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THIRTY-FOURTH ANNUAL REPORT Fe d e r a l R ese r v e B a n k of A tlanta 1:948 T h i r t Y 'F o u r t h A of nnual R epo rt THE F e d e r a l R eserv e B a n k of A tla n ta THE fo r YEAR ENDED DECEMBER 3 1, 19 4 8 / SIXTH FED ER A L RESERVE DISTRICT LETTER OF TRANSMITTAL January 31, 1949 To the Stockholders of the Federal Reserve Ban\ of Atlanta I am pleased to submit the Thirty'Fourth Annual Report of the Federal Reserve Bank of Atlanta reviewing operations for 1948. W. S. M cLARIN, JR. / President TABLE OF CONTENTS PAGE F o r e w o r d ..................................................................................................... 5 H ighlights of the N ation ’s E c o n o m y ...................................................6 Prices Leveled O f f ................................................................................. 6 Employment Reached N e ar'M ax im u m ..............................................7 Production Attained Peacetime H i g h s ..............................................7 Purchasing Power Continued G a i n ................................................... 7 Farmers Attained Record P roduction ...................................................8 Credit Policy Was A ntH nflationary...................................................9 Highlights of the D istrict’s E c o n o m y ...................................................12 Farmers P r o sp e re d ................................................................................. 12 Bankers Proceeded C au tio u sly ............................................................. 14 Retail Sales Activity Reached New H e ig h t s ....................................15 Industrial Production and Employment Showed G a i n s .................... 17 R eview o f Bank O p e r a tio n s .................................................................. 19 Consumer Instalment C r e d i t ............................................................. 19 Fiscal Agency and Securities D epartm en t......................................... 19 Custody D e p a rtm e n t............................................................................ 21 Currency and Coin D ep artm en t........................................................ 23 Check Collection D ep artm en t............................................................. 24 Discount D epartm en t............................................................................ 24 13 (b) Loan O p eration s........................................................................25 Research D ep artm en t.............................................................................25 Bank and Public Relations........................................................................26 Changes in Membership in the Sixth D is t r ic t ....................................27 Additions to Par L i s t .............................................................................28 D i r e c t o r s ................................................................................................. 28 Federal Advisory C o u n c i l ...................................................................30 Industrial Advisory C om m ittee............................................................. 30 Appointment of O ffic e rs........................................................................30 L ist of D irectors and Officers ................................................... 3136 V olum e R eports and Financial S t a t e m e n t s ............................... 39-46 FOREWORD o n e of the twelve regional banking institutions established under the Federal Reserve Act of 1913, the Federal Reserve Bank of Atlanta has a dual responsibility. Because the Bank shares the responsibility for maintaining monetary and credit conditions that are suitable to the accommodation of agriculture, industry, and commerce, it has a vital interest in the economic affairs of the re' gion it serves and of the nation as a whole. Another responsibility of the Bank is in its service to member banks that hold its corpo' rate shares and that have provided its capital funds. This response bility implies an accounting of the Bank’s operating activities for the information of its stockholders. The Thirty'Fourth Annual Report of the Federal Reserve Bank of Atlanta is therefore designed to serve two purposes: (1) to explain briefly the economic setting in which the Bank operated during the year 1948 and its relation to over-all credit policy, and (2) to review in some detail the activities of the various operating depart' ments of the Bank for the year. [5] HIGHLIGHTS OF THE NATION'S ECONOMY The year 1948 was one of sustained and near-maximum employ ment, production, and purchasing power. Because purchasing power was still redundant, inflationary forces largely dominated the econ' omy, but with decreasing influence as the year ended. PRICES LEVELED OFF Prices, as measured by the indexes computed by the Bureau of Labor Statistics, demonstrated some weakening in the inflationary pressures as the year developed. The index of consumers’ prices was at 168.8 percent of the 1935'39 average in January 1948. It de' clined in the two succeeding months, reaching a low for the year of 166.9 in March. It then began climbing again and in both August and September stood at the all-time high of 174.5. During the remainder of the year the index fell moderately and on December 15 was at 171.4. The index of wholesale prices revealed similar uneven trends. In January, the Bureau’s revised monthly index was at 165.7 percent of the 1926 average. By February, it had fallen to 160.9, which proved to be the low for the year. By August, it had risen to 169.5, the high point for the year. On December 28 the revised weekly index, which permits direct comparison with the monthly index, was down to 162.2. A lowering in the prices received by farmers was primarily re' sponsible for the downward tendency of the over-all price indexes that became evident toward the end of the year. The index of prices received by farmers, computed by the Department of Agri' culture, was at 307 percent of the 191044 average in January 1948. This was the high for the year. It dropped to 279 in February, but reacted to 301 in June. Thereafter, it fell steadily and in December stood at 268, the low point for the year. Prices paid by farmers, on the other hand, remained at, or near, peak levels throughout the year. The index was at 251 percent of the 191044 average in January, June, and July, and at 247 in December. In consequence, the parity ratio (prices received divided by prices paid) declined from 122 in January to 109 in December. The farm' C6 ] ers, therefore, experienced a considerable decline in the relative price advantage which they had enjoyed in the war and earlier postwar years. EMPLOYMENT REACHED N EA R M A X IM U M Total civilian employment averaged 59.4 million for the year. In five of the months, June through October, such employment was above 60 million and only through seasonal influences did it fall below this figure in the closing months of the year. Civilian employ' ment in December 1948 was 59,434,000, against 57,947,000 in December 1947. Unemployment was at a near-minimum, ranging from a high of 2,639,000 in February to a low of 1,642,000 in October. The gains in employment for the year were experienced primar ily in nonagricultural industries. Employment in agriculture was slightly lower for 1948 than for 1947. PRODUCTION A TTA IN ED PEACETIM E HIGHS Industrial production, measured by the Federal Reserve Index, exceeded all previous records except for the war years. The index for January 1948 was 193 percent of the 1935-39 average and for November it was 194. The gain in physical output for the year 1948 was about 3 percent over the preceding year. New construction in dollar volume for the year totaled $17.7 billion, which was $2.9 billion more than the total for 1947. Resi dential construction declined somewhat towards the end of the year in comparison with corresponding months of 1947, but public con struction was sharply upward. p u r c h a s in g p o w e r c o n t in u e d g a in By almost any measure, purchasing power of the country as a whole reached unprecedented levels in 1948. Total national income for the year was estimated at $224 billion. In 1947, it was $202.5 billion and in 1946, $179.3 billion. Compensation of employees was at an annual rate of $140.6 billion in the third quarter, and cor porate profits after taxes were estimated at $21.4 billion for the quarter. Disposable personal income for the year was $190 billion, against C7 ] $174 billion for 1947. Personal savings were higher for 1948 than for 1947. In spite of restrictions on its use, consumer credit had risen to an estimated total of $15.3 billion in outstandings as of November 30, 1948, as against $12.6 billion a year earlier. The total money supply (currency outside banks and adjusted demand deposits) was somewhat smaller at the end of 1948 than at the end of 1947. FARM ERS A T T A IN ED RECORD PRODUCTION The outstanding development in the country’s agricultural activities for the year was the production of record or near-record crops of the principal farm commodities. Aggregate volume production was 137 percent of the 1923-32 average and exceeded the 1946 produc tion, which was the previous record, by 11 percentage points. Linked with a slackening in foreign exports for some major items, this production record resulted in a general easing of prices for farm products. Perhaps only the operation of the agricultural price-support program prevented what might otherwise have become a severe adjustment, if not a collapse, in prices of farm products. Production gains in cotton and com were especially notable. The 1948 cotton crop of 14.9 million bales was the largest since 1937 and exceeded the 1947 crop by more than three million bales. The record com crop of 3.5 billion bushels was one and a half times as large as that of 1947. Moreover, the wheat crop of 1.3 billion bushels was less than 300,000 bushels short of 1947’s record crop. Impressive gains were scored, too, in the production of oats, pea nuts, Irish potatoes, and oranges. The high levels of agricultural production for the year were re flected by generally increased receipts from farm marketings. Cash receipts from marketings of crops for the country as a whole were down about 2 percent for 1948 as against 1947. This decline was more than offset by an increase of about 5 percent in cash receipts from livestock. Estimated receipts from farm marketings for the year were thus slightly higher; $30.8 billion for 1948 as against $30.2 billion for 1947. Because operating costs were about 7 percent higher, the net income to farmers was, of course, somewhat lower for the year. Barring emergencies that may arise from a worsening of inter [83 national relations, the outlook for agriculture is one of continued adjustment to postwar forces. The year 1946 marked the turning point in real income of the American farmer in terms of 1939 dol' lars. The year 1947 marked the turning point in terms of net dollar income, and January 1948 marked the turning point in prices re' ceived for agricultural products. On the basis of current trends, therefore, the nation’s agriculture will operate in 1949 under pros' pects of declining net income as the result of moderately lower prices received and moderately higher prices paid. CREDIT POLICY WAS ANTMNFLATIONART The commercial banks of the country operated in 1948 under con' stant but moderate pressure from Federal Reserve and Treasury anti'inflation policies. Some of these measures were initiated in the latter part of 1947, and as 1948 progressed a clear pattern in the attack on the problem of inflation was revealed. A t the initiative of the Federal Reserve authorities, an arrange' ment was made in October 1947 with the Treasury to use a portion of its cash surplus for the redemption of the System’s holdings of maturing issues of Government securities. By the end of fiscal 1948, partly in keeping with this arrangement, the Treasury had retired United States Government marketable securities in the amount of about $8 billion. This action effectively offset the increase in bank reserves resulting from the continued inflow of gold. A joint statement was issued on November 25, 1947 by the Board of Governors of the Federal Reserve System, the Comptroller of the Currency, the Federal Deposit Insurance Corporation and the Executive Committee of the National Association of Supervisors of State Banks urging caution in extending bank credit during the en' suing year. The banks were asked particularly to discourage con' sumer loans, real'estate loans, and speculative loans of every type. They were also urged to maintain a high degree of liquidity and to build up their capital structures. The American Bankers Association in 1948 threw its support behind these warnings, urging upon the country’s 14,000 banks the need for voluntary restraint in extending credit. On December 24, 1947 downward adjustments were permitted in Federal Reserve support prices for medium'term and long'term Gov' [9] emment securities. On the longest restricted 21/2 percent issue, the support price was placed at 1001/4 . Because of this adjustment, some uncertainty prevailed all through 1948 about the future support levels, an uncertainty that contributed, no doubt, to restraining unhealthy optimism. In co-operation with the Treasury, the Federal Reserve authorities continued the policy initiated in mid-1947 of permitting short-term Government securities to move toward higher yields. The effective rate on Treasury bills was permitted to rise from % of one percent to above one percent. At the same time, the yields on twelve-month Treasury certificates were permitted to increase from °f one percent to 11/4 percent. These rises in the short-term rate were sig nificant because banks were thereby encouraged to hold or invest their available funds in short-term securities rather than to put such funds in loans or other investments. The Federal Reserve Banks increased their discount rates twice during 1948. In January the discount rate of the Federal Reserve Banks on advances secured by Government obligations was uni formly advanced to 1j/4 percent. In August, the rate was advanced to U/2 percent. These changes in the discount rate did not have the effect that similar changes had in the period following World War I. Discounts and advances of the Federal Reserve Banks during 1948 ranged somewhere between $250 million and $300 million, a degree of borrowing by member banks that was too small to give any ma terial effect to the changing of the discount rate. The chief purpose, therefore, of the rise in the discount rate was to equalize the cost of borrowed Reserve funds with cost of funds obtained through the sale of short-term securities in the market. Another part of the program of restraining bank-credit expansion was the raising of reserve requirements. Effective on February 27, 1948, the Board of Governors increased reserve requirements against demand deposits at central reserve city member banks from 20 per cent to 22 percent. Effective June 11, 1948, such reserve require ments were raised another 2 percent, or from 22 percent to 24 per cent. In September 1948, pursuant to authority granted by the special session of Congress in July and August, the member bank reserve requirements were raised another 2 percentage points. This action established reserve requirements on net demand deposits of 26 [10} percent for central reserve city banks, 22 percent for reserve city banks, and 16 percent for country banks. At the same time, reserves against time deposits for all member banks were raised from 6 per cent to 71/2 percent. In all, therefore, some $3 billion in bank funds were immobilized by these changes. As a further measure to control inflation, the Board of Governors of the Federal Reserve System re-issued its Regulation W which imposed restrictions upon the use of consumer instalment credit. These restrictions were designed to curb the use of credit in recog nition of the fact that when goods and services are in relatively short supply at full employment levels an increase in credit merely serves to push prices higher without a corresponding increase in produc tion. Both the Federal Reserve System and the Treasury continued to encourage individuals to invest their surplus funds in Government securities, thus damping, to some extent, the available purchasing power. This campaign proved to be relatively successful, and by the close of the year the amount of United States savings bonds out standing was about $3 billion larger than at the beginning of the year. As an accompaniment to this concerted program of containing inflationary pressures, the expansion of bank credit that took place in the latter part of 1947 was largely avoided in the corresponding period of 1948. In fact, there was a general tightening of bank credit that was particularly noticeable in the very fields where tightening was most needed, namely, in lending to security and real-estate buy ers and to consumers. Cl l ] HIGHLIGHTS OF THE DISTRICTS ECONOMY The Sixth Federal Reserve District, which the Federal Reserve Bank of Atlanta serves, participated in 1948 in the general prosperity of the country. Agricultural production, banking activity, retail trade, and industrial production and employment were maintained at, or near, record levels. FARM ERS PROSPERED The District states participated importantly in the country’s production record. They produced 5.7 million bales of cotton, a crop more than a third larger than that of 1947. They harvested approximately 259 million bushels of corn, which was a crop more than a fifth larger than that of 1947. They gathered a record crop of pecans. Florida’s production of oranges for the 1948-49 season was estimated to be about 10 percent larger than for the preceding season, as against a decline of about 7 percent in grapefruit production. Tobacco production in both Georgia and Tennessee, because of reduced acreage allotments, was off for the year, except for Tenner see’s Burley crop which was the third highest on record. A number of factors were responsible for the production achieve" ment of the District. Favorable weather for the most part prevailed in the growing season, though both Louisiana and Tennessee suf fered some from drought conditions. A more liberal use of fertilizers and insecticides and improved methods of tillage contributed importantly to the increased yields per acre of the field crops. Farmers of the District states enjoyed a relative gain in cash re' ceipts over those of the country as a whole. Cash receipts from live stock and products were $802 million for January through Novem ber 1948, against $747 million for the comparable period of 1947. Cash receipts from crop marketings for the same period of 1948 were $1,630 million as against $1,535 million for the like period of 1947. Receipts from livestock for the year were thus up about 7 percent and from crops, about 6 percent, making an over-all gain of about 6.5 percent. The price-support program played an important part in maintain ing farm income levels. With approximately 40 percent of ginned cotton moving into loan storage instead of onto the market, receipts [ 123 from Commodity Credit Corporation loans were particularly large. Loan receipts on peanuts and payments under the Irish potato program were also substantial. Citrus fruits and pecans were not in' eluded under the price'support program, and because of large sup' plies, the market prices on these products were severely depressed. Favorable farm'income levels led to generally rising farm'land prices in the District, except in Florida where such prices fell about 9 percent during the year 1948 in reflection of the unfavorable citrus'fruit situation. For the District as a whole, farmland prices rose by 6.2 percent from July 1947 to July 1948. In all of the states of the District but Georgia such prices by mid'1948 had surpassed the boom levels of the period following World War I. Georgia, however, led all other states of the District in percentage gain in farm'land prices for the period from July 1947 to July 1948, having a gain of 11 percent. Throughout the year 1948, there was but little activity in farm' land sales in the District. Speculative buying was at a minimum, and most of the buying was done by operating farmers who wished to add to their holdings. This type of activity in the farm market is an evidence of stability and of confidence in the long'term outlook. By and large, the 1949 outlook for District agriculture is by no means pessimistic in nature. Though some decline in cash receipts from farm marketings may be anticipated, there will be strong sus' taining forces at work in the economy as a whole. Foremost among these forces will be the Government’s preparedness program, heavy expenditures by State and local governments, and expenditures made in overcoming existing shortages in automobiles, housing, and metal products of one kind or another. Though there will be some shifting in the character of agricultural exports, the over'all export volume is not expected to be much dif ferent for 1949 than it was for 1948. Exports of grain may decline somewhat, but exports of cotton and tobacco, the chief cash crops of the District, are expected to increase. A very strong sustaining factor for 1949 will be the agricultural price'support program. Acreage controls for com and cotton will not be in effect for the year. Though some decline may be anticipated in the support levels for these crops, the decline will not be material. Peanut farmers, because of acreage controls for 1949, will expep [13] ience some reduction in income from the peanut crop. Income from Irish potatoes in the District will almost certainly be less in 1949 than it was in 1948 because of the reduction in the price-support level and official urging that plantings be sharply reduced. The outlook for citrus-fruit producers remains cloudy. The rapid development in the canning of citrus-fruit juices and the potential growth in frozen-fruit-juice marketings are favorable developments, but the citrus industry still continues to function without crop con trol or price supports. Operating as they do in a free market, citrusfruit producers must contend with more price uncertainties than do the other major producing groups in the District’s agriculture. Producers of meat animals and poultry and dairy products will face a more difficult market situation than they did in 1948. If the expected increases in meat animal marketings in 1949 occur, some re duction in pork and beef prices is almost certain. Not much change is indicated in prices of milk and dairy products and in eggs, but prices of chickens and turkeys are expected to be lower. Some weakening in the prices of fats and oils is also anticipated. BANKERS PROCEEDED CAUTIOUSLY District banking activities during 1948 directly reflected the prevail ing high levels of income, production, and prices. For the member banks of the Sixth District, the changes in assets and liabilities from the beginning to the end of the year were reasonably moderate. Loans and discounts rose from $1,437 million to $1,546 million. Holdings of United States Government obligations dropped from $2,479 million to $2,255 million. Demand deposits declined from $4,681 million to $4,638 million. Time deposits were slightly off, dropping from $1,075 million to $1,060 million. In general, these changes indicated a marked stability. Toward the close of the year 1948, there appeared to be a general willingness to exercise caution in lending activities. Satisfaction was general with the outcome of short-term advances to farmers during the year. Good crop returns were reflected by a high volume of re payments, and the carry-over of farmer loans was at a minimum. The only exception to this experience was found in the rice district of Louisiana and the citrus section of Florida where carry-over of some loans seemed probable. C14] A large volume of Commodity Credit Corporation guaranteed loans was carried in the beginning of the harvest season, but most of this volume was expected to be promptly liquidated as soon as the loans could be properly processed and retired through Governmen tal funds. Because of the general rise in short-term interest rates, the banks were largely disinclined to invest their funds in Commodity Credit Corporation participation certificates which netted them only U/2 percent interest. Bankers of the District were also exhibiting restraint in making loans on real estate. The 28 weekly reporting member banks, as of December 29, 1948, had a total of $65 million in real-estate loans, which was $3 million less than they had on the corresponding day a year earlier. Preference was being given to loans on income-produc ing commercial properties and to residence properties having good locations and conservative margins between loan commitments and market valuation. Bankers were making few G. I. mortgage loans, primarily because of the low rate of interest, the long maturities, and the thin equities. A cautious position was being taken, too, in the matter of construction loans when construction costs did not appear to be firm. Advances to retail establishments were being made freely but with due regard to avoiding overstocking of merchandise. RETAIL SALES A CTIV ITY REACHED N EW HEIGHTS Retail sales activity in the District, as measured by sales of firms reporting to this bank, surpassed in 1948 the very high levels of 1947. A t the close of the year, retail sales were barely exceeding those of the corresponding period of 1947, however, and this de velopment, coupled with the realization that the gains were largely in terms of dollars rather than in physical volume, seemed to be implying that the boom was beginning to level off. Nevertheless, there were all indications that profits for the year were highly satis factory. The flurry of markdowns that occurred in the first part of 1947 in department store and furniture store operations was avoided in 1948. Operating economies, improved efficiency, and larger gross profits resulted in fairly general higher net profits even though salaries, wages, and operating expenses were generally higher. As measured by department store sales, the year showed retail [15] sales activity in the District at a higher rate of expansion over 1947 than 1947 showed over 1946. The gain in department store sales for 1948 was approximately 9 percent over 1947. In contrast, the gain for 1947 over 1946 was only 4 percent. Actually, department store sales in the District for every month of the year 1948 exceeded those of the corresponding months of 1947 except for the month of No vember when, compared with the preceding November, a slight decrease was experienced. Cities of the District that registered the greatest gains in department store sales over the preceding year were Birmingham, Mobile, Orlando, Columbus, New Orleans, and Knox ville. Cities that showed about the same volume for 1948 as for 1947 were Jacksonville, Augusta, Macon, Rome, and Meridian. Sales of reporting furniture stores in the District were about 3 percent lower for 1948 than for 1947. This loss contrasts with the gain for 1947 over 1946 of 10 percent. Sales of reporting household appliance stores were approximately 18 percent greater for 1948 than for 1947, which was less than the gain experienced in 1947 over 1946. A considerable part of the increase, however, was achieved in the first third of the year when in each month sales were from 36 percent to 65 percent higher than for the corresponding months of 1947. During the summer months, household appliance sales ran about 20 percent ahead of the corresponding months of 1947, but in October such sales were one percent less than for October a year earlier. At the close of the year, therefore, there was every indication that the urgency with which District housewives had wished to ob tain household appliances ever since the war ended had considerably diminished. Jewelry store sales of the District were approximately 5 percent smaller in volume for 1948 than for 1947. Sales for 1947 were about 2 percent less than for 1946, thus somewhat foreshadowing the moderate decline in volume that took place in 1948. In contrast with moderate increases or outright decreases in sales volume, District retail establishments reported substantial gains in inventories. Department store inventories at the end of 1948 were about 12 percent larger than for the end of the preceding year. Inventories of retail furniture stores were up 12 percent for the corresponding period. The ratio of sales to inventories, however, was by no means alarming and the increase in inventories was more [16] an indication of increasing availability of merchandise items than one of overstocking. The outlook for retail sales activity for the year 1949 is one of mixed trends. In view of the production gains of the automobile industry for 1948 over previous years and the favorable outlook for sustained high production, the retail sales of automobiles in the District will almost certainly reach new high levels in 1949. Now that the most urgent needs of consumers have been largely satisfied for durables other than automobiles and now that depart' ment stores, furniture stores, and appliance stores are able to obtain merchandise in ample quantities, it would not be surprising if retail selling in such stores for the year 1949 should fall in dollar volume somewhat below the volume they attained in 1948. Such an expecta' tion, however, would not hold if the American preparedness and foreign'aid programs should take more of the national product than is presently indicated. in d u s t r ia l p r o d u c t io n a n d e m p l o y m e n t SHOWED GAINS The inflationary pressures that characterized the economy as a whole for the year 1948 were reflected in the Sixth District by extraordi' narily high levels of industrial activity. Nonmanufacturing employ' ments reached heights never before attained and, in general, industry operated at top capacity. Some segments of industry, notably ship' building, experienced a postwar letdown, but expansion in other industrial lines more than took up the slack. Construction contracts awarded in 1948, as reported by the Dodge Statistical Research Service, exceeded in dollar volume by a substantial margin, about 19 percent, the awards for the year 1947. Nevertheless, in the closing months of the year, construction activity in terms of dollars was falling below the volume recorded in the closing months of 1947. This decline might well indicate a lessening of construction activity in 1949. Cotton consumption by mills of the District was maintained at a high rate in 1948 but at a rate that was about 5 percent less than for 1947. District bale consumption for the first 11 months of 1948 amounted to 2,968,137 bales, against 3,138,065 bales for the cor' C17] responding period of 1947, and 3,404,902 bales for the entire year of 1947. The decline in exports was partly responsible for the decline in cotton consumption. The loss in exports, in turn, was due to ex change restrictions, quotas, and embargoes. Moreover, there was a considerable increase in cotton goods production not only in Europe but in Latin America and the Far East as well. It is expected that Economic Co-operation Administration funds for foreign purchases will be more freely available in 1949 than they were in 1948. Some recovery in the export market could be expected to benefit the textile industry in the District, an industry which plays a highly important part in the economy of the region. Electric power production for every month of 1948 exceeded such production for the corresponding months in 1947. In Novem ber 1948, it was 2.5 billion kilowatt hours, against 2.2 billion kilo watt hours in November 1947. District industry in 1948 gave employment to over one million persons, as it had in 1947. Estimated manufacturing employment in the District totaled 1,097,600 persons in November 1948, against 1,111,700 persons in November 1947. Shipbuilding employment in both Alabama and Florida dropped considerably for the year, but in most other categories employment in the District was higher in 1948 than it was in 1947. Toward the close of the year, some industries, particularly in textile manufactures, were retaining their workers but operating on reduced schedules. There was clearly an emergent tendency, as the year ended, to await further developments in the over-all economic situation. Unemployment in each of the states of the District seemed to be at a minimum, but if any further hesitation in industrial activity developed and extended well into the year 1949, there was apprehension that unemployment might become a serious problem. [18] REVIEW OF BANK OPERATIONS The operating activities of the Federal Reserve Bank of Atlanta fall into two principal categories: (1) services for the Government and its agencies, and (2) services for the business public in general and the member banks in particular. These activities and related matters for the year 1948 are here briefly reviewed under their re' spective descriptive headings. COHSUM ER IN STA LM EN T CREDIT Under the direction of the Board of Governors of the Federal Re' serve System, the Bank again assumed responsibility for adminis' tering consumer credit controls in the Sixth District and established the necessary operating department to carry out the new function. Public Law 905, approved August 16, 1948, authorized the Board of Governors “ to exercise, up to and including June 30, 1949, con' sumer credit controls in accordance with and to carry out the pur' poses of Executive Order No. 8843 (August 9, 1941) insofar as it relates to instalment credit.” Pursuant to the new authority, the Board reissued Regulation W, effective September 20, 1948. As was the case under the previous regulation which expired November 1, 1947, the new regulation controls down payments, loan values, and maximum maturities. The restrictions apply to instalment sales of, and loans for, 12 listed arti' cles and to instalment loans for certain other consumer purposes. After Regulation W was promulgated, the activities of the Fed' eral Reserve Bank of Atlanta in connection with the controls of consumer instalment credit were confined to distributing copies of the Regulation and its amendments, to sending out registration forms and issuing registration certificates, and to making compliance checks in the field. Only those business and financial firms engaged in the extension of consumer instalment credit are required to file registration statements with the Bank. A t the close of the year, a total of 10,890 registration certificates had been issued. FISCAL AGEN CY A N D SECURITIES DEPARTM ENT The Bank acts as the Treasury’s fiscal agent in the Sixth District. The Fiscal Agency Department distributes information and instruc' C19] tions regarding new issues throughout the District, and performs all necessary operations incident to the placing of the issues. Because the Treasury, during the year, operated with a cash surplus, the new issues in 1948 were largely in replacement of maturing issues. But there was a considerable volume of work in redeeming coupons, re deeming maturing issues, making denominational exchanges, effect ing registration of marketable issues, and converting registered bonds to coupon bonds. The handling and servicing of United States Savings Bonds con tinued to be an important task. Redemptions of Savings Bonds, Se ries A through E, for the year amounted to $325,372,565 and to 4,892,495 pieces. For the year 1947, in contrast, such redemptions amounted to $360,536,777 and to 6,298,034 pieces. But issues of such Savings Bonds were also made throughout the year and by the close of the year the Department had issued 1,809,116 pieces in the amount of $207,877,940. Corresponding figures for 1947 were $209,370,325 and 1,957,462. On December 31, 1948, the number of qualified issuing agents for Savings Bonds, Series E, in the District was 1,443. The Department performed other services for the Treasury. These services included the handling of armed forces leave bonds, accounting for withholding tax collections in co-operation with the Accounting Department, and handling war-loan accounts and col lateral. The Department also acts as custodian of securities deposited for governmental purposes, such as collateral for public moneys and bankruptcy funds, collateral deposited by immigration officials, and collateral for penal or performance bonds of the Forestry Service or the Commissioner of Internal Revenue. On December 31, 1948, the Department, as custodian, held for the public 268,463 pieces of sav ings bonds in the face amount of $28,132,845. The Department also performs security functions as a direct op eration of the Bank. These functions, in part, consist of safekeeping of securities for member banks, holding securities pledged by mem ber banks to secure municipal and state deposits, the purchase and sale of securities in the open market for member banks, and clearing securities with dealers on contracts made directly between such dealers and member banks. During the year 1948, further progress was made in adjusting the [20] work of the Department to more normal operating conditions as against the highly expanded activities that were characteristic of the war years. In recognition of the postwar contraction in savings bond activities, the savings bond issue and redemption operations of the Jacksonville Branch were transferred during the year to the parent bank, in the same manner as the transfer of such operations from the Birmingham and Nashville Branches on June 1, 1947. These trans fers effected a considerable saving in cost with no material incon venience to the banks and bondholders in the Z£>nes served by the branches. A further operating economy was effected by transferring from the New Orleans Branch to the parent bank the operation of proc essing paid savings bonds from agents. Paying agents in the New Or leans zone continue to send their paid bonds to the Branch for credit, but such bonds are then forwarded to the Head Office for processing. CUSTODY DEPARTM ENT The Bank continued during the year to perform custody services for two major Government agencies, namely, the Reconstruction Fi nance Corporation and the Commodity Credit Corporation. Services for the RFC were in considerably smaller volume than for previous years. The Corporation on January 15, 1948, com pleted a decentralization program that resulted in transferring to its loan agencies the bulk of the work in the servicing of loans thereto fore performed by the Federal Reserve Banks. By midyear the new “ custody record procedure” had been fully established. Under the new arrangement, the Bank accepts deposits from the loan agencies for credit to the account of the Corporation with the Treasurer of the United States. It issues Treasury checks for the ac count of the RFC upon receipt of schedules of disbursement exe cuted by authorized representatives of the Corporation. It continues to service certain nondecentralized loans. It holds in safekeeping for account of the RFC, negotiable securities, notes, mortgages, and re lated supporting documents. These duties and responsibilities are defined by agreements between the Corporation and the Federal Reserve Banks. The volume of the Bank’s custody activities for the Commodity Credit Corporation expanded greatly during the year. This expan' [21] sion occurred mostly in the latter months of the year as large quan' tities of cotton and peanuts were being placed under loan or pur' chase agreements under the Federal farm price'support program. In addition to holding producers’ notes, the work that the custody department performs for the CCC is largely that of making disburse' ments and receiving collections. In this work, the Bank plays a purely passive role. It does not initiate transactions, nor does it have any direct interest in them except to see that they are handled expe' ditiously and correctly. Most of the transactions originate with the three field offices of the Corporation, namely, the Cotton Branch at New Orleans, the Atlanta Area Fiscal Office, and the GFA Peanut Association at Camilla, Georgia. Operations functioned by the Bank as fiscal agent for the CCC during the first eight months of 1948 practically followed the pat' tern of the previous year. The 1947 cotton loan program, which ac' counted for the major volume of activities for 1947, was approxi' mately 25 percent greater than for the preceding year. The loan rate or support price was well under the market price, and most of the loan was repaid by maturity, July 31, 1948. The few notes remaining in the loan were pooled and returned to the Corporation’s regional office at New Orleans in the latter part of August. Thus, for the second successive year, the cotton loan program was completely liq' uidated insofar as the Bank was concerned. Immediately after September 1, the 1948 program became active and maintained a high daily volume of transactions right up to the end of the year. Present indications are that the 1948 cotton loan will be the largest since the original 1933 loan. There are three prin' cipal reasons for the current record loan: (1) the volume of the cur' rent crop—the seventh largest in history and the largest since 1937; (2) the new high loan rate or support price; and (3) the current market price which is practically on a par with the loan price. The New Orleans Branch, as fiscal agent for the Corporation, does all disbursing and collecting for the New Orleans office of the Corporation. It does this, however, only for that portion of the cot' ton program that is not being handled by the custodian Federal Reserve Banks. Disbursements continued to be made during the year for the ac' count of the Atlanta Area Fiscal Office of the Production and Mar' [22] keting Administration on the support programs for flour, wheat, naval stores, peanuts, and sweet and Irish potatoes. Also, collections under these programs were functioned and credited to the Treasurer of the United States for the account of the Corporation. The volume of the work expanded in the last four months of 1948 to the extent that 49 employees were required to handle it. In contrast, in the preceding 20 months, only an average of eight employees had been necessary. CURRENCY A N D COIN DEPARTM ENT An important service that the Bank renders to the member banks, and through them to business and the public, is the supplying of cur rency and coin. A characteristic of any central banking system is the exercise of control over currency issues. This control in the Federal Reserve System is provided through the issuance of Federal Reserve notes which now, under successive legislative changes, virtually make up the country’s currency supply. Federal Reserve notes, in fact, account for nearly 85 percent of the United States money in circulation. Federal Reserve notes in circulation of the Atlanta bank at the close of the year amounted to $1.3 billion, which was approxi mately $68 million less than it was at the end of the preceding year. Added significance is given to the amount of Federal Reserve notes outstanding by the action of the Board of Governors, initiated in 1947, in determining that the Federal Reserve Banks would pay interest on the amount of such notes outstanding that was in excess of the amount of gold certificates held by the Federal Reserve Agent as collateral security. The amount of interest so paid is designed to transfer a large proportion of the net operating profits of the Federal Reserve Banks to the Treasury. Such interest payments are made on a quarterly basis. For the year 1948 these payments for the Atlanta Bank amounted to $8.3 million. In 1948 the Atlanta Bank and its Branches received and counted 259.991.000 pieces of currency and 252,940,000 coins. The corre sponding figures for 1947 were 249,823,000 and 241,216,000. The amount of currency and coin payments to member and nonmember banks in 1948 was $1,138,115,000, and receipts from these banks were $1,465,630,000. For 1947 the corresponding figures were $1,096.931.000 and $1,356,995,000. [23] CHECK COLLECTION DEPARTM ENT Another major service function of the Bank is that of check collec' tion and clearing. One of the primary objectives of the Federal Re' serve System in its beginning was the providing of a nationwide mechanism for the most direct, expeditious, and economical routing and clearing of checks drawn upon the country’s banks and Govern' ment accounts. This mechanism, however, is available only for clear' ing checks that are paid at par, with no deduction of an exchange charge. With relation to the number of employees, the collection of checks and noncash items is currently the second largest function of the Bank. During 1948 the Bank and its branches cleared 122,038/ 000 checks against 115,598,000 during 1947. Check'collection service has been considerably speeded up in re' cent years by the use of air'transport facilities, which was initiated in 1946. Various problems and procedures have been worked out in the meantime, and daily shipments of checks by air to all Federal Reserve Banks and branches has become an established and success' ful method. The chief problem remaining is that of overcoming de' lays occasioned by unfavorable flying conditions and by sudden changes in flying schedules. Air shipment has enabled the Federal Reserve Bank of Atlanta to make material changes in its time schedule of deferred availability. A t the Atlanta office, for example, there are now 13 one'calendar' day cities whereas there were only three prior to the use of air ship' ments. Cities as far away as Dallas, Houston, and Kansas City are thus included. TwO'calendar'day points include the cities of El Paso, Texas, Salt Lake City, Utah, and Helena, Montana, all of which were previously included in the three'day schedule. d isc o u n t d e p a r t m e n t U Another important function that the Bank can perform for its mem' ber banks is to advance funds to them on their own promissory notes secured by United States obligations or by eligible paper. For a mem' ber bank, the Bank can also rediscount customers’ notes that meet certain requirements. Though member banks have not needed to use these facilities to any great extent, the service is potentially of great [24] value and is, indeed, a safeguard to them if times of banking stress should ever arise again. During 1948 the Bank made 407 advances accommodating 42 member banks to the extent of $650,941,459. Of that amount $648/ 303,000 was secured by United States Government obligations, $380,238 by eligible paper, and $2,258,221 by collateral not eligible for purchase or rediscount. The high point of member bank borrowings was reached on February 27, 1948, when $21,601,000 was outstanding. At the end of the year only one member bank was indebted to this Bank, in the amount of $35,000, compared with two at the end of 1947 in a total amount of $80,000. As in 1947, 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 shortages of the member banks. On December 31, 1948, the Bank was participating to the extent of $7,795,125 in Foreign Loans on Gold made by the Federal Reserve Bank of New York. Such advances amounted to $2,074,600 on December 31,1947. 13 (b) LOAN OPERATIONS Under the authority of Section 13 (b) of the Federal Reserve Act, relating to discounts for industrial purposes, the Bank made 18 ad vances during the year in the total amount of $12,648,809.68, rep resenting participation with one member bank in commodity-secured loans. There were no such advances outstanding at the end of the year. The Bank also executed commitments in favor of two member banks to acquire deferred participations amounting to not more than $316,000 in loans totaling $1,240,000. RESEARCH DEPARTM EN T Because of Federal Reserve responsibilities in the field of over-all monetary and credit control, a staff of economic and business spe cialists is maintained at each of the twelve Reserve Banks and by the Board of Governors in Washington, D. C. Such major policy actions as changes in reserve requirements of member banks, changes of dis count rates of the Reserve Banks, and changes in Government security-management procedures are made only after extensive factual analyses have been made. The Research Departments of the various [25] Reserve Banks assemble, organize, and present much of the basic business data needed for these decisions. The work of the Research Department at the Atlanta Federal Re serve Bank is thus carried on in close relationship with that of the Board of Governor’s Division of Research and Statistics. The De partment has developed reporting relationships with department, furniture, jewelry, and wholesale appliance stores, and with con sumer credit agencies of all kinds. It gathers, classifies, and analyzes complete data on bank operations. The Bank’s Monthly Review of business, industrial, and agricultural conditions is prepared by the Department. The Research Department also carried on an extensive program in the field of bank and public relations. Members of the Department made addresses at various agricultural and civic club meetings. Much of this work was in connection with the Bank’s agricultural pro gram which was carried on during the year in co-operation with bankers’ associations in the District. Facilities of the Research Department are open to the use of mem ber banks at all times. The annual operating ratio study of member banks is an example of this type of service. The department is always ready to supply any needed information for member bankers and during the course of the year handled hundreds of requests for in formation. The facilities of the Research Library are also available for the use of member bankers, and active use of such facilities is made. BA N K A N D PUBLIC RELATIONS Recognizing the desirability of having direct contact with the bank ers of the District, the Bank continued an active program of bank visitation during the year. Its officers and staff members, accordingly, made 1,751 visits to commercial banks, of which 758 were to mem bers of the System and 993 to nonmembers. Such visits are more than routine in nature; they provide opportunity for discussing prob lems arising from clearings and collections, from handling Govern ment securities, from shipments of coin and currency, and from other services. Every effort is thus made to work out operational de tails to the end that the Bank may render the greatest possible service to the bankers of the District. Representatives of the Bank also attended numerous meetings [ 26] where banking problems were discussed. Altogether, the Bank was represented at 145 meetings of this kind during the year, including each of the six state annual bankers association meetings, and the American Bankers convention, as well as 37 group meetings. The Bank’s officers and staff members made 65 speeches or informal talks at such meetings. CHANGES IN MEMBERSHIP IN THE SIXTH DISTRICT Over the past several years, membership in the Federal Reserve System in the Sixth Federal Reserve District has shown an almost unin terrupted gain. A t the beginning of 1942 there were 317 members; at the end of 1948 there were 340. During the year 1948, the Sixth District had a net gain of six members. Of the additions, two were newly organized national banks: the Loop National Bank of Mobile, Mobile, Alabama, which opened for business on March 17, 1948, and the First National Bank of Eufaula, Eufaula, Alabama, which opened on November 1, 1948. Another addition was accomplished through the conversion of a state bank to a national bank, namely, the West Georgia Bank and Trust Company, Carrollton, Georgia, which on January 2, 1948, became the West Georgia National Bank of Carrollton. There was another conversion of a state bank to a national bank during the year, namely, the American Trust and Banking Company, Chattanooga, Tennessee, which became the American National Bank and Trust Company of Chattanooga; in this case, however, the bank was already a member so that the conversion had no effect on total membership. Four additions to membership came about through the admission of state banks. These were the Columbia Bank of Ybor City, Tampa, Florida, admitted on April 16; the Farmers and Merchants Bank, Forest, Mississippi, admitted April 30; the Beach Bank, Jacksonvdle, Florida, admitted on May 17; and the Citizen’s Trust Company, Atlanta, Georgia, admitted on October 1. There was only one bank that withdrew from membership dur ing the year. This was the First National Bank of East Point, Geor gia, which on November 19 converted to a State nonmember bank and now operates under the name of The Citizens and Southern Bank of East Point. It is affiliated with the Citizens and Southern National Bank, Atlanta, Georgia. [27] ADDITIONS TO PAR LIST At the end of 1948, there were 1,186 banks in the Sixth Federal Re' serve District. Of this number, 556 were on the Federal Reserve Par List. For the year the number of banks increased by 16 and the num' ber of banks on the Par List increased by 11. Of banks on the Par List, 279 were national banks, 67 were state-chartered member banks, and 210 were state-chartered nonmember banks. Nonmember state banks added to the Par List during the year were: Bank of College Grove, College Grove, Tennessee; Bank of Dunedin, Dunedin, Florida; Boynton Beach State Bank, Boynton Beach, Florida; Farmers and Merchants Bank, Piedmont, Alabama; The Commercial Bank in Panama City, Panama City, Florida; The Gulf Beach Bank, St. Petersburg, Florida; The Robertson Banking Company, Demopolis, Alabama; The Eufaula Bank and Trust Com' pany, Eufaula, Alabama; Cartersville Bank, Cartersville, Georgia; and the Phenix'Girard Bank, Phenix City, Alabama. DIRECTORS The Federal Reserve Bank of Atlanta has nine directors. Of these, three are Class A directors, who are chosen by and represent the member banks; three are Class B directors, who are elected by the member banks but who must be actively engaged in agriculture, busi' ness, or industry; and three are Class C directors, who are appointed by the Board of Governors of the Federal Reserve System. Terms of the directors are for three years on a staggered basis so that the term of one director of each of the three classes expires each year. At the regular elections held toward the close of the year 1948, the member banks re'elected as their Class A director, R. C. Wil' liams, president, The First National Bank of Atlanta, Atlanta, Geor' gia, and as their Class B director, J. A . McCrary, vice president and treasurer, J. B. McCrary Company, Inc. The Board of Governors, in turn, appointed Paul E. Reinhold, president, Foremost Dairies, Inc., Jacksonville, Florida, as a Class C director. Mr. Reinhold sue' ceeds J. F. Porter of Columbia, Tennessee. Mr. Porter, who is an active farmer, retired on December 31, 1948, after serving 11^2 years as a director and 10 years as deputy chairman. The Board of Governors of the Federal Reserve System desig' nated Frank H. Neely, president, Rich’s, Inc., Atlanta, Georgia, as [28] chairman of the Board and Federal Reserve agent for the year 1949 and Rufus C. Harris, president, The Tulane University of Louisi' ana, as deputy chairman. Each of the four branches of the Federal Reserve Bank of Atlanta has seven directors of whom four are appointed by the Board of Di' rectors of the Federal Reserve Bank of Atlanta, and three by the Board of Governors of the Federal Reserve System. The terms of these directors are also for three years, with the terms expiring on a staggered basis so that the terms of either two or three directors, as the case may be, expire each year. Branch directors who represent member banks are not eligible for reappointment because of the n> tation principle which has been adopted. A t the New Orleans branch, the terms of two directors expired with the end of 1948. John J. Shaffer, Jr., a planter of Ellendale, Louisiana, whose term was one of those expiring, was reappointed by the Board of Governors for another three-year term. J. C. Bolton, president, Rapides Bank and Trust Company, Alexandria, Louisi' ana, was elected by the Bank’s Board of Directors to succeed T. G. Nicholson, president, The First National Bank of Jefferson Parish at Gretna, Gretna, Louisiana. For the two three'year terms that expired at the end of 1948 at the Birmingham branch, William Howard Smith, president, Me' Queen'Smith Farms, Prattville, Alabama, was reappointed; and D. C. Wadsworth, president, American National Bank, Gadsden, Ala' bama, was appointed to the other vacancy. Mr. Wadsworth sue' ceeds M. B. Spragins, president, The First National Bank of Hunts' ville, Huntsville, Alabama. A t the Jacksonville branch, the appointments for the two new terms expiring in 1951 were those of J. Hillis Miller, president, Uni' versity of Florida, Gainesville, Florida, and J. D. Camp, president, Broward National Bank, Fort Lauderdale, Florida. Mr. Miller sue' ceeds himself, as he was appointed on July 9, 1948, to fill the unex' pired term of Charles S. Lee, a planter of Oviedo, Florida, who re' signed because of ill health. Mr. Camp succeeds J. S. Fairchild, ex' ecutive vice president, The First National Bank of Winter Garden, Winter Garden, Florida. The Nashville branch appointments for the two new terms were those of H. C. Meacham, a farmer of Franklin, Tennessee, and Parkes Armistead, president, American National Bank, Nashville, Tennessee. Mr. Meacham succeeded himself and Mr. Armistead sue' [29] ceeded Edward Potter, Jr., president, Commerce Union Bank, Nash ville, Tennessee. At the Nashville branch, also, T. L. Cathey, presi dent, Peoples and Union Bank, Lewisburg, Tennessee, was appointed to complete the unexpired term of W. G. Birdwell, cashier, Citi2£ns Bank and Trust Company, Carthage, Tennessee, who resigned his directorship on December 10, 1948, because of ill health. FEDERAL ADVISORY COUNCIL The Board of Directors of each Federal Reserve Bank annually ap points from its district a representative to the Federal Advisory Council. The Council meets at least four times a year and maintains active contact with business, industrial, and agricultural develop ments in their relation to policies of the Federal Reserve System. The representative of the Sixth Federal Reserve District on the Council for the year 1948 was J. T . Brown, president, Capital Na tional Bank in Jackson, Jackson, Mississippi. Mr. Brown was reap pointed by the Bank’s Board of Directors to serve for the year 1949. IN D U STRIA L ADVISORY COMMITTEE With respect to the powers of the Federal Reserve Banks in making loans and discounts for industrial purposes, each Federal Reserve District maintains an industrial advisory committee. Members of these committees are appointed by the directors of the Federal Re serve Banks, under the approval and regulation of the Board of Gov ernors of the Federal Reserve System. Members of the industrial and advisory committee for the Federal Reserve Bank who served for the year 1948 were all reappointed for the year 1949. The chairman is John E. Sanford, vice president, Armour & Company, Atlanta, Georgia. 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. Mil" ner, president, Gate City Cotton Mills, Atlanta, Georgia. APPOINTM ENT OF OFFICERS There was only one change in the official staff of the Federal Reserve Bank of Atlanta during 1948. Roy E. Milling, manager of the Cur rency and Coin Department, was designated Assistant Vice Presi dent, effective June 1,1948. C303 DIRECTORS AND OFFICERS For the Year 1949 DIRECTORS C la ss R. C. W A Term Group .......................................................... il l ia m s 1 Expires 1951 President, The First National Bank of Atlanta, Atlanta, Georgia W . D . C o o k ............................................................................................... 2 Chairman of the Board, First National Bank in Meridian, Meridian, Mississippi 1949 G eorge J . W h i t e ................................................................................... 3 President, The First National Bank of Mount Dora, Mount Dora, Florida 1950 C lass B A. B. F r e e m a n ............................................................................ 1 1950 Chairman of the Board, Louisiana Coca-Cola Bottling Co., Ltd., New Orleans, Louisiana J. A. M cC ra ry ............................................................................ 2 1951 Vice President and Treasurer, J. B. McCrary Co., Inc., Decatur, Georgia D o n a ld C o m e r ......................................................................................... 3 Chairman of the Board, Avondale Mills, Birmingham, Alabama 1949 C lass C F r a n k H. N e e l y , Chairm an .............................................................................. 1950 President, Rich’s Inc., Atlanta, Georgia R u f u s C . H a r r is, Deputy C h airm an ............................................................ 1949 President, The Tulane University of Louisiana, New Orleans, Louisiana P a u l E. R e i n h o l d ................................................................................................1951 President, Foremost Dairies, Inc., Jacksonville, Florida [ 31] OFFICERS W . S . M c L a r in , J r ., L . M . C lark President I. H . M First Vice President V. K. Bow man R oy Vice President J. E. D a r t in Assistant Vice President E. M il l i n g Assistant Vice President J. R . M c C ravey, J r . en m a rk Vice President Assistant Vice President S. P. SCHUESSLER H a r o ld T . P a t t e r s o n Vice President Counsel J. H. B o w d e n Assistant Vice President W. E. P ik e General Auditor C . R . C am p E. C . R a in e y E. L. R auber Assistant Vice President Assistant Vice President F. H. M a r t in Assistant Vice President Director of Research Member of Federal Advisory Council J. T . B row n President Capital National Bank in Jackson Jackson, Mississippi Industrial Advisory Committee John E. S anford, Chairman eo r g e I. C . M L u t h e r R andall W. W. W in s h i p il n e r President Gate City Cotton Mills Atlanta, Georgia President Randall Brothers, Inc. Atlanta, Georgia G President Fulton Supply Company Atlanta, Georgia Vice President Armour Company Atlanta, Georgia French Chairman of the Board Moore-Handley Hardware Company, Inc. Birmingham, Alabama [ 32] B ir m in g h a m B r a n c h DIRECTORS „T™ Expires T had H o l t , C hairm an............................................................................ 1949 President'Treasurer, Voice of Alabama, Inc. (Radio Station W API), Birmingham, Alabama W il lia m H oward S m i t h ................................................................................... 1951 President, McQueen-Smith Farms, Prattville, Alabama J. R oy F a u c e t i ..................................................................................................... 1950 Faucett Brothers, Northport, Alabama D. C. W a d sw o r th ....................................................................................................... 1951 President, The American National Bank, Gadsden, Alabama R . L. A da m s ........................................................................................................... 1949 President, Bank of York, York, Alabama J a m e s G. H a l l ..................................................................................................... 1949 Executive Vice President, The First National Bank of Birmingham, Birmingham, Alabama W .C . Bo w m a n ............................................................................................................. 1950 President, The First National Bank of Montgomery, Montgomery, Alabama OFFICERS P. L. T. B e a v e r s Vice President and Manager H. J. H. C. F r a z e r Assistant Manager L. W. S t a r r Assistant Cashier [33] U rquhart Cashier J a c k s o n v il l e B r a n c h DIRECTORS Expires J. H i l l i s M i l l e r , C h a ir m a n ..............................................................................1951 President, University of Florida, Gainesville, Florida M a r s h a l l F. H o w e l l ..........................................................................................1950 Secretary-Treasurer, Bond-Howell Lumber Company Jacksonville, Florida J . D . C a m p ................................................................................................................. 1951 President, Broward National Bank, Ft. Lauderdale, Florida M ax L o s n e r ............................................................................................................1949 President, The First National Bank of Homestead, Homestead, Florida H . S. M o o d y ............................................................................................................1949 Executive Vice President, Manatee River Bank H Trust Company, Bradenton, Florida J . W . S h a n d s ............................................................................................................1950 President, The Atlantic National Bank of Jacksonville, Jacksonville, Florida OFFICERS T . C . C lark T . A . L a nford Vice President and Manager J. W yly C . M a so n F ord S n yder Assistant Cashier Assistant Cashier Cashier C 34] N a s h v il l e Branch DIRECTORS W. B r a t t e n E v a n s, T'™ Expires Chairm an.............................................................1949 President, Tennessee Enamel Manufacturing Company, Nashville, Tennessee H . C . M e a c h a m .....................................................................................................1951 Farmer, Franklin, Tennessee C. E. Br e h m ...........................................................................................1950 President, University of Tennessee, Knoxville, Tennessee P a r k e s A r m i s t e a d ............................................................................................... 1951 President, American National Bank, Nashville, Tennessee T. L. Ca t h e y ........................................................................................... 1949 President, Peoples and Union Bank, Lewisburg, Tennessee L. R. Dr iv e r ........................................................................................... 1949 President, The First National Bank in Bristol, Bristol, Tennessee W . H . H it c h c o c k ............................................................................................... 1950 President, First and Peoples National Bank, Gallatin, Tennessee OFFICERS J o el B . F o rt, J r . E. R. H Vice President and Manager R o bert E. M oody , Assistant Cashier [ 35] ar riso n Cashier J r. N ew O rlea n s Branch DIRECTORS „T<™ Expires J o h n J. S h a f f e r , J r ., Chairman............................................................. 1951 Planter, Ellendale, Louisiana E. O . B a t s o n ............................................................................................................1949 President, Batson'McGehee (f Company, Inc. Millard, Mississippi, H. G . C h a l k e y ......................................................................................................1950 President, Sweet Lake Land and Oil Company, Inc. Lake Charles, Louisiana J . C . B o l t o n ............................................................................................................1951 President, Rapides Bank 6f Trust Company Alexandria, Louisiana J o h n L e g i e r ............................................................................................................1949 President, National American Bank of New Orleans, New Orleans, Louisiana W . S. J o h n s o n ...................................................................................................... 1949 Executive Vice President, The First National Bank of McComb City, McComb, Mississippi T. J. E d d i n s ................................................................................................. 1950 President, Bank of Slidell, Slidell, Louisiana OFFICERS E . P. P a r is W . H. S ew ell Vice President and Manager M. L. S h a w Assistant Manager Cashier F. C. V a s t e r l in g Assistant Cashier L. Y. C h a p m a n Assistant Cashier [36] VOLUME REPORTS AND FINANCIAL STATEMENTS CURRENCY AND COIN OPERATIONS OF THE FEDERAL RESERVE BANK OF ATLAN TA AND BRANCHES N um ber of P ie c e s R e c e iv e d C o unted and January .................... . February . . . . ,. M a r c h .................... . A p r i l.................... . M a y .................... .... . J u n e .................... . J u l y ......................... . August . . . . . September . . . . October . . . . . November . . . . December . . . ,. TOTAL . . . . . e c e ip t s f r o m . . . . . . . . . . . . . Banks . . . . . . . . . . . . . . 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 and Paym ents by by M o nth s 22,263 21,384 21,913 24,393 22,119 18,651 19,395 17,062 20,111 20,749 18,936 22,820 249,823 to Banks fo r 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 24,178 19,559 20,745 19,442 21,231 19,330 19,749 19,723 19,302 19,901 17,099 20,957 241,216 1948 1947, and M onth s Receipts (In Thousands) Payments 1948 1947 1948 1947 Month January . February . March . . April . . May . . . . June . . . . July . . . . August . . September . October . . November . December . TOTAL . 1948 a n d 1947, Currency fin Thousands)_____Coin 1948 1947 1948 1947 Month R fo r . . . . . . . . . . . . . . . . . . . . . . . . $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 $147,426 108,996 120,046 112,428 105,231 97,854 104,293 93,629 105,975 114,836 102,256 144,025 $1,356,995 [ 391 $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 $66,012 83,180 81,638 79,715 91,526 78,514 82,312 102,902 121,104 104,844 80,943 124,241 $1,096,931 RESERVE POSITION OF SIXTH DISTRICT MEMBER BANKS (As of December 31, 1948 and 1947) Total Reserves (Millions) 1948 1947 State Alabama . Florida . . Georgia . . Louisiana . Mississippi . Tennessee . DISTRICT . $147.1 . 180.0 187.3 . . 174.3 31.9 . 131.2 . . $851.8 $136.6 162.9 175.1 151.0 27.2 118.6 $771.4 Percent State Reserves to District Reserves 1948 1947 17.2 21.1 22.0 20.5 3.8 15.4 100.0 [ 40] 17.7 21.1 22.7 19.6 3.5 15.4 100.0 Percent Total Reserves to Required Reserves 1948 1947 107.1 107.5 104.7 109.1 110.0 106.8 107.1 114.3 106.9 106.7 109.0 111.9 110.8 109.3 MEMBER BANK CALL REPORT—SIXTH FEDERAL RESERVE DISTRICT ASSETS AND LIABILITIES OF MEMBER BANKS ON DECEMER 31, 1948, COMPARED W ITH DECEMBER 31, 1947 (Amounts in thousands of dollars)__________________ A SSETS December 31, 1948 December 31, 1947 $4,313,226 Loans and in v estm en ts................................................ $4,198,759 Loans (including o v e r d r a f t s ) ........................... 1,436,581 1,545,915 U. S. Government obligations, direct and guaran2,479,212 t e e d ............................................................. 2,254,725 308,198 Obligations of States and political subdivisions 310,966 80,088 77,580 Other bonds, notes, and debentures Corporate stocks (including Federal Reserve 9,147 9,573 Bank S t o c k ) ............................................... 1,722,517 1,796,756 Reserves, cash, and bank b a l a n c e s ........................... 47,728 51,303 Bank premises owned and furniture and fixtures 1,156 2,058 Other real estate o w n e d ............................................... Investments and other assets indirectly representing 1,508 748 bank premises or other real estate . . . . 4,576 6,521 Customers’ liability on a ccep tan ces........................... 14,637 15,623 Other a s s e t s .................................................................... $6,105,348 $6,071,768 TO TA L A S S E T S ......................................... LIABILITIES Demand deposits............................................................. Individuals, partnerships, and corporations . U. S. G o v e rn m e n t............................................... 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 i t s ............................................................. Total d e p o sits................................................ Bills payable, rediscounts, and other liabilities for borrowed m o n e y ................................................ Acceptances outstanding................................................ Other liab ilities.............................................................. TO TA L L I A B I L I T I E S ............................ $4,638,218 3,197,181 77,959 622,043 690,042 $4,680,686 3,281,850 51,726 585,968 706,091 50,993 1,059,624 5,697,842 55,051 1,075,431 5,756,117 235 8,378 26,011 $5,732,466 305 5,422 23,827 $5,785,671 $ 113,477 152,627 53,602 19,596 339,302 $ 110,202 143,030 45,434 21,011 319,677 $6,071,768 $6,105,348 CA PITAL ACCOUNTS Other capital a c c o u n t s ................................................ Total capital accoun ts.................................. Total liabilities and capital accounts [ 41} FEDERAL RESERVE BANK OF ATLANTA FINANCIAL RESULTS OF OPERATION 1948 Earnings: Earnings from discounts and advances . Earnings from industrial loans . . . . Earnings from commitments to make industrial l o a n s .................................... Earnings from U. S. Securities-System accou n t................................................... Other e a r n in g s......................................... Total current earnings......................... Expenses: Total operating expenses......................... Less reimbursable expenses.................... Net operating expenses............................... Assessment for expenses of Board of G overn ors.............................................. Cost of Federal Reserve currency . . Total current expenses......................... Current net earn ings.................................... Additions to current net earnings . . . . Deductions from current net earnings . . Net additions to or deductions from current net earnings.................................... Net earnings................................................... $ 193,434.25 6,209.69 1947 $ 84,408.20 2,033.39 753.71 602.06 14,986,851.73 31,450.77 15,218,700.15 8,195,218.61 66,949.26 8,349,211.52 4,270,212.96 980,762.82 3,289,450.14 4,521,827.30 1,469,443.23 3,052,384.07 132,681.00 487,862.29 3,909,993.43 11,308,706.72 329,267.93 1,993,779.72 107,131.64 384,219.11 3,543,734.82 4,805,476.70 140,982.89 35,474.81 —1,664,511.79 $9,644,194.93 105,508.08 $4,910,984.78 Distribution of Net Earnings: Paid U. S. Treasury (Interest on Federal $8,260,729.10 Reserve notes outstanding) . . . . Paid U. S. Treasury (Section 13b) . . 465,487.56 Dividends P a i d ......................................... 917,978.27 Transferred to surplus (Section 7) . . . .............................................. $9,644,194.93 TOTAL $4,022,553.50 87.84 441,269.98 447,073.46 $4,910,984.78 [42] FEDERAL RESERVE BANK OF ATLANTA COMPARATIVE STATEMENT OF CONDITION A SSETS December 31,1948 Gold Certificates.............................. $1,059,483,417.35 Redemption Fund for Federal Reserve N o t e s ......................... 44,407,590.00 Total Gold Certificate Reserves 1,103,891,007.35 Other C a s h ................................... 23,505,882.30 Discounts and Advances . . . . 7,830,125.00 U. S. Government Securities: B i l l s .............................................. 275,100,000.00 Certificates................................... 304,687,000.00 N o t e s ........................................ 39,633,000.00 Bonds ........................................ 550,320,000.00 Total U. S. Government Securities . 1,169,740,000.00 Total Loans and Securities 1,177,570,125.00 Due From Foreign Banks . . . . 2,002.06 Federal Reserve Notes of Other Banks 19,581,000.00 180,308,861.14 Uncollected I t e m s ......................... Bank P r e m is e s .............................. 1,573,911.11 Other A sse ts................................... 7,536,046.74 TOTAL ASSETS . . $2,513,968,835.70 December 31, 1947 $1,013,769,769.91 40,529,185.56 1,054,298,955.47 23,750,361.69 2,154,600.00 531,611,000.00 396,910,000.00 86,229,000.00 166,605,000.00 1,181,355,000.00 1,183,509,600.00 3,900.75 16,919,005.00 174,514,529.43 1,559,110.76 6,699,593.65 $2,461,255,056.75 LIABILITIES Federal Reserve N o tes.................... Deposits: Member Bank-Reserve Account . U.S. Treasurer-General Account F o re ig n ......................................... O t h e r ........................................ Total Deposits . . . Deferred Availability Items . . . Other Liabilities.............................. TOTAL LIABILITIES $1,329,27vl,475.00 $1,397,716,085.00 874,451,464.53 75,302,347.75 26,063,700.00 3,938,619.75 979,756,132.03 171,763,347.73 490,176.86 $2,481,281,131.62 789,320,235.94 55,312,188.69 13,489,000.00 2,346,677.40 860,468,102.03 173,035,317.51 618,819.05 $2,431,838,323.59 [ 43] COMPARATIVE STATEMENT OF CONDITION [ Continued] CAPITAL A C CO U N TS December 31,1 948 Capital Paid I n .............................. $ 7,874,150.00 Surplus (Section 7 ) ......................... 20,027,863.59 Surplus (Section 1 3 b ).................... 762,425.68 Other Capital Accounts . . . . 4,023,264.81 Total Liabilities and Capital Accounts.............................. $2,513,968,835.70 Contingent liability on bills pur chased for foreign correspondents [ 44] $136,497.89 December 31, 1947 $ 7,513,750.00 19,109,885.32 762,425.68 2,030,672.16 $2,461,255,056.75 $100,874.24 CHANGES IN MEMBERSHIP OF THE FEDERAL RESERVE SYSTEM IN THE SIXTH DISTRICT 1942-48 1942 1943 1944 1945 1946 1947 1948 Membership, beginning of year . 317 318 316 316 325 331 340 Additions during year: Organization of National banks 2 0 0 1 0 3 2 Conversion of State banks to National banks* . . . . 2 1 5 4 2 4 2 Admission of State banks . . 2 3 7 5 6 4 3 Resumption following suspen sion ................................... 0 0 0 0 0 0 0 4 Total additions . . . . 4 11 10 11 10 8 Losses during year: Mergers between National 1 b an k s.................................... 0 0 0 1 0 0 0 0 Suspension or insolvency . . 0 0 0 0 0 1 2 1 8 3 Withdrawal of State banks* . 1 1 Voluntary liquidation . . . 0 0 2 1 0 0 0 Conversion of member to non 2 0 0 0 1 4 0 member b a n k s * *.................... 3 10 2 4 2 Total lo sse s.................... 6 2 +9 0 +9 +6 +6 Net change during year . . . + 1 —2 Membership end of year . . . 318 316 316 325 331 340 346 National b a n k s .................... 263 260 265 268 272 276 279 57 59 64 51 67 55 56 State banks.............................. *Includes conversion of State member banks to National banks. **Includes conversion of National banks to nonmember banks, and absorption of members by nonmembers. [ 45] SIXTH DISTRICT PAR AND NONPAR BANKS January 1, 1949 T^lot on Par List On Par List Total Ban\s Rational State Ban\s 438 175 182 191 200 66 50 61 58 44 17 18 12 7 13 40 24 46 90 10 123 92 119 155 67 315 83 63 36 133 . 1,186 279 67 210 556 630 Zone Atlanta . . . Birmingham Jacksonville Nashville New Orleans . . TOTALS . Member Banks J^pnmember [ 463 Total Ban\s