adjusted upward by approximately 5 percent in January 1949.
Attention is given to employee welfare. The Bank services a group
life-insurance plan for employees. It pays two-thirds of the cost of a
hospitalization and surgical insurance coverage. It maintains em
ployee cafeterias at the head office and at the Birmingham and New
41
Orleans Branches. It maintains a full-time registered nurse at the
head office and at the New Orleans Branch and a part-time nurse at
the Birmingham Branch. W ith the co-operation of the local health
officers, the Bank arranges for chest X-ray examinations of all em
ployees. Medical examinations are also furnished to each employee.
The Bank encourages participation in the educational courses
offered by the American Institute of Banking by reimbursing the
cost of tuition and of textbooks to employees who complete such
courses. In 1949, it paid the expenses of eleven officers and depart
ment heads at the summer session of the Graduate School of Banking
at Rutgers University.
Appointments, Elections, and Official Staff Changes
For the year 1950, the Board of Governors of the Federal Reserve
System appointed Frank H. Neely of Atlanta, Georgia, to serve as
Chairman of the Board of the Federal Reserve Bank and as Federal
Reserve Agent, and Rufus C. Harris of New Orleans, Louisiana, as
Deputy Chairman. For the three-year term beginning January 1,
1950, the Board appointed Rufus C. Harris as Class C Director and
Branch Directors as follows: Birmingham Branch, Thad Holt of
Birmingham, Alabama; Jacksonville Branch, Howard Phillips of
Orlando, Florida; Nashville Branch, W . Bratten Evans of Nashville,
Tennessee; and New Orleans Branch, E. O. Batson of New Orleans,
Louisiana.
For the three-year term beginning January 1, 1950, member banks
chose L. R. Driver of Bristol, Tennessee, as their Class A Director
and Donald Comer of Birmingham, Alabama, as their Class B
Director.
For the three-year term beginning January 1, 1950, the Board of
Directors of the Federal Reserve Bank of Atlanta appointed the fol
lowing Branch Directors: Birmingham Branch, J. B. Barnett of Mon
roeville, Alabama, and A. M. Shook of Birmingham, Alabama; Jack
sonville Branch, N. Ray Carroll of Kissimmee, Florida, and J. E.
Bryan of St. Petersburg, Florida; Nashville Branch, T. L. Cathey
42
of Lewisburg, Tennessee, and Thomas D. Brabson of GreeneviUe,
Tennessee; New Orleans Branch, Elbert E. Moore of Baton Rouge,
Louisiana, and Percy H. Sitges of New Orleans, Louisiana.
The Board of Directors of the Federal Reserve Bank of Atlanta
reappointed J. T. Brown, President, The First National Bank of
Jackson, Jackson, Mississippi, to serve as member of the Federal
Advisory Council for the year 1950. The Board of Directors also
reappointed, for the year 1950, the five members of the Industrial
Advisory Committee for the Sixth District. The Chairman is John
E. Sanford, Vice President, Armour & Company, Atlanta. The
other members are George Winship, President, Fulton Supply Company, Atlanta, Georgia; W . W . French, Chairman of the Board,
Moore-Handley Hardware Company, Inc., Birmingham, Alabama;
Luther Randall, President, Randall Brothers, Inc., Atlanta, Georgia;
and I. C. Milner, President, Gate City Mills Company, East Point,
Georgia.
There were three changes in the official staff of the Bank. Effective
August 1, 1949, J. R. McCravey, Jr., Assistant Vice President,
resigned to become associated with the Bank of Forest, Forest,
Mississippi, as Vice President. Effective October 1, 1949, W . E.
Pike, General Auditor, resigned to accept a position with the First
National Bank of Atlanta, Atlanta, Georgia, as Vice President.
R. DeW itt Adams, Manager of the Auditing Department, was
appointed Acting General Auditor to succeed Mr. Pike.
43
Nashville Branch
Federal Reserve Ban\
of Atlanta
DIRECTORS FOR 1950
C lass A
Elected by and representative of member banks
Group
Term Expires
December 31
R . C lyde W i l l i a m s ...........................................................................................1
President, The First National Bank of Atlanta,
Atlanta, Georgia
1951
L eslie R . D r i v e r .................................................................................................. 2
President, The First National Bank in Bristol,
Bristol, Tennessee
1952
G eorge J. W h i t e .................................................................................................. 3
Chairman and President, The First National Bank of M ount Dora,
Mount Dora, Florida
1950
C lass B
Elected by member banks and representative of nonban\ing interests
A lfr ed B ird F r e e m a n .................................................................................... 1
Chairman of the Board, Louisiana Coca-Cola Bottling Company, Ltd.,
New Orleans, Louisiana
1950
J. A . M c C r a r y ...................................................................................................2
Vice President and Treasurer, J. B. McCrary Company, Inc.,
Decatur, Georgia
1951
D o n a l d C o m e r ...................................................................................................3
Chairman of the Board, Avondale Mills,
Birmingham, Alabama
1952
C lass C
Appointed by the Board of Governors of the Federal Reserve System
F r a n k H. N e e l y , Chairman ............................................................................ 1950
Chairman of the Board, Rich’s Inc.,
Atlanta, Georgia
R u f u s C . H arris , Deputy C h a ir m a n ........................................................... 1952
President, The Tulane University of Louisiana,
New Orleans, Louisiana
P a u l E. R e i n h o l d ................................................................................................................. 1951
President and Director, Foremost Dairies, Inc.,
Jacksonville, Florida
46
OFFICERS
W . S. M c L a r in , J r .,
President
V. K. B o w m a n
L. M . C l ark
First Vice President
J. E. D e n m a r k
S. P. S c h u e s s l e r
Vice President
Vice President
H aro ld T . P a t t e r so n
Vice President
E. L. R a u b e r
General Counsel
Director of Research
R . D e W it t A dam s
Acting General Auditor
J. H. B o w d e n
C. R. C am p
Assistant Vice President
F. H. M a r t in
Assistant Vice President
I. H . M a r t in
Assistant Vice President
R oy E. M il l in g
Assistant Vice
President
E. C . R a in e y
Assistant Vice President
Assistant Vice President
Member of Federal Aduisory Council
J. T . B r o w n
President
The First National Bank of Jackson
Jackson, Mississippi
Industrial Aduisory Committee
J o h n E. S a n f o r d , Chairman
Vice President
Armour & Company
Atlanta, Georgia
I.
L uther R andall
G eorge W in s h ip
President
President
Randall Brothers, Inc.
Fulton Supply Company
Atlanta, Georgia
Atlanta, Georgia
C M il n e r
President
Gate City Mills Company
East Point, Georgia
W . W . French
Chairman of the Board
M oore-Handley Hardware Company, Inc.
Birmingham, Alabama
47
Birmingham Branch
DIRECTORS
Appointed, by the Board of Governors of the Federal Reserve System
Term Expires
December 3 1
Wm. H o w ard S m it h ,
Chairm an
President, McQueen-Smith Farms,
Prattville, Alabama
......................................................................1951
T h a d H o l t .....................................................................................................................................1952
President and Treasurer, Voice of Alabama, Inc. (Radio Station W A P I),
Birmingham, Alabama
J. R oy F a u c e t t .......................................................................................................................1950
Senior Partner, Faucett Brothers,
Northport, Alabama
Appointed by the Board of Directors, Federal Reserve Ban\ of Atlanta
J. B. B a r n e t t .............................................................................................................................. 1952
President, The First National Bank of Monroeville,
Monroeville, Alabama
W . C. B o w m a n ...................................................................................................1950
Chairman of the Board, The First National Bank of Montgomery,
Montgomery, Alabama
A . M . S h o o k ...............................................................................................................................1952
President, Security Savings Bank,
Birmingham, Alabama
D. C. W
a d s w o r t h ............................................................................................. 1951
President, The American National Bank,
Gadsden, Alabama
OFFICERS
P. L. T. B ea v er s
Vice President and Manager
H. C. F r a z e r
Assistant Manager
48
H. J. U r q u h a r t
Cashier
L. W . S tark
Assistant Cashier
Jachsonuille Branch
DIRECTORS
Appointed by the Board of Governors of the Federal Reserve System
Term Expires
December 31
M a r sh a l l F. H o w e l l , C h a ir m a n ................................................................1950
Director and Secretary-Treasurer, Bond-Howell Lumber Company,
Jacksonville, Florida
J. H illis M i l l e r ................................................................................................... 1951
President, University of Florida,
Gainesville, Florida
H ow ard P h i l l i p s .................................................................................................................1952
Vice President, Dr. P. Phillips & Sons, Inc.,
Orlando, Florida
Appointed by the Board of Directors, Federal Reserve Ban\ of Atlanta
J. E. B r y a n ............................................................................................................... 1952
President, Union Trust Company,
St. Petersburg, Florida
J. D. C a m p ............................................................................................................... 1951
President and Director, Broward National Bank of Fort Lauderdale,
Fort Lauderdale, Florida
N. R ay C a r r o l l ....................................................................................................1952
J.
President, First National Bank,
Kissimmee, Florida
W . S h a n d s ..........................................................................................................1950
President and Director, The Atlantic National Bank o f Jacksonville,
Jacksonville, Florida
OFFICERS
T . A . Lanford
Vice
T. C . C l a r k
Cashier
J. W
yly
President and Manager
S nyder
Assistant Cashier
C . M a s o n F ord
Assistant Cashier
49
Nashoille Branch
DIRECTORS
Appointed by the Board of Governors of the Federal Reserve System
Term Expires
December 31
H arold C . M e a c h a m ,
Farmer,
Franklin, Tennessee
C h a ir m a n
.......................
............................. 1951
C . E. B r e h m ..............................................................................................................................1950
President, University of Tennessee,
Knoxville, Tennessee
W . B r a t t e n E v a n s ..........................................
.........................................................1952
President, Tennessee Enamel Manufacturing Company,
Nashville, Tennessee
Appointed by the Board of Directors, Federal Reserve Ban\ of Atlanta
P a r k es A r m i s t e a d .................................................................................................................1951
President, First American National Bank of Nashville,
Nashville, Tennessee
T h o m a s D . B r a b s o n .................................................................................................................1952
President, The First National Bank of Greeneville,
Greeneville, Tennessee
T . L. C a t h e y ...............................................................................................................................1952
President, Peoples and Union Bank,
Lcwisburg, Tennessee
W . H . H i t c h c o c k .................................................................................................................1950
President, First and Peoples National Bank of Gallatin,
Gallatin, Tennessee
OFFICERS
J oel B. F o rt , J r .
Vice President and Manager
E. R . H a rriso n
Cashier
50
R o b e r t E. M oody , J r .
Assistant Cashier
Neui Orleans Branch
DIRECTORS
Appointed by the Board of Governors of the Federal Reserve System
T erm Expires
December 31
H e n r y G. C h a l k l e y , J r ., C h a irm a n .......................................................... 1950
President, Sweet Lake Land and Oil Company, Inc.,
Lake Charles, Louisiana
J o h n J. S h a f f e r , J r .................................................................................................................1951
Sugar Planter,
Ellendale, Louisiana
E. O . B a t s o n ...............................................................................................................................1952
President, Batson-McGehee Company, Inc.,
Millard, Mississippi
Appointed by the Board of Directors, Federal Reserve Bank of Atlanta
J a m e s C . B o l t o n ........................................................................................................................1951
President, Rapides Bank & Trust Company in Alexandria,
Alexandria, Louisiana
T. J. E d d i n s ............................................................................................................................... 1950
President, Bank of Slidell,
Slidell, Louisiana
E l b e r t E. M o o r e ........................................................................................................................ 1952
President, Louisiana National Bank of Baton Rouge,
Baton Rouge, Louisiana
P e rcy H. S i t g e s ........................................................................................................................ 1952
President, Louisiana Savings Bank 6s* Trust Company,
N ew Orleans, Louisiana
OFFICERS
E. P . P aris
Vice
M. L. S h a w
Assistant Manager
F. C . V a s t e r l in g
Assistant Cashier
President and Manager
W . H. S e w e l l
Cashier
L. Y. C h a p m a n
Assistant Cashier
51
^{eu> Orleans Branch
_
Federal Reserve Ban\
'
of Atlanta
__
~
Currency and Coin Operations
Main Banh and Branches
N u m b e r o f P ieces R eceived a n d C o u n t e d fo r 1949 a n d 1948, b y M o n t h s
Currency
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
Coin
1949
1948
1949
1948
. 24,368
. 24,024
. 24,030
. 23,000
. 21,688
. 20,400
. 19,116
. 21,555
. 20,856
. 20,426
. 20,379
. 21,279
. 261,121
23,971
22,328
23,890
22,800
22,083
19,554
20,528
21,295
20,212
19,148
20,554
23,628
259,991
24,704
28,478
25,953
24,802
25,067
25,798
21,114
25,945
24,363
23,564
22,966
24,088
296,842
23,377
20,472
22,118
22,644
20,723
22,722
19,981
22,134
18,971
18,641
19,037
22,120
252,940
Month
January .......................
February . . . .
M a r c h .......................
A p r il.............................
M a y .............................
J u n e .............................
J u l y .......................
August . . . .
September . . .
October . . . .
November . . .
December . . .
Total . . .
(In T h ou san d s)
R e c e ip t s fro m B a n k s a n d P a y m e n t s to B a n k s fo r 1949 a n d 1948,
by M o n t h s
(in Thousands)
Payments
Receipts
Month
1949
January . . . .
$146,309
February . . .
123,622
March . . . .
144,890
A p r il.......................
120,843
M a y .......................
110,574
J u n e .......................
112,620
107,674
J u l y .......................
August . . . .
114,510
September . . .
110,038
October . . . .
108,202
November . . .
115,211
December . . .
141,529
Total . . . 51,456,022
54
1948
$144,235
119,968
138,313
122,014
105,769
110,119
110,242
106,006
113,345
114,485
124,822
156,312
$1,465,630
1949
1948
$67,946
85,021
108,498
94,459
93,832
90,621
97,142
94,404
98,211
103,466
100,245
124,421
$1,158,266
$68,193
77,395
91,106
87,922
88,184
99,558
92,412
103,761
110,158
105,432
95,390
118,604
$1,138,115
Reserue Position of Member Banhs
S e m im o n t h l y P erio d E n d e d D e c e m b e r 31, 1949 a n d 1948
Total Reserves
(Millions)
Suite
Alabama
Florida .
Georgia .
Louisiana
Mississippi
Tennessee
District
Percent State
Reserves to
District Reserves
Percent Total
Reserves to
Required Reserves
1949
1948
1949
1948
1949
1948
. $111.3
. . 145.5
. . 146.5
141.3
.
22.0
. . 103.2
. . $669.8
$147.1
180.0
187.3
174.3
31.9
131.2
$851.8
16.6
21.7
21.9
21.1
3.3
15.4
100.0
17.3
21.1
22.0
20.5
3.7
15.4
100.0
108.4
111.8
105.5
108.9
109.5
110.5
108.9
107.1
107.5
104.7
109.1
110.0
106.8
107.1
55
Comparatiue Statement
December 31, 1949 December 31, 1948
ASSETS
Gold certificates.................................................... $ 995,700,383.92 $1,059,483,417.35
44,407,590.00
39,850,752.57
Redemption fund— F. R. notes . . . .
1,103,891,007.35
1,035,551,136.49
Total gold certificate reserves . . . .
23,505,882.30
21,131,989.40
Other c a s h ............................................................
Discounts and advances:
Secured by U. S. Government obligations
35,000.00
30,000.00
direct and guaranteed..............................
*7,795,125.00
*2,849,500.00
Other bills discounted and advances .
7,830,125.00
2,879,500.00
Total discounts and advances .
U. S. Government securities:
275.100.000.00
B i l l s ...................................................................
258.911.000.00
304.687.000.00
C e r tific a te s .....................................................
336.446.000.00
39,633,000.00
N o t e s ...................................................................
30,141,000.00
550.320.000.00
386.962.000.00
Bonds ...................................................................
1,012,460,000.00 1,169,740,000.00
Total U. S. Government securities .
Total loans and securities . . . .
1,015,339,500.00 1,177,570,125.00
2,002.06
Due from foreign b a n k s ..............................
1,543.52
19,581,000.00
Federal Reserve notes of other banks .
18,865,250.00
180,308,861.14
Uncollected item s.............................................
211,620,743.98
1,573,911.11
Bank premises ( n e t ) ......................................
1,523,303.62
7,536,046.74
Other a s s e t s .....................................................
5,498,809.07
Total assets..................................................... 2,309,532,276.08 2,513,968,835.70
LIABILITIES
Federal Reserve notes in actual circulation .
Deposits:
Member bank— reserve account .
U. S. Treasurer— general account .
F o r e i g n ............................................................
Other d e p o s i t s .............................................
Total d e p o sits.............................................
Deferred availability i t e m s ..............................
Other liabilities.....................................................
Total liabilities.............................................
CAPITAL ACCOUNTS
Capital paid i n .............................................
Surplus (Section 7 ) .............................................
Surplus (Section 1 3 b ) ......................................
Reserve for co n tin g en cies..............................
Total liabilities and capital accounts .
Contingent liability on acceptances purchased
for foreign correspondents .
Commitments to make industrial loans .
*Consists solely of foreign loans on gold.
56
1,290,998,620.00
1,329,271,475.00
685,366,469.27
50,492,636.50
31,184,600.00
31,948,301.66
798,992,007.43
182,688,791.71
455,043.24
2,273,134,462.38
874,451,464.53
75,302,347.75
26,063,700.00
3,938,619.75
979,756,132.03
171,763,347.73
490,176.86
2,481,281,131.62
8,239,800.00
21,193,500.54
762,425.68
6,202,087.48
2,309,532,276.08
7,874,150.00
20,027,863.59
762,425.68
4,023,264.81
2,513,968,835.70
430,842.31
None
136,497.89
287,500.00
Earnings and Expenses
1949
1948
Current Earnings:
Discounts and a d v a n c e s ................................................. $ 110,508.60 $ 193,434.25
Industrial l o a n s .................................................................
None
6,209.69
Commitments to make industrial loans . . . .
753.71
713.55
U. S. Government s e c u r i t i e s ......................................... 16,734,213.52 14,986,851.73
All o t h e r .................................................................................
34,512.89
31,450.77
Total current e a r n in g s ................................................. 16,879,948.56 15,218,700.15
Current Expenses:
Operating exp en ses.................................................................
Less reimbursements for certain fiscal agency and
other e x p e n s e s .........................................
. .
Net operating expen ses.........................................................
Assessment for expenses of Board of Governors
Cost of Federal Reserve c u r r e n c y .................................
Total current expenses . . .
4,344,269.80
4,270,212.96
903,984.43
3,440,285.37
133,800.00
519,838.83
4,093,924.20
980,762.82
3,289,450.14
132,681.00
487,862.29
3,909,993.43
Current net earnings . . . .
Additions to current net earnings:
Profit on sales of U . S. Government securities .
All o t h e r ..................................................................................
Total additions .
12,786,024.36
11,308,706.72
1,638,434.57
384.59
1,638,819.16
327,610.70
1,657.23
329,267.93
Deductions from current net earnings . . . .
Net additions .
Transferred to reserves for contingencies
Paid U . S. Treasury (Interest on outstanding Federal
Reserve N otes)
104,639.48
1,534,179.68
2,178,867.89
1,142.37
328,125.56
1,992,637.35
10,490,251.54
8,260,729.10
1,651,084.61
485,447.66
1,165,636.95
1,383,465.83
465,487.56
917,978.27
Net earnings after reserves and payments to U . S.
Treasury
Dividends paid
Transferred to surplus (Section 7)
57
Member Banh Comparative Statement
)
(Amounts in thousands of dollars
December 31, 1949
ASSETS
$4,412,144
Loans and investm ents.............................................
1,610,587
Loans (including overdrafts)
U. S. Government obligations, direct and guar
2,371,976
a n t e e d ....................................................
344,381
Obligations of States and political subdivisions
75,469
Other bonds, notes, and debentures
Corporate stocks (including Federal Reserve
9,731
Bank s t o c k ) .............................................
1,622,170
Reserves, cash, and bank balances . . . .
55,431
Bank premises owned and furniture and fixtures
1,490
Other real estate o w n e d .....................................
Investments and other assets indirectly representing
1,011
bank premises or other real estate .
8,666
Customers’ liability on acceptances .
17,286
Other assets.....................................................
$6,118,198
Total a s s e t s ..............................
LIABILITIES
Demand d e p o s it s .....................................................
Individuals, partnerships, and corporations
U. S. Government......................................
States and political subdivisions
Banks in U. S. and foreign countries .
Certified and officers’ checks, cash letters of
credit and travelers’ checks, etc. .
Time d e p o s it s .....................................................
Total deposits......................................
Bills payable, rediscounts, and other liabilities for
borrowed m o n e y ..............................
Acceptances o u t s t a n d in g ..............................
Other liabilities . . .
. . . .
Total li a b il it i e s ..............................
CAPITAL ACCOUNTS
C a p ita l.....................................................
Surplus . . . .
Undivided profits
Other capital accounts .
Total capital accounts
Total liabilities and capital accounts
58
December 31, 1948
$4,198,843
1,546,005
2,254,680
311,125
77,629
9,404
1,796,758
51,303
2,058
748
6,522
15,358
$6,071,590
$4,633,481
3,179,553
95,569
612,612
694,989
$4,606,712
3,197,195
69,219
605,118
684,227
50,758
1,078,186
5,711,667
50,953
1,091,089
5,697,801
205
11,870
30,980
$5,754,722
35
8,379
26,163
$5,732,378
$ 115,713
164,228
59,474
24,061
$ 363,476
$6,118,198
$ 113,479
152,627
53,376
19,730
$ 339,212
$6,071,590
Changes in Membership 1942-1949
1945 1946 194 7 1948 1949
Membership, beginning of year 317 318 316 317 325 333 340 346
Additions during year:
Organization of National
4
2
0
0
0
0
3
banks ................................... 0
Conversion of State banks to
1
2
National banks* . . . 2
3
4
6
1
3
Admission of State banks . 2
4
5
3
7
5
6
3
Resumption following
s u s p e n s io n ........................ 0
0
0
0
0
0
0
0
Total additions . . . 4
4 10 11 11 10
8
8
Losses during year:
Mergers between National
banks .................................... 0
1
0
0
1
0
0
0
Suspension or insolvency
0
0
0
0
0
0
0
0
2
Withdrawal of State banks* 1
2
1
3
1
1
8
Voluntary liquidation . . 0
1
2
0
1
1
0
0
Conversion of member to
nonmember banks** .
2
4
0
0
0
0
0
0
Total losses . . . . 3
2
3
6
9
3
3
3
Net change during year
+ 1 —2 + 1 + 8 + 8 + 7 + 6 + 5
Membership end of year . . 318 316 317 325 333 340 346 351
National b an k s........................ 263 260 266 268 274 276 279 281
State b a n k s .............................. 55 56 51 57 59 64 67 70
1942
1943
1944
*Includes conversion of State member banks to National banks.
**Includes conversion of National banks to nonmember banks, and absorption
of members by nonmembers.
59
H igginj'M cA rthur Company
Printers - A tlanta
property of
Ib e
C o m m it t e e
on
tn e
B i-
m i s s is s ip p f s
BAWI PLAN
An Experiment in Industrial Subsidization
FEDERAL RESERVE BANK OF A T L A N T A
D e p a r tm e n t of Research and Statistics
MISSISSIPPI’S BAWI PLAN
Balance
A griculture
1N ith
Industry
AN EX PER IM EN T IN
IN D U ST R IA L SUBSIDIZATIO N
by E r n e s t J . H o p k in s
Senior Economist
FEDERAL RESERVE BANK OF ATLANTA
J a n u a r y 1944
FOREWORD
For more than a quarter of a century, the Federal Reserve Bank of
Atlanta, as an integral part of the Federal Reserve System, has served
its District and the nation in accordance w ith a variety of respons
ibilities that, from tim e to time, have been placed upon the System
and the Bank by Congress. These responsibilities, which are discharged
in the public interest, have been typically related to banking and
monetary affairs. In fulfilling these responsibilities, the Bank, as a
matter of course, has always concerned itself with commercial and
industrial developm ents and trends w ithin the District it serves. Ever
since 1919 the Bank has issued a m onthly review of business and agri
cultural conditions in the Sixth Federal Reserve District.
T h e preparation of the M on th ly R eview has always been one of
the primary tasks of the Bank’s Research and Statistics Department.
Because of the enorm ously changed econom ic and financial relation
ships that have emerged as the current war has progressed, the Board
of Directors more recently requested the Departm ent to expand its
undertakings for the purpose of m aking the Bank's knowledge of eco
nom ic affairs in its region more com plete and more detailed. W ith
this w idening of the scope of the Research Departm ent's investigations,
the directors of the Bank, with the cordial endorsem ent of W . S. McLarin, Jr., president of the Bank, authorized the printing and distri
bution to the public of any studies that appeared suitable for a wider
circle of readers than m ight be available w ithin the Bank itself and
that m ight not fit w ithin the space lim itations of the m onthly
publication.
O ne such study was the Bank's recently issued Directory of Postwar
Planning Agencies . T h is Directory, prepared in mim eographed form,
was m ailed to those individuals and agencies who co-operated in as
sem bling the data the Directory contained. A few copies of the Direc
tory were also made available on request to other individuals who had
an interest in postwar planning problems.
D uring the course of the research staff’s effort to collect inform ation
regarding the activities of a planning and prom otional character in the
District, it appeared that, aside from the ever-present concern for the
agricultural future of the Southern territory, interest in industrial ex
pansion of the region was param ount. In this latter connection, repre
sentatives of a number of chambers of commerce and other organiza
tions having a primary interest in prom oting Southern industry fre
[iii]
quently cited Mississippi's state-controlled plan for subsidizing new
enterprises, a plan that was term inated shortly before the outbreak of
the current war.
T h e recurring m ention of the M ississippi plan prom pted the Bank's
Departm ent of Research and Statistics to undertake a review of the
entire experience. T h e report proved to have an interest that war
ranted the issuance of a second special publication, nam ely, the one
here presented.
Publication appeared justified as a matter of historical record alone,
for the M ississippi subsidy experim ent was in m any respects unusual in
its conception as well as in its adm inistration. M oreover, attempts to
attract new industries by various subsidy offers are so characteristic of
the South, and the literature upon the subject is so scant, that it was
believed value would be found in a factual analysis of this elaborate
attempt to use the subsidy m echanism —w hich usually is organized less
thoroughly, administered less vigorously, and conducted less completely
within the public view.
In publishing this study by its research staff, it need hardly be said
that the Bank thereby assumes no point of view toward the M ississippi
plan, toward subsidy plans in general, or toward the various other is
sues and questions involved. T h e position of the Bank in this respect
is precisely that of any other publisher; namely, that the work is of
interest, that it is calculated to stim ulate individual thought, and that
there is a wide latitude for differences of opinion and reaction on the
part of the reader and for personal judgm ent on the part of the writer.
T h is pam phlet is the work of Ernest J. H opkins, who holds the
rank of senior econom ist in the Research and Statistics Departm ent of
the Bank. In the field investigation, Mr. H opkins had the assistance of
Buford Brandis, assistant manager and econom ic analyst of the same
staff. T h e work was performed under the direction of Lloyd B. Raisty,
manager of the Research and Statistics Departm ent.
F rank H. N eely
Chairman of the Board
January 22, 1944
[ iv ]
FEDERAL RESERVE BANK OF ATLANTA
D IR E C T O R S
Frank H. Neely,
Executive Vice President and Secretary, R ich’s, Inc.
Atlanta, Georgia
J. F. Porter, Deputy Chairman, President and General Manager
Tennessee Farm Bureau Federation, Columbia, Tennessee
W. D. Cook, President, First National Bank, Meridian, Mississippi
George J. W hite, President, First National Bank, M ount Dora, Florida
Thom as K. Glenn, Chairman of the Board, Trust Company of Georgia
Atlanta, Georgia
Fitzgerald H all, President, Nashville, Chattanooga and St. Louis Railway
Nashville, Tennessee
Ernest T . George, President, Seaboard Refining Company, Ltd.
New Orleans, Louisiana
J. A. McCrary, Vice President and Treasurer, J. B. McCrary Company, Inc.
Atlanta, Georgia
Rufus C. Harris, President, T h e T ulane University of Louisiana
New Orleans, Louisiana
Chairman,
M E M B E R O F F E D E R A L A D V IS O R Y C O U N C IL
Keehn W. Berry, President, W hitney National Bank, New Orleans, Louisiana
I N D U S T R I A L A D V IS O R Y C O M M IT T E E
John E. Sanford, Chairman, Vice President, Armour and Company, Atlanta, Georgia
A. M. Lockett, President, A. M. Lockett and Co., Ltd., New Orleans, Louisiana
George W inship, President, Fulton Supply Company, Atlanta, Georgia
I. C. Milner, Executive Vice President, Gate City Cotton Mills, Atlanta, Georgia
W. W. French, President, M oore-Handley Hardware Company
Birmingham, Alabama
O F F IC E R S
W. S. McLarin, Jr.,
Malcolm H. Bryan, First
President
Vice President
L. M. Clark, Vice President
H. F. Conniff, Vice President
V. K. Bowman, Assistant Vice President
C. R. Camp, Assistant Vice President
S. P. Schuessler, Assistant Vice President J. R. McCravey, Jr., Assistant Vice President
•J. E. Denmark, General Auditor
W. E. Pike ,iActing General Auditor
Pollard Turm an, Counsel
#On Leave—Military Service
[ V ]
RESEARCH STA FF
Lloyd B. Raisty, Manager
Earle L. Rauber, Senior Economist
Ernest J. Hopkins, Senior Economist
D. E. Moncrief, Assistant Federal Reserve Agent and Statistician
Buford Brandis, Assistant Manager and Economic Analyst
♦Charles T . Taylor, Economic Analyst
B IR M IN G H A M B R A N C H
DIRECTORS
P. L. T . Beavers, Managing Director, Birmingham, Alabama
Edward L. Norton, Chairman, Executive Vice President, M onger
Realty Company, Birmingham, Alabama
Donald Comer, Chairman of the Board, Avondale Mills, Birmingham, Alabama
James G. H all, Executive Vice President, First National Bank, Birmingham, Alabama
Gordon D* Palmer, President, T he First National Bank, Tuscaloosa, Alabama
M. B. Spragins, President, First National Bank, H untsville, Alabama
P. O. Davis, Director of Extension Service, Alabama Polytechnic Institute
Auburn, Alabama
OFFICERS
P. L. T . Beavers, Managing Director
H. J. Urquhart, Cashier
*L. W. Starr, Assistant Cashier
J A C K S O N V IL L E B R A N C H
DIRECTORS
George S. Vardeman, Jr., Managing Director, Jacksonville, Florida
Frank D. Jackson, Chairman, President and General Manager
Jackson Grain Company, Tam pa, Florida
Walter J. Matherly, Dean, College of Business Administration, University of Florida
Gainesville, Florida
J. C. McCrocklin, Executive Vice President, First National Bank
Tarpon Springs, Florida
J. L. Dart, Vice President and Cashier, Florida National Bank, Jacksonville, Florida
Bert C. Teed, Executive First Vice President, First National Bank
Palm Beach, Florida
Charles S. Lee, Citrus Grower, Oviedo, Florida
OFFICERS
George S. Vardeman, Jr., Managing Director
T. A. Lanford, Cashier
_________
T . C. Clark, Assistant Cashier
# On Leave—Military Service
[ vi ]
N A S H V IL L E B R A N C H
DIRECTORS
Joel B. Fort, Jr., Managing Director, Nashville, Tennessee
Clyde B. Austin, President, T h e Austin Company, Inc., Greeneville, Tennessee
W . E. McEwen, Director, County Farm Bureau, W illiamsport, Tennessee
Leslie R. Driver, President, First National Bank, Bristol, Tennessee
B.
L. Sadler, President, First National Bank, Harriman, Tennessee
Edward Potter, Jr., President, Commerce Union Bank, Nashville, Tennessee
OFFICERS
Joel B. Fort, Jr., Managing Director
E. R. Harrison, Cashier
NEW ORLEANS BRANCH
DIRECTORS
E. P. Paris, Managing Director, New Orleans, Louisiana
E. F. Billington, Chairman, Vice President, Soule Steam Feed Works
M eridian, Mississippi
Alexander Fitz-Hugh, President, P. P. W illiam s Company, Vicksburg, Mississippi
John Legier, President, National American Bank of New Orleans
New Orleans, Louisiana
J. F. McRae, President, T h e Merchants National Bank, M obile, Alabama
T . G. Nicholson, President, First National Bank of Jefferson Parish
Gretna, Louisiana
John J. Shaffer, Jr., Sugar Planter, Ellendale, Louisiana
F. C. Vasterling,
Assistant
OFFICERS
E. P. Paris, Managing Director
M. L. Shaw, Cashier
Cashier
W . H. Sewell,
SA V A N N A H AGENCY
*J. H. Bowden, Manager
E. M. Looney, Acting Manager
•O n Leave—M ilitary Service
[vii]
Assistant Cashier
C O N T EN T S
1. C e n t r a l F e a t u r e s o f t h e P l a n ..................................................................
Issues Involved in the B A W I .................................................................................
W orking Features of the B A W I .......................................................................
PAGE
1
2
6
II. H o w t h e B A W I P l a n D e v e l o p e d .........................................................
Experience of Columbia, M ississippi..................................................................
Spread of the Columbia I d e a .................................................................................
Shortcomings of the Columbia P la n ..................................................................
Further Developm ent of the P la n .......................................................................
Problem of Drafting the A c t .................................................................................
Details of the Industrial A c t .................................................................................
II
11
13
14
14
16
19
II I . T h e B A W I P l a n o n t h e S t a t e L e v e i ......................................................
Selection of the C om m issioners...........................................................................
Activities of the C om m issio n .................................................................................
T he Process of C ertification.....................................................................................
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21
22
24
IV . T h e B A W I P l a n o n t h e C o m m u n it y L e v e l ..................................
Local Variations and U n iform ities.......................................................................
T he Question of Interpretation............................................................................
Narrative of the Community Subsidy E xperiences......................................
Cities of Durant, Cleveland, and G renad a...............................................
City of A m o r y .........................................................................................................
Jackson County (P a sc a g o u la ).......................................................................
City of T e r r y ............................................................................................................
City of W in o n a ........................................................................................................
City of U n io n ..........................................................................................................
City of N atch ez.........................................................................................................
City of N e w to n .........................................................................................................
Forrest County (H a ttie sb u r g ).......................................................................
City of I u k a ..............................................................................................................
City of New A lb a n y ...............................................................................................
City of Crystal S p r in g s .......................................................................................
City of Biloxi and Harrison C o u n ty ..............................................................
City of E llis v ille ....................................................................................................
Lee C o u n t y ..............................................................................................................
27
27
34
38
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42
42
44
45
46
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50
V . E n d , A f t e r m a t h , a n d S u m m a r y o f t h e B A W I .............................
Aftermath of the B A W I ...........................................................................................
Summary of the B A W I ...........................................................................................
51
53
55
V I. S o m e C o n c l u d in g C o m m e n t s o n t h e B A W I P l a n ...................
59
[ i x ]
INDUSTRIAL SUBSIDY LOCATIONS IN MISSISSIPPI
UNDER T H E BAW I PROGRAM
IUKA O I
#St* O
I.B.S. MFG. CO.
LEE COUNTY
Jllll i I m —
—
O
NEW ALBANY
O
GRENADA INDUSTRIES, INC.
GRENADA
AMORY
#
< 0
CLEVELAND
W IN O N A BEDSPREAD CO.
• W INO NA
REAL SILK HOSIERY MILL
• DURANT
LEBANON SHIRT CO.
• UNION
O NEWTON
O
TERRY
• CRYSTAL SPRINGS
CRYSTAL SPRINGS SHIRT CORP.
ELLISVILLE HOSIERY MILLS, INC.
0 ELLISVILLE
1• NATCHEZ
ARMSTRONG TIRE & RUBBER CO.
• FORREST COUNTYX
HATTIESBURG HOSIERY CO.
| JACKSON COUNTY (PASCAGOULA)
HARRISON COUNTY - BILOXI n
I
• Project completed
O Project not completed
^
CO.
W. G. AVERY BODY
BC
JACKSON MILLS, INC.
INGALLS SHIPBUILDING CORP.
M ISSISSIPPI’S BAWI PLAN
Central Features of the Plan
From Novem ber 1936 to June 1940, M ississippi was engaged upon a
unique experim ent in the developm ent of new industries by public
subsidy. Under the authority of the state governm ent, cities and coun
ties issued bonds, built or acquired m anufacturing facilities, and leased
them to private enterprises at nom inal cost. T h e im m ediate purpose
of this system was to relieve an emergency of unem ploym ent, serious
in M ississippi at the time. T h e long-range purpose was to “balance
agriculture w ith industry” in a cotton-growing and lumber-producing
area; and this purpose gave its nam e to the movem ent, which was and
is today popularly known as the "BAW I.”
T h e story of this adventure in state-fostered industrial developm ent
has a bearing upon regional problem s of the South at the present time.
T h e B A W I was a prewar plan: one of the. few systematic state pro
grams attem pted during the 1930's in this region. As such, it repre
sented a direct if lim ited endeavor by a single state to remedy the
deficiency of the m anufacturing structure w ithin its area. Thus, the
B A W I dealt w ith a question that is not only of central importance
to m uch of the South, but is revived for consideration today in con
nection w ith the region’s postwar situation. M ississippi's particular
m ethod of attacking this problem , that of attracting new industries
[ 1 ]
by subsidizing them, also represented a long-fam iliar and highly
debatable Southern practice, in a culm inating form. T h e resulting
experience was a m ingled one; the B A W I developed its quota of
controversies and failures as well asats quota of successes. Some of its
attempts came to nothing, while several new plants, including some
of war importance, were founded under the terms of the plan. T his
prewar experience has an empirical value today. It may be looked to
for case material illum inative of problems and questions of the present
time. It is believed that some of the same fundam ental issues w ill again
arise, and again require difficult decisions by the econom ic leader
ship of the South.
Issues Involved in the BAWI
In its theoretical aspect, the BAW I represented a series of assumptions
by the M ississippi leadership on five underlying issues. Four of these
issues are still current; the fifth arose from the B A W I plan itself.
First to be listed is the broad difference in point of view between
those who desire the South to become more highly industrialized and
those who conceive of its more appropriate developm ent in terms
primarily agrarian. Upon this basic issue the BAW I took a clear
position. T he assumption in favor of a m anufacturing developm ent
was the fundamental tenet of the plan, though what m ight consti
tute a balance with the agricultural life of M ississippi was never very
clearly defined.
T he second issue was this question of balance. T h e BAW I had a
system for selecting not only the types of m anufacturing, but also the
particular manufacturing companies, to be fostered w ithin the state.
T h e difficult problem of industrial desirability accordingly arose, in
volving such questions as these: whether to develop certain special
types of production, or simply more m anufacturing of any type;
whether, for example, to stimulate more processing of M ississippi's
raw materials in minerals, lumbering, and agriculture, or to foster
types of industry not clearly related to the basic resources; whether
to encourage the hazard of M ississippi capital in expectation of profits,
or to award both risk and profits to outside capital; whether to prefer
the independent type of enterprise, or the branches and affiliates of
multiestablishm ent concerns.
T h e answer of the B A W I was, again, a clear one, but it was largely
dictated by the emergency that existed at the time. T h e principal
[2]
criteria adopted were, first, that all risk and possibility of failure must
be avoided and, second, that the most im m ediate opportunities for
increasing em ploym ent must be seized. These twin requirements im
plied a preference for the branch or affiliate plants of existing organi
zations, the stronger the better, and subordinated the questions of
the participation of M ississippi capital, the econom ic appropriateness
of enterprises to the M ississippi background, and the founding of new
native industries. In practice, a further restriction was found desirable:
no m anufacturing operation was brought into M ississippi from a
previous location; all B A W I plants proved to be. new expansions of
their parent concerns. T h e concept of balance, under these lim itations,
am ounted to that of supplem enting the state’s farm incom e by an
increased incom e from industrial wages and of providing added local
purchasing power to buy the products of the farm.
T h e third issue was the entire problem of subsidies, and with this,
the controversial nature of the experim ent is seen to m ount. T o induce
the establishm ent of new manufacturing affiliates w ithin Mississippi,
the B A W I offered subsidy inducements. A great national question,
both historic and current, was here involved. Classical and neoclassical
econom ic theory has generally condem ned—and actual practice in the
U nited States has long included—the subsidization of private enter
prise. Subsidy has been assailed, both generally and in specific cases,
for arbitrarily loading the scales of open com petition and interfering
w ith the natural course of a free economy. Yet subsidy has been found
in a wide variety of forms, direct and indirect—am ong them the tariff,
the disposal of public lands and of their agricultural, timber, and
m ineral resources, public financing of canal and railroad develop
ments, tax exem ptions and differentials, franchise and patent m onop
olies, public highway, seaport and airport developm ents for com
mercial use, and Government contracts in aid of new or existing
econom ic functions in peace and in war.
Instances of subsidy have ranged from those that had a discredit
able coloring to those that am ounted to the purchase by Government
from private enterprise of some desired gain or outright necessity
of the public welfare. But generally the practice has been contro
versial; few issues in our political economy have presented a greater
challenge. T o this vast background of debate, M ississippi now con
tributed an isolated and somewhat unusual chapter.
T h e fourth issue was that of com m unity subsidization, a form of
[3]
subsidy not peculiar to the South but of such frequent occurrence in
this region as to be among its standing problems. Com m unity subsi
dization of individual m anufacturing companies is a piecem eal and
particularistic kind of subsidy emphasized in areas that tend to be
disfavored by the more wholesale differentials. In its usual form,
comm unity subsidization involves the raising of local subscription
funds, gifts or virtual gifts of lands and buildings to wanted estab
lishments, state and local tax exem ptions to new industries, and the
free provision of special m unicipal services, all in aid of new local
business developments. T his form of subsidy is usually spoken of as
“buying pay roll” or “bringing in industry.” M any com m unities in the
Southeast ascribe to it their prosperity and, indeed, their survival.
But such subsidies confer arbitrary com petitive advantages upon
the favored companies, and in addition to the more general argu
ments brought against subsidization itself, this local variant has been
condem ned for having an uneconom ic effect upon the location of
industries, for robbing other com m unities of their m eans of support,
for being most alluring to unsound and unreliable business concerns,
for being the work of an “inside” group rather than of the whole
community, for exploiting the local labor supply, and, in the cases
where none of these things may have been true, for having been
fundam entally unnecessary, inasmuch as the sounder establishm ents
certainly needed no subsidy and presumably had already selected
their locations. Nevertheless, the practice has persisted. T h e B A W I
adopted community subsidization as its basic practice but adapted
and elaborated it, inventing new procedures and establishing a plan
of centralized controls.
T h e fifth and last issue was the public financing and state author
ization of community subsidies. T his issue, peculiar to the B A W I, cul
m inated the controversies. Under the M ississippi plan, comm unity
subsidization of particular manufacturing com panies was made a
feature of the policy of the state. T h e raising of local funds was
translated into terms of public bond issues and appropriations by city
and county governments. T h e voters endorsed each local subsidy
proposition and the taxpayers underwrote it. T h e m anufacturing
facilities that were made available to the private com panies accord
ingly were publicly owned. T h e law, in fact, w ent so far as to author
ize the cities and counties to operate their factories directly; on paper,
this drastic power existed, though it was never actually used.
[4]
As the centralizing feature, the state investigated and expressly
authorized each act of city or county subsidization* T h is control was
exercised through a powerful state industrial commission, which, first,
inquired into each new m anufacturing proposal in close detail and,
second, upon being satisfied as to the soundness of each deal, author
ized it by legal franchise—the fam iliar certificate of public convenience
and necessity in a new and unprecedented application—issued to the
local unit of government. Upon receiving the certificate, the local
governm ent did the rest. Such was the B A W I plan; it at once provided
the most centralized, systematic, and financially potent form yet taken
by com m unity subsidization in the South and at the same tim e carried
the state of M ississippi, on paper at least, a considerable distance in
the direction of socialistic theory.
A n ironical contradiction is here apparent. M ississippi would
generally be ranked as a conservative and highly individualistic state,
and at the tim e of the B A W I it was under a “businessm an” adm inis
tration. Yet, in its urge to develop new industrial em ploym ent, it
actually extended the previous lim its of constitutionality. H ow this
situation came about is a fascinating illustration of causation sequence,
as w ell as of the conflict between theory and practice not infrequently
found in econom ic life.
T hese issues, then, define the econom ic significance of the B A W I.
Some of these issues were and are today regional in scope and in
one form or another may be expected to recur. T h e question of
increased industrialization of the South is the fundam ental consider
ation of postwar planning in the region. T h e accom panying problem
of selecting the more appropriate and more desirable types of industry,
and of truly balancing the basic economy, becomes more far-reaching
in its im portance the longer it is studied. Subsidy in the large is
am ong the gravest of national issues, and the challenge that it presents
appears to be increasing rather than decreasing w ith time. A nd cer
tainly the South has not seen the last of com m unity subsidization
of local industry. T his is an old remedy, alm ost habitually resorted
to in the past and likely to be revived and to call for new decisions
of leadership in connection with local problems of postwar unem ploy
ment, conversion of sm all war plants, or developm ental activity on
the local level.
T h e B A W I, as w ill be seen, had its measure of success and also
of frustration. T o pass judgm ent upon a com pleted matter of history
[5]
is beside the point, and it is not here attempted. Rather, the search
is for im plications bearing upon current and future problems. W hether
to emphasize the practical gains or the debatable theory of the Missis
sippi experiment, and whether to accept, reject, or m odify the various
features of the B A W I plan, the reader w ill decide.
Working Features of the BAWI
There are in Mississippi today 12 m anufacturing establishm ents1 that
were founded under the B A W I. T heir names, locations, types of prod
uct, and approxim ate size in number of workers are given in table 1.
Certain features of the present status of these concerns and of their
common history serve to define the B A W I plan in more detail and
to describe its working features. A word of caution is necessary.
Because these 12 plants present a sample of concerns w ithin the broad
area of industrial subsidization, there is danger that inferences bearing
upon this broad area may be drawn. Such inferences w ould be unjus
tified. T h e B A W I enterprises were a carefully selected group; no
other manufacturing concerns that have been aided by subsidies in
the South were subjected to quite the same process of advance selec
tion. In lim iting the study to this particular group of plants, it is
expressly recognized that the special m ethodology may have brought
nontypical results.
T h e first working feature of the B A W I plan to be* observed from
table 1 is its obvious flexibility. Except that all 12 concerns are engaged
in some form of manufacturing, they have little in comm on. In size
they range today from the em ploym ent of approxim ately one hundred
workers to the em ploym ent of several thousand. In types of m anu
facture they produce shirts and ships, bathing suits and ordnance,
plywood and silk stockings, bedspreads and rubber tires. Few of them
are peculiarly adapted to M ississippi alone. W hat here is indicated
is the fact that the B A W I plan itself had no lim its or bounds other
than the selections made by its administrators from am ong the m anu
facturing concerns that were interested in locating in M ississippi.
Literally any kind or size of m anufacturing establishm ent could have
been established in Mississippi under the plan.
1 One silk hosiery plant shut down in June 1943 and the structure it had occu
pied was leased to a new tenant in October 1943. Similarly, the plywood plant
changed tenants in midyear of 1943.
[6]
TA BLE 1
NAMES, LOCATIONS, PRODUCTS AND APPROXIM ATE NUM BER OF
WORKERS OF FACTORIES ESTABLISHED IN MISSISSIPPI
UNDER TH E BAW I
Name of Establishment
Community
Ingalls Shipbuilding Corp.
Grenada Industries, Inc.
Armstrong Tire & Rubber Co.
Jackson County Mills, Inc.
Pascagoula
Grenada
Natchez
Pascagoula
Type of Product
Steel Ships
Silk Hosiery, Shells
Rubber Tires, Shells
W oolen Sweaters,
Bathing Suits
Lebanon-Shirt Co. b
Union
Shirts
I. B. S. M anufacturing Co.
New Albany Shirts
Crystal Springs Shirt Corp.
Crystal Springs Shirts
Winona Bedspread Co.
W inona
Chenille Bedspreads
Real Silk Hosiery Mill
Durant
Silk Hosiery
W. G. Avery Body Co. c
Pascagoula
Plywood, Wooden
Automobile Parts
Ellisville Hosiery Mills, Inc. Ellisville
Silk Hosiery
Hattiesburg Hosiery Co. d
Silk Hosiery
Hattiesburg
No. Workers
a
1,000 and over
500 - 1,000
500 - 1,000
500 - 1,000
250 - 500
250- 500
2 5 0 - 500
250 - 500
250 and less
250 and less
250 and less
250 and less
* Based upon data of June 30, 1943, grouped to avoid disclosure.
t> Formerly W est Shirt Co. Succeeded original tenant, a silk-throwing concern, in
January 1940.
c Succeeded as tenant by Pascagoula Decoy Co. in July 1943.
d Succeeded as tenant by Reliance M anufacturing Co. in October 1913.
T h e second working feature was the process of careful advance
investigation of the applicant prospects, leading to the selections that
were made. W hile the influence of other im portant factors m ust be
recognized, this investigative and selective feature cannot be over
looked in accounting for the importance of these plants, some of them
especially, in M ississippi today. T his importance is considerable.
In the period of four and one-half years from the beginning of 1939
to midyear of 1943, these 12 enterprises paid a total of $43,539,361
in wages. T his total is heavily dom inated by the shipyard, which is
by far the largest em ployer( at present in M ississippi, but even the
smallest of these concerns is of importance to the small com m unity
in which it is located. T h e total numerical em ploym ent in the B A W I
[7]
plants, likewise dom inated by the shipyard, was 12,466 on June 30,
1943. M ississippi even yet has no great volum e of manufacturing, so
that the B A W I plants have a considerable percentage importance:
combined they em ployed 14 per cent of the total manufacturing
workers of the state and paid 24 per cent of the total m anufacturing
wages in the second quarterly period of 1943.
Comparison of the two percentage figures indicates that the aver
age wage in these plants exceeds the state average, but this m ust be
qualified: the shipyard accounts for most of the excess above the
average wage, the rem aining 11 plants, taken together, accounting
for only a fractionally higher percentage of state total wages than
of state total employment. More to the point of the general vitality
of these establishments is the fact, later to be discussed in detail2, that
in all of them the total wage payments have risen year by year more
rapidly—in some cases much more rapidly—than the num ber of work*
ers. T h e fact that to begin with these 12 enterprises were winnow ed
by an investigative process from some 3,800 total propositions and
suggestions, and selected for their operative and financial strength, is
in some part responsible for their present-day im portance in the state.
After having been investigated and selected, these 12 concerns were
aided or subsidized by their respective com m unities. T h is aid was the
third working' feature of the plan. W hile some variations appeared,
the usual history—one that would be hard to duplicate for any other
12 plants in the U nited States—was as follows:
1) Each establishment, after having been investigated and ap
proved by the State Industrial Commission, was officially and formally
certified to be necessary to the public welfare of the com m unity in
which its location was desired.
2) Each certified company was legally authorized by the state to
become a recipient of public subsidy aids extended by the city or
county government of the community. T h is authority was evidenced
by a certificate of public convenience and necessity, issued by the
State Industrial Commission to the local governm ent concerned.
3) Each authorized subsidy deal was further ratified by the voters
of the given city or county by means of a bond election requiring a
two-thirds majority of voters for passage of the necessary bonds.
4) Each bond issue (the amounts ranged from $6,000 to $300,000)
2 See table
2,
page 32, and discussion, page 31.
[8]
was then sold and the proceeds were expended by the city or county
governm ent to buy plots of ground and to erect factory buildings
satisfactory to, and in most cases planned by, the accepted m anu
facturing concerns.3
5) Each publicly owned site and building then was leased for a
term of years to the m anufacturing concern, which thus became a
private tenant in city-owned or county-owned premises.3
6) Each operating tenant, under a leasing contract approved by
the State Industrial Commission, paid a cash rental, in some cases as
low as $1 or $5 a year and in all cases low in relation to the value
of the premises.4
7) Each operating tenant, as the m ain rental consideration, con
tracted to attain and m aintain the em ploym ent of a certain minim um
num ber of workers, or, more usually, a certain m inim um annual pay
roll, subject to various contingencies, qualifications, and penalties.
Local residents were given preferential status for em ploym ent.
8) Each tenant enterprise provided and installed its own ma
chinery and equipm ent. Such capital investm ent was exem pted from
taxation during the first five years of actual operation.
9) In m ost cases the tenant enterprises were additionally aided by
paving, sewer construction, and other facilities and services provided
by the city and county governments at public expense, and# in some
cases stipulated in the contracts.
T h is enum eration gives an outline of the general method. In
essence, the plan am ounted to the public provision of m anufacturing
premises to selected operating concerns, in consideration of local pay
roll. W ithin this m ain pattern, of course, the terms and arrangements
varied.
One final feature of the system, not characterizing every case but
im portant in some, was a by-product of the B A W I and may not have
been foreseen: an attitude of interest or sponsorship continuously
taken by some com m unities and their officials in the affairs of the
m anufacturing enterprises, such as would hardly exist in the case of a
w holly private operation. Such a proprietary feeling remains to some
extent today. It arises from the memory of the voters that they author
3 T he exception is the Pascagoula shipyard, the site for which was prepared by
the county, after being purchased by the company. No buildings were involved.
4 T he highest rent paid is $3,600 a year for a property costing $290,000, the first
five years’ rent being waived.
[9]
ized the establishments in the beginning. It comes from the annual
reminder to the taxpayers that they subsidized the plants and are
still paying for the bonds. It develops from the landlord-and-tenant
relationship between the city aldermen or county supervisors and the
plant management. In some cases co-operative and helpful relation
ships have resulted, in others a certain friction has appeared; but,
in any event, this proprietary interest seems intrinsic in the public
subsidization of a private m anufacturing concern and in the use for
private industrial purposes of premises that are publicly owned.
In addition to its positive features, the B A W I plan had im portant
negative features. First, in eight com m unities proposals were approved
and certified by the State Industrial Commission, yet came to nothing,
because the operation went to some rival com m unity, because manage
m ent changed its mind, or (in two cases) because opposition de
veloped in the community. A lthough not in all cases responsible, the
B A W I system is sometimes blamed for these disappointm ents.
Second, a large number of propositions were rejected. For this
the B A W I is generally praised today, even by its former opponents:
“T he State Industrial Commission ‘rode herd' on the m unicipalities
and protected them from unsound deals.” “T h e good concerns m ight
have come into the state anyway—the bad ones were kept out." These
opinions are frequently heard, and they serve to em phasize the danger
that is inherent in any well-advertised general subsidy plan; namely,
that of attracting the worst elements in industry along w ith the best.
T his danger, in Mississippi, was purposefully guarded against by
investigations and judgments administrative in character, though, even
so, some disappointments occurred.
Questions, indeed, exist: Was the w innow ing process of the State
Industrial Commission too vigorous? W ere some good propositions,
especially those calling for the formation of hom e-owned companies
to process local agricultural and mineral products, perhaps thrown
out along with the propositions of the poorly financed or less repu
table applicant concerns? Some M ississippians think that the com
mission “leaned over backward to be safe.” On the whole, however,
the strenuous centralized control exerted by the State Industrial
Commission over the many subsidy proposals that were m ade is
regarded as one of the most valuable features of the plan, as it was
also one of the most unusual.
[ 1 0 ]
How the BAWI Plan Developed
Experience of Columbia, Mississippi
T h e leading figure in the developm ent of the B A W I was H ugh L.
W hite, capitalist and retired lumberman, who was Governor of Missis
sippi from 1936 to 1940. T h e B A W I plan was his conception and
developed from his experience. Its inception was in Mr. W hite’s home
town of Colum bia, M ississippi, in 1931-32.
T h e pay rolls of the lumber interests owned by Mr. W hite had
been for years the principal econom ic basis of Colum bia, a town with
a population of 4,833 in 1930. T h e enterprises consisted of three saw
m ills, a veneer plant, and a box factory. Colum bia was also the trade
center of an agricultural area, but much of its market for farm prod
ucts was provided by the wage incom e of the town. Early in the de*
pression, because of a com bination of reduced lum ber demand and
depletion of the timber supply of the locality, Mr. W hite retired from
the lum ber industry and the Colum bia operations were discontinued.
T h e consequences provided an em phatic lesson in the importance
of industrial pay roll to a small comm unity. T h e population of Co
lum bia showed signs of serious decline. Houses and stores became
vacant, hom es were lost, fam ilies were divided, and the surrounding
farms suffered along with the town. Feeling some responsibility for
this developing distress, Mr. W hite took steps to remedy the situation.
[ 1 1 ]
On a contribution of $3,000, a new Chamber of Commerce was
organized. It proceeded to shop around for a foot-loose industry that
m ight be induced to locate in Colum bia and replace the lost pay rolls.
Opportunity for attracting new plants existed at the time, the pressure
of the depression and of labor troubles having developed a locational
restlessness among certain industries in other sections. T hese industries
were, typically, manufacturing enterprises of the lightly mechanized
type, not especially oriented to adjacent raw materials or markets,
but primarily in search of low labor-cost ratios. So marked was the
phenom enon of industry on wheels in that period that a form of
brokerage had developed, designed to bring together client companies
on the one hand and subsidy-offering com m unities on the other.
Through such a location broker, of Chicago, the Colum bia Chamber
of Commerce was put in touch w ith a garm ent-m anufacturing con
cern that wanted to set up a plant in the South.
A subsidy of $80,000 was required to cover the costs of land and
buildings and probably, also, the broker's comm ission. T h is sum was
raised in Colum bia by a Chamber of Commerce campaign. Part of
the contribution was in cash, but much of it was in the form of 6 per
cent notes made out to the Chamber of Commerce and collectible by
instalments. These promissory notes presented a financing problem,
for cash was needed. T he problem was solved w hen a N ew Orleans
bank advanced the full am ount of the unpaid contributions on the
security of the portfolio of notes and the personal signatures of. 40
Colum bia businessmen, including Mr. W hite, on a master note. Thus,
the building for the garment plant was financed. Construction pro
ceeded and the company moved in.
Economically the garment factory was unconnected with its Co
lum bia environm ent and socially it was at first a stranger to the town*
T o the question of why the same sum was not used to capitalize a
native industry processing some M ississippi product, Mr. W hite replied
that none of the requirements were present for success in such a
venture. Outside of lumbering, Colum bia had had no previous indus
trial experience. It had no available qualified m anagem ent, no trained
labor, and no established marketing contacts. Also, the time was ex
tremely unfavorable for new hazards. T o bring in an already operating
company, it was concluded, offered the only feasible solution to the
town's unem ploym ent problem.
T h e garment plant came in and it succeeded. It soon was em ploy
[12]
ing about seven hundred workers. Concededly, the wages it paid were
low, as the labor market was at bottom price and this was before the
passage of Federal m inim um wage legislation and after the $12-a-week
N R A standard had been abandoned. A Jackson newspaper, attem pt
ing to muckrake Mr. W hite during his campaign for the governorship
in 1935, assertedly found instances of girls' receiving as little as $9.11
a week in the Colum bia plant. A N ew York newspaperman reported
wages of $7.20 a week in the same plant.
Nonetheless, the new factory produced a good-sized pay roll, and
its sum total revived the town. Instances occurred of homes saved and
of fam ilies held together. Local business revived. Moreover, the exodus
of population was curbed. T he reaction on the surrounding farming
area also was marked. A n observation frequently heard today in M is
sissippi may be dated from that time; namely, that the wom en and
girls of farm fam ilies represent a labor surplus and that farm incomes
are especially benefited by their em ploym ent in industry—that, thus,
a factory may subsidize a farm. (It is less frequently recognized that
the presence of a cheap and im m obile labor surplus on the farms also
may subsidize an industrial operation.) Since both the farm and wage
incom e were spent principally in the town, the $80,000 subsidy ex
tended to this plant by the local businessmen had the character of a
self-supporting and self-retiring investment on their part.
Spread of the Columbia Idea
T h e Colum bia subsidization was not the first instance of the kind in
M ississippi, but it was the most widely advertised. T h e plan created
intense interest, and Mr. W hite found him self invited to tour the
state and explain it to Chamber of Commerce groups. Columbia
businessmen, by m uch the same method, later brought in a plant to
process pine stumpage, and also a cannery. So rapidly did the device
gain ground that in 1936 Mr. W hite, who had become Governor, was
able to inform a state editorial convention that “over 20 new indus
tries have been established, representing investments of $5,000,000,
giving em ploym ent to some 5,000 individuals, w ith an annual pay roll
exceeding $2,500,000, as the result of the Colum bia m ethod.” He also
recited that the sales of merchants in Colum bia had gained in dollar
volum e by 26 per cent since 1932, whereas in comparable com m unities
that had no m anufacturing industry, the sales had declined by an
[13]
average 32 per cent. In 1940, it may be added, Colum bia’s population
was 6,064, or 26 per cent larger than it had been ten years before.
Shortcomings o£ the Columbia Plan
As the leading sponsor of this developm ent, Mr. W hite observed its
workings over a four-year period and by 1935 had come to certain
conclusions. T h e basic idea, he believed, was sound. Especially, he
considered that the plan was sound as applying to small comm unities,
lacking in pay roll, and located in relatively poor agricultural or
lumber areas. There were many such com m unities in M ississippi, and
they were generally in distress.
Yet Mr. W hite saw that the Colum bia plan had certain flaws: One,
such comm unities were usually very poor; it was an effort for the more
active citizens to contribute or pledge the needed subscription funds.
Tw o, in the course of the voluntary fund drives, there were always
some individuals who were w illing to contribute freely, others who
would not contribute at all; this situation created bad feeling, since
all stood to benefit, in theory at least, from the gain of the comm unity
in respect to pay roll. Three, the Chambers of Commerce of the
smaller towns lacked the means to investigate thoroughly or to deter
m ine capably whether given propositions were sound; local desire
for em ploym ent had overcome good judgm ent at times. Some unfor
tunate episodes—such as the prompt departure from one town of an
overall factory whose advent had been enthusiastically celebrated
by a public “Overall Day” not long before—served as a warning that
a means of overhead investigation and control was greatly needed.
And four, bankers had not in all cases come to the aid of the fund
raising sponsors and liquidated the pledge notes, as they had done
in the case of Columbia.
Further Development of the Plan
It was purely as a practical solution to difficulties that had actually
arisen in the various cases of com m unity subsidization that Mr. W hite
developed what were to become the features of the final B A W I plan.
H e wanted results. In translating the Colum bia system of privately
raised subscription funds to one involving the use of local govern
m ent funds, he was crossing a gap that was wide in theory but ap
peared narrow in practice.
[H ]
T h e m unicipal and county governments, Mr. W hite reasoned, were
close to their people, in the smaller com m unities especially. These
governments offered a ready m edium for doing what the people
wanted; counties and cities already had participated in the subsidy
movement to the extent of supplying various services in aid of the
new industries. It was typical of the area that, in the smaller towns,
the same set of leaders would work now through the Chamber of
Commerce, now through the local government, and now individually,
in various patterns of private-public co-operation. Indeed the inclusion
of these governments in the comm unity subsidy efforts appeared to
Mr. W hite more democratic than their omission, inasmuch as what
might otherwise appear as the act of a lim ited group of town leaders
could, in this way, have the sanction of the voters in general.
T o raise the subsidy funds from public rather than private sources
would, in itself, in Mr. W hite’s view, have financial advantages. Pri
marily, he believed that the entire scope and energy of the movement
would be greatly increased, inasmuch as the borrowing power of the
units of governm ent could raise much larger sums than the business
men w ould be able or w illing to pledge. T h e burden of what might
be termed the subscriptions would be spread evenly and proportion
ately over all the taxpayers; thus, the unequal incidence of the private
subscription system w ould be reduced. Also, the problem of deferred
payments w ould disappear, for public bonds would be imm ediately
convertible into cash. Finally, even though the electorate itself was
lim ited, the active voters in the smaller comm unities were usually
a high percentage of the eligible voters. T he bond election, therefore,
w hile not a perfect means, impressed Mr. W hite as a good available
means of pollin g the com m unity as to whether the particular new
enterprise was wanted or not.
U nderlying the resort to public deficit financing was also the
existing dearth or frozen condition of private capital funds. T he
money market at the tim e was reluctant to accept the securities of
private industrial concerns. But the market was responding readily to
full-faith-and-credit bonds of towns and counties that were not already
too heavily bonded. Therefore, under the stimulus of public bond
issues, it appeared that capital would flow, m uch larger sums could
be raised, public sanction would be more general, and the subsidies
would be available in cash from the start.
Basic to the entire scheme was the control to be exercised by the
[15]
state government. A central state board, em powered to investigate
the various subsidy propositions and to control the local deals, would
operate, in Mr. W hite's belief, as an im portant safety factor. A ble and
neutral businessmen could thus be placed in charge of the entire
growth of new industry in M ississippi. A state advertising campaign
also would assist in bringing queries to the localities that wanted new
industries and would help supply the necessary m om entum .
Thus, the two-level B A W I plan was developed. It provided for
state sponsorship and control, but for local financing and operation.
It was to be at once a means of attracting industries, of controlling the
subsidizations, of polling the voters, and of getting capital to flow.
Mr. W hite in 1935 campaigned for governor and was elected, largely
on the basis of this plan. T aking office at the beginning of 1936, he
proceeded to try to put the B A W I, as it was already known, into effect.
Problem of Drafting the Act
T he first session of the legislature under the new adm inistration ap
propriated $100,000 for state advertising and established an Advertis
ing Commission. But the legislators prom ptly encountered the fact
that serious problems of constitutionality were involved in the Gov
ernor's B A W I plan, and they were unable to draft a bill. Toward
the end of the session, the Governor called several prom inent attorneys
into conference. H e placed before them the practical objectives that
he wanted to reach and entrusted to them the legal problem of draft
ing the necessary legislation. T hey accepted the challenge. T h e final
stage in the developm ent of the B A W I plan had been reached.
T h e group of attorneys included H. H. Creekmore, Garner W.
Green, Forrest B. Jackson, Louis M. Jiggitts, W. H . W atkins, Sr., and
Major W . Calvin W ells—all leading members of the Jackson, Missis
sippi, bar. Just as Governor W hite had arrived at his plan by purely
pragmatic considerations, so these attorneys now sought a workable
means of bringing it about w ithin the fundam ental laws of M ississippi.
T he legal issue was a difficult one; it appeared at first insuperable.
T h e M ississippi Constitution forbade the use of the public m oney or
credit, derived ultim ately from taxes, in aid of private individuals,
firms, or corporations. T his inhibition was altogether specific:
T he credit of the state shall not be pledged or loaned in aid of
any person, association, or corporation, and the state shall not
[16]
become a stockholder in any corporation or association. . . .
N o county, city, town, or other m unicipal corporation shall
hereafter become a subscriber to the capital stock of any rail
road or other corporation or association, or make appropria
tion, or loan its credit in aid of such corporation or association/'
These forthright provisions were based upon the due-process clause
and had been upheld by the Mississippi Supreme Court in a number
of decisions. In one case a county had been prohibited from subscrib
ing to the capital stock or lending credit in aid of a private or semi
public hospital.0 In another case the city of Jackson had been for
bidden to turn over to a streetcar company a forfeit collected from its
predecessor.7 As recently as 1932, in another court decision, the town
of Booneville had been prohibited from using the proceeds of a
$15,000 bond issue to build a garment plant for lease to a private
operating concern.® T h e last procedure was precisely what it was now
desired to do on a large scale under the proposed B A W I plan.
T h e attorneys readily perceived that what had seemed a simple,
workable way of bringing new industry into M ississippi involved the
very fundam entals of constitutional law. Accordingly they set out to
find a basic legal principle higher and more com pelling than “due
process” and capable of overcom ing it in court.
T heir attention became centered upon the "general welfare” clause
that is so fam iliar to Am erican constitutional law. It is basic to govern
m ent to prom ote the general welfare of the people. Could this princi
ple be so interpreted as to apply to the problem that was now in hand?
T h e principle of the general welfare, indefinable per se, had been
em bodied in many legal cases. T hese cases were now exhaustively
explored. O bviously the power of a governm ental unit to lease out a
publicly ow ned facility—the plan called for such power—must be
based upon the legal power to operate as well as to own that facility.
Since general m anufacturing was contemplated, Governor W hite's
plant-leasing plan involved outright public ownership and operation
of m anufacturing plants as a legal right, at least. But how far did the
legal right of public ownership extend? Could it extend to city or
* Constitution
sec. 258 and see. 183.
156 Miss. 240; 125 So. 816.
1 Adams v. Jackson, etc., 78 Miss. 887; 30 So. 58*
Jackson, etc. v. Adams, 79 Miss. 408; 30 So. 694.
* Carothers v. Town of Booneville, 169 Miss. 511, 153 So. 670.
of Mississippi,
* Brister v. Leflore County,
[ 1 7 ]
county ownership and operation of hosiery, tom ato-canning, and ply
wood plants?
In legislation adopted by the state of N orth Dakota, during the
period of the ascendancy of the Non-Partisan League, the Mississippi
attorneys finally found their desired legal precedent. U nder Governor
Lynn Frazier, North Dakota had developed a full-fledged system of
state banks, state crop insurance, state hom e building, public grain
elevators, grain warehouses, and even flour m ills to process grain.
T he legislation was based on the general welfare clause and on specific
provisions of the North Dakota Constitution, which defined the wel
fare of that state in terms of its wheat economy. But, in addition, there
was language indicating that em ploym ent itself m ight be regarded
as a general welfare necessity. Thus, the clue was supplied. If indus
trial employment, irrespective of the type of industry, could be de
clared by the Mississippi Legislature to be a requirem ent of the public
welfare of Mississippi, the legal bars against the Governor's B A W I
plan m ight be down.
T h e North Dakota system had been attacked in a taxpayer's suit
and the U nited States Supreme Court had decided, in effect, that it
was a state’s right to define the terms of its own welfare. T h e decision
had concluded:
If the state sees fit to enter upon such enterprises as are here
involved, with the sanction of its Constitution, its Legislature
and its people, we are not prepared to say that it is w ithin
the authority of this Court, in enforcing the processes of the
Fourteenth Am endm ent, to set aside any such action by ju
dicial decision.0
On the basis of this decision, the M ississippi Industrial Act was
finally drawn.10 T h e bill was presented to the Governor and legislative
leaders, was passed at a special session sum m oned for that purpose,
and became law by Governor W hite’s signature on September 19, 1936.
Embodying powers of public manufacturing far broader than Gov
ernor W hite—or anyone else in M ississippi—had the least intention of
using, the act also contained provisions for lim iting those powers, on
# Green v. Frazier, 253 U.W. 233,40 Supreme Court 499.
10 Mississippi Laws, 1936, First Extraordinary Session, Ch. 1;
1930 Anno . Ch. 124A, 1938 Supplement.
[ 1 8 ]
Mississippi Code
the adm inistrative level, to the m uch narrower bonding, plant build
ing, leasing, and central supervision features of the B A W I. T he law
could be one thing; the practice, a lesser thing.
Details of the Industrial Act
T he provisions of the Industrial Act may be summarized briefly,
with quotations in part.11
Its heading began: “An Act recognizing M ississippi’s necessity to
protect its people by balancing agriculture w ith industry . . . . ” A
lengthy pream ble set forth the existence of an “acute economic
emergency0 involving both unem ploym ent and lack of agricultural
markets, of which “the sole remedy . . . is to develop industry so
that her citizens may be afforded a livelihood . . . .”
T h e act proper began with a declaration of policy, in part as
follows: “. . . the present and prospective health, safety, morals, pursuit
of happiness, right to gainful em ploym ent and general welfare of its
citizens demand, as a public purpose, the developm ent within Missis
sippi of industrial and m anufacturing enterprises
T h e later sections set up a State Industrial Commission of three
members (one full-tim e and two part-time) and charged it with the
execution of this policy. T h e commission was specifically empowered
to determ ine:
* . . w hether the public convenience and necessity require that
any m unicipality shall have the right to acquire lands and
thereon to erect industrial enterprises and to operate them and
to dispose of such lands and industrial enterprises.
U pon application by a local government, the commission was em
powered to issue a “certificate of public convenience and necessity, de
term ining that the public convenience and necessity and that the gen
eral welfare require that such m unicipality enter into such enterprise.”
Before granting such certificate, the State Industrial Commission
was required to satisfy itself as to certain points. At least 20 per cent
of the registered voters of a local governm ent had to petition directly
for the certificate. Surplus labor supply in the area had to be sufficient
to provide one and one-half workers for each prospective job. Bonds
issued for the purposes of the act m ight not exceed 10 per cent of the
11 Mississippi
Laws,
1936, First Extraordinary Session, Ch. I.
[19]
total assessed valuation of the property in the issuing unit. Finally,
the commission had to find that:
. . . said enterprise is well conceived, has a reasonable prospect
of success, w ill relieve unem ploym ent, or w ill add m aterially to
the financial and business interest of the m unicipality, w ill not
become a burden upon the taxpayers of the m unicipality, and
that the m unicipal officers proposing to operate said enterprise
are suitable, competent and fit persons to direct and control
such operations.
T h is last provision was the heart of the act, in practice. It passed
the question of direct municipal operation of factories squarely up
to the commission, which, in order to keep public operation of factories
out of the picture, had only to declare that the m unicipal authorities
were not “suitable, competent and fit." Since a later clause in the act
provided that a m unicipality m ight lease to private operators any
m anufacturing facility that it did not operate, Governor W hite's
original objective was thus attained in roundabout fashion. In practice,
the m unicipal authorities were invariably found by the commission
not to be “suitable, competent and fit" to run a factory. Thereby, the
leasing provision was brought into play.
A dditional provisions related to the bond issues, the terms being
on the whole the usual ones, except that the burden of the securities
was exem pted from the m unicipal taxation lim its and also from state
and local taxation. It was provided that surplus sinking funds of
counties or m unicipalities instead of funds from bond issues m ight
be used in acquiring factory premises.
T a x exem ption for five years was granted upon all privately owned
equipm ent used to operate a subsidized plant but not upon the prod
ucts manufactured. Such exem ption reiterated a law that was already
on the statute books and remains in effect in M ississippi today.12
T his act, em bodying the BA W I plan, successfully passed both
state and Federal appellate tests. It was term inated in 1940 by legis
lative repeal.
MMississippi
Code, 1930, Anno
. sec. 3109.
[ 20]
The BAWI Plan on the State Level
Selection of the Commissioners
Follow ing the enactm ent of the M ississippi Industrial Act, the first
step in practice was that of setting up the State Industrial Commission.
T he act provided for the appointm ent by the Governor of three com
missioners, one full-tim e and salaried, the others part-time and com
pensated on a per diem and expense basis. T h eir terms were to extend
until April 1, 1940, “or until their successors are appointed,” an
arrangement that recognized the experim ental nature of the act and
would give the next governor (in M ississippi a governor may not
succeed him self) a three-m onth opportunity to decide the fate of
the experim ent.
Governor W hite w ent outside the political field in selecting the
commissioners. As the full-tim e member and chairman, he selected
Harry O. H offm an of Hattiesburg, assistant to the vice president of
the M ississippi Central, a short-line railroad. Mr. Hoffman was in
charge of the public relations and com m unity work of the railroad.
He had com e to M ississippi in railroad work 26 years before. Before
accepting the B A W I appointm ent, Mr. Hoffman stipulated that the
commission should be w holly free of political interference or influence.
T he Governor in turn stipulated that the commission should “do
nothing for w hich we w ill afterward be sorry/’
[21]
As part-time commissioners, Frank A. England of G reenville and
S. A. Klein of M eridian were appointed. Mr. England had been with
the Oliver Plow Company at South Bend, Indiana, and had been for
several years its Southern sales manager, for a territory extending from
El Paso to Norfolk. Selecting Greenville as his hom e, he had acquired
the Ford agency and other interests and had been active as a bank
director and as a leader in comm unity affairs.
Mr. Klein was a retired merchant, having ow ned a department
store in M eridian for many years. Later he had com bined philanthropy
and civic activity with his financial interests as a broker and invest
m ent banker. In Mississippi today, nothing but praise of this com
mission and its personnel may be heard from opponents and adherents
of the B A W I plan alike.
T h e commissioners required an attorney and selected Forrest B.
Jackson, who had assisted in drafting the M ississippi Industrial Act.
At the outset Mr. Jackson established the technical procedures and
forms, and at a later period he successfully defended the commission
in the appeal proceedings before both the M ississippi and the U nited
States Supreme Courts.
T here were never more than the two secretarial em ployees, Frances
Ham m ond, who served throughout the life of the comm ission, and
W allace Ijams, who served during part of that period. T h e total cost
of the commission, to the state, for its entire duration, was $77,250.
It should be m entioned at this point that the original commis
sioners served only about three years, resigning in January 1940, when
Governor Paul B. Johnson succeeded Governor W hite. T hey were
succeeded by three new commissioners, who liquidated the operation.
Three of the 21 certificates of public convenience and necessity were
granted by the successor commission.
Activities of the Commission
Sped by the general publicity given to the plan by advertisements
of the M ississippi Advertising Commission in trade journals and other
national media and by a series of advertising circulars prepared by
the same commission, the flow of proposals and inquiries began.
T h e routine work of the State Industrial Com m ission and its staff
consisted in screening these proposals, sifting the good from the bad.
H ow thoroughly this task was performed is attested by the small
number of deals finally approved.
[22]
In all, about 3,800 inquiries and propositions were received (a con
siderably sm aller num ber than had been anticipated). O f these, more
than nine tenths were quickly elim inated. In some cases the inquirer
failed to respond to the first routine reply, which consisted of a trans
mittal letter with a circular. In other cases the propositions were
clearly im practicable and, occasionally, fantastic.
T h e propositions that were adjudged im practicable included some
suggestions for the establishm ent of new, indigenous Mississippi in
dustries, involving the form ation of new com panies in the venture
category. A lthough the M ississippi Industrial Act contained wording
in contem plation of this type of developm ent and included a list
of M ississippi agricultural, lumber, and mineral raw materials that
might be processed, the continuing attitude of the commission was
that neither the tim e nor the managerial and labor-skill situation in
the state warranted a public subsidization of new hazards. T he em
phasis of the com m ission throughout its operations was upon the
extension of established enterprise, not the birth of new. Governor
W hite in 1938 called a “Chemurgic Conference,” the express purpose
of which was to find new uses for M ississippi's agricultural products
and natural resources, but nothing concrete came from the conference.
T h e initial screening or sifting process brought the 3,800 proposals
down to 300 that appeared worth while. T h e investigative work
then began.
Unfavorable credit reports were grounds for elim inating many
of the 300. Others were elim inated because of unfavorable reports
received through various channels of direct inquiry, which were excep
tionally com plete. T h e commissioners had business and financial con
nections in N ew York and other cities. M ississippi’s senators and repre
sentatives had others. T h e business and financial leadership of the
state was interested in the commission's work, and placed various
sources of inform ation at its disposal. Industrial departments of power
companies and railroads contributed. T h e records show a constant
participation in many aspects of the B A W I m ovem ent by R. S. MacFarlane and B. M. Davis of the M ississippi Power and Light Company
and by Dave Cottrell of the M ississippi Power Company. Central
sources of inform ation of these companies were also used. T he com
missioners also investigated in person. T h e superior ability of a
strongly m anned state board to bring investigative power to bear on
distant enterprises was thoroughly established by this commission.
[ 23]
T h e 300 propositions were in turn brought down to about 100.
T h e work then involved a concentration upon those 100, w ith the
result that 60 m anufacturing concerns became sufficiently interested
to send their representatives into the state for interviews and inspec
tions. These visitors were interviewed, taken around M ississippi, intro
duced to local officials, and shown industrial sites. In the process they
themselves were thoroughly looked over. By deliberate decision, the
commissioners sedulously avoided an attitude of salesmanship in deal
ing with both the interested visitors and the m unicipalities. Their
attitude was that the m omentum would be supplied by the Advertis
ing Commission, the localities, and the industries themselves, and
that the commission's proper position was that of an independent
and impartial arbiter.
O ut of the final 60 firms that showed definite interest in M ississippi
came the issuance of 21 certificates of public convenience and neces
sity—18 issued by the original commission, three by the successor
group. Tw enty of these certificates covered new establishm ents and one
provided for a plant enlargement. For various reasons that w ill be
exam ined, eight propositions fell through in final stages; thus only
12 plants were eventually established under the B A W I plan.13
For the original 3,800 proposals, there was an over-all mortality
rate of 99.7 per cent. For the 300 propositions that seemed fairly
promising, the mortality rate was 90.1 per cent. Such m ortality rates
arouse reflection, on the one hand, as to whether the com m ission may
not have been too conservative—as is occasionally claim ed today—and,
on the other hand, as to the prevailing quality of subsidy-seeking
industries and the bad effects upon the econom y of the state if the
acceptance test applied by the State Industrial Comm ission had been
less severe.
The Process of Certification
T h e central power of the commission was that of issuing the certificate
of public convenience and necessity. In practice, certain prelim inaries
preceded the issuance of certificates. W hile the actual bargaining was
done primarily by the county and local authorities, the prestige of
the commission was such that its members were invariably called in
to hear the local discussions and to advise. T h e final granting of the
13 These plants are listed by name and location in table 1, page 7.
[ 24]
certificate, accordingly, required no new presentation of facts and
became more or less a formality. Conversely, the mere verbal and
informal indication to the local leaders that the commission would
disapprove of a given proposition if formally applied for was invari
ably enough to bring about the abandonm ent of that proposition
midway. T h e official record shows no instance of the denial of a
certificate, once it was actually requested.
T he first formal step in the process of certification was the signing
of petitions in the localities. T h e signatures of 20 per cent of the
registered voters were required, but in most cases this percentage was
far exceeded. (For exam ple, in Pascagoula, on the shipyard deal, 80
per cent of the registered voters signed petitions and the bond election
was virtually sure of success.) T h e standard petition read:
W e, the undersigned qualified electors of ______ __ _ hereby
petition your Board to make request of the M ississippi Indus
trial Com m ission for the issuance by said Commission of a
certificate of public convenience and necessity after hearings
and investigation by said Commission, perm itting this m unici
pality to avail itself of the provisions of Chapter 1, of the Laws
of M ississippi, First Extraordinary Session, 1936, being Senate
Bill N um ber 1, of said Legislative Session approved by the
Governor on Septem ber 19, 1936.
N ext came the filing w ith the comm ission of these petitions, to
gether w ith the statem ent of the valuation of the city assessment roll
by the county or m unicipal tax collector and of the existing bonded
debt by the clerk. T h e clerk also replied to the formal questionnaire
of the com m ission, giving num erous items of prescribed information:
total num ber of electors, number signing petition, estimated employ
ment of the proposed industry, estim ated average weekly and annual
wage per worker, length of proposed lease, estim ated number of sur
plus workers in area, estim ated number of operative jobs in the pro
posed industry, total assessed valuation, am ount of proposed bond
issue, terms of the bonds, estim ated tax rate for interest and retire
ment, cost of proposed site, and size of proposed building and its
estimated cost.
T h e n ext step, in the event a project was accepted, was the formal
granting of the certificate of public convenience and necessity. T he
record shows that all certificates granted were unanim ously approved
by the commissioners.
[25]
T hen came official study and approval of the proposed leasing
contract between the local governmental unit and the operating
concern. After this came the official authorization of the bond election,
stipulating the amounts and the interest and retirem ent terms of the
bonds* T h e final step was the receipt by the com m ission of the record
of the vote that had been cast.
A t this point, the commission's role ended, except for a few cases
in which the contract terms were later revised and the revisions re
quired commission approval. Buying the land, planning and contract
ing for the building, and similar details were left to the m unicipality
or county concerned.
[ 2 6 ]
The BAWI Plan on the Community
Level
Local Variations and Uniformities
As is often true of a two-level system, the B A W I plan had uniformity
at the top but provided am ple leeway for variation at the bottom.
T his fact of w ide variation is im portant in considering how the system
worked out in the various com m unities to which certificates of public
convenience and necessity were granted by the state.
N o two local experiences proved to be precise duplicates. T he
industrial types and m anagem ents of industries varied; so did the
com m unities, their leadership, and their respective bargaining posi
tions. T h e eagerness of com m unities to obtain new industries and the
results of that eagerness likewise varied. Some com m unities found
themselves engaged in bidding against rival comm unities. Some pros
pective lessees made greater demands; some towns made greater con
cessions. Therefore, variety existed in the contract terms, both as to
form and content. T w o com m unities lost prospective plants because
of internal com m unity opposition. O f the industries that became
established, some found themselves both econom ically and psycholog
ically at hom e; others rem ained to some extent strangers in their new
locations. As tim e passed, yet greater variations developed because of
[ 27]
the effects of the rising business cycle, the defense effort, and the war.
Despite these variations, certain experiences were at first common
to all the enterprises that were established. T h e initial contact between
the local leaders and the representatives of industry led in every case
to more or less protracted bargaining; and the com m ission participated
in the discussions, generally by m unicipal invitation. T h en the pre
liminary contract was framed, its approval by the State Industrial
Commission being generally assured in advance.
T h e next official steps taken were those previously described for
obtaining the certificates of public convenience and necessity. These
formalities having been completed, and the state certificate received,
the bond campaign began. In some cases, passage of the bonds was
a foregone conclusion, enough voters having already signed the initial
petitions to guarantee such result. In others, parades were held,
speeches made, and public opinion aroused. Except in one or two
communities, the majorities voting in favor of the bonds were ex
tremely large.
Approval of the bond issues was follow ed by other equally neces
sary steps. T h e bonds were sold. T h e site was bought. T h e local board
of public works and the tenant m anagem ent agreed on the construc
tion plans. T h e public contracts were let, and the facilities constructed.
W hile these steps were being taken, job applicants were listed and
interviewed. T h e selected applicants were trained, the school author
ities and the plant managem ent generally co-operating in the training
process. T h e machinery—provided by the tenant concerns—arrived and
was installed. Comm unity interest in the new project was thus kept
at a high pitch and, when opening day arrived, a celebration usually
took place.
Once production began in the subsidized plants, expansion of
em ploym ent normally followed. In virtually every instance, the con
tract quotas of numerical em ploym ent or total pay roll were attained
well in advance of the stipulated dates. T h is success is generally
ascribed to the learning capacity of the resident labor supply, as well
as to experienced management and the process of industry selection.
T h e pathway of newly established organizations never is com
pletely smooth, but as far as the B A W I enterprises are concerned,
the production story with few exceptions was one of unexpectedly
quick attainm ent of normal operative capacity.
T h e factory structures that were bu ilt by the m unicipalities were
[ 28]
and are today creditable in appearance and efficiency. As a rule these
buildings are of reinforced concrete construction, well lighted and
ventilated, plain and w ithout ornam ental features. Few of them, of
course, are large. T hey are located, as a rule, in sem iopen or wooded
country on the outskirts of the towns. Ground space being ample, they
are generally of the one-story type w ith the entire operation on a
single floor. Some have lawns, and com m unity pride is shown in the
neat appearance of the buildings and grounds. Because the land was
cheap and the m unicipal governments had the equipm ent for grading
and concretc work, the dollars expended went far. As previously stated,
the buildings were laid out on plans satisfactory to the tenant con
cerns, if not actually drawn by them; in some instances extensions
were later added as the operations expanded.
Since the buildings were part of the subsidy, it follows that the
tenant concerns occupied them at very sm all rentals. T h e contracts
varied somewhat in this respect, but in most cases the basic payment
was a token rental of either $1 or $5 a year, coupled with what may be
termed a penalty paym ent if the stipulated m inim um total pay roll
or total number of workers was not reached, and a credit if exceeded
in any given year. For exam ple, this additional rental may be stated
at $1,200 a year, reducible by 50 per cent if the pay roll reaches
$30,000 annually and by 100 per cent if it reaches $60,000; while the
excess above $60,000 is applicable to the succeeding year or to any
year in a five-year period. In some cases, the building would be the
property of the tenant after a given period of pay roll production,
free or at a depreciated price. In one case where the rental charge was
a flat $3,600 annually for a 50-year period, the first five years’ pay
ments were forgiven. In short, the revenue directly obtained by the
local governm ent through the lease of the facilities was in most cases
virtually nil; the com pensation primarily sought was the pay roll,
regarded as incom e to the com m unity in general.
T h e redem ption of bonds, the interest, and the costs of the paving,
grading, and other m unicipal services, thus was thrown back upon the
general taxpayer. It is for this reason that the bonds were not, in the
strict sense, revenue bonds resting upon the returns of the enterprises
to the public treasuries, but full-faith-and-credit bonds based upon
the general assessment rolls. In theory, the taxpayers were assumed
to share in the pay roll returns, whether directly or indirectly. Thus
[29]
they were assumed to be compensated for the bond charges, which ordi
narily represent two to five m ills in the local tax rates.
T h e theory presupposes that the voters who voted the bonds, the
taxpayers who must retire them over 20-year or 25-year periods, and
the beneficiaries of the factory pay roll are identical. T h is, of course,
is not always the case; presumably there are voters who pay no taxes
and taxpayers who do not share in the benefits of the pay roll either
directly or secondarily. Roughly, however, in sm all com m unities a
sufficient coincidence exists am ong these three groups so that the
theory is seldom questioned.
In the total em ploym ent of the B A W I plants, the m en today out
number the women, but in the plants first established, the employees
were mostly wom en and girls. T h is fact was related to the types
of manufacturing that responded most readily to the subsidy; only
within those types could the State Industrial Comm ission make its
selection. T h e commission favored hosiery plants as a superior kind
of fiber industry; as has been seen, four hosiery plants were founded,
as w ell as a woolen knitting m ill, a chenille concern, and three shirt
factories. (T extile m ills had figured in the Colum bia-plan type of
subsidization, but none were established under the B A W I.) These
types of industry emphasized female em ploym ent. T h e sm all towns
previously had provided little opportunity for fem ale em ploym ent,
although the large families, characteristic of the area, included women
and girls who wanted em ploym ent. Frequently heard during the in
quiry made for purposes of this study was the statem ent that the
$ 1 5 o r $ 1 8 a week brought hom e by the daughter from a B A W I plant
equaled or exceeded the cash earnings of the father on the farm. T his
background of low farm incom e cannot be om itted from the con
sideration of this and other aspects of the B A W I.
T h e wage levels in the B A W I plants, especially at the outset,
were low in relation to national or industrial standards. Every factor
of a low-wage situation was present in these com m unities: the pro
tracted history of general im poverishm ent, the large labor surplus,
the lack of alternative em ploym ent other than that of the W PA, the
lack of industrial experience and training of the labor, and the absence
of any legal or organizational floor under wages. T h at the new enter
prises in some cases took shrewd advantage of these background cir
cumstances is regrettable rather than remarkable.
[ 30]
Against their background of need, the local governments were
weak in bargaining power. T h e contracts were made in terms of total
pay roll, w ith no stipulation as to individual wages beyond the vague
requirem ent that prevailing standards for the same type of occupation
in the same area should be observed—a requirem ent that, in practice,
meant little or nothing. Questions as to this wage situation were and
are today usually answered by the statements that the labor was
untrained, that the fem ale workers lived at hom e and were not depend
ent solely upon wages, and that living costs were low.
Regardless of the fact that individual wages tended to be low, most
B A W I com m unities today date their prosperity from the advent of
the new plants. T h e com m unities responded to the total pay roll. T o
the individuals, half a loaf in wages looked extrem ely large.
A trend of wage betterm ent, however, was at work. T h e demonstra
tion of this principle was one of the most im portant developments
of the B A W I. First, in October 1938 the national Fair Labor Stand
ards Act w ent into effect, and the B A W I plants that were already
in operation, in m ost cases, had to raise their wages to meet the m ini
mum. But, also, from 1939 onward the total wage payments in these
plants, with a single m inor exception, continued to rise year by year,
and to do so m uch more rapidly than the average numerical employ
ment. T h is gain is shown in table 2, in the form of index figures
based upon the 1939 average em ploym ent and pay roll.
T h e rapidity of the rate of wage increase above the rate of increase
in the num erical em ploym ent is seen in some cases to have been
phenom enal. Some such consequence was foreseen by the leaders of
the B A W I. T hey reasoned: start a new plant, and it w ill expand and
increase wages if it is sound; provide em ploym ent, and the produc
tivity of the worker, hence his wages, w ill increase with time; absorb
the labor surplus of any locality (all contracts required the prefer
ential hiring of resident lab or), and wages may ultim ately respond to
a local scarcity of workers. T h e war brought about these results with
abnormal speed. Nevertheless, the principles involved would probably
have operated to som e extent had there been no war.
In Jackson, one may still hear favorably quoted the dictum of
Justice W . D. Anderson, who dissented from the majority opinion by
which the Industrial Act was finally upheld. “In my judgment, he
wrote, “the majority opinion drives a steam shovel through our
[31]
TA BLE 2
INDEXES OF NUM ERICAL EMPLOYMENT AND ANNUAL WAGES PAID IN
PLANTS ESTABLISHED UND ER T H E MISSISSIPPI IN DU STRIA L ACT a
1939
Ingalls Shipbuilding Corp.
Number of W o r k e r s ........................ 100
W a g e s ........................................................ 100
Jackson County Mills, Inc.
Number of W o r k e r s ........................ 100
W a g e s ........................................................ 100
Grenada Industries, Inc.
Number of W o r k e r s ........................ 100
W a g e s ........................................................ 100
Lebanon Shirt Co.
Number of W o r k e r s ........................
W a g e s ........................................................
Armstrong Tire and Rubber Co.
Num ber of W o r k e r s ........................ 100
Wages ........................................................ 100
Crystal Springs Shirt Corp.
Number of W o r k e r s ........................ 100
W a g e s ........................................................ 100
I. B. S. M anufacturing Co.
Number of W o r k e r s ........................
W a g e s ........................................................
W. G. Avery Body,Co.
Number of W o r k e r s ........................
W a g e s ................................................... ,
Real Silk Hosiery Mill
Num ber of W o r k e r s ........................ 100
W a g e s ........................................................ 100
Winona Bedspread Co.
Num ber of W o r k e r s ........................
W a g e s ........................................................
Hattiesburg Hosiery Co.
Num ber of W o r k e r s ........................ 100
W a g e s ........................................................ 100
Ellisville Hosiery Mills, Inc.
Number of Workers . . . . . .
W a g e s ........................................................
TO TAL, ALL COMPANIES
Number of W o r k e r s ........................ 100
W a g e s ........................................................ 100
TO TAL W IT H O U T SHIPYARD
Number of W o r k e r s ........................ 100
W ages.......................................................... 100
—
—
1940
1941
1942
1943 b
400
471
804
1404
1870
4169
2877
6385
95
110
125
156
132
176
117
182
97
111
104
137
149
195
232
369
100
100
278
328
462
598
493
719
197
206
224
273
161
217
228
418
120
127
198
249
197
306
154
232
100
100
224
443
231
538
263
693
100
100
339
355
89
100
116
145
182
183
172
254
207
248
100
100
202
197
176
216
330
467
261
305
232
315
168
273
50
84
100
100
457
824
636
1137
332
536
567
1271
787
1900
—
194
235
142
157
a First full year of operation was taken as the base year for
cal employment used in the calculation is the annual
the annual totals.
b Based upon first six months.
[32]
262
240
213
400
302
246
each plant. T h e num eri
average. T h e wages are
Constitution.” In the smaller comm unities, daily familiarity with the
factories in publicly owned buildings has left no more consciousness
of an anom alous situation than is felt by the average rider on a
publicly constructed subway that is leased for private operation.
W hen the B A W I plan is considered from the financial side, it
is to be noted that the bonds sold readily, except for a few early
offerings that were made prior to the appellate decisions establishing
their legality. T h e securities were absorbed by local banks, by banks
in other Southern cities, and by brokerage and investment banking
houses, singly or in groups. In one case, a power company acquired
part of an issue and, in another, a M idwest insurance concern bought
a considerable block. T h e bonds could not be sold at less than par
initially; and in some cases, ow ing to com petitive bidding, they were
sold at a slight prem ium . O n resale, they generally appreciated—some
issues considerably. T h e bonds were not revenue bonds, based on the
small incom e from the rental of plants, but full-faith-and-credit secur
ities backed by the county or city assessment rolls. T h e local govern*
ments had to be sufficiently solvent to support the bonds, under the
terms of the law.
T h e general dem onstration was that capital responded readily to
this form of investm ent in a period when it was not responding to
private industrials, especially sm all industrials. In no case, it may be
emphasized, has there been to date a single instance of default or
delay by a m unicipality or county in m eeting interest and retirement
charges on these B A W I bonds. T h is fact reflects the pay roll income
that was created, strengthening the com m unities’ ability to carry the
indebtedness, adding to the per capita incom e, and increasing the
local bank deposits.14
Nevertheless, som e bankers who disapproved of the BA W I plan
express the opinion today that the general credit standing of the
participating m unicipalities was adversely affected. T h e institutions
that these bankers represent have refrained from investing in these
particular securities. T h is aspect of banker opinion is generally based
upon a disapproval of com m unity subsidization and a denial of its
ultim ate econom ic wisdom.
“ Deposits in member banks in BA W I communities rose from $50,380,000 in
December 1938 to $119,187,000 in December 1942. T h e BAW I pay rolls, however,
were not the sole influence.
[33]
The Question of Interpretation
In interpreting the degree of influence exercised by the B A W I system
upon the success or nonsuccess of the individual subsidized plant, a
knotty question arises: that of deciding whether any particular inci
dent or trend was or was not a direct result or ultim ate consequence
of the plan. Other causative factors besides the B A W I system of plant
founding and subsidization were clearly at work, both at first and
later. Local comm unity conditions, types of industry and m anagem ent,
the personal wisdom of officials and leaders of the towns, differences
in financial judgm ent, the rising trend in the business cycle—all played
their part. In Mississippi, where there is still a perceptible line-up of
opinion for or against the B A W I, confusion exists on this matter
of causation.
T w o illustrations of this difficulty of interpretation may be given.
D uring the latter part of 1942, in Hattiesburg, a silk hosiery m ill
that had been established under the B A W I plan and had operated
successfully up to that time began to lose its labor to the near-by
war industries and to feel the shortage of silk. In June 1943, this plant
shut down and left the comm unity with a vacant factory structure
on its hands. During the same period, in Grenada, a silk hosiery m ill
that was also a B A W I plant and was similar to the Hattiesburg
concern in many respects added a shell-m anufacturing unit and kept
on expanding. Some former critics of the B A W I dw elt upon the
Hattiesburg occurrence as a sign of the weakness or failure of the
B A W I system. Former protagonists of the B A W I plan regretted the
Hattiesburg experience, but pointed to the Grenada experience as a
sign of the success of the plan.
Yet such diametrically opposite results could hardly have arisen
from the same single cause, even at the outset, m uch less after a con
siderable period of time. T h e B A W I was not the causative factor in
either of these cases. W hat these two episodes primarily presented was
a difference of reaction on the part of nonresident m anagem ents (in
the one case in N ew York, in the other case in Indianapolis) to busi
ness conditions brought about by the current war.
T h e same confusion has existed in regard to the issue of low
wages, previously discussed. T o what extent was the B A W I, whether
as a plan or as an administrative system, responsible for the wage
levels? As has already been indicated, the econom ic situation in the
[ 34]
state was one root cause; the B A W I was expressly called into existence
to remedy that situation. T hus the fact that wages were not higher
at the outset represented the initial obstacle faced by the plan. It has
been suggested that a stronger stand m ight have been taken; that the
State Industrial Comm ission, w hile it could not under the law write
wage m inim a into the contracts, m ight have influenced the local
governments to do so. It may be seriously questioned whether these
suggestions were at all practicable under existing circumstances. It is
probable that the mere attem pt to do so m ight have caused these appli
cant enterprises to go to some com peting place.15 In reality the em
ploying m anagem ents alone fixed the terms of employment, and the
B A W I policy of starting a plant and trusting to econom ic develop*
ments to better the wage levels was probably the only policy possible
under the conditions.
In short, discrim ination m ust be exercised in judging the BA W I
plan solely by its fruits. T h at is a process that leads to overpraising
it in some respects, underpraising it in others. T h e fruit of a tree is
affected by soil, clim ate, and cultivation long after the initial planting.
As an industrial “p lanting” system, the B A W I did have certain con
tinuing effects that m ust be clearly distinguished from the other
influences that were at work first and last T o explore this distinction
at this p oint is to aid the interpretation of the individual case stories
that follow.
T o begin with, under the system, the particular enterprises were
selected for their operative strength. T h is selection meant that the
enterprises had higher-than-average chances of survival iind growth
and thus protected the com m unities against instability; but it also
meant that the enterprises were tough bargainers and that decisions
vitally affecting the M ississippi com m unities were made at distant
points w ith reference solely to the needs of the corporate interests
involved. In no case did these selected concerns strictly need the
subsidy that was offered; this basic contradiction runs throughout the
B A W I plan. T h e choice lay between (1) subsidizing relatively strong
organizations or (2) bringing in weak concerns; in choosing to avoid
the latter type of hazard, the comm ission and the localities further
reduced their com parative w eight at the bargaining table. Some of
the incidents in the record of the subsidy experiences are traceable to
15The effect of the Federal Seamen's Act on the American Merchant Marine in
the 1920's offers material in point.
[ 35]
this cause, which in turn was intrinsic in the B A W I plan as it was
administered by the State Industrial Commission.
Subsidized plants received three different kinds of public aids.
First, capital subsidies were offered. T h e com m unities issued and sold
$980,500 in bonds to provide $834,500 in lands and buildings and
$146,000 in later expansions and incurred other expenses to an un
known sum. T h e industries, however, did not im m ediately benefit
to the entire am ount of this aid. Offsetting the direct subsidy at the
outset were their capital outlays for new machinery and equipm ent,
the costs of getting into production, and incidental expenses. In some
cases, where the machinery was merely rented, the net capital endow
m ent represented by the ground and building was probably a con
siderable portion of the total capital investment; in others, the usual
explanation that the subsidy only “helped pay the m oving expenses”
is nearer the truth. Land and buildings are normally a m inor but by
no means a negligible elem ent in capitalization. T h e capital subsidy
must be regarded as having had a beneficial and continuing effect
upon the capital position of the enterprises and as giving them vary
ing degrees of advantage in com petition.
T h e second kind of subsidy was the current-expense saving in the
costs of plant occupancy. T he tenant enterprises paid and, in most
cases, still pay a rental very low in relation to the value of the property.
If measured by the current costs to the taxpayers for bond interest
and redem ption, this saving amounts to roughly $70,000 a year dis
tributed among these enterprises. This, however, is no great sum, and
there is an important offset. Some plant m anagem ents assert that their
disadvantage from increased freight costs, arising from their added
distance from affiliated plants or from their markets, is greater than
their current savings in costs of occupancy. T h is contention, which
amounts to the statement that the subsidy only equalizes com petition
by overcom ing a locational disadvantage, may conceivably apply to
some of these cases. But there are other cases in which transportation
costs have been actually reduced by location in M ississippi and in
which this continuous economy in occupancy costs is accordingly
of real importance.
T h e third kind of subsidy is the five-year tax exem ption on pri
vately owned machinery and equipm ent in the plants. T h is exem ption
is, or has been, of advantage to the enterprises only in those cases
in which competitors do not have the same advantage. T a x exem ption
[36]
is no M ississippi patent, and in the hosiery and garment industries
especially there are many com peting concerns in other states that are
equally tax free. W here industrial tax exem ption is sufficiently general,
its main effect is that of reducing the public revenue, rather than
that of conferring com petitive advantages. O ne or two plants on the
BA W I list have, however, been greatly aided in com petition by the
saving in taxes.
These three kinds of subsidies constitute the total of the public
aids extended to enterprises by the B A W I. T heir sum has undeniably
given certain of these enterprises a definite com petitive edge, and this
effect is continuous. T h e same com petitive advantage was accorded
under the old Colum bia plan, w hich also granted land, buildings and
municipal services, low rent, and tax exem ption—but to less carefully
selected enterprises. T hus, there is a broader base than the BA W I
sample alone for the conclusion that all three types of subsidy put
together w ould not be sufficient to overcome continued bad manage
ment, inadequate or im proper financing, loss of markets, or lack of
any of the primary requirem ents of industrial survival. Subsidy un
doubtedly helps, but it does not determ ine, the continued competitive
success of the beneficiary concerns.
Perhaps the principal effect of the B A W I system was its influence
upon plant location. T h e plan operated to induce strong enterprises
to locate in what was to all intents and purposes a virgin industrial
territory. T h is primary fact of locational influence was in most cases
a greater aid to the industries than the specific subsidies, for Missis
sippi itself, apart from the B A W I, had much to offer to these enter
prises in the way of cost savings due to climate, freedom from regu
latory legislation, and low labor costs. In one outstanding instance,
major considerations were a good shipyard site and access to raw
materials and, in another, the consideration was nearness to a market
that it was desired to develop.
A ll in all, it cannot be said that the B A W I system was in itself
the fundam ental or decisive factor in determ ining many things that
were ascribed to it at the outset or that have been ascribed to it since.
Rather, its offer of aids was a marginal factor, serving to precipitate
half-formed decisions of m anagem ent, to ease and aid the transitions,
and to grant some degree of continuing advantage in the business
positions of the enterprises.
[ 37]
Narrative of the Community
Subsidy Experiences
T h e case stories of the 21 instances of certification under the B A W I
system can now be presented. In this presentation the order of certifi
cation is generally followed, but the com m unity itself is made the focal
point of interest. T able 3 summarizes the basic data.
Cities of Durant, Cleveland, and Grenada
Certificates numbers 1, 3, and 4, issued to the cities of Durant, Cleve
land, and Grenada, originated from an expansion program of the
Real Silk Hosiery M ills, Incorporated, of Indianapolis, Indiana. T his
company already had a branch plant in D alton, Georgia, and in the
latter part of 1936 proposed to establish three more branches. Attracted
by the publicity of the M ississippi plan, the company's representatives
were put into touch, by the State Industrial Commission, w ith local
officials of Durant, Cleveland, and Grenada, M ississippi. T hese officials
and commission members visited the Real Silk plants at D alton and
Indianapolis and conferred with the brothers Jacob A. and Lazure L.
Goodman, who headed the concern. T h e B A W I leaders liked both
the particular company and the prospect of starting the new B A W I
system by getting three plants in a single transaction.
T h e Durant proposal called for a building costing the public
$25,000; the consideration was a m inim um $60,000 annual pay roll
and $5 annual rent. T he certificate for the Durant subsidy deal was
the first that was granted by the M ississippi Industrial Commission
after Chairman Hoffman's appointm ent.
Durant previously had been supported by railroad shops, but it
had lost this em ploym ent. T h e voters authorized the $25,000 in 6 per
cent bonds by a vote of 330 to 19. T h en two obstacles arose. T h e con
stitutionality of the law had not yet been tested and the legality of
the entire situation was in doubt. H ence, the Durant bonds would
not sell, in spite of the 6 per cent interest rate, and after a tim e they
were withdrawn from sale. Sim ultaneously, in Indianapolis, the G ood
mans, who had done the bargaining, withdrew from the R eal Silk
Corporation.
At this point, a M ississippi investor, with banking support, after
receiving legal advice from a leading bond attorney, bought the entire
[38]
TABLE 3
SUMMARY OF T H E DETAILS OF T H E CERTIFICATIONS OF PUBLIC
CONVENIENCE AND NECESSITY ISSUED BY TH E STATE
IN DU STRIAL COMMISSION OF MISSISSIPPI
No.
Date
1. 12/ 8/36 City of Durant . . .
2. 1/27/37 City of Amory . . .
3.
4.
5.
Amount
of Bond
Issue
,Issued to
$ 25,000
50,000
3 / 4/37 City of Cleveland .
3/16/37 City of Grenada . .
3/30/37 Jackson County . .
(District 3)
6. 4/19/37 Jackson County . .
(District 1)
7. 6 / 1/37 City of Terry . . .
8.
6 / 1/37 City of W inona . .
9. 7/19/37 City of Union . . .
10. 10/ 5/37 City of Natchez . .
11. 10/ 5/37 City of N ewton . .
12. 8/17/38 Forrest County . .
(District 2)
13. 10/20/38 Jackson County . .
(District 1)
14. 6 / 2/39 City of Iuka . . . .
15. 9/18/39 City of N ew Albany
16. 10/ 3/39 Jackson County . .
(District 2)
17. 11/21/39 City of Crystal Springs
18. 12/29/39 City of Biloxi . . . .
19.b 2/23/40 City of Ellisville . . .
20.b 3/22/40 Harrison
County . . .
(District 1)
21.b 3/27/40 Lee, Prentiss Counties
(District 2)
Life,
Max.
Yrs
( .)
25
32,000
32,000a
150,000
21
25
10,000
Appro
priation
15,000
35,000
35,000
300,000
35,000
67,500
100,000
Int.
Rate
(Pet.)
Result
Plant established
Plant independently
established
Defeated by voters
Plant established
Plant established
Plant established
25
Negotiations failed
4 Plant established
6 Plant established
3£ Plant established
Negotiations failed
31 Plant established
25
4 | Plant established
25
25
20
25,000
75,000
30,000
75.000
Negotiations failed
3 Plant established
20
25 353£ Plant expanded
20
Negotiations failed
25 3£-3g Plant established
Negotiations failed
40.000
Bond sale en joined
8,000
25,000
75,000
a Supplemented by later issues of $6,000, $15,000 and $50,000 for expansions.
b Issued by successors to original commissioners, who resigned in January 1910.
Durant issue at par. Friendship for the W hite administration figured
in this purchase; the Governor's adherents did not want to see the
first B A W I deal fail. T h e apparent financial risk that was involved
in the purchase did not materialize, however, and later, the issue was
resold at 115, with some of the series subsequently rising still higher.
Real Silk, under its new officials, decided to go ahead with the
agreement. T h e D urant operation started in 1938. T he total pay roll
[39]
stipulation of $60,000 a year was exceeded in 1939, and both em ploy
m ent and wages since then have risen rapidly. T h e product is finished
hosiery, sold direct to the consumer through a widespread system of
house-to-house selling. T h e plant continues in successful operation
today, though some reduction in em ploym ent occurred in the spring
of 1943.
Certificate number 3, which was issued to Cleveland, was to have
established a second Real Silk plant. But this became the only instance
in which approval by the State Industrial Commission was followed
by failure of the voters to endorse the bond issue at the polls. T he
proposed $32,000 bond issue got a majority of 222 to 163, less than
the necessary two-thirds. Reflecting the attitude of the opposition, a
Cleveland newspaper before election called attention to the pro
spective wage levels and asked: “Is that the class of laborers we want
in Cleveland? . . . W e insist that if a factory concern is not big enough
to erect its own building, and doesn't want to come to Cleveland that
bad, let them stay away. . . . Steady growth is better.” Enough voters
responded to this argument to veto the deal.
Grenada approved its bond issue by a vote of 412 to 69. T h e bonds
were purchased by local and M emphis banks. T h e operating concern,
which had rem ained in the Goodm an interest, was incorporated in
M ississippi as Grenada Industries, Incorporated. It leased about $450,000 worth of equipm ent, hired workers specially trained for the pur
pose by the public schools, exceeded its stipulated $60,000 annual
pay roll by four times in 1939, and expanded with especial rapidity
after September 1941. Three expansions of the building occupied by
this firm were financed by additional public bond issues: the first, at
the outset, for $6,000 at 4 per cent; the second, in 1939, for $15,000
at 3 per cent; and the third, in 1942, for $50,000 at 2 % per cent. T h e
basic operation of the company is the manufacture of hosiery in the
gray, which is finished and sold in Indianapolis. A shell-m anufacturing
plant has been added and this is am ong M ississippi's more im portant
war industries today.
T h e comm unity aspect of the Grenada operation has had an inter
esting bearing upon labor relations. T h e original contract included
the follow ing provision:
T he Second Party [Grenada Industries, Inc.] pledges itself to
be fair in all of their dealings with em ployees and to pay fair
and reasonable wages, and the First Party [the City] agrees that
[ 40]
it w ill so far as possible prevent any interference from outside
sources w hich may cause or result in labor disputes or trouble,
and the pay roll guarantee hereunder by the Second Party shall
be cancelled during the period of any labor disturbance caused
by outside interference.
This clause, apparently pledging the police power of the munici
pality to the policy of preventing attempts to unionize the plant,
except by a com pany union, was amended in 1938 to emphasize the
preferential em ploym ent of local residents and to provide that:
T he Second Party pledges itself . . . that it w ill not require
membership in any organization, religious, fraternal, or other
wise, as a prerequisite to entering the em ploym ent of said
Second Party. Second Party agrees that it w ill not enter into any
contract w ith any group of em ployees unless and until said con
tract shall first have been subm itted to First Party [the m unici
pality] for its approval.
This agreement, in effect, apparently required the approval of the
Board of Alderm en to a collective bargaining contract, even should
the tenant concern seek to depart from its pledge and become a closed
shop. T h e im plications of this provision do not appear to have been
explored in practice.
However, com m unity involvem ent in labor relations at Grenada
has appeared in another form. Early in the operation, some incidents
of firing, dispute over the effective date of a wage increase, and a shiftfreezing plan of the m anagem ent, im pelled the workers to appeal to
the superintendent of schools, under whom most of them had gone
to school in the past and under whose supervision they had been
trained for this work. U pon the m anagem ent’s agreeing, a plant elec
tion was held at w hich the workers chose a committee to umpire
grievances. T h e com m ittee consisted of three m en—the superintendent
of schools, a local m erchant, and a local theater owner. This com
mittee served for som e time; in all cases, its recommendations were
accepted by the m anagem ent and the workers. T h e War Labor Board
eventually superseded the com m ittee.
Such a com m ittee arrangem ent undoubtedly arose from a general
feeling that the com m unity had a certain proprietary interest in the
m anufacturing operation, ow ing to the plant’s BA W I origin. The
management of the plant did not share this feeling but was willing to
go along” w ith it. Grenada Industries, Incorporated, is well liked in
its com m unity, and it is the largest em ployer in the vicinity today.
[41]
City of Amory
Certificate number 2, issued to the city of Amory, resulted in a plant,
but not under the B A W I system. After the voters had passed the
$50,000 bond issue by 542 votes to 25, the enterprise, fearing legal
involvem ents, decided to do w ithout the subsidy and constructed
its own building.
Jackson County (Pascagoula)
Certificates numbers 5 and 6 were issued to Jackson County in behalf
of the Onyx K nitting M ills, a family-held partnership operated by
three Peterzell brothers in Philadelphia. T his firm had had labor
trouble and was looking for a new location in a place where a more
stable labor force m ight be found.
Jackson County, Mississippi, in the area of Pascagoula, was at the
same time in great need of m anufacturing em ploym ent. In this area
farming was poor, lum bering had declined, and a large rural popula
tion was in a condition verging upon distress. T hrough the industrial
agent of the M ississippi Po%ver Company, the Jackson County board
of supervisors was put into contact with Meyer J. Peterzell, head of
the O nyx K nitting M ills. From this contact resulted what was to
become the second largest em ploying company in the B A W I list.
T h is company is now the Jackson County M ills, an im portant
manufacturer of woolen bathing suits and sweaters. It was established
on the outskirts of Pascagoula by a county bond issue of $150,000
at 5 per cent, voted by a majority of 1,259 to 110. O f this issue, the
largest B A W I financing to that date, $100,000 was bought after com
petitive bidding by a group of brokers and bankers of M obile, N ew
Orleans, and other points, and $50,000 was bought by the county
itself. A n annual pay roll of $250,000 was stipulated in the contract.
T h e company was housed in a concrete building of about 100,000
square feet of floor space. T h e building was econom ically constructed
by the use of county grading and cem ent m ixing equipm ent and some
county convict labor. It was later nearly doubled in size through funds
supplied by a second bond issue of $75,000, voted in 1938.
A t the time of the enlargement, the Peterzells abandoned their
Philadelphia parent plant and made Pascagoula their headquarters,
while retaining an affiliated yarn m ill in N ew England. T h e stipulated
pay roll was considerably exceeded from 1939 on. T h e new em ploy
[ 42]
ment changed the outlook of the area and resulted in mortgage re
demption, farm im provem ent, and considerable building. Pascagoula
today looks to this com pany for m uch of its future stability, the
prospect of a postwar backlog of consumer dem and for woolen goods
being favorable.
A second Jackson County venture in subsidies, for which certificate
number 6 was issued, brought to Pascagoula a plywood plant. T he
subsidy in this case was a building constructed from the proceeds of
an appropriation of $10,000. T h e stipulated annual pay roll was $30,000. T his was a case of the subsidization of an indigenous Mississippi
industry, for the operating tenant was the W . G. Avery Body Company,
a M ississippi enterprise w ith several plants, utilizing the state’s hard
woods to make bodies and veneer parts for Detroit autom obile con
cerns. T h e branch at Pascagoula had its highest em ploym ent in August
1942, after w hich date its num ber of workers gradually diminished.
In 1943 this operation was consolidated w ith the parent plant at
Jackson, M ississippi. A new tenant, the Pascagoula Decoy Company,
making w ooden equipm ent for the army, soon occupied the building.
A third Jackson County venture in subsidy, for which certificate
number 13 was issued, was instrum ental in part in bringing the Ingalls
Shipbuilding Corporation to Pascagoula. T his venture is usually re
garded as the clim ax of the B A W I, but the causation in this case may
be questioned, inasm uch as first-class shipyard sites are few and a
company desiring to establish a yard in a certain general area may
be presumed to know all the available sites and to take its choice.
T his venture included citizen activity as well as BA W I financing
and had m any ramifications.
In 1938, the Ingalls Iron Works Company of Birmingham, an
important fabricator of structural and plate steel, planned to found
a shipyard as an outlet for its products and to bid on Maritime Com
mission contracts then in view. Its representatives toured the Gulf
Coast, looking for shipyard sites. Pensacola had an unoccupied site,
and so had Pascagoula. Officials o f Jackson County, in which the
Pascagoula site is located, first suggested a $50,000 subsidy but heard
that Pensacola had offered $130,000. Jackson County doubled its offer
to $100,000, and the offer was accepted by the parent company.
T h e site, of am ple acreage, was unique in having a natural d eep
water channel broad enough for endwise launching of the largest type
of vessel. In addition, the site had an advantageous natural slant of
[ 43]
ground. D uring the first W orld War, this site had been used with
success by the International Shipbuilding Corporation in building
vessels for the Italian Government. T h e property had reverted to the
city for taxes, but the title was clouded, several residents of the city
of Hattiesburg having claims.
T h e first steps rather resembled the Colum bia plan. T h e com
m unity leadership undertook to clear the titles and consolidate the
land holdings. A citizen group was formed as a com m ittee of trustees.
It included a banker, who supplied the necessary financing, and an
attorney, who went to Hattiesburg, interviewed the claim ants, and
obtained quitclaim agreements. T h e city governm ent escrowed its tax
titles w ith the trustees.
T h e county governm ent then applied to the State Industrial Com
mission and received the certificate of public convenience and neces
sity for a bond issue of $100,000, to be used in clearing, grading, and
im proving the shipyard site. T h e voters, 80 per cent of w hom had
signed the petition, passed the bonds almost unanim ously. T h e clear
ing and grading work on the site was performed by the county.
T he Port Authority, which received reim bursem ent from the county,
dredged and straightened the launching basin and drove a large quan
tity of creosote piling. Finally, the finished site was conveyed by the
city to the newly incorporated Ingalls Shipbuilding Corporation, the
com m ittee of trustees acting as intermediary in the transaction.
Thus, by an instance of all-round cooperation am ong a citizen
group, four governm ental units, the voters, and the enterprise itself,
the famous “250-mile assembly lin e” of the Ingalls concern was found
ed. T h e parent company provided the shipbuilding equipm ent, the
new company bid for and obtained a $10,000,000 M aritim e Commis
sion contract, and the first all-welded, “one-piece” steel ship in the
U nited States was soon under construction. Later the shipyard em ploy
m ent was m ultiplied and additional lands were purchased by the
company. W hen the war emergency came, this shipyard was ready for
performance, as the record abundantly shows.
City of Terry
Certificate number 7 was issued to the city of Terry. After having
voted $15,000 in bonds to bring in a garm ent m anufacturing opera
tion, the voters of Terry were disappointed by the action of the m an
agement in calling off the deal and deciding upon a location in Texas.
[ 44]
City of Winona
Certificate num ber 8 was issued to the city of W inona and resulted
in the establishm ent of the W inona Bedspread Company. T his certifi
cation won its place in B A W I history by becom ing the basis of the
taxpayers' suit that tested the constitutionality of the Industrial Act.
Such a suit was w anted by the friends and opponents of the act alike,
and the narrow m argin in the W inona voting, 262 to 113 on a $35,000
•issue of 4 per cent bonds, suggested the opportunity. W . S. Albritton,
a railroad em ployee at W inona, was the plaintiff. H e lost his case in
the local chancery court, and an appeal was arranged.
T h is case was elaborately briefed and argued by both sides before
the M ississippi Supreme Court. W . E. Morse of Jackson, Mississippi,
appeared as attorney for Albritton. Forrest B. Jackson, W. T . Knox,
H. H . Creekmore, Garner W . Green, and Louis M. Jiggitts, all of
Jackson, appeared for the commission. W eaver E. Gore filed a brief,
as amicus curiae, taking the view that the act was unconstitutional.
These briefs are exhaustive and are significant today to the student
of m unicipal ownership and of the debatable ground between “due
process” and the general welfare. O n April 4, 1938, the Mississippi
Supreme Court declared the Industrial Act constitutional by a vote
of five to one.16 T h e U nited States Supreme Court later found that
no Federal question was involved, that the matter was exclusively for
determ ination by the state.
T h e practical effect of this decision was to liberate the important
Natchez deal (certificate num ber 10), w hich was under way, and to
free the resale of previous bond issues that were in the original in
vestors' hands. Lower interest rates on the subsequent bond issues
were also m ade possible.
T h e tenant in the new W inona plant, the W inona Bedspread
Company, was a Jackson, M ississippi, concern loosely affiliated with
a group of cotton cloth and bedspread plants in M ississippi and A la
bama towns. T h e operation in W inona made a halting start, owing,
it is said, to the belief on the part of the first em ployees that the
new em ploym ent had a public relief character. After initial produc
tion delays, and discharges and replacem ents of labor, the annual
18 Albritton v . City of Winona, 181 Miss. 75, 178 So. 799; App. dism. 58 Supreme
Court 766. 303 U. S. 627.
[45]
pay roll stipulation of $75,000 a year was satisfactorily m et and con
tinues so today.
City of Union
Certificate number 9, issued to the city of U nion, resulted in an issue
of $35,000 in 6 per cent bonds, voted by the overwhelm ing majority
of 293 to 9. T h e proceeds of the bond issue were used in constructing
a factory building for a silk-throwing concern. T h e tenant enterprise
started operations but failed to perform its contract and after a brief
period closed down. T his closure caused disappointm ent alm ost as
great as the initial enthusiasm*
T h e community-owned building then stood idle for some 18
months. It was finally rented in Novem ber 1939 by the W est Shirt
Company (later the Lebanon Shirt C om pany), a M ississippi corpora
tion with N ew York and Pennsylvania affiliations. T h e operation of
this company has continued to the present time, w ith pay roll results
several times the $50,000 m inim um stipulated in the first contract.
City of Natchez
Certificate number 10, issued to the city of Natchez, resulted in the
largest of all bond issues under the B A W I—$300,000 in 3 y 2 per cent
bonds of the city. Proceeds were used for the purchase of a 22-acre site
and the construction of reinforced concrete buildings to house the
Armstrong T ire and Rubber Company, Incorporated. T h is company
is owned 50 per cent by Armstrong Rubber Company of W est Haven,
Connecticut, and 50 per cent by Sears, Roebuck and Company. It was
established at Natchez under contract to m anufacture tires for dis
tribution by the latter concern, which was represented in the subsidy
negotiations.
T h e Armstrong T ire and Rubber Company does not appear to
have been in need of subsidization from any source, but as to Natchez'
need of industrial em ploym ent, there could be no question. T h e
decline in river traffic had seriously reduced the com m unity's em ploy
m ent opportunities. T h e State Industrial Commission, w hile anxious
to secure soundly financed enterprises for the state, raised questions
about the certification. One question bore upon the rem aining bond
ing capacity of Natchez, which already owed $776,000 in bonds. T h e
additional $300,000 would virtually absorb the city's rem aining margin
[46]
of bonding capacity. Again, the com m ission pointed out that the
$300,000 bond issue was to bring in a stipulated $300,000 annual pay
roll, or a ratio of one to one, whereas in all previous subsidy proposi
tions the ratio of prospective pay roll to bond investments had been
considerably higher. Natchez* need of em ploym ent, however, prevailed
over these considerations.
T h e weakness of Natchez' bargaining position was apparent in the
rental terms of the contract. Under the original contract, the company
was to pay $600 a year basic rent for the $290,000 property17 for five
years. A t the end of that time, the property w ould be conveyed in fee
sim ple to the company, providing the pay roll by that time amounted
to $1,000,000. If the pay roll had not reached $1,000,000, the convey
ance w ould be postponed until it had done so. Under this arrange
ment after five years the property w ould become private property
and, hence, taxable.
A t the end of 1938, when operations were beginning, this rental
arrangement was amended. T h e am ended contract provided for a
50-year lease, the rental for the first five years to be waived, and $3,600
annually to be paid after this rent-free period. T h e company was given
an option to purchase the property at cost less a stipulated annual
straight-line depreciation at any tim e during the leasing period. Thus,
the property pays no taxes to the city for 50 years, unless the option is
exercised. Interest on the bonds, initially, was $10,500 annually, and
average annual amortization is $12,000. T h is am ount may be com
pared w ith the annual $3,600 rental payment. T h e city also was
obligated by the contract to provide pavem ent to the site, and it per
formed grading work. T h e cost of these services has been estimated as
between $35,000 and $50,000.
T h e pay roll incom e has m eant as much to Natchez as to any other
com m unity—perhaps more. W ith the sim ultaneous growth of the Arm
strong plant and of a second factory in the area—indirectly the result
of an earlier attem pt at subsidization by the fund-collecting process—
the com m unity revived. So rapidly did the pay roll of the Armstrong
operation expand that, had the original contract been unchanged, the
company w ould have become owner of the site and building by mid1941. A t that time the rubber shortage became evident and numerical
em ploym ent receded temporarily, but, as in the case of Grenada, a
11 $10,000 was paid by Natchez as a location fee.
[47]
shell plant was added, and in 1943 the plant's pay roll was larger than
ever before. From the beginning of 1939 up to June 30, 1943, the
Armstrong plant disbursed in pay roll more than nine times the face
of the bond issue. Since the ratio of pay roll to bond issue is the
customary way of figuring the “return upon investm ent” in the sub
sidizing comm unities, it is* apparent that Natchez is financially satisfied
- with the deal.18
However, the town authorities failed to act upon a request laid
before them by company representatives that the city issue another
$150,000 in bonds in order to provide funds for the construction of
a tire warehouse. T h e argument upon which the refusal was based
was that a warehouse does not em ploy a large labor force and that,
as figured on a ratio of bond issue to prospective pay roll, the invest
m ent w ould not pay. T h e company thereupon built the warehouse
from its own resources.
City of Newton
Certificate num ber 11 was issued to the city of N ew ton. Voters of the
city approved a $50,000 issue of bonds in order to bring in a branch
of a M ichigan hosiery concern. U pon decision of the com pany not to
establish a plant in the South, the bonds were cancelled.
Forrest County (Hattiesburg)
Certificate num ber 12 was issued to Forrest County for the purpose
of bringing a m anufacturing company to Hattiesburg, the county seat.
Hattiesburg, third city in population in M ississippi, had had a silkweaving m ill that had discontinued operations. T h e presence of an
experienced labor supply attracted the attention of one o f the largest
concerns in the silk industry, Julius Kayser and Company, Incorpo
rated, with numerous subsidiaries and an integrated vertical operation
extending from silk throwing to finished m anufacturing and selling
in retail outlets.
T h e subsidy was in the form of a factory building. Proceeds from
a county bond issue of $67,500 were used to take over and alter the
vacant silk m ill. T h e H attiesburg Hosiery M ill, a Kayser subsidiary,
15 Some pay rolls of the BAW I plants have returned yet higher ratios. See
table 6, page 57, and discussion, pages 57-58.
[ 48]
was thereupon incorporated in M ississippi, and it leased the building
from the county.
Operations of the new m ill started in January 1939 and expanded
gradually. N orm al production was m aintained during 1940 and until
about October 1941. T h en the plant began to lose labor to near-by
war industries and training classes. It also encountered silk and nylon
shortages. In June 1943 the plant was closed by the parent concern.
T he workers generally found other em ploym ent and in October 1943
the plant was leased and reopened by a new tenant. It is now operated
as a branch of the R eliance Garm ent Company, a shirt manufacturing
concern.
City of Iuka
Certificate num ber 14 represented an anticlim ax. After the voters of
Iuka had approved an issue of $8,000 in bonds to im port a garment
company located in adjoining Alabama, the company decided to stay
where it was.
City of New Albany
Certificate num ber 15 put a second shirt factory, the I. B. S. M anu
facturing Company, into N ew Albany, where the Irwin M anufacturing
Company, Incorporated, was already located. Irwin B. Schwabe of
New York is president of both concerns, which have identical officers
though they are separately incorporated. W ork shirts are manufactured
on a contract basis and handled through Irwin B. Schwabe Company
of N ew York City.
Operations began in 1940 in a new factory building financed by
a bond issue of $25,000. Em ploym ent has been at capacity and on
a remarkably even keel since the beginning of 1941. T h e stipulated
$50,000 annual pay roll has been far exceeded. Comm unity relations
of the public-tenant corporation are not distinguishable from those
of the older, purely private plant.
City of Crystal Springs
Certificate num ber 17 covered part of a somewhat complicated and
protracted transaction involving the city of Crystal Springs. T he trans
action at various stages involved the acquisition of the city's m unicipal
power plant by the M ississippi Power and Light Company, the erection
of one structure to house a shirt factory by a Chamber of Commerce
[ 49]
fund of $30,000, and the erection of an extension from the proceeds
of a public bond issue of $25,000. T h e operating concern is the Crystal
Springs Shirt Company, a family partnership connected w ith the
Bernstein and Son Shirt Corporation of N ew York. T h e contract
provided that the company could acquire the public building in 10
years, if its total pay roll in that tim e am ounted to $500,000. T his
am ount was reached in less than five years.
City of Biloxi and Harrison County
Certificates numbers 18 and 20 were granted to the city of B iloxi and
to District 1 of Harrison County, in which B iloxi is located.10 These
certificates were for a pottery-manufacturing operation to utilize local
kaolin deposits and represented a departure from the previous policy,
in that the proposed operation was a new prom otion. Each authoriza
tion was for $75,000, a total of $150,000 for the new venture, but the
proposition was dropped and, according to local opinion today, was
unsound.
City of Ellisville
Certificate number 19 resulted in a bond issue of $30,000. Proceeds
were used to establish the Ellisville Hosiery M ills, Incorporated, in
Ellisville. T h is plant was the smallest of the B A W I establishm ents
and proved to be the last. It has operated with success.
Lee County
Certificate number 21, granted to two county districts in Lee County,
northeastern M ississippi, was to have established a branch of the Blue
Ridge Overall Company of Virginia near the town of Baldwyn. A $40,000 bond issue was voted. Sale of the bonds was enjoined by taxpayers
in the neighboring comm unity of Guntown, and the deal fell through.
T his failure is still greatly regretted in Baldwyn today.
11 Certificate number 18 was the last certificate issued by the original State
Industrial Commission before its resignation in January 1940 at the conclusion of
the administration of Governor W hite. Several other deals were “on the fire*' at
this time, and three were certified by the successor commission, appointed by
Governor Paul Johnson. Tw o resulted in the establishment of plants, one under
the BA W I and one under other auspices.
The new commissioners were Joseph F. D ixon of Natchez, who succeeded Mr.
Hoffman as chairman; M. P. Bush of Ellisville, who succeeded Mr. England; and
J. G. Repsher of Meridian, who succeeded Mr. Klein.
[ 50]
End, Aftermath, and Summary
of the BAWI
As A pril 1, 1940, approached, the impression was general in Mississippi
that the Industrial Act of 1936 was due to expire automatically. T he
act, to be sure, provided only that the appointm ents of the commis
sioners, and any unused certifications, should become void on that
date. But in M ississippi, where a Governor may not succeed himself,
each new adm inistration is expected to review the more experimental
acts of its predecessor. T h e Industrial Act had been so written as to
provide expressly for such a review.
T h e circumstances at this tim e favored the discontinuance of the
B A W I for several reasons. Governor W hite, father of the plan, was
no longer in office, having been succeeded by Governor Paul B. John
son. Coincidentally, the B A W I appeared to have worked itself out
of a job. T h e restlessness and southward drift of industry had subsided.
War had com e in Europe and the business trend in the U nited States
was upward. Few applications had been received by the State Indus
trial Com m ission for some m onths past. M ississippi's unem ploym ent
emergency was less acute than formerly. M ost com m unities that wanted
to act under the B A W I plan, and had the bonding capacity to do so,
had either got their new industries or had tried and failed.
[ 51]
Concern with problems of public revenue had put the B A W I
under heavy fire. Its features of public subsidy, bonded debt, and tax
exem ption for industrial property were clearly related to the revenue
problems. Moreover, no abundant showing of returns in num erical
em ploym ent and in pay roll dollars could yet be cited in answer to the
recurrent attacks upon the theory of the B A W I.
T h e fact was that up to April 1940 the visible returns from the
B A W I plan had been actually meager. T o conduct negotiations, ap
prove bond issues, build new plants, and bring new factories into
normal production were steps that required time. U p to the date
m entioned, only seven new concerns had come into actual operation
under the B A W I, and these had a total of only 2,691 em ployees. T his
number was less than 5 per cent of the total m anufacturing em ploy
m ent of M ississippi. Thus, the plan appeared to have failed to produce
the hoped-for and intended results. T h e future, of course, could not
be foreseen.
Joseph F. D ixon, whom Governor Johnson had appointed chair
man of the State Industrial Commission, favored the continuance of
the public subsidy plan, but w ith a change in adm inistrative policy.
Mr. D ixon believed the B A W I system m ight be used to develop
natural hom e industries, such as tom ato canning, the higher forms
of lum ber processing, furniture making, and other processes adding
value to M ississippi’s raw products. H e discussed this idea w ith Gov
ernor Johnson. T h e verdict, however, was negative, as it had pre
viously been on the part of the former State Industrial Commission
on the same point.
In April 1940, the M ississippi Legislature with virtually no opposi
tion adopted, and the Governor signed, an act consolidating the State
Planning Board, the State Advertising Commission, and the State
Industrial Commission into the new M ississippi Board of D evelopm ent
and repealing the Industrial Act of 1936. T h is act became effective
June 30, 1940. T hus ended the legal existence of the B A W I. T w o
matters of unfinished business were affected by the repeal. Taxpayers
enjoined the sale of the $40,000 bond issue that was to have brought
in a garment plant at Baldwyn. On the other hand, a m anufacturing
developm ent in M eridian, the negotiations for w hich had been started
under the B A W I, became established after the Industrial Act had
expired.
[ 52]
Aftermath of the BAWI
Three years from the date of the repeal of the Industrial Act, the
numerical em ploym ent in the B A W I plants had m ultiplied by ap
proxim ately four tim es and the wage disbursements by nearly nine
times. T h is rate of expansion far exceeded that of the previously
established m anufacturing in the state.
T h e B A W I plan could not be regarded as the cause of the expan
sion, w ithout strong qualifications.20 T h e business cycle and the war
demands were the dom inating influences. T h e shipyard became larger
than all the rest of the plants com bined. T h e experience of three of
the concerns ran som ewhat counter to the general trend.21
D uring the eight m onths of 1940 after the repeal of the Industrial
Act, the W inona Bedspread Company at W inona and the I. B. S.
M anufacturing Company at N ew Albany came into operation. T he
Ingalls Shipbuilding Corporation was still a relatively small employer.
T he Jackson County M ills, Crystal Springs Shirt Corporation, Grenada
Industries, Incorporated, Arm strong T ire and Rubber Company at
Natchez, and H attiesburg Hosiery Company were at or near their
normal peaks. T h e Real Silk Hosiery M ill at Durant was reorganizing,
and its em ploym ent had temporarily dropped; the W est Shirt Com
pany at U nion was just getting started. A t the end of 1940, 10 B A W I
plants were in operation, having 7 per cent of the total numerical
em ploym ent, and 8 per cent of the total pay roll, w ithin Mississippi's
total of m anufacturing.22
In 1941, the E llisville building, w hich had been standing idle,
secured a new tenant, and the Pascagoula plywood plant commenced
operations. Thus, all the B A W I plants were now going concerns, and
in 10 of them 1941 was a year of steady expansion. T h e shipyard more
than doubled its em ploym ent during the year. But the hosiery m ill at
H attiesburg had reached m axim um em ploym ent. T h e rubber and tire
plant at Natchez was already feeling the shortage of rubber brought
about by the military demands, and in the latter m onths of 1941
em ploym ent in the plant declined. For M ississippi as a whole, the
20 See discussion, pages 34*37.
” How each plant, in relation to its size, affected the total growth of the B A W I
group has previously been indicated in the index figures of table 2. See table 2,
page 32, and discussion, page 31.
33 T h e basic figures, by quarters, are shown in tables 4 and 5. See table 4,
page 55, and table 5, page 56.
[ 5 3 ]
total em ploym ent in m anufacturing increased during 1941 by 27 per
cent and the total manufacturing wages by 56 per cent. A t the end
of the year the B A W I group of plants had increased its percentage
share to 9 per cent of the total em ploym ent and to 14 per cent of the
total m anufacturing pay roll of the state.
. D uring 1942, several of the B A W I plants turned to war produc
tion. Mississippi's major industry, that of lum ber production and
processing, was under heavy war demands but was having difficulty
in keeping its workers. T h e total increase in m anufacturing em ploy
m ent for the state in 1942 was 16 per cent above 1941, and in m anufac
turing wages, was 38 per cent above 1941. But the B A W I plants during
1942 nearly doubled their number of workers and more than doubled
their paym ent of wages. T hese 12 plants for 1942 alone contributed
42 per cent of the state’s total gain in manufacturing em ploym ent and
47 per cent of the state's total gain in m anufacturing wages. M ost of
this gain was due to the shipyard expansion—the shipyard again
doubled its em ploym ent, for the second successive year—but other
plants also contributed in proportion. Exceptions were the H atties
burg and Durant hosiery m ills and the Crystal Springs shirt factory,
which lacked raw materials and labor and sustained slight declines.
T h e Natchez tire factory rem ained below its 1941 levels during most
o£ the year. As 1942 ended, the 12 B A W I plants had 14 per cent of
the em ploym ent and 23 per cent of the pay rolls in the rising total
of M ississippi's manufacturing.
D uring 1943 the B A W I plants as a group continued to prosper.
T hey had generally attained their war peaks by A pril and continued
thereon, with m inor changes due primarily to labor shortage. T h e
shipyard was performing at near capacity in spite of excessive labor
turnover. T h e Natchez tire factory and the Grenada silk plant were
m anufacturing shells and were expanding their facilities. Other plants
also had war orders. But there were negative developm ents as well.
T h e H attiesburg Hosiery Company shut down in June because of
com bined labor losses and silk shortage. A t alm ost the same tim e, the
Pascagoula branch of the W . G. Avery Body Company was consolidated
with the parent plywood concern at Jackson, M ississippi.
D uring the first half of 1943, the lum ber industry lost further
labor and the state total of m anufacturing em ploym ent declined some
what. But the B A W I total on June 30, w hile slightly below that of
April, still was above that of the previous December. T h u s at midyear
[ 54]
TABLE 4
NUM BER OF WORKERS, AVERAGED BY QUARTERLY PERIODS, IN 12
M ANUFACTURING ESTABLISHM ENTS FOUNDED IN MISSISSIPPI
UND ER T H E BA W I a
First
Quarter
Year
1939
1940 .
1941
1942
1943 .
.
. . . . . .
. . . .
. .
. . . . . .
2,569
4,359
12,818
Second
Quarter
Third
Quarter
Fourth
Quarter
1,348
3,023
4,952
8,392
12,898
1,951
3,347
5,823
10,199
2,154
3,728
6,533
11,728
Average
for Year
b
1,633
3,167
5,417
9,265
a Source; Mississippi Bureau of Unemploym ent Compensation,
b Average of 12 m onthly periods.
of 1943 the B A W I group accounted for 14 per cent of the em ploym ent
and 24 per cent of the pay roll of all m anufacturing in Mississippi.
In July, the Pascagoula plywood plant obtained a new tenant, and, in
October, the H attiesburg plant did likewise. T h e other operations
continued generally at capacity.
Summary of the BAWI
M ississippi’s official attem pt to balance agriculture with industry re
sulted in the establishm ent of 12 m anufacturing plants that were new
to the state. T hey included 4 hosiery plants, 3 shirt factories, a chenille
concern, a woolen-goods m ill, a plywood plant, a rubber and tire
plant, and a shipyard. N one had left its former location; all were the
branches or affiliates of central or parent concerns that used the B A W I
subsidy plan as an aid to their decentralized expansions.
Em ploym ent figures for these 12 concerns are shown in table 4
by quarterly periods from the beginning of 1939 to midyear of 1943.
T he growth in em ploym ent was remarkably consistent, as well as
rapid, though it is to be recognized that the largest plant, namely,
the shipyard, dom inates the totals.
T h e wage disbursements of the 12 B A W I plants are set forth
in table 5.
T h e grand total of wages in table 5, for the period of four and one-
[ 55]
TABLE 5
W AGE PAYMENTS BY QUARTERLY PERIODS IN 12 M ANUFACTURING
ESTABLISHMENTS FOUNDED IN MISSISSIPPI U N D E R T H E B A W I a
First
Quarter
Year
1939 .
1940.
1941 .
1942 .
1943 .
.
.
.
.
.
.
.
.
.
.
,
.
.
.
.
.
.
.
. 609,952
* 1,201,666
. 2,752,115
. 6,396,435
Second
Quarter
Third
Quarter
$ 272,790 5 404,542
896,826
764,819
2,082,547
1,572,602
3,689,388
5,271,056
6,976,092
Fourth
Quarter
$ 529,414
1,043,048
2,693,414
6,181,827
---------
Total
for Year
$ 1,407,574
3,314,645
7,550,229
17,894,386
13,372,527 b
a Source: Mississippi Bureau of Unemployment Compensation,
b Six months only.
half years, is $43,539,361. T h is sum, in the customary parlance, is
termed the pay roll that M ississippi “bought” or in which, under the
public subsidy plan, the taxpayers of the state “invested/' T h e “invest
m ent” was the sale of a total of $980,500 in public bonds, plus the
operating cost of the State Industrial Commission (which was $77,250), the unknown cost of additional m unicipal aids and services,
and a varying am ount of bond interest. Figured in these terms, as is
comm on in subsidy deals, the ratio of “returns” to total “investm ent”
in four and one-half years’ time was approxim ately 36 to 1.
But this popular way of calculating the results of a subsidy deal
is open to grave objections. It involves the sweeping assum ption that
the subsidy actually was an investm ent—that it actually “brought in ”
the industries as a purchase payment brings a return in goods. But a
subsidy is an inducem ent, not an investment, and the causative effect
of that inducem ent can never, in the nature of things, be satisfactorily
proved. T hough neither the grantor nor the recipient of subsidy will
ordinarily admit it, the establishm ent m ight have been m ade w ithout
subsidy, in which case the ratio of “returns” would be infinity.
Another common way of figuring the results of subsidy is to divide
the total am ount of the subsidy by the num ber of jobs in the new
enterprise, the result being the “average cost of a job.” T h is m ethod
has the same fallacy as the first, in that it assumes causation; but,
further, the result of this m ethod varies according to the em ploym ent
status of an industry at a given time. For exam ple, if calculated for
the B A W I plants as of their 1939 average em ploym ent, the “cost of
[ 56]
TABLE 6
COMPARISON OF W AGE DISBURSEM ENTS AND SUBSIDY BOND ISSUES
FOR 12 M ANUFACTURING ENTERPRISES ESTABLISHED IN
MISSISSIPPI UNDER T H E BAW I
Total Wage
Disbursements
Name of Establishment
Ingalls Shipbuilding Corp. . .
W. G. Avery Body Co..................
Crystal Springs Shirt Corp. . .
I. B. S. M anufacturing Co. . .
Lebanon Shirt Co...........................
Real Silk Hosiery Co...................
Grenada Industries, Inc. . . .
Ellisville Hosiery Mills, Inc. . .
W inona Bedspread Co..................
Armstrong T ire & Rubber Co.
Jackson County Mills, Inc. . .
Hattiesburg Hosiery Co. . . .
TO T A L .....................................
TO TA L W IT H O U T
S H I P Y A R D ........................
a
.
.
.
,.
. $32,941,661
.
306,428
.
973,704
.
552,820 *
.
.
.
.
.
.
.
.
.
.
.
523,250
1,780,600
176,470
254,814
2,773,607
2,017,807
. . $10,597,770
Amount
of Bonds
Ratio of Wages
to Bonds
b
$100,000
10,000 c
25,000
25,000
35,000
25,000
103,000*
30,000
35,000
300,000
225,000
67,500
$980,500
73.2
15.3
8.7
7.4
$880,500
2.9 to 1
66
4.7
3.9
2.9
2.1
2.1
2.0
1.5
9.8
to
to
to
to
to
to
to
to
to
to
to
to
to
1
1d
1
1®
1t
1
1
1d
1t
1
1
1
1
• Source: Mississippi Bureau of Unem ploym ent Compensation.
*> On basis of annual average pay roll for the period, January I, 1939, to June 30,
1943, unless otherwise noted.
c Direct appropriation.
July 1, 1941, to June 30, 1943.
e July 1, 1940, to June 30, 1943.
* January 1, 1940, to June 30, 1943.
« Four bond issues.
a job” is approxim ately $600, whereas if calculated for the identical
plants as of 1943, the “cost of a job” is about $90. N othing can be
made of such a m ethod of figuring, which is here m entioned only
because it is prevailingly used in prom otional circles in justifying
subsidy by its so-called “results.”
T h e ratios between the annual average wage disbursements and
the am ount of bonds issued for each B A W I plant are shown in table 6,
but for a reason very different from the usual “return upon invest
m ent” calculation. In the table, the establishm ents are arranged in
[57]
descending order of ratios; this arrangement suggests what m ight prove
to be, upon the basis of broader data, a significant lim itation upon
com m unity subsidization itself. T h e more highly m echanized and
technically advanced operations are in the lower half of the list. T he
shirt factories are well toward the top, and the shipyard, w hich is a
very heavy user of hand labor in proportion to capital equipm ent,
is at the top.
W hile the 12 plants alone do not constitute a sufficient exhibit,
there are reasons for believing that the sample may run true for the
practice of com m unity subsidization in general. Local subsidies are
“purchases of pay roll/' not of plant. Therefore, the labor-using
industries are likely to make better showings than the industries that
emphasize capital and that are, on the whole, o f the higher techno
logical types. As far as the B A W I plants are concerned, the subsidiza
tion of the more heavily capitalized and elaborate types of industry was
more costly and did not “pay" in pay roll “returns" as w ell as that of
the more rudimentary operations; and if this holds good in the general
field, then there is an econom ic explanation for the order of enter
prises with which comm unity subsidization, prevailingly, has dotted
the South.
[58]
Some Concluding Comments on the
BAWI Plan
T he South has long discussed certain major issues connected with the
comparatively low level of industrial activity in the region. Should
a higher degree of industrialization be a regional goal? If so, what are
the preferable types of industry? Should the region endeavor to bring
in branch plants of successful national concerns, or should it chiefly
attem pt the establishm ent of new concerns, locally owned, and new
industries characteristic of the area? Should subsidization be used to
encourage the establishm ent of enterprises, or can the normal forces
of interregional com petition be relied upon to industrialize the South?
T o such issues, briefly indicated by the foregoing questions, Mississippi
added another: If subsidies are to be used, should they be purely
private and local, or should state authority and public financing be
factors in the organization of the subsidy program?
T h e B A W I experim ent yielded a background of experience re
lated to these questions, but the most generous review of its history
cannot say that it settled any of them. On all such issues, there remain
today, even in M ississippi, very grave and entirely justifiable differences
of opinion. T hese differences were expressed in the many interviews
made for the purposes of this study, and they are worth noting specif
ically because attem pts to attract industries by means of subsidies of
[ 59]
various descriptions are quite characteristic of the South and are
alm ost certain to reappear in the postwar period.
T h e B A W I demonstrated the great value of industrial pay rolls
to com m unities previously lacking in wage incom e. Yet some hold the
view that if the energy expended under the B A W I had been applied
to the diversification and modernization of the state’s agriculture, the
results w ould have been more appropriate to the basic econom y of
the area. T h e industrial and agrarian attitudes, however, are not neces
sarily contradictory; they find a comm on ground in the general opinion
that more industries arising from agriculture are a necessity of the
Southern econom y—a view that may be termed alm ost universal.
T h e B A W I procedure for selection and investigation is, in general,
strongly approved today by M ississippians who are for other reasons
either adherents or opponents of the plan. T h e selective and investi
gative procedure, indeed, may well be regarded as the system's greatest
innovation and foremost contribution to the planning and develop
m ent of industrial expansion. However, the question of industrial
types—that is, choosing am ong the many varieties of m anufacturing
production and between locally owned indigenous industry or the
branch-plant kind—is an exceedingly com plex problem . Probably for
the reason that there is no clear-cut arbitrary solution, this question
is one on which there are severe differences of view, even am ong those
who are perfectly agreed that industrialization is desirable. T h e B A W I
can be said only to have propounded this problem anew, not to
have solved it.
M uch the same can be said regarding the w hole problem of whether
subsidies of any sort are proper in the attem pt to stim ulate an indus
trial expansion. Many differences of opinion exist in M ississippi as
elsewhere. These differences, so far as M ississippi is concerned, are
based upon experience with com m unity subsidization in three forms:
the uncontrolled Colum bia plan, the state-controlled B A W I system,
and a few cases in which W PA training classes became a starting point
for private activities.
T h e controlled B A W I plan is usually considered to have worked
the best; but there are many who dislike and disapprove of the entire
practice. In some cases, the larger aspects of com m unity subsidization
were recognized. In behalf of the practice, some argued that a greater
decentralization of industrial activity was nationally desirable, and
that if the efforts of individual com m unities could help to reduce the
[60]
national concentrations and fill up the points of industrial vacuum,
then the subsidies were an influence in the right direction. On the
other hand, there was a considerable tendency to question whether the
more “w orthwhile'1 types of industry were responsive to the subsidy
inducem ents.23
O n the use of the public bonding power as a means of creating
subsidy funds, the full round of differences of opinion was found.
T his was both a m ost distinctive and also a most controversial fea
ture of the B A W I.24
O pinions on this issue, to some extent, also varied by localities.
In com m unities where the B A W I system had operated, the emphasis
tended to be upon favorable aspects of the plan. One point of emphasis
was that the B A W I raised larger sums than could have been raised
by the private-collection m ethod. A nother point made was that the
sale of m unicipal and county bonds caused investm ent capital to flow
into industrial developm ent at a time when capital was badly frozen.
It was said, too, that the plan distributed the burden of subsidies
fairly over all the taxpayers and that the bond elections, characteristic
of the plan, polled the voters affected as to whether or not they wanted
new industry. Still another point of emphasis was that the BA W I
system was more above-board than the old Chamber of Commerce plan.
In other com m unities, but alm ost w holly in the nonparticipating
com m unities, the emphasis was upon the unfavorable aspects of the
plan. O ne criticism was that the credit of the m unicipalities suffered.
23 Typical expressions on this point were: If an enterprise will move oncc, it
can move again. A good, strong enterprise needs no subsidy.
24 Some typical opinions follow:
A banker: T he thing was outright Socialism and should never have been at
tempted, much less held constitutional.
Another banker: T h e BA W I plan was socialistic in its tendency, but it worked.
A third banker: I’m so much concerned about real forms of Socialism that I
can't worry much about that m unicipally owned but privately operated factory
down the street.
A businessman and civic leader: Municipal ownership of a necessary facility,
and Socialism, are two very different things.
A Chamber of Commerce leader: T he people of this town have a right to work
through their local government as well as through this Chamber of Commerce.
A town mayor: I am chairman of a municipal corporation and if this corpora
tion wants to lease a building to another corporation, I don’t see that any highsounding principle whatever is involved.
A factory manager in a BAW I building: This is a purely private enterprise,
and don’t forget it.
[61 ]
A second criticism was that the burden was shifted from the group that
would directly benefit to the shoulders of all the taxpayers. Another
criticism was that voter sentim ent in some towns was stam peded and
that some com m unities were so “up against it” for em ploym ent at the
tim e that they would have tried anything.
Even the legal aspect remains a subject of disagreement. T h e Indus
trial Act was held constitutional, but some attorneys were not con
vinced by the majority decision. Other attorneys, however, expressed
the view that the essentiality of a given public facility to the welfare
of a given area is a question of fact for the court to decide in each
case, rather than a question of law, and that essentiality in fact may
vary from time to time and place to place. In view of increasing
tendencies toward the legal recognition of incom e from em ploym ent
as a social necessity and Supreme Court recognition of the right of a
state to define the terms of its own general welfare, some believe that
a local government m ight issue bonds for well-proved public welfare
purposes under a simple state enabling act, w ithout the apparatus of
certification that was found necessary in M ississippi in 1936.
Differences of opinion such as these and case material such as the
Mississippi experim ent provided are primary to the problem of a
stim ulated industrial expansion. There are, in contrast, four aspects
of the B A W I experim ent that partake so little of controversy that
they may be presented as tentative conclusions.
1)
Mississippi made a plan and put energy into carrying it out.
T h e plan may not have been perfect, and indeed it is not regarded
as perfect by its former participants today. T hey rightly view the
B A W I as having been a valiant attem pt on the part of an im pover
ished area to “lift itself by its own bootstraps.” T hey say that when
an emergency arose they tried to use all available weapons to cope
with that emergency.
It is em phatically true that M ississippi tried and tried hard. A
definite program was conceived, and dynam ically pressed w ith con
siderable results. H aving unem ploym ent, M ississippi set out to create
em ploym ent. Finding the law a barrier to action, it changed the law.
H aving little private capital, it used the public credit. Lacking estab
lished industries, it induced established industries to come in. H aving
an untrained labor supply, it trained the workers. F inding the old
plan of comm unity subsidization faulty, it revised that plan. T h e effort
[ 62]
was conceived, not necessarily perfectly, but always clearly; and it was
pressed w ith energy at every step.
T he need for energy in carrying out a plan seems obvious. It is
worth noting, however, because the South has for a long time been
full of various plans for expanding its industry and numerous such
plans are even now afoot. So many industrial prom otion schemes have
failed in the past, no matter how well or badly they were conceived,
simply because sufficient energy was not expended in carrying them out.
2) T h e B A W I plan was directly operated by outstanding m en .
N either the planning nor the execution of the plan was left to inferior
abilities. Both on the state and com m unity levels, able men left their
affairs or emerged from retirem ent to conceive the B A W I, draft the
legislation, and supply the personnel. T hese leaders did not lend their
names in any “showcase” capacity; they did the actual work. Even
those who opposed the B A W I or were unenthusiastic about it stressed
the fact that w hile they considered the idea of the B A W I as dubious,
the situation was m ade good by a set of leading men in whom all
had confidence.
T h is point is worth noting because the procedure of the BA W I
in this regard has not always been characteristic of the processes of
government. N o blueprint is any better in practice than the hands
to. w hich it is entrusted for execution. A ble leadership in a partici
pating capacity is an essential requirem ent of successful action.
3) T h e B A W I > as practiced in Mississippi, demonstrated the supe*
rior results of a two-level approach to developmental problems. Local
energy and com m unity self-interest were combined, in the BA W I
setup, w ith the more neutral judgm ent and greater fact-finding ability
of a central state agency. T his vertical arrangement was an important
invention, apart from all questions as to how it was applied. T h e pre
vailing setup in this region consists of a state planning board or de
velopm ental body, w ith a vague m andate to develop the area, and a
m ultiplicity of detached and unrelated local agencies, all working in
virtual isolation and w ith little unity of policy or purpose. Precisely
this situation, in M ississippi, threatened econom ic chaos under pres
sure of emergency and showed the need of some centralizing structure.
T h e two-level idea has lately reappeared in Louisiana, where there
is an active m ovem ent in county resource analysis with state technical
aid. A pproaching problem s appear almost certain to require some such
structural provision for unified approach. Disem ploym ent, prospec
[ 63]
tively the central problem, w ill probably present itself as a series of
com m unity emergencies. Each town or small city may have its quota
of war workers returning from shipyard centers, or m en dem obilized
from the armed forces. Simultaneously, the one or two sm all or
medium-sized factories supporting the typical sm all town may be in
the throes of postwar conversion.
Federal assistance for the larger plants seems probable regardless
of their ability to solve their conversion problems from their own
resources. But in the workings of any general system of assistance the
smaller units quite comm only are om itted or do not fit the require
ments. Thus, the basis of incom e in com m unity after com m unity may
be in jeopardy because the factory that is its m ain support m ust con
vert from war work to peacetim e production of doubtful prospects.
Com m unity emergencies may be expected to breed com m unity
subsidization efforts in the postwar period. Local aid to local industries
is a remembered pattern in the South, used alm ost habitually in
emergencies and, indeed, in the ordinary course of prom otional activ
ity. M ississippi found, as some other Southern areas have found, that
a m ultiplicity of unregulated subsidy attempts was creating consider
able disturbance and threatening to change the econom ic structure in
undesirable directions. Comm unity interest, moreover, may easily run
counter to econom ic wisdom. T h e answer of M ississippi am ounted to
the organization of the effort, with a state com m ission as the top
planning authority.
T he M ississippi Industrial Commission had direct and mandatory
powers. W hether such powers were necessary may be open to question.
A state agency, empowered only to investigate the local developm ent
proposals and to render public reports, m ight have had virtually the
same effectiveness. However, some M ississippi leaders believe that the
success of the suasion m ethod of the B A W I rested upon the fact that
the State Industrial Commission had “a club in the corner.” T h e point
is debatable. But the need of central authority w ith influence over
localities seems likely to present itself with some em phasis in develop
m ental problems of the future.
4)
T h e B A W I did not bring into being any new enterprises
the independent or indigenous types. Its failure to do so is the final
challenge to developm ental work. T h e independent enterprise is gen
erally representative of the economy of individualism that is favored
in the South. A higher utilization of Southern raw and semiprocessed
[ 64]
of
production is obviously the real key to a balanced economy and a
higher regional incom e.
W hat were the reasons for the failure of the B A W I to develop new
industries? First, capital for investm ent purposes was lacking. Second,
managerial ability and labor skills and experience were also lacking.
And, third, the period of deep depression had suspended the fundamen
tal econom ic act of risking capital funds and had paralyzed the venture
spirit in enterprise.
T hese lim iting conditions do not confront the Southeastern region
as detrim entally today as in the prewar years. Regional funds are
probably sufficient to finance a considerable am ount of new local
industry, if soundly applied. Labor skills and experience have very
greatly increased, and there is a better supply of capable management
and submanagement. Surveys of industrial resources and of regional
consumer needs are being actively made, so that industrial venturing
may have a factual basis upon which to proceed. W hether the entre
preneurial spirit itself w ill revive, and whether the business environ*
ment of the com ing period w ill favor its revival, only the future
can determ ine.
[6 5 ]
6
D is tr ic t
r
f
t
i
c
The
u
n
m
Commitiv
the Feder,
Facilities
Output
Income
Debt
S^ederaC Reserve 'Bank cfjttCanto.
RESEARCH DEPARTMENT
or
SIXTH DISTRICT AGRICULTURE SINCE 1910
F A C IL IT IE S
OUTPUT
IN C O M E
DEBT
This study was prepared in the Agriculture Section of the
Research Department by Brandon D avis, Research Assistant
FEDERAL RESERVE BANK OF ATLANTA
June 1953
In carrying out its responsibilities for monetary
and credit matters, the Federal Reserve Bank
of Atlanta must keep abreast of developments
within the economic structure of the region that
it serves. For that reason, statistical data are
gathered by the Bank from a variety of sources
and serve a number of purposes. In this instance,
the data have been used to compile a brief his
tory of how new ways of farming have affected
agriculture in the Sixth District states* The
pamphlet is presented for the use of bankers,
businessmen industrialists, farmers, and others
who are interested in the progress of the area.
Additional copies are available upon request.
SIXTH DISTRICT AGRICULTURE SINCE 1910
F A C IL IT IE S , O U TPU T, IN C O M E , A N D D E B T
Farmers in the United States set production records during
World War II and surpassed them in postwar years. The national
farm output for consumption and sale1 in 1940-44 was about
21 percent above the 1935-39 average, and in 1945-49 was 32
percent higher than the prewar average (Figure 1), Although
farmers in the Sixth Federal Reserve District states2 did not
match this performance, they maintained a 1940-44 output that
was roughly one percent above 1935-39* After the war they
made a better showing, pushing 1945-49 production 11 percent
above 1935-39High farm output began, of course, when the wartime need
for food and raw materials created a favorable market for farm
products* Farmers were able to supply the market during and
after the war in large part because the wartime shortages in
farm labor and production materials and the postwar rise in
operating expenses encouraged efficiency in production* They
were more willing to try recommended practices that accumu
lated from farm research after World War I—practices designed
to help them feed the growing national population despite the
declining farm labor force. American farming since 1940 has
therefore been in one of its most active periods of change.
*The index of farm output for consumption and sale was calculated for this study by
dividing the index (1935-39» 100) of gross farm income (cash receipts, value of home
consumption, and annual rental value of farm dwellings—calculated for District states as
10 percent of U.S. rental values) by the index of prices received for farm products.
^Alabama, Florida, Georgia, Louisiana, Mississippi, and Tennessee.
1
Figure 1
INDEX O F FARM OUTPUT FOR SALE AND CONSUMPTION
DISTRICT STATES AND U.S.
perceu'v
1955_39=100
Parra output in the sixth District states rose less
and fluctuated more than in the nation.
Figure 2
MULES, TRUCKS, AND TRACTORS ON FARMS
Thousands
DIStkICT STATES
Trucks and tractors are replacing mules on farms.
2
MECHANIZATION
In District states, an important part of the changing produc
tion program on farms has been the replacement of manpower
and mule power with farm machinery. Between 1920 and 1940,
tractors on District state farms increased from around 10,000
to about 57,000 (Figure 2). The number reached 117,000 in
1945 ; and with the greatest strides in mechanization taking
place after the war, farmers in District states were using
277,000 tractors in 1950—one tractor for every 409 acres of
farm land. Meanwhile, mules on farms had declined from 1.5
million in 1935 to around one million.
FERTILIZERS
With the use of commercial fertilizers, farmers have been able
to gain greater production through higher yields. In 1940,
fertilizer consumption in District states, at 2.6 million short
tons, was 13 percent higher than the 1935-39 average and
averaged around 150 pounds per acre of cropland harvested.
In 1950, District state farmers used about 4.9 million short
tons of commercial fertilizer, an average of approximately
336 pounds per acre of cropland harvested.
NUMBER AND SIZE OF FARMS
A reshaping of the traditional structure of agriculture has
been seen in a decline in the number of farms and an increase
in their average size. The 1950 Census of Agriculture reported
that there were approximately 275,000 fewer farms in the
District states than there had been in 1935 (Figure 3). The
average size of farms had increased from 75 acres to 130.
FARM TENURE AND LAND OWNERSHIP
Changes in farm tenure and in the proportion of land in farms
owned by farm operators have accompanied the consolidation
of small farms into larger holdings. In 1930, over 400,000
3
croppers represented 31 percent of total farm operators (Fig
ure 4). By 1950, the number had dropped to 186,000 and the
percentage to 17. Farm operators have owned an increasing
share of the land in farms since 1935, when they held title
to only 50 percent. In 1950, operators owned 74 percent of
the land in farms.
LAND USE
Between 1935 and 1950, about 13 million acres were added
to the land in farms in District states, but cropland harvested
declined 5 million acres (Figure 5). Of the 18 million acres
in new land or land diverted from harvested crops, 16 million
went into pasture acreage. According to the Census of Agri
culture, 1945 was the first year when pasture acreage sur
passed that of harvested cropland in the District states* land
use pattern. By 1950, farmers were using 45 million acres
of their land for pasture, whereas crops were harvested from
only 29 million acres.
LIVESTOCK AND POULTRY
The increase in pasture signals a rapid development of live
stock enterprises. Rising prices for red meats, Government
control of cash crops, and the efficient use of labor and land
obtained in a livestock program contributed to an upward
trend in livestock numbers after 1930 (Figure 6). A higher
production per animal unit has been obtained through the
grazing of high protein cover crops and the feeding of oilbearing crops. Winter cover crops have afforded almost yearround grazing. Success in cultivating and harvesting hay,
small grains, and pasture crops with farm machinery has also
helped the feed production program.
The 1925 Census of Agriculture disclosed the lowest
inventory of dairy cows on District state farms since 1910*
After that the number of dairy cows increased steadily, and
by 1950 there were 2.3 million cows on farms, or roughly
4
Figure 3
NUMBER OF JARMS AND AVERAGE S E E OP BARMS
Thousand r,
DISTRICT STATES
Acres
1 ,4 0 0
------ — ----- .------------- 1------------- 1------------- 1 1**0
1 ■“
Number of Farms
1
7
120
1
4
V
1,300
100
1,200
Average Size of Parms
!
K
-
1,100
80
1,000
1
1
.1 . .
1 ^t/Vv 60
OA/v--------1910
1920
1925
1930
1935
19^0
19^5
1950
After 1 9 3 5 the marked decline In the number of farms was
accompanied by a growth In the average size of farm units.
Figure 4
LAND OWNED BY FARM OPERATORS AND NUMBER OF
CROPPERS, DISTRICT STATES
Thousands
500
»f00
300
200
100
90
1920
1930
19HO
1950
Ownership of farm land has been rapidly passing Into the
hands of farm operators. A corresponding reduction In
the number of croppers has taken place.
5
Figure 5
ons of Acres
FARM LAND USE
DISTRICT STATES
110
100
90
80
OTHER ►
19#
60
ALL LAND
70
WOODLAND
IN FARMS
50
J*o
30
20
10
0
1925
1930
1935
191*0 1945
195°
in the farm land Pattern has been toward more
as hewi I t J * °
r Pasture-type crops. Recently, more land
n put to pasture than to any other single use.
6
twice the 1925 inventory. Undoubtedly, the improvement of
grazing and feeding programs was the foundation for an un
interrupted expansion in beef and dairy enterprises.
The inventory of swine on farms in 1920 was the highest
ever reported by the Census of Agriculture for District states,
but inventories then dropped sharply until 1930 (Figure 7).
Although the trend has been upward since that time, producers
must overcome an inability to compete with midwestern pro
ducers before hog production becomes a major agricultural
enterprise in District states.
In postwar years, modern transportation facilities and the
low prices of chicken in comparison with the prices of red
meats have opened markets throughout the nation for broiler
growers in District states. The mushrooming production of
commercial broilers to supply this market has been one of
the most phenomenal developments in the section's agricul
ture. District state growers produced 11.3 million birds in
1939 (Figure 8). Production in 1952 totaled 187.8 million.
Feed dealers were primarily responsible for this expansion.
Under contracts with growers, they agreed to supply chicks,
feed, and management advice. Growers furnished labor and
equipment. The typical contract further provided that the
feed dealer assume responsibility for marketing the mature
birds and that the grower’s returns be determined by the
degree of efficiency he achieved in converting feed into meat.
Alabama, Georgia, and Mississippi are the leading broiler
producers in the Sixth District, with Georgia first among
District states as well as in the nation. Georgia growers
produced 112.6 million broilers in 1952.
CASH CROPS
Despite the increased emphasis on livestock in District
states, farmers still depend primarily upon their cash crops—
particularly cotton, peanuts, and tobacco. A survey of crops
7
for recent years reveals a rising production obtained with
higher yields.
Since 1910 cotton yields in District states have been
increasing, which has offset the downward trend in acres
harvested. Between the census years 1910 and 1950, the
number of acres harvested dropped from 14 million to 8 mil
lion, whereas the average yield for the six states rose from
165 pounds of lint cotton to 262 (Figure 9). Excluding years
of exceptionally large or small crops, cotton production has
averaged about 4.5 million bales.
Part of the falling-off in cotton acreage has resulted from
a conversion of cropland into permanent or temporary pasture,
but importance is also attached to factors involved in pro
duction that are taking some of the profitableness out of cotton
growing. Aside from labor shortages, rising farm wage rates
have added to the expense of turning out this labor-consuming
crop. Mechanization has been slow because the small size of
the typical farm unit limits the efficient use of cultivating
and harvesting machinery. This condition has recently given
rise to another problem for cotton growers in District states —
the necessity of competing with rapidly developing cotton
enterprises in Arizona, New Mexico, and California, where
machinery can be used efficiently from planting to picking on
large, flatland farms.
A favorable increase in cotton yields, however, is evi
dence that farmers in District states have managed the degree
of efficiency needed to maintain their production. They have
reserved their best land for cotton, and have preserved the
the fertility of this land by fertilizing adequately and by
rotating cotton with legumes. Boll weevil damage has been
held down with insecticides.
Peanut acreage and production were on the rise in District
states from 1910 throughout the war years, but both declined
after the war. Sparked by a wartime demand for oil-bearing
8
Figure 6
CATTLE AND DAIRY COWS ON FARMS
DISTRICT STATES
Cattle and dairy cow numbers have been rising since 1 9 1 0 #
but the Increase In dairy cows has been much less pro
nounced than that In cattle.
Figure 7
SWINE ON BAEMS
DISTRICT STATES
Millions
After falling sharply between 1 9 2 0 and 1 9 3 0 , hog Inven
tories have since shown a gradual rise.
Figure 8
COMMERCIAL BROILERS PRODUCED
DISTRICT STATES
Millions
200
200
150 —
Commercial
Broilers
100
50
l/
—
n m
— 150
^
1 T~i1—
L l
1. I
1 L
1 9 *t2
1944
1946
1948
1950
1952
During the postwar years, commercial broiler production
has expanded phenomenally.
19^0
9
100
50
Figure 9
COTTON: ACRES HARVESTED, PRODUCTION,
AND AVERAGE YIELD
Pounds Per
Acre Yield
DISTRICT STATES
Millions
16
300
12
260
220
180
Bales produced
I
' J '
V
j _______ I________i -vw> i4o
1910 1915 1920 1925 1930
1935 1940 1945 1950
In the face of declining cotton acreage. Improved yields
have tended to ataballze production.
Figure
10
PEANUTS: ACRES HARVESTED AND PRODUCTION
DISTRICT STATES
Millions of Acres
Tons
A
1
Productior11 /
1*
-
▼
"
600
XJL
1910
I
1
-
l/lll
400
200
1915
1920
1925
^
1—
1930
1
Acres Harvested
—
1 11 1 1 1 1 11 LL
1935 1940
145
1950
production of peanuts for war use led to a peak in acre
age harvested. Since the war acreage allotments have
restricted plantings.
10
crops, production of picked and threshed peanuts rose in the
six states from 289,000 tons harvested from 1.1 million acres
in 1939 to a peak of 654,000 tons harvested from 1.8 million
acres in 1943 (Figure 10). Both production and acreage then
remained at a high level until 1948, when a noticeable down
ward trend began.
Peanuts were used more in food products during the war
than as. a source of oil for industrial purposes. The demand
for peanuts for food and the success peanuts achieve in
competing with other sources of oil, therefore, will probably
have a lot to do with determining their future as a cash crop.
Of the leading cash crops, tobacco is under the strictest
Government programs of acreage allotments and of marketing
quotas, which are aimed at keeping production closely in
line with demand (Figure 11). Since the imposition of these
controls in the 1930’s, tobacco production in District states
has accompanied the steady growth in tobacco consumption.
Exceptions have been a decline in the early 1940*8, reflect
ing the effects of the war which disrupted marketing of tobacco
abroad, and another drop between 1947 and 1950, that coincides
with a dollar shortage in foreign nations that ordinarily use
large quantities of cigarette tobacco.
The over-all agricultural pattern presented here is one
that may apply most generally to the three entire states and
that portion of three other states which make up the Sixth
Federal Reserve District. A general discussion of this sort
obscures the contributions that selected crops make to the
farm economy of the individual states. Such crops are often
leading cash crops in some states and production and prices
received for them in any year are reflected throughout the
state’s agriculture. Some examples are citrus fruits in Florida,
rice and sugarcane in Louisiana, and small grains in Tennessee.
11
FEED AND HAY CROPS
In District states corn is important as a feed crop rather than
a cash crop. Although more cropland is planted to corn than
to any other crop, this acreage has been declining since the
mid-1930*s (Figure 12). Much of the land on which corn was
once grown for mule feed now supports meat animals or is
being planted to cash crops.
Despite this reduction in corn acreage, there has been
no appreciable falling-off in production because the average
six-state yield has risen about five bushels per acre since
1944. Corn output, therefore, has probably helped support
the rise in hog numbers concentrated in Alabama, Georgia,
and Tennessee.
Because a field of small grain can be grazed as well as
harvested for feed, a marked growth in small grain acreage
and production since 1930 has accompanied the increase in
livestock numbers (Figure 13). Of the small grain feed crops,
oats lead by a wide margin in acreage and production. Barley
and rye are relatively insignificant. Wheat production in the
District is centered in Tennessee, where it is the most im
portant small grain grown and where it is primarily a cash
crop rather than a feed crop.
Hay has been of major importance in the development of
the feeding program that has supported the growth of livestock
enterprises in District states. The most rapid expansion in
acreage and production of hay took place between 1930 and
1940 (Figure 14). A decline in hay acreage and a slight drop
in production during the war years probably came about be
cause the demand for such crops as cotton and peanuts sparked
an extension of cash crop acreage. After 1945, production
turned upward sharply, although acreage continued to go
down. This was possible largely because of a shift to higher
12
Figure II
TOBACCO: ACRES HARVESTED AND PRODUCTION
DISTRICT STATES
Millions of pounds
Thousands of Acres
The peak in tobacco production was reached in 1 9 ^ 5 » where
as the peak in acres harvested had occurred in 19^0*
Figure 12
COHN: ACRES HARVESTED AND PRODUCTION
DISTRICT STATES
Millions of Bushels
Millions of Acres
Corn acreage has been declining since 1935, but because of
higher yields there has been no appreciable change in pro
duction.
13
Figure 13
SMALL GRAINS: ACRES HARVESTED AND PRODUCTION
DISTRICT STATES
Millions of Acres
Millions of Bushels
small grain and hay production has tended to increase.
These crops are the foundation of the feed program
which has made possible the recent expansion in livestock.
Figure llf
HAY: ACRES CUT AMD PRODUCTION
DISTRICT STATES
Millions of Tons
14
Billions of Dollars
Figure 15
FARM INCOME
DISTRICT STATES
Farmers received a high net Income during the war years but
after 1 9 4 6 rising costs reduced net as a percentage of gross.
15
yielding legume hays, and an increasing use of these hays
in crop rotation programs.
FARM INCOME SHIFTS
Farmers in District states saw their gross income rise from
about one billion dollars in 1940 to around 3.6 billion by
1951 (Figure 15). This increased income, of course, resulted
largely from the trend of higher prices for farm products that
has been in evidence since 1940, As far as farmers in the
six states are concerned, the share of this gross income that
they have realized as net income has depended mainly upon
the prevailing demand for their cash crops. When the wartime
demand for cotton and peanuts caused prices received to
climb faster than production expenses, farmers enjayed a
period of high net income. Their 1941-44 average was around
60 percent of gross. Since 1945 a falling-off in demand for
these cash crops and rising costs of production have resulted
in a reduced net income. Net income for 1945-49 averaged
around 52 percent of gross.
That farmers in District states have shared in a national
growth in farm income does not reveal how the relative im
portance of farm products as a source of this income has
changed. Farmers in the section got 84 percent of their 1925
cash receipts from the sale of crops, and 16 percent from
livestock (Figure 16). Of total receipts that year, cotton and
cottonseed brought 59 percent; peanuts, truck crops, and
tobacco, only 8 percent. On the livestock side, cattle and
hogs each sold for 3 percent of total receipts, dairy products
for 4 percent, and chickens for 2 percent.
By 1951 the pattern of income sources for farmers in the
six states had changed considerably. Crops brought 64 per
cent of cash receipts, and livestock and livestock products
brought 36 percent. Only 31 percent of the total was obtained
through sale of cotton and cottonseed. Peanuts, truck crops,
16
F i g u r e *16
SOURCES OF FARM INCOME
DISTRICT STATES
Percent
100
1925
1930
1935
19^0
191*5
1950
Income from livestock and livestock products Is Increasing,
whereas that from cotton and cottonseed Is declining.
17
and tobacco accounted for 13 percent. Cattle sales contrib
uted 11 percent; dairy products, 8 percent; chickens, 5 per
cent; and hogs, 7 percent.
FARM DEBT
During the war when the brisk demand for cash crops grown
in District states kept prices received rising faster than
operating expenses, farmers were able to reduce their total
debt. Between 1942 and 1946, the farm real estate debt was
reduced from 465 million dollars to 379 million; non-real
estate debt, excluding Commodity Credit Corporation loans,
dropped from 207 million dollars to 169 million3 (Figure 17).
Farm mortgage debt in each of the six District states
followed this general pattern of decline during the war years
and of sharp increase in the postwar period (Figure 18). The
most pronounced rise in farm mortgage debt after 1946 occurred
in Florida, with Georgia and Mississippi next in importance.
On January 1, 1946, Florida farm mortgage debt stood at 26
million dollars. By January 1, 1952, the debt had reached
96.5 million dollars.
In the non-real estate sector, the debt picture in District
states has also been one of wartime reductions and postwar
increases, with the exception of Mississippi (Figure 19)*
Non-real estate loans to Mississippi farmers rose from around
23 million dollars in 1940 to an average of 45 million for
1943-47. Loans outstanding January 1, 1948, showed a decline,
but January 1 reports show loans have been rising in Missis
sippi since 1948. The sharpest wartime reduction in nonreal estate loans took place in Tennessee—from 56 milli°n
dollars in 1940 to 21.8 million in 1943. The subsequent in
crease in non-real estate loans to farmers in Tennessee was
also more pronounced than in other District states. By January 1, 1952, non-real estate debt in Tennessee, totaling
18
Figure 17
TOTAL FARM DEBT: U.S. AMD DISTRICT STATES
Millions of Dollars
1 0 ,0 0 0
10 , 0 0 0
I
9.000
5,000
9.000
8.000
7.000
6.000
5.000
«*,000
4.000
8.000
7,000
Real estate debt, U.S. +
I
6,000
3,000
Non real estate debt, U.S. *
2.000
2, 00 0
1,000
900
1,000
900
800
700
600
800
Heal estate debt, District States +
500
Non real estate debt, District States *
200
100
700
600
500
400
»*00
300
3.000
300
200
J___ I___ I___L
J___ I__ L
100
1940
1945
I95O
1952
Long-term debt Is Increasing at about the same rate as for
the nation as a whole. Short-term debt Is increasing at a
slower rate than for the nation.
* Includes loans at all commercial banks, production credit
associations, Federal intermediate credit banks, and FHA
production and subsistence loans, disaster loans, and emer
gency crop and feed loans.
+ Includes debt outstanding held by Federal Land Banks, Fed
eral farm mortgage corporations, FHA, life insurance compan
ies, commercial banks. Individuals, and others.
19
F ig u r e
J.8
REAL ESTATE FARM LOANS, OUTSTANDING JAN.
DISTRICT STATES
Millions of Dollars
1
1940
1945
1950
!952
Since 1 9 4 6 , farm real estate loans by all agencies
have risen sharply.
figure 19
NON REAL ESTATE FARM LOANS, OUTSTANDING JAN.
DISTRICT STATES
Millions of Dollars
1
60
50
40
30
20
10
1940
1950
1952
19^5
Total non real estate loans have been rising since
19^3.
20
54 million dollars, was the highest among District states.
The farm mortgage debt in District states totaled 661
million dollars on January 1, 1952, and the non-real estate
debt reached 283 million. On the real estate side, the rising
postwar debt probably has financed the increase in the aver
age size of the farm unit, the bringing of new land into the
farming system, and the development of a cattle enterprise
on many farms. Recent increases in the value of farm land
would also have the effect of increasing the mortgage debt
by making it necessary for operators to incur larger loans in
order to buy additional land. On the non-real estate side,
factors operating to expand the debt have been the rise in the
quantities and costs of production materials and the expense
of a postwar shift from traditional cash crops to other enter
prises, an important example of which is livestock.
Despite the postwar rise in total farm debt, farmers in
the six states appear to be in a far better financial position
than they were before World War II. In 1940 their mortgage
debt was 83 percent of their net income, out of which this
debt is paid (Figure 20).Their 1946-51 mortgage debt (reported
on January 1 in these years), however, averaged only 29
percent of their net income for this period. Non-real estate
debt in District states in 1940 was about 27 percent of total
cash receipts, from which the debt is paid (Figure 21). The
1946-52 debt averaged only about 8 percent of cash receipts.
Since 1940 there have also been some changes in the
importance of the sources from which farmers borrowed. The
over-all pattern of real estate borrowing shows growing ac
tivity in commercial and private financing; and, with the
exception of Farmers Home Administration loans, a decline
in Government financing. In the postwar years, the financing
of the non-real estate debt by commercial and private agents
21
Figure 2 0
FARM MORTGAGE DEBT AS PERCENT OF NET FARM INCOME
DISTRICT STATES
percent
100
80
60
40
20
Since 1 9 4 0 , farm mortgage debt has become a much small
er portion of net farm income.
Figure 21
FARM NON REAL ESTATE DEBT AS PERCENT OF CASH RECEIPTS
percent
DISTRICT STATES
25
20
15
10
22
has expanded rapidly; whereas, Government financing gained
mostly during the war and has since' stabilized at a high level.
SUMMARY
Mechanized farming for more efficient production, increased
use of fertilizer and improved seeds for higher yields, and
a conversion from row-crops to livestock are significant trends
in District agriculture. Their development was hastened by
a war and postwar demand for farm products on the home
front, as well as abroad. Barring another period of wartime
conditions, these trends may therefore be expected to lose
some of their force in the coming years. Whether District
state farmers will continue to push a diversification of their
farm systems, particularly in giving more attention to live
stock, will depend largely upon future demand for their cash
crops, which are still the mainstay of farming in the six
states.
The intensification of production efforts during recent
years by District state farmers has contributed to a greater
need for capital in the farm production pattern. The financing
of fertilizer, machinery, or the initial acquisition of livestock
for breeding will have to come out of retained net farm in
comes or be carried on with borrowings. Possible falling
prices for farm products may retard diversification of enter
prises unless output is upped enough and costs are cut enough
to maintain incomes at a level that will facilitate the repay
ment of debts. So far, District state farmers seem to have
kept their short-term debt low in relation to long-term debt,
and have been favored with an over-all debt which is low in
relation to their receipts and income.
23
BIBLIOGRAPHY
Commercial Fertilizer Yearbook, Vol. 7 7 , No.
3A, S ep t. 1948;
Vol. 8 3 , No. 3A, Sept. 1 951; Vol. 8 5 , No. 3A, S ept. 1 9 5 2 .
Walter W. Brown Publishing Company, I n c ., A t la n ta , Georgia.
United States Bureau of Agricultural Economics
Agricultural Finance Review , V o l s . 2 - 1 4 , 1 9 3 9 - 1 9 5 2 .
Cash Receipts from Farming, 1924-1944 , Ja n u a ry 1 9 4 6 .
Changes in American Farming, M is ce lla n e o u s P u b lica tio n
Johnson, Sherman E .
No. 7 0 7 ,
December 1949.
Crop Production , Annual Summary, 1951.
Farm Income Situation Reports , F e b . 19 4 6
Statistics on Cotton and Related Data,
through Ju ly 1 9 5 2 .
S tatis tic a l Bulletin No. 9 9 , June 19 51.
United States Bureau of Census
Fourteenth Census of the United States: 1920 .
United States Census of Agriculture: 1925, P a r t II; 1930; 1940,
Vol. Ill; 1945 , Vol. II; 1950 , S e ri e s A C 5 0 - 1 ; 1950 , Vol. I, P a r t s
17, 18, 20, 21 , 2 2 , 24.
United States Census of Population: 1940,
V ol. I;
1950 ,
Advance
Reports, S eries P C - 8 .
United States Department of Agriculture
Agricultural Statistics , Annual e d itio n s, 1 9 3 6 - 1 9 5 1 .
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S ta tis tic a l Bulletin No. 101, Ju ne 1 9 5 1 .
United States Department of Commerce
Income P aym en ts to Individuals by Typ e of P a y m e n t and Industrial
Source, 19 3 9 -1 9 5 1 , (State data supplied by the O ffice of B u s in e s s
E conom ics)
United States Production and Marketing Administration
Annual Report on Tobacco Statistics,
24
1939,
19 40,
1947, 1951.
Seattle
Tk. x
. " ° P « t y 01
lie Comnittee on tho Hlstor
thQ F e « s r a l R es e r v s S y a te
Entrance to M ain Vault
fX '///t/ Annual Report for the Year Ended
December 31,1950
February 15, 1951
To the Member Banks of the
Sixth Federal Reserve District:
In the following pages I present a review of the operations of
the Federal Reserve Bank of Atlanta for the year 1950. A major
part of this report deals with specific departmental activities.
These activities are carried on for the benefit of the Government
and the public in general and of banking and the business com
munity in particular. In truth, the Bank is a service institution and
again I urge, as I have in the past, that bankers of the District visit
our offices in the interest of becoming better acquainted with our
work and of strengthening those personal relationships which mean
so much in maintaining mutual confidence and understanding.
It is indeed gratifying that our relations with the banks of the
Sixth Federal Reserve District were maintained during the year
on the same basis of friendly co-operation that has been charac
teristic of the past. Jointly, we share in the vast responsibility of
maintaining a sound and adaptable financial mechanism for the
benefit of the public in its monetary dealings. In the year 1951,
this responsibility will be greatly enhanced because of the na
tional defense effort. I am sure that in our joint relationships we
shall discharge our trust with continued integrity and efficiency.
Sincerely yours,
W. S. M cL arin , Jr.,
President
TABLE OF com m
PAGE
D e v e l o p m e n t s .........................................9
R e v ie w
of
B a n k in g
R e v ie w
of
B a n k O p e r a t i o n s ...................................................... 17
Business B a c k g ro u n d ..........................................................10
Changes in Membership in the Sixth District . . . . 14
Growth in Par B a n k in g ....................................................15
V-Loan Program .....................................................................18
Consumer C redit..................................................................... 19
Real Estate C r e d i t ............................................................... 20
Commodity Credit C o rp o ratio n ........................................ 21
Reconstruction Finance C o rp o ra tio n .............................22
Bank and Public Relations....................................................23
Bank E xam ination................................................................24
Check Clearing and C o lle c tio n .........................................25
Currency and C o i n ................................................................27
Discount and C redit................................................................28
Fiscal Agency and Securities.............................................. 29
Personnel.................................................................................33
R e s e a rc h .................................................................................34
Appointments, Elections, and Official Staff Changes . . 35
D ir e c t o r s
and
F inancial
a nd
O f f i c e r s ............................................................. 39
V o lum e R epo rts
46
Measured by their ability to meet the demands of business bor
rowers, by growth in assets, and by earnings, the member banks
of the Sixth District operated with complete success during the
year. As a group, their total assets grew from $6.1 billion to $6.7
billion, reaching an all-time high. Although holdings of securities
declined by about $50 million, total loans and discounts increased
by approximately $390 million. Reflecting the growth in loans
was a rise in total deposits from $5.7 billion to $6.2 billion.
Earnings of the member banks as a whole were substantial.
Current operating earnings amounted to $162 million, compared
with $146 million in 1949, a gain of 11 percent. Interest on
United States Government obligations provided $38.7 million, or
23.9 percent of the total. Interest and discount on loans amounted
to $83.3 million, or 51.4 percent of the total. Net current operat
ing earnings were $61.7 million, compared with $54 million for
1949. Net profits after all charges, including taxes on net income,
amounted to $37 million, against $34 million for 1949.
9
Increases over the preceding year were made in dividend pay
ments. For the year 1950, such payments amounted to $12.8 mil
lion, against $11.7 million for 1949.
These gains in banking re
sources indicated that business
activity was in an expansionary
phase. When goods are moving briskly from producer to con
sumer, the demand for bank loans increases to facilitate the grow
ing volume of exchanges. On a rising price level, businessmen
purchase for inventory with confidence and enlarge and improve
their plants. Consumers are stimulated to practice anticipatory
buying and to save at a decreasing rate. All of these factors were
present during the year, but they gained in force following the
outbreak of the Korean War at midyear.
During the first half of the year, only a moderate expansion of
business activity took place. This expansion was evidenced by
almost uninterrupted month-to-month gains in industrial produc
tion, in generally rising employment after allowing for seasonal
changes, and in rising income. The distribution of National Serv
ice Life Insurance refunds, largely in the first quarter, provided a
strong stimulus to business and served in large measure to avoid
a decline such as had appeared in the early part of each of the
other postwar years.
With the decision by the United States Government to repel the
North Korean forces that crossed into South Korean territory on
June 25, 1950, the expansionary factors that were already in evi
dence in the economy were given added strength. There is no par
ticular mystery about what took place. An avalanche of consumer
and business spending that brought sales to abnormal levels had
been released. Fearing that the Korean conflict marked the begin
ning of another major war, consumers went on a buying spree
10
that embraced houses, automobiles, tires, electric appliances, and
many other items. Panic buying occurred even for articles of wear
ing apparel and food. Business investment also expanded sharply.
Another buying wave was set in motion when the Chinese
Communist armies swept into North Korea in late November.
In spite of all-time highs in the output of automobiles, electric
appliances, and textiles, consumer demand remained unsatiated.
In response to this sustained demand, business planned an even
greater investment in additional productive capacity for 1951
than had been committed in 1950.
Price inflation following the outbreak of the Korean War had
assumed major proportions as the year ended. The index of 28
basic commodities was 50 percent higher than it was in March,
wholesale prices were 16 percent higher, and consumer prices,
6 percent higher.
The upward pressure on prices was strongly supported by an
expansion of credit. Consumer instalment credit increased $493
million in July, $409 million in August, and $322 million in Sep
tember. Following the imposition of consumer credit restrictions
in late September, these extraordinary gains were checked, and in
November consumer instalment credit dropped by $74 million to
an estimated total of $13.3 billion. As testimony to the effective
ness of the credit controls, this decline was the first November
decrease experienced since 1943.
But in the meantime bank-credit expansion had gone on un
checked. At the end of the year, loans at all commercial banks
stood at an estimated $52.7 billion, a gain of $10 billion for the
12 months. Most of this gain, $8 billion, came in the second half
of the year. Obviously, if total bank loans had in some way been
prevented from growing beyond the midyear level, the country
would have been spared a large part of the ensuing inflation.
The most striking feature in this inflationary situation was that
it came about without additional Federal spending and deficit
financing. Treasury budget expenditures for the second half of
1950 were $20 billion against $22 billion for the like period of
11
1949, and the budgetary deficit was $1 billion against $4 billion.
The gross public debt at the end of the year was $256.7 billion
against $257.2 billion a year earlier.
Here then is the dominant note for 1951: at a time when personal-consumption and business-investment expenditures are at
record levels, government spending for defense is to be stepped
up sharply. A potent expansionary lift to an already overexpanded
economy is thus indicated.
At the end of 1950, the country was producing at near-capacity
rates. The index of industrial production in December was at 216
percent of the prewar average compared with 195 percent reached
at the top of the 1948 expansion. It is obvious, therefore, that
increased defense production in 1951 must be at the expense of
production for personal and business needs, insofar as total out
put cannot be enlarged.
The responsibility of the banking system in the new national
defense program that will get under way in 1951 is thus partic
ularly grave. The commercial banks are endowed with the extra
ordinary power of being able to expand or contract the money
supply. Through the fractional reserve mechanism, the banks
can lend more money than they actually have on hand, and, when
they make loans, additional purchasing power is made available
to the borrower.
Additional Federal spending, as it becomes translated into
additional consumer purchasing power, will increase borrowing
capacity and will at the same time result in the quickening of
production and consumption. Under these circumstances, der nuLS i r k^s*ness and consumer loans will continue to expand.
The banks will be in a position to sift these demands for the pur
pose of channeling bank credit into the defense effort and away
from nondefense purposes. Such channeling will remain the para
mount responsibility of bankers so long as the defense effort lasts.
uring 51, the banks in the District will operate in an eco
nomic setting whose broad outlines will be determined by the
expanding program of national defense. Implicit in the program
12
is a high level of business activity, accompanied by severe dis
turbances and dislocations not present in the preceding postwar
years.
Some initial dislocation will be involved in the conversion of
production facilities to defense needs. In many key industries, the
transition will involve no great disturbances. Steel, nonferrous
metals, lumber, textiles, chemicals, rubber products, petroleum
products, and tobacco manufactures will simply be diverted, to
whatever extent is necessary, from civilian to Government use.
Severe dislocations, however, are assuredly in store for the auto
mobile, housing, and electric appliance industries, among others.
There are certain to be sharp reductions in allotments for a long
list of manufactured civilian goods. New home building will be
another casualty, with new starts dropping sharply under those
of 1950.
Severe readjustments are also in store for retail distribution.
Business will certainly not be as usual in a growing number of
lines as the year unfolds. Every ton of steel diverted to war and
defense production will mean that some manufacturer of civilian
items will be denied needed materials, and this derangement will
reduce the flow of goods to distributive channels and compel
many retailers to accept declining sales volumes. Automobile dis
tributors and appliance dealers will be major casualties as the flow
of new units drops off in response to reduced production sched
ules. Home building supply dealers will be another major cas
ualty. On the other hand, department, drug, and jewelry stores, and
eating, drinking, and amusement establishments, among others,
should experience a sharpened demand. The primary retailing
problem for 1951 will be one of finding supplies. The survival of
many retailers will depend on their success in such quests.
Business will also be compelled to cope with a growing number
of Government controls. The controls that have already been
established are disturbing enough, but they constitute only a be
ginning. A part of the control program will consist of sharply
higher tax burdens both on individuals and business.
The quest for manpower will be intensified, and the manpower
pinch is likely to become severe. Nonagricultural employment
reached 54,075,000 in December, a record total. Unemployment
was estimated at 2,229,000, or 3.6 percent of the total labor force.
It is anticipated that stepped-up draft calls will practically elimi
nate unemployment, except that of a temporary or transitional
nature occasioned by the shifting of production for civilian uses
to production on defense orders. More intensified use of available
manpower will be necessary. A longer work week in industry,
reduction in absenteeism and turnover, avoidance of the hoarding
of labor, and direction of workers to essential occupations are
phases of such an intensified program.
In spite of rigid controls and manpower shortages, business as
a whole should experience extraordinary levels of activity in
1951. Except for some inevitable failures in the ranks of non
defense and nonessential industries, boom conditions will charac
terize the economy. The banks will share in this pattern of busi
ness expansion and may anticipate a further growth in resources
and deposits.
The District had a net gain of
two members during the year
1950, compared with a net gain
of five in 1949. On December 31, 1950, membership in the Sixth
District totaled 353 banks, consisting of 283 national banks and
70 state banks. This is the largest number of member banks the
System has had in the Sixth District since 1931 when there was
a total of 390. The smallest number of such banks, since the
System’s establishment, was in 1934, when there were 309.
The increase in membership came through the admission of
two state banks and the organization of one national bank. The
new member banks are identified as follows:
14
Dale of
Admission
Name of Bank
Location
Deposits
December 31,
1950
February 27 Peoples National Bank Miami Shores,
of Miami Shores
Florida $8,530,050.22
July 17
Monroe County Bank Monroeville,
Alabama 2,112,779.55
December 11 Merchants Trust & Kenner,
Savings Bank
Louisiana 177,854.89
The only loss in membership came through the merger of the
Citizens Bank & Trust Company with the Savannah Bank & Trust
Company on February 25, under the title of the Savannah Bank
& Trust Company of Savannah, Savannah, Georgia.
The Childersburg State Bank, Childersburg, Alabama, a state
bank member, converted into the First National Bank of Chil
dersburg, Childersburg, Alabama, on January 3, 1950.
The American National Bank of Nashville, Nashville, Tennes
see, changed its name to the First American National Bank of
Nashville, Nashville, Tennessee, effective February 1,1950.
The Palmer National Bank and Trust Company of Sarasota,
Florida, changed its title to Palmer First National Bank and Trust
Company of Sarasota, Sarasota, Florida, on December 1, 1950.
During 1950, the number of
par banks continued the growth
that has been characteristic of
the past several years. On December 30, 1950, there were 1,198
banks in the Sixth District, of which 595 were on the Par List.
The number included 283 national banks, 70 state bank mem
bers, and 242 nonmember state banks. There was a gain of seven
15
in the total number of banks in the District and a gain of nineteen
in the number on the Par List.
Nonmember state banks added to the Par List in 1950 were
the following:
F lorida
Hastings Exchange Bank
Bank of Hollywood
Madeira Beach Bank
Okeechobee County Bank
The Punta Gorda State Bank
Citizens Bank in Sarasota
G eorgia
Albany Savings Bank
Albany Trust & Banking Company
The Bank of Albany
Citizens and Southern Bank of Dublin
The Citizens & Southern Bank of LaGrange
LaGrange Banking Company
St. Simons State Bank
Citizens and Southern Bank of Thomaston
Farmers and Merchants Bank
Bank of Waynesboro
Hastings
Hollywood
Madeira Beach
Okeechobee
Punta Gorda
Sarasota
Albany
Albany
Albany
Dublin
LaGrange
LaGrange
St. Simons Island
Thomaston
Washington
Waynesboro
T e nn e sse e
Union County Bank
Citizens Bank & Trust Company
Bank of Commerce
M aynardville
Wartburg
Woodbury
Banks that are on the Par List remit at par for checks drawn
on them when received from the Federal Reserve Bank.
16
tJixi/i tyecleta/0ieSe't ve QDtift id/
Since the outbreak of the Korean War on June 25, 1950, the
Bank’s operating responsibilities have been considerably ex
panded. Pursuant to the Defense Production Act of 1950, ap
proved September 8, the Board of Governors of the Federal
Reserve System was authorized to act as fiscal agent of the United
States in the making of guaranteed loans to finance contractors
operating on Government defense contracts and to exercise con
sumer credit and real estate construction credit controls. In carry
ing out these new responsibilities, the Board reinstituted its
Regulations W and V, referring to consumer credit controls and
guaranteed defense loans, respectively, and issued an entirely
new regulation, Regulation X, to establish restrictions on real
estate construction credit. The Board, in turn, called upon the
twelve Federal Reserve Banks to set up the necessary operating
departments to administer these regulations.
In response to the Board’s directives, the Bank made appro
priate operating arrangements. Two additional operating depart
17
ments were established to administer the consumer credit and
real estate construction credit controls. Provision was also made
to handle the V-Loan Program within the existing Discount
Department. A review of the operations involved in these addi
tional responsibilities, as well as an account of the Bank’s regular
activities, is presented in the following sections.
L
Z H / i / K / f / '/ ih
1
The new V-Loan Program, au
thorized by the Defense Pro
duction Act of 1950 and the
President’s Executive Order No. 10,161 of September 9, 1950,
is substantially the same as that in effect during the Second World
War. The twelve Federal Reserve Banks are designated in the
Order as fiscal agents of the United States. As such, they are
charged with facilitating the guarantee by Government depart
ments of loans made by banks and other lending institutions to
individuals and private corporations for the purpose of financing
contracts and other operations related to the national defense
program. The departments authorized to extend such guarantees
are the Army, the Navy, the Air Force, the Commerce, Interior,
and Agriculture Departments, and the General Services Admin
istration.
Upon consultation with the guaranteeing agencies, the Board
of Governors revised its Regulation V, effective September 27,
1950, to establish the forms and procedures to be observed in
the operation of the program. Except for minor changes, both
the forms and procedures prescribed are identical with those used
in the wartime program.
A guaranteed loan may not bear an interest rate in excess of
5 percent. Such a loan originates with the holder of a defense
contract. His initial step is to apply for the loan at his local bank
or another financial institution. If approved by the local financing
18
institution, an application for a guarantee of the loan by the ap
propriate agency is then filed with a Reserve Bank or Branch.
The Bank’s share in the program is essentially that of agent or
facilitator. It makes a credit investigation of the contractor and
endeavors to provide maximum protection to the guaranteeing
agency, but with due regard to the urgency of placing contracts
for the defense effort.
Following the issuance of Regulation V, the Bank handled a
large number of inquiries from banks and contractors concerning
the V-Loan program and a considerable number of applications
and other forms were distributed. Because of the necessary delays
in awarding defense production contracts, the volume of applica
tions filed with the Bank for guarantee was relatively small at the
end of the year. From the time the regulation was first issued,
September 27, 1950, to the end of the year, the Bank handled
nine loan applications, aggregating $3,299,927. Of these appli
cations, two had been approved, aggregating $900,000, and the
remainder were still under consideration, but no application had
been declined or denied.
The new Regulation W, the
Board of Governors’ consumer
credit control measure, became
effective on September 18, 1950. It applies to extensions of credit
granted in connection with or arising from instalment sales of
listed articles and instalment loans. It fixes minimum down pay
ments and maximum loan values and prescribes terms of repay
ment and maximum maturities. The listed articles are divided into
four groups, namely, automobiles, household appliances, furni
ture, and residential repairs, alterations, or improvements.
Because of unabated upward pressures on prices, the Board of
Governors issued an amendment to the regulation, effective Octo
19
ber 16, 1950. The amendment increased the down payments on
appliances from 15 percent to 25 percent and on furniture from
10 percent to 15 percent. It also reduced the maximum maturity
on automobiles, appliances, and furniture credits to fifteen
months, but left the maximum maturity on home-improvement
credits unchanged at thirty months.
All businesses subject to the regulation are required to file regis
tration statements with the Federal Reserve Bank or Branch in
the District in which their main office is located. In the Sixth
Federal Reserve District, registration certificates had been issued
at the close of the year to 11,500 businesses that had filed state
ments of registration. In the meantime the department had estab
lished an active enforcement program and field compliance
checks had been made of more than 10 percent of the registrants.
I
M B T ""
1
Regulation X of the Board of
Governors establishes restric
tions on the granting of residential real estate credits. The regulation became effective October
12, 1950, and in general was applicable to credit extensions in
connection with one and two family residences started since Au
gust 3, 1950, and to major improvements on residences, both old
and new, where the cost exceeds $2,500. The regulation makes
some provision for exempt credits in hardship cases, disaster
areas, and in cases where commitments for credit were outstand
ing as of October 12. Effective November 14, the regulation was
amended to provide that its prohibitions shall not apply to any
real estate construction credit extended prior to May 1, 1951,
with respect to new construction begun prior to October 12,1950.
Under the regulation, individuals and firms engaged in the
business of extending real estate credit, either as principal or
agent, are subject to its provisions and are designated as “Regis20
tr a n ts T h e registrants are principally banks, savings and loan
associations, insurance companies, mortgage loan companies, and
mortgage loan brokers.
Real estate credit departments have been set up at the head
office and at the branches for administering Regulation X. Inves
tigators have been appointed who will operate out of the respec
tive offices, making field investigations to check for compliance
with the terms of the regulation. Such investigations will even
tually be made of all registrants in the District.
Under a continuing agreement
entered into with the Commod
ity C redit C orporation, the
Bank and its Branches served as fiscal agent and custodian for
the Commodity Credit Corporation during 1950. As fiscal agent,
the Bank receives and disburses funds for the Production and
Marketing Administration’s New Orleans Cotton Office, and the
Atlanta Area Fiscal Office, and the GFA (Georgia-Florida-Alabama) Peanut Association at Camilla, Georgia. As custodian for
the Corporation, the Bank'holds in its vault and services Form A
and Form G cotton-loan notes and related collateral comprised
of warehouse receipts.
The 1949-50 cotton-loan program of the Corporation was
completed early in the fall. Of the 394,435 bales of the 1949
crop placed in the Government loan, 380,365 bales were re
deemed by note repayments during 1950. These transactions
related only to cotton stored at warehouses in Alabama, Georgia,
South Carolina, North Carolina, Virginia, and Florida. The rest
of the cotton-producing states are served by other Federal Reserve
Banks or Branches, as well as by the PMA Commodity Office at
New Orleans. The Bank prepared and forwarded to member and
nonmember collecting banks a total of 29,597 collection letters,
21
containing cotton producers’ notes, called for repayment, amount
ing to $56,575,380.29.
Because of the current high market price, only 1,534 bales of
the 1950 crop, grown in the states served by this Bank, were
placed in the Government loan by the end of the year. Most of
the bales pledged were of the long-staple variety. All restrictive
acreage allotments for the 1951 cotton crop have been removed,
and, in an effort to replenish the country’s short stockpile, pro
ducers have been urged to grow 16 million bales in 1951.
In addition to cotton-loan transactions, the department re
ceived and disbursed funds under the PMA general commodities
programs. During 1950, the department paid 10,713 sight drafts
(PM A-277), totaling $7,950,423.03. These drafts were drawn
by authorized representatives of the PMA in connection with
the Irish potato, sweet potato, corn, wheat, barley, oats, soybean,
cottonseed and farm-storage facilities programs, and were han
dled in substantially the same manner as transit cash items.
Peanuts were the chief Government price-support commodity
handled by this Bank during the year. As fiscal agent of the Cor
poration, the Bank received deposits and made disbursements
under the 1950 peanut loan and purchase programs from the
GFA Peanut Association at Camilla, Georgia, and for five com
mercial banks which had entered into fiscal agency or lending
agency agreements with the Corporation. Under these programs,
the department disbursed in excess of $43 million.
Effective June 30, 1950, the
function of acting as Custodian
for the Reconstruction Finance
Corporation was discontinued at the Federal Reserve Bank of
Atlanta. This service was discontinued by mutual agreement and
at the request of the Corporation. The notes, mortgages, securi22
ties, and supporting documents formerly held by this Bank as
custodian have been delivered to the Atlanta Loan Agency of the
R.F.C. or other offices, pursuant to instructions.
The Corporation continues to clear checks through the Fed
eral Reserve Bank of Atlanta, and the proceeds of such checks
are credited to the account of the Treasurer of the United States
in the same manner that deposits are accepted for other govern
mental agencies. It also continues to use the private wire system
of the Federal Reserve Banks. A number of the Corporation’s
files are still held by this office, pending receipt of an agreement,
in satisfactory form, releasing the Federal Reserve Bank from
liability in connection with such files.
Bank and public relations ac
tivities, as in previous years,
were directed primarily to pro
moting efficiency in the Bank’s service functions and to a better
understanding of them. Operating as it does within statutory
limitations and prescribed responsibilities, there is no occasion
for the Bank to undertake a program of new business solicitation
and service advertising as is necessary with most business enter
prises.
The bank-visitation program occupies the most important
place in the bank and public relations activities. The number
of such visits totaled 1,118 for the year, of which 546 were to
member banks and 572 to nonmember banks. Such visitations
are more than simply courtesy calls; an effort is made to check
on the efficiency, promptness, and completeness of the Federal
Reserve Bank’s services to the banking community.
In order to maintain close touch with banking developments
of the District, the Bank takes an active interest in all meetings
where bank problems are discussed. Representatives of the Bank
23
and Branches attended all the principal banker gatherings in the
District, totaling 38 for the year, including the annual conven
tions of the State Bankers Associations and the American Bank
ers Association. Representatives were also present at 211 other
meetings where banking matters pertaining to the economy of the
District were discussed. Fifty-five speeches and informal talks on
various subjects were made by members of the Bank’s staff during
the year.
In its public relations, the Bank served as host for a number
of important meetings. One such meeting was held for the pur
pose of promoting the sale of United States Savings Bonds. An
other was the joint conference of supervisors and trust men from
the Sixth Federal Reserve District. There was a conference of
reserve city banks, held for the purpose of discussing mutual
problems, and several meetings were held for the discussion of
problems involved in the administration of Regulations X and W.
As a part of this program, members of the staff conducted a large
number of tours, at the head office and branches, of visiting
groups who were interested in seeing the various functional serv
ices of the institution in actual operation.
The Bank continued its operations survey service, which was
established in 1949. Cost analyses and surveys were made for
19 member banks and one nonmember bank during the year.
This service is available only upon application and is designed
to supplement, and not to take the place of, any similar service
that may be available in correspondent banking relationships.
At least one examination was
made of all state member banks
in the District, including their
trust departments. Although such examinations are conducted
primarily in the public interest, care is taken to ensure that the
24
institutions examined shall also be benefited. The facts developed
by examinations are used as a basis upon which constructive ac
tion may be taken by the supervisory authorities and the manage
ment of the banks. Reports are prepared and presented in such a
manner that they will be helpful to the directors and executive
management of the banks examined, as well as to the Federal
Reserve Bank and the Board of Governors in the discharge of
their responsibilities.
During 1950, the demand for new banks and additional
branches of established institutions continued on about the same
basis as in the preceding year. In each case where an application
for membership in the Federal Reserve System was received
from a state bank in process of organization, or when a request
for a recommendation was received from the Comptroller of the
Currency in connection with an application to organize a na
tional bank, a representative of the Bank made a field investiga
tion to develop information on which the Bank might base its
decision on the matter. These investigations were made with the
close co-operation of the other supervisory agencies. In passing
on an application, care is always exercised not to create an over
banked condition in any locality and to see that the proposed
bank has adequate capital, capable management, and a favorable
earnings prospect.
1
Regulation J of the Board of
Governors of the Federal Re
serve System and operating circulars and time schedules of this Bank prescribe the terms and
conditions upon which cash items will be received and handled
for collection. Accepted as cash items are checks drawn on banks
or banking institutions collectible at par, Government checks,
and such other items as are specifically approved.
25
Scheduled for adoption on January 12, 1951, was a two-day
deferred credit schedule. The new schedule provides for a maxi
mum period of deferment of credit of two business days from
date of receipt for cash items received from member banks for
collection and two business days from date of dispatch for cash
items routed direct by member banks to other Federal Reserve
Banks and Branches. Also scheduled for adoption on January 12,
1951, was the absorption by the Bank of the cost of telegrams
transmitted over the Federal Reserve leased wires relative to the
nonpayment, tracing, or other pertinent information on the han
dling of cash items.
In order to promote earlier presentment of checks and other
cash items, the Bank continued to encourage the use of the uni
form check routing symbol. A survey made toward the end of
the year revealed that 78 percent of all par checks in circulation
in the Sixth District bore the uniform routing symbol in the proper
Listing Checks on Proof Machines
location. A similar survey made in 1949, in comparison, indi
cated that 74 percent of such checks bore the symbol.
Check clearing and collection activity of the Bank reached
another all-time high. The number of checks handled by the Bank
at its head office and branches during 1950 was 142,691,000.
The value of the checks handled was $59 billion.
a n d c(?<iht
Dollar volume of currency and
coin receipts and payments in
creased substantially over 1949.
Receipts from banks amounted to $1,520 million, an increase of
$63.9 million. Payments to banks amounted to $1,264 million,
an increase of $106 million. During the year, 271.9 million pieces
Training in Sorting and Counting of Currency21
of currency and 312.4 million pieces of coin were received and
counted, representing increases in the number of pieces handled
over the previous year of 10.8 million in currency and 15.6
million in coin.
The head office and branches received from the Federal Re
serve Agent during 1950 a total of $435 million in Federal Re
serve notes, an increase of $27 million over the previous year,
and the largest amount received since 1945. Net circulation of
the Bank’s Federal Reserve notes outstanding at the close of 1950
was $1,276 million. This amount outstanding represented a de
cline of $15 million in comparison with the close of 1949, but
it is the smallest decrease that has occurred since the end of 1945,
when our circulation was at its highest peak. From $1,291 million
at the end of 1949, net circulation declined by August 31 to about
$1,242 million, and increased by December 31 to $1,276 million.
In October of this year, arrangements were made with an
armored car service for transporting Army payroll funds each
month to Fort Benning, near Columbus, Georgia, where such
funds are delivered to representatives of the three participating
banks. This arrangement is a convenience to the Columbus banks,
and the cost of this service is approximately a third less than
registered mail costs.
1
During 1950, the Bank made
259 advances, accommodating
39 member banks to the extent
of $430 million. Of that amount $426 million was secured by
United States Government obligations, $4 million by eligible
paper, and $377,000 by collateral not eligible for discount or
purchase.
The high point of member bank borrowings was reached on
November 27, 1950, when $25 million was outstanding. At the
28
end of the year, only one member bank was indebted to this Bank,
in the amount of $25,000, compared with one at the end of 1949,
in the amount of $30,000. As in 1949, no advances were made
during the year to nonmember banks. In most instances, ad
vances made during the year were for short periods and were
for the purpose of covering temporary reserve deficiencies of
the member banks.
There were increases of 27.6 percent and 62.1 percent in the
number and amount, respectively, of notes discounted during
1950, over the preceding year. The discount rate on member
bank borrowings under Sections 13 and 13a of the Federal Re
serve Act was increased from 1V2 percent to 1% percent by this
Bank on August 24, 1950.
the result of war financing, the
issuance, redemption, and refunding of the various obligations
has become one of the largest financial activities in the country.
The Federal Reserve Bank of Atlanta, through its Fiscal Agency
and Securities Department, plays a very important part in this
service function.
No cash offering of unrestricted securities, except weekly bills,
was made by the Treasury Department during the year. Maturing
securities included eight issues of certificates of indebtedness, one
issue of Treasury notes, and one issue of Treasury bonds. In addi
tion, the Treasury exercised the call privilege on three issues of
bonds. On each of these issues, a refunding privilege was offered,
which involved nine note issues and one issue of certificates of
indebtedness. In the Sixth District, there were 5,703 subscrip
tions received in these operations, totaling over $742 million.
Beginning January 1, 1950, facilities for issuing Treasury bills
29
were in operation at each of the branch offices as well as at the
head office. During the year, 2,457 tenders were received, from
which there was allotted over $543 million. Issues of Treasury
savings notes amounted to over $47 million, and redemptions
were in excess of $48 million.
The departm ent also handled a considerable volume of issues,
reissues, and redemptions of United States Savings Bonds. Issues
of savings bonds of all series amounted to 1,921,307 pieces, with
a m aturity value of $292 million. Compared with 1949, there
was an approxim ate increase of 3 percent in m aturity value, and
a 10 percent decrease in the number of pieces. Approximately
60 percent of the amount issued, or $174 million, was by issuing
agents. A t the end of the year, there were 1,326 such agents.
Savings bonds can be reissued only by the Federal Reserve
Banks or the Treasury Department. A reissue involves an ex
change of a new bond for one that is already outstanding. During
Punching Cards in Savings Bonds Redemption
30
the year, the head office and branches processed 12,383 such
transactions, involving 186,216 pieces and a m aturity value of
$40 million.
Redemptions of savings bonds were in particularly large vol
ume. Series A-E redemptions amounted to $329 million and num
bered 4,187,828 pieces. Com pared with 1949, there was a slight
decrease in the num ber of pieces redeemed, but there was an
increase of 33 percent in face value. A t the end of the year, there
were 1,317 paying agents. Redemptions of Series F and G sav
ings bonds amounted to 55,527 pieces, with a face value of $56
million.
As a service to the public, the Federal Reserve Banks are au
thorized to hold savings bonds in custody for individuals. During
1950, this Bank handled the deposit or withdrawal of 69,749
pieces, having a maturity value of $10 million. On December 31,
1950, the Bank held 244,000 pieces with a m aturity value of
Sorting Government Card Checks
31
$29 million, a slight increase in maturity value above the hold
ings at the end of 1949.
Other volume operations included the processing of coupons;
the handling of exchanges, transfers, and redemptions of Treas
ury issues; serving as custodian of securities deposited by member
banks and governmental agencies; and performing open-market
operations for member banks. Although diminishing in volume
because certain short-term securities are now offered without
coupons, the processing of coupons, forwarded for payment or
clipped directly from United States obligations held in custody,
requires much time and attention to detail. Such coupons paid
during the year amounted to approximately $27 million and
numbered 481,000 pieces. In its capacity as fiscal agent of the
Treasury, the Bank processed for exchange or transfer Treasury
issues in the number of 56,583 and handled the redemption of
80,201 such pieces. In its capacity as custodian, the Bank held
at the end of the year $2,925 million in face value of securities
for the account of member banks and governmental agencies.
The Bank’s open-market operations were confined to making pur
chases, sales, and clearings of United States Government securi
ties in behalf of member banks. Such transactions during the year
numbered 7,356, representing $1,823 million in maturity value.
The change announced by the Treasury Department effective
January 1, 1950, for the reporting and depositing of Federal
taxes was put into operation. Receipts for the employers who
deposit taxes are in the form of a punch card that is processed
on tabulating machines. The tabulating operation is done in the
Atlanta office only. Collection of taxes for the calendar year 1950
was in excess of $319 million. Banks which are qualified under
Treasury Department Circulars 92 and 848 may accept tax pay
ments from employers and make payment to the Bank by credit
in the Treasury Tax and Loan Account. In 1950, depositary
banks handled 197,581 receipts received from employers. The
procedure is continuously being refined to effect a maximum of ef
ficiency for the employer, the Treasury Department, and the Bank.
32
On December 31, 1950, there were 848 banks qualified as
Treasury Tax and Loan depositaries in the amount of $1,437
million and holding balances in the amount of $92 million. The
number of entries in the Treasury Tax and Loan Accounts was
122,076 in 1950, an increase of 84 percent over those of 1949.
The increase was principally because of the acceptance by depos
itaries of deposits of Federal taxes.
1
Personnel procedures and poli
cies were changed during the
year to meet conditions brought
about by the expansion of the armed forces and the enactment
of new Federal legislation. Between the time the war broke out in
Korea and the end of the year, twenty-one employees left the
Bank and branches to enter military service. Accordingly, the
Bank revived its wartime policy with respect to the rights of em
ployees entering such service. Under this policy, employees,
other than those on a temporary employment basis, are accorded
special treatment. Whether they enter upon duty with the armed
services under the Selective Service Act of 1949 or voluntarily
enlist, they are allowed re-employment rights following the end
of their military service. Moreover, upon re-employment they may
be restored to active membership in the Bank’s retirement system,
with no loss of service for the period of military leave. In addition,
they will be reimbursed for premiums paid on National Service
Life Insurance policies not in excess of $5,000 in coverage.
Finally, if they have had at least one year of employment with
the Bank, they are paid one month’s unearned salary upon enter
ing military service.
In response to the national defense effort, there was a general
tightening of the employment situation, a tightening particularly
noticeable as the year drew to a close. The rate of turnover in
33
creased in the second half of the year, making necessary an active
employee-recruiting effort.
Amendment on August 28, 1950, of the Social Security Act
extended the benefits of the social security program to employees
of the Federal Reserve Banks, beginning January 1, 1951. Ac
cordingly, effective November 30, 1950, changes were made in
the retirement system of the Federal Reserve Banks to integrate
the retirement costs and benefits with those of the new coverage.
The enactment of new Federal minimum wage legislation,
effective January 25, 1950, caused minor upward salary adjust
ments in the unskilled classification group. All salary grades were
later adjusted upward on the basis of the regular annual salary
survey made by the Personnel Department in September 1950.
The Bank continued active encouragement of study at ad
vanced banking schools by its officers and employees. Twelve
staff members, six of whom received their graduate diplomas,
were sent to the summer session of the Graduate School of Bank
ing at Rutgers University. Two other staff members were sent
to the new Banking School of the South at Louisiana State Uni
versity which held its first session for graduate banking students
in June. The new school is scheduled to graduate its first students
at the close of the 1952 summer session.
For the past three years this
Bank has had an active pro
gram that includes agricultural
relations. This program was begun in recognition of the impor
tant role played by farming in the economy of the Sixth Federal
Reserve District and of the desirability of assisting member banks
in helping farmers to make needed changes in their farming meth
ods. Activating the program is one of the many functions per
formed by the Research Department.
34
The agricultural relations program is conducted in close co
operation with the agricultural committees of the State Bankers
Associations. One phase of such co-operation is represented by
banker-farmer meetings which are sponsored by the State Bank
ers Associations, the State Agricultural Colleges, and the Bank.
During the year, three such meetings were held in Florida, two in
Alabama, three in Mississippi, five in Tennessee, and three in
Louisiana. Most of these meetings were held on farms where the
results of improved pastures, proper forestry practices, and sound
bank credit could be demonstrated. The Bank also assisted in
planning and conducting a number of farm credit schools, in
co-operation with the Georgia and Florida Bankers Associations.
Much of the department’s work is for use within the Bank and
within the System. In addition to carrying on this work and pub
lishing the Bank’s Monthly Review and the Bankers Farm Bul
letin, the Department met numerous requests for economic data
by commercial banks, colleges, trade organizations, Federal and
state agencies, civic clubs, and individuals.
Frank H. Neely, Chairman of
the Board of Rich’s, Inc., At
lanta, Georgia, was appointed
by the Board of Governors of the Federal Reserve System a Class
C director of the Federal Reserve Bank of Atlanta for an addi
tional term of three years, beginning January 1, 1951. Mr. Neely
was redesignated by the Board of Governors as Federal Reserve
Agent and Chairman of the Board of Directors of the Federal
Reserve Bank of Atlanta for the year 1951. Rufus C. Harris,
President of The Tulane University of Louisiana, New Orleans,
Louisiana, was reappointed by the Board of Governors as Deputy
Chairman of the Board of Directors for the year 1951.
At elections held in October, Roland L. Adams, President,
35
Bank of York, York, Alabama, was chosen by member banks
in Group 3 as a Class A director, and Alfred Bird Freeman,
Chairman of the Board, Louisiana Coca-Cola Bottling Company,
Ltd., New Orleans, Louisiana, was re-elected by member banks
in Group 1 as a Class B Director. Each of these directors was
elected for a term of three years, beginning January 1,1951.
Appointed by the Board of Governors of the Federal Reserve
System, each for a term of three years beginning January 1,1951,
were the following branch directors: Birmingham Branch, John
M. Gallalee, President, University of Alabama, Tuscaloosa, Ala
bama; Jacksonville Branch, Marshall F. Howell, Vice President,
Bond-Howell Lumber Company, Jacksonville, Florida; Nashville
Branch, C. E. Brehm, President, University of Tennessee, Knox
ville, Tennessee; New Orleans Branch, H. G. Chalkley, Jr., Pres
ident, Sweet Lake Land & Oil Company, Inc., Lake Charles,
Louisiana.
The Board of Directors of the Federal Reserve Bank of Atlanta
also appointed four branch directors. These appointments, each
for a three-year term, beginning January 1,1951, were as follows:
Birmingham Branch, T. J. Cottingham, President, State National
Bank of Decatur, Decatur, Alabama; Jacksonville Branch, Clem
ent B. Chinn, President, The First National Bank of Miami,
Miami, Florida; Nashville Branch, G. C. Graves, President, The
First National Bank of Athens, Athens, Tennessee; New Orleans
Branch, William C. Carter, President, Gulf National Bank of
Gulfport, Gulfport, Mississippi.
As a member of the Federal Advisory Council, representing
the Sixth Federal Reserve District, for a term of one year begin
ning January 1, 1951, the Board of Directors of the Federal Re
serve Bank of Atlanta appointed Paul M. Davis, Chairman of the
Board of Directors of the First American National Bank of Nash
ville, Nashville, Tennessee.
To serve as members of the Industrial Advisory Committee for
the Sixth District, the Board of Directors of the Federal Reserve
Bank of Atlanta re-appointed for the year 1951, John E. Sanford,
36
President, Armour Fertilizer Works, Atlanta, Georgia; George
Winship, President, Fulton Supply Company, Atlanta, Georgia;
W. W. French, Chairman of the Board, Moore-Handley Hard
ware Company, Inc., Birmingham, Alabama; Luther Randall,
President, Randall Brothers, Inc., Atlanta, Georgia; and I. C.
Milner, President, Gate City Mills Company, East Point, Geor
gia. Mr. Sanford is Chairman of the committee, and Mr. Milner
is Deputy Chairman.
Three changes were made in the Bank’s official staff during
the year. R. DeWitt Adams, Acting General Auditor, was ap
pointed General Auditor. L. B. Raisty, Senior Economist, was
appointed Assistant Vice President. F. C. Vasterling, Assistant
Cashier, New Orleans Branch, retired.
The Bank has nine directors, divided into three classes. Class A
Directors are elected by the stockholding banks and in practice
are officers of member banks. Class B Directors are also elected
by member banks but may not be operating bankers. The Board
of Governors of the Federal Reserve System appoints the Class C
Directors, one of whom is designated as Chairman and another
as Deputy Chairman. No Class C Director may be an officer,
director, employee, or stockholder of any bank.
For the purpose of electing Class A and Class B Directors, the
member banks are divided into three groups, representing large
banks, middle-sized banks, and small banks. Each group elects
one Class A and one Class B Director.
Each of the four branches has a Board of Directors of seven
members. Four of these members are appointed by the parent
Board and in practice are operating officers of member banks and
serve only one term. The other three directors are appointed from
nonbanking fields by the Board of Governors.
39
R.
Group
C l y d e W i l l i a m s .................................. ...
President, The First National Bank of Atlanta
Atlanta, Georgia
R.
Term Expires
Decem ber 31
1951
D r i v e r ..................................... ...
1952
R o l a n d L. A d a m s ..................................... ...
1953
L eslie
President, The First National Bank in Bristol
Bristol, Tennessee
President, Bank o f York
York, Alabam a
C lass B
Elected by Member Banks
J. A. M
cC r a r y
...........................................
Vice President and Treasurer, J. B. McCrary Com pany, Inc.
Decatur, Georgia
1951
D o n a l d C o m e r ...........................................
1952
A l f r e d B ird F r e e m a n ................................ ...
1953
Chairman of the Board, Avondale M ills
Birmingham, Alabam a
Chairman o f the Board, Louisiana Coca-Cola Bottling Com pany, Ltd.
N ew Orleans, Louisiana
C lass C
Frank
Appointed by the Board of Governors of the
Federal Reserve System
H. Neely, Chairman ..........................................................................
Chairman o f the Board, Rich’s, Inc.
Atlanta, Georgia
Deputy C h airm an ......................................................
President, The Tulane University o f Louisiana
New Orleans, Louisiana
1953
Rufus C. Harris,
1952
P a u l E. R e i n h o l d .....................................
1951
President and Director, Foremost Dairies, Inc.
Jacksonville, Florida
40
£
t ' X
u
W. S. McLarin, Jr., President
L. M. Clark, First
Vice President
S. P.
V . K. B o w m a n
Vice President
J. E. D e n m a r k
E. L. Rauber
SCH U ESSLER
Director of Research
Vice President
Harold
T. Patterson
R. D e Witt Adams
General Auditor
General Counsel
Vice President
J. H . B o w d e n
I. H. M ar t i n
C. R. C a m p
Roy
F. H . Martin
E. C. Rainey
Assistant Vice President
Assistant Vice President
Assistant Vice President
E. Milling
Assistant Vice President
Assistant Vice President
L. B. Raisty, Assistant Vice President
Assistant Vice President
o
Paul M. Davis
Q Hcaiber Federal
,n O Advisory Council
Chairman of the Board
First American National Bank of Nashville
Nashville, Tennessee
E. Sanford, Chairman
President
Armour Fertilizer Works
Atlanta, Georgia
John
W . W . French
Chairman of the Board
Moore-Handley Hardware Co., Inc.
Birmingham, Alabama
I. C. M i l n e r
President
Gate City Mills Company
East Point, Georgia
o
0
^
9
Q Industrial Ailvi-
C soryCommittee
Luther Randall
President
Randall Brothers, Inc.
Atlanta, Georgia
George Winship
President
Fulton Supply Company
Atlanta, Georgia
41
S /irtt/jtfj/tt
H </t
Appointed by the Board of Governors
of the Federal Reserve System
Term Expires
D ecem ber 31
T h a d Holt, Chairm an ...............................................................................................................1952
President and Treasurer, V oice of Alabam a, Inc. (Radio Station W A PI)
Birmingham, Alabam a
W m . H o w a r d S m i t h ............................................ 1951
President, M cQueen-Smith Farms
Prattville, Alabam a
John M . G a l l a l e e ............................................... 1953
President, University o f A labam a
Tuscaloosa, Alabam a
Appointed by Board of Directors,
Federal Reserve Bank of Atlanta
D . C. W a d s w o r t h ............................................... 1951
President, The Am erican N ational Bank of Gadsden
G adsden, Alabam a
J. B. B a r n e t t .................................................. 1952
President, The First N ational Bank o f M onroeville
M onroeville, Alabam a
A . M . S h o o k ..................................................... .......
President, Security-Commercial Bank
Birmingham, Alabam a
T. J. CO TTING H A M ............................................................................................................................. ........
President, State N ational Bank o f Decatur
Decatur, Alabam a
OFFICERS A
/
P. L. T . Beavers, Vice President and Manager
H . C . Frazer
H . J. U r q u h a r t
Assistant Manager
42
Cashier
L-rW rS 1
Auixtant Ciixfnrr
q
A ppointed by the Board of Governors
of the Federal Reserve System
J.
C
(
^
Term Expires
December 31
Chairman
H illis M i l l e r ,
............................................................................................... 1951
President, University of Florida
Gainesville, Florida
H o w a r d P h i l l i p s ................................................................................................................... 1 9 5 2
Vice President and General Manager, Dr. P. Phillips Company
Orlando, Florida
M a r s h a l l F. H o w e l l ............................................ 1953
Vice President, Bond-Howell Lumber Company
Jacksonville, Florida
Appointed by Board of Directors ,
Federal Reserve Bank of Atlanta
J. D . C a m p
................................................................................................................................. 1951
President, Broward National Bank of F o rt Lauderdale
Fort Lauderdale, Florida
J. E . B r y a n ................................................................................................................................. 1 9 5 2
President, Union Trust Company
St. Petersburg, Florida
R a y C a r r o l l ....................................................................................................................1 9 5 2
President, The First National Bank of Kissimmee
Kissimmee, Florida
N.
Clement
B.
C h i n n ............................................
President, The First National Bank of Miami
Miami, Florida
T. A.
T.
C. C l a r k
-Cashier
L a n f o r d ,Vice
J.
President and Manager
W y l y Sn y d e r
AzsixtziErCashier
1953
C. M a s o n F o r d
Assistant Cashier
43
a cv\
Appointed by the Board of Governors
of the Federal Reserve System
Term Expires
D ecem ber 31
H . C . M ea ch a m , C hairm an .............................................................................. ......
.
1951
Agriculture and Livestock
Franklin, Tennessee
W . B r a t t e n E v a n s ...............................................................................................................................
President, Tennessee Enamel Manufacturing Company
Nashville, Tennessee*
C . E . B r e h m ..........................................................................................................
J953
President, University of Tennessee
Knoxville, Tennessee
Appointed by Board of Directors f
Federal Reserve Bank of Atlanta
P a rk es A r m ist e a d . .................................................................................................................1951
President, First American National Bank of Nashville
Nashville, Tennessee
T . L. C a t h e y ......................................................................................................................................
President, Peoples and Union Bank
Lewisburg, Tennessee
T h o m a s D . B r a b s o n ................................................................................................................. .......
President, The First National Bank of Greeneville
Greeneville, Tennessee
G . C . G r a v e s ............................................................................................................................... .......
President, The First National Bank of Athens
Athens, Tennessee
iimmifi X
Q
^
f
J o e l B. F o r t , J r., Vice President and Manager
E . R . H a r r is o n
Cashier
R o bert
E.
M oody, Jr.
Assistant Cus frier
Appointed by the Board of Governors
of the Federal Reserve System
A llR lil’TOIIS
^
^
Term Expires
Decem ber 31
C hairm an
E . O. B a ts o n ,
.......................................................... ......................................1952
President, Batson-McGehee Company, Inc.
Millard, Mississippi
J o h n J. S h a f f e r , J r ............................................................................................................1951
Agriculture and Farm Machinery
Ellendale, Louisiana
H. G. C h a lk le y , J r ............................................................................................................ 1953
President, Sweet Lake Land and Oil Company, Inc.
Lake Charles, Louisiana
Appointed by Board of Directors ,
Federal Reserve Bank of Atlanta
Ja m es C . B o l t o n
.............................................................................................................. 1951
President, Rapides Bank & Trust Company in Alexandria
Alexandria, Louisiana
P ercy
H . S i t g e s ............................................................................................................. 1952
President, Louisiana Bank & Trust Company
New Orleans, Louisiana
E l b e r t E . M o o r e .............................................................................................................. 1952
President, Louisiana National Bank of Baton Rouge
Baton Rouge, Louisiana
W illia m C . C a r t e r ........................................................................................................1953
President, Gulf National Bank of Gulfport
Gulfport, Mississippi
E. P. P aris ,Vice
M.
L.
Shaw
Assistant Manager
President and Manager
W . H.
S e w e ll
Cashier
L. Y .
C hapm an
Assistant Cashier
45
n m m i
i\n
VOLUME REPORTS
S e m im o n t h l y P e r io d E n d e d D e c e m b e r 31, 1950
State
Required
Reserves
Actual
Reserves
Percent of Actual
Excess
Reserves to
Reserves Required Reserves
A LA BA M A $107,800,000 $120,900,000 $13,100,000
112.2
FLO RIDA
148,500,000
161,700,000
13,200,000
108.9
GEO RG IA
151,700,000
159,600,000
7,900,000
105.2
LO U ISIANA
135,700,000
153,500,000
17,800,000
113.1
MISSISSIPPI
21,500,000
24,100,000
2,600,000
112.1
TENNESSEE
98,600,000
109,500,000
10,900,000
111.1
$663,800,000 $729,300,000 $65,500,000
109.9
DISTRICT
46
Currency and Coin Operations Main Hank and llranclies
N u m b e r o f P ie c e s R e c e iv e d a n d C o u n te d f o r 1950 a n d 1949,
by M onths
Month
January .
February .
March
April . .
May . .
June . .
July . .
August .
September
October .
November
December
Total
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
Currency (In Thousands) Coin
1950
1949
1950
1949
22,181
21,465
25,493
21,495
23,980
21,535
20,638
23,518
22,412
. .
22,842
. . 23,292
. . 23,108
. . 271,959
30,861
24,641
25,230
21,899
28,351
26,265
24,287
29,265
27,619
24,562
26,289
23,169
312,438
24,368
24,025
24,030
23,000
21,688
20,401
19,116
21,555
20,856
20,426
20,379
21,279
261,123
24,703
28,478
25,953
24,801
25,067
25,798
21,113
25,945
24,363
23,564
22,966
24,088
296,839
R e c e ip t s f r o m B a n k s a n d P a y m e n ts t o B a n k s f o r 1950 a n d 1949,
by M o n t h s
Month
Receipts
(In Thousands) Payments
1950
1949
1950
1949
. $ 135,915 $ 146,309
January .
120,748
123,622
February
146,378
144,890
March .
119,937
120,843
April
124,848
110,574
May . .
117,774
112,620
June . .
119,700
107,674
July . .
126,646
114,510
August .
114,736
110,038
September
121,670
108,202
October
126,689
115,211
November
December
144,905
141,529
Total . . $1,519,946 $1,456,022
79,263 $ 67,946
85,021
103,368
108,498
119,626
94,459
91,124
93,832
96,959
90,621
96,093
97,142
96,072
94,404
105,749
98,211
113,437
103,466
118,112
100,245
112,076
124,421
132,160
$1,264,039 $1,158,266
$
47
STATEMENT OF CONDITION
ASSETS
Gold C ertificates..........................
Redemption Fund for Federal Re
serve N o te s ................................
Total Gold Certificate Reserves
Other C a sh .......................................
Total Cash . . . . . .
Discounts and Advances . .
Industrial L o a n s ..........................
U. S. Government Securities—
System Account . . . .
Total Loans and Securities .
Federal Reserve Notes of Other
Banks . . . .
Uncollected Cash Items
Bank Premises (N et)
Other Assets . . .
T otal A sse t s . .
December 31,1950 December 31,1949
$ 890,799,772.39 $ 995,700,383.92
39,540,790.00
39,850,752.57
930,340,562.39 $1,035,551,136.49
18,763,112.38
21,131,989.40
949,103,674.77 $1,056,683,125.89
25,000.00
2,879,500.00
6,596.90
0
1,110,085,000.00 1,012,460,000.00
$ 1,110,116,596.90 $ 1,015,339,500.00
20,312,250.00
18,865,250.00
277,132,397.83
211,620,743.98
1,720,100.56
1,523,303.62
6,328,745.61
5,500,352.59
$2,364,713,765.67 $2,309,532,276.08
LIABILITIES
Federal Reserve Notes in Actual
C ircu la tio n ................................ $1,276,091,240.00
Deposits:
Member Bank Reserve Accounts 740,421,957.53
U. S. Treasurer— General A c
count .......................................
38,559,111.47
F o r e ig n .......................................
37,283,400.00
Other D ep o sits..........................
42,761,729.66
Total Deposits . . . .
859,026,198.66
Deferred Availability Cash Items
191,070,072.32
Other L ia b ilitie s ..........................
200,073.95
T otal L ia b il it ie s . .
$2,326,387,584.93
C A PITA L ACCOUNTS
Capital Paid In . . .
$
8,954,450.00
Surplus (Section 7 ) . .
22,368,597.95
Surplus (Section 13b) .
762,425.68
Reserves for Contingencies
6,240,707.11
Total Capital Accounts
$ 38,326,180.74
T o t a l L ia b ilit ie s a n d
C a p ita l A c c o u n t s
48
$1,290,998,620.00
685,366,469.27
50,492,636.50
31,184,600.00
31,948,301.66
$ 798,992,007.43
182,688,791.71
455,043.24
$2,273,134,462.38
$
8,239,800.00
21,193,500.54
762,425.68
6,202,087.48
36,397,813.70
$2,364,713,765.67 $2,309,532,276.08
Current Earnings:
1950
Discounts and Advances . . .
$ 78,261.81
Industrial L oans..........................
128.93
Industrial Loan Commitments . .
0
U. S. Government Securities—System
14,611,876.32
Account .....................................
All O th e r....................................
22,222.89
Total Current Earnings . . $14,712,489.95
Current E xpenses..........................
4,342,755.89
Current Net Earnings . . . $10,369,734.06
Net Addition to Current Net Earnings
1,942,583.76
T o tal.................................... $12,312,317.82
Other Deductions:
Transferred to Reserve for Contin
gencies ..................................... $ 40,434.18
Paid to U. S. Treasury (Interest on
Outstanding Federal Reserve
N o te s )....................................
10,575,575.12
T o ta l.................................... $10,616,009.30
Net Earnings after Reserves and Pay
ment to U.S.Treasury.....................$ 1,696,308.52
Distribution of Net Earnings:
Dividends P a i d .......................... $ 521,211.11
Transferred to Surplus (Section 7)
1,175,097.41
$ 1,696,308.52
Surplus (Section 7):
Surplus January 1 ..................... $21,193,500.54
Transferred to Surplus—As Above
1,175,097.41
Surplus December 31.....................$22,368,597.95
1949
$ 110,508.60
0
713.55
16,734,213.52
34,512.89
$16,879,948.56
4,093,924.20
$12,786,024.36
1,534,179.68
$14,320,204.04
$ 2,178,867.89
10,490,251.54
$12,669,119.43
$ 1,651,084.61
$ 485,447.66
1,165,636.95
$ 1,651,084.61
$20,027,863.59
1,165,636.95
$21,193,500.54
[Amounts in thousands of dollars]
ASSETS
Loans and in v e s t m e n t s ...................................................
Loans (including o v e r d r a fts )..............................
U. S. Government obligations, direct
and g u a r a n t e e d ....................................................
Obligations of States and political subdivisions
Other bonds, notes and debentures .
Corporate stocks (including Federal
Reserve Bank s t o c k ) ............................................
Reserves, cash, and bank b a la n c e s ..............................
Bank premises owned and furniture and fixtures .
Other real estate o w n e d ...................................................
Investments and other assets indirectly represent
ing bank premises and other real estate . . .
Customers’ liability on accep tan ces..............................
Other a sse ts.................................................................................
Total a s s e t s ...........................................................
Decem ber 30
Decem ber 31
1950
1949
$4,753,841
1,999,595
$4,412,170
1,610,669
2,286,834
386,448
70,778
2,371,942
344,351
75,476
10,186
1,811,039
59,406
1,448
9,732
1,622,125
55,405
1,612
1,722
6,947
19,914
$6,654,317
889
8,654
17,236
$6,118,091
$5,105,298
3,544,179
94,136
624,650
781,084
$4,601,939
3,179,581
83,086
598,594
689,979
LIABILITIES
Demand d e p o s it s ..................................................................
Individuals, partnerships, and corporations .
U. S. G o v e r n m e n t....................................................
States and political subdivisions . . . .
Banks in U. S. and foreign countries .
Certified and officers* checks, cash letters o f
credit and travelers* checks, etc. .
Tim e d e p o s it s .........................................................................
Total d e p o s it s ....................................................
Bills payable* rediscounts, and other liabilities for
borrowed m o n e y ............................................
Acceptances o u tsta n d in g .....................................
Other l i a b i l i t i e s ...........................................................
Total lia b ilitie s............................................
61,249
1,111,802
6,217,100
50,699
1,109,613
5,711,552
175
8,634
37,773
$6,263,682
30
11,869
31,259
$5,754,710
C APITAL A C C O U N T S
C a p it a l..........................................................................
S u r p lu s ..........................................................................
Undivided p r o f it s ...................................................
Other capital a c c o u n t s .....................................
Total capital accounts . . . .
Total liabilities and capital accounts
122,753
182,903
60,893
24,086
$ 390,635
$6,654,317
115,713
164,230
59,249
24,189
$ 363,381
$6,118,091
50
$
$
Changes in ta k r s liip I!)!:{-19.111
1943 1944 1945 1946 1947 1948 1949 1950
Membership, beginning of year
318
316
317
325
333
340
346
0
0
3
2
0
351
Additions during year:
Organization of National
banks .......................................
0
4
Conversion of State banks to
National banks*. . . .
1
1
3
4
6
1
2
3
1
Admission of State banks
.
3
3
7
5
6
4
5
2
Resumption following
s u s p e n s i o n ..........................
0
0
0
0
0
0
0
0
.
4
10
11
11
10
8
8
4
Mergers between National
banks .......................................
0
0
0
0
1
0
1
0
Mergers between State banks
0
0
0
0
0
0
0
1
Suspension or insolvency .
.
0
0
0
0
0
0
0
0
Withdrawal of State banks*.
2
8
1
1
2
1
0
1
1
2
3
Voluntary liquidation.
0
1
1
0
0
4
0
0
0
0
0
2
0
3
0
2
-f 6
+5
+2
Total additions
.
.
Losses during year:
.
.
Conversion of member to
nonmember banks" * .
9
3
3
3
Net change during year .
.
.
-2
+ 1
+ 8
+ 8
+7
Membership end of year
.
Total losses
.
6
. . .
.
316
317
325
333
3 40
346
351
353
N ational b a n k s ..........................
2 60
266
268
274
276
279
281
283
State b a n k s .................................
56
51
57
59
64
67
70
70
’''Includes conversion of State member banks to National banks.
* * Includes conversion of National banks to nonmember banks, and absorption of
members by nonmembers.
FEDERAL
RESERVE
OF ATLANTA
EDERAL
igsi
RESERVE BANK OF ATLANTA
far the Year Ended December 3 1 ,1Q51
March 14, 1952
To the Member Banks of the
Sixth Federal Reserve District:
Herein is presented the Thirty-seventh
Annual Report of the Federal Reserve Bank
of Atlanta. It includes comments on out
standing changes during the year in the
Bank’s financial condition, a brief review of
Sixth District member bank developments,
and an account of the Bank’s principal
activities and services.
-
Sincerely yours,
M
alcolm
B ryan,
President
TaLle of C ontents
PAGE
R eview of Banking D evelopm ents ................................. 9
Bank Financial C h an g e s..................................................11
Member Bank Financial C h a n g e s ................................. 14
Changes in M em bership..................................................14
Nonmember Par-clearing B an k s.......................................15
Appointments, Elections, and Staff Changes . . . . 17
R eview of O pe r a t io n s ....................................................... 21
Real Estate C r e d it.............................................................22
Consumer C r e d i t .............................................................23
Bank E xam ination.............................................................24
R e se a rc h ..............................................................................24
Fiscal Agency and S ecurities............................................ 25
Commodity Credit C orporation.......................................28
Check Clearing and C ollectio n.......................................29
Currency and C o in .............................................................30
Bank and Public Relations.................................................. 31
Discount and Credit............................................................. 33
Voluntary Credit Restraint.................................................. 34
Personnel..............................................................................36
D irectors and O fficers ........................................................39
F inancial
and
V o l u m e R eports
46
Sixtli Federal R eserve D istrict
1REVIEW OF BANKING '
DEVELOPMENTS * * * :
)
________ i
Banking activity in the Sixth District was conducted in 1951 on
the basis of a business background characterized by relative sta
bility. Industrial output fluctuated from month to month within
an unusually narrow range, a range that closely approximated
optimum levels. Production for defense purposes took an increas
ing share of the nation’s effort, but even so production for civilian
uses was ample, or more than ample, to meet consumer demand.
Unemployment generally was reduced to a minimum and, de
spite a substantial increase in the armed forces of the country,
employment for the country as a whole averaged about one
million higher than in 1950. Associated with greatly accelerated
defense spending was a considerable rise in personal income.
Although upward pressure on the price structure was potentially
very strong, price changes, as a whole, proved to be moderate for
the year.
A return to more normal buying and saving habits on the part
of consumers was an essential element in reducing pressure on
prices. After a strong buying upsurge in the first quarter of the
year, consumers became more willing to hold a larger proportion
■
4 Entrance to Head Office, Atlanta, Georgia
9
of their income in cash claims. Contributing to this change was
an easing of war fears and the demonstrated availability of
civilian goods.
Business investment spending was also reduced in certain
categories, primarily through the withdrawal of basic materials
and supplies from nondefense uses. By the fourth quarter of 1951,
such spending was substantially less than it had been during the
first half of the year.
Another key factor in the reduction of inflationary pressure
was the Federal tax program. Higher taxes served to absorb an
important part of increased business and consumer incomes and
enabled the defense program to proceed essentially on a pay-asyou-go basis.
Probably the most important factor in the abatement of infla
tion was restrictive monetary action applied by the Federal
Reserve System. In the latter part of 1950, the rates charged by
the Federal Reserve Banks on borrowings were increased, and
member bank reserve requirements were raised in the early part
of 1951. Both measures affected the supply, availability, and cost
of loanable funds. Then, on March 4,1951, the Treasury-Federal
Reserve accord was announced, whereby a far-reaching modifi
cation in procedures for supporting the price of marketable Gov
ernment securities was brought about. The accord was almost
immediately accompanied by a reduction in the availability of
funds for credit expansion. Reinforcing the restrictive effect of
these monetary actions was a more cautious lending policy on
the part of commercial banks, inspired partly by voluntary credit
restraint committees organized throughout the country.
Whatever may have been the contributing factors, the inflation
problem that appeared in such aggravated form at the beginning
of the year seemed to be under control by the end of the year.
The impact of the changed situation was notable in the District
in the changes that took place in the financial condition of the
Federal Reserve Bank of Atlanta and in that of the member
banks. Resources of the Federal Reserve Bank increased only
10
moderately. Although deposits of member banks increased sub
stantially during the year, aggregate loan volume at the end of
the year was almost identical with that at the beginning of the
year.
i________
Bank
Financial Changes
)
_______ _________________ __________ ___ L
By the end of 1951, the resources of the Federal Reserve Bank
of Atlanta amounted to $2.5 billion, representing a 12-month
gain of $175 million. After paying dividends of $567,001 to its
member banks and paying interest of $13,524,304 on its out
standing Federal Reserve notes to the United States Treasury, the
Bank had a net addition of $1,502,799 to surplus for the year.
These distributions were made out of net earnings, which totaled
$15,642,107.
Gold-certificate reserves amounted to $973,357,440, an in
crease of $43,016,878 for the year. The Bank must hold claims
to gold certificates equal to 25 percent of both deposits and
Federal Reserve note liabilities. The actual ratio of gold certifi
cate reserves to combined deposits and Federal Reserve note
liabilities at the end of 1951 was 41.8 percent. Calculated sepa
rately, the deposit ratio was 43.6 percent, and the Federal Reserve
note ratio was 40.5 percent.
Participation in the System Open Market Account amounted to
$1,273,684,000, an increase of $163,599,000 over such partici
pation a year earlier.
Liability on Federal Reserve notes in actual circulation was
$1,382,154,565, an amount $106,063,325 greater than that of
a year earlier. These notes are fully secured by gold certificates
and Government securities. The increase in the amount of this
Bank’s notes outstanding reflected the high level of business ac
tivity experienced in the Sixth Federal Reserve District, since
11
requirements for pocket, till, and vault cash generally rise with
an expanding volume of business.
Deposit liabilities amounted to $947,769,209, a rise of $88,743,010 for the year. Member-bank reserve accounts, amounting
to $915,857,708, represented the major part of the Bank’s
deposit liabilities.
Capital accounts amounted to $40,633,683, a rise of $2,307,502 for the year. Of this amount, capital paid in amounted to
$9,711,150.
Net changes in the Capital Paid-in Account represented an in
crease of $756,700 for the year, compared with $714,650 for
the year 1950. Additions to, or subtractions from, the account are
strictly a matter of statute. When member banks increase their
capital stock and surplus, they are required to subscribe for an
additional amount of capital stock equal to 6 percent of the
increase. Only one half of the subscription, however, must be
paid in, the other half is subject to call. Owing to this require
ment, the member banks of the Sixth Federal Reserve District
subscribed to $1,502,900 of capital stock at $100 per share, of
which one half, or $751,450, was actually paid in. These sub
scriptions were made pursuant to an approximate increase of
$25,000,000 in capital and surplus of the member banks. A
further increase in the Capital Paid-in Account amounting to
$17,250 was made as the result of the admission of three banks
to membership. Two decreases in the account were recorded, one
representing a return of $1,500 paid-in capital to a member bank
because it had reduced its capital and surplus in the amount of
$50,000, and the other representing a reduction of $10,500 fol
lowing the withdrawal of a bank from membership.
Surplus (Section 7) increased $1,502,799 during the year,
bringing the total to $23,871,397 at year’s end. This item repre
sents the accumulated net earnings of the Federal Reserve Bank
after all dividend claims have been fully met.
Surplus (Section 13b), at $762,426, represents a dormant
account. No changes in the account balance have been made since
12
1944. This surplus fund originated from advances by the Treas
ury to the Federal Reserve Banks with respect to loans and
discounts for industrial purposes.
Reserves for contingencies were increased by $48,003, bring
ing the total of such reserves to $6,288,711. Of this total,
$690,711 is earmarked for registered mail losses, inasmuch as
under a System-wide loss-sharing arrangement the Federal Re
serve Banks handle shipments of coin and currency by registered
mail on a self-insured basis.
Current earnings for 1951 amounted to $21,111,140, com
pared with $14,712,490 for 1950. All but $150,000 of the 1951
earnings were from United States Government securities held by
the System Account.
Current expenses for the year amounted to $5,384,700, some
$1 million higher than for 1950. Higher operating costs were
characteristic of the year. The increase in expenses was primarily
because of an expanded volume of operations, particularly in
original cost of currency and increased shipping charges. Salary
payments to employees were also substantially higher, but the
increased salary costs reflected in part the net addition of 137
people to the working force.
Expenses of the Bank are directly related to service activities.
Salary scales are adjusted to those prevailing among the banking
institutions in the cities where the Bank maintains offices. All
expenses are under strict budgetary control. Accounts are under
constant audit review, not only by the Bank’s staff of auditors but
also by examiners directly representing the Board of Governors.
These measures prevent waste, extravagance, and unauthorized
expenditures.
Of net earnings amounting to $15,642,107, there was paid
to the United States Treasury the sum of $13,524,304, repre
senting interest on outstanding Federal Reserve notes not collateraled by gold certificates.
13
MemLer Bank Financial Clian^es
The member banks of the Sixth District experienced a further
growth in resources and deposits in 1951. In the aggregate, their
resources amounted to $7.3 billion at the end of the year, repre
senting a 12-month gain of $600 million. Their holdings of
securities increased by $280 million, but their loans and discounts
barely changed in amount. Their deposits in the aggregate rose by
$570 million, bringing the year-end total to $6.8 billion.
Earnings of the member banks for the year were higher than
for the preceding year. Current operating earnings for 1951
amounted to $179 million, against $162 million for 1950, a gain
of 11 percent. Interest on United States Government obligations
provided $39.0 million, or 21.8 percent of current operating
earnings. Interest and discount on loans contributed $95.8
million or 53.5 percent of the total.
Operating expenses amounted to $110 million in 1951, com
pared with $100 million in 1950. Gains in income more than
offset increases in expenses, however, so that net current operating
earnings for 1951, amounting to $68.2 million, exceeded such
earnings for 1950 by $14.2 million. Primarily because of larger
transfers to valuation reserves and higher income taxes, net profits
after all charges were slightly smaller for 1951 than for the pre
ceding year, $35.2 million against $37 million.
Changes in M embership
On December 31, 1951, there were 355 member banks in the
Sixth District, a net gain of two members for the year. Of these
banks, 286 were national banks and 69 were state banks.
The changes in membership reflected the admission of three
14
banks and the withdrawal of one. The banks admitted to member
ship are identified in the following list:
Date of
Admission
Name of Bank
Location
Deposits
December 31,
1951
March 1
The First National Bank Gatlinburg, $ 784,000
of Gatlinburg
Tennessee
March 27 North Dade National
North Miami, 2,765,000
Bank of North Miami Florida
June 30
Sullivan County Bank Kingsport, 4,135,000
converted to Kings
Tennessee
port National Bank
The Sarasota State Bank, Sarasota, Florida, withdrew from
membership on December 13,1951.
On January 2, 1951, the Louisiana Savings Bank and Trust
Company, New Orleans, Louisiana, a state bank member, chang
ed its name to the Louisiana Bank and Trust Company.
The Peachtree Trust Company, Atlanta, Georgia, changed its
name to the Peachtree Bank and Trust Company, Atlanta, Geor
gia, on March 1, 1951. On November 1, 1951, the bank again
changed its name, this time to The Citizens and Southern Buckhead Bank, Atlanta, Georgia.
N onm em Ler Par-clearing Banks
Nonmember state banks added to the Par List in 1951 were the
following:
F lorida
The Citizens Bank of Bunnell
Hialeah-Miami Springs Bank
Bunnell
Hialeah
15
South Dade Farmers Bank
Bank of Lake Alfred
Commercial Bank of Miami
Bank of Mulberry
Colonial State Bank
First Bank & Trust Company
The Riviera Beach Bank
The Peninsula State Bank
West Pensacola Bank
G eorgia
The Citizens and Southern Emory Bank
Bank of Upson
The Citizens Bank of Toccoa
The Commercial Bank at Valdosta
The Bank of Barrow
L ouisiana
Guaranty Bank & Trust Company
T ennessee
Ridgedale Bank and Trust Company
Homestead
Lake Alfred
Miami
Mulberry
Orlando
Pensacola
Riviera Beach
Tampa
West Pensacola
Atlanta
Thomaston
Toccoa
Valdosta
Winder
Gretna
Chattanooga
At the close of 1951, there were 1,216 banks in the Sixth Dis
trict, of which 615 were on the Par List and 601 were not. Of the
615 banks on the Par List, 260 were nonmember state banks.
The year 1951 was the first since the organization of the Ban
in which the number of par-clearing banks in the Sixth District
exceeded the number of nonpar-clearing banks.
There is little formality required with respect to the addition
of a nonmember state bank to the Par List. The only requiremen
is that the bank agree to remit at par for checks drawn on it when
received from the Federal Reserve Bank.
16
( A ppointm ents, E lections, and Staff Changes
Frank H. Neely, Chairman of the Board of Rich’s, Inc., Atlanta,
Georgia, was redesignated by the Board of Governors as Federal
Reserve Agent and Chairman of the Board of Directors of the
Federal Reserve Bank of Atlanta for the year 1952. Rufus C.
Harris, President of The Tulane University of Louisiana, New
Orleans, Louisiana, was reappointed by the Board of Governors
as Deputy Chairman of the Board of Directors for the year 1952.
Paul E. Reinhold, President and Director, Foremost Dairies, Inc.,
Jacksonville, Florida, was appointed by the Board of Governors
of the Federal Reserve System a Class C Director of the Federal
Reserve Bank of Atlanta for an additional term of three years,
beginning January 1,1952.
At elections held in November, W. C. Bowman, Chairman of the
Board, The First National Bank of Montgomery, Montgomery,
Alabama, was chosen by member banks in Group 1 as a Class A
Director, and J. A. McCrary, Decatur, Georgia, Vice President
and Treasurer, J. B. McCrary Company, Inc., Atlanta, Georgia,
was re-elected by member banks in Group 2 as a Class B Director.
Each of these directors was elected for a term of three years, be
ginning January 1, 1952.
The Board of Governors of the Federal Reserve System
appointed the following branch directors, each for a term of three
years beginning January 1, 1952: Birmingham Branch, Edwin
C. Bottcher, Cotton and Dairy Farmer, Cullman, Alabama;
Jacksonville Branch, J. Hillis Miller, President, University of
Florida, Gainesville, Florida; Nashville Branch, H. C. Meacham,
Agriculture and Livestock, Franklin, Tennessee; New Orleans
Branch, Joel L. Fletcher, Jr., President, Southwestern Louisiana
Institute, Lafayette, Louisiana.
The Board of Directors of the Federal Reserve Bank of Atlanta
also appointed four branch directors, each for a term of three
17
years beginning January 1, 1952: Birmingham Branch, A. J.
Goodwin, Jr., Vice President, The Anniston National Bank,
Anniston, Alabama; Jacksonville Branch, G. W. Reese, Presi
dent, The Citizens and Peoples National Bank of Pensacola,
Pensacola, Florida; Nashville Branch, Sam M. Fleming, Presi
dent, Third National Bank in Nashville, Nashville, Tennessee;
New Orleans Branch, G. M. McWilliams, President, Citizens
Bank of Hattiesburg, Hattiesburg, Mississippi.
As a member of the Federal Advisory Council, representing
the Sixth Federal Reserve District, for a term of one year beginning
January 1, 1952, the Board of Directors of the Federal Reserve
Bank of Atlanta reappointed Paul M. Davis, Chairman of the
Board of Directors of the First American National Bank of Nash
ville, Nashville, Tennessee.
To serve as members of the Industrial Advisory Committee for
the Sixth District, the Board of Directors of the Federal Reserve
Bank of Atlanta reappointed, for the year 1952, John E. Sanford,
President, Armour Fertilizer Works, Atlanta, Georgia; George
Winship, President, Fulton Supply Company, Atlanta, Georgia;
Luther Randall, President, Randall Brothers, Inc., Atlanta, Geor
gia; and I. C. Milner, President, Gate City Mills Company, East
Point, Georgia. Shannon M. Gamble, Executive Vice President,
Standard-Coosa-Thatcher Company, Chattanooga, Tennessee,
was appointed for the year 1952.
There were several changes in the Bank’s official staff during
1951. William S. McLarin, Jr., retired as President, effective
March 1. He was succeeded by Malcolm Bryan, effective
April 1. Mr. Bryan returned to this Bank from his position as
Vice Chairman of the Board, Trust Company of Georgia, a post
he had held since October 1946, after having served as First
Vice President of this Bank from May 1941 to October 1946. At
its December meeting, the Board of Directors approved the ap
pointments, effective January 1, 1952, of Harold T. Patterson,
General Counsel, as Vice President and General Counsel, and of
J. E. McCorvey as Assistant Vice President.
18
At the Birmingham Branch, Melvin Mcllwain was appointed
Assistant Cashier. At the Jacksonville Branch, T. C. Clark was
appointed Assistant Manager and J. Wyly Snyder, Cashier. At
the Nashville Branch, R. E. Moody, Jr., was appointed Vice
President and Manager to succeed Joel B. Fort, Jr., who died
suddenly on October 17, 1951; E. R. Harrison and E. C. Rainey
were appointed Assistant Managers; and Leo W. Starr was
appointed Cashier.
19
REVIEW OF BANK
OPERATIONS ' - '
In behalf of the Board of Governors of the Federal Reserve Sys
tem, the Bank continued administrative responsibilities for certain
activities associated with the national defense effort. By Act of
Congress, approved July 31, 1951, the Defense Production Act
of 1950, scheduled for expiration on July 31, 1951, was amended
and extended to July 1, 1952. Under authority conferred by this
Act, the Board of Governors of the Federal Reserve System exer
cises control over consumer credit, regulates real estate credit,
and services the guarantee of defense production loans. The
Bank’s responsibility for these activities involved the continuance
of the appropriate operating departments established in the pre
ceding year. Reflecting District economic expansion and the
impact of the nation’s accelerating defense program, certain of
the more usual operating activities of the Bank were sharply
increased in volume.
Upper:
Lower:
Compiling Statistics in Research Department
Processing Post Office Money Orders
21
Real Estate Credit
Regulation X as originally issued, effective October 12, 1950,
restricted and regulated credit on new residential construction.
Effective January 12, 1951, the regulation was broadened to
include restrictions on credit in connection with both new resi
dential properties and new multi-unit (commonly known as
apartment house) residential properties. Again, on February 15,
1951, the scope of the regulation was further extended to include
nonresidential properties.
In its definition of nonresidential properties, the regulation
exempted a number of structures from credit restrictions. Schools,
hospitals, and churches were excluded. So, too, were structures
exclusively used or designed for use by a public utility, or by any
Government or political subdivision. Structures of which more
than 80 percent of the floor space is used for manufacturing
purposes were likewise excluded.
Effective September 1, 1951, the regulation was amended
to bring it into conformity with the provisions of the Defense
Housing and Community Facilities and Services Act of 1951. The
principal effect of the amendment was to lower down-payment
requirements on conventional and on FHA-insured and VAguaranteed loans for residences costing $12,000 or less, and to
increase the permissible maturity on such loans to 25 years.
Down-payment requirements on loans for residences costing be
tween $12,000 and $15,000 were lowered by as much as 5 per
cent, and the entire schedule up to $24,500 was lowered slightly.
The amendment also provided for certain suspensions of credit
extensions in critical defense housing areas, and for exemption
of certain essential nonresidential defense construction.
Through December 31, 1951, lenders under the regulation
filed 3,507 registration statements with the Bank. These Regis
trants included 1,145 banks, 254 savings and loan associations,
22
89 insurance companies, and 2,019 other firms, corporations,
and individuals.
For the purpose of achieving compliance with the regulation,
the Bank conducts examinations of Registrant lending activities.
Such investigations numbered 696 for the year. The Bank does
not make such examinations of the lending operations of com
mercial banks and savings and loan associations. These lenders,
by mutual agreement, are examined for compliance with Regu
lation X by other supervisory authorities.
Consum er Credit
In accordance with the revision and extension of the Defense
Production Act, the Board of Governors on July 31, 1951,
amended the terms of Regulation W— Consumer Credit. Maxi
mum maturities on installment credit for automobiles, major
household appliances, and household furniture were extended to
18 months from the earlier limitation of 15 months. The maturity
term for home-repair-and-improvement installment credit was ex
tended from 30 to 36 months. Longer maturities were also per
mitted for consumer installment loans.
Down-payment requirements were modified. For household
appliances, radios, and television sets, down payments were re
duced from 25 percent to 15 percent. Another major revision
permitted down payments on all listed articles to be made in
cash, trade-in, or combination of cash and trade-in.
Registration is required of all businesses subject to the regu
lation. At the end of the year, there were 14,543 Sixth District
firms registered. Pursuant to its authority and responsibility, the
Bank makes examinations of credit extensions on the part of
Registrants. From the reinstatement of the regulation in Sep
tember 1950 to the close of 1951, compliance checks had been
made of 57 percent of the firms registered.
23
Bank Exam ination
Little change took place in the activities of the Bank Examination
Department. Each state member bank in the District was examin
ed at least once during 1951 and one of the three holding com
panies, which have been issued general permits by the Board
of Governors to vote the stock of their subsidiary member banks,
was examined. Several field investigations were made in connec
tion with proposed state and national banks and in connection
with applications of national banks for permission to exercise
trust powers.
All examinations are made in close co-operation with the state
banking authorities in the states composing the Sixth Federal
Reserve District. In this way there is a minimum of duplication
of effort. As a usual practice, joint examinations are made with
the state authorities in Florida, Louisiana, Mississippi, and Ten
nessee. Independent examinations are made in Alabama and
Georgia.
Whether examinations are made jointly or independently is
generally determined by state law, manpower requirements of the
examinations, and policies and wishes of the various state bank
ing departments. Close working relations are also maintained
with the office of the Comptroller of the Currency and the
Federal Deposit Insurance Corporation so that all supervisory
matters may be handled efficiently and without conflict or friction.
Research.
Carrying out the programs initiated or fostered by the Board
of Directors in the field of agriculture continued to be of great
importance in 1951. By means of these programs, carried out
24
co-operatively with State Bankers Associations, State Colleges of
Agriculture, and the Extension Service, commercial bankers are
able to learn firsthand the problems involved in the extension of
farm credit, and are, therefore, better able to serve the credit
needs of agriculture understandingly. These programs are also
valuable to this Bank because they serve to improve relations
with commercial banks and with the fundamental institutions
serving this important segment of the economy of the Sixth
District.
Farm meetings sponsored jointly by the State Bankers Associa
tions, the State Colleges of Agriculture, and the Branches of the
Bank were held in all District states except Georgia— four in
Mississippi in April, three in Louisiana in May, nine in Alabama
in June and July, five in Tennessee in August, and three in
Florida in September. In Georgia, two farm credit short courses
were held in February— one at Tifton, and one at Athens.
As usual, members of the professional staff of the Department
represented the Bank at sundry meetings of bankers, business
men, and agriculturists. They also filled numerous speaking en
gagements, in addition to answering frequent requests from the
public for information on a wide variety of subjects.
Two publications of the Department, the Monthly Review and
the Bankers Farm Bulletin, continued to command attention and
respect, not only in this District, but throughout the nation. An
extensive study of farm credit, appearing in three installments in
the April, May, and June issues of the Monthly Review, attracted
much attention and was reprinted in pamphlet form to satisfy the
demand for it.
Fiscal A gency and. Securities
The Bank acts as Fiscal Agent of the Treasury Department in the
Sixth District in the issuing and servicing of the various obliga
25
tions of the United States. During the year, the Treasury exercised
the call privilege on three issues of bonds having interest rates of
2 Va percent, 2 % percent, and 3 percent, respectively. Short-term
1% percent Certificates of Indebtedness were offered in exchange
for each matured or called issue. In the Sixth District, there were
4,235 subscriptions covering these operations, amounting to $612
million.
The Treasury Department offered a 2% percent Treasury
Bond, Investment Series B 1975-80, dated April 1,1951, to hold
ers of the 2 l/ z percent Treasury Bonds of June and December
1967-72 who wished to exchange. Pursuant to this offering, the
Bank handled 636 exchanges totaling $116 million.
Other than the weekly Treasury Bill offerings and two offerings
of bills designated Tax Anticipation Series in the amount of
$1,250 million each, no cash offering of nonrestricted securities
was made during the year. The total applied for on each Tax
Anticipation Series was over $3,300 million. The total amount
of bills of all series issued in the Sixth District during 1951 was
approximately $971 million, allotted from 5,660 tenders received.
Servicing of Treasury issues processed for exchange or trans
fer amounted to over $1,402 million and involved the processing
of 42,148 pieces. Redemption of coupon and registered Treasury
issues amounted to $1,565 million, numbering 97,194 pieces. In
number of pieces, this volume represented approximately a 21
percent increase over that of 1950 and a 54 percent increase over
that of 1949.
On May 14, 1951, the Treasury Department announced the
termination of sale of Treasury Savings Notes, Series D, and the
sale of a new issue of Treasury Savings Notes, Series A, beginning
May 15. Treasury Savings Notes issued in the District were in
excess of $86 million, involving the inscribing of 5,491 pieces.
Issues, reissues, and redemptions of United States Savings
Bonds are also serviced by the Department. It serviced issues of
Savings Bonds of all series, amounting to 2,121,202 pieces with a
maturity value of $201 million. Compared with that of 1950, this
26
operation represented an approximate increase of 10 percent in
the number of pieces, but a decrease of 30 percent in maturity
value. Approximately 74 percent of the amount issued, or $148
million, was handled by issuing agents of which at the end of the
year there were 1,378.
Reissues can be made only by a Federal Reserve Bank or the
Treasury Department. In 1951, the Bank processed 170,970
reissues, with a maturity value of $40 million.
Redemptions of Series E Savings Bonds serviced by the De
partment amounted to $307 million, numbering 3,975,034
pieces. Compared with that of 1950, this volume reflected a de
crease of 5 percent in the number of pieces and a decrease of 7
percent in maturity value. At the end of the year, there were
1,352 paying agents in the District. Series F and G redemptions
amounted to 50,206 pieces, with a maturity value of $59 million,
or an increase of $3 million over the redemptions of 1950.
Savings bonds are held by the Bank in custody for individuals.
On December 31,1951, such holdings numbered 235,962 bonds,
having a maturity value of $27 million.
Coupons paid, representing coupons forwarded for payment
and clipped from direct United States Government obligations
held in safekeeping, amounted to $31 million and numbered in
excess of 489,000 pieces.
Treasury Tax and Loan Accounts are serviced for the Treasury
Department by the Bank. On December 31, 1951, there were
867 banks qualified as depositaries of public moneys under the
provisions of Treasury Department Circular No. 92, the quali
fications exceeding $1,389 million and having balances of over
$97 million. There were 129,652 entries in the accounts during
1951, an increase of approximately 6 percent.
Reporting and depositing of Withheld Federal Taxes are
handled by the Bank. Effective July 1, the Treasury Department
included taxes withheld under the provisions of the Railroad
Retirement Act. During 1951, the amount of taxes so handled was
in excess of $463 million, representing an increase of 45 percent
27
over the amount serviced in 1950. At the end of the year, there
were 730 banks qualified to accept tax payments.
An important service performed for member banks by the
Bank was the purchase and sale, including the clearance, of
United States Government securities in the open market. This
service was performed without charge to the member banks, ex
cept for the small fee the Treasury Department charges for trans
ferring securities by wire. During 1951, there were 7,579 trans
actions handled in the Sixth District, representing $1,328 million
in maturity value.
The Bank also acts as custodian of securities for member banks
and as custodian of securities deposited for municipal and gov
ernmental purposes. On December 31, 1951, the Bank held
$1,271 million of these securities.
C om m odity Credit Corporation
Under a continuing agreement the bank serves as fiscal agent and
custodian for the Commodity Credit Corporation. Funds are
received for the Corporation’s account from note repayments and
collections forwarded by the various PMA Commodity Offices.
Funds are paid out by the issuance of United States Treasury
checks in accordance with schedules of disbursements prepared
by the PMA Commodity Offices, in payment of sight drafts drawn
on the Corporation by authorized agents, and in payment of pub
lic vouchers prepared by the Bank. Cotton loan notes and related
collateral, consisting of negotiable warehouse receipts, are serv
iced by the Bank and held in its vault.
The 1950 cotton loan program, reflecting in part the applica
tion of acreage controls, was one of the smallest in recent years.
Only 2,107 bales, produced in the states served by the Bank, were
pledged under the Government loan.
Offerings under the 1951 cotton loan program were in greatly
28
expanded volume. At the end of the year, 403,817 bales from
the states served by the Bank had been pledged under the loan,
and 108,034 bales had been redeemed.
Under the general commodities programs, which covered
wheat, corn, oats, soybeans, cottonseed, sweet potatoes, and farmstorage facilities, the Atlanta office paid 23,120 sight drafts
(PMA-377) totaling $13 million. Disbursements under the 1951
peanut loan and purchase programs amounted to $33 million.
The New Orleans Branch during the year issued 6,889 checks
on the Treasurer of the United States amounting to $81,357,783.
The checks were issued against schedules of disbursement furn
ished by the New Orleans PMA Commodity Office.
On March 5,1951, the Production and Marketing Administra
tion of the Department of Agriculture began drawing checks on
the New Orleans Branch in payment of equities due cotton pro
ducers in settlement of the 1948 Cotton Producers’ Pool. Ap
proximately 1,200,000 checks, having a value in excess of $66,000,000, were issued for this purpose.
The Jacksonville Branch, under the 1950 and 1951 peanut
programs, paid sight drafts amounting to $4,888,569, and re
ceived deposits of $6,611,708.
Check Clearing and C ollection
Check clearing and collection activities were in sharply larger
volume. The number of checks and Post Office money orders
cleared during 1951 was 156,403,000 and 13,905,000, respec
tively. The number of checks cleared in 1950, which marked the
previous high in volume, was 142,446,000, postal money orders
not having been handled during that period.
An important responsibility in the handling of the new Post
Office money orders, beginning July 1, 1951, was assumed by the
29
Federal Reserve Banks’ check collection system. A new 24-com
partment transit proof machine, with a punching device added,
was developed by a manufacturer to function these items. As the
money orders are fed into the machine, the operator punches
amounts into the money orders. They are then almost simul
taneously listed, endorsed, and sorted into designated machine
pockets according to paying Regional Accounting Post Offices.
A continued growth in the percentage of par checks in circula
tion bearing the uniform routing symbol was revealed. The survey
made toward the end of 1950 revealed that 78 percent of all
checks in circulation in the Sixth District bore the uniform routing
symbol in the proper location, which is in the upper right-hand
corner of the check. A similar survey made in December 1951, in
comparison, indicated that 82 percent of such checks bore the
routing symbol.
Currency and coin handled during the year was in the largest
volume on record. Receipts from banks totaled $1,712 million,
compared with receipts of $1,520 million for 1950, an increase of
$192 million. Payments to banks of $1,489 million compared
with payments of $1,264 million for 1950, an increase of $225
million. The number of pieces of currency received and counted
totaled 295 million and the number of coins received and counted
totaled 350 million, reflecting increases over 1950 of 23 million
pieces of currency and 38 million pieces of coin.
During the last half of the year, the Bank was faced with a
coin shortage, particularly of pennies, resulting from heavy de
mands of commercial banks for coin supplies and the inability
of the Treasury to produce coins in sufficient volume to meet the
increased demands. To insure an equitable distribution of the
30
coins available, it was necessary to resort to a temporary rationing
of the supply. By the close of the year, however, the supply situa
tion had materially eased.
Bank and Public R elations
Bank and public relations activities were concerned with the
development of closer relationships with bankers of the region
and with efforts to comply with requests from various public
organizations and groups for information and services that arise
in connection with the Bank’s operations. No program is main
tained for the purpose of enlarging the Bank’s responsibilities or
directing public opinion or legislation.
The Bank is much interested in improving its service functions
for commercial bankers of the region. Its activities in this regard
are closely identified with the operating and service functions of
the Bank itself and have no other significance or purpose.
During 1951, representatives of the Bank and its Branches met
and talked with officers of every commercial bank in the District.
With the exception of a few small banks and small savings banks,
every bank in the District was visited one or more times. These
calls numbered 1,364 for the year, 630 of which were to member
banks and 734 to nonmember banks.
Representatives of the Bank attended all of the 140 principal
bankers meetings in the District. In addition to these meetings, the
Bank was represented at the State Bankers Conventions in each
of the six states of the District, at the National Convention of the
American Bankers Association, and the National Convention of
the Financial Public Relations Association. During the year, Bank
representatives also attended 103 other meetings where banking
matters pertaining to the economy of the District were discussed.
Public relations activities, as such, were conducted largely in
31
response to specific public requests for assistance and informa
tion. That is to say, there was no planned program involving the
promotion of meetings or the issuance of printed material de
signed to enhance the Bank in public favor. As in the case of other
institutions, Bank representatives are frequently called upon to
make public addresses on financial and economic affairs. In re
sponse to such requests, representatives of the Bank made 62
public speeches during the year to an aggregate audience of
13,000 people.
Inasmuch as the Bank and its Branches in large measure rep
resent the financial heart of their region and conduct many
important and intricate operations, they are frequently called
upon by interested groups to conduct tours of their facilities.
Requests for such tours are welcomed, particularly as they come
mostly from groups of school children. Approximately 1,000
individuals were conducted on such tours through the Bank
and Branches in 1951.
In response to numerous requests from school, civic, and bank
ing groups, the Bank has made available for public showing three
sound films explaining the operations, purposes, and functions of
the Federal Reserve System. One of the films, The Federal Re
serve System, was produced by Encyclopaedia Britannica Films
Inc., the Board’s staff assisting in the technical review of the
script. The Bank has five prints available for showing. The second
film, The Federal Reserve Bank and You, was produced by the
Federal Reserve Bank of Minneapolis but is applicable to all
Federal Reserve Banks. The Bank also has five prints of this
film. A third film, A Day at the Federal Reserve Bank of Cleve
land, was also produced by an individual Federal Reserve Bank
and is equally applicable to all Federal Reserve Banks. The Bank
has one print of this film available for public showing. During the
year, 178 separate groups viewed one or more of these films.
32
D iscount and. Credit
Discounts and advances totaled $300,000 at the end of 1951.
During the year, the Bank made 381 advances accommodating
47 member banks to the extent of $1,040,119,000. Of that
amount, $1,005,469,000 was secured by United States Govern
ment obligations; $30,985,000 by eligible paper; $665,000 by
collateral not eligible for discount or purchase; and $3,000,000
represented commercial paper rediscounted.
Member bank borrowings reached their high point on January
30, 1951, when $43,862,000 was outstanding. As in 1950, no
advances were made during the year to nonmember banks. In
most instances, advances made during the year were for short
periods and were for the purpose of covering temporary reserve
deficiencies of the member banks.
The number and amount of notes discounted during 1951 in
creased 47.1 and 142 percent, respectively, compared with 1950.
Industrial advances totaled $583,885, an increase of $577,288.
One direct loan in the amount of $30,000 was advanced during
1951. The Bank also participated to the extent of 50 percent
with one member bank in a revolving-credit loan of $1,800,000.
Ninety percent of this loan is guaranteed by the Department of
the Army under the terms of Regulation V. Advances made dur
ing the year on the loan aggregated $2,065,766.24, half of which
was advanced by the member bank servicing the loan, and half
by this Bank.
Re-established in 1950, the V-Loan Program was continued
throughout 1951. Additional vigor was given the program when
on May 15, 1951, Public Law 30— 82nd Congress was enacted,
removing uncertainties about the rights of financing institutions to
take assignments of Government contracts as security for loans
to defense contractors. These uncertainties had proved to be a
hindrance to the program.
33
V oluntary Credit Restraint
The Voluntary Credit Restraint Program was promulgated under
the powers given the President by the Defense Production Act of
1950 and delegated by the President to the Board of Governors
of the Federal Reserve System. The program was implemented by
the appointment by the Board of Governors of a national Volun
tary Credit Restraint Committee, by the acceptance by lenders of
a set of broad principles for credit restraint, and by the establish
ment of various regional committees. On the national committee
are representatives of major types of financing institutions. Each
regional committee is composed of representatives of some major
category of finance, i.e., insurance, commercial banking, etc.,
operates in a territory which is usually co-extensive with a Federal
Reserve District, and may be consulted on matters pertaining to
the program.
Two subcommittees have been established in the Atlanta Fed
eral Reserve District, namely, the Sixth District Commercial
Banking Voluntary Credit Restraint Committee and the Sixth
District Savings and Loan Voluntary Credit Restraint Committee.
Members of the Sixth District Commercial Banking Committee
are: John A. Sibley, (Chairman) Chairman of the Board, Trust
Company of Georgia, Atlanta, Georgia; J. Finley McRae, (Vice
Chairman) President, The Merchants National Bank of Mobile,
Mobile, Alabama; James G. Hall, Executive Vice President, The
First National Bank of Birmingham, Birmingham, Alabama; V.
H. Northcutt, President, The First National Bank of Tampa,
Tampa, Florida; Herman Jones, Jr., Executive Vice President,
The First National Bank of Atlanta, Atlanta, Georgia; Dale
Graham, President, The National Bank of Commerce in New
Orleans, New Orleans, Louisiana; Dawson B. Harris, President,
Hamilton National Bank of Chattanooga, Chattanooga, Tennes
see; and V. K. Bowman, Vice President, Federal Reserve Bank
34
of Atlanta, Atlanta, Georgia. Dowdell Brown, Jr., Assistant to
the General Counsel, Federal Reserve Bank of Atlanta, serves the
Committee as Secretary.
Members of the Sixth District Savings and Loan Committee
are: J. D. McLamb, (Chairman) President, First Federal Sav
ings & Loan Association, Savannah, Georgia; F. B. Yeilding, Jr.,
President, Jefferson Federal Savings & Loan Association, Bir
mingham, Alabama; Irving H. Schonberg, President, Union Sav
ings & Loan Association, New Orleans, Louisiana; C. L. Clem
ents, President, Chase Federal Savings & Loan Association,
Miami Beach, Florida; and V. K. Bowman, Vice President,
Federal Reserve Bank of Atlanta, Atlanta, Georgia. Dowdell
Brown, Jr., is also Secretary for this Committee.
Fundamentally, the objective of the Voluntary Credit Re
straint Program is to assure adequate financing for defense and
defense-related activities and to curtail credit for nonessential or
deferrable purposes on a voluntary basis at the source. Broadly
speaking the program is concerned with all extensions of credit
not otherwise controlled by law or by a regulation or ruling of a
governmental agency or administrative body, and such as are
guaranteed, or insured, or authorized as to purpose by the Federal
Government or an agency thereof. The core of the program is the
Statement of Principles, wherein credits of various kinds are
classified according to whether they may be regarded as essential
or are of a kind which might be postponed in the national interest.
Voluntary co-operation of financing institutions is sought on
the basis that they will screen applications for credit in the light
of this Statement of Principles and will reject those applications,
which, if made, would be inflationary and would not further the
defense effort. The primary function of the two committees in the
Sixth District is to assist financing institutions in their efforts to
extend credit on a basis consistent with the purposes of the Volun
tary Credit Restraint Program. To this end, the respective sub
committee renders assistance to financing institutions within its
jurisdiction by receiving from such institutions requests for advice
35
as to the propriety of certain proposed credit transactions under
the program, and by expressing advisory opinions in regard to
them.
From time to time the national committee has issued bulletins
and other informative material dealing directly with the program
and with the question of whether credit transactions of particular
kinds should be made within the purview of the program. The
Sixth Federal District committees have aided financing institu
tions by promptly distributing this material.
Financing institutions in the District have accepted the pro
gram favorably, and it has received the endorsement of the State
Bankers Associations of all the Sixth District states and of the
clearing house associations in the larger cities.
An active employee-recruiting program was conducted by the
Personnel Department throughout the year. The Bank, including
the Branches, employed 393 additional workers, but there were
256 terminations. On January 1, 1952, there were 1,098 officers
and employees on the payroll, compared with 961 at the
beginning of 1951.
During the year, a new group life insurance coverage was
provided for the employees. The new protection is on a System
basis and replaces the individual group life insurance which a
majority of the Federal Reserve Banks had acquired for their
employees.
As in the past, the Bank encouraged study at advanced banking
schools by its key office members. Four of the staff members
received their graduate diplomas from the Graduate School of
Banking at Rutgers University. Two staff members enrolled in
the banking School of the South at Louisiana State University in
1951 in addition to the two who had enrolled for the 1950 session.
36
A formal employee and executive training and development
program was instituted during the year. In addition to placing
emphasis upon improved techniques for employee selection, the
program provided for planned in-service training of key staff
members as well as new employees.
The training program involved assignment of certain staff
members to the branch offices or to specific departments for the
express purpose of acquainting them with new responsibilities and
procedures, the institution of a rotation plan whereby key staff
members would exchange duties for certain periods, and assign
ment of two staff members to member banks for brief training in
commercial bank practices.
Two formal instruction courses in Federal Reserve policies,
procedures, and functions were also established. One of the
courses was designed for staff members at the supervisory level
and provided a reasonably comprehensive survey of the responsi
bilities of the Federal Reserve System. The other course was
designed for new employees for the purpose of acquainting them
with Bank operations.
37
DIRECTORS
AND OFFICERS
Directors of the Bank are nine in number, divided into three
classes of three each, designated as classes A, B, and C. Class A
and Class B Directors are elected by the member banks. Class C
Directors, one of whom is designated Chairman and another as
Deputy Chairman, are appointed by the Board of Governors of
the Federal Reserve System.
Each of the four branches has a Board of Directors of seven
members. Four of these members are appointed by the Federal
Reserve Bank and three by the Board of Governors.
The directors of the Federal Reserve Bank appoint all officers.
Appointments of the President and the First Vice President, for
terms of five years, are subject to the approval of the Board of
Governors.
^ U p p e r : Sorting and Counting Silver Coins
^ L o w e r : Preparing C urrency for Shipm ent to Banks
39
mm
iFecleral Reserve Bank o f'A tlanta Ms Wk
rv
-
.Directors
^j
C lass A
Elected by Member Banks
}
Term Expires
Group December 31
L e s l ie R . D r i v e r .................................................................................................. 2
President, The First National Bank in Bristol
Bristol, Tennessee
Roland L. A d a m s ..................................................................................................3
President, Bank o f York
York, Alabam a
W . C . B o w m a n ......................................................................................................... 1
Chairman of the Board, The First National Bank of M ontgom ery
M ontgom ery, Alabama
1952
1953
19 54
C la s s B
Elected by Member Banks
Donald C o m e r ......................................................................................................... 3
Chairman of the Board, Avondale Mills
Birmingham, Alabam a
A . B. F r e e m a n ......................................................................................................... 1
Chairman o f the Board, Louisiana Coca-Cola Bottling Com pany, Ltd.
N ew Orleans, Louisiana
J. A . M c C r a r y ..........................................................................................................2
V ice President and Treasurer, J. B. McCrary Company, Inc.
Atlanta, Georgia
1952
1953
19 54
C lass C
Appointed by the Board of Governors of the
Federal Reserve System
H . N e e l y , Chairman .........................................................................
F rank
Chairman o f the Board, Rich’s, Inc.
Atlanta, Georgia
R u f u s C . H a r r is , Deputy C hairm an ......................................................
President, The Tulane University of Louisiana
N ew Orleans, Louisiana
Paul
E. R e i n h o l d .....................................
President, Forem ost Dairies, Inc.
Jacksonville, Florida
40
1953
19 52
1954
M a l c o l m B r y a n , President
L e w is M . C l a r k , First Vice President
V. K. Bow m an
J. E .
Sc h u e ssl e r
Vice President
S. P.
D enm ark
H a r o ld T . P a t t e r s o n
Vice President
Vice President
Vice President
and General Counsel
E. L. R a u b e r
Director of Research
R . D e W it t A d a m s
F. H. M a r t in
General Auditor
Assistant Vice President
J. H. B o w d e n
I. H . M a r t in
Assistant Vice President
Assistant Vice President
C. R. C am p
R oy E . M il l in g
Assistant Vice President
J. E . M c C o r v e y
Assistant
Vice President
Assistant Vice President
L. B. R a isty
Assistant Vice President
P a u l M . D avis
Chairman o f the Board
First Am erican National Bank of Nashville
Nashville, Tennessee
Shannon M . G am ble
Executive Vice President
Standard-Coosa-Thatcher Company
Chattanooga, Tennessee
I. C . M il n e r
President
Gate City M ills Com pany
East Point, Georgia
J o h n E. S a n fo r d
L u t h e r R andall
President
President
Armour Fertilizer Works
Randall Brothers, Inc.
Atlanta, Georgia
Atlanta, Georgia
MemLer
Federal
Advisory
Council
Industrial \
Advisory
Committee
G e o r g e W in s h ip
President
Fulton Supply Com pany
Atlanta, G eorgia
41
B i rmingham Branch
D irectors
Appointed by the Board of Governors
of the Federal Reserve System
Term Expires
December 31
J o h n M . G a l l a l e e , C h airm an ........................................................................................ 1953
President, U niversity o f A labam a
T u scaloosa, A labam a
T h a d H o l t .................................................................................................................................1 9 5 2
President and Treasurer, V oice o f A labam a, Inc. (R adio Station W A P I)
Birm ingham , A labam a
E d w in C . B o t t c h e r ............................................................................................................ 1 9 5 4
C otton and D airy Farm er
C ullm an, A labam a
Appointed by Board of Directors,
Federal Reserve Bank of Atlanta
J. B . B a r n e t t ..........................................................................................................................1 9 5 2
President, M onroe C ounty Bank
M onroeville, A labam a
A . M . S h o o k .................................................................................................................................1 9 5 2
President, Security C om m ercial Bank
Birm ingham , A labam a
T . J. C o t t i n g h a m ................................................................................................................... 1953
President, State N ation al Bank o f D ecatur
D ecatur, A labam a
A . J . G o o d w in , J r ...................................................................................................................... 1 9 5 4
V ice President, T h e A nniston N ational Bank
A nniston, A lab am a
V^rticers
42
P. L. T .
q F razer
B e a v e r s , Vice President and Manager
H . J. U r q u h a r t
Assistant Manager Cashier
M e l v in M c I l w a in
Assistant Cashier
Jacksonville Branch
Appointed by the Board of Governors
of the Federal Reserve System
D irectors
Term Expires
Decem ber 31
H o w a r d P h i l l i p s , C h a ir m a n ........................................................................................ 1 9 5 2
V ice President and G eneral M anager, Dr. P. Phillips C om pany
O rlando, F lorida
M a r s h a l l F . H o w e l l ...................................................................................................... 1 9 5 3
V ice President, B ond-H ow ell Lum ber C om pany
Jacksonville, Florida
J. H il l is M i l l e r ....................................................................................................................1 9 5 4
President, U niversity o f Florida
G ainesville, F lorida
A ppointed by Board of Directors ,
Federal Reserve Bank of Atlanta
B r y a n ................................................................................................................................. 1 9 5 2
President, U nion Trust C om pany
St. Petersburg, F lorida
N . R ay C a r r o l l ....................................................................................................................1 9 5 2
President, T he First N ation al Bank o f K issim m ee
K issim m ee, Florida
C l e m e n t B . C h i n n ...................................................................................................................... 19 5 3
President, T he First N ational Bank o f M iam i
M iam i, Florida
G. W . R e e s e ................................................................................................................................. 1 9 5 4
President, T he Citizens and Peop les N ational Bank o f P ensacola
Pensacola, Florida
J. E .
T. A.
T.
L a n f o r d , Vice President and Manager
C . C la rk
Assistant Manager
J.
W yly Sny d er
Cashier
C . M ason F ord
Assistant Cashier
O f
fiC e iT S
43
Directors
Appointed by the Board of Governors
of the Federal Reserve System
Term Expires
December 31
M e a c h a m , Chairm an ...........................................................................................1954
Agriculture and Livestock
Franklin, Tennessee
C. E . B r e h m .....................................................................................................................1953
President, University o f Tennessee
K noxville, Tennessee
W . B r a t t e n E v a n s .................................................................................................................1952
President, Tennessee Enamel Manufacturing Com pany
N ashville, Tennessee
H. C.
Appointed by Board of Directors ,
Federal Reserve Bank of Atlanta
C a t h e y .....................................................................................................................1952
President, Peoples and Union Bank
Lewisburg, Tennessee
T h o m a s D. B r a b s o n ................................................................................................................. 1952
President, The First National Bank o f Greeneville
G reeneville, Tennessee
G . C . G r a v e s ............................................................................................................................... 1953
President, The First National Bank o f Athens
Athens, Tennessee
S am M . F l e m i n g ........................................................................................................................19 54
President, Third N ational Bank in Nashville
N ashville, Tennessee
T. L .
O fficers
R . E . M o o d y , J r ., Vice President and Manager
E . R. H a r r is o n
Assistant Manager
E . C . R a in e y
Assistant Manager
L e o W . S ta r r
Cashier
Directors
Appointed by the Board of Governors
of the Federal Reserve System
Term Expires
December 31
C h a irm a n
H . G. C h a l k l e y , Jr .,
.............................................................................. 1953
President, Sweet Lake Land and Oil Company, Inc.
Lake Charles, Louisiana
E . O. B a t s o n ..................................................................................................................... 1952
President, Batson-McGehee Company, Inc.
Millard, Mississippi
Jo e l L . F l e t c h e r , Jr ........................................................................................................1954
President, Southwestern Louisiana Institute
Lafayette, Louisiana
Appointed by Board of Directors ,
Federal Reserve Bank of A tlanta
P e r c y H. S i t g e s .............................................................................................................. 1952
President, Louisiana Bank and Trust Company
New Orleans, Louisiana
E l b e r t E. M o o r e ...............................................................................................................1952
President, Louisiana National Bank of Baton Rouge
Baton Rouge, Louisiana
W i l liam C. C a r t e r ........................................................................................................ 1953
President, Gulf National Bank of Gulfport
Gulfport, Mississippi
G. M. M c W i l l i a m s ........................................................................................................ 1954
President, Citizens Bank of Hattiesburg
Hattiesburg, Mississippi
E.
M. L.
P. P a r is , Vice President and Manager
Sh a w
Assistant Manager
W . H.
Se w e l l
Cashier
L. Y .
Chapman
Assistant Cashier
\
Officers
4
Sixlli Federal Reserve District
FINANCIAL
an<
VOLUME REPORTS
Reserve Position of MemLer B an k s
S e m im o n th ly P e r io d E n d ed D e c e m b e r 31, 1951
State
Required
Reserves
Actual
Reserves
Percent of Actual
Excess
Reserves to
Reserves Required Reserves
A LA BA M A $132,800,000 $142,600,000 $ 9,800,000
FLO RIDA
186,600,000 197,600,000 11,000,000
GEO RGIA
193,800,000 204,100,000 10,300,000
LO U ISIA N A 165,200,000 183,900,000 18,700,000
MISSISSIPPI
27,000,000 29,800,000 2,800,000
TENNESSEE 125,800,000 137,100,000 11,300,000
107.4
105.9
105.3
111.3
110.4
109.0
DISTRICT
107.7
46
$831,200,000 $895,100,000 $63,900,000
| Currency an J C oin O perations M ain B ank and B randies j
Number of Pieces R eceived and Counted for 1951 and 1950,
by Months
Currency (In Thousands) Coin
Month
January .
February .
March. .
April . .
May . .
June . .
July . .
August
September
October .
November
December.
T otal
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
1951
25,417
20,993
24,449
25,309
28,258
23,393
23,808
26,300
24,085
24,837
24,457
23,751
295,057
1950
22,181
21,465
25,493
21,495
23,980
21,535
20,638
23,518
22,412
22,842
23,292
23,108
271,959
1951
35,139 30,861
30,712 24,641
32,341 25,230
26,768 21,899
30,186 28,351
28,973 26,265
34,524 . 24,287
33,138 29,265
22,676 27,619
24,743 24,562
23,825 26,289
27,331 23,169
350,356 312,438
R e c e ip t s f r o m B a n k s a n d P a y m e n t s t o B a n k s f o r
by M o n th s
Month
January .
February
March .
A pril. .
May . .
June . .
July . .
August .
September
O ctober.
November
December
T otal
. .$
.
.
.
.
.
.
.
.
.
.
. .
1950
1951 a n d 1950,
Receipts
(In Thousands)
Payments
1950
1951
1950
1951
170,107 $ 135,915
136,809
120,748
167,278
146,378
127,700
119,937
136,784
124,848
117,774
125,905
134,704
119,700
143,646
126,646
114,736
127,128
142,144
121,670
145,220
126,689
154,882
144,905
$1,712,307 $1,519,946
$ 94,647 $ 79,263
103,368
105,409
122,790
119,626
112,338
91,124
124,211
96,959
96,093
121,117
117,302
96,072
148,117
105,749
121,196
113,437
142,433
118,112
123,312
112,076
155,932
132,160
$1,488,804 $1,264,039
47
STATEMENT OF CONDITION
D ecem ber 3 1 ,1 9 5 1
A SSETS
G old C e r tific a te s........................... $ 9 2 3 ,5 4 9 ,7 8 5 .1 0
R edem ption Fund for Federal
4 9,8 0 7 ,6 5 5 .0 0
R eserve N o t e s ...........................
T otal G old Certificate R eserves $ 9 7 3 ,3 5 7 ,4 4 0 .1 0
2 6 ,5 7 8 ,8 0 4 .5 0
Other C a s h .........................................
Total C a s h .................................. $ 9 9 9 ,9 3 6 ,2 4 4 .6 0
D iscounts and A dvances .
3 0 0 ,0 0 0 .0 0
583,88 4.83
Industrial L o a n s ...........................
U. S. G overnm ent Securities—
1 ,27 3,68 4,0 00 .0 0
System A ccount . . . .
Total Loans and Securities . $ 1,2 74 ,5 67 ,88 4.83
Federal Reserve N otes of Other
2 1,2 6 2 ,0 0 0 .0 0
Banks ................................................
U ncollected Cash Item s .
2 34 ,0 2 1 ,4 2 0 .1 3
Bank Prem ises (N et) . . . .
2 ,8 8 2 ,2 9 0 .0 0
O ther A s s e t s ..................................
7 ,3 1 3 ,7 0 1 .3 9
T otal A s s e t s ........................... $ 2,5 39 ,9 83 ,54 0.95
L IA B IL IT IE S
Federal R eserve N otes in A ctual
C ir c u la tio n .................................. $ 1 ,3 8 2 ,1 5 4 ,5 6 5 .0 0
D eposits:
M em ber Bank Reserve A ccounts 9 15 ,8 5 7 ,7 0 8 .2 7
U . S. Treasurer— General
A c c o u n t ..................................
4 ,030,392.51
F o r e i g n .........................................
2 1,8 6 1 ,0 0 0 .0 0
6,02 0,10 7.7 5
Other D e p o s it s ...........................
$ 9 47 ,7 6 9 ,2 0 8 .5 3
Total D eposits . . . .
1 6 8 ,83 5,43 5.7 0
D eferred Availability Cash Item s
Other L ia b ilit ie s ...........................
590,64 8.75
T otal L iabilities . . . .
$2 ,4 9 9 ,3 4 9 ,8 5 7 .9 8
C A P IT A L A C C O U N T S
Capital Paid I n .................................. $
9 ,7 1 1 ,1 5 0 .0 0
Surplus (Section 7 ) .
2 3 ,8 7 1 ,3 9 6 .7 0
Surplus (Section 13b) . . .
7 62 ,42 5.68
Reserves for Contingencies .
6 ,28 8,71 0.5 9
T otal C apital A cco unts . $ 4 0 ,6 3 3 ,6 8 2 .9 7
T otal L iabilities and
C a pital A ccounts . . $ 2 ,5 3 9 ,9 8 3 ,5 4 0 .9 5
48
D ecem ber 3 1 ,1 9 5 0
$ 8 90 ,79 9,77 2.3 9
3 9 ,5 40 ,7 90 .00
$ 9 30 ,34 0,56 2.3 9
18,763,112.38
$ 9 49 ,10 3,67 4.7 7
25,0 00 .0 0
6 ,59 6.90
1 ,11 0,085,000.00
$ 1,1 10 ,1 16 ,59 6.90
2 0 ,3 12 ,2 50 .00
2 77 ,13 2,39 7.8 3
1,720,100.56
6 ,328,745.61
$ 2,3 64 ,7 13 ,76 5.67
$ 1,2 76 ,0 91 ,24 0.00
7 40 ,421,957.53
3 8,5 59,111.47
3 7,2 83 ,4 00 .00
4 2 ,7 61 ,7 29 .66
$ 8 59 ,02 6,19 8.6 6
1 91,070,072.32
200,073.95
$ 2,3 26 ,3 87 ,58 4.93
$
$
8 ,95 4,45 0.0 0
2 2,3 68,597.95
762,425.68
6,240,707.11
3 8,3 26 ,1 80 .74
$ 2 ,3 64 ,7 13 ,76 5.67
EA RNING S A N D E X PE N SE S
Current Earnings:
Discounts and A dvances . . . .
Industrial L o a n s ..................................
U . S. Governm ent Securities— System
A c c o u n t ...............................................
A ll O th er......................................................
Total Current Earnings .
Current E x p e n se s........................................
Current N et Earnings .
N et Addition to Current N et Earnings
N et D eductions from Current
N et E a r n i n g s ........................................
Total . . . . . . . .
Other Deductions:
Transferred to Reserve for Contin
gencies .....................................................
Paid to U . S. Treasury (Interest on
Outstanding Federal Reserve N otes)
T o t a l ...............................................
Net Earnings after Reserves and Pay
ment to U . S. Treasury . . . .
Distribution of N et Earnings:
Dividends P a id ........................................
Transferred to Surplus (Section 7 )
1951
$
130,93 4.62
9,2 8 0 .5 7
2 0 ,9 5 9 ,9 9 7 .0 2
1 0,927.39
$ 2 1 ,1 1 1 ,1 3 9 .6 0
5,38 4 ,6 9 9 .8 3
$ 1 5 ,7 2 6 ,4 3 9 .7 7
0
$
7 8,2 61 .8 1
128.93
1 4 ,6 1 1 ,8 7 6 .3 2
2 2 ,2 2 2 .8 9
$ 1 4 ,7 1 2 ,4 8 9 .9 5
4 ,3 4 2 ,7 5 5 .8 9
$ 1 0 ,3 6 9 ,7 3 4 .0 6
1 ,9 4 2 ,5 8 3 .7 6
0
8 4 ,3 32 .8 2
$ 15 ,6 4 2 ,1 0 6 .9 5
$ 1 2 ,3 1 2 ,3 1 7 .8 2
$
$
4 8 ,0 0 3 .4 8
4 0 ,4 3 4 .1 8
13,524,303.61
$ 1 3 ,5 7 2 ,3 0 7 .0 9
1 0 ,5 7 5 ,5 7 5 .1 2
$ 1 0 ,6 1 6 ,0 0 9 .3 0
$ 2 ,0 6 9 ,7 9 9 .8 6
$ 1 ,69 6 ,3 0 8 .5 2
$
$
567,00 1.11
1 ,50 2,79 8.7 5
$ 2 ,0 6 9 ,7 9 9 .8 6
Surplus (Section 7 ):
Surplus January 1 .................................. $ 2 2 ,3 6 8 ,5 9 7 .9 5
Transferred to Surplus— A s A bove
1 ,502,798.75
Surplus D ecem ber 3 1 ........................... $ 2 3 ,8 7 1 ,3 9 6 .7 0
1950
5 21 ,21 1.11
1,175,097.41
$ 1 ,6 9 6 ,3 0 8 .5 2
$ 2 1 ,1 9 3 ,5 0 0 .5 4
1 ,17 5,09 7.4 1
$ 2 2 ,3 6 8 ,5 9 7 .9 5
49
MEMBER BANK COMPARATIVE STATEMENT
[Amounts in thousands o f dollars
ASSETS
Loans and in v estm en ts.........................................................
Loans (including o v e r d r a fts )................................
U. S. Government obligations, direct
and g u a ra n teed .........................................................
Obligations of States and political subdivisions
Other bonds, notes and debentures . . . .
Corporate stocks (including Federal Reserve
Bank s t o c k ) ...............................................................
Reserves, cash, and bank b a la n c e s ................................
Bank premises owned and furniture and fixtures .
Other real estate o w n e d ..................................................
Investments and other assets indirectly representing
bank premises and other real e sta te ..........................
Customers’ liability on acceptan ces................................
Other a s s e t s ............................................................................
Total A s s e t s ...................................................
]
Decem ber 31
Decem ber 30
1951
1950
$5,043,251
$2,004,495
$4,754,000
$1,999,788
2,526,334
422,426
79,122
2,286,801
386,446
70,779
10,874
2,126,768
68,541
2,014
10,186
1,811,038
59,485
1,762
1,605
7,195
18,896
$7,268,270
1,392
6,945
19,609
$6,654,231
$3,869,324
106,904
703,599
882,949
$5,102,701
$3,544,023
93,348
624,019
780,095
LIABILITIES
Dem and deposits.....................................................................
Individuals, partnerships, and corporations .
U . S. G overn m en t.........................................................
States and political su b d iv is io n s .........................
Banks in U. S. and foreign countries . . . .
Certified and officers* checks, cash letters of
credit and travelers’ checks, etc.........................
Time d e p o sits............................................................................
Total d e p o sits............................................
Bills payable, rediscounts, and other liabilities for
borrowed m o n e y .........................................................
Acceptances o u ts ta n d in g ............................................
Other lia b ilit ie s ...............................................................
Total l ia b i li t i e s ......................................
72,116
1,155,016
$6,789,908
61,216
1,114,368
$6,217,069
440
11,902
45,819
$6,848,069
25
8,631
37,952
$6,263,677
CAPITAL AC C O U N TS
C a p it a l..................................................................................
Surplus ..................................................................................
Undivided p rofits...............................................................
Other capital a c c o u n ts ...................................................
Total capital a c c o u n ts ..........................
Total liabilities and capital accounts
$ 130,900
198,013
66,444
24,844
$ 420,201
$7,268,270
$ 122,755
182,902
60,879
24,018
$ 390,554
$6,654,231
50
CHANGES IN MEMBERSHIP 1944-1951
1 9 4 4 1 9 4 5 1 9 4 6 1 9 4 7 1 9 4 8 1 9 4 9 1 9 5 0 1 95 1
M em bership, begin n ing o f year
A dditions during year:
O rganization o f N ation a l
banks ..........................................
C on version o f State banks to
N ation a l banks* . . .
A d m ission o f State banks .
R esum ption follo w in g
s u s p e n s i o n ............................
T o ta l additions . . .
L osses during year:
M ergers betw een N ation a l
banks ..........................................
M ergers betw een State banks
Suspension or in solv en cy .
W ithdraw al o f State banks".
V olu n tary liquidation . . .
C on version o f m em b er to
n on m em ber b a n k s* * . .
T o tal losses . . . .
31 6
317
325
333
340
346
351
353
4
0
0
3
2
0
1
2
3
3
4
7
6
5
1
6
2
4
3
5
1
2
1
0
0
10
0
11
0
11
0
10
0
8
0
8
0
4
0
3
0
0
0
8
1
0
0
0
1
2
0
0
0
3
0
1
0
0
1
1
0
0
0
1
1
1
0
0
2
0
0
1
0
1
0
0
0
0
1
0
0
9
0
3
+ 8
0
3
+8
0
3
+7
340
27 6
64
0
2
+6
0
3
+5
351
281
70
0
2
+2
0
1
+2
353
283
70
35 5
28 6
69
N e t change during year . . . + 1
M em bership end o f year . . 31 7 32 5
N ation a l b a n k s ............................ 26 6 268
State b a n k s ...................................
51
57
333
274
59
34 6
27 9
67
"'Includes conversion o f State member banks to National banks.
--In clu d es conversion of National banks to nonmember banks, and absorption of
members by nonmembers.
51
De sign
Kath erine Sp e a r
Typ og rap h y and P rin tin g
H ig g in s - M c A r t h u r Com pany
A t la n t a
This document contains internal or confidential information and has
been removed.
Author(s): Federal Reserve Bank of Atlanta
Title: 6-F Messenger
Date: April 1955
Page Numbers:
This document contains internal or confidential information and has
been removed.
Author(s): Federal Reserve Bank of Atlanta
Title: Jacksonville Branch/Federal Reserve Bank of Atlanta
Date: [1952]
Page Numbers:
BANK LENDING TO FARMERS
IN THE SIXTH DISTRICT
Borrowing During 1950
Current Livestock Lending Policies
Community Capital Accumulation
and Farm Financing
Reprinted from April, May, and June, 1951, issues of the
Monthly Review
FEDERAL RESERVE RANK OF ATLANTA
Borrowing During 1950
Since the end of World War II, many farmers in the
Sixth District have changed their way of farming ra
ther rapidly. Outstanding among these changes are a
greater dependence upon livestock and feed crops and
less reliance on the traditional row crops* Some few
farmers have completely substituted one type of farm
ing for another. For example, a number of farmers
whose cash sales formerly consisted entirely of cotton
are now selling only fluid milk. Most of them, how
ever, have merely added livestock and decreased their
acreage of cash crops, but some have converted idle
land or wasteland to improved pasture and added live
stock with little or no decrease in cash crop acreages.
From a farm management standpoint, the increase in
size of business is the most common characteristic of
these changes. From a financial standpoint, the most
common features are the increases in invested capital
and in the amount needed for operating expenses.
The recent shift toward livestock has coincided with
a period of favorable farm product prices and a large
increase in farm income. Because of the marked im
provement in their financial position, a large propor
tion of farmers can now meet the requirements for
commercial credit. Country banks, therefore, have as
sumed a position of greater leadership in farm credit
at a time when farmers’ credit needs were undergoing
the most far-reaching change of recent decades.
In order to meet farmers’ credit needs more com
pletely, country bankers have revised their lending
policies and have participated in a wide variety of
farm credit conferences, clinics* and schools. Some of
them have established special farm credit departments
with a full-time credit man in charge. It is well known
that many banks have made great progress in enlarg
ing and increasing their services to farm customers
and in fostering a more efficient type of farming in
their trade territories.
The purpose here is to report some of the results of
a recent survey on bank lending to farmers. This sur
vey was designed to yield some quantitative and quali
tative information on bank lending with special em
phasis on loans made for beginning or expanding
livestock programs or for other enterprises used to
supplement or replace part of the income received
from row crops. It is not, in any sense, a well-rounded
summary of the contribution that country banks are
making to the progress of agriculture* Although the
extension of credit is one of the more important func
tions of country banks* it is only one of the services
that banks render to farmers or to any of their other
patrons.
H ow the Inform ation W a s O b tain ed
Information was obtained from 27 banks throughout
the six farming areas shown here. Farmers in these
areas, which were chosen because row crops are the
main source of income, are now changing to systems
that place more emphasis on livestock. The banks con
tacted ranged in size from about 700 thousand dollars
to about 40 million dollars in total deposits. All the
banks had either a larger-than-average volume of
farm loans or a larger-than-average percentage of
their total loans in farm loans.
At each bank the information was obtained by a
personal interview with an officer who was thoroughly
FARMING AREAS INCLUDED IN FARM CREDIT SURVEY
[l]
familiar with the farm loans made and who knew the
essential facts about the borrowers. Information was
obtained from bank records wherever such records
were applicable. Records on the 1950 borrowings of
about 20 or 25 farmers were obtained from each
bank. These borrowers were selected at random from
those whose income came largely from farming and
who got at least half of their income from cash crops
such as cotton and peanuts. These two restrictions
were intended to eliminate farmers whose off-farm
earnings materially affected their financial status and
those who had no particular problem in changing
from a row-crop system.
In interpreting the results, it should be recognized
that a bank’s farm borrowers are not necessarily a
typical cross-section of the farmers in the bank’s terri
tory. According to the farm census, for example, only
8 percent of the farmers in the area sampled had 100
acres of cropland or more, yet 46 percent of the bank
loans were made to farmers in this group. This does
not mean that the banks confined their lending to
large operators. Farmers who had less than 50 acres
of cropland accounted for 28 percent of the borrow
ers. These comparisons do show, however, that as the
size of farm declines there is also a decline in the pro
portion of farmers who can use credit effectively and
who can meet the requirements for commercial credit.
H ow the M o n e y W a s Used
Of the 621 farmers whose 1950 borrowing records
were studied, 170, or 27 percent, used part of the
money to begin or expand livestock or other enter
prises besides row crops. Money was borrowed for
these purposes mostly by farmers with relatively large
farms. Only 11 percent of the farmers with less than
80 acres of cropland borrowed for expansion of live
stock, yet 42 percent with 80 acres or more borrowed
for this purpose.
PERCENT OF FARMERS W H O BORROWED TO BEGIN OR EXPAND LIVESTOCK
Farmers With Less Than
SO Acres of Cropland
Farmers with 80 Acres
of Cropland or More
All
Farmers
Sand Mountain . . .
15
n.a.
21
Upper Coastal Plain.
Lower Coastal Plain.
8
35
50
36
58
44
13
42
Area
.
.
.
n.a.
10
7
11
Most of the borrowing to expand livestock enter
prises was to buy cattle or to help pay for pasture
establishment and improvement. Since hogs are the
most suitable livestock enterprise for the Peanut Belt
and few farmers needed to borrow to begin or expand
a hog enterprise, there was a relatively small propor
tion of livestock expansion loans made in that area.
Of the total amount of money borrowed, 65 percent
was for usual production expenses, 22 percent was for
livestock expansion alone, and 13 percent was for a
combination of livestock expansion and the usual pro
duction expenses. Total borrowings refer to the total
face amount of the notes made in 1950. For a par
ticular farmer, total borrowings are usually greater
than the maximum of the line of credit. Because live
stock expansion loans usually have longer maturities
than crop production loans do, total borrowings used
as a measure of loan volume likely result in some
understatement of the importance of livestock loans.
HOW FARMERS USED THE MONEY THEY BORROWED IN 1950
ABFA-*
SAND
MOUNTAIN
PIEDMONT
UPPER
COASTAL
PLAIN
[2]
LOWER
COASTAL
PLAIN
LIMESTONE
31
25
51
26
16
27
PEANUT
ALL
PERCENT OF TOTAL BORROWINGS USED FOR LIVESTOCK EXPANSION
PERCEN T
PER CEN T
P L A IN
P L A IN
The proportion of total borrowings used for expan
sion of livestock differs markedly according to the
type of farming area. In the Lower Coastal Plain, 41
percent of the money borrowed was expressly for this
purpose, and an additional 12 percent was used for a
combination of row crops and livestock expansion.
Only 47 percent of the money was borrowed for row
crops alone. In the Piedmont area, only 17 percent
was used for livestock expansion alone, but an addi
tional 20 percent was used for a combination of pur
poses that included livestock expansion.
Farmers with less than 80 acres of cropland used
10 percent of their total borrowings for livestock ex
pansion alone and an additional 2 percent for a com
bination of purposes that included livestock expan
sion. Farmers with 80 acres of cropland or more, on
the other hand, used 24 percent of their borrowings
for livestock and an additional 15 percent for a com
bination of purposes.
A m o u n ts B orrow ed
AVERAGE AM O UN T BORROWED
For Crop
Production
Sand M ountain.............................. $1,321
Piedmont.......................................
1.982
Upper Coastal P l a i n ......................
1,828
Lower Coastal P l a i n ......................
2,388
Limestone......................................
1,981
P eanut...........................................
2,375
Total .
...................................... $2,017
AVERAGE AM OUNT BORROWED
Purpose
of Loan
By Farmers With
Less Than 80 Acres
of Cropland
Crop production only . . . .
Crop production and livestock
Livestock expansion only . . .
By Farmers With
80 Acres of Cropland or More
By All
Farmers
$ 806
$3,275
$2,017
n.a.
1,095
5 832
5,652
2,827
$3,351
4,970
2,553
$2,297
Loans for livestock expansion in relation to those
for crop production expenses usually were larger on
small farms than on large farms. This difference is
partly due to the tendency toward dairy cattle on
small farms. To produce Grade A milk commercially,
for example, a minimum investment is required for
cows, barns, equipment, and pastures. Some of these
AVERAGE SIZE OF LOAN
Area and
Size of Farm
For Crop
Production Only
For Livestock
Expansion Only
For All
Purposes
$ 493
1,018
953
1,243
773
1,033
$ 773
1,089
1,603
1,399
$ 538
1,156
1,126
1,381
955
1,119
Area:
The average amount borrowed for all farms in 1950
was about 2,300 dollars. The individual amounts, of
course, were closely related to the size of the farms.
Farmers with less than 80 acres of cropland borrowed
an average of 832 dollars, whereas those with 80 acres
or more borrowed an average of 3,351 dollars. AlArea
though the average amount borrowed tends to increase
with the size of the farm, measured by cropland acre
age, borrowing increases at a slower rate. Farmers
with larger acreages are able to pay a larger propor
tion of their usual operating costs and the costs of
livestock expansion out of current income and savings.
On farms of comparable size in most areas, there
was little difference in the average amounts borrowed
for usual production expenses and those for expansion
of livestock. Most farmers, of course, are stretching
their livestock expansion program out over a number
of years with the result that annual investments are
small compared to the total cost of the program. Bor
rowings for usual crop production expenses averaged
2,017 dollars a farm; for livestock expansion alone,
2,553 dollars; and for a combination of both pur
poses, 4,970 dollars.
For Expansion
of Livestock
For All
Purposes
$1,611
1,568
2,847
3,606
2,651
2,987
$2,553
$1,362
2,164
2,249
3,064
2,276
2,463
$2,297
Upper Coastal Plain . . .
Lower Coastal Plain . . .
Size of Farm:
Farms with less than
80 acres of cropland . .
Farms with 80 acres of
cropland or more . . .
1 ,6 8 6
1,867
365
634
386
1,340
$ 868
1,590
$1,443
1,455
$1,025
investments, such as that for a barn, must be made in
a lump sum. The farmer who is expanding or begin
ning a beef-cattle enterprise, on the other hand, can
make his investments at almost any annual rate he
chooses. Also, there is some indication that larger
farmers tend to expand their livestock enterprises on
[3]
a more conservative basis, in relation to their total in
vestment, than do small operators.
Differences in the average size of individual loans
were greater than differences in total borrowings. For
farmers with less than 80 acres of cropland, loans for
crop production alone averaged 365 dollars and those
for livestock expansion averaged 634 dollars. For
farmers with 80 acres of cropland or more, loans for
crop production averaged 1,340 dollars and those for
livestock expansion averaged 1,590 dollars. The aver
age size of note also was related to the type of farm.
Loans for crop production, for example, averaged 493
dollars in Sand Mountain and 1,033 dollars in the
Peanut area.
M aturities
The net investment through bank lending during any
given period depends partly, of course, upon the ma
turity of the loans. In this discussion the maturity as
shown on the note is used. Many loans are repaid be
fore the maturity date, but the maturity shown on the
note is indicative of both the banker’s and farmer’s
attitude and judgment. Of the loans for crop produc
tion, only 8 percent were written for one year or long
er. Most crop production loans with long maturities
were for the purchase of tractors and other machin
ery. Of the loans for the expansion of livestock, 25
percent had maturities of one year or more. The pro
portion of loans written for less than six months was
about the same for the crop production loans as for
livestock expansion.
Demand notes were used more frequently in con
nection with financing livestock expansion than with
crop production. Most of these demand notes involved
borrowing by large operators.
PERCENTAGE DISTRIBUTION OF NOTES BY MATURITY
__________________________ Crop Production Loans To
Farmers With
Less Than SO Acres
80 Acres Cropland
All
Maturity_______________Cropland or More Farmers
Dem and..............................
Less than 6 mos....................
6 to 12 mos...........................
12 mos. and over................
T o t a l ..................................
1
1
1
30
62
7
100
35
55
9
100
32
59
S
100
Livestock Expansion Loans To
Farmers With
Less Than SO Acres
80 Acres Cropland
All
Cropland
or More Farmers
..
36
53
11
100
4
3
30
3S
28
100
31
41
25
100
In most areas, the practice of making livestock ex*
pansion loans for a year or longer was more common
on loans to large farmers than to small farmers. For
farmers with less than 80 acres of cropland, only 11
percent of the livestock expansion loans had maturi
ties of one year or more, while 28 percent of these
[4]
loans made to farmers with 80 acres of cropland or
more had maturities of one year or over.
R e n e w als
The growth of bank lending for expansion of livestock
has been accompanied more and more by a verbal
understanding between the farmer and the banker that
the loan can be renewed provided progress has been
satisfactory. The actual maturities on notes for this
purpose, therefore, do not always accurately indicate
the length of the loan period.
In the areas studied, only 5 percent of the crop pro
duction loans were made with any understanding of
a renewal at the stated maturity date. Most of these
notes, furthermore, were for the purchase of a tractor
and equipment. Of the loans for livestock expansion,
on the other hand, 46 percent were made with some
understanding about a renewal. Usually the farmer
was expected to pay part of the loan at maturity date.
The banker then advanced another loan for the re
mainder of the debt, provided the farmer was pro
gressing satisfactorily with the livestock enterprise.
PERCENT OF LOANS W ITH VERBAL UNDERSTANDING FOR RENEWAL
Area and
Size of Farm
Crop Production
Loans
Area:
Sand Mountain....................
Upper Coastal Pl ai n. . . .
Lower Coastal Plain . . . .
Size of Farm:
Farmers with less than
SO acres of cropland . . .
Farmers with SO acres of
cropland or more . . . .
Total....................................
Livestock Expansion
Loans
All
Loans
14
17
4
3
9
36
50
56
24
52
71
6
29
8
5
5
50
46
16
13
9
8
2
12
12
10
16
For crop production loans there were understand
ings for renewals on 6 percent of the loans made to
farmers who had less than 80 acres of cropland, and
on 5 percent of those made to farmers who had 80
acres or more. On loans for livestock expansion, how
ever, the renewal understanding was used more often
on large than on small farms. There were understand
ings for renewal on 50 percent of such loans to farm
ers with 80 acres of cropland or more and on 29 per
cent of such loans to farmers with less than 80 acres.
Security
Chattels, or some combination of security including
chattels, were used to secure most loans. Chattels
alone were the security on 69 percent of all the loans
made. The security taken on livestock expansion loans
differed from that on crop production loans in two
important respects. First, a larger proportion of the
livestock expansion loans was secured by only a chat
tel mortgage on livestock, and second, a large propor
tion of these loans was made on the farmer’s signa
ture, Government bonds, life insurance, and other
similar security.
Nearly half of the livestock expansion loans to
farmers with less than 80 acres of cropland were se
cured by livestock alone. On farms with 80 acres or
more, livestock was the only security on about onefifth of the livestock expansion loans. A larger propor
tion of these loans was made without specific collat
eral on the large farms than on the small farms.
PERCENTAGE DISTRIBUTION OF NOTES BY SECURITY
Livestock Expansion Loans to
Farmers With
Less Than
80 Acres
SO Acres
Cropland
All
Cropland
or More
Farmers
Security
No specific security, no endorsement . .
Endorsement and combination including
endorsement..........................................
Real estate and combination including
real estate ..........................................
Livestock alone . . . . .........................
Chattels and combinations of chattels. .
Stocks, bonds, insurance policies. . . .
O th e r.......................................................
Total .......................................................
. .
9
. .
. .
36
9
. .
1 00
All Crop
Production
Loans
16
15
11
4
3
7
12
11
21
8
IS
42
7
1
100
42
7
1
100
3
68
1
2
1 00
For all farms and all types of loans, real estate—
or any combination of collateral including real es
tate—was used on only 9 percent of the loans. There
were no significant differences in the frequency with
which real estate was used between the large farms
and the small farms or between the different types of
loans. Most of the differences in type of security used
were related to the size of farm and financial position
of the farmer rather than to the purpose of the loan.
Incom e of the Farm er
Lending for livestock expansion is affected by the
level of farm income as well as by the size of farm.
For each of the farm borrowers studied, the banker
was asked to estimate whether the farmer’s cash in
come from the farm in 1950 was less than 3,000 dol
lars or 3,000 dollars or more. The 3,000 dollar figure
was chosen because it was felt that few farmers with
a smaller cash income could pay production expenses,
obtain cash for family living, and have anything left
for the retirement of a loan for livestock expansion.
A comparison of the bankers’ estimates with other
data on farm income seems to indicate that they are
quite conservative. This may be due to the fact that
the bankers included in their estimate of cash income
only those items of income that are ordinarily used to
repay debts. Income from such enterprises as poultry
flocks, for example, probably is not included. Al
though these income estimates are subject to some
limitations, they do provide a reasonably accurate
means of comparing groups of farmers.
Only 8 percent of the loans to farmers with an in
come of less than 3,000 dollars were for livestock ex
pansion, while to those with an income of more than
3,000 dollars 33 percent were for this purpose. Even
in groups of farms that were comparable in size, the
purpose of the loans was affected by income.
On farms with less than 80 acres of cropland and
with an income of less than 3,000 dollars, only 5 per
cent of the loans were for livestock expansion; loans
for this purpose accounted for 16 percent of the loans
on small farms that had more than 3,000 dollars of
income. On large farms, 80 acres of cropland or more,
21 percent of the loans to farmers who had incomes of
less than 3,000 dollars were for livestock expansion;
35 percent of the loans made to farmers with in
comes of more than 3,000 dollars were for this purpose.
The relationship between income and purpose of
loan differed markedly from one type of farming
area to another. In the Sand Mountain area, loans for
livestock expansion were made with the same fre
quency to the low-income groups as to the high-income
groups. In the Peanut area, on the other hand, prac
tically no loans for livestock expansion were made to
farmers in the low-income group, while 15 percent of
the loans in the high-income group were for this use.
PERCENT OF TOTAL NUMBER OF LOANS MADE FOR LIVESTOCK EXPANSION
Area and
Farmers With Incomes
Size of Farm___________________ of Less Than $3,000
Area:
Sand Mountain.................
Piedmont.....................
Upper Coastal Plain . .
Lower Coastal Plain . .
Limestone.....................
Peanut .........................
15
16
1
17
All
Farmers
*
15
36
46
58
28
15
5
16
7
21
35
33
34
23
6
Size of Farm:
Farmers with less than 80
acres of cropland . . .
Farmers with SO acres of
cropland or more. . .
T o t a l.............................
Farmers With Incomes
of $3,000 or More
8
15
28
31
49
19
10
♦Less than .05 percent.
That bank credit was used less frequently for live
stock expansion by low-income farmers does not nec
essarily indicate an important credit problem on the
low-income farms. Most farmers who have low in
comes have relatively small farms. Some livestock
[ 5]
enterprises—beef cattle, for example— often are not
well adapted to a small acreage. The experience of
agricultural extension workers and other similar tech
nicians also indicates that, as a rule, farmers with
small acreages and low incomes are less interested in
livestock expansion and related farm adjustments than
are farmers with relatively high incomes.
On low-income farms that are well suited to an ex
pansion of livestock and where the farmer does want
to make such an expansion, the mere existence of the
low level of income, however, is a problem. The na
ture of this problem is shown by comparing the most
probable income with the most typical amount bor
rowed for various size groups of farms. The income
figures are derived from the bankers’ estimates and
from secondary sources. Farmers with 20 to 39 acres
of cropland had incomes that exceeded borrowings by
only 440 dollars. These farmers appeared to be using
about all the credit that they could command simply
to produce their row crops. Incomes exceeded borrow
ings by 870 dollars in the 40 to 59 acre group, by
1,660 dollars in the 60 to 79 acre group, by 2,640
dollars in the 80 to 99 acre group, by 3,450 dollars in
the 100 to 119 acre group, and by 3,860 dollars in the
120 to 139 acre group.
Borrowings averaged approximately 10 dollars for
each acre of cropland for all sizes of farms up to
about 80 acres. On farms with more than 80 acres, the
amount borrowed per acre tended to decline as the
size of farm increased. Income, on the other hand, in
creased more for each acre added to the farms with
less than 80 acres of cropland than for each acre
added to farms with more than 80 acres. The average
income of the farmers with 80 acres of cropland was
approximately 3,000 dollars.
These relationships between size of farm and in
come and between size of farm and amounts borrowed
indicate that farmers with low incomes are using bank
credit more intensively than farmers with high in
comes. On most of the low-income farms, a large in
crease in the amount of money borrowed for any pur
pose, including the expansion of livestock, probably
could not be extended on commercially acceptable terms.
R e fu sa ls o f Loan A pp lications
For each farmer on which a borrowing record was ob
tained, the banker was asked whether he had rejected
any loan applications for expanding livestock and the
reasons for not making the loans. So few rejections
were reported that no statistical summary of the re
[6]
sults could be made. None of the rejections were re
lated to the purpose of the loan, the size of the farm,
the income of the applicant, or the collateral offered.
Although very few loan applications were actually
rejected, a large proportion of the bankers reported
that they had worked closely with their farm custom
ers in planning livestock expansion programs and in
many instances had helped farmers to alter their orig
inal plans in order that the bank could help finance
their programs. Farmers who planned to buy cattle
before establishing pastures, for example, often were
persuaded to establish the pastures first.
Current Farm Credit P roblem s
Since the extension of credit to farmers is a continu
ous process, a spot survey of the type reported on here
can show only part of the results of that process. In
spite of this limitation, however, these findings do
throw some light on current farm credit problems.
One question is whether or not bank credit procedures
and bank policies are changing rapidly enough to
keep pace with farmers’ livestock expansion pro
grams. If the borrowings in 1950 are assumed to be
typical of the current trends in lending for livestock
expansion, at least 25 to 30 percent of the borrowings
each year at the banks surveyed is being used for this
purpose. This rate of borrowings appears high consid
ering that most of it represents capital investment.
According to the census figures on income, for ex
ample, Alabama farmers who got at least half of their
income from field crops got only 10 percent from
livestock. With respect to types of farms, these farm
ers are comparable to those included in this survey.
Farmers’ borrowings for livestock expansion, there
fore, constitute a larger share of their total borrow
ings than the distribution of income would seem to
indicate. These comparisons do not necessarily prove
that banks generally are meeting the demands for live
stock expansion credit. In the banks surveyed, how
ever, it seems clear that such credit is receiving the
attention that its importance justifies.
In many discussions of bank credit for livestock,
much stress has been laid on the differences between
this type of credit and that for financing row-crop
production. Many of these differences are reflected in
the findings of this survey. The survey seems to show,
however, that these differences are far less important
than many people outside the banking business have
thought them to be. It is true that the investments
usually required for livestock expansion are large in
relation to the usual crop production loan. The study
shows that the farmer can grow into the livestock pro
gram rather than make the entire investment at once,
and thereby keep the average size of his livestock loan
comparable to the usual crop production loan. This
procedure brings most farmers’ livestock expansion
programs into the range of commercial credit and is
also desirable from a farm management standpoint.
Another diffeernce between lending for livestock
expansion and crop production that is often cited is
the longer maturities required on livestock expansion
loans. According to this survey the latter are written
for somewhat longer maturities than crop production
loans. The differences in maturities, however, are
minor. The step-by-step procedure usually followed
on these loans reduces the need for long-term loans. In
instances where all the loan cannot be conveniently
repaid within the stated maturity on the original note,
understandings for renewals usually solve the matur
ity problem. These understandings, which were in
effect on almost half of the livestock expansion loans,
appear to be highly satisfactory in most respects. They
insure that the livestock expansion program gets a
thorough, periodic review by the banker and the
farmer. They are based, of course, upon mutual con
fidence and understanding.
Bank lending to farmers was characterized by its
flexibility. By adjusting the terms and conditions of
the loans, the bankers were able to finance almost any
livestock expansion program that was efficient from a
farm management standpoint and that was being con
ducted by a farmer of good character. They were able
to do this and apply prudent banking principles.
In order to make the large volume of livestock
loans shown by this survey, many bankers had to
make some innovations in their handling of loans.
Generally those who had a good understanding of the
farming business and of the credit problems peculiar
to farming could make these innovations rather easily.
This is not to imply that there are no problems in con
nection with appraisal of the farmers’ programs, bank
records, loan procedures, and the other technical as
pects of farm credit. The main point is that these
technical problems are not a particularly serious ob
stacle to advancement of credit for livestock expan
sion on the part of bankers who have a rather thor
ough understanding of farm lending.
In interpreting the survey findings, it should be
kept in mind that all of the banks contacted had been
very active in farm lending for a number of years.
Their accumulation of experience in making crop
production loans was the foundation upon which they
built their loan program for livestock expansion. Most
of them have made loans to farmers within a wide
range of net worth, management ability, and ambi
tion. Country banks that have confined their farm
lending to a few highly selected farmers whose credit
requirements could be met in a routine manner and
without any particular knowledge of farming on the
part of the banker have a different kind of problem.
The survey findings in regard to livestock loans are
not applicable to banks in the latter group.
Farm Credit in the Future
Present indications are that the need for credit for
financing the expansion of livestock as well as for
crop production will continue to grow on District
farms. As shown here, many country banks have al
ready demonstrated their ability and willingness to
meet farmers’ credit needs. In these banks the policies
of the officers and boards of directors toward farm
lending are such that a continued improvement in
loan procedures may be expected. Many country
banks, on the other hand, are not following a policy
with respect to farm lending that is conducive to the
fullest agricultural development of their trade terri
tories. How well banks meet farm credit needs in the
future will depend partly upon the policies of indi
vidual banks or, stated in another way, upon the atti
tude of the banks’ management toward agriculture.
Some banks that have done an excellent job of
financing desirable farm adjustments up to the pres
ent are finding that their farm customers’ needs for
credit are growing faster than the resources of the
bank. In these localities a form of capital rationing
is appearing that may not be consistent with the best
interests of farmers or of the entire community, state,
or region. In a sense this development seems to reveal
an imperfection in the capital market or in the struc
ture of banking as it affects agriculture. The contri
bution of bank credit to farm prosperity, therefore,
may also depend upon the ability of bankers, includ
ing those in the larger financial centers, to adapt the
structure of banking to the greater need for farm
credit that seems likely to develop.
The future of bank lending to farmers will also de
pend upon the circumstances and attitudes of farmers
themselves. Farmers with low incomes and small
[ 7]
acreages, for example, probably will be able to use
credit only to a limited extent to help finance such ad
justments as the expansion of livestock. Innovations
in farm credit will solve only a small part of the prob
lems faced by these farmers. All bankers contacted
were asked why they did not have more loans to farm
ers to expand livestock enterprises. Almost invariably
the answer was, “The farmers haven’t asked for
[8]
them.” Most of these bankers have held meetings, vis
ited farms, and tried in other ways to interest more
of their customers in improving their farming systems.
In the last analysis, the initiative for all farm ad
justments, including the expansion of livestock, rests
with the farmer. The farm customers who had that
initiative were obtaining the necessary credit at the
banks surveyed.
Brown r R4wlincs
Current Livestock Lending Policies
Since commercial banks are essentially community
institutions, agricultural credit policies are influenced
considerably by customs and traditions of farm life
and rural communities. Credit policies, moreover, not
only are the result of changes that take place on the
farm and in town, but they shape the direction and
rate of the changes themselves.
In the early days of commercial banking, decisions
on individual farm loans and those regarding total
farm loan volume were somewhat simpler than they
are today. There was no question, for example, about
a banker being interested in agriculture; there wasn’t
much of anything else he could be interested in. The
few stores around the town square were borrowers, it
is true, but their sales and collections were almost
solely dependent on the ups and downs of farm in
come. Agriculture was the economic life of most rural
communities.
Farming in most of the District was a comparatively
simple operation. Even as late as the 1920’s, the pat
tern was still similar to what it had been for almost a
century— cash-crop production with mules and man
power. Neither farming nor farm lending, however,
was particularly easy. Prices of commodities were
erratic and the high degree of farm specialization
increased risks. In most instances the banker took a
calculated risk both as to production and price, and
that, more than anything else, determined lending
policy. If the borrower met that risk, he got his loan;
otherwise he didn’t.
There is, of course, a definite relationship between
production patterns and bank lending policies. When
tractors began to replace mules on cotton farms, the
financing of them presented many new problems.
The banker, for example, had to find reasonable an
swers to such questions as: On what size cotton farms
will tractors be economical? What type and length
of loan will best suit the borrower and lender? What
is the collateral value of tractors and equipment?
Aside from the questions raised in the financing of
the tractor, however, were those that arose from
changes in the production pattern of cotton. Where
tractors replaced mules, croppers were usually re
placed by cash-wage hands at harvest, and that change
in labor supply materially affected risks and costs.
In the decade of the 1930’s, the control programs
and the development of new market opportunities
caused farmers to start diversifying. Each time a new
crop was added to cotton or other cash crop, the lend
er had to appraise not only cotton production and
tractor power, but the entire farm program. As these
programs have become increasingly complicated,
moreover, with the addition of year-round grazing,
livestock, and seed crops, all the problems and com
bination of problems associated with them have found
their way to the banker’s desk. Because managerial
capacity is much more important to the successful
operation of diversified farm programs than it is in
the production of a single cash crop, the borrower’s
managerial ability also had to be appraised. The
number and type of decisions that call for the estab
lishment of lending policies, therefore, have increased
markedly.
W h y A re Policies N e c e ssa ry ?
To explain what current farm lending policies are as
they relate to livestock loans, it is necessary to an
swer the question, “What makes bankers do what they
do?” Although it is difficult for anyone to explain in
detail why he did or did not do something, the bank
ers contacted in a recent credit survey had rather defi
nite reasons for establishing their lending policies.
Bankers make many decisions relative to farm
loans, but not all of them could be termed policy de
cisions. When a decision has been made which ap
plies to borrowers generally, however, that action de
cided upon becomes a policy. If a farmer were re
fused a loan for a tractor because of a lack of mana
gerial ability, or because of his character, or some
other individual consideration, such refusal might
not, of course, be in accordance with a specific policy
decision. On the other hand, if the bank required a 40
percent down payment and the balance in two years
(as many do), that action would become a policy. If
[ 9]
the applicant were turned down because he lacked the
down payment, the refusal would be in accordance
with an established policy of the bank.
The difference between the two is important. Ap
praisal of an applicant against a policy is impersonal,
at least to the extent that the borrower feels that the
same yardstick will be used on all other borrowers.
There is an understandable tendency for bankers to
establish both positive and negative policies and, from
a public relations standpoint, it is easier to handle a
request based on general qualifications than one based
only on personal characteristics.
The establishment of policies can make the job of
lending easier and the use of funds more effective,
because once a policy is thought out, it is not neces
sary to repeat the process with each new application.
And, by the same token, as the number of specific
policies becomes larger, the area in which individual
appraisal is needed becomes narrower.
There is, moreover, another important advantage
that accrues from making policies generally known;
it saves time in the bank. If a bank makes it known,
for example, that it will finance cattle only after pas
tures and grazing crops are established, then a farmer
is not likely to come to the bank seeking a cattle loan
until he has met that requirement.
A farmer can make excellent use of the bank’s
lending policies in planning his farm program. It is
the policy of some banks not to extend credit for pas
tures and grazing crops until the area to be seeded is
fenced. Thus, farmers in the areas served by those
banks can plan their livestock expansion accordingly—
first the fence, then the feed crops, and finally the
cattle.
There is one consideration in making specific poli
cies known to the community, however, that is looked
upon unfavorably by some bankers. Once policies are
established, the bank is obligated, at least in the bor
rower’s opinion, to lend to all customers who meet
those standards. But it may be that the capital struc
ture of the bank and of the community is such that
all prospective borrowers simply cannot be taken
care of. Where that condition exists, it puts the bank
and the banker in an embarrassing position to have to
turn down some customers who have met the estab
lished lending criteria.
Perhaps the most important group of people who help
to determine lending policies are the farmers them
selves. Their attitudes, ambitions, and opportunities
determine what they want to do and influence their
requests for capital. That does not mean, of course,
that banks do not inspire and encourage farmers to
adopt better management practices. Many do so.
Their attendance and participation in the various
types of farm meetings and programs, particularly
those of the 4-H Clubs and the FFA, have been instru
mental in encouraging farmers. But whether from
county agent instruction, banker stimulation, or from
whatever source, the farmers themselves must first
want to do those things that require credit. This was
demonstrated repeatedly in the credit survey when,
on inquiry as to why there were not more livestock
loans, the bankers replied, “People just haven’t asked
for them.”
Next in order, perhaps, among the determiners of
policy, come the bank executives. Their interest,
knowledge, and foresight may determine whether the
bank has lending policies and if so whether they are
positive or negative. In no instance, however, did the
study reveal progressive policies where the executive
officers were not genuinely interested in agriculture.
Back of the officers, of course, come the directors.
They are ultimately responsible for the bank policies
and are instrumental in making them. Even when the
officers are enthusiastic and want to try new proce
dures or new methods, the directors can stop them if
they do not agree with them. Or, as in many banks,
the policies may originate with the directors. Neither
the officers nor the directors, of course, are complete
ly free to make the rules of lending. State and nation
al authorities prescribe the general boundaries of ac
tivity through laws and regulations and enforce them
through examination.
Custom also plays a part in determining policies.
Where a bank has become well known for its interest
in farming, that recognition is a powerful incentive
to keep abreast of changes and modify lending prac
tices whenever necessary. Then too, competition of
other banks or of Government-sponsored credit agen
cies has a bearing on the way a particular bank han
dles its loans.
W h o M a k e s Len din g Policies?
In order to ascertain how rapidly and on what terms
farmers are seeking loans for livestock in their tran
sition toward diversified farming, information was
Since banks do have farm lending policies, it is per
tinent to ask who makes them and for what reasons.
[10]
W h a t Did the S u rv e y S h o w ?
obtained from 27 banks in sections representing the
various types of farming areas in Alabama and Geor
gia. The banks were chosen because they had a sizable
farm loan business; they are, therefore, probably
above average. And for that reason their lending pol
icies are probably a bit more tailored to the needs of
financing livestock than those of the average commer
cial bank.
The study was not designed to obtain information
on interest rates; nor is the purpose here to appraise
the lending policies, but rather to explain them. And
it should perhaps be emphasized that, with almost no
exception, these policies are applicable only to the
regular customers of the banks. The reluctance of
banks to take on new borrowers, particularly for live
stock loans, is due to the heavy demands of present
customers, the desire to hold down the volume of
loans in the present inflationary period, and the ne
cessity of having a record of past performance on the
borrower.
How M uch the Farmers A sk e d For One of
the first questions that arises in the borrower’s mind
is, “How much money will the bank lend?” The an
swer to that question depends on many variables, some
of which involve bank policies, but the one thing that
determines the amount of credit, more than any other,
is the borrower’s request. Only in rare instances did
the banks surveyed require a downward adjustment
in the farmer’s estimate of his credit needs.
From the records of approximately 600 borrowers
in the 27 banks, it is evident that, as a rule, the farm
er expanding his livestock is using credit rather spar
ingly. His own conservatism plus the repeated advice
of his county agent and others to grow into the busi
ness have made the farmer cautious. Generally speak
ing, the borrowers for livestock expansion may be di
vided into two broad classes; those seeking to substi
tute livestock for a part of their crop operations, and
those who are adding livestock while maintaining
their cash-crop program.
How much credit a farmer applies for to begin a
livestock program or to expand an existing one de
pends on his choice of livestock, his experience, his
own capital and collateral, and the rapidity with
which he seeks to attain his goal. Apparently not
many farmers who have had profitable crop opera
tions wish to jeopardize their program or their finan
cial position by biting off too much at once. That is
evident from the amount of credit they have request
ed. The amount of credit sought, as measured by to
tal acres of cropland, was roughly the same per acre
whether for cash crop production or for livestock.
That suggests that the farmers, particularly those who
are substituting livestock for crops, have evidently
set some over-all credit ceiling for their farm which
they are reluctant to break through. Undoubtedly they
have been influenced by bank policy.
Then too, farmers are well aware that in the initial
stages of livestock development, income is low and
for a period their ability to repay loans is reduced.
Those farmers who are adding livestock to their nor
mal operations by clearing and draining land while
not borrowing more per acre are borrowing on more
acres. Hence, their credit totals are larger. In these
instances, however, the farmers have advanced sub
stantial amounts of the capital costs and have pledged
additional collateral such as bonds and additional se
curity by the assignment of life insurance. Many of
the latter group have filed financial statements show
ing net worth of more than adequate coverage.
Obviously, there are many farmers who have no
desire to add livestock to their program. Among them
are tenants who lack security, old people who do not
want to undertake new enterprises, small farmers
who must farm intensively, and finally those who pre
fer cash-crop farming.
Farmers who have been refused a loan for live
stock production have been, for the most part, of un
satisfactory character, or completely inexperienced,
or have presented wholly impractical plans to the
banker. Banks have shown a willingness to adjust the
credit conditions to fit the borrower where the opera
tion to be financed was practical and was within his
managerial capacity to carry out.
How Much the Banks Granted The amount
that banks are willing to lend on livestock is variable.
These variations are accounted for by bankers’ atti
tude toward livestock, by their experience in making
livestock loans, and by market opportunities. Legal
limits, moreover, both as to individual loans and to
tal loans, are at present affecting lending by some
banks. In addition, the amount of check-up or atten
tion that banks can devote to their farm borrowers,
ranging from none in some banks to quite a bit in
banks with special farm men, has some bearing on the
amount of credit granted.
Despite the wide variations in farm experience and
net worth and despite a wide range in attitude and
[ii]
bank experience, loans for livestock follow a fairly
general pattern. In most banks the amount of money
loaned for livestock, whether for animals, feed crops,
or facilities, paralleled the amount loaned for crop
production measured on a per-acre basis. Between
banks, of course, the amounts varied widely.
The survey was not designed to determine the max
imum amount that banks would lend, yet if the indi
vidual loans are divided by the total cropland of the
borrower and reduced to a per-acre basis, a practical
maximum can be determined. Using that measure, the
amounts ranged from 10 dollars to a practical high
of about 30 dollars. In three of the 27 banks the max
imum loans for livestock were 38, 45, and 55 dollars
per crop acre. These were special cases, however,
each of which involved a real estate mortgage on the
farm. The 55-dollar loan was for a period of four
years. In most of the banks the ceiling for annual
livestock loans, secured mostly by chattels, centered
about 20 to 25 dollars per acre.
The policy of limiting annual loans for livestock to
approximately the amount extended per acre for crop
production is based on the recognition by bankers
that there is little likelihood that per-acre returns
from livestock will be higher than cash-crop returns.
And it is that recognition of income potential that is
responsible for bankers limiting credit extensions for
livestock to a pay-as-you-go basis. Based on the cov
erage of the survey, it was only when borrowings ex
ceeded this general limit that any real difficulties in
lending practices or procedures occurred.
O n W h a t K in d s of Livestock W e re Loans
M ade?
Because of the very rapid strides made recently in
the production of forage, most of the current live
stock borrowings are for grazing animals—beef cat
tle and dairy cows. Beef-cattle loans predominate not
only because of the high interest in cattle, but also be
cause of the availability of markets in practically ev
ery part of the District. The construction of auction
markets and improvements in trucks and highways
have brought the market within reach of all farmers.
The wide dissemination of market information, more
over, particularly by means of the radio, has given
most farmers flexibility in their choice of markets.
Loans for dairying, on the other hand, are limited
because of market outlets. The market for Grade A
milk, for example, cannot be expanded to all farm
[12]
ers and, as yet, there are few processing facilities for
manufacturing milk. Therefore, farmers who are not
on milk routes, either Grade A or B, obviously are
not interested in obtaining loans for dairy cows.
There was, however, no reluctance to lend for dairy
ing as such. On the contrary, banks usually preferred
dairy loans, which were easy to collect because of the
regularity of milk payments.
Basic to cattle loans, either for beef or dairy cattle,
are loans for fencing, feed crops, and equipment. Be
cause of the variety of such products and the wide
range in their costs, their financing is geared to the
income potential of the livestock and is within the
over-all annual credit program of the farmer.
For Beef Cattle The amount of credit for beef
cattle and the policies under which it is extended de
pend, substantially, on the type of farm operation.
Because most farmers do not have abundant carbohy
drate feed for finishing cattle, the cow and calf com
bination is by far the most popular of the beef enter
prises.
With only minor exceptions, the banks surveyed
would lend for the purchase of grade cows up to the
limit of the feed available on the farm, provided the
cost of the cows was reasonable and they were free of
Bang’s disease. Although loans were readily made for
the purchase of purebred herd bulls, banks were re
luctant to lend for the purchase of purebred beef
cows. Moreover, banks were not inclined to lend for
fattening cattle or for speculative purposes. Because
of their special educational value, loans for 4-H and
FFA cattle are handled differently from commercial
cattle loans.
For D airy Cattle Loans for dairy cattle followed
a fairly uniform pattern. Where feed was available
and where farmers were expanding, banks would fi
nance the purchase of cows up to the number the
farmer already owned. If a farmer had five cows, for
example, the bank would lend for the purchase of up
to five more cows. The usual practice is for the bank
to take a mortgage on the herd and have the loan re
tired through monthly amortization by deductions
from milk receipts.
The production of milk, particularly Grade A
milk, requires a higher capital investment in build
ings and equipment than does the production of cattle
or hogs. But despite that, some workable procedure
for handling the milk production loan is usually
made. Loans of this type, however, are usually made
for a period of more than one year, or with an under
standing for renewal, and are retired by applying al
ternate milk checks, or one-half of each, to the in
debtedness.
W h a t A re the Prerequisites fo r Livestock
Loan s?
Although the personal qualifications of a borrower
are rather nebulous, there are certain general require
ments which a farmer must meet. These requirements
are applicable regardless of other factors that may
be considered in granting a loan.
Character Always an important consideration in
lending, character is unusually significant in lending
for livestock expansion. As mentioned earlier, 46 per
cent of the total loans made for livestock expansion
by the 27 banks carried verbal understandings for re
newal. Obviously, such personal and unwritten under
standings require that the borrower be honest and of
the highest integrity. Just how much the policies gov
erning character requirements have limited livestock
loans is not known, but they are important. A few ap
plicants for livestock loans were turned down by the
banks surveyed because of their character, but they
would likely have been turned down for any kind of
a loan.
Experience Some experience in the raising of
livestock was a prerequisite to obtaining livestock
loans in all the banks. That does not mean, of course,
that the farmer must have had experience of commer
cial proportions, but rather that he must know how to
feed, breed, and care for the type of livestock he
sought to expand.
Another, and the more stringent requirement, was
that the farmer must have shown successful manage
ment of his cash crops. If he had shown increasing
yields and efficient use of labor and machinery and
had sought to build up the productivity of his farm,
then it was felt he would extend those same manage
ment qualities to livestock. Conversely, those farmers
who had shown little desire to improve their farms or
yields were discouraged before a formal application
for credit was made.
Tenure Since the proportion of farm tenancy in
the South is generally high, the question of whether
the region will ever become a livestock area is some
times raised. The mere fact that a farmer has a ten
ant status does not preclude him from obtaining live
stock loans at the banks participating in the study. If
he meets the other qualifications and has some secur
ity in his tenure, either by lease or long occupancy,
then the banks have demonstrated that they will lend.
Size of Farm The size of a farm has little mean
ing except in terms of what it is producing and in
comparison with other farms. In the preceding article,
it was shown that 34 percent of all the loans made
to farmers with 80 acres or more of cropland were
for livestock purposes, whereas on farms of less than
80 acres only 7 percent of the loans were for that
purpose. If 80 acres of cropland is considered a fair
general division between large and small farms, then
the larger farms are expanding their livestock much
more rapidly.
Size of farm and income are so closely related that
it is difficult to separate them. The majority of live
stock loans havetgone to the larger farmers mainly
because of the popularity of beef cattle, which, in
most cases, is not practicable on small farms. Most of
the cattle loans were obtained by farmers who operat
ed on about a hundred acres or more.
There are some cattle enterprises that can be suc
cessful on small farms, and farmers who sought cred
it for them were usually accommodated. One bank in
a mountainous area, for example, made about a third
of its cattle loans, based on a random sample, to
farmers with less than 80 acres. Because of the high
labor requirements and higher returns per acre, the
production of milk is more feasible on smaller farms
than the raising of cattle. The loans for dairying,
therefore, were made mainly to farmers on mediumsize farms of around 60 to 100 acres of cropland. In
a few instances, loans were made on smaller farms,
but these were for the production of milk for manu
facturing purposes as well as for usual crop production.
O n W h a t Basis W e re the Loans M a d e ?
In making livestock loans, bankers are much more
careful to itemize the particular purposes for which
the money is to be used than they are in making crop
production loans. Itemization is particularly impor
tant in working out maturity and amortization and
in tailoring the loan to the need for it.
When financing beef cattle, for example, the bank
er and borrower sought to make the loan for a pe
riod of time and with a maturity date that would co
incide with an income period. Since, on many farms,
[13]
cattle are sold in the fall when grass begins to die,
maturity dates were usually made to coincide with
that marketing period. Where no sales of livestock
were contemplated within a 12-month period, the ma
turity date was adjusted to a crop-income period. In
making dairy loans, repayment was amortized month
ly or semimonthly regardless of purpose or maturity.
In some instances repayment was delayed until pro
duction reached a certain level.
M aturity Although the practice of making a live
stock loan mature in 12 months or less may seem an
unrealistic policy when viewed from the purpose for
which the loan was made, renewals have had the
practical effect of extending what is usually termed
“intermediate credit.” Although the loan is due and
callable on maturity date, the bankers said that they
would not arbitrarily call them when to do so would
force liquidation or sale at an inopportune time. The
high percentage of renewals on livestock loans is evi
dence that the policy is working both for the lender
and for the borrower. Annual maturities, moreover,
give the banker and farmer an opportunity to review
progress and perhaps head-off trouble before it be
comes serious.
Collateral The differences in collateral required
for livestock loans were not really the determining
factors in making most of the loans. Sixty-nine per
cent of the total notes listing security for livestock
loans were for chattels either on livestock alone or in
a combination with other chattels. Only 9 percent in
volved a mortgage on real estate, and 12 percent were
made on open note.
Appraisals Policies regarding appraisal of a
farm and its equipment and livestock as a prerequi
site to a cattle loan also were variable, particularly
between banks. The size of the loan is, of course, very
important. In some banks, particularly those which
have special farm representatives, an appraisal of
the farm and the farm program was customary. This
was especially true where either the amount of the
loan or its terms required a real estate mortgage.
Generally, the banks required no complicated
forms, schedules, or appraisal for the average live
stock loan to a regular customer. If the loan were for
a new customer, appraisals of farm and program
were made.
Supervision Since for many banks the financing
of livestock is a relatively new venture, some of them
maintained frequent check upon the progress of the
borrower. This was particularly true of banks with
special farm men. These check-ups are most impor
tant, and while every effort is made to make them ap
pear to be a casual visit, they are part of a definite
policy. In some banks a report is made on these visits
and appropriately filed; in others nothing is written.
The methods by which this check-up is maintained
are numerous; they include personal visits, riding the
country roads and observing, and contacts with neigh
bors of the borrower. In none of the banks, however,
did the bankers report any unfavorable reactions
from the borrowers because of follow-ups on the
loans. On the contrary, many of the banks reported
that visits by bank personnel, especially farm men,
were genuinely welcomed. The fact that many of the
officers in rural banks have farms of their own on
which they, too, are expanding livestock put the visits
on a basis of mutual interest.
S u m m a ry
The credit problems arising from the shift from highly
specialized crop farming to a diversified program in
cluding livestock, have been numerous and, in a few
instances, vexing. Nevertheless, progressive rural
banks have devised means and adopted policies that
have made credit available for this transition without
imposing unreasonable requirements or changing the
basic policies that have governed their farm lending
in the past. The high percentage of farmers who are
currently using bank credit to expand their livestock
enterprises is evidence that the policies of the banks
are acceptable to the borrower.
Jo h n L. L iles
[ 14 ]
Community Capital Accumulation
and Farm Financing
From the standpoint of lending to farmers, the most
important banks in the Sixth District are those in
small towns. With a few exceptions they are unit
banks that obtain almost all of their deposits from
the local communities. A large proportion of their
assets is in the form of loans to local businessmen
and farmers. How much money one of these banks
can and will lend depends to a large extent upon the
ability of the businessmen, farmers, and other individ
uals in the community to accumulate bank deposits
and upon the demands for loans that meet the require
ments of prudent banking.
The ability to accumulate deposits depends partly
upon the efficiency with which the land, the money,
and the people are organized to produce goods and
services of value. This efficiency, in turn, is impor
tantly affected by the ability and willingness of the
local banks to extend credit. This close relationship
between the rural bank and the area which it serves
has some important implications for farmers who use
bank credit and for the whole banking system in the
Southeast.
The discussion so far can be summarized in three
tentative statements. First, the need for bank credit to
expand livestock will continue to grow. Second, many
country banks are already devoting a large propor
tion of their lending power to this purpose. Third,
many banks have shown that they can adapt their
lending policies to fit this type of credit and still con
duct a safe and efficient banking business.
Bankers in some areas are finding that their de
posits are not growing fast enough to permit them to
grant all the farm loan applications that fall within
their established lending policies. Farmers in these
areas cannot borrow to the same extent as farmers in
other areas for the expansion of livestock or for other
changes in their farming systems. During the last two
decades the structure of rural banking has undergone
some sweeping changes, most of which have been
toward making it safer and more stable. The test of
its adaptability to the credit needs of a changing agri
culture has only begun. The purpose here is merely to
point out some features of the structure of country
banking that affect farm lending programs. No at
tempt is being made to appraise the effectiveness of
banks in such financing.
The Problem
The problem that confronts many country banks is
illustrated by the following example. A certain bank,
located in a community where farming is the principal
source of income, has always tried to grant the credit
demands of farmers who, in turn, could meet the
requirements for commercial bank credit. In so doing,
it has built its volume of farm loans to a point where
the management feels that any further loan expansion
at the present level of deposits would be unsound.
Until the past few years, most of the farmers got a
large part of their income from row crops. As farm
ers began to expand livestock, the bank began to make
loans for this purpose.
Last year it became apparent to the bank manage
ment that the bank could not follow through on the
livestock program it had helped start and at the same
time continue to finance crop production for all of its
old customers. Since the farmers who were expanding
livestock were making financial progress while many
farmers who were growing only row crops year after
year were not progressing financially, the bank de
cided to eliminate some of its row-crop customers. In
this way the bank hoped to have more money to lend
to the farmers who were expanding livestock. As the
current crop season progressed, however, the remain
ing farmers who were borrowing for row crops began
coming back for more money in order to meet the
higher costs of production. As country bankers well
know, a crop loan that falls short of assuring all of
the materials for a successful crop carries a very high
[ 15 ]
risk. The bank, therefore, advanced about as much
money for crop production this year as it did last
year and is now in almost exactly the same position
in regard to livestock loans as it was a year ago.
Another country bank, in similar circumstances,
not only stopped advancing credit to some of its regu
lar crop-loan customers but actually helped them to
get jobs in towns and in industries located outside of
the community. Many small, row-crop farmers simply
cannot operate unless they can get credit.
The Capital M a rk e t
Banks, of course, do not lend to everyone who asks
them for money. One of their main jobs as custodians
of the pool of funds made available by the people of
the community is to allocate the limited supply of
money among those who can use it most effectively.
A rationing of credit, therefore, is inherent in the very
nature of the capital market. If the market were per
fect, farmers could bid for credit against credit users
everywhere or could go outside of their communities
to borrow. Credit would be rationed to farmers in
exactly the same way as for all other users and credit
for a particular farming purpose, such as livestock
expansion, would be weighed in the market against
all other uses. In practice, however, credit for farming
purposes does not always move readily from one
community to another, nor can farmers, generally
speaking, borrow outside of their own communities.
The market for non-real-estate loans to farmers is
still primarily a local one. These loans are based
largely upon the local banker’s intimate knowledge of
the individual farmer. This knowledge includes a
good idea of the farmer’s character, of his hopes and
ambitions, of his management ability, both with re
spect to the farm and to his finances, and of the sound
ness of his farming program. Collateral is usually
taken, of course, but it is not a substitute for this
personal evaluation. Bankers often sum up this idea
by such a remark as “If the man’s not good, the loan’s
not good, regardless of how much collateral he can
offer.” A farmer who goes outside of his own com
munity to borrow usually has to be an extraordinarily
good risk in order to get a loan.
The growing importance of livestock loans tends to
make farm lending even more local in character than
before. These loans, as compared to the usual crop
loans, require a more careful study of the farmer’s
entire program and considerably more supervision by
[16]
the banker. Often there is a tacit agreement between
the farmer and banker about additional loans if a
four- or five-year livestock expansion program is
being financed. Collections, as in the case of dairy
loans where payments are made by assignment of
milk checks, may also depend upon the cooperation
of local business interests. The market for these loans,
therefore, seems likely to become even more local in
nature.
The question of mobility of credit, or the ability
of farmers to bid for credit in a national market, is
very old as far as country banking is concerned. Many
of the framers and sponsors of the Federal Reserve
Act believed that the System would overcome the diffi
culty. The sponsors of the Government’s farm credit
system likewise believed that they had the cure. Al
though these systems have proved serviceable in deal
ing with emergencies in farm financing, they have not,
at least in many areas in the District, provided a
satisfactory permanent solution.
Country bankers’ reluctance to borrow, either from
other commercial banks or from the Federal Reserve
Bank, prevents a free flow of funds from financial
centers to rural communities. Although the reasons
for this attitude vary from bank to bank, much of the
CHANGES IN TOTAL DEPOSITS
IN CITIES OF LESS THAN 15,000 POPULATION
1945-1950
+
10 OR
MORE
K j x l 0 TO -
0 TO 4* 10
1. Citrus
2 . Gulf Truck
3.
4.
5.
6.
Winter Truck
Highland Rim
Central Basin
Appalachian
“ 10 OR M O R E
7.
8.
9.
10.
11.
12.
Flatwoods
Ala.*Miss. Timber
Sand Mountain
Piedmont
Upper Coastal Plain
Lower Coastal Plain
13.
14.
15.
16.
17.
18.
Blaekbelt
Silt Loam
Limestone
Rice
Sugarcane
Peanut
attitude may be explained by the fact that country
bankers do have a deep sense of responsibility for
keeping their loan and investment policies within the
capabilities of their banks. They want to have a “good
strong bank.” Bank supervisory authorities, in their
efforts to make sure that banks are operated with due
regard to the safety of deposits and, in general, in
the public interest, have helped to shape this attitude
of reluctance toward borrowing. From a practical
standpoint, therefore, borrowing by banks is not very
effective in meeting local demands for farm credit.
The B a n k in g Structure
What are the main characteristics of the capital struc
ture of country banking that affect the ability and
willingness of banks to make farm loans? The amount
and kind of deposits held by a bank, of course, are
the most important. One banker facing a farm loan
situation similar to that described earlier and who
has about 5 million dollars in deposits said, “What
we need is another 5 million in deposits.”
Although bank deposits have increased greatly dur
ing the last decade, they have not increased at the
same rate in all farming areas or even in all com
munities within any area. In some places they have
actually decreased. From the end of 1945 to the end
of 1950 in the Sand Mountain area, for example,
deposits in banks located in cities having populations
of less than 15,000 declined 22 percent, while de
posits in cities of 15,000 or more declined only 4 per
cent. In the Blackbelt, on the other hand, deposits in
the smaller cities increased 8 percent, while those in
the larger cities decreased 2 percent.
According to the annual deposit ownership surveys
made in this district, farmer-owned bank deposits
increased 11 percent from the end of 1944 to the end
of 1948. During the same period, farm income in
creased 43 percent. Deposits owned by other individ
uals, on the other hand, increased 25 percent during
this period, while nonfarm income payments in
creased 23 percent.
The extent to which changes in the income of a
community are reflected in changes in bank deposits,
of course, varies according to its economic organiza
tion. In areas where a large proportion of total income
comes from farming, the tendency of farmers to put
excess earnings back into the farm business has
tended to offset the effect of the increase in farm
income on deposits. During the past few years District
farmers have bought, at an unprecedented rate, farm
machinery, fencing materials, fertilizers, and other
goods needed to improve their farms. Much of the
deposit money that is created by loans for the pur
chase of such items flows out of the rural community.
Even where deposits in rural areas have grown
rapidly, the demand for loans has often increased
even more rapidly because of the increase in the cost
of farm production. Part of this increase in cost is
accounted for by price rises. From 1945 to 1950, for
example, the national index of prices paid for items
used in farm production increased 37 percent.
In addition, the ratio of cash costs to total costs has
increased. This increase in the “out-of-pocket” costs
of farming means that farmers are using more oper
ating capital. A large share of the increase in farm
production loans in recent years has gone to meet
this need.
The ability of banks to lend is affected by the sta
bility of deposits from week to week and from month
to month as well as by the average amounts held over
the course of a year. Deposits of country banks in
cash crop areas usually follow a seasonal pattern
that is almost exactly the opposite of the seasonal
changes in the volume of farm loans. In the Sand
Mountain area, for example, at banks in cities of less
than 15,000 population, deposits declined 3.8 million
dollars during the first half of 1949 and farm loans
increased 1.1 million. Deposits and farm loans behave
in much the same way in the Peanut area. In middle
and eastern Tennessee, on the other hand, where farm
income is about equally divided between crops and
livestock, there is little seasonal fluctuation in either
farm loans or deposits at country banks.
Individual banks have even greater variations in
loans and deposits than the averages for a farming
area would indicate. The banker whose deposits vary
from 1.0 million to 1.5 million and whose farm loans
vary from 100 thousand to 400 thousand dollars can
not base his loan policy on annual averages. If the
low point in deposits coincides with the high point in
loans, as is usually the case in cash crop areas, and
if he hopes to keep total loans below some fixed per
centage of total assets, he must base his lending policy
on the low point of deposits. One of the very real
difficulties is that he doesn’t know, at the beginning
of the year, what the low point in deposits is going
to be. As deposits decline and as loans increase, he
often comes to a point where he cannot take on any
[17]
more farm loan customers and still give the proper
attention to loan diversification or to a proper ratio
of loans to total assets. Furthermore, he must always
be prepared to advance additional money to farmers
who already have crop loans. In the cotton areas farm
ers often come back for additional loans with which
to purchase insecticides and to pay for picking. These
loans are almost always granted since repayment of
the original loan on schedule depends largely upon
the success of the crop.
How completely deposits can be mobilized for farm
financing depends not only on their total amount and
upon their seasonal variations, but also on how they
are distributed among various owners. Most of the
deposits in country banks are owned by individuals,
partnerships, and corporations. At one country bank
where these deposits amount to about a million dol
lars, over 40 percent were held in less than ten ac
counts of 10 thousand dollars or more each. At
another bank of comparable size, on the other hand,
only 5 precent of its deposits were in accounts of
10 thousand dollars or more. Obviously, the deposits
of the former bank cannot be invested in quite the
same way as those of the latter. In the first case, any
erratic movement in a few accounts could alter the
deposit picture appreciably.
The size of a bank’s capital accounts affects farm
lending mainly through its use in setting the legal
limitations on the amount of credit that can be ex
tended to a single borrower. Under state and national
banking laws, the maximum credit that banks can
have outstanding to a single borrower is set at a per
centage of total capital accounts. In recent years there
has been a marked increase in the number of farm
borrowers reaching these limits. One by-product of
farm mechanization and of the migration of workers
from farms is that many a large land holding that
was formerly farmed by croppers or tenants is now
operated as one large unit with hired labor. The credit
requirements that were formerly divided among sev
eral borrowers have now been concentrated on one.
Another reason for the increase in the demand for
large loans is the increase in the scale of their busi
ness that has been made by many individual farmers.
Many of today’s large farmers were struggling ten
years ago to pay for a small farm. Country bankers
have, therefore, seen some of their best customers
grow too large for them to finance. From the farmer’s
standpoint this limitation on the bank is probably of
[18]
little importance since many large farmers are not
confined to the local market for farm loans. They
usually have the kind of a financial statement and
collateral that enables them to borrow rather easily
outside of their home communities. Banks, further
more, have been adding to their capital accounts dur
ing recent periods of favorable earnings. At the end
of 1950 the average ratio of total capital accounts
to total assets was the highest since the end of 1943.
Farm loans, of course, are only one kind of loan
made by banks in rural communities. The severity
with which farmers are rationed in their use of bank
credit depends partly upon the banks’ policies toward
other classes of borrowers. These policies, in turn,
are affected by the profitability of farm loans as com
pared to other types of loans. At an individual bank
the relative profitableness of a particular type of loan
may be affected by the kind of community it serves,
by the kind of competition it has, by the aptitudes of
its officers, and by a host of other factors.
Statistical comparisons do not show any significant
differences between the proportion of total loans
classified as farm loans as of a given date and the
usual measures of the rate of earnings on capital
accounts or upon total assets. Neither do they show
any relationship between changes in the proportion
of farm loans and changes in the rate of earnings.
There is, however, a positive and highly significant
relationship between the percentage of total assets
accounted for by loans and the rate of earnings. Con
clusive evidence on this point could be obtained only
by such an accurate cost accounting on different types
of loans as to be impracticable for most of the small
country banks covered by this study. The data do
indicate, however, that, on the average, the type of
loans that a country bank makes does not greatly
affect its profits. There seems to be no such clearly
defined connection between the type of a bank’s loans
and the bank s profits as to require that farmers be
rationed either more or less severely than other types
of borrowers in the community.
Som e A lte rn ative Solu tion s
The foregoing characteristics of the structure of rural
banking and the effect they may have on the adequacy
o ^farm credit are pointed out for the purpose of
raising questions rather than to suggest answers. If*
owever, it is true that farmers who use credit are
a versely affected, some effects of possible solutions
should be considered. When local banks fail to meet
what the business interests of the community believe
to be their proper needs, one common solution is to
organize a new bank. For the kind of problems raised
here, however, an increase in the number of banks
is definitely not the answer. The problems are most
acute in areas where the banks have already gone
“all out” to help finance agriculture. Merely to divide
a community’s deposits among more banks would not
make more local funds available.
A second alternative, the borrowing by banks from
other banks or from the Federal Reserve, has already
been rejected. Although borrowing may again be used
extensively to meet seasonal or emergency shortages,
as it has been in the past, the understandable reluc
tance of country banks to remain permanently in debt
seems to close this door.
Although some relaxation of legal restrictions on
lending and some change in the policies of bank super
visory authorities might help banks in making certain
kinds of farm loans, any possible benefits from such
changes would certainly not be worth the sacrifice of
the safety that the rules now give to depositors. The
policies of country banks are influenced more by the
commonly accepted principles of prudent banking
than by any particular set of rules.
On the farm side, a greater diversification in the
sources of farm income would allow banks in cash
crop areas to use their available deposits more effec
tively. In areas where farming is now well diversified
even small country banks usually do not experience
wide seasonal swings in deposits or a bunching of
loan demands into a short period.
In areas where income is fairly evenly distributed
as among agriculture, industry, and trade, deposits
can be used with the maximum efficiency. The use of
credit is needed to obtain either kind of diversifica
tion. In communities where income is derived chiefly
from farming, however, and where most of the farm
income is from one or two cash crops, the bank de
posits upon which such credit can be based accumu
late only slowly.
One of the best ways for a bank in such a com
munity to get access to an outside credit market is
probably through the correspondent relationship.
Country banks have always relied upon help from
their city correspondents in carrying large or unusual
lines of farm credit. If this relationship could be
made workable on farm loans that are not large or
unusual, the structure of country banking and a slow
rate of deposit growth in a local community would
have little adverse effect upon farm financing. Cer
tain practical problems would, of course, have to be
solved. If loans, for example, could be kept on a local
basis so that the personal relationship between a
farmer and his banker could be retained, country
banks would be able to do a better job of serving
their trade areas.
No one of the more promising alternatives to the
present system seems likely to afford a quick solution
to the kind of problem under discussion. Over a pe
riod of years, however, some revision in the structure
of banking and in the relationship among banks would
undoubtedly prove beneficial to bankers as well as to
farmers. Certainly there should be, and need be, no
conflict between the present policy of restraining the
expansion of bank credit and carefully planned steps
looking toward greater mobility in the capital market
so that the reasonable and necessary credit require
ments of agriculture may be met effectively and
econom ically.
B rown R. R aw lings
[ 19 ]
Property of
The Committee on the History o f
the Federal Reserve System
R E T A IL C R E D IT S U R V E Y FO R 1951
SIXTH F E D E R A L R ES ER V E D IS TR IC T
RESEARCH DEPARTM ENT
F E D E R A L R ES ER V E B A N K O F A T L A N T A
CONTENTS
Page
Summary of Retail Credit in 1951
1
Department Stores
I
Men’
s Clothing Stores
7
Women’
s Apparel stores
9
Furniture Stores
11
Hardware Stores
1%
Household Appliance Stores
16
Jewelry Stores
18
Automobile Dealers
20
Automobile Tire and Accessory Stores
*3
Appendix
t<
R e ta il
C re d it
Survey
1951
fo r
Retailers In the Sixth District selling
previous year's levels{sales at stores selling
on both cash and credit terms experienced a 3-
less durable commodities exceeded 1950 totals*
percent decline In total dollar sales In 1951,
Automobile
compared with 1950, the year marking the start
stores in the District reported 8 percent
of the Korean War and the first siege of scare
ductions in total sales; furniture
buying*
slightly better with sales off 3 percent.
A breakdown of the decline reveals a
4-percent rise
In charge account sales,
a 3*
dealers
the plus side,
and
household
hardware stores
appliance
re
stores did
On
led the group
percent dip in cash sales,and almost no change
with a 6-percent rise,
in instalment purchases*
jewelry stores with a 5-percent advance in to
The Retail Credit Survey for 1951#cover
ing the nine
retailers,
major lines
of credit
granting
is the ninth annual Survey conduc
followed
Several outstanding changes in long-term
trends occurred in
1951*
Consumer purchases
at men's clothing and women's
Survey was made in 195°• Although these out
reversed
lets made only 40 percent
Automobile dealers
retail
sales in 1951,they account for most of the cre
dit sales*
Data were received from almost 800
by
tal sales*
ted by the Pederal Reserve Bank since 1942; no
of District
closely
apparel
stores
downward trends which began in 1948*
experienced
their
first
year-to-year decline since World War II years*
Little
change occurred
in the relative
stores in the Sixth Federal Reserve District,
Importance of cash,charge,and Instalment sales
which embraces all of Alabama.Georgia,Florida,
in 1951, compared with 195°• Credit sales rep
the lower halves of Louisiana and Mississippi,
resented 65 percent of total District sales In
and the eastern two-thirds of Tennessee*
the nine lines in 1951 and
Consumer purchases at stores selling ma
jor durable goods in 1951
lagged behind
the
percent in 1950*
These percentages are considerably higher than
those recorded in earlier Surveys.
rr
SALES CHANGES, 1950-1951
SIXTH DISTRICT CREDIT-GRANTING RETAIL STORES
Percent of Total Sales
No*
1 Percent Change, l9$0 -U5I '1
1
Charge
Report
Kind of
Account Iastalmant
Cash
Charge
Instal
ing
Business
n
H
ment
Stores 1 Total 1 Cash Account
46
44
- 4
46
10
Department
+ 4 + 6 + 5
11
130
2
2
26
+ 6
Men's Clothing
33
33
65
65
+ 4 + 4 + 4
42
4
18
+ 12
Women's Apparel
+ 4 + 2 + 4
43
3
5*
556 83
10
6
11
6
84
122
Furniture
3 + 1 + 4
62
30
2 + 14
+ 2
33
65
Hardware
+ 6
5
5
27
Household
20
24
21
26
241
0 - 2
8
Appliance
- 13
56
5?
26
+ 4
Jewelry
+ 5 + 6 + 7
17
17
29
29
5*
Automobile
**
40
16
16 48
8
- 6
44
+ 2
Dealers
36
95
13
Auto* Tire and
8 48
107
- 8
Accessory
+ 0 + 10 + 6
**■
3
39
9
53
26
0
792
36
38
- 3 - 3 + 4
Weighted Average
27
38
35
-
-
Pag# l
As Is to be expected, stores selling in
Although consumer purchases
at men's clothing
stalment paper reported lover ratios of recei
stores in the District increased 4 percent,in
vables to instalment sales than those not dis
ventories at these stores were still
posing of such paper*
cent above the related 1950 dollar value.
On the whole, merchants
sold less of their instalment paper
sales finance, and related firms
to banks,
in 1951
32 per
The following pages contain summaries on
and
individual lines of business for the District,
1950 than they did in the preceding two years.
state, and local areas* Data were withheld for
All but three of the nine lines of busi
local areas wherever fewer than three reports
ness reported lower year-end inventories
In
1951,compared with 1950,despite rising prices.
were received in order not to divulge
conf1-
dential Information*
YEAR-END CHANGES IN ACCOUNTS RECEIVABLE, 1950-1951
SIXTH DISTRICT CREDIT—GRANTING R E T A IL STORES
Ckarge Accounts
Receivable
Instalment Receivables
Inventories
Ho.
As Percent of
As Percent of
Kind of Business
Report Percent Annual Charge Percent Annual Instal Percent Turn
Account Sales Change
ing
Change
ment Sales
Change Over*
Stores
.1950 1950-51 1951
1950-51 1951
15^0-51 1951
30
- 8
Department
- 6
4.4
+ 7
31
65
75
67
5.2
34
30
Men's Clothing
+ 18
+ 5
+ 32
27
17
27
4.6
- 6
Women's Apparel
41
+ 5
+ 11
27
27
39
15
Furniture
1
41
56
56
- 5
39
- 7
2.5
99
- 1
Hardware
16
3.4
14
+ 16
+ 8
34
19
35
Household Appliance
14
- 10
3.2
+ 5
30
29
15
- 5
151
1.8
+ 8
- 8
Jewelry
+ 9
39
53
15
39
55
10
10.0
Automobile Dealers
4
+ 1
74
+ 13
9
- 9
5
Auto* Tire and
100
Accessory
+ 8
- 11
15
15
5.9
- 17
51
57
Weighted Average
22
1
1
22
4.6
+
26
25
- 5
565
-
SALE OF INSTALMENT PAPER, 1950-1951
SIXTH D IS T R IC T CREDIT-GRANTING R E T A IL S T O R E S
Stores Not Selling
Stores Selling Instalment paper
Instalment paper
Paper Sold Receivables
Receivables
Ho.
Percent as Percent
as Percent Percent
as percent
Report
Kind of Business
of Re of Instal of Instal of Re
of Instal
porting ment Sales
ing
ment Sales
ment Sales porting
Stores
Stores
1?*>0 1951 1?5° Stores
l??i 1950 .
••
100
42
46
8
Department
40
Men's Clothing
4
100
37
. .
- - - —
—
—
-«
—m
Women's Apparel
4
Furniture
8
68
41
32
53
59
59
57
Hardware
8
41
44
23
27
63
37
51
35
44
Household Appliance
144
16
8
92
56
54
54
17
••
—
—
Jewelry
100
11
53
55
100
Automobile Dealers
46
69
45
5
Auto. Tire and
48
Accessory
65
52
96
43
65
37
*5
51
For footnotes, see appendix
Fage 2
PERCENT CHANGE IN COMBINED TOTAL SALES OF
MINE LINES OP BUSINESS, 1950-1951
WEIGHTED BY RELATIVE IMPORTANCE OF SALES
BY STATS AND AREA
No.
No.
State
Area*
Reporting Percent
Reporting Percent
Change
Stores
Stores Change
• 1
Alabama
Georgia:
176
- 1
Florida
Atlanta (11)
133
53
++ 43
210
Georgia
+- 3
Augusta
(12)
9
2
Louisianat
21
Columbus (13)
I2
- 6
86
Mississippit
14
++ 165
Macon
(14)
- 2
Tennesseef
110
- 0
Savannah (15)
93
- 1
South Georgia (16)
Louisiana:
Areat
Al
a*t.alrA P.hQrlAa
12
t+ 5j
Alabama:
Baton
Rouge
(18)
- l 96
19
Anniston-Gadsden (1)
4
- 4
Lafayette-Iberia
(19)
11
Birmingham (2)
- 2
115
New Orleans (20)
33
+ 5
- 3
Dothan (3)
Mississippi:
%
Mobile (4)
16
+ 2
Jackson (21): Natchez (23) 22
- 7
Montgomery (5)
- 8
Hattiesburg-Laurel15
Florida:
Merldlan (22)
16
- 3
*» 1
Jacksonville ( 6 )
21
Tennessee:
Miami (7)
28
Chattanooga (24)
24
- 1
Orlando ( 8 )
+ 99
13
Knoxville
(25)
25
+
7
Pensacola (9)
+ 1
Nashville (26)
15
5
35
Tampa-St. Peters
Tri-Cities
(27)
6
4
burg ( 10 )
24
* 4
t That part within the Sixth Federal Reserve District*
t Boundaries of areas do not necessarily coincide with state lines. For counties included in
areas, see appendix.
NOTE. * The estimated percent change in total sales was,arrived at by weighting the percent
change for each line of business according to the importance of the particular line in total
sales of a ll nine lines of business throughout the United States.
Page
3
DEPARTMENT STORES
Total sales at reporting D istrict depart
ment stores rose 4 percent in 1951 from 1950,a
gain equal to that for a ll such stores in the
United States* Furthermore, D istrict depart
ment store sales reached the highest level on
record* The total gain reflects the 6-percent
and 5-percent Increases In cash and charge pur
chases, respectively, which more than compen
sated for a 4-percent decline in Instalment
sales*
Most of the states and cities for which
data are available witnessed a greater dollar
▼olume of sales in 1951 than in 1950* Bach
D istrict state bettered its 1950 mark except
Mississippi# where consumer purchases in 1951
approximately equaled those of 1950*
Five of the six states adhered to the
D istrict pattern by recording increases in
both cash and charge account sales* H lstlatip-
pians, however, bought about the same amount
on these sales terms in 1951 && in 195°. Only
Qeorgla department stores ended the year with
Instalment sales in 1951 above the 1950 level*.
Little change occurred In the relative
Importance of cash and credit sales at allre
porting department stores In the D istrict In
1951* compared with 195°.Credit purchases ac
counted for 56 percent of total sales in 1951
and for 57 percent in the previous year*
D istrict consumers owed 7 percent more
for charge account purchases at the end of
1951 than at the end of 1950 ,but their Instal
ment Indebtedness was down 8 percent *Year-end
inventories were off 6 percent from the 1950
figure* Department store stocks were replen
ished, on an average, almost every three
months in 1951 and about 2*5 months In 1949,
the year of the last Survey.
SALES AT DEPARTMENT STORES
TOTAL SALES, 1941 = 100
300
P E R C E N T -----------------------------------------------------------
TOTAL SALES
200
100
1941
1943
1945
1947
1949
1951
DEPARTMENT STORES
S A L E S BY T Y P E
, By
Classlficatlont
and
Locationt
ALL REPORTINQ STORES
Small
Medium
Large
Mot Classified by Size
ALABAM
Small A
Medium
Birmingham Area
1 Birmingham
Montgomery Area
Dothan Area
FLORIDA
Medium
Tampa-St. Pete* Area
Outside Pensacola
Jacksonville Area
Miami Area
Orlando Area
GEORGIA
Small
Medium
Atlanta
Outside Atlanta
South Georgia Area
Augusta Area
Macon Area
Macon
Columbus Area
Savannah Area
LOUISIANA
Small
Medium
Baton Rouge
New Orleans Area
New Orleans
MISSISSIPPI
Small
Medium
Jackson Area
Meridian Area
TENNESSEE
Medium
Large
Chattanooga Area
Knoxville Area
Knoxville
Nashville Area
Nashville
Tri-Cities Area
No.
Report
ing
Stores
130
38
72
16
13
22
5
7
47
6
3
374
7
5
3
7
5
27
107
38
43
5
3
43
18
4
5
5
9
5
10
43
5
5
26
11
4
4
6
3
11
5
9
OF T R A N S A C TIO N
Percent Change,1950- 1951
Charge Instal
Total Cash Account ment
+ 4 + 6 + 5 - 4
+ 5 + 3 + 9 - 3
+ 6
+ 6
+ 3 ++ 47 + 3 +- 121
+ 4 + 1 + 7 —
+1
+ 4
- 12
+ r 13 - 2 ++ 45 + 0
+ 4 + 6 + 6 - 19
+ 2 + 2
- 4
+ 2 + 2 ++ 33 - 4
- 0 + 4 + 10 - 30
+ 2 —
—
+ 11 + 10
11
15 -- 11
+ 11 + 11 ++ 15
+ 6
+ 10 --—
+ 6
+ 9 +-- 3 --—
...
+ 8
+ 14 —
—
—
+ 6 + 8 + 3 + 5
8 + 2 + 13 + 30
+ 15 + 18 + 8 4* 43
+
+ 2 + 2
+ 33 + 6 + 2 --*- 76
+
20 ++ 175 + 31
+ 18 ++ 13
+
+ 8
+ 30
+ 55 +— 8 ++-- 33 +—30
+
+ 149 —
—
—
+- 2 + 2 + 6 - 12
- 2 + 1 - 10
+ 31 - 1 + 2 + 1
8
- 4
10
+ 3 +- 73 + 7 -- 29
+ 3 + 2 + 7 - 10
0 - 0 + 0 - 11
+ 9 + 10 + 7 «
- 1 - 2 - 0 - 11
2 - 2 - 1 - 11
+ 1 -—
—
+ 4 + 4 + 6
+ 5 + 4 + 7 -- 13
+ 1 + 2 + 3 - 20
--+ 7 -+ 3 + 5 + 4 - 5
+ 3 + 5 + 4 - 5
4 + 2 + 8
+ 3 + 1 + 7 -- 33
+ 4 + 7 + 4 - 25
Percent of Total Sales
Charge
Instalment
Cash Account
1951 1950 l j j l 1J?0 1*51
44 43 46 46 10 11
46 50 49
45
5 125
46 46 42
12
42
40 40 52 51
8
9
53 54 47 46 —
41 41 51 49
8 10
40 42 46 45 14 13
43 42 50 49
7
9
37 37 5* 5*
98
9
37 37 38
5*
55
34 13 199
49 47
—
60
61
58
6l 37
6l 36
__
60
42
... --
36
35
40
3
3
—
--
43
«._
m—
—
42
43
*5
41
41
5«t
51
44
44
—
—
42
41
44
38
43
43
3^
52
31
28
—
44
44
41
-48
47
*3
43
30
41
*5
44
41
39
55
50
43
43
—
—
42
41
*5
37
43
U3
33
51
31
28
-44
45
40
—
46
46
44
44
29
50
56
46
.50
51
46
25
55
55
--*5
42
35
?2
7?
44
64
48
66
68
51
5*
*9
51
52
*5
29
8
9
8
8
-24
1
1
**■
—
13
17
21
10
12
13
--2
3
w4
11
13
5
8
1
7
9
9
21
1
1
..
—
15
19
21
13
14
15
3
3
4
*5
43
5*
37
37
*5
44
69
56
56
—
—
43
40
3*f
59
43
42
64
5?
66
68
—
44
42
53
1
- -
37
37
43
*f3
69
15
16
12
13
1
12
13
7
*171
17
*131
13
2
por footnotes, see appendix*
P&irft
k
DEPARTMENT STORES
A C C O U N TS RECEIVABLE AND
Charge Accounts
Receivable *
By
End of Year
C lassification
No.
As Percent of
and
Report Percent Annual Charge
Loca,tiont
ing Change Account Sales
Stores 1950-51 1951 . 1550
ALL REPORTING STORES 75 + 7
30
31
Small
21
26
+ 16
25
Medium
41
27
27
Large
10 ++ 77
34
35
Not classified by siLze 3 + 10
28
28
22 + 5
ALABAMA
27
H
20
Small
18
3
9
Medium
+ 6
25
9
25
Birmingham Area
27
74 ++ 23
27
27
Birmingham
27
--—
Dothan Area
36
-Montgomery Area
—
—
+-- 16
FLORIDA
25
374
25
-__
Small
l8
Medium
24
24
+ 16
__
Jacksonville Area
—
—
Miami and Miami Beac h 73
--Orlando Area
5
Pensacola Area
31
+
17
29
5
-Tampa-St.Pete. Area
—
—
7
34
GEORGIA
35
27 ++ 296
10
30
27
Small
30
+ 12
Medium
29
15
8 + 4
Atlanta Area
36
36
Atlanta
3 ++ 144
37
21
Outside Atlanta
23
5
+ 12
30
South Georgia Area
31
3
+ 4
Macon Area
32
31
5
+ 4
Macon
32
31
43 +— 8
Augusta Area
25
25
-—
Columbus Area
43
—
Savannah Area
—
—
18
+ 16
316
LOUISIANA
3*
46
Small
9
9 ++ 10
Medium
27
29
5
26
Baton Rouge Area
29
5 + 9
29
26
Baton Rouge
3
+
9
+ 16
New Orleans Area
33
9
36
New Orleans
33
5 + 17
10
- 1
MISSISSIPPI
23
23
- 12
Small
27
33
3
22
22
Medium
7 + 1
20
21
Jackson Area
5 +—0
—
—
Meridian Area
5
+ 4
26
2?
TENNESSEE
27
28
Medium
29
194 ++ 24
Large
23
23
--—
4
Chattanooga
24
24
6 + 3
Knoxville Area
24
24
Knoxville
+ 3
28
26
Nashville Area
113 + 2
87
+ 0
Nashville
25
»
—
-—
4
Outside Nashville
- 1
30
Tri-Cities Area
31
9
Por footnotes, see appendix
Page 6
INVENTOR IES
Instalment Receivables,
End of Year
As Percent of
percent Annual Instal
Change ment Sales
1950
1950-51 1951
- 8
67
65
+ 0
38
37
- 4
61
65
- 12
72
72
—
—
—
- 20
60
65
47
- 1
68
- 29
59
59
---- 109
63
59
—
-—
—
55
--- 12
--5H
- 12
5*
55
„_
--—
--—
—
--—
74
+ 0
71
+ 26
5°
52
+ 30
75
69
- 7
71
73
--- 9
7*
76
-—
--—
50
+ 26
52
+ 26
52
50
70
+ 32
78
-—
—
—
—
- 11 71
71
- 6
24
25
66
- 3
69
61
- 34
57
6l
57
-- 8
72
7{f
72
- 8
7*
--- 11
36
36
--- 11
36
36
- 11
36
36
—
—
—
- 8
60
57
61
-- 207
57
51
51
--—
- 6
56
56
- 6
56
56
- 10
63
59
- 10
6?
59
-38
*3
- 33
Inventories,
End of Year
Percent Turn
Change over*
1950-51 1951
4.4
- 6
3.4
+- 43
*•5
- 10
4.6
+ 4
3.3
- 12
4.2
3.0
+ 9
4.2
- 17
4.2
-- 698
*.3
+ 4
2.5
4.4
- 33
4.1
+ 4
+ 8
3.1
+ 5 *.3
4.4
+- 65
3.9
- 1
3.7
+ 6
3.1
4.4
+ 11
- 6
5.2
3.4
+ 1
5.2
+ 9
- 12
5.3
5.3
13
-- 12
5.3
-—
+ 4
5.3
++ 244
5.3
4.3
6*1
+ 1
* 11
*.7
4.8
- 12
- 3
3.9
6.0
- 6
4.6
- 14
4.6
- 14
- 13
- 13
*.9
4.2
- 10
+ 8
3.H
»*.3
- 13
- 14
**.7
3.3
- 5
4.1
-- 109
4.2
3.8
- 9
4.8
4.1
-- 85
- 8
4.1
4.0
- 13
1 .1
- If
- 4
3.8
- 3
3.7
M E N 'S CLOTHING S T O R E S
Reporting men's clothing stores in the Dis
tric t ended 1951 with sales up 4 percent from the
year-ago level; an increase slightly higher than
that of similar stores in the U. S.
Sales Increases, however, were insufficient
to reduce Inventories much as is shown by the 32percent rise In 1951 stocks over the dollar value
of 19?0« This was the largest gain In stocks re
ported for any of the nine lines of business sur
veyed* In physical terms, however, the Increase
was not as great, since prices of men's clothing
rose 7*5 percent during 1951*
All three states for which data are avail
able experienced a higher dollar volume of con
sumer purchases in 1951 than in 1950. Total sales
were up 9 percent in Florida* 5 percent in Louis
iana, and 2 percent in Georgia*
The Increase In total D istrict sales mir
rors rises of 4 percent, 4 percent and 6 per
cent in cash, charge,and instalment sales re
spectively. Each state likewise exhibited in
creases in these modes of purchases.
No change from 1950 was indicated in
the relative importance of cash, charge ac
count, and instalment sales. Cash purchases
accounted for 33 percent of the total; charge
account $ales ,65 percent;and instalment sales
the remainder, or 2 percent. D istrict consu
mers bought more heavily on credit in the
last two years than in 19^8 or 19^9 *
Rising charge account and Instalment
sales resulted in increases in the correspond
ing receivables ..Consumers owed 5 percent more
for charge account obligations at the end of
1951 than they did a year earlier* Instalment
receivables rose 18 percent.
SALES AT M EN'S CLOTHING STORES
TOTAL SALES, 1941 = 100
PERCENT -------------------------------------------------------------------------------
200
1941
TOTAL SALES
1943
1945
1947
1949
1951
Page
7
M EN 'S CLOTHING S T O R E S
S A L E S B Y T Y P E OF T R A N S A C T I O N
Percent of Total S<ales
Percent change, 1950-1951
No,
Charge
Report
C lassificationt
Account Instalment
Cash
Charge Instal
ing
and
l?5l
ment
Account
i9£l
l?5° 1951
Cash
Total
Stores
Location t
65 28 28
33 65 48
33 44
+ 4 + 4 + 4 ++ 66 41
26
all REPORTING STORES
+
+
3 + 15
Small
17
I 1 |9
31 31
+ i + 14 + 17
Medium
54
1
1
30
s
69
+ l
+ 5 31
+ 2 +
Large
55
43
45
+ 9 + 1 + 12
6
FLORIDA
—
56
44
42
1
1
—
+
+
+
17
13
Small
5
— — -- — -—
+ 12 — —
Tampa-St. Pete. Area
3
l.o 1
31 31 68 68
+ 2 + 3 ++ 22 + 5
6
GEORGIA
1
1
30 29 69 70
+ 5
+ 3 + 5
Large
3
1
1
68
69
+ > + 4 + 2 ++ 66 51 50
Atlanta Area
6
6
45 47 49 47
4 2
47
3 + 7
Outside Atlanta
28
29 72 71 — —
+ 5 + 3 + 5 —
LOUISIANA
+ 2
Lafayette-Iberia Ares 33
MEN'S CLOTHING STORES
ACCOUNTS RECEIVABLE ANO INVENTORIES
Charge Accounts'
Receivable.,
End of Year
*y
+T
No.
As Percent of
Classification
Repprt- Percent Annual Charge
and
ing Change Amount Sales
Location t
Stores 1950-51 1951 __ 1 ^ 0
27
ALL REPORTING STORES
27
17
++ 165 27
Small
11
27
20
20
2
Medium
+ 1
28
28
4
Large
+ 3
24
8
+ 14
FLORIDA
25
26
+ 18
6
Small
25
-—
—
Tampa-St• Pete.Area
3
28
29
GEORGIA
+—3
9
—
Small
3
—
--Medium
3
28
Large
+ 3
29
3
29
28
Atlanta Area
7
24
++ 23
Outside Atlanta
3
25
22
21
LOUISIANA
+ 3
45
-Small
—
—
—
Lafayette-Iberla Area
-3
—
For footnotes, see appendix*
Page 8
Instalment Receivables,
End of Year
As Percent of
Percent Annual Instal
Change ment Sales
1950
1950-51 .1951
+ 18 34
30
+—16 40
37
+ 27 16
13
—la.
mm*
—
-—
—
—
—
+ 27 16
11
--—
--+ 27 16
13
+ 27 m16am
13
—
—
—
—
---
Inventories,
End of Year---Percent turn
Change over *
1950-51 1951
3.2
++ 32
12 2.2
+ 1 4.2
+ 56 3.6
+ 10 2.4
+ 8 2.3
+ 9 2.5
+ 48
+ 22 1.8
+ 8 2.0
+ 59 3.6
+ 48 3.4
+ 48 3.4
+ 9 4.7
+ 29 1.9
- 1 1.8
WOMEN’S A PPA R EL STORES
In line with other less durable and soft
goods trades covered in the Survey, total sales
at women's apparel stores In the D istrict were 4
percent higher in 1951 than a year earlier* Dis
tric t sales lagged behind those throughout the
U*S*, which advanced 7 percent, according to the
Department of Commerce, Higher prices of womenfs
apparel, of course, inflated the dollar volume
of sales.
Increases in cash and charge account sales
in particular helped boost 1951 sales* Cash pur
chases were up 2 percent and charge account pur
chases, 4 percent. These sales accounted for 96
percent of total sales in 1951 and for an even
higher proportion in 1950 - 97 percent. Instal
ment sales climbed 12 percent during the year.
Medium-size stores recorded the largest in
creased in total sales ,11 percent, compared with
5 percent for small and one percent, for large
stores. Most of the Instalment selling was
done at medium-size stores.
Consumers in Alabama, Georgia,and Missis
sippi, the only states for which women*s ap
parel store data are available, spent more at
these outlets in 1951 than in 1950.Total sale*
were up 11 percent in Alabama, 7 percent ir
M ississippi, and 3 percent in Georgia.
Although Instalment collections were some
what faster in 1951,the stores had a larger amount of instalment receivables on their books
at the end of the year, an 11-percent increase
from the end of 1950* Collection speed wasm*
changed for charge accounts, but charge recei
vables rose 5 percent* Inventories in Decem
ber 1951 at women*s apparel stores were down (
percent from December 1950* Stocks were re
fille d , on an average, every 2.5 months during
1951.
SALES AT WOMEN'S APPAREL STORES
TOTAL SALES, 1941 = 100
P E R C E N T -----------------------------------------------------------------------------------
200
TOTAL SALES-^ _
100
1941
1943
1945
1947
1949
1951
Page 9
WOMEN'S APPAREL ST O R E S
SALES
BY
T Y P E OF
TRANSACTION
No.
Percent Change, 193^-1^1
By
Report
Classlficatlont
and
ing
Charge Instal
Stores Total Cash Account ment
Locationt
18
+ 4 + 2 + 4 + 12
ALL REPORTING STORES
Small
5
+ 115 ++ 103 ++ 115 ++ 48
Medium
8
+
12
Large
5 + 1 - 0 + 3 mm
ALABAMA
4 + 11 + 11 + 12 + 0
FLORIDA
—
3 + 1 —
GEORGIA
+ 2
Medium
47 ++ 23 ++ 23 + 1 ++ 31
31
Atlanta Area
5 + 1 + 1 + 0 + 16
Columbus Area
3 + 13 + 17 + 11 —
0 —
LOUISIANA
— —
—
MISSISSIPPI
3 + 7 + 6 + 9
TENNESSEE
1 —
— —
—
percent of Total Sales
Charge
ash
Account Instalment
1950
1??1
1??°
42 43 54 5*
4
2
13
36 37 62 62
41 HI 47 48 12 11
43 *3 57 57 — —
6
60 60 34 34
6
— — — — — —
30 30 67 68
3 2
30 30 67 68
3 2
31 31 64 64
5
5
28
26 72 74
— __ — — —
42 43 58 57 — —
WOMEN'S APPAREL STORES
ACCOUNTS RECEIVABLE AND INVENTORIES
Charge Accounts
Receivable,
Instalment Receivables,
By
End
of
Year
End of Year
No.
Classlficatlont
As
Perdent
of
Perc<ant of
Report Percent Annual Charge Percent As
and
Annual
:Enstaling Change Account Sales Change
Locationt
3ales
ment
Stores 1950-51 1951
I??0 1950-51 1951 ..
41
ALL REPORTING STORES
27 + 11
154
+ 35
27
39
-21
21 -Small
+
6
Medium
41
+ 11
31
31
+
9
39
26 —
Large
26
+ 4
—
5
28
4
ALABAMA
29 - 7
27
29
+7
—
-FLORIDA
—
— —
3
—
+ 6
30
+
18
GEORGIA
50
7
45
22 + 18
28
Medium
4
30
+ 6
50
45
+ 18
4
Atlanta Area
28
50
29
+ 5
*5
4
Outside Atlanta
28
+ 18
50
+ 5
29
45
36
-+ 8
-—
Columbus Area
35
3
—
0
— —
—
—
—
LOUISIANA
24
—
—
4
MISSISSIPPI
+ 3
25
—
—
— —
—
TENNESSEE
1
For footnotes, see appendix.
Page 10
Inventories
End of Year
Percent TurnChange Over*
1950-51 1951 _
4.6
- 6
4.0
+ 1
4.2
- 23
4.7
- 5
- 16
7.1
- 1
M
5.*
- 7
—
- 8
3*
- 8
--5.*
—
—
-4.4
- 19
—
—
FURNITURE STORES
D istrict furniture stores, like other ma
jor consumer durable retailing outlets, sus
tained a decline in to tal sales in 1951* com
pared with 1950* The 3 percent reduction at
furniture stores compares favorably with the 8
percent decrease registered at both household
appliance stores and automobile dealers.
With the exception of 19J0* D istrict fur
niture store dealers have encountered year-toyear declines in total sales since 194-7* These
stores in 1951 # moreover, failed to keep up
with their counterparts throughout the U* S*,
whose sales in 1951 were approximately equal
to the 1950 level.
The relative Importance of cash, charge,
and instalment sales to total sales was practi
cally the same in both years. Credit purchases
in both 1951 and 1950 accounted ibr almost nine
tenths of the total furniture store purchases*
Interestingly enough,although credit sales rep
resented over 80 percent of the to tal in the
Tampa-St* Petersburg area, the charge account
proportion was considerably larger in that sec
tion than in any other area in the D istrict,
Consumer charge and instalment indebted
ness, as reflected in receivables outstanding
declined one percent and 5 percent^respectively
in 1951 , compared with 1950* Charge accounts
in 1951 were outstanding for shorter periods
than in 1950 3 no change in the speed of pay
ment occurred in instalment Indebtedness*
At reporting D istrict furniture stores,in
ventories, which were steadily reduced through
out 1951, were down 7 percent at the year's
end* Inventories were replenished almost twice
during 1951*
SALES AT FURNITURE STORES
TOTAL SALES, 194! = 100
PERCENT --------------------------------------------------------------
200
TOTAL SALES
1941
1943
1945
1947
1949
1951
FURNITURE STO R ES
SALES
No.
Classification*
Report
and
ing
Locatlont
Stores
ALL REPORTING STORES
122
Small
38
Medium
32
Large
26
Not Classified by Slse 26
ALABAMA
21
Small
5
Medium
5
Large
7
Birmingham Area
10
Birmingham
96
Mobile Area
Mobile
5
6
Montgomery Area
20
FLORIDA
Small
7
Large
Not Classified by Size 8
8
Jacksonville Area
Jacksonville
6
Miami Area
3
Tampa-St, Fete#Area
7
22
GEORGIA
Small
8
Medium
8
Large
6
Atlanta Area
14
Outside Atlanta
12
Columbus Area
Columbus
45
Macon Area
5
Macon
3
Savannah Area
3
LOUISIANA
7
Medium
4
New Orleans Area
New Orleans
49
Alexandria-Lake
Charles Area
3
MISSISSIPPI
11
Small
5
4
Jackson
Gulfport-Biloxl Area
3
TENNESSEE
18
Small
5
Medium
7
Chattanooga Area
6
Chattanooga
3
Knoxville Area
7
Knoxville
6
Nashville Area
10
Nashville
6
Tri-Cities Area
5
••Increase of over 100 percent.
For footnotes, see appendix.
http://fraser.stlouisfed.org/
Page 12
Federal Reserve
Bank of St. Louis
BY
TYPE
OF
TRANSACTION
Percent Change, 1950-51
Charge Instal
Total Cash Account ment
6
- 73 +- 31 +- 184 • 7
• 36 +- 26 ++ 196 . 75
- 2 - 5 - 5 - 1
• 4 + 1 + 12 . 5
- 1 - 3 .. . . 1
+ 83 - 1 + 45 + 1
+ 1 - 9 - 9
. 10
• 9 + 0 H. . .
- 9 - 1
+ 7 + 10 . . .
+ 137
+ 8 + 8
+ 8
“ 14 - 28 - 7 - 13
_
.
- 115 +- 121 -- 66 - 127
...
.
...
10
+ 72 ++ 19
+ 91
. 1
+- 5 + 32 *«
...
. 4
+
26
2
- 29 . . . . . .
- 9 + 3 - 11 - 12
•
.
• 13 +- 76 ++ 103 - 22
. 1
* 0 + 6 «...
- 1 + 12 + 14 - 3
. 6
...
- 6
- 44 ++ 77 . . .
..
+ 2 + 12 .«...
+ 1
+ 3 + 14
+ 2
+ 5
+ 3 - 4 .. .. ..
+ 3
+ 4
+ 9 +- 105 + 32 + 4
• 5 - 0 ...
. 6
- 3
- 3 - 4 ...
+- 1 + 19 + 4 . 0
4 + 5 + 8
5
+ 11 + 10 + 20 + 11
+- 3 + 24 - 24 + 3
5 + 11 - 19 - 7
- 16 + 22 . . .
. 19
+ 36 + 50 - 18 + 35
•
- 10 + 11
+ 47 - 6 + 0 + 76
- 12 - 8 + 12 - 14
• 10 - 25 + 3 . 9
- 9 - 20 . . .
- 49
- 5 - 9
0
•
0 .
• 65 -- 129 - 7 _ 45
- 7 - 12
- 6
- 9 -—
percent of Total
Charge
Account
Cash
1951 1950 1951 1950
6
6
11 10
8
16
9
17
10
10
6
5
10
6
9
5
8
13
13
9
10 10
4
3
..
13
13
10
10
8
6
8
3
3
9
0
3
9
9
3 --0
9
9
119 119 —
6
11 13
7
0
12 10
0
14 12 . .1
1
..
8
11
15 14 — —
10
8
4
2
10
8
.. .. .. —
17 15 33 34
11 11
3 102
22 23 11
6 .. ..
147 12
3
3
12
13
139 128 -..
0
12 137 — --. .
10 11 —
9 17 14
9
12 11 . . —
13 13 —
1
1
9
7
1
1
7
7
26
26
3
3
12 10
7
9
20 17
6
7
13 119 --0 -12
1
11 11
2
32
1
13
15
12 12
6
5
8
76
5 . .4
7
0
0
13 14
0
0
14
13
12 13 12
12
11 12 — —
— — — --
Sales
Instalment
1S51 1950
83 84
15
84 15
84 85
86
79 78
86
8/ §7
87
84
82
88
89
88
91
88
91
91 91
89
89
82
81
88
85
89
85
90
86
90
90
92
50
51
86
67
P83
§7
87
91
92
88
90
74
88
87
90
92
71
81
74
87
88
86
85
82
88
94
87
87
76
89
—
87
2?
86
87
67
2**
85
88
88
92
93
§7
89
77
89
87
92
92
71
81
76
91
88
87
84
83
88
§3
86
86
15
88
—
FURNITURE STORES
ACCOUNTS RECEIVABLE AND INVENTORIES
Charge Accounts
Receivable,
End of Year
By
As Percent of
Classificationt
Ho*
and
Report Percent Annual Charge
ing Change Account Sales
Locationt
Stores 1950-51 32>L
- 1
41
ALL REPORTING STORES
99
32
Small
- 18
36
32
43
Medium
+ 21
36
35
25
50
Large
22
+ 2
49
20
Not Classified by Siz 20
29
- *7
46
24
+
11
46
ALABAMA
6
Snail
Medium
42
7
29
p
Large
1
63
57
5
Birmingham Area
Birmingham
6
Montgomery Area
6
Mobile Area
Mobile
5
46
24
FLORIDA
+ 23
35
46
Small
+ 23
9
35
Large
Not Classified by Size
8
Jacksonville Area
Jacksonville
Miami and Miami Beach 5
*
Tamp-St* Pete* Area
- 4
42
GEORGIA
37
%
- 16
Small
**7
39
Medium
8
+“~6
Large
36
9
39
Atlanta Area
14
8
Outside Atlanta
Columbus Area
5
Columbus
4
20
20
Macon Area
5
Macon
3
South Georgia Area
3
10
LOUISIANA
Medium
5
Large
3
New Orleans Area
9
New Orleans
3
Alexandrla-Lake
3
Charles Area
- 43
MISSISSIPPI
13
32
23
6
Small
- 33
^3
35
4
Jackson
Gulfport-Biloxl Area
3
Natchez Area
4
+ 10
40
*4
TENNESSEE
39
Small
I
41
Medium
+ 10
41
Large
3
6
Chattanooga Area
48
- 16
39
mm
Chattanooga
3
Knoxville
7
Nashville Area
+ 10
41
41
9
Nashville
6
Tri-Cities Area
5
For
footnotes,
see
appendix.
Instalment Receivables ,
___ End of Year
As Percent ot
Percent Annual Instal
ment Sales
Change
1950-51 J£5L JL252.
56
56
5
61
10
2
1
1
1
1
3
4
4
10
12
14
13
192
15
15
- 17
+ 0
- 4
+ 3
- 1
- 1
- 1
- 2
- 11
+ 2
+ 3
5?
56
56
53
59
67
53
60
61
59
59
52
V61
52
5f
56
56
53
5*
47
57
57
+ 6
+ 28
10
3
11
5
5
2
11
12
-
16
- 9
I ll
- 40
- 2
53
5Z
5*
52
52
+
- 6
+ 15
- 3
12
12
2.8
2.7
2.9
2.6
4.6
!:1
2.2
3.0
2.4
2.5
3.3
2.7
2.7
5.7
5.7
4
23
12
33
22
26
15
3.3
2.4
2 .1
2.7
2.6
2.3
3.1
+ 2
- 0
2.8
2.8
62
58
53
53
59
51
50
3.2
2.7
2.7
1:1
2.3
2.4
2.5
3.1
2.9
258
53
51
53
t3
61
2 .3
2 .5
16
48
46
78
53
2.5
2.7
8
16
3
56
53
10
+ 5
+ 17
- 1
48
- 4
+ 9
- 17
10
51
68
68
5**
-
+ 6
- 1
60
60
7
3
1
13
4
62
59
49
+
-
- 15
- 7
+ 3
50
61
61
- 11
+ 4
- 7
55
5f
56
57
67
5*
57
56
55
57
Inventories
End of Year
Percent Turn
Change over*
1950-51 1951
52
5?
56
II
59
51
51
57
55
5*
+ 14
- 15
+ 3
- 11
- 11
+ 2
- 19
- 16
■ 16
• 8
- 2
-
-
7
10
2.5
2.8
2.6
5.0
2.2
1.9
3.0
1 .8
1.5
1.4
1.4
kl
3.9
1.7
Pfiff* IT
HARDWARE STORES
Consumers In the Sixth D istrict bought 6
percent more on credit at reporting hardware
stores In 1931 than they did In 1930, Gains of
14 percent In charge account and 2 percent In
Instalment sales more than compensated for a 2percent drop In cash sales* Hardware stores
throughout the U. S. did better; their sales
climbed 11 percent over 1950*
Only Tennessee,of the five D istrict states
for which data are available,sustained a decline
In consumer purchases of hardware store commod
itie s. This decrease of 2 percent contrasts with
advances of 13 percent in Florida, 8 percent in
Louisiana and Georgia, and 6 percent in Alabama.
•As in previous years* charge account sales
were the most important In relation to total
sales, representing 63 percent of the total In
SALES
1951 and 62 percent In 1930. Consumers through*
out the D istrict laid down cash for 30 percent of
their purchases In 1931 , a smaller proportion
than in 1950*
Despite the increase in charge account
sales, consumers in the D istrict owed one percent
less on charge receivables at the end of 1931
than they did a year earlier.
Instalment receivables rose 16 percent; on
an average, instalment obligations were outstand
ing for a longer period.
Hardware stores* one of the three lines of
business reporting year-end advances in inventor-*
ies, showed stocks up 8 percent in December 1931
from the dollar value of the year before* Mer
chandise turned over about 3*4 times during 1951»
unchanged from 1949.
AT HARDWARE STORES
TOTAL SALES, 1941 =100
PERCENT ---------------------------------------------------------------
200
TOTAL SALES
100
INSTALMENT;
1941
Page 14
1943
1945
1947
1949
1951
HARDWARE STO RES
tfo.
fey
Report
Classlficatlont
and
ing
Locationt
Stores
ALL REPORTING STORES
27
Small
12
Medium
13
4
ALABAMA
Medium
3
Birmingham Area
3
4
FLORIDA
Jacksonville Area
3
4
GEORGIA
4
LOUISIANA
Medium
3
Lafayette-Iberia Aret 3
MISSISSIPPI
1
TENNESSEE
4
Nashville Area
3
SALES
BY T Y P E O F
TRANSACTION
Percent Change, 19!>tpr953~
Charge Instal
Total Cash Account ment
+ 6 • 2 + 14 + 2
+ 1 + 2 - 1 + 3
+ 3 - 3 + 8 + 1
+ 6 _ 2 + 9 + 34
+ 7 + 4 + 7 + 34
+ 11 - 9 + 95 + 34
+ 15 + 15 + 11 + 31
+ 19 + 17 + 18 + 31
--+ 8 —+ 8
7 + 13 + 21
+ 9 - 9 + 14 + 21
+ 10 + 1 + 12 + 22
----——
- 2 + 4 - 8 - 7
- 4 - 0 - 5 - 29
—
Percent of Total Sales
Charge
Account Instalment
Cash
ltfO IP?! 1 ^ 0
1951
1??1
62
30 33 65
5
5
42
78 7
51 42
51 42
53
7
39
51
2
6t
34 36 P64
64 43
3
32 33
50
40 45 5*
6
5
40 10
9
51 51 39
38 11 10
51 52 38
— — -— — —
10
68
11
21
65
2?
10
24 69
66
20
11
76
3
3
19 21 78
38
50 43
53
52
50
40
44
9
5
10
6
HARDWARE STORES
ACCOUNTS RECEIVABLE AND INVENTORIES
bharge Accounts
Receivable,
find
of Year
By
No.
As
Percent of
Classlficatlont
Report- Percent Annual
and
iing Change Account Charge
Sales
Locationt
Stores 1950-51 1951
1950
16
ALL REPORTING STORES
- 1
14
20
Small
8
1
19
Medium
10
15
+- 65
15
Large
l
13
17
ALABAMA
- 16
14
Medium
45
16
13
- 13
Birmingham Area
16
3
23
- 19
+ l8
18
6
16
FLORIDA
18
Small
+ 18
16
5
+ 24
Jacksonville Area
18
3
17
GEORGIA .
4
---—
-LOUISIANA
12
9
5
Medium
16
3
- 9
13
Lafayette-Iberla Area 3
- 12
12
15
18
TENNESSEE
20
+ 33
29
Medium
—
—
3
Nashville Area
—
—
3
Instalment Receivables f
End of Year
As percent of
Percent Annual Instal
Change
ment Sales
1950-St 1951 1950
34
+ 16
35
14
+ 20
13
40
+ 16
37
-- 27
- 27
- 27
+ 18
+ 18
+ 17
+ 20
+ 20
+ 22
+ 37
37
37
37
13
13
14
—
43
*3
77
37
—
—
—
67
67
67
15
15
16
—
43
43
77
25
—
Inventories
End of Tear
Percent TurnChange Over*
_ 1950-51 1951
+ 8
3.4
1
2.0
+ 206
3.4
+
*.5
+ 0
3.3
+ 1
3.3
36
*.5
-
-
12
11
-
16
+ 3
+ 18
+ 22
+ 21
+
+ 55
+ 36
1.8
1.7
1.5
2.1
2.5
2.9
2.4
6.5
6.4
7.2
Por footnotes, see appendix
15
HOUSEHOLD APPLIAN CE STORES
Consumer resistance in 1951» following the
fear-buying scramble of 1950, was reflected in
the 8-percent reduction in total sales at re
porting D istrict household appliance stores.
These stores in the U. S. as a whole, however,
sustained an 11-percent decline in total house
hold appliance store sales*
Three of the six D istrict states for which
data are available experienced a falling off in
consumer buying in 1951.Georgians and Louisian
ians both bought 8 percent less in 1951 than
they did in 195° and Tennesseans bought 13 per
cent less. On the positive side, consumers
spent 7 percent and one percent more at Alabama
and Florida household appliance stores respec
tively.
Total cash purchases in 1951 at these dur
able goods stores compared more favorably with
a year earlier than either charge or Instalment
sales. For the D istrict, cash sales equaled the
195° figure but charge and instalment sales
dropped 2 percent and 13 percent, respectively.
D istrict household appliance sto*e charge
accountsrecelvable outstanding at the end of
1951 were up 5 percent from the
comparable
figure a year earlier, but instalment receiv
ables fe ll 10 percent in the same time span.
Charge and Instalment aaaounts were outstand
ing for slightly longer periods in 1951*
After suffering from an oversupply of mer
chandise during most of 1951* D istrict house
hold appliance stores ended the year with in
ventories down 5 percent dollarwlse. Since
prices rose about 7»5 percent in the interim
on a physical unit basis, stocks were down
even more.
SALES AT HOUSEHOLD APPLIANCE STORES
TOTAL SALES 1941=100
PERCENT
200
1941
Pag* 16
TOTAL SALES
1943
1945
1947
1949
1951
HOUSEHOLD APPLIANCE STORES
SALES
BY T Y P E
OF T R A N S A C T I O N
1
CoM
By
Mo.
Percent change. 195C-1951
Report-*
C lassification
irnr
and
Charge Instal
Location*
Stores Total Cash Account ment
8 - 0 - 2 - 13
ALL REPORTING STORES
241
Snail
- 20 - 11
18
19
- 5 -- 29
Medium
10
- 8 - 0
15
- 7 + 3
Large
- 1 - 15
7
Not classified by Size 206
- 7
+ 9 + 6 - 15
+ 7 + 11 + 12 + 4
81
ALABAMA
Birmingham Area
— —
75 + 10 —
18
+ 1 + 17 - 1 - 26
FLORIDA
4 + 3’ + 9 - 2 - 3
Medium
- 17
- 8
- 11 - 52
Miami Area
83
Tampa-St. Pete*Area
- 7 - 4 - 7 - 14
GEORGIA
9*
15
- 89 +- 102 ++ 49 -- 26
Small
3
Medium
3 + 2 - 19 + 10 + 7
Atlanta Area
5 -“ 108 - 16 ++ 16 -- 118
Atlanta
3
- 17
m
8 - 9 - 4 - 10
LOUISIANA
5
Small
3 - 11 - 17 - 17 - 6
Baton Rouge
- 16 - 10 - 14
3
—
—
—
- 30
MISSISSIPPI
36
10
TENNESSEE
13
3
- 9 - 18
percent of Tot til Sales
Charge
Cash Account Instalment
1??1 1??0 1951 1950 1951 1?5°
26 24 21 20 53 56
30 34 23 23 *7 *3
28 27
30 43
43
29
48
28
26
24 22
IS
22 18 10 62 68
26
18
17 13 12 69 71
-- -- — — —
—
40 41 UP. 13 18
46 40
46 48 11 12
*••3
46 42 44 41 10
43 41 52 33 25 26
24
11 60 65
27
46 26 32
22 22 13
52
19 24 25 23 56 53
23 25 10 8 67 67
29 31 14 11 57 5$
18
*3 44
19
17 19 26 28 57 53
21 20 29 28 50 52
—
28
—
27
—
38
~
37
—
3*
36
HOUSEHOLD APPLIANCE STORES
ACCOUNTS RECEIVABLE AND I NVENTORIES
CM
H\
1
** Increase of over 100 percent*
Instalment Receivables
End of Year
Per
As Percent of
Percent Annual Instal
Change ment Sales
1950
1950-51 1951
- 10 30
29
22
+ 3 26
31
29
+ 5 40
40
-- 10
15
26
27
+ 8 *7
*5
—
—
—
-—
..
*»«l
—
—
—
-—
—
—
22
- 16 21
1
♦ o
1
+ 10 35
3*
28
- 7 28
- 9 48
*7
- 10 42
42
+ 4 42
38
—
—
-- 20 40
40
—55
M
CCM
1
Charge Accounts
Receivable,
End of Tear
By
As Percent of
Classificationt
No.
and
Report Percent Annual Charge
Locationt
ing Change Account Sales
Stores 1950-51 1951
14
ALL REPORTING STORES
151
♦ 5 15
. Small
10
16
9
17
Medium
12
11
11
- 3 22
20
Large
6
+
9
Not Classified by Size 124
+ 11
9
9
*• .
81
ALABAMA
11
21
—
-—
Birmingham Area
75
14
18
14
FLORIDA
5
..
—
—
Small
Medium
43
12
12
- 3
8
Tampa-St. Pete. Area
- 18
13
15
+ 18
12
GEORGIA
11
95
Small
- 4
5
19
17
Medium
14
+ 14
3
13
Atlanta Area
28
5
++ 225 26
Atlanta
16
3
15
LOUISIANA
28
6
8
7
Small
- 42
3
13
9
—
—
—
36
MISSISSIPPI
10
Baton Rouge Area
8
5
4
20
TENNESSEE
20
- 7
Inventories
End of Year
Percent Turn
Change over*
1950-51 1951
-- 25 3.2
- 0 3.3
*t.3
- 3 3.5
- 7 2.9
+ 5 3.0
+17
2.5
+ 8 4.1
- 38 6.7
+ 23 **.3
+ 40
.7
- 24 3.6
- 1 2.6
- 3 3.2
- 2 3.1
+- 11
15 4.2
2.5
+ 21 1.8
+ 27
+ 9 2 *7
JEW ELRY STO RES
After having declined steadily from 1946
through 1949, total sales at reporting D istrict
Jewelry stores began a rising trend which con
tinued through 1951* when consumers bought 5percent more than they did in the preceding
year. D istrict Jewelry stores fared consider
ably better than similar re ta il outlets through
out the U. S ., whose 1951 sales stabilized at
the dollar volume of a year earlier.
The increase In total sales reflects
rises in a ll three modes of purchases*, cash
sales climbed 6 percent, charge account sales ^
percent, and instalment buying 4 percent in
1931, compared to 195°• Georgians spent 4 per
cent more and Louisianians one percent more,the
only two states for which data are available.
D istrict consumers in 1951 used the cash,
charge, and Instalment methods of buying In the
same proportions as in 1950* cash sales accounted for 29 percent of the total; charge ac
count sales, 17 percent; and Instalment sales,
the remaining 54 percent. The relative amounts
bought on credit in these two years were moder
ately higher than in 1949 and 1948*
Charge account indebtedness outstanding
at the end of 1951 was 9 percent greater than a
year earlier; Instalment receivables, ln°turn,
were up 8 percent. Charge account lia b ilitie s
in 1951 were being settled at approximately the
same rate as in 1950 whereas the speed of pay
ment on Instalment lia b ilitie s decreased.
Inventories were down 8 percent in Dec
ember 1951* from the year-ago figure. Jewelry
stores reported a stocks turnover ratio of 1.8
In 1951* compared to 1.6 In 1949, the year of
the last Retail Credit Survey*
SALES AT JEWELRY STORES
TOTAL SALES 1941 = 100
PERCENT -----------------------------------------------------------
1941
Page 18
1943
1945
1947
1949
1951
JEWELRY STORES
SALES BY TYP E
OF T R A N S A C T I O N
NO.
percent change* l95oBy
PercentCharge
of iotsX
Classlflcatlont
Report
and
lng
Charge Instal Cash Account
ment 1951 1&5<* 19?1 1950
Locatlont
Stores Total Cash Account
26 + 5 + 6 + 7
29 48
ALL
REPORTING
STORES
17
4*
4 46
17 30
22 32
Small
11 —
- 2 - 7 + 5
0
—
—
—
Medium
3 ----—
--- -- ---- --Large
2
Not Classified by Size 10 + 2 + 3 + 0
+ 1 24 23 11 11
— —
ALABAMA
3 --8 + 4 + 6 + 9
GEORGIA
+ 1 28 28 20 19
FLORIDA
—- —
3 —
LOUISIANA
+ 4 28 29 18 19
3 + 1 + 0 - 4
MISSISSIPPI
3 --— —
— —
TENNESSEE
5 —
Sales
Instalment
1951
54
54 22
22
—
-- —
65 66
52
53
52
JEWELRY STORES
ACCOUNTS RECEIVABLE AND INVENTORIES
Charg;e Accounts
Instalment Recelvablesv
Recleivable,
End of Year
End of Year
As percent or
No*
of
As Per<:ent
Report Percent Annual Charge Percent Annual Instal
ing
Change Accouni Sales Change ment Sales
1950 1950-51 1951 . 19.50_
Stores 1950-51 1951
+ 8
53
15
55
+ 9
39
50
56
52
36
+ 7
37
+ I
+---16
70
72
+*l8
1
30
31
By
Classlflcatlont
and
Locatlont
ALL REPORTING STORES
Small
Medium
Large
Not Classified by Size 7
ALABAMA
3
FLORIDA
3
GEORGIA
8
4
LOUISIANA
Small
3
MISSISSIPPI
3
TENNESSEE
5
For footnotes, see appendix.
+ 4
....
+ 10
+ 2
—
-------
49
—
—
47
—
40
38
—
39
36
—
•*
—
+ 5
—
—
+ 5
+ 16
—
—
—
49
47
—
—
—
49
78
47
70
—
—
—
--
Inventor'Les,
End of year
Peroent Turn*
Change Over*
195Q-51 1951
- 8 1.8
+- 101 1.5
2.2
+ 11 1.3
- 16
- 9
- 6
+ 1
+ 5
- 3
—
+ 2
1.9
1.7
1.6
1.8
2.5
1.5
—
2.4
page 19
AUTOMOBILE D EA LER S
The steadily expanding market for auto
mobile® since the close of World war II was
broken in 1951 as total sales slid 8 percent
below the high-mark established in 1950* Dollar
volume of sales in 1951> nevertheless* was the
second highest attained in the last decade*
Total sales of automobile dealers in the
D istrict would have declined further had i t not
been for a 2-percent rise in Instalment sales*
The increasing Importance of long-term financ
ing la indicated by the larger proportion of
total automobile sales made on the instalment
plan,148 percent in 1951» compared with 44 per
cent in 1950* This advance was offset by a de
cline in the cash ratio*
Georgia was the only D istrict state ex
periencing an increase in total automobile
sales* a moderate 3-percent rise reflected
gains of 23 percent in charge account and 11
percent in Instalment sales*
Receivables for automobile dealers within
the Sixth D istrict moved inversely with their
related sales* Thus* despite a 6-percent de
cline in charge account sales, charge reeeivables were up one percent in 1951.compared with
1950. On the other hand, consumer Instalment
indebtedness fe ll 9 percent in the face of a
mild Increase in instalment sales*
Automobile dealers ended 1951 with inven
tories up 13 percent from the preceding year's
level one of the three increases registered in
the nine lines of trade surveyed* Merchandise
turned over approximately 10 times during 1951
compared to 10.8 in 1949*
SALES OF AUTOMOBILE DEALERS
TOTAL SALES, 1941 = 100
PERCENT ---------------------------------------------------------------------
1941
Page to
1943
1945
1947
1949
1951
AUTOMOBILE DEALERS
SALES
By
rto.
Classlficatlont
Report
and
ing
Stores
Locationt
ALL REPORTING STORES 95
Small
9
Medium
13
Large
64
Not Classified by Size 9
ALABAMA
17
Large
13
Birmingham Area
8
Outside Birmingham
6
Dothan Area
4
4
Mobile Area
Montgomery Area
5
FLORIDA
15
10
Large
Miami Area
Miami and Miami Beac i 76
Orlando Area
5
Orlando
3
Pensacola Area
Tanpa-St.Pete.Area
43
GEORGIA
Atlanta Area
South Georgia Area
LOUISIANA
Large
Alexandria-Lake
Charles Area
Lafayette-Iberia Are*i
MISSISSIPPI
Small
Medium
Large
Jackson Area
Meridian Area
TENNESSEE
Large
Chattanooga Area
Outside Chattanooga
Knoxville Area
Nashville Area
Nashville
Tri-Cities Area
.
•
•
-
8
1585
5
7
7
07
- 103
- 16
“ 109
.
- 13
14
+ 9
+ 12
25
- 10
-
-
+ 3
+ 5
- 7
- 23
5
3
10
3
34
45
+ 2
- 12
* 7
- id7
- 4
•
+ 176
3
3
TYPE
OF
TRANSACTION
Charge Instal
Total Cash Account ment
11
45
8
7
13
9
5
3
3
7
BY
percent of Total Sales
Charge
Account Instalment
Cash
Percent Change, 1$
- 13
- 25
-- 13
15
+ 3
- 12
- 13
-- 13
12
+- 16
45
- 6
+ 15
-- 36
- 15
- 13
- 13
- 15
-+ 20
13
+ 9
+ 2
+ t
- 17
+ 3
- 5
- 2
1
- 1
- 0
- 43
- 1
- 20
- 20
- 29
-+ 311
+ 1
- 8
- 9
- 12
- 13
- 8
- 8
- 14
- 16
- 20
- 28
- 8
- 14
- 8
+ 23
+ 26
+ 16
++ 88
+ 7
+ 9
+ 21
+ 26
++ 25
46
- 13
+ 11
+ 14
- 9
- 1
+ 3
- 7
+ 12
—
+ 10
+ 6
- 11
+ 14
+ 3
+ 5
- 6§
+ 6
+ 12
- 6
- 13
+ 6
——
- 8
+- 137
- 8
- 18
+ 16
+ 6
+ 7
+ 2
- 1
+ 1
- 13
—
- 33 -58 +
10 131 -
22
31
30
13
24
19
76
10
13
18
14
. . .
-
“
*
-
—
- - -
—— —
1??1
36
25
40
3X
18
27
27
24
25
52
24
—
43
47
47
4?
42
51
44
39
32
52
46
46
1950
40
32
40
4l
17
29
29
26
27
32
28
~
49
53
57
59
46
--56
43
44
38
55
49
49
1??1 1??0
16
16
18
15
12
13
16
16
10 11
18
19
18
19
21
18
16
8
11
19 —
17
—
13 14
12
13
12 14
10 12
12 14
12
— 15
—
13 13
13 11
8
20 166
17
18
17
35
--
39
15
28
27
11
19
17
51
50
5*
44
38
32
12
21
22
53
52
5Z
48
21
15
14
20
21
47
52
53
2l
28
—
52
18
- -
22
—
20
27
15
18
20
—
17
23
14
18
12
14
20
21
14
16
- -
1951
48
57
47
47
72
55
55
57
59
37
57
—
44
41
41
43
46
37
-43
48
60
28
35
36
43
—
65
45
58
68
66
69
29
29
31
38
28
23
28 20
1?5°
44
53
48
43
72
52
3*
53
P
60
55
—
37
34
29
29
40
29
44
45
56
29
34
34
—
41
—
65
39
54
70
64
27
27
29
36
67
25
19
For footnotes, see appendix.
Page 21
AUTOMOBILE DEALERS
ACCOUNTS
By
No*
Classlflcatlont
and
Report
ing
Locatlont
Stores
ALL REPORTING STORES 74
Small
7
Medium
7
Large
Not Classified by Size n
ALABAMA
23
Small
3
Medium
3
Large
15
Birmingham Area
Outside Birmingham
1
Dothan Area
4
Mobile Area
4
Montgomery Area
Montgomery
45
FLORIDA
19
Large
13
Miami Area
Miami and Miami Beach
Orlando Area
5
Orlando
3
Pensacola Area
3
Tampa-St.Pete* Area
4
16
GEORGIA
Large
13
Atlanta Area
5
Atlanta
I
South Georgia Area
LOUISIANA
pge
Larg
x8
Alexandria-Lake
Charles Area
Lafayette-Iberia Area 35
MISSISSIPPI
11
Small
3
Medium
Large
35
Jackson Area
5
Jackson
3
Meridian Area
Meridian
45
TENNESSEE
16
Large
12
Chattanooga Area
5
Outside Chattanooga
3
Knoxville Area
3
Nashville Area
7
Nashville
3
Tri-Cities Area
3
** Increase of over 100 percent
For footnotes, see appendix.
Page 22
RECEIVABLE
A ND
Charge Accounts
Receivable,
End of Year
As Percent of
Percent Annual Charge
Change Account Sales
1950
1950-51 1951
10
+ 1
9
- 4
14
17
14
13
++ l5
9
9
+ 24
16
13
8
- 13
3
—
—
----8
- 13
3
- 21
76
7
- 23
9
+ 3 11
13
—
—
+ 8
11
89
+ 5 10
8
11
14
++ 7b
9
10
+ 8
■~9
-—
3
13
- 9
3
- 9
13
12
- 3
15
10
- 8
13
- 11
11
13
11
- 9
13
- 8
11
13
—
—
12
+ 26
10
- 22
11
15
+ 28
12
12
109
+ 34
- 16
12
15
+ 44
12
9
16
+ 29
13
+ 20
10
8
+ 20
10
8
12
15
-- 8
21
17
+ 29
13
89
11
+ 30
"—
INVENTORIES
- - -
*- 78
- 11
* 11
- 54
---
—
— -
. . .
--
—
- - -
- -
--
- - -
- -
- -
Inventories»
End of Year
Percent Turn
Change over*
1950-51 1251 _
+ 13 10.0
4.4
++ 65 10.0
7.6
+ 14
+ 16
8.9
+ 4 10.0
- 11
4.5
9.1
+ 7 10.1
+ 7
9.6
+ 5 11.9
+ 5 10.6
+- 94
9.0
7.0
+
3
::
- 36
4.5
14 + 33 10.4
+ 32 11.0
15
4 + 6 12.4
+ 2
15 + 96 3.2.9
8.7
8.1
+ 93n
07 OX
+ 53 10.0
1 + 4 12.4
1 + 5 12.3
- 0 14.1
- 11 18.7
1 + 28 10.2
2
- 5
9.**
* 6
1
9.3
- 8
7.6
1
4 22 13.9
8.0
1 + 18
+ 1
3.1
34
7.0
+
7
0 + 35 10.7
1
0
7.6
+ 6
5.3
8.4
1 + 44
8.4
2
+ 25
+ 18
2
9.1
+ 20
2
9.2
8.0
8 + 1
7.0
16
+ 6
+ 61
6.8
2
+ 10
6.8
1 + 14
8.5
—— + 15
Instalment Receivables,
End of Year
As Percent of
Percent Annual Instal
Change ment Sales
1950
.1950-51 _«41
4
85
+- 299 10
- o
5
45
- 89
5
11
+ 1
13
4
4
- 14
--—
—
-...
-- 20
4
3
4
- 18
34
-+ 171
115
19
- 56
- 56
. . .
- 34
. 9
- 22
- 23
—
- 12
**
- 27
- 67
*7
25
-- 26
+ 20
+ 22
+ 21
+ 21
+ 18
+ 32
+
» *.-
..
12
13
43
0
** ■§
0
0
. .
. .
0
2
1
1
-1
6
30
1
1
1
2
2
10
19
3
1
——
. .
-—
art*
-
. .
V
AUTOMOBILE T IRE AND A C C E SSO R Y STO RES
Greater cash and charge account sales were
reported for D istrict automobile tire and ac
cessory stores* The 10-and 6-percent Increases
respectively, however, were not enough to coun
terbalance an 8-percent decline in instalment
sales; consequently, total sales in 1951 sta
bilized at the 1950 level. For the nation as a
whole, Department of Commerce estimates showed
sales up 6 percent.
An Inverse relationship appears between
store sixes and percentage changes in total
sales* The largest gain - 20 percent - was made
by small auto tire and accessory outlets;medium
sized stores reported sales up 12 percent; and
large stores, 7 percent. Stores unclassified
as to size, however, suffered a 6 -percent de
cline in total sales*
Plus and minus signs were evenly distribu
ted throughout the D istrict states. Alabama,
Louisiana, and Mississippi showed gains of 11
percent ,2 percent,and 20 percent, respectively,
in comparison with reductions of 5 percent in
Florida and Tennessee and 6 percent in Georgia*
Changes in movement of instalment sales
and total sales appeared to be directly re*
lated in the six states; a rise In Instalment
sales was associated with a rise in total
sales and vice-versa*
All reporting cities and all areas ex
cept the Atlanta and Chattanooga areas noted
higher sales in 1951 than In 1950. The largest
increase - 20 percent occurred in the area
outside Chattanooga*
Stocks of D istrict stores at the end of
1951 were 11 percent lower dollarwise than at
the end of 1950. Auto tire and accessory
stores operated during 1951 with a merchan
dise turnover rate averaging 5 *9 *
SALES AT AUTOMOBILE TIRE AND
ACCESSORY STORES
PERCENT
TOTAL SALES, 1941 =100
200
100
1941
1943
1945
1947
1949
1951
Page 23
AUTOMOBILE T IRE AND ACCESSORY STORES
SALES
BY
TYPE
OF
TRANSACTION
No. || Percent Change. 1950-1951 II
By
Report
Classificationt
and
ing
Charge Instal
Locationf
Stores Total Cash Account ment
ALL REPORTING STORES 107 + 0 + 10 + 6 - 8
Small
4 + .20 + 27 + 94 + 3
Medium
+ 12 + 10 + 13 + 18
17
Large
30
+
7 + 15 + 6 - 3
Not Classified by
Size
56
- 6 + 3 + 2
- 11
10
ALABAMA
+
28
+
11
+
+
17
Large'
6
+ 21 + 21 + 36 + 209
Birmingham Area
8
+ 9 + 14 + 36 + 6
Outside Birmingham
5 + 20 + 18 + 36 + 20
_
FLORIDA
+ 10 + 10
Large
4 + 35 + 12 + 9 -- 111
Pensacola Area
—
--3 + 1 —
GEORGIA
18
6
- 14
+ 3
Large
11
- 3 + 5 ++ 17
- 13
17
Atlanta Area
10
4 - 1 + 17
- 15
Outside Atlanta
8
- 4 - 1 + 17
-1 5
LOUISIANA
13if ++ 2 + 3 ++ 22 ++ 280
Large
7 - 3
Not Classified by
Size
8
- 1 + 6 + 2
- 5
New Orleans Area
76 ++ 14 - 3 ++ 22 + 1 1
New Orleans
- 3
+ 5
20
+
20
MISSISSIPPI
6
63 ++ 1160
Medium
4 ++ 11 + 9 ++ 22
Jackson Area
4 + 12 + 9 + 31 + 1 8
.. 5
TENNESSEE
-1 3
134
+ 9 - 2
Large
- 20
- 7 + 10 - 3
10 + l l - 5
Chattanooga Area
- 23
5 + 20
Outside Chattanooga
+
3k
3
+
19
+19
Knoxville
4 + 6 + 14 - 1 + 9
For footnotes, see appendix.
24
DigitizedPage
for FRASER
Percent of Total Sales
Charge
Account
Instalment
Cash
l?f 0
1951 1950
1951
8
48 53
43
39
9
70 67
2
3
27 31
68
28
66
29
4
5
16
16
49 46
35 38
64 67
2
34 31
2
27 26
70
3
3
71
68
68
27 27
5
5
4
3
69
71
27 26
8
63 63 ,
29 30
7
0
0
30
65 70
35 27
29
0
70
1
73
-- — -- —
— —
31 28
5* 60
15 12
20
29 26
17
51 57
28
26
21
45 51
29
26
21
29 28
*5 51
20
20
43 45
35 35
24
28
29
43 *5
31
8
8
38 36
54 56
21
30 32
21
47
49
44 42
31 33
25 25
2
2
1
1
97 97
70
6
72
23 22
7
18
8
73 75
17
9
20
20
47
33 29
51
20
35 41
17
*5 42
32 27
43 50
256 23
76
19 19
5
26 24
41 44
33 32
AUTOMOBILE TIRE AND ACCESSORY STORES
ACCOUNTS RECEIVABLE AND INVENTORIES
Charge Accounts
Receivable,
End of Year
By
No.
As Percent of
Classlficatlont
and
Report Percent Annual Charge
ing Change Account Sales
Locationt
Stores 1950-51 1951
1950
100
+** 8
ALL REPORTING STORES
15
15
Small
24
21
3
Medium
24
22
+ 21
11
Large
16
16
+
7
2
2
Mot Classified by Size
56
+ 19
46
ALABAMA
13
.- . . 0 --36
-, Medium
5
Large
6
- 2
38
53
8
- 2 38
Birmingham Area
53
Outside Birmingham
4
- 2 38
53
FLORIDA
19
35
47
154
Large
-- 20
37
51
Pensacola Area
—
—
3
—
**
20
GEORGIA
11
17
••
20
Large
11
11
••
20
10
11
Atlanta Area
- 2
LOUISIANA
134
Large
129
129
3
8
2
Not Classified by Size
+ 21
1
12
12
New Orleans Area
76
- 3
12
12
New Orleans
- 3
18
6
14
MISSISSIPPI
+ 23
4
Medium
30
32
+ 13
4
Jackson Area
+ 18
32
29
TENNESSEE
21
-. . .29
15
15
-—
Medium
3
4
21
Large
- 29
15
Chattanooga Area
18
16
+. . . 6
5
—
Outside Chattanooga
3
Knoxville Area
14
24
- 41
Knoxville
45
14
24
- *1
" ** Increase of over 100 percent.
For footnotes, see appendix.
Instalment Receivables,
End of Year
As Percent of
Percent Annual Instal
ment Sales
Change
1550
1950-51 1951
51
- 17
51
36
+ 3
29
26
25
+ 17
-- 113 **3
5°
62
56
43
49
.- . . 4
—
+ 4
34
39
44
- 6
49
28
+ 6
32
46
- 25
55
38
- 11
43
—
—
—
58
51
-- 25
23
^9
55
62
- 29
52
44
- 12
51
+ 15
47
52
44
- 18
50
- 3
45
52
44
- 9
51
26
+ 0
29
24
24
+ 14
+ 10
-—27
- 28
- 32
+ 2.
+ 2
15
45
49
52
—
35
35
16
53
—
55
59
-«•
38
38
Inventories,
End of Year
Percent Turn
Change over*
1950-51 1951
- 11 5.9
- 8 3.9
+ 1 3.3
6 1.0
- 6 4.3
5.8
+-- 885 3.2
5.8
5*2
+- 63 4.8
- 18 6.5
- 18 6.0
- 16 8.0
- 8 6.5
- 4 7.0
- 8 7.1
- 27 8.1
- 3 9.8
- 37 7.6
- 29 8.9
- 30 8.7
++ §9 4.1
2.9
+ 7 2.7
- 26 5.8
- 2 3.2
- 6 7.0
- 8 6.4
- 18 3.5
- 12 5.9
- 13 6.1
Page
25
APPENDIX
FOOTNOTES
* Inventory turnover Is computed by dividing the average of the inventories for the end of
195° and the end of 1951 into 1951 total sales. Inventories are reported at sales prices*
t Size Classification by Kind of Business
Size Classification
sales in thousands of dollars)
Kind of Business
Large
Medium
Small
1. Automobile
500
Under
2J0
250 to
500
2. Automobile Tire & Accessor? n
50
50 to
100
100
3 • Department
"
1,000
1,000 to
10,000
10,000
4. Furniture
200 to
"
200
500
500
5 • Hardware
n
100
100 to
500
500
250
250
6* Household Appliance
"
100
100 to
500
500
7. Jewelry
"
100
100 to
8 . Men's Clothing
1,000
1,000
"
250
250 to
9* Women*s Apparel
"
250
1,000
250 to
1,000
(1951
&
n
n Over
n t
ti it
t
«n 11
t n
it it
11 tt
Consolidated reports for two or more stores were not classified by size. D istrict and state
totals may, therefore, include data from stores not included in the size groups. Data for
state totals may also include stores classified by size but not shown In the tables.Where
no classification is shown, data were withheld to prevent disclosure of the operations of
Individual stores.
t Area totals Include not only data from dties and parts of areas shown but may also include
data from reports received from cities for which Individual city data must be withheld to
prevent disclosure of Individual store operations* In some cases, boundaries or areas do
not coincide with state lines* Counties Included In areas are listed below*
Birmingham Area. Alabama: Bibb, Blount, chll- Orlando Area, Florida t Brevard, Citrus, Flag*
ton, Clay, Colbert, Coosa, Cullman, Fayette, ier, Hernando, Lake, Marion, Orange, Osceola,
Franklin, Greene, Jefferson, Lamar, Lawrence, Seminole, Sumter, Volusia.
Marlon,Marshall, Morgan, Pickens,Saint Clair,
Shelby, Talladega, Tuscaloosa, Walker,Winston Pensacola Area, Florida: Bay, Calhoun, Escam
bia, Franklin,
dadsden,
Dothan Area, Alabama: Barbour, Coffee,Coving- Liberty,
Okaloosa,
SantaGulf,
Rosa,Holmes.,
WaltonJackson,
Washton, Dale, Geneva, Henry, Houston.
ington.
Anniston-Gadsden Area, Alabama; Calhoun,Chero- St. Petersburg Area, Florida; Charlotte, De
lee, Cleburne, Etowah, Randolph.
Soto, GladesT Hardee,Highlands, Hillsborough,
Lee, Manatee,Pasco, Pinellas, Polk, Sarasota*
Mobile Area, Alabama: Baldwin,Choctaw, Clarke,
"Conecuh, Escambia, Marengo, Mobile, Monroe, Atlanta Area, Georgla; Banks, Barrow, Bartow,
Sumter, Washington, Wilcox{Mississippi: Jack- Butts, Carroll, Cherokee, Clarke, Clayton,
son.
Cobb,Coweta, Dawson, De Kalb,Douglas, Fannin,
Fayette, Floyd, Forsyth, Franklin, Fulton,
Montgomery Area, Alabama: Autauga, Bullock, Gilmer, Gordon, Greene, Gwinnett, Habersham,
Butler, Crenshaw,Dallas, Elmore,Hale,Lowndes, Hall,Haralson, Heard, Henry, Jackson, Jasper,
Macon, Montgomery, Perry, Pike, Tallapoosa. Lamar, Lumpkin, Madison, Meriwether, Monroe,
Morgan,Murray, Newton,Oconee, Pickens, PauldJacksonville Area, Florida: Alachua, Baker, ing, Pike, Polk, Putnam, Rabun, Rockdale,
Bradford, Clay, Columbia, Duval, Dixie, Gil- Spalding, Stephens, Towns,Union,Upson,Walton,
Christ, Hamilton, Jefferson, Lafayette, Leon, White, Whitfield.
Levy* Madison, Nassau, Putnam, S t. Johns, Su
wannee ,faylor Union, Wakulla.
Columbus Area, Georgia: Chattahoochee, Harris,
Muscogee, Talbot, Troup; Alabama: Chambers,
Miami Area, Florida: Broward, Collier, Dade, Lee, Russell.
Hendry, Indian River, Martin,Monroe, Okeecho
bee, Palm Beach, S t. Lucie.
Augusta Area, Georgia: Burke, Columbia,Elbert,
26
Digitized forPage
FRASER
t
(Continued)
Glascock, Hancock, Hart, Jefferson, Jenkins,
Lincoln, McDuffie, Oglethorpe, Richmond,
Taliaferro, Warren, Washington, Wilkes.
Macon Area, Georgia: Baldwin, Ben H ill, Bibb,
ileckley, Crawford, Crisp, Dodge, Dooly,
Emanuel, Houston, Jefferson Davis, Johnson,
Jones, Laurens, Lee, Macon, Marlon, Mont
gomery, Peach, Pulaski, Quitman, Randolph,
Schley, Stewart, Sumter, Taylor, Telfair,
Terrell, Toombs, Treutlen, Turner, Twiggs,
Webster, Wheeler, Wilcox, Wilkinson*
Savannah Area, Georgia: Bryan, Bullock, Caaden, Candler, Chatham, Effingham, Evans,
Glynn, Liberty, Long, McIntosh, Screven,
Tattnal, Wayne.
South Georgia Area, Georgia: Appling, Atklnson, bacon,Baker7 Berrien, Brantley, Brooks,
Calhoun, Charlton, clay, Clinch, Coffee,
Colquitt, Cook, Decatur, Dougherty, Early,
Echols,Grady, Irwin,Lanier, Lowndes, Miller,
Mitchell, Fierce, Seminole, Thomas, T ift,
Ware, Worth.
Alexandria-Lake Charles Area, Louisiana: Avoyelles, Evangeline, Rapides, Vernon, Allen,
Beauregard, Calcasieu, Cameron, Jefferson
Davis.
Baton Rouge Area, Louisiana: Ascension, East
Baton houge, East Feliciana, Iberville, Liv
ingston, Polnte Coupee, Saint Helena, West
Baton Rouge, West Feliciana.
Lafayette-Iberia-Houma Area, Louisiana:Acadia
Assumption, LaFourche, Terrebonne,Iberia,La
fayette, saint Landry, Saint Martin, Saint
Mary, Vermillion.
New Orleans Area, Louisiana: jefferson,0rleans, Plaquemines, Saint Bernard, Saint
Charles, Saint James,Saint John the Baptist,
Saint Tammany, Tangipahoa, Washington; Mis
sissippi: Hancock, Harrison.
Jackson Area, Mississippi:Copiah, Hinds, Jef
ferson Davis, Lawrence, Leake,Lincoln, Madi
son, Marion, Pike, Rankin, Scott, Simpson,
Walthall, Yazoo.
Hattlesburg-Laurel-Merldlan Area.Mississippi:
Clarke, CovfngtonT Forest, George, Greene,
Jasper, Jones, Kemper, Lamar, Lauderdale,
Neshoba, Newton, Pearl River, Perry, Smith,
Stone, Wayne.
Natchez Area, Mississippi: Adams,AmiteClai
borne , Franklin, Issaquena,
Jefferson,
Sharkey, Warren, Wilkinson*
Chattanooga Area, Tennessee: Bradley,Bledsoe,
FranklinT Grundy, Hamilton,MarIon, McMlnn,
Meigs, Monroe, Polk, Rhea, Sequatchie, Van
Buren;Alabama: DeKalb, Jackson;Georgla: Ca
toosa, Chattooga, Dade, Walker*
Knoxville Area. Tennessee; Anderson, Blount,
Campbell , claiDorne, Cocke Cumberland,Grain
ger, Hamblen, Hancock, Jefferson, Knox, Lou
don, Morgan, Roane, Scott, Sevier, Union*
Nashville Area, Tennessee; Bedford, Cannon,
Cheatham, Clay, coffee, Davidson, DeKalb,
Dickson, Fentress, Giles, Hickman, Houston,
Humphreys,Jackson, Lawrence, Lewis, Lincoln,
Macon, Marshall, Maury, Montgomery, Moore,
Overton, Perry, Pickett, Putnam, Robertson,
Rutherford,Smith, Stewart, Sumner,Trousdale,
Warren, Wayne, White, Williamson, Wilson}
Alabama: Lauderdale, Limestone, Madison.
Tri-Cities Area, Tennessee: Carter, Greene.
Hawkins, Johnson, Sullivan,Unlcoi, Washing
ton.
Page 27
Property of
The Committee on the History ol
the Federal Reserve System
R E T A IL C R E D IT SU R VE Y FOR 1 9 4 8
SIXTH F E D E R A L R ES ER V E D IS TR IC T
R ESEAR CH D EP A R TM EN T
F E D E R A L R E S ER V E B A N K O F A T L A N T A
CONTENTS
Page
Summary of R etail C redit in 1 9 4 8
1
Department Stores
4
Men*s Clothing Stores
7
Women's Apparel S tores
9
Furniture S tores
11
Hardware Stores
14
Household Appliance S tores
16
Jew elry S tores
18
Automobile D ealers
20
Automobile T ire and A cc e ss o ry S tores
F o o tn o tes
23
26
RETAIL C R ED IT S U R V E Y F O R
Consum ers in the Sixth F e d e ra l R eserv e D is
1 9 4
*
in c r e a s e s in 1 9 4 8 a s they did in 1 9 4 7 , but th e y 'S till
tr ic t bought more from cred it-g ran tin g re ta ile rs during
led the oth er typ es of b u sin ess in ra te s o f in c r e a s e .
1 9 4 8 than e v e r b efore, but th ey paid c a s h for a sm al
U ntil
le r proportion of w hat they bought than in 1 9 4 7 .
sto re s did a b u sin e ss which g reatly e x c e e d e d th at of
th e corresp on d ing months of 1 9 4 7 and d e sp ite the
The
g re a te r p art of th eir in cre a se d p u rch ases w as made
p o ssib le by c re d it buying.
O ctob er
1948,
D istrict
household
ap p lian ce
At the end of 1 9 4 8 , th ey
s a le s letdown during the la tte r part of 1 9 4 8 , s a l e s
owed 16 p ercen t more on open cred it, or charge a c
for the en tire y ear e x c e e d e d th o se of 1 9 4 7 by 16 per
c o u n ts , than a t the end of 1 9 4 7 , and 42 p ercen t more
c e n t.
on in stalm en t a c c o u n ts .
s a le s e x c e e d e d th o se of 1 9 4 7 by 1 9 p ercen t.
T h ey w ere a ls o taking lon g
e r to s e ttle both th eir ch arge and in stalm en t d e b ts .
T h e 1 9 4 8 s a le s of m en 's cloth in g s to re s about
T h e s e c o n clu sio n s are the resu lt of th is b an k 's
sev en th annual re ta il c red it survey.
Automobile d e a le rs reported th at th eir 194 8
equaled th o se of 1 9 4 7 .
A pproxim ately
Women’s ap parel s to re s end
ed the y ear with a 5-p ercen t annual in c r e a s e , in co n
6 ,0 0 0 m erch an ts, in nine different lin es of b u s in e s s ,
tr a s t with a 3 -p e rce n t d eclin e reported for 1 9 4 6 —1 9 4 7 .
lo c a te d in A labam a, F lo rid a , G eorgia, the southern
D epartm ent As to re s a l e s in 1 9 4 8 , 6 p ercen t g re a te r
h a lv e s of L o u isia n a and M ississip p i, and the e a ste rn
than in 1 9 4 7 , s e t a new re co rd .
tw o-thirds of T e n n e s s e e were asked to co -o p e ra te in
from 1 9 4 7 a t the autom obile tire and a c c e s s o r y s to re s
the su rv ey .
more than o ffs e t th e d e clin e reported in 1 9 4 7 ; and the
Although the re ta il s a le s in the lin es of
A 9*p ercen t gain
b u s in e s s su rveyed amount to approxim ately only o n e-
7-p e rc e n t gain in hardware sto re s a le s con tinu ed the
third of a ll re ta il s a le s made in the a re a , th e se lin e s
record of uninterruped y early s a l e s in c r e a s e s begun
in clu d e
in 1 9 4 2 .
a ll s to re s th at gran t cred it in su b sta n tia l
am ounts, e x c e p t building m aterial d e a le rs .
T h e su rvey show s th a t, d esp ite a sm aller pro-
Of the nine lin e s of re ta il b u sin ess su rveyed ,
only two — furniture and jew elry — reported s a l e s low
e r in 1 9 4 8 than in 1 9 4 7 .
F o r furniture s to r e s , it w as
more c a s h exp en d itu res in 1 9 4 8 than in 1 9 4 7 — an e s
tim ated 3 “p ercen t g ain .
th e fir s t annual d e c r e a s e in s a l e s s in c e the su rv ey
Autom obile d e a le rs w ere th e
only re ta ile r s w hose c a s h s a l e s in c r e a s e d .
w as s ta rte d in 1 9 4 2 , but even with a 2-p ercen t d e
In every
o th er lin e of b u s in e s s , c a s h s a le s w ere down from
c lin e from 1 9 4 7 , they were estim ated to be 6 8 p ercen t
g re a te r than in 1941*
portiQn of c a s h p u rch a se s , con su m ers a c tu a lly made
1 9 4 7 to 1 9 4 8 e x c e p t in the wom en’s ap p arel s to re s
F o r the jew elry s to r e s , the
where the in c r e a s e w as only one p e rc e n t. C onsu m ers
d e c r e a s e o f 2 p ercen t from 1 9 4 7 marked the seco n d
bought so much more on c re d it, h ow ever, in the nine
co n s e c u tiv e y e a r-to -y e a r d e clin e in s a l e s .
lin e s of b u s in e s s com bined, th at the proportion of
N eith er autom obile d e a le rs nor household ap
p u rch a se s made on a c a s h b a s is fell from 4 7 p ercen t
p lia n ce s to re s reported su ch strikin g ra te s of s a le s
of to ta l s a l e s in 1 9 4 7 to 4 4 p ercen t in 1948*
S A L E S CHANGES, 1 9 4 7 - 1 9 4 8
Sixth District Credit-Granting Retail Stores
Kind of Business
Department
Men's clothing
Women's Apparel
Furniture
No.
Report
ing
Stores
116
Percent Change
Total
+
39
30
151
Cash
Charge
Account
Instal
ment
Percent of Total Sales
Charge
Cash
Account
Instalment
1948
194Y
1948
1947
1948
1947
6
-
1
+ 11
+ 39
48
51
44
43
8
6
0
- 13
+ 10
+ 12
39
45
56
51
5
4
+ 1
- 14
+
8
-
5
44
45
56
54
—
I
-
8
+
1
14
16
8
9
78
75
-
31
25
36
64
61
5
3
35
17
18
58
47
+
5
-
2
7
Hardware
125
+
+ 13
+ 71
Household Appliance
169
+ 16
- 18
8
+
6
+ 44
4
Jewelry
57
-
2
- 12
+
6
35
39
35
33
30
28
Automobile Dealers
73
+ 19
+ 13
+ 19
+ 43
57
60
25
25
18
15
Auto. Tire and A ccessory
91
+
-
3
+
1
+ 66
34
38
44
47
22
15
+
3
+ 14
+ 22
44
47
35
34
21
19
Weighted Average
851
9
+ 10
+
E x c e p t for th e furniture s to r e s , all ty p es of
m erch an ts had g re a te r ch arg e a cco u n t or open c re d it
s a l e s in 1 9 4 8 .
A ll ty p es of b u sin e ss reported g re a te r
in sta lm e n t s a l e s .
c e n t a t the end of 1 9 4 7 .
In som e lin e s of b u s in e s s ,
no lengthening o f open cred it term s w as ob servab le*
Some m erch an ts sold in stalm en t paper during
B e c a u s e furniture s to re s a c co u n t
the y ear arid thus in stalm en t a c co u n ts w ere red u ced .
for such a larg e proportion of in stalm en t s a le s among
T h is p ra c tic e w as m ost p rev alen t among th e autom o
the nine d ifferent lin es of b u s in e s s , how ever, the
b ile d e a le rs , 95 p ercen t of whom rep orted su ch s a l e s
nominal in c r e a s e in in stalm en t s a le s a t th e se s to re s
during
lim ited the ra te of gain in to ta l in stalm en t c re d it.
s to r e s , 8 9 p ercen t of w hich sold in stalm en t p aper.
In stalm ent s a l e s for a ll th e typ es o f b u s in e s s e s com
L ittle s a le of paper w as reported by the departm ent,
ap parel, and furniture s to r e s .
bined in cre a se d from only 19 p ercen t o f to tal s a le s
in 1 9 4 7 to 21 p e rce n t in 1 9 4 8 .
1948;
and
among th e
household ap p lian ce
D etailed tab u latio n s for e a ch line o f b u s in e s s
Some slow ing down in c o lle c tio n s w as evid en t
are included in the follow ing p a g e s .
C h an ges are
during 1948*
B oth ch arg e a c co u n ts and in stalm en t
a c co u n ts in cre a se d more than the c re d it s a le s in
shown in s a le s and cre d it item s by s iz e o f b u s in e s s
c re a s e d .
ad dition, w herever a s u fficie n t number of s to re s re
A s a group, the m erchants found a t the end
for the D istrict a s a whole and for e a c h s ta te .
In
o f 1 9 4 8 th at th eir cu sto m ers s till owed them for 2 0
ported to make the re le a s e of d ata p o s sib le without
p ercen t of a ll the good s th ey had bought on open c r e
rev ealin g the op eratio n s of sin g le firm s, d ata h ave
d it during the y e a r, com pared with 19 p ercen t a t the
been shown by c i ti e s and a r e a s .
end of 1 9 4 7 .
e x c lu s io n of any a re a or c ity from a p a rticu la r tabu
T h eir in stalm en t cu sto m ers s till owed
The in clu sio n or
for 2 9 p ercen t o f the good s they had bought on the
lation is en tirely the re s u lt of the sm all number o f
in stalm en t plan during 1948* com pared with 25 per
rep orts re c e iv e d from th at c ity or a r e a .
Kind of Business
CHANGES IN ACCOUNTS R E C E IV A B L E , 1 9 4 7 -1948
Sixth D istrict Credit-Granting Retail Stores
Charge Accounts Receivable,
Instalment R eceivab les,
End of Year
End of Year
No.
A s Percent
A s Percent
Report
Percent
Percent
of Annual Charge
of Annual Instalment
ing
Change,
Change,
Account Sales
Account Sales
Stores
1947 -4 9 4 8
1947*4948
1948
1947
1947
1948
103
+ 16
26
25
+ 59
50
Men's Clothing
38
+ 14
25
24
+ 14
3?
35
Women's Apparel
29
+ 10
25
+ 37
60
42
+ 21
+ 73
46
21
21
Department
44
Furniture
142
+ 11
25
24
20
Hardware
114
+ 17
14
14
Household Appliance
163
46
+ 10
12
12
+ 64
17
15
+ 22
31
26
+ 15
38
36
Automobile Dealers
70
+ 19
9
9
+ 27
6
7
Auto. Tire and A ccessory
85
+ 13
13
12
+ 93
36
32
790
+ 16
20
19
+ 42
29
25
Jewelry
Weighted Average
38
S A L E O F IN STA LM EN T P A P E R , 1 9 4 7 - 1 9 4 8
Sixth D istrict Credit-Granting Retail Stores
Kind of Business
Department
No.
Report
ing
Stores
50
Men's Clothing
8
Women's Apparel
2
Stores Selling Instalment Paper
Paper Sold as
R eceivables as
Percent of Percent of tostal- Percent of Instal
of
Reporting
, ment Sales
ment Sales
Stores
1947
1948
1948
1947
3
3
64
8
23
--—
—
0
—
—
-0
Furniture
119
11
35
Hardware
27
37
13
150
89
26
Stores Not Selling Instal
ment Paper
R eceivatues as
Percent
Reporting P ercent of Instal*
ment sa le s
Stores
1947
.1948
92
49
46
100
36
35
100
60
42
38
15
9
45
42
89
45
12
10
63
31
33
9
11
39
30
36
Jewelry
29
0
—
24
--
—
8
--
100
38
Automobile Dealers
61
95
62
64
6
6
5
28
25
Auto. Tire and A ccessory
78
10
30
41
29
51
90
37
31
Household Appliance
Page 2
Federal Reserve Bank of Atlanta
Remearch Department
P E R C E N T CHANGE IN COMBINED T O T A L S A L E S O F
NINE L IN E S O F BU SIN ESS, 1 9 4 7 - 1 9 4 8
W EIGHTED
R E L A T IV E IM PO RTA N CE O F S A L E S
B Y S T A T E AND A R EA
BY
State
Alabama
Florida
Georgia
Louisiana1
M ississippi1
T en n essee1
No.
Reporting
Stores
144
126
240
89
89
112
Percent
Change
+
+
+
+
+
+
12
8
10
13
4
7
+
+
+
+
+
0
11
20
13
12
A rea2
Alabama:
Anniston-Gadsden ( l )
Birmingham (2)
Dothan (3)
Mobile (4)
Montgomery (5)
Florida:
Jacksonville (6)
Miami (7)
Orlando (8)
P ensacola (9)
Tampa*6L Petersburg (10)
7
57
11
24
23
26
27
21
20
30
+ 2
+ 10
+ 5
+ 19
+ 8
A rea2
Georgia:
Atlanta (11)
Augusta (12)
Columbus (13)
Macon (14)
Savannah (15)
South Georgia (16)
Louisiana:
Alexandria*Lake Charles (17)
Baton Rouge (18)
Lafayette-Iberia (19)
New Orleans (20)
Mississippi:
Jackson (21)
Hattiesburg*Laure 1-Meridian (22)
Natchez (23)
Tennessee:
Chattanooga (24)
Knoxville (25)
Nashville (26)
Tri-Qities (27)
No.
Reporting
Stores
Percent
Change
60
15
23
14
12
23
+ 9
+ 8
+ 8
+ 6
+ 7
+ 10
13
13
19
46
+
+
+
+
17
13
14
12
16
30
3
f
+
4
6
•
31
28
43
24
+ 3
+ 5
+ 13
+ 9
...3
1That part within the Sixth Federal Reserve D istrict
2Boundaries of areas do not necessarily coincide with state lines* For counties included in areas, see page 26.
3Coverage too limited for estimating purposes.
NOTE. —The estimated percent change in total sales was arrived at by weighting the percent change for each line
of business according to the importance of the particular line in total sales of all nine lines of business throughout
the United States.
Retail Credit Survey, 1948
Page 3
DEPARTMENT STORES
S a le s in 1 9 4 8 a t the D is tr ic t cred it-g ran tin g
departm ent s to re s were g reat enough to push them 6
in the la tte r y ear.
and
charge
C ash s a l e s d eclin ed one p ercen t
a cco u n t
s a le s
in cre a se d
11
p ercen t.
p ercen t above th o se of 1 9 4 7 , thus continuing the re
cord
of uninterrupted y e a r-to -y e a r s a le s
first es ta b lis h e d in 1 9 3 9 .
in c r e a s e s
S a le s in 1 9 4 8 were 2 .7
tim es what th ey were in 1 9 4 1 .
parts of the D is tr ic t w as n oted , how ever.
Th e Alabam a s to re s with a 13-p ercen t in c r e a s e show
ed the g r e a te s t g ain .
s to re s ,
s a le s
w ere
The ra te s of in cre a se in ch arg e a c co u n ts
re ce iv a b le of 16 p ercen t and in in stalm en t r e c e iv a
A d iv e rsity o f s a l e s e x p e rie n ce throughout the
variou s
C o lle c tio n s were som ew hat slow er in 1 9 4 8 than
in 1 9 4 7 .
A t the L o u isia n a reporting
up 9 p e rce n t;
a t the G eorgia
s to r e s , 5 p ercen t; a t both th e F lo rid a and T e n n e s s e e
s to r e s , 4 p ercen t; and at the s to re s in M is sis sip p i,
3 p ercen t.
T h e trend toward g re a te r cred it buying w hich
b les of 5 9 p ercen t e x c e e d e d the ra te s of in c r e a s e in
the corresponding ty p es o f s a l e s .
A s a re s u lt, the
s to re s found th at a t the end of 1 9 4 8 th eir cu sto m ers
owed them for 2 6 p ercen t of the good s th ey had bought
on a ch arge a cco u n t b a sis in 1 9 4 8 , com pared with 25
p ercen t at the end of 1 9 4 7 .
T h eir in stalm en t r e c e iv a
b le s amounted to 5 0 p ercen t of 1 9 4 8 in stalm en t s a l e s ,
com pared with a 4 4 -p e rc e n t ratio in 1 9 4 7 .
C o lle ctio n s
on ch arg e
a c co u n ts during 1 9 4 8 ,
a cco rd in g to monthly re p o rts, av erag ed 4 6 p e rce n t of
began in 1945 con tinu ed into 1 9 4 8 . A s a group, the
s to re s sold 4 8 p ercen t of th eir goods for c a s h in
the a c co u n ts ou tstan d in g a t th e end of the p reced in g
1 9 4 8 , com pared with 51 p ercen t in 1 9 4 7 . E v e n though
m onths, com pared with 51 p ercen t in 1 9 4 7 .
in stalm en t s a le s in c re a s e d 3 9 p e rce n t from 1 9 4 7 to
1948* th ey acco u n ted for only 8 p e rc e n t'o f to ta l s a l e s
lectio n ra tio s for in stalm en t re c e iv a b le s av erag ed 2 0
The c o l
in 1 9 4 8 and 2 8 in 1 9 4 7 .
300
3 00
200
f200
100
100
1941
1942
Page 4
1943
1944
1945
1946
1947
1948
Federal Reserve Bank of Atlanta
Research Department
DEPARTMENT STORES
SALES BY TYPE OF TRANSACTION
By
.
Classification
and
Location
A LL REPORTING STORES
Small
Medium
Large
ALABAMA
Small
Medium
Birmingham Area
Birmingham
Outside Birmingham
Dothan Area
Mobile Area
Mobile
Montgomery Area
FLORIDA
Small
Medium
Jacksonville Area
Jacksonville
Miami Area
Miami
Orlando Area
Orlando ,
Outside Orlando
Tampa
GEORGIA
Small
Medium
Atlanta Area
Atlanta
Outside Atlanta
Augusta
Columbus Area
Columbus
Macon
Savannah
South Georgia
LOUISIANA
Small
Medium
Baton Rouge Area
Lafayette*Iberia Area
New Orleans Area
New Orleans
Outside New Orleans (L a .)
MISSISSIPPI
Small
Medium
Jack son Area
Jackson
Meridian Area
Meridian
Outside Meridian
TENNESSEE
Small
Medium
Chattanooga Area
Chattanooga
Outside Chattanooga
Knoxville
Nashville Area
Nashville
Outside Nashville (A la.)
Tri*Cities Area
Bristol
Outside Bristol
Total
Cash
Charge
Account
1 16
1*6
51
6
+ 6
+ 2
+ 4
+ 10
+
1
6
3
1
31
12
7
+ 13
+ 2
+ 5
+
-
2
5
3
+
+
+
+
+
+
+
7
4
3
8
5
3
3
+ 16
+ 17
+ 4
+ 3
+
+ 10
+ 7
-
2
2
8
+
+
+
+
0
+
-
4
+
13
3
10
+
+
A
4
3
3
4
4
3
3
5
21
7
II
a
3
5
3
A
3
3
3
4
17
9
6
4
3
13
8
3
16
9
7
4
3
9
3
7
10
6
3
3
3
9
6
3
4
3
3
II
+ 39
II
+ 12
7
+ 41
15 ’+ 37
25 -• + 4 9
12
+ 23
10
+ 28
32
+ 43
33
:+ 44
19 + 22
--—
12
+ 44
9
48
48
52
42
51
52
55
45
44
46
38
53
43
42
37
50
8
6
10
5
6
6
8
5
45
52
43
51^
57
47
49
49
54
—
51
-59
47
45
48
50
50
41
—
51
—
33
43
41
45
8
3
9
6
2
8
44
44
36
—
49
9
9
II
-~
I
33
13
7
7
10
—
0
»
8
69
57
70
21
38
21
21
36
20
62
62
76
-50
-—
67
67
81
-53
—
—
23
22
7
2t
20
r
14
9
14
15
16
17
46
.41
41
48
—
48
~
54
65
53
65
+ 73
- 3
- 14
- 2
+ 8
r 2
+ 3
+ 36
+ 9
+ 37 :
+ 1
+ 1
+ II
+ 5
- 2
+ 18
- 0
+ 4
- 6
- 6
+ 4
*-— -*
- 7
——
— -
+ II
+ II
+ 21
——
+ 4
------
+ 25
+ 25
+ 52
------
—
—
49
—
—
—
—
—
—
+
+
+
5
5
3
+
-
1
5
2
+ 7
+ 13
+ 1
+ 33
+ 65
+ 49
46
46
| 53
48
51
56
47
52
34
47
48
35
7
2
13
5
1
9
+ 6
+ 6
+ 4
+ 0
+ 14
+ 13
2
+ 7
+ 8
+ 9
+ 5
+ 7
+ 10
+ 4
+ 8
+ 8
+ 6
+
+
+
+ 8
+ 8
+ 16
- 10
+ 9
+
+
+
+
+
!
!
i
j
i
44
44
46
54
52
45
45
52
58
55
52
51
53
28
33
51
51
47
30
34
4
5
1
18
15
4
4
1
12
II
-
2
3
8
6
9
4
--
52
- -0
0
+
2
47
43
2
3
+
+
+
1
1
3
+ 7
+ 12
+ 12
+ 6
48
—
54
46
48
53
48
34
35
46
32
36
67
46
46
41
34
47
47
64
33
45
45
■ 58
JIB
57
46
39
38
55
47
54
63
63
44
52
48
50
37
51
50
47
70
51
53
47
47
46
49
53
24
48
43
43
-37
57
-63
-
•
Instal
ment
4
8
4
-----+ 3
- 0
+
-
o
?
- II
1
4
- II
- 28
+
+
+
2
5
4
-
+
+
+
+
+
+
+
+
2
+
- 4
——
+ 1
——
+
3
-—
+ 2
+ 3
+ 8
+ 7
- 3
-
6
18
Percent of Total Sales
Charge
Instalment
Cash
Account
1^48 1947 1948 1947 1948 1947
Percent Cnange. 1947-1948
Mo.
Report*
ing
Stores
3
6
5
5
5
4
2
3
+ 3
- 6
- 13
- 4
- 4
- 18
3
10
2
1
2
13
7
4
- 6
-
8
20
20
33
56
58
—— .
*
- —-0 . —-
+
- 16
+ 28
+ 5
+ 27
-~—
±
6
IS
+ 13
+ 18
±
+ 50
+ 26
+ 26
- 0
+ 12
+ /4
+ 13
+ 12 + 73
+ 1*1 + 48
+ 13
+ 48
+ II
+ 48
1
+ 22
.+ 4 7
♦
+
+
+
+ 65
+
+
8
7
7
5
5
8
+
+
+
+ II
+ 9
+ 8
-—+ 5
■—
+
9
11
82
+ 13
1
+ 17
+ 85
+ 61
+ 61
- 4
——
- 4
47
51
42
46
I 51
i
66
43
42
35
42
52
39
34
34
46
51
41
47
32
48
49
- 46
64
45
•—
42
••
34
T-
—
56
55
53
--
-53
—
—
33
58
42
—
...
42
49
59
60
40
33
45
46
44
45
48
53
20
45
42
41
56
60
'
I
i
—
>
to
20
.
__
10
7
10
12
13 .
12
-1
8
20
II
0
10
II
1
0
9
9
1
6
4
\
7
3
3
10:
1
5
2
2
16
1
II
6
21
6
5
0
4
19
4
2
2
1
1
3
"S
1. 0
12 10
7
4
8
5
9
6
•Increase of over 10 0 percent.
Fo r footnotes* see page 26*
Retail Credit survey, 1948
Page 5
D E PA R T M E N T STO RES
ACCOUNTS R E C E IV A B L E
By
Classification
and
Location
A LL REPORTING STORES
Small
Medium
Large
ALABAMA
Small
Medium
Birmingham Area
Birmingham
Outside Birmingham
Mobile Area
Montgomery Area
FLORIDA
Small
Medium
Jacksonville Area
Orlando Area
GEORGIA
Small
Medium
Atlanta Area
Atlanta
Outside Atlanta
South Georgia Area
LOUISIANA
Small
Medium
New Orleans Area
New Orleans
Outside New Orleans
MISSISSIPPI
Small
Medium
Jackson Area
Meridian Area
Outside Meridian
TENNESSEE
Small
Medium
Chattanooga Area
Chattanooga
Knoxville
Nashville Area
Nashville
Tri-C ities Area
No.
Report
ing
Stores
Charge Accounts Receivable,
End of Year
As Percent of
Percent
Annual Charge
Change,
Account Sales
1947-4948
1947
1948
108
45
39
6
30
12
6
+
+
+
+
Instalment Receivables,
End of Year
As Percent of
Percent
Annual Instal
Change,
ment Sales
1947-4948
1947
1948
+
+
+
+
+
+
+
59
20
65
57
87
31
54
50
45
48
53
44
43
42
47
24
18
24
25
19
24
26
22
19
23
43
38
42
34
35
35
41
42
2
13
17
24
24
14
22
22
23
23
17
24
20
+ S3
+ 85
+ 31
40
40
39
31
31
36
+ 73
5M
47
6
2
6
22
21
22
22
20
22
+ 49
+ 8
+ 52
36
29
36
36
23
37
26
17
26
18
+ 59
+ 13
36
46
36
37
16
7
6
+ 9
+ 2
+ 9
+ 20
+ 4
28
23
24
28
21
23
+ 1
- 1
+ 86
52
27
56
57
45
42
7
3
4
4
+ 9
+ 10
+ 11
- 8
29
29
20
21
29
29
22
27
+
+
4
4
52
52
61
61
-
6
3?
28
16
8
6
+ 24
+ 18
+ 15
26
13
25
24
13
23
+ 81
+ 20
+ 49
58
50
57
41
44
47
13
8
5
+ 24
+ 24
+ 63
26
27
9
24
25
6
+ 78
+ 78
+ 0
59
59
57
41
41
38
13
8
5
3
8
6
+
+
+
+
+
+
16
II
16
20
13
19
21
22
21
21
23
20
+ 62
31
32
+ 62
31
32
18
24
23
18
24
24
+ *53
*
33
32
22
17
7
9
+ II
+ 1
+ II
25
14
27
24
14
26
+ 79
+ 20
+ 98
47
51
48
28
43
48
44
+
+
+
+
+
+
30
32
21
26
25
19.
27
29
22
25
25
16
+
+
+
+
-
35
35
38
53
53
45
30
35
43
44
44
44
16
13
12
20
26
20
24
27
+ 34
+ 7
+ 17
7
*4
3
3
3
+
+
+
+
10
3
7
+
+
+
3
4
6
3
3
9
6
3
13
13
6
12
10
23
31
1
62
96
96
3
♦increase of over lo o percent.
F o r footnotes, see page 26*
Page 6
Federal Reserve Bank of Atlanta
Research Department
MEN’S CLOTHING STORES
T o ta l
s a le s
at
a ll
reporting
D istrict men’s
s iz e s to r e s .
A s a group, the s to re s sold only 3 9 Pe *~
clo th in g s to re s w ere approxim ately the sam e in 1 9 4 8
c e n t of their good s for c a sh l a s t y e a r, com pared with
a s in 1 9 4 7 . In c r e a s e s in A labam a and L o u isia n a were
4 9 p ercent in. 1 9 4 7 .
enough to o ffset d e clin e s at the reporting s to re s in
sold 65 p ercen t of th eir goods on a c a s h b a s i s .
th e oth er s t a te s o f the D is tric t,
d it s a l e s , m ost of them on a ch arg e a c co u n t b a s i s , in
T h e large s to re s as
In 1945 the reporting s to re s had
C re
a group, h ow ever, reported g re a te r s a ie s l a s t year
c re a s e d from 19 4 7 to 1 9 4 8 , with ch arg e a c co u n t s a l e s
than in 1 9 4 7 .
up 1 0 p ercen t and in stalm en t s a le s up 12 p e rc e n t.
S a le s a t the reporting s to re s through
ou t the D is tr ic t for 1 9 4 8 were 2 0 8 p ercen t of what
th ey w ere in 1 9 4 1 .
T h e in c r e a s e in ch arge a cco u n t s a l e s brought
S a le s e x p e rie n ce a t the D is tr ic t s to re s w as the
a c co u n ts re c e iv a b le a t the end of 1 9 4 8 to a le v e l 14
sam e a s th at of s to r e s throughout the n ation , a c co rd
p ercen t g reater than a t the end of 1 9 4 7 .
in g to D epartm ent of Com m erce fig u res. S a le s in 1 9 4 8
little ch an ge in the ratio of a c co u n ts re c e iv a b le to
throughout the country are estim ated a t $ 2 ,4 1 3 ,0 0 0 ,0 0 0
cre d it s a le s during the y e a r, how ever.
com pared with
th ere
$2, 4 1 4 ,0 0 0 ,OO&in
1947.
T h ere w as
F u rth erm o re,
w as little d ifferen ce betw een the c re d it e x
p e rie n ce o f the s to re s in the d ifferent s iz e gro u p s.
C a s h s a l e s d eclin ed from 1 9 4 7 to 1 9 4 8 in a ll
On an a v e ra g e , a t the end of 1 9 4 8 , ch arg e a c c o u n ts
s t a t e s in clu din g th o se where to ta l s a le s in cre a se d .
re c e iv a b le amounted to 25 p ercen t of ch arg e a c co u n t
T h e d e clin e o f 14 p ercen t in c a s h s a le s ac the large
s a l e s in 1 9 4 8 , com pared with a 2 4 -p e rc e n t figure for
s to r e s w as g re a te r than a t eith er the sm all or medium-
1947.
1300
300
SALES
AT
MEN'S
CLOTHING
STORES
TOTAL SALES 1941 = 100
2
0
0
*
100
200
1 0 0
1941
Retail Credit Survey, 1948
Page 7
MEN’S
CLOTHING
STORES
SALES
BY TYPE
OF TRANSACTION
By
1
Classification
and
Location
A LL REPORTING STORES
Small
Medium
Large
ALABAMA
Small
Mo.
Report
ing
Stores
3
6
7
4
5
5
3
MISSISSIPPI
2
9
TENNESSEE
Small
Medium
5
4
3
3
Nashville Area
T ri-C ities Area
- 16
- 21
- 15
0
9
LOUISIANA
New Orleans
- 5
- 15
- 3
+
+
3
Atlanta Area
Atlanta
Outside Atlanta
4
4
——
7
4
8
GEORGIA
Small
13
- II
- 13
- 14
- 12
- 14
- 7
- 5
- i!
- 8
- 12
- 4
- 12
- 8
- 12
——- 14
- 13
- 14
-—
+
5
Tampa-St* Petersburg Area
Cash
0
3
3
2
4
FLORIDA
Small
Medium
Total
39
23
10
4
5
Birmingham Area
Outside Birmingham
Percent Cnange, 1947-1948
-
6
+ 18
+ 25
- 2
1
- 2
+
-
+
+
3
I
1
1
0
6
+ 3 - 2
+ to “■
Charge
Account
Instal
ment
Percent of Total Sales
Charge
Instalment
Cash
Account
1^48 1947 1948 1947 1948 1947
+ 10
+ 10
+ 9
+ II
+ 12
+ 3
-----+ 6
39
54
49
31
45
58
55
36
56
32
51
66
2Z
45
61
5
14
0
3
4
14
0
3
+ 9
+ 18
+ 24
+ 24
+ 26
+ 5
29
36
36
32
35
27
35
32
29
30
+ 26
+ 51
-----------
18
25
36
43
23
32
21
29
20
30
61
46
57
38
68
75
65
38
30
41
32
25
35
0
0
0
0
0
0
64
40
36
0
43
6f
42
60
39
55
35
2
4
0
2
4
60
56
3
2
51
+ i6
------
62
70
59
60
+
+
8
II
+ 2
+ 14
38
57
+
7
37
+
2
+ 2
- —+ 16
52
56
44
41
4
3
+ 16
+ 16
------
+ 14
+ 14
------
35
33
—
41
40
55
56
4
5
—
61
62
—
—
—
4
4
—
+ 6
- 10
-
41
41
46
44
54
29
49
28
30
+ 16
+ 21
+ 15
+ 8
+ 1
9
9
-----+————
16
41
40
47
43
59
37
—
53
37
b
5
23
5
28
5
20
MEN’S CLOTHING STORES
ACCOUNTS RECEIV A BLE
By
C lassification
and
Location
.
A LL REPORTING STORES
Small
Medium
Large
ALABAMA
Small
Birmingham Area
Birmingham
FLORIDA
Small
GEORGIA
Small
Atlanta Area
Outside Atlanta
LOUISIANA
New Orleans
MISSISSIPPI
TENNESSEE
Small
Medium
Nashville Area
No.
Report
ing
Stores
38
23
9
4
7
4
5
4
7
5
9
6
7
5
5
3
2
9
5
M
4
Charge Accounts Receivable,
End of Year
As Percent of
Percent
• Annual Charge
Change,
Account Sales
1947-1948
+ 14
+ 14
+ 16
+ 13
+ 21
+ 27
+ 36
+ 33
+ 24
+ 40
+ 9
+ 12
+ 9
+ 7
+ 21
+ 20
-----+ 11
- 12
+ 14
+ 7
Instalment Receivables,
End of Year
As Percent of
Percent
Annual Instal
Change,
ment Sales
1948
1947
1947-4948
1948
1947
25
23
24
25
29
27
26
26
22
21
25
20
25
17
24
24
24
22
23
25
26
25
20
24
20
18
25
20
25
17
23
23
—
24
30
23
26
+ 14
+- —25
- 18
+ 36
+ 28
+ 36
+ 52
------
36
46
——
25
42
54
42
31
35
38
—
33
39
45
39
31
—
4
+
27
28
27
28
24
24
—
25
29
25
28
2
8
2
8
- 19
- 19
-----+ 23
+-----23
+ 21
—
—
50
50
“—
50
—
29
30
29
30
34
34
~
37
37
—
37
For footnotes* se e page 2 6 * '
Page 8
Federal Reserve Bank of Atlanta
Research Department
WOMEN’S APPAREL STORES
B u s in e s s
improved for the D istrict women’s
ap p arel s to re s in 1948*
S a le s in 1 9 4 7 had been b e
m erch an dise for c a s h .
In 1 9 4 8 the proportion w as re
duced to 4 4 p ercen t.
T h e p recen tag e of c a s h s a l e s
low th o se o f 1 9 4 6 but the 5"Pe rc e n t in c re a s e from
made in 1 9 4 8 , how ever, g reatly e x c e e d e d the 3 3 per
1 9 4 7 to 1 9 4 8 brought s a le s up to a le v e l 1 0 8 p ercen t
ce n t figure for 1 9 4 1 .
g re a te r th an th at of 1 9 4 1 , the firs t y e a r for which in
form ation is a v a ila b le , and e s ta b lis h e d a new reco rd .
C om p aratively few women’s ap p arel s to re s sold
T h e exp an sion in D is tr ic t s a le s from 1 9 4 7 to 1 9 4 8 ,
good s on th e in stalm en t plan and th ey w ere th e sm all
h ow ever, w as som ew hat le s s than the in c r e a s e of 9
s to r e s , th o se with annual s a l e s of l e s s than one
p ercen t rep orted for women’s apparel s to re s through
m illion d o lla rs .
out the n atio n .
l e s s in 1 9 4 8 than in 1 9 4 7 .
In stalm ent s a le s of th e se film s w ere
C a s h s a l e s of a ll but th e m edium -size s to re s —
E a c h group of s to re s reported g reater a c c o u n ts
th o se w ith annual s a l e s of one to 10 million d o llars —
re c e iv a b le a t th e end of 1 9 4 8 than a t th e end of 1 9 4 7 .
w ere g re a te r in 1 9 4 8 than in 1 9 4 7 , but th ere w as a
C harge a c co u n ts re c e iv a b le w ere up 1 0 p e rce n t for
much g re a te r growth in ch arge a cco u n t s a l e s .
For
the s to re s a s a group, but the exp an sion a t the sm all
th e D is tric t a s a w h ole, ch arge acco u n t s a le s in
s to re s amounted to 16 p ercen t.
c r e a s e d 8 p ercen t and acco u n ted for 5 6 p ercen t of
to ta l s a l e s in 1 9 4 8 , com pared with 5 4 p ercen t in 1 9 4 7 .
c e iv a b le a t the end of 1 9 4 8 amounted to 2 5 p e rce n t of
pharge a c co u n t s a l e s made during th e p reced in g y e a r,
A s in a ll oth er lin e s of b u s in e s s su rv ey ed , the
com pared with a ra tio of 24 p ercen t in 1 9 4 7 . T h is
ra tio varied little from s ta te to s ta te . The ra tio for
wom en’s ap parel s to r e s made a sm aller proportion of
the women’ s ap p arel s to r e s in 1 9 4 8 w as ap p roxim ate
C h arge a c c o u n ts re
th eir s a l e s for c a s h in 1 9 4 8 than th ey h ave for s e v
ly th e sam e a s at d epartm en t, m en’ s clo th in g , and
e ra l y e a r s .
furniture s to r e s .
In 1 9 4 7 th ey had sold 45 p ercen t of th eir
300
300
1948
Retail Credit Survey, 1948
Page 9
WOMEN’S APPAREL STORES
SALES BY TYPE OF TRANSACTION
By
.
Classification
and
Location
A LL REPORTING STORES
Small
Medium
. Large
No.
Report
ing
Stores
30
15
10
3
Percent Cnange, 1947-4948
Cash
Total
+
+
+
+ 8
+ 14
+ 4
+ 8
-
5
5
0
0
44
40
49
39
45
43
51
41
- 5
+ 10
- 8
+ 16
.+ 24
+ 12
- 6
- 6
-----------
47
32
54
52
34
5
44
ALABAMA
Small
Medium
9
6
3
+ 5
+ 16
+ 0
Mobile
3
3
3
+
4
- 10
+ 15
FLORIDA
Small
+ 8
+ 24
+ 2
------
+ 40
- —-
GEORGIA
Small
9
3
+ 4
+ 10
-
+ 7
+ 27
+ 2
------
+
+ 16
+ 1
0
5
Atlanta
5
LOUISIANA
3
+
+
MISSISSIPPI
3
+ 13
+
9
TENNESSEE
4
+
-
1
6
9
0
Instal
ment
1
2
5
1
+
+
+
5
8
0
5
Charge
Account
Percent of Total Sales
Charge
Instalment
Cash
Account
1948 1947 1948 1947 1948 1947
8
-----
38
---- 2
- 2
------—
8
56
56
51
61
50
59
46
62
54
53
49
59
0
4
0
0
1
4
0
0
45
55
42
3
9
0
3
11
0
56
0
0
82
—
86
18
—
14
—
0
—
0.
37
42
38
49
63
52
62
45
0
6
37
—
38
—
63
—
62
0
6
0
—
—
39
40
61
60
0
0
39
39
61
61
0
0
0
WOMEN’S A PPA REL STORES
ACCOUNTS RECEIVABLE
By
.
C lassification1
and
Location *
ALL REPORTING STORES
Small
Medium
Large
ALABAMA
Small
Medium
Mobile
FLORIDA
GEORGIA
Small
Atlanta
LOUISIANA
MISSISSIPPI
TENNESSEE
Nashville Area
No.
Report
ing
Stores
Charge Accounts Receivable,
End of Year
As Percent of
Percent
Annual Charge
Change,
Account Sales
1947-4948
1948
Instalment Receivables,
End of Year
As Percent of
Percent
Annual Instal
Change,
ment Sales
1947
1947-4948
1948
1947
29
15
10
3
+ 10
+
+ 10
+
\6
II
25
24
27
24
24
23
26
24
+ 37
+ 37
60
60
42
42
9
6
3
+ 18
+ 26
+ 14
26
25
27
26
25
26
+ 42
+ 42
64
64
42
42
26
26
+ 18
+ 18
47
47
39
39
—
—
64
42
3
+ 17
2
9
3
+ 10
+ 35
25
31
5
+ 10
**
24
29
—
3
+ 17
25
24
4
+
4
26
25
5
+
7
26
25
2
+ 42
Fo r footnotes, see page 26*
Page 10
Federal Reserve Bank of Atlanta
Research Department
FURNITURE STORES
A fter s i x
y ears
of uninterrupted y ear-to -y ear
in stalm en t s a le s
were lo w est a t the sm all s to r e s .
s a l e s in c r e a s e s , furniture s to re s throughout the D is
During 1 9 4 8 , furniture s to re s sold 14 p ercen t o£
tr ic t reported th at, a s a group, their s a le s during
1 9 4 8 were s lig h tly l e s s than during 1 9 4 7 .
e r part of the
2 -p ercen t
The g re a t
d eclin e w as accou n ted for
th eir to ta l m erch an dise on a c a s h b asis*
T h e propor
tion of to ta l s a le s acco u n ted for by c a s h s a le s d e
by low er s a le s during the la s t quarter of the y ear.
clin ed a s the s iz e of the store in cre a se d .
S a le s a t the s to re s in L o u isian a and M ississip p i,
s to re s had sold 18 p ercen t of th eir good s for c a s h but
how ever,
in 1941 the proportion w as only 6 p ercen t.
w ere
e x c e p tio n s
to
the
gen eral
trend.
In 1 9 4 6 ,
Throughout the U nited S ta te s , acco rd in g to D epart
D esp ite the d eclin e in ch a rg e .a cc o u n t r a te s and
ment o f Com m erce e s tim a te s , furniture sto re s a le s
th e re la tiv e ly m oderate growth in in stalm en t s a l e s ,
w ere 5 p ercen t g re a te r in 1 9 4 8 than in 1 9 4 7 .
c h arg e a c co u n ts re c e iv a b le a t the end of 1 9 4 8 were
D e clin e s in both c a s h and ch arge a cco u n t s a le s
were' resp o n sib le for the d eclin e in to ta l s a l e s .
In
up 11 p ercen t from th o se ou tstand ing a t the end o f the
p reced in g y e a r and in stalm en t re c e iv a b le s w ere up 21
stalm en t s a l e s , which acco u n ted for 7 8 p ercen t of
p e rc e n t.
to ta l s a l e s in 1 9 4 8 , were up one p ercen t from 1 9 4 7
any o f th eir in stalm en t paper during 1 9 4 8 .
for the D is tr ic t a s a w hole.
s to re s
At the sm all s to re s ,
how ever, th ey w ere down 3 p ercen t and the tab u la
tio n s by s t a te s show th at the d e clin e s in th is type of
Only about 10 p ercen t of the s to re s sold
At th e se
in stalm en t paper so ld amounted to ap p roxi
m ately 33 p ercen t of the y e a r ’s in stalm en t s a l e s . A t
th e o th er s to r e s , in stalm en t re c e iv a b le s ou tstan d in g
s a le s w ere g r e a te s t at the sm all s to re s in e a c h s ta te
a t the end of 1 9 4 8 amounted to 45 p ercen t of the
for w hich d e c lin e s in to ta l s a l e s were rep orted.
y e a r ’ s in stalm en t s a l e s , com pared with a 3 8 -p e rc e n t
In
L o u isia n a and M ississip p i the ra te s of in c re a s e in
figure for 1 9 4 7 .
300
300
SALES AT FURNITURE
TOTAL SALES
STORES
1941=100
200*
200
100
100
1942
Retail Credit Survey, 1948
1944
1947
1948
Page 11
FURNITURE
SALES BY
TYPE OFSTORES
TRANSACTION
By
Classification
and
Location
ALL DISTRICT STORES
Small
Medium
Large
ALABAMA
Small
Medium
Large
Birmingham Area
Birmingham
Outside Birmingham
Mobile Area
Montgomery Area
Montgomery
FLORIDA
Small
Jacksonville
Miami Area
Miami
Orlando Area
Orlando
Pensacola
Tampa-St. Petersburg Area
Tampa
Outside Tampa
GEORGIA
Small
Medium
Large
Atlanta Area
Atlanta
Outside Atlanta
Augusta
Columbus Area
Columbus
Savannah
South Georgia Area
LOUISIANA
Small
Medium
Large
Lafayette~Iberia Area
New Orleans Area
New Orleans
MISSISSIPPI
Small
Meridian Area
TENNESSEE
Small
Medium
Chattanooga Area
Chattanooga
Knoxville Area
Knoxville
Outside Knoxville
Nashville Area
Nashville
Outside Nashville (Tenn.)
T ri-C ities Area
No.
Report*
ing
Stores
151
67
35
22
31
10
10
7
16
13
3
3
8
7
31
18
4
4
3
4
3
5
10
5
3
34
15
11
8
16
10
6
4
8
6
3
3
21
4
5
4
4
15
13
7
6
3
27
14
6
7
6
8
5
3
9
53
5
Percent of Total Sales
Percent Cnange, 1947-1948
!
Charge
Cash
Account Instalment
Charge Instal
ment
Account
Total Cash
1948 1947 1948 1947 1948 1947
9 78 75
+
1
14 16
8
- 8
- 52 *- 14
11 - 6 - 3
7 69 67
24 26
7
9 75 73
+ 0 - 14 + 10 + 3 16 18
9
4 86 84
10 12
+ 1 - 14 + 1 + 3
4
4 82 80
+ 13 + 2
13 16
5
- 1 - 19
3 69 66
26 31
5
18 + 32 + 1
- 37 -- 26
6 80 78
+ 13 - 5
13 16
7
6 85 82
11 16
+ 2 - 16 + 11 + 5
4
- 2 - 18 + 14 + 1
15
3
84 82
3
13
- 2 - 20 + 14 + 1
15
1
12
2
86 84
- 6 - 3 + 13 - 11
24
62
14
58
25
17
- 5 - 19 + 81 - 3
0 87 86
1
12 14
8 80 77
8
12 15
t 2 - 19 + 6 + 5
8 80 77
8
12 15
+ 1 - 19 + 5 + 5
15 66 65
17
7 - 17 + 1 - 6
17 20
13 61 61
- 10 - 9 - 12 - 1 1
13
26 26
—
— 90 87
_ 7 - 27
4
10
13
5 64 61
5
31 34
~ 21 -- 103 -- 44 +- 20
7 68 67
6
26 26
8 61
64
9
+ 20 + 29 + 29 + 14
30 28
10
57 60
+ 22 + 32 + 29 + 15
33 30 10
4
84
77
3
+ 6 - 28 - 30 + 16
13 19
_ 13 - 22 + 2
33 45 49
20
18 39
16
43 37 41
5 - 21 + 9 - 13
13 . 16 50
27
46 3!
- 10 - 5 - 19 + 1
28 27 41
- 1 - 12 + 2 + 1
7 79 77
7
16
14
- 11
1 79 75
2
- 27 + 17 - 7
19 24
6 75 73
6
+ 8 - 2 + 9 + 11
19 21
8 82 81
- 5 - 16 - 3 - 3
9
9 11
- 2 - 10 - 1 - 0
4
83 81
1
15
13
- 3 - 9 - 5 - 1
4 83 81
4
13 15
3 83 81
4
+ 0 - 13 + 17 + 2
13 16
15 74 73
+ 3 - 13 + 8 + 5
10 12 16
1 82 77
0
+- 0 - 16 - 0 + 6
18 22
1 90 84
0
10 - 41 - 8 - 4
10 15
- 3 - 16 + 13 - 3
9 78 77
12 14 10
—
— —
-----— —
+ 5 -----85 83
4
+ 9 - * 2 - 8 + 12
5
11 12
+ 26
15 50 62
0 + 2
38 23 12
+ 1 - 23 - 10 + 6
14
16 77 73
9 n
93 92
—
+ 12 - 2 ------ + 13
7 8 —
3
2 79 80
+ 6 + 10 + 50 + 5
18 18
1
9 - 17 - 35 + 13
1 90 87
9 12
91 89
—
+ 10 - 16
+ 13
9 11 —
77 66
4
5
+ 1 - 32 - 26 + 18
19 29
6
+ 5 - 23 - 26 + 20
9 75 65
19 26
2
+ 1 - 34 + 29 + 15
1 79 69
19 30
- 10
12
73 71
13
14
7
15 15
- 4 - 11 -- 251 - 1
6
70 68
5
24
27
6
- 1 - 11 + 29 - 0
74 73
5
20 22
- 22 + 2 - 30 - 20
24
70 68
27
6
5
- 22 - 4 - 31 - 20
23
72 70
26
4
5
- 9 - 23 + 3 - 4
5
68 64
5
27 31
- 15 - 30 + 25 - 7
1
1 72 66
27 33
58
+ 5 + 4 - 0 + 7
16 59 76
26 26 151
+ 5 - 8 - 21 + 9
1 79
20
23
——
—
81 78
+ 6 - 7
+ 9
22
19 29
+ 0 - 8 - 21 + 5
27
71
2
68
3
2 - 15 + 28 + 3
18 22
14
68 67
11
•Increase of over 100 percent.
For footnotes* see page 26-
Page 12
Federal Reserve Bank of Atlanta
Research Department
FURNITURE STORES
ACCOUNTS RECEIV A BLE
By
C lassification
and
Location
.
A LL DISTRICT STORES
Small
Medium
Large
ALABAMA
Small
Medium
Large
Birmingham Area
Birmingham
Outside Birmingham
Montgomery Area
Montgomery
FLORIDA
Small
Jacksonville
Miami Area
Miami
Orlando Area
Orlando
Pensacola
Tampa-St Petersburg Area
Tampa
Outside Tampa
GEORGIA
Small
Medium
Large
Atlanta Area
Atlanta
Outside Atlanta
Augusta
Columbus Area
Columbus
Savannah
LOUISIANA
Small
Medium
Large
New Orleans Area
New Orleans
MISSISSIPPI
Small
Meridian-Hattiesburg-Laijrelj Arc a*
TENNESSEE
Small
Medium
Chattanooga Area
Chattanooga
Knoxville Area
Knoxville
Outside Knoxville
Nashville Area
Nashville
Outside Nashville (TemM
Tri-C ities Area
No.
Report
ing
Stores
Charge Accounts Receivable,
End of Year
As Percent of
Percent
Annual Charge
Change,
Account Sales
1947-1948
1948
1947
142
62
33
+ II
~ 7
+ 24
+ 10
25
26
20
30
20
26
17
28
30
9
10
+ 30
+ 98
+ 52
- 2
26
26
32
20
22
16
23
22
16
13
3
7
- 0
- 7
+ 15
+ 59
+ 59
20
21
18
33
32
23
26
18
22
21
30
17
- 7
- 16
——
+ 3
+ 3
+ 35
+ 35
4* 13
- 14
- 8
- 28
18
23
—
. 43
43
20
20
38
15
14
20
20
24
—
40
40
19
19
29
18
17
23
32
15
II
6
+ 17
+ 7
+ 18
+ 17
31
27
25
40
14
+ 13
5
4
3
+ 13
+ 33
" 6
- 6
+ 13
32
-32
42
33
33
18
3
5
4
+ 11
- 37
+ 53
«■■»»
14
13
Instalment Receivables,
End of Year
As Percent of
Percent
Annual Instal
Change,
ment Sales
1947-4948
1947
46
47
47
43
38
42
40
36
21
8
21
25
20
15
II
15
24
25
13
12
12
43
46
46
42
37
40
39
34
45
44
49
43
42
36
36
39
40
40
+ 11
+ 6
52
55
44
47
+
+
+
+
+
+
-
19
7
1
21
22
36
9
3
5
55
53
35
61
61
51
49
50
38
45
51
49
57
58
44
43
44
40
28
30
23
33
+ 15
+ 2
+ 20
+ 14
45
45
44
45
39
41
41
38
40
40
34
21
21
18
—
+
+
+
+
+
+
+
18
17
18
23
8
8
15
42
44
36
50
39
43
58
36
37
30
43
38
39
49
15
24
13
--
12
38
8
—
+ 3
- 2
+ 43
+ 37
48
41
56
41
38
42
42
34
- 28
35
19
■—
+ 46
+ 46
47
47
37
37
5
+
+
3
3
38
38
21
21
+ 40
+ 39
51
50
43
44
3
+ 68
41
31
+ 37
50
42
24
13
4
+ 14
+ 9
•- — -
30
31
18
28
-~
+ 19
+ 7
+ 30
45
42
47
35
39
37
+ 11
+ 14
+ II
+ 28
+ 7
+ 2
- — -*
+ 2
+ 14
30
29
29
46
26
50
19
18
27
45
24
38
—
38
18
+
+
+
+
+
+
+
+
47
47
41
41
41
45
49
25
30
33
33
34
35
33
39
40
34
37
20
7
8
4
4
3
4
3
4
10
5
3
9
8
6
20
6
6
8
5
5
3
9
5
3
3
50
18
+
+
+
+
+
+
+
+
+
+
+
+
+
1948
15
15
15
10
35
27
34
26
5
For footnotes, see page 2 6 .
Retail Credit Survey, 1948
Page 13
HARDWARE STORES
Although
the
sm all
and
m edium -size
s to re s
throughout the D is tr ic t reported low er s a l e s in 19 4 8
than in 1 9 4 7 , in cre a se d s a le s at the larg e s to re s and
the ch ain s to r e s , w hich are not c la s s ifie d by s i z e ,
brought 1 9 4 8 s a le s for a ll D is tr ic t s to re s up 7 p ercen t
from 1 9 4 7 .
Throughout the n ation , hardw are sto re
s a l e s in cre a se d 9 p ercen t. It is extim ated th at the
D is tr ic t's hardware s to re s sold 1 2 8 p ercen t more in
1 9 4 8 than th ey did in 1941 •
th ey had m 1942 when th ey amounted to 9 p ercen t of
to ta l s a l e s .
Growth o f ch arg e a c co u n ts re c e iv a b le betw een
th e end of 1 9 4 7 and the end of 1 9 4 8 for a ll the s to re s
amounted to 1 7 p ercen t and in in stalm en t re c e iv a b le s
to 73 p ercen t.
C redit extended on ch arg e a c co u n ts
w as ou tstand ing for a com p arativ ely short tim e, a c
cording to the re p o rts.
At the end o f 1 9 4 8 a s w ell a s
th e end of 1 9 4 7 , th e se a cco u n ts amounted to only 14
A lm ost without e x c e p tio n , the s to re s reported
th at th eir c a s h s a l e s w ere low er in 1 9 4 8 than in 1 9 4 7 .
F o r the s to re s a s a group, th ey w ere down 8 p ercen t.
C harge acco u n t s a l e s were up 13 p ercen t and in s ta l
ment s a le s 17 p e rce n t.
p ercen t of annual ch arg e acco u n t s a l e s .
In stalm ent
r e c e iv a b le s at the end of 1 9 4 8 amounted to 21 perof in stalm en t s a le s in the p recedin g year.
A bout a third of the s to re s reported s a le of in
stalm ent paper to fin an cial in stitu tio n s.
P a p e r sold
in 1948 amounted to 13 p ercen t of in stalm en t s a l e s
T h e in c r e a s e in in stalm en t s a le s probably re
fle cte d
in cre a se d
household
s a le s
a p p lia n ce s .
of
su ch
m erch an dise
com pared with 9 p ercen t in 1 9 4 7 .
A t th e se s to r e s , of
as
c o u rs e , in stalm en t re c e iv a b le s a t the end of 1 9 4 8
N e v e rth e le s s, in stalm en t
w ere low er in relatio n to in stalm en t s a le s than a t the
s a le s in 1 9 4 8 amounted to only 5 p ercen t of total
s to re s th at sold no p aper — 12 p ercen t com pared with
s a l e s , and th ey did not re a ch the re la tiv e im portance
31 p ercen t.
300
300
200
200
100
1942
Page 14
1943
1944
1945
T
1946
Federal Reserve Bank of Atlanta
Research Department
SALES HARDWARE
BY TYPE OFSTORES
TRANSACTION
By
.
Classification
and
Location
A LL REPORTING STORES
Small
Medium
Large
ALABAMA
Medium
Birmingham Area
Mobile Area
FLORIDA
Small
Medium
Jacksonville Area
Miami
Tampa-St. Petersburg Area
GEORGIA
Medium
LOUISIANA
New Orleans Area
MISSISSIPPI
Medium
Meridian Area
TENNESSEE
Small
Medium
Chattanooga Area
Chattanooga Area (Tenn.)
Nashville Area
Nashville A rea (Tenn.)
Tri-C ities Area
125
13
31
6
Total
Charge
Account
+
+
+
+
71
32
47
32
*
+ 0
31
58
45
21
36
63
50
25
64
38
52
75
61
34
48
72
54
52
61
57
3.6
43
- 3♦
70
41
75
49
37
46
23
44
35
42
.4 0
43
4947
64
58
57
49
24
"41
50
30
53
51
76
59
56
51
51
50
70
47
—
33
49
34
49
66
50
66
51
1
1
0
0
+ 13
+ 5
+ 3
+ 10
- 16
- 15
- 23
- 16
+
-
+ 1
- 15
- 17
- 17
- 26.
- 30
+ 14
- 4
- 7
+
8
+
1
- 12
+ 4
- 10
- 14
- 18
- 30
+ 25
+
3
1
+
4
0
- 9
+ 14
+ 13
- 3
+ 0
+ 25
+ 10
+
2
0
+ 24
+ 18
+ 65
18
62
23
58
67
27
68
25
15
II
9
7
+
+
+
- 10
- 10
+ 22
+ 22
+ 45
+ 45
39
39
47
47
54
54
48
48
7
7
5
5
- 15
+ 19
- 3
+ 52
- 3
+
+
+
+
43
51
43
76
43
52
44
5
39
68
39
54
31
58
51
23
54
7
1
3
5
6
1
3
38
34
40
57
43
39
35
43
61
54
58
61
60
43
38
57
60
57
39
32
4
5
0
0
19
4
5
0
0
14
14
7
4
5
17
4.
3
3
3
6
II
7
9
3
3
Cash
- 8
- 13
- 12
- 13
+ 7
- 5
- 4
+ 5
- 6
- 7
- 18
+ 2
6
6
Instal
ment
Percent of Total Sales
Charge
Instalment
Cash
Account
ltf48 1947 1948 1947 1948 1947
Percent Change, 1947-1948
No.
Report
ing
Stores
8
8
1
15
5
6
- 8
+ 12
- 10
7
5
5
3
3
- 15
- 17
+ 1
- 8
+ 1
+
+
“
-
83
0
19
18
19
6
15
19
4
0
5
6
- 14
- 17
+ 7
+ 2
+ 20
-----*
*
*
15
17
16
19
9
9
0
0
32
19
47
5
4
3
4
9
2
7
15
1
3
3
2
3
3
6
4
I
~3
0
~2
0
HARDWARE STORES ^
ACCOUNTS RECEIV A BLE
By
.
C lassification 1
and
Location3
ALL REPORTING STORES
Small
Medium
Large
ALABAMA
Medium
Mobile Area
FLORIDA
Small
Medium
Miami
Tam pa-St Petersburg Area
GEORGIA
Medium
LOUISIANA
No.
Report- ■
Ing
Stores
114
6
29
6
I2_
7
5
12
10
27
50
17
16
+ 37
+100
-----+100
----------♦
*
10
33
1
—
1
—
5
5
17
16
+
3
II
15
16
16
3
6
+ 16
+ 23
17
12
-
II8
17
13
12
14
13
16
+ 41
23
II7
12
6
R etail Credit Survey, 1948
+ 36
+ 50
+
+
+
- 7
- 83
TENNESSEE
Medium
16
16
14
18
15
14
15
17
18
MISSISSIPPI
Medium
For footnotes, *•« pagfl 26*
+ 77
+ 41
21
*40
20
38
14
17
14
14
J
7
5
3
3
+ 13
+ 13
IIII
20
+
+
5
9
15
13
13
1
5
+ 12
+ 18
13
12
+-
Instalment Receivables.
End of Year
As Percent of
Percent
Annual Instal
Change,
ment Sales
1947-1948
1947
1948
21
41
23
40
+ 17
- 13
- 2
12
14
3
3
8
4
4
Chattanooga Area
Chattanooga A rea (Tenn,)
^ a s h v ille A re a
Tri-C ities A rea
Charge Accounts Receivable,
End of Year
As Percent or
Percent
Annual Charge
Change,
Account Sales
1947-1948
1947
1948
ro
25
13
13
II
IIII9
25
+ 73
*
*
1
1
__
—
32
29
13
21
13
10
26
26
15
15
+ 34
- 4
42
37
37
31
+ 24
+ 24
—- + 39
50
50
36
36
40
38
%
♦
Page 15
HOUSEHOLD APPLIANCE STORES
Although
low er
s a le s
were reported
in 1 9 4 8
clin ed
18 p e rce n t.
A s a re s u lt, the proportion of
than In 1 9 4 7 by the household ap p lian ce s to re s with
to ta l s a le s made on the in stalm en t plan in cre a se d
annual s a l e s o f l e s s than $ 2 5 0 ,0 0 0 , in c r e a s e s a t the
from 4 7 p ercen t in 1 9 4 7 to 58 p ercen t in 1 9 4 8 . A l
though the 1 9 4 8 ratio e x ce e d e d th at reported for any
la rg e r s to re s brought to ta l s a le s for the D is tric t up
16
p ercen t.
S a le s of household ap p lian ce s to re s
throughout the nation w ere up 11 p e rce n t.
The ra te
of the p recedin g s ix y e a r s , it w as s till l e s s than the
proportion of 8 4 p ercen t reported for 1 9 4 1 .
o f in c r e a s e in s a le s from 1 9 4 7 to 1 9 4 8 w as co n sid e r
About nine out of every 10 household ap p lian ce
ab ly l e s s than th e gain of 6 0 p ercen t from 1 9 4 6 to
1 9 4 7 , p rin cip ally b e c a u s e of a slowdown in s a le s b e
s to re s sold a t le a s t part of their in stalm en t paper to
ginning in O ctober 1 9 4 8 .
fin an cin g
S a le s in 1 9 4 8 , h ow ever, are
in stitu tio n s
during 1 9 4 8 lim iting the in
c r e a s e in in stalm en t re c e iv a b le s from 194 7 to 1 9 4 8 .
e stim ated to be 135 p ercen t higher than in 1 9 4 1 . The
r a te of in c r e a s e in s a l e s a t the household ap p lian ce
N e v e rth e le s s,
s to re s w as seco n d only to that of the
the s to re s in cre a se d 6 4 p ercen t.
autom obile
to ta l in stalm en t re c e iv a b le s held by
In stalm ent paper
sold during 1 9 4 8 by a ll the s to re s th at sold paper
d e a le rs in the D is tric t.
amounted to 2 6 p ercen t of 1 9 4 8 s a l e s , com pared with
A s would be e x p e c te d , in stalm en t s a le s c o n
2 4 p ercen t in 1 9 4 7 .
F o r the s to re s s ellin g in s ta l
tinued to expand f a s te r in 1 9 4 8 than eith er c a s h or
ment paper, in stalm en t re c e iv a b le s a t the end o f 1 9 4 8
ch a rg e a c co u n t s a l e s .
A t all th e reporting s to r e s ,
amounted to only 9 p ercen t of s a l e s during the p re
in cre a se d 4 4 p ercen t and ch arge
cedin g y e a r.
A t the s to re s not s e llin g paper,^the
ra tio w as 3 9 p ercen t.
in stalm en t s a l e s
a c co u n t s a l e s , 6 p ercen t; w h ereas c a s h s a le s d e
3 00
300
200»
200
100
100
194!
1942
Page 16
1944
v
1947
Federal Reserve Bank of Atlanta
Research Department
HOUSEHOLD
APPLIANCE
STORES
SALES
BY TYPE
OF TRANSACTION
By
1
Classification
and
Location
No.
Report
ing
Stores
A LL REPORTING STORES
Small
Medium
Large
169
15
10
7
10
ALABAMA
Birmingham
Percent of Total Sales
Charge
Cash
Account
1948 1947 1948 1947 1948
Percent Change, 1947-4948
Cash
Total
Charge
Account
Instalment
Instal
ment
+ 16
- 4
+ tl
+ 15
- 18
- 19
- 9
- II
+ 6
- II
+ 14
+ 26
+
+
+
+
44
39
34
39
25
49
33
34
+
9
-
35
58
40
44
20
—
17
18
26
15
9
18
20
26
14
58
33
41
51
47
22
34
42
—
II
—
75
—
69
—
50
49
57
64
46
17
17
34
16
13
32
40
54
21
34
38
II
20
53
17
38
25
18
19
16
34
50
35
14
31
47
16
32
44
64
23
19
50
18
21
28
18
24
—
24
14
34
39
33
39
22
—
29
—
17
—
7
8
3
3
1
- 12
------
- 8
-------
+ 18
------
16
—
+ II
- 23
+ 18
- 6
- 55
- 8
+ 23
- 2
+ 27
+ 29
+ ♦13
43
29
45
5
3
+ 23
+ 4
+ 6
- 34
+ 64
+ 18
Medium
107
5
3
+ 18
- 18
- 10
- 21
- 24
- 13
+ 45
+ 45
+ 2
- 19
- 4
+ 50
+ 3
- 19
55
29
22
46
34
Atlanta
5
4
+
+
1
0
- 10
- 9
+ 19
+ 29
+
+
38
43
43
47
LOUISIANA
4
- 10
------
+ 27
------
------
47
—
61
—
33
+ 17
+ 40
------
------
------
------
7
3
+ 13
+ 2
- 20
- 9
+ 8
+ 35
+
+ 24
FLORIDA
Small
Medium
Miami Area
Outside Miami
GEORGIA
Small
Atlanta Area
Lafayette-Iberia Area
3
MISSISSIPPI
TENNESSEE
Small
1
0
♦
m
1947
—
—
—
—
—
—
26
59
38
56
32
4
33
3
42
37
29
31
1
HOUSEHOLD A PPLIAN CE STORES
ACCOUNTS RECEIV A BLE
By
C lassification*
and
Location
ALL REPORTING STORES
Small
Medium
Large
ALABAMA
FLORIDA
Miami Area
GEORGIA
Small
Atlanta Area
Atlanta
LOUISIANA
MISSISSIPPI
TENNESSEE
Small
No.
Report
ing
Stores
Charge Accounts Receivable,
End of Year
As Peircent of
Percent
AnnualI Charge
Change,
Accou nt Sales
1947-4948
+
+
+
+
10
21
65
64
1948
1947
12
17
14
14
12
13
10
II
Instalment Receivables,
End of Year
As Percent of
Percent
Annual Instal
Change,
ment Sales
1947-4948
1948
1947
+ 64
- 7
+ 65
+ 72
17
14
40
46
15
21
30
37
163
13
7
6
10
+ 65
18
10
+ 61
39
28
5
+ 50
17
14
+ 37
44
37
3
+ 62
16
9
18
14
+
4
II
13
10
14
8
5
7
6
12
10
6
4
+ 80
- 5
♦
♦
43
43
19
19
6
13
—
14
—
-----
33
—
26
~
+ 9
+ 63
15
41
15
34
+ 60
- 53
28
14
29
37
105
4
+
*
*
5
4
3
8
9
+
33
7
3
*
* Increase of over 100 percent. '
For footnotes, see page 26*
Retail credit survey, 1948
Page 17
JEWELRY STORES
In 194 8 , for the seco n d c o n se c u tiv e y e a r, Sixth
c e n t g re a te r than a t the end of 1 9 4 7 , w h ereas in
D istrict jew elry s to re s rep orted th at th eir s a le s were
stalm ent
low er th an'd u ring the p recedin g y e a r.
F o r the D is
though the in cre a se in ch arge a c co u n ts re c e iv a b le
re c e iv a b le s
in cre a se d
15
p e rce n t.
A l
tric t a s a w hole, to ta l s a le s w ere down 2 p ercen t
w as the g r e a te s t a t the larg e s to r e s , 2 9 p e rc e n t, the
and a t th e sm all and m edium -size s to re s th ey w ere
sm all s to re s reported the g r e a te s t rate of in c re a s e
down 4 p ercen t. T here w ere, h ow ever, som e e x c e p t
ion s to thje gen eral trend.
Throughout the U nited
in instalm ent re c e iv a b le s , 23 p e rce n t.
A t p ra c tic a lly
all the s to r e s , a c co u n ts were ou tstand ing for a long
S ta te s , jew elry sto re s a le s in 1 9 4 8 w ere 8 p ercen t
er period at the end of 1 9 4 8 than a t the end of 1 9 4 7 .
l e s s than in 1 9 4 7 .
C h arge a cco u n ts re c e iv a b le a t the end of la s t y e a r
D esp ite th e d e c lin e s of the la s t
two y e a r s , 1948 s a le s are estim ated to be 6 9 per
amounted to 31 p ercen t of the annual ch arg e a c co u n t
c en t ab ove th ose of 1 9 4 1 .
s a l e s , com pared with 2 6 p ercen t at the end of 1 9 4 7 .
C ash s a l e s d eclin ed 12 p ercen t betw een 1 9 4 7
and 1 9 4 8 .
C red it s a le s in c r e a s e d , h ow ever, ch arg e
a c c o u n ts , 4 p ercen t and in stalm en t a c c o u n ts , 6 per
c e n t.
T h e proportion o f to ta l s a l e s a cco u n ted for by
c a s h p u rch ases w as 35 p e rce n t in 1 9 4 8 , con sid erab ly
A pparently, the s m aller th e s iz e of th e sto re
the g reater w as the proportion o f to ta l s a le s made on
the in stalm en t plan.
sa le s
A t the sm all s to r e s , th o se with
below $ 2 5 0 ,0 0 0 a y e a r, instalm ent s a l e s a c
sm aller than th at o f 1 9 4 4 , when it w as 61 p e rce n t,
counted for 33 p e rce n t of to ta l s a le s in 1 9 4 8 , com
but far g re a te r than the 2 8 p e rce n t ra tio for 1 9 4 1 .
pared w ith 7 23 p e rce n t a t the
larg e
s to r e s , th ose
with annual s a le s o f $ 5 0 0 ,0 0 0 or m ore.
F o r a ll D is tr ic t reporting s to r e s , ch arg e a c
co u n ts re c e iv a b le a t th e end of 1 9 4 8 w ere 22 per
In stalm ent
cred it w as a ls o ev id en tly ou tstan d in g for a longer
period a t the sm all s to r e s than a t th e o th e rs .
300
300
SALES
AT JEWELRY
STORES
TOTAL SALES 1941 = 100
200
200
100
1941
1942
Page 18
1943
1944
1945
1946
1947
1948
Federal Reserve Bank of Atlanta
Research Department
JEWELRY STORES
SALES BY TYPE OF TRANSACTION
By
.
Classification
and
Location
No.
Report
ing
Stores
ALL DISTRICT STORES
Small
Medium
Large
57
25
16
5
ALABAMA
Small
17
8
Birmingham Area
Birmingham
Mobile
FLORIDA
Small
Medium
Jacksonville
Miami
Pensacola Area
GEORGIA
Small
Atlanta Area
South Georgia Area
LOUISIANA
MISSISSIPPI
Medium
Meridian Area
TENNESSEE
Medium
By
C lassification
and
Location
ALL DISTRICT STORES
Small
Medium
Large
ALABAMA
Small
Birmingham Area
Birmingham
Mobile
FLORIDA
Small
Medium
Miami
Pensacola Area
GEORGIA
Small
Atlanta Area
LOUISIANA
MISSISSIPPI
Medium
TENNESSEE
Medium
6
5
3
II
6
4
3
3
4
13
8
3
3
4
5
3
4
7
5
Percent Change, 1947-1948
Total
-
-
2
4
4
2
+ 1
- 7
-
-
Cash
- IS
- 16
- II
- 10
- 9
Charge
Account
+
+
+
Instal
ment
4
6
2
3
+ 6
+ 4
+ 15
+ 2
9
6
3
5
5
8
2
7
0
4
2
1
3
+ II
- II
+ 23
+ 3
+ 3
+100
+
+
+
-
12
9
12
- 19
- 21
- 23
+
+
4
9
2
-
12
II
6
-
13
21
24
+
_
44
48
51
28
19
27
26
JL6
24
32
40
28
30
36
25
30
8
15
35
41
44
35
41
36
3
15
29
2
60
31
56
25
19
62
18
58
35
51
49
II
13
+ 9
+ 25
36
52
41
60
30
14
16
4
17
6
7
4
+ 17
+ 0
+ 26
52
32
53
40
29
6
29
52
52
28
28
-
5
+ 11
+
7
27
8
8
-
19
18
- 22
- 22
-
15
+
3
+ 59
+ 59
8
46
46
52
+
+
1
0
+ 13
+ 15
36
34
+ 22
+ 13
+ 13
+ 29
+ 27
+ 24
+ 28
+ 28
+ 54
+ 5
- 7
+ 1
+ 66
- 7
+ 10
+ 10
- 8
+ 59
- 2
- 2
+ 14
+ 14
10
10
49
35
45
40
4
9
58
59
8
- 12
- 11
+ 15
*
6
1
61
61
16
10
35
10
9
49
12
+ 55
+ 8
+ 22
+ 22
+
+
+
53
19
30
33
31
23
10
36
39
53
44
34
+ 1
+ 2
- 5
+ 18
-
33
17
30
44
37
46
32
32
43
35
19
30
46
57
19
35
48
39 '
31
33
45
29
29
35
40
41
45
_
..
-
7
6
-
JEWELRY STORES
ACCOUNTS RECEIVABLE
Charge Accounts Receivable,
End of Year
No.
As Percent of
Report
Percent
Annual Charge
ing
Change,
Account Sales
Stores
1947—1948
1947
1948
46
22
16
4
II
7
6
5
3
10
6
4
3
4
12
7
3
3
3
3
7
5
Percent of Total Sales
Charge
Instalment
Cash
Account
1948 1947 1948 1947 1948 1947
31
43
36
27
31
81
32
32
51
23
26
22
15
26
24
24
17
II
14
14
52
54
26
38
31
22
26
63
26
26
66
22
31
20
14
31
21
21
18
8
II
II
46
47
17
16
33
33
28
30
26
22
56
55
26
26
15
15
55
31
27
17
18
39
37
41
42
41
42
23
24
20
21
Instalment Receivables,
End of Year
As Percent of
Percent
Annual Instal
Change,
ment Sales
1947-4948
1947
1948
+ 15
+ 23
+ 12
+ 21
- 0
+ 3
+ 0
+ 5
+ 6
+ 13
+ 32
+ 6
+ 8
+ 29
+ 18
+ 78
+ 12
+ 25
+ 19
+ 19
+ 9
+ 12
38
50
35
33
41
50
36
32
54
51
51
51
52
53
42
50
34
32
37
37
20
18
36
42
36
29
42
46
37
33
50
44
39
46
43
47
39
31
31
28
50
50
21
18
F o r footnotes* se e page 26*
Retail credit survey, 1948
Page 19
AUTOMOBILE DEALERS
Of approxim ately 1 3 0 billion d o llars worth of
p ercen t of th eir in stalm en t s a l e s , about the maximum
m erch an d ise th at A m erican con su m ers bought from
amount that could be so ld when co n sid eratio n is
a ll re ta il s to r e s in the U nited S ta te s during 1 9 4 8 ,
tak en o f down paym ents re c e iv e d .
th e y bought alm o st 16 b illion d o llars worth from a u to
in stalm en t
m obile d e a le rs .
1 9 4 8 a t th e se s to re s amounted to only 6 p ercen t of
A utom obile d e a le rs , how ever, had
re c e iv a b le s
ou tstand ing
C o n seq u en tly ,
a t the
end of
m uch g reater im portance in re s p e c t to d ollar s a le s
the y e a r 's in stalm en t s a l e s .
among the lin e s of cred it-g ran tin g b u s in e s s e s su r
ing in stalm en t paper, in stalm en t re c e iv a b le s a t the
vey ed than th e s e figu res would in d ic a te .
end of 194 8 w ere 2 8 p e rce n t of the y e a r 's in stalm en t
C onse
q uen tly, the 19-p erce n t in c re a s e in the s a l e s o f the
A t the s to re s not s e l l
s a le s.
reporting d e a le rs in the S ixth D is tr ic t w as one o f the
T h e s a le of in stalm en t paper ih as, of c o u rs e ,
p rin cip al e xp lan atio n s for the growth in c re d it buying
during 1 9 4 8 .
Throughout th e Sixth D is tr ic t, the ra te
o f s a le s growth e x c e e d e d th at o f an y oth er b u s in e s s .
been re fle cte d in the growth of au tom otive in stalm en t
p aper held by fin a n cia l in stitu tio n s.
A t th e com m er
c i a l banks throughout the D is tr ic t, for exam p le, pur
Although the d ealers* c a s h s a l e s were 13 p er*
c h a s e d autom otive p aper ou tstan d in g a t the end o f
c e n t g re a te r in 19 4 8 than in 1 9 4 7 , cre d it s a le s ex~
1 9 4 8 w as 7 .7 m illion d o llars g re a te r than a t the end
panded s o much — ch arge a c c o u n t, 1 9 p ercen t an in
o f th e p reced in g y e a r.
s talm en t, 4 3 p ercen t — th at th e proportion of s a le s
a t autom obile d e a le rs w a s , no doubt, fin an ced by
P a rt of the c a s h p u rch a se s
made for c a s h d eclin ed from 6 0 p e rce n t in 1 9 4 7 to
lo a n s made by th e banks and oth er in stitu tio n s d ir
5 7 p ercen t in 1 9 4 8 .
e c tly to the p u rch a se rs.
Only 5 p ercen t of the d e a le rs
c a rrie d th eir own in stalm en t p ap er.
T h e rem aining
d e a le rs sold paper during 1 9 4 8 th a t amounted to 62
D ire c t autom otive in s ta l
ment lo an s ou tstan d in g a t the D is tr ic t’ s com m ercial
banks
in cre a se d
1 4 .6 '9t i l l i o n
d o llars
during 1 9 4 8 .
300T
300
SALES
OF AUTOMOBILE
DEALERS
TOTAL SALES 1941=100
200
•200
100
100
INSTALMEI
1942
Page 20
1944
1945
1946
1947
1948
Federal Reserve Bank of Atlanta
Research Department
SALESAUTOMOBILE
BY TYPE OFDEALERS
TRANSACTION
By
Classification
and
Location
ALL REPORTING STORES
Small
Medium
Large
ALABAMA
Small
Large
Birmingham Area
Birmingham
FLORIDA
Large
Jacksonville Area
Miami
GEORGIA
Small
Medium
Large
Atlanta Area
Outside Atlanta
Columbus
South Georgia Area
LOUISIANA
Medium
Large
Alexandiia~Lake Charles Area
Alexandria Area
Lafayette-Iberia Area
New Orleans
.MISSISSIPPI
Medium
Large
New Orleans A rea
Jackson Area
Jackson
Meridian Area
TENNESSEE
Large
Chattanooga Area
Knoxville Area
Knoxville
Nashville Area
Mo.
Report*
ing
Stores
Percent of Total Sales
Percent Cnange, 1947-4048
Charge
Cash
Account Instalment
Charge Instal
Total Cash Account ment 1948 1947 1948 1947 1948 1947
73
11
15
44
+
+
+
+
19
26
13
21
10
3
7
+ 21
+ 21
+ 21
6
5
+ 18
+ 19
12
7
+ 17
+ 20
3
3
+ 22
+ 1-2
+ 13
+ 25
+ 4
+ 15
+
+
+
+
19
17
19
20
+
+
+
+
43
52
42
45
57
56
56
57
60
56
61
60
25
30
27
25
25
32
26
25
+ 53
+ 43
+ 54
56
63
56
58
68
57
22
20
22
+ 22
+ 23
58
57
24
24
+ 30
+ 32
58
57
50
51
25
18
26
24
25
58
58
28
29
+ 39
+ 57
25
78
37
84
+
+
+
+
30
62
49
23
58
51
65
58
18
14
17
18
22
17
22
15
12
13
15
18
19
18
18
23
24
22
20
19
18
58
5
48
4
17
17
15
12
25
36
II
27
17
13
24
15
6
6
54
28
16
II
19
15
29
35
1
37
25
4-2
14
27
30
44
2
35
6
6
50
26
17
14
17
17
6
5
6
+
+
+
+
21
28
17
22
18 + 6
+ 36
12
+ 5
18
17 + 17
19 •+ 18
1 + 44
+ 44
6
+ 48
- 17
+ 40
+ •4
+ 19
+ 20
+ 9
+ 39
- 1
+ 13
+ 20
+ 23
6
4
3
3
+
+
+
+
23
24
16
19
+ 24
+ 46
+ 9
+ 7
+ 21
- 2
+ 13
+ 28
+
+
+
+
25
29
23
24
65
59
45
35
59
47
67
58
64
50
48
39
+ 19
+ 16
+ 20
+ 13
+ 16
+ 13
+ 20
+ 12
+ 22
65
70
64
69
70
69
25
23
25
24
24
24
10
7
II
7
6
7
+
+
+
+
+
18
20
22
16
18
+ 10
+ 8
1+ 15
+ 14
------
+ 13
+ 7
+ 28
+ 26
------
+ 75
+ 30
+ 87
*
+ 43
+ 89
+ 17
------
61
55
55
72
--
66
61
59
74
--
27
26
40
17
—
28
30
38
15
12
19
5
II
—
6
9
3
II
—
10
3
6
+ 5
+ II
+ 3
- 8
+ 5
- 12
- 5
+ 13
- 10
+ 67
+ 22
+ 75
50
46
51
57
48
59
24
34
21
26
34
25
26
20
28
17
18
16
5
3
3
+ 4
+ 5
+ 13
-
+
+
-
8
8
9
+ 25
+ 85
+ 96
48
48
42
52
56
52
37
37
22
35
36
27
15
15
36
13
8
21
II
9
+ 18
+ 19
+ 17
+ 19
+ 23
+ 22
+ II
+ 10
62
63
62
62
26
25
25
24
12
12
+
+
+
+
+ 4
+
+ 26
+ 6
+ 35
+ 19
+ 17
- 1
+ 49
- 29
- 32
*
54
65
65
54
62
60
59
65
31
26
26
17
27
25
26
23
15
9
9
29
13
14
II
15
15
12
II
4
7
5
3
3
4
3
3
5
4
3
17
16
15
29
+
+
+
+
+
+
+
6
8
9
26
* •Increase of over 100 percent*
Fo r footnotes, se e page 26*
Retail Credit Sinvey* 194#
page 21
AUTOMOBILE
DEALERS
ACCOUNTS
RECEIVABLE
By
Classification 1
and
Location
Instalment Receivables,
End of Year
As Percent of
Percent
Annual Instal
Change,
ment Sales
1947-4948
1947
1948
Charge Accounts Receivable,
End of Year
As Percent of
Percent
Annual Charge
Change,
Account Sales
1947-4948
1947
1948
No.
Report
ing
Stores
A LL REPORTING STORES
Small
Medium
Large
70
tl
14
42
+
+
+
+
19
19
20
19
9
13
10
9
9
13
10
9
ALABAMA
Small
Large
10
3
7
-
3
7
2
8
10
8
-
6
9
II
6
+ 26
+ 29
3
17
6
5
6
+ 27
+ 26
6
7
8
6
7
3
,9
7
9
15
9
-? ■
- 31
4
16
3
8
7
8
7
6
9
8
- 31
- 39
5
4
9
7
f
5
6
6
+ 18
+ 20
2
2
2
2
+ 36
5
5
+ 13
+ 8
+ 26
+ II
+ 4
8
14
15
7
9
12
12
8
4
2
6
4
2
27
25
28
38
38
37
7
16
24
10
8
13
21
10
10
3
7
5
3
4
+
+
+
+
+
+
+
+ 13
—
——
——
+ 9
4
il
4
8
3
II
10
II
10
8
10
+ 25
---+ 25
+ 47
+ 1
+ 8
13
8
8
10
9
9
+ *41
II
3
7
+ 30
+ 35
+ 29
12
II
9
9
9
Jackson
5
3
3
+ 29
+ 37
+ 41
TENNESSEE
Large
10
8
5
4
3
Birmingham Area
Birmingham
FLORIDA
Large
Jacksonville Area
GEORGIA
Small
Medium
Large
Atlanta Area
Outside Atlanta
Columbus
South Georgia
LOUISIANA
Medium
Large
Alexandria-Lake Charles Area
Alexandria Area
New Orleans Area
MISSISSIPPI
Medium
Large
Jackson Area
Meridian Area
Knoxville Area
Knoxville
Nashville A rea
6
5
6
4
3
3
,
12
+ *if2?
'
+ *48
*
-
9
*
- 9
*
10
10
15
9
8
10
+ 17
+ 21
+ 27
+ 30
10
10
10
9
+ 7
+ 14
+ 35
+ 43
+ 5
12
12
7
10
10
7
- 7
- 7
+ 38
1
12
2
2
2
2
2
2
2
2
2
3
2
||
10
8
10
7
5
-1
13
2
3
3
~2
2
1
3
1
2
4
II
9
7
7
16
"Increase of over 10 0 percent
For footnotes, see page 26*
Page 22
Federal Reserve Bank of Atlanta
Research Department
AUTOMOBILE TIRE AND ACCESSORY STORES
S a le s
s to re s
at
th e
autom obile
tire
throughout th e D istrict in
enough to s e t a new re co rd .
and a c c e s s o r y
1 9 4 8 w ere g reat
The 9-p ercen t gain over
amounted to 2 9 p ercent of to ta l in stalm en t s a le s for
th e p recedin g y e a r.
At the s to re s se llin g no p ap er,
th e ratio w as 3 7 p ercen t.
1 9 4 7 not only o ffset th e d eclin e th at had taken p la ce
from
1 9 4 7 but exceed ed the 6*percen t in
One re s u lt of th e g reater in stalm en t s e llin g in
c r e a s e in s a l e s throughout the nation during 1948*
1 9 4 6 to
1 9 4 8 w as th at in stalm en t a c co u n ts a t th e end o f th e
y e a r w ere about double th e figure rep orted for th e end
E x c e p t a t the sm all s to r e s , g re a te r in stalm en t
of the p reced in g y e a r.
D esp ite the re la tiv e ly m o d est
buying a cco u n ted for alm ost a ll the in cre a se d s a l e s .
g ain in ch arg e acco u n t s a l e s , ch arg e a c co u n ts re
C a s h s a l e s w ere down 4 p ercen t.
c e iv a b le ou tstand ing a t the end of 1 9 4 8 were 13 p er
s a le s
in c re a s e d
only
one p ercen t,
s a l e s w ere up 6 6 p e rce n t.
C harge acco u n t
but in stalm en t
c e n t g re a te r than a t the end of 1 9 4 7 .
The larg e s to re s sold 73
C h arg e
p ercen t more on the in stalm en t plan during 1 9 4 8 than
in 1 9 4 7 , w h ereas th e sm all s to re s so ld only 7 p ercen t
m ore.
In 1 9 4 8 in stalm en t s a le s at a ll the s to re s a c
a c co u n ts
at
the autom obile tire
p ercen t of the p reced in g y e a r 's ch arg e a c co u n t s a l e s ,
cou n ted for 2 2 p ercen t o f to ta l s a l e s , com pared with
com pared with 12 p ercen t a t the end of 1 9 4 7 .
14 p ercen t in 1 9 4 7 .
ra tio s
w ere
T h ese
low , com pared with sim ilar ra tio s for
many of the oth er lin es of b u s in e s s su rveyed .
Only 10 p ercen t of the s to re s sold in stalm en t
and
a c c e s s o r y s to re s a t the end of 1 9 4 8 amounted to 13
E v i
d ently c h a rg e a cco u n ts are outstanding for a much
p aper in 1 9 4 8 , but a t th e s e s to re s the amount of paper
sh o rter period of time a t the sm all s to r e s , h ow ever,
s o ld w as 9 8 p ercen t g reater th an in 1 9 4 7 and e x
than a t the large and m edium -size s to r e s .
c e e d e d the ra te of in c re a s e in in stalm en t s a le s for
re la tiv e com p arison w as c h a r a c te r is tic of the s to re s
th e sam e p eriod .
in e a c h s ta te of the D is tr ic t.
The s a le of in stalm en t paper w as
T h e sam e
T h e v ariatio n in the
more common a t the sm all and m edium -size s to re s
ch a rg e a c co u n t term s exten d ed by the d ifferent s iz e
th an a t th e larg e ones*
s to r e s probably a cco u n ts for a g re a t d e a l of th e v a r ia
tion in the ra tio from one a re a to an oth er.
A t the s to re s sellin g p aper,
in stalm en t a c co u n ts outstanding at the end of 1 9 4 8
1300
300r
SALES
200 '
AT AUTOMOBILE TIRE
ACCESSORY STORES
TOTAL SALES
1941=100
AND
•200
100
1948
Retail Credit Survey, 1948
Page 23
AUTOMOBILE
ACCESSORY STORES
SALES BY TIRE
TYPEAND
OF TRANSACTION
By
C lassification
and
Location
No.
Report
ing
Stores
ALL REPORTING STORES
Small
Medium
Large
ALABAMA
Medium
Large
Montgomery Area
FLORIDA
Medium
Large
Jacksonville
Pensacola Area
GEORGIA
Small
Medium
Large
Atlanta Area
Outside Atlanta
Augusta Area
Macon Area
South Georgia Area
LOUISIANA
Medium
Large
Baton Rouge
Lafayette~Iberia Area
Iberia Area
MISSISSIPPI
Medium
Meridian-Hattiesburg-Laurel Area
Outside Meridian
TENNESSEE
Medium
Large
Chattanooga Area
Knoxville Area
Nashville Area
Tri-C ities Area
91
II
28
43
15
3
II
4
Percent of Total Sales
Charge
Cash
Account Instalment
Charge InstalTotal Cash Account ment 1^48 1947 1948 1947 1948 1947
Percent Cnange. 1947-1948
+ 9
+ 5
+ 4
+ 12
13
16
13
23
22
8
5
10
6
16
6
4
19
5
6
+ 26
7
6
3
3
3
14
5
5
5
4
3
7
4
5
4
14
5
7
3
3
5
5
- 4
- 4
+ 6
+ 13
+ 13
+ 3
I
+ I
+ 5
- 4
+ 0
+ 9
+ 4
+ 2
+ I
+ 10
- 4
+ 14
- 13
- 2
+ 11
+ 29
8
-
- 3
+ 5
- 14
- 0
+ 1
- 7
+ 1
+ 25
+ 0
- 7
+ 6
- 15
+ 34
- 3
+ 6
- 1
- 5
- 13
- 14
- 12
+ 1
+ 3
- 5
- 21
+ 2
- 3
- 9
- 3
- 17
- 26
- 19
- 18
- 7
- 19
+ 1
- II
- 27
+ 2
- 2
+ 1
+ 1
- 9
+ 3
- 5
- 10
- 4
+ 1
- II
- 17
- 12
- 13
+ 8
+ 10
+ 4
- 6
+ 11
- 6
- 2
+ 0
+ 10
- 13
- 1
- 28
- 2
+ 6
+ 2
+ 2
- 4
- 2
- 5
+ 5
+ 9
- 7
+ II
- 21
+ 8
+ 11
+ 19
+ 66
+ 7
+ 50
+ 73
+ 92
+ 89
+ 95
*
+ 82
+ 33
+ 73
+ 27
+ 42
+ 17
+ 47
+ 42
+ 26
+ 24
+ 43
+ 58
+ 5.9
+ 47
+ 43
+ 52
+ 56
+ 45
+ 46
+ 58
+ 40
+ 39
+ 22
+ 61
+ 81
+‘59
+ *2
+ 39
+ 72
34
81
43
30
28
25
28
32
35
42
32
22
J5
35
85
52
30
33
39
42
27
48
45
51
36
40
73
74
26
22
27
30
33
58
26
38
39
32
28
38
81
52
33
31
31
31
32
37
48
35
25
52
39
86
56
34
36
43
50
30
53
49
63
37
43
77
76
34
30
34
37
39
69
30
37
52
35
37
44
7
21
48
44
34
46
50
39
13
35
61
19
49
5
23
55
47
45
23
55
17
37
4
50
53
16
18
33
34
36
40
47
18
55
41
49
55
26
47
7
23
53
52
44
54
62
47
17
46
66
22
49
5
27
54
48
44
24
57
22
39
6
53
52
15
18
38
37
39
39
47
18
57
45
45
54
28
22
12
36
22
28
41
26
18
26
45
33
17
26
16
10
25
15
20
16
35
18
35
18
45
14
7
11
8
41
44
37
30
20
24
19
21
12
13
46
15
12
25
14
17
25
15
16
35
19
9
26
12
9
18
12
16
13
26
13
25
12
31
10
5
8
6
28
33
27
24
14
13
13
18
3
II
35
+Increase of over loO percent*.
For footnotes, see page 2 6 .
Page 24
Federal Reserve Bank of Atlanta
R esearch Department
AUTOMOBILE TIRE AND ACCESSORY STORES
' ACCOUNTS RECEIVABLE
By
C lassification 1
and
Location2
No.
Report
ing
Stores
Charge Accounts Receivable,
End of Year
As Percent of
Percent
Annual Charge
Change,
Account Sales
1947-4948
1947
1948
Instalment Receivables,
End of Year
As Percent of
Percent
Annual Instal
Change,
ment Sales
1947-1948
1947
1948
A LL REPORTING STORES
Small
Medium
Large
85
8
26
42
+ 13
+ 19
- 1
+ 15
13
14
14
13
12
11
13
12
+ 93
+ 7
+ 87
+ 95
36
31
35
37
32
30
29
32
ALABAMA
Medium
Large
14
3
10
+ 2
- 10
+ 2
13
to
14
12
10
13
+ 85
32
36
31
34
34
34
4
+ 12
t6
14
+
+
15
22
16
24
13
18
13
22
Montgomery Area
FLORIDA
' Medium
Large
P ensacola Area
GEORGIA
Small
Medium
Large
Atlanta Area
Outside Atlanta
Macon Aiea
LOUISIANA
Medium
Large
Baton Rouge Area
Lafayette-Iberia Area
Iberia Aiea
MISSISSIPPI
Medium
Meridian-Hattiesburg-Laurel Area
Outside Meridian
TENNESSEE
Medium
Large
Chattanooga Area
Knoxville Area
Nashville Area
Tri-C ities Area
21
4
10
4
17
3
6
8
7
6
3
2
2
7
+ 17
+ 82
+ 62
»
+ *67
+ 6
+ 80
+ 37
*
40
+ 76
29
18
26
30
+ 74
+ 81
+ 82
38
40
30
27
27
26
13
5
13
+ 70
+ 58
+ 81
33
31
35
29
28
30
33
30
30
34
26
26
40
41
32
31
39
41
29
29
29
20
31
24
39
27
31
10
10
II
10
9
9
12
9
15
12
10
II
II
II
+
9
4
5
3
3
+ 14
+ 2
+
0
15
II
II
14
11
II
+ 52
+ 65
+ 100
6
4
+
+
25
20
15
16
12
13
4.
T
-
6
25
14
15
13
13
+
28
- 13
+ 32
16
16
16
13
17
13
- 21
+ 30
+ *9
II
16
I3
28
II
13
13
14
4.
3
+
+
14
5
7
3
3
5
5
35
33
37
33
22
20
10
25
25
14
0
*
46
37
2i
37
37
+
+
+
+
14
16
12
13
4
5
22
41
37
42
*
fiU
OS'
+ 90
4. 71
T,
I 1
+
jB8
+
84
34
30
35
61
+ 98
28
34
32
36
+ ♦15
+
.
•Increase of over 100 percent.
Fo r footnotes, see page 26-
Retail Credit Survey, 1948
Page 25
FO O TN O TES
1. Size Classification by Kind of Business
Small
Kind of Business
1.
2.
3.
4.
5.
6.
7.
8.
9.
Automobile
Automobile Tire & Accessory
Department
Furniture
Hardware
Household Appliance
Jewelry
Men's Clothing
Women's Apparel
Under
•'
M
”
”
”
250
50
1,000
200
100
100
100
250
250
Size Classification
(1948 sales in thousands gf dollars)
Medium
250 to
5 0 to
1,000 to
200 to
100 to
100 to
100 to
250 to
250 to
500
100
10,000
500
500
250
500
1.000
1,000
Large
500
100
10,000
500
500
250
500
1,000
1,000
& Over
" M
M ”
" M
” M
” ”
” M
” "
” M
Consolidated reports for two or more stores were not classified by size. D istrict uad state totals may, therefore, include
data from stores not included in the size groups. Data for state totals may also include stores classified by size but not
shown in the table. Where no classification is shown, data were withheld to prevent disclosure of the operations of in
dividual stores.
2. Area totals include not only data from cities and parts\of areas shown but may also include idata from reports received
from cities for which individual city data must be withheld to prevent disclosure of individual store operations. In some
cases, boundaries or areas do not coincide with state lines. Counties included in areas are listed below.
Birmingham Area, Alabama: Bibb, Blount, Chilton, Clay, Pensacola Area, Florida: Bay, Calhoun, Escambia, Frank-*
Colbert, Coosa, Cullman, Fayette, Franklin, Greene, Jef lin, Gadsden, Gulf, Holmes, Jackson, Liberty, Okaloosa,
ferson, Lamar, Lawrence, Marion, Marshall, Morgan, P ic Santa Rosa, Walton, Washington.
kens, Saint Clair, Shelby, Talladega, Tuscaloosa, Walker,
St. Petersburg Area, Florida: Charlotte, De Soto, Glades,
Winston.
Hardee, Highlands, Hillsborough, Lee, Manatee, Pasco,
Dothan Area, Alabama: Barbour, Coffee, Covington, Dale, Pinellas,. Polk, Sarasota.
Geneva, Henry* Houston.
Atlanta Area, Georgia: Banks, Barrow, Bartow, Butts,
Anniston-Gadsden Area, Alabama: Calhoun, Cherokee, Carroll, Cherokee, Clarke, Clayton, Cobb, Coweta, Dawson,
Cleburne, Etowah, Randolph.
De Kalb, Douglas, Fannin, Fayette, Floyd, Forsyth, Frank
lin, Fulton, Gilmer, Gordon, Greene, Gwinnett, Habersham,
Mobile Area, Alabama: Baldwin, Choctaw, Clarke, Cone H a llH aralso n |, Heard, Henry, Jackson, Jasper, Lamar,
cuh, Escambia, Marengo, Mobile, Monroe, Sumter, Wash Lumpkin, Madison, Meriwether, Monroe, Morgan, Murray,
ington, Wilcox; M ississippi: Jackson.
Newton, Oconee, Pickens, Paulding, Pike, Polk, Putnam,
Rabun, Rockdale, Spalding, Stephens, Towns, Union, Up
Montgomery Area, Alabama: Autauga, Bullock, Butler, son, Walton, White, Whitfield.
Crenshaw, D allas, Elmore, Hale, Lowndes, Macon, Mont Columbus Area, Georgia: Chattahoochee,, Harris, Mus
gomery, Perry, Pike, Tallapoosa.
cogee, Talbot, Troup; Alabama: Chambers, Lee, R ussell.
Jacksonville Area, Florida: Alachua, Baker, Bradford, Augusta Area, Georgia: Burke, Columbia, Elbert ^G lascock,
Clay, polumbia, Duval, Dixie, G ilchrist, Hamilton, Jef Hancock, Hart. Jefferson, Jenkins, Lincoln, McDuffie,
ferson, Lafayette, Leon, Levy, Madison, Nassau, Putnam, Oglethorpe, Richmond, Taliaferro, WaiTen, Washington,
St. Johns, Suwannee, Taylor, Union, Wakulla.
Wilkes.
Macon Area, Georgia: Baldwin, Ben Hill, Bibb, Bleckley,
Miami Area, Florida: Broward, Collier, Dade, Hendry, Crawford, Crisp, Dodge, Dooly, Emanuel, Houston, Jef
Indian River, Martin, Monroe, Okeechobee, Palm Beach, ferson Davis, Johnson, Jones, Laurens, Lee, Macon, Mar
St. Lucie.
lon, Montgomery, Peach, Pulaski, Quitman, Randolph,
Schley, Stewart, Sumter, Taylor-, Telfair, Terrell, Toombs,
Orlando Area, Florida: Brevard, Citrus, Flagler, Hernando, Treutlen, Turner, Twiggs, Webster, Wheeler, Wilcox* Wilk
Lake, Marion, Orange, Osceola, Seminole, Sumter, Volusia. inson.
Page 26
Federal Reserve Bank of Atlanta
Research Department
2. (Continued)
Savannah Area, Georgia: Bryan, Bulloch. Camden, Candler,
Chatham, Effingham, Evans, Glynn, Liberty, Long, McIn
tosh, Screven, Tattnall, Wayne.
South Georgia Area, Georgia: Appling, Atkinson, Bacon,
Baker, Berrien, Brantley, Brooks, Calhoun, Charlton,
Clay, Clinch, Coffee, Colquitt, Cook, Decatur, Dougherty,
Early, Echols, Grady, Irwin, Lanier, Lowndes, Miller, Mit
chell, Pierce, Seminole, Thomas, Tift, Ware, Worth.
Alexandria-Lake Charles Area, Louisiana: Avoyelles,
Evangeline, Rapides, Vernon, Allen, Beauregard, Cal
casieu, Cameron, Jefferson Davis.
Baton Rouge Area, Louisiana: Ascension, E ast Baton
Rouge*, East Feliciana, Iberville, Livingston, Pointe Cou
pee, Saint Helena, West Baton Rouge, West Feliciana.
Lafayette-Iberia Area, Louisiana: Assumption, LaFourche,
Terrebonne, Acadia, Iberia, Lafayette, Saint Landry, Saint
Martin, Saint Mary, Vermilion.
New Orleans Area, Louisiana: Jefferson, Orleans, Plaq
uemines, Saint Bernard, Saint Charles, Saint James, Saint
John the Baptist, Saint Tammany,/Tangipahoa, Washington;
M ississippi: Hancock, Harrison.
Jackson Area, M ississippi: Copiah, Hinds, Jefferson Davis,
Lawrence, Leake, Lincoln, Madison, Marion, Pike, Ran
kin, Scott, Simpson, Walthall, Yazoo.
Retail Credit Survey, 1948
Meridian Area, M ississippi: Clarke, Covington, Forrest,
George, Greene, Jasper, Jones, Kemper, Lamar, Lauder
dale, Neshoba, Newton, Pearl River, Perry, Smith, Stone,
Wayne.
Natchez Area, M ississippi: Adams, Amite, Claiborne,
Franklin, Issaquena, Jefferson, Sharkey, Warren, Wilkinson.
Chattanooga Area, Tennessee: Bledsoe, Bradley, Frank
lin, Grundy, Hamilton, Marion, McMinn, Meigs, Monroe,
Polk, Rhea, Sequatchie, Van Buren; Alabama: DeKalb,
Jackson; Georgia: Catoosa, Chattooga, Dade, Walker.
Knoxville A rea,.Tennessee: Anderson, Blount, Campbell”
Claiborne, Cocke, Cumberland, Grainger, Hamblen, Han
cock, Jefferson, Knox, Loudon, Morgan, Roane, Scott,
Sevier, Union.
Nashville Area, Tennessee: Bedford, Cannon, Cheatham,
Clay, Coffee, Davidson, DeKalb, Dickson, Fentress, G iles,
Hickman, Houston, Humphreys, Jackson, Lawrence, Lewis,
Lincoln, Macon, Marshall, Maury, Montgomery, Moore, Over
ton, Perry, Pickett, Putnam, Robertson, Rutherford. Smith,
Stewart, Sumner, Trousdale, Warren, Wayne, White, William
son, Wilson; Alabama: Lauderdale, Limestone, Madison.
T ri-C ities Area, Tennessee: Carter, Greene, Hawkins,
Johnson, Sullivan, Unicoi, Washington.
Page 27
@FedFRASER