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j
Treasury bills is v e r y
.o small Huc.ua.-ons

T;r ^ .iv e
h

very active and is
demand or supply-

il Production

Credit and Interest Rate Developments
During the first quarter of 1960, interest rates in
the nation’s highly competitive security markets
have been in a downward trend. Three-month
Treasury bills were priced by the market to yield
over 4 1/2 9^ during the first week of the year. By
late March investors in this security were willing
to pay a price which put the yield around 2 Y 7 CIn 1959, interest rates trended persistently up­
ward establishing new post W orld W ar II highs.
The yield on three-month Treasury bills, again
illustrative of rate movement, rose from a little
over 2y2c/c early in the year to over 4Yi^c ^ate
December.
A larger amount of spending rested on bor­
rowed money in 1959 than ever before in any
peacetime year. Total debt in the economy was
pushed upward by approximately $60 billion—
estimated to be a one-third greater increase than
in any other peacetime year.
The most significant economic aspect of this huge
boost in the indebtedness of individuals, business
firms and governmental units lies in the source of
the funds. Money that is made available to bor­
rowers must come from one of two possible
sources: from someone giving up the ability to
spend now in order to make the funds available to
2



the borrowers, that is to say, from saving; or from
the manufacture of new’ money. Rapid rates of
economic growth tend to generate upward price
pressures. The creation of new money under such
conditions accentuates the inflationary tendencies.
The attraction of saving to meet borrowers’ de­
mands, on the other hand, has a salutary effect,
reducing expenditures for goods and services while
making funds available to meet borrowers’ de­
mands for such expenditures.
In 1959, borrowers obtained their funds almost
entirely from savings. Thus far in 1960 savers
have supplied all the funds that have been made
available to meet borrowers’ demands.
BANKING UNDER PRESSURE Commercial banks,
the private money-creating institutions among
American financial businesses, increased their
loans by over $12 billion in 1959, an annual in­
crease approached only in the previous record
year, 1955. This lending activity did not, how­
ever, generate a comparable increase in the na­
tion’s active money supply. The money supply
(demand deposits adjusted plus currency outside
the banks) at the close of December 1959, amount­
ing to $144.9 billion, was only $700 million above

its level at the beginning of the year. Although
the money supply increased very little, investors
added a record volume of highly liquid assets to
their holdings in 1959. Not only was the money
supply not substantially added to by this unusual­
ly high level of bank lending, the banks’ total de­
posits actually declined slightly over the year.
Since bank loans generally generate deposits, how
could such an enormous volume of lending fail to
be reflected in either deposits or in a substantial
increase in the money supply?
In order to meet the loan demands of their cus­
tomers in 1959, commercial banks had to draw
heavily on the savings of individuals, business
firms, and others. They did this primarily by
disposing of securities, thus acquiring savings
made available in the credit markets through the
purchase of such securities. The banks sold or
let run off at maturity approximately $8 billion of
securities, $7.8 billion of these being obligations of
the Federal Government. The banks also acquired
savings by additions to their capital accounts to­
taling $1.2 billion for the year as a whole. In
addition, commercial banks obtained some funds
with which to meet customer loan demand by a
more efficient utilization of their cash accounts.
In the first two months of 1960, the commercial
banking system experienced a reduction in its total
loans and investments of nearly $5 billion. Bank

customers reduced their loans outstanding by $2.5
billion in January and although loan demand was
stronger than customary in February, the increase
in loans which resulted was insufficient to out­
weigh the previous month’s decline. For the two
months together, loans were reduced by $ 1.8 bil­
lion. The banks liquidated security holdings in
both January and February, the total amounting
to $3 billion.
OTHER LENDERS Financial institutions other than
commercial banks also channelled savings to the
credit markets in record amounts in 1959. Savings
and loan associations supplied approximately $8
billion, the bulk of it going into the market for resi­
dential mortgage loans. Life insurance companies
provided nearly $6 billion, this sum being widely
distributed over the securities markets and the
residential and commercial mortgage markets.
Pension funds invested almost $5 billion of their
members’ contributions and their own earnings in
the securities markets.
Mutual savings banks, suffering the competitive
squeeze of higher interest rates offered by other
media for saving, supplied less funds to the credit
markets than in immediate past years. They never­
theless directed over $ 1^2 billion to the nation’s
mortgage markets. Most of this amount was ob­
tained from increases in savings deposits, but ap­

State and local governm ents and corporations, heavy issuers of new securities in 1959, have borrow ed in sm aller volum e in 1960.




Municipal Bonds
Corporate Bonds

Consum er

instalm ent

borrow ing

broke

all

records

in

1959.

proximately $500 million was pulled out of the
securities markets by liquidation of U. S. Govern­
ment and other bonds.
Sales and consumer finance companies and
credit unions garnered nearly $ 2 ^ billion of sav­
ings from various sources and made it available in
the consumer credit market. In addition to these
institutional means for putting the nation’s saving
to productive use through the credit markets, in­
dividuals supplied a record amount of funds direct­
ly to the securities and mortgage loan markets.
Under the spur of alluring rates of return, indi­
viduals diverted large sums from the conventional
savings channels to what appeared for the time
being to be more attractive outlets for their funds.
To what extent high rates of interest induce sav­
ing at the expense of current consumption remains
one of the unknowns in the financial picture. Logic
leads one to believe, however, that under such cir­
cumstances many individuals find the lure of the
financial markets greater than that of some per­
sonal expenditures and that, therefore, the interest
rate changes in 1959 did bring more saving to the
credit markets than would have been forthcoming
at lower rates of interest.
THE BORROWERS
During 1959 the U. S. Treas­
ury entered the markets with cash issues on eight
different occasions, raising a total of over $25 bil­
lion. The most dramatic of these cash borrowings
was the issuance of a 5% note in October, 1959,
popularly referred to as the “magic fives.” In­
Digitized for 4
FRASER


vestors, including many individuals, were so eager
to obtain this note that they tendered subscriptions
amounting to $11.1 billion, of which the Treasury
accepted $2.3 billion, giving preference to savingstype and nonbank investors.
Although each entry of the Treasury into the
market for cash had its impact in the market as
investors diverted funds to meet these demands,
approximately two-thirds of the total thus raised
was subsequently fed back to the markets in retire­
ment of other issues. The total public debt in
1959 increased by only $7.9 billion. Nonmarketable debt outstanding, of which U. S. savings
bonds is the largest component, was reduced dur­
ing the year by $4.5 billion.
Thus far in 1960 (through mid-March) the
Treasury has raised $3.5 billion in cash. Of this
amount $2 billion was obtained from a tax antici­
pation bill due this June, and $1.5 billion from a
special one-year bill maturing in January, 1961.
Other borrowers who rely on the securities m ar­
kets as a source of funds issued approximately $17
billion of securities in 1959, well under the previ­
ous record of $19.5 billion in 1957 and not quite
up to 1958’s $18.6 billion, the second highest year
on record. State and local governments, however,
are estimated to have set a new high in the volume
of new securities offered by them, the preliminary
total of $7.8 billion having a slight edge over the
previous record year, 1958. The total dollar vol­
ume of corporate new issues at $9.4 billion trails
well below' the previous record year of $12.4 bil­
lion in 1957.
In the first two months of 1960 demands for
funds by corporations in the form of new security
sales is estimated to be about 25% smaller than in
the similar period in each of the two preceding
years. At the same time, state and local govern­
ment issues of new securities were running ap­
proximately 15% below the similar period in 1959
and almost 25% under the 1958 period.
MORTGAGE LENDING—A RECORD PACE
M ort­
gage lenders channelled a larger volume of funds
to this credit market in 1959 than ever before in
their experience. Total mortgage debt is estimated
to have increased by $19 billion, over two-thirds of
this increase being in loans secured by mortgages
on one- to four-family houses. In spite of the de­
clining trend in home construction after April, the
dollar amount of recordings of nonfarm mortgages
of $20,000 or less, totaling $32.2 billion, exceeded
by $3.7 billion the previous record in 1955.
In the first month of 1960, the dollar volume of

mortgage recordings dropped off sharply from im­
mediately preceding months. The January level,
however, was on a par with previous January
highs, excepting January 1959 when residential
construction was in its upward trend.
CONSUMER BORROWING—ALSO HIGH Individ­
uals also employed a larger volume of credit in the
financing of their personal affairs in 1959 than
ever before. Instalment credit extended to con­
sumers totaled $48.5 billion, over 15% greater
than the previous peak. Repayments were also at
a record level and the total of instalment credit
outstanding increased over the year by $5.4 billion,
just about the same increase as in the previous
high year, 1955. Total consumer credit including
charge accounts, service credit, and single pay­
ment loans, increased in 1959 by $6.5 billion, just
slightly more than 1955’s previous record.
In January of 1960, repayments on loans out­
standing exceeded new instalment loans made to
consumers as is customary at this time of year.
The decline in outstanding loans which resulted,
however, wT considerably less than usual in Janu­
as
ary. Other types of consumer credit also declined
but less than seasonally. Consumers thus remained
a very strong factor in the demand side of the
credit picture.
TREASURY BILLS AND TAXES Although the flow
to the credit markets of funds derived from saving
was unusually large during 1959, it was not suffi­
cient to meet all the rapidly mounting demands for
credit at the level of interest rates which existed
at the beginning of the year. As a result demand
pressures forced interest rates upward, very large
increases occurring during periods when credit de­
mands were more concentrated, such as just prior
to corporation tax payment dates. Large corpo­
rations generally begin accumulating funds to meet
their tax liabilities sometime prior to the payment
day. In order to avoid loss of revenue from hold­
ing idle funds, corporation treasurers invest these
funds in short-term high-grade securities. The
favorite in recent years has been the three-month
Treasury bill—particularly in 1959 with the bill
rate being over 4% in the last four months of the
year. From this practice there stems a heavy de­
mand for funds around tax payment dates in the
form of liquidation of the securities purchased to
meet this need.
Interest rate changes in ’59 were also influenced
by Treasury cash financings. The magnitude
of Treasury debt transactions has reached such
proportions that the Treasury’s entry into the mar­



ket overshadows all other market developments for
the time involved. As indicated above, the Treas­
ury was in the markets frequently in 1959 and has
been to them, both for cash and for refunding
maturing issues, in each of the first two months
of this year.
Although rates generally reacted to these sharp
upward movements by subsequent declines, the
declines proved temporary. In the final weeks of
the year, rates on all types of credit transactions
were well above their levels at the beginning of the
year. Illustrative of these changes, the yield on
three- to five-year U. S. Government securities
which averaged 3.86% in January 1959, had ad­
vanced to an average of 4.95% in December; the
yield on long-term U. S. Government bonds ad­
vanced from an average of 3.90% in January to
4.27% in December. Corporate bonds experienced
similar changes, the average yield on Aaa
(Moody’s) bonds rising from 4.12% to 4.58% in
December 1959.
In the first quarter of 1960, most interest rates
trended downward as seasonal declines in borrow­
ers’ needs coupled with loan liquidation customary
at this time of year synchronized with a fairly
large flow of savings to the markets. Short-term
money market rates experienced the sharpest de­
clines, but longer-term rates also drifted down­
ward. The yield on long-term Government se­
curities, for example, moved from an average of
4.42% in the first week of the year to 4% at the
close of March.
Thirteen

months

of

m ortgage

recordings set

a

new

record.




Cotton: FroSeed to Gin

PLANTING

CULTIVATION

HARVESTING

GINNING

THE
MAGNETIC
CHECK
The Fuggers, the Medicis, the Rothschilds and
other great banking families of bygone centuries
in Europe wrestled with some of the same eco­
nomic problems of banking that modern bankers
d o ; but the passage of time, bringing with it mod­
ifications and improvements in banking, plus the
twentieth-century business and population explo­
sion have combined to create a challenging problem
for American commercial banks. The problem : a
relentlessly increasing volume of checks.
The stark handwriting on the wall is there for
those who are willing to read i t : Eight years ago
the nation’s banks handled about eight billion
checks; this year they may have to process about
14 billion. By 1970 it is estimated that banks will
be flooded by 22 billion checks per year. The
magnitude of the job is further indicated by the
fact that many checks are now handled a total
of 10 to 20 times by several banks in the process
of collection.
It has become obvious that placing small chinks
in the dike wrill not stave off the onrushing flood
of checks already beginning to show its strength.
The methods at the command of the nation’s
banks currently being utilized to process this evermounting volume will shortly be obsolete. It is
later than we think!
If the present system and equipment continue to
be used, the collection of the monstrous volume of
checks in prospect can only result in higher total
costs or slower schedules. The alternative: re­
placement of currently used materials, methods and
machines by a new type of check and automatic
check-handling equipment.
MECHANICAL READING The electronic mechani­
zation of check handling is a project that has been
studied for a number of years by the Bank Man­
agement Commission of the American Bankers
Association. Members of this group and commit­
tees representing office equipment manufacturers,
check printers and others have worked out an ad­
vanced form of automation in check processing,
and pilot operations in five Federal Reserve Banks
are being put into action.
W hat is it? Basically, the process consists of



machines that can “read” and checks that can be
read mechanically. The link between the twro and
the distinguishing feature of the proposed check
clearing system is a common machine language.
The latter, in turn, consists of a set of specially
designed magnetized characters and numerals
printed in ink containing iron oxide. Each numeral
emits a different signal when subjected to an
electric impulse as the check imprinted with mag­
netic ink is processed by the "reading” equipment.
The data obtained in this manner are automatically
fed into a computer which simultaneously obtains
totals and controls sorting and records-printing
operations.
REQUIREMENT: UNIFORMITY
The first requisite
feature of checks imprinted with a common ma­
chine language is uniformity of location of the
magnetic ink printing. After careful study of all
the factors involved, the ABA has worked out a
set of standards. The common language imprint­
ing should be in a space extending six inches from
the right edge of the check and five-eighths of an
inch from the bottom edge. This space should be
divided into three areas to contain the routing
symbol and transit number (which will continue
to be shown also in their present upper right-hand
location), account number or other information
desired by drawee bank, and the amount of the
check. A specific kind of printing type must be
used for magnetic ink imprinting in order to meet
stipulated dimensional specifications and toler­
ances. The font chosen after much testing and
evaluation by many printers is now known as Type
E-13B. (ABA’s Bank Management Publication
147, The Common Machine Language for Mech­
anized Check Handling, contains details on this
font and other essential information about the new
program.)
The second necessary step toward realization
of the common machine language for mechanized
check handling concerns the check forms them­
selves. For the advantages of a magnetic ink pro­
gram to be realized, individual banks will have to
print their routing symbol-transit numbers in mag­
netic ink on the check forms furnished to custo­
mers. Again, it is vitally important that this

o o o
printing be done in the manner and in the place
on the check prescribed by the ABA. This applies
also to checks that customers have printed at their
own expense.
FOR THE BENEFIT OF ALL A bank in planning its
program of magnetic ink check imprinting should
weigh the costs and benefits in terms of its par­
ticular situation. This may raise questions for the
bank that does not expect to purchase any new
accounting equipment designed for use in process­
ing the new checks. But the answers are clear.
The check forms generally must be redesigned in
accordance with the format wrorked out by an
ABA committee at some expenditure to the bank.
Aside from this nonrecurring cost, continuing ex­
penses of printing the new check should be very
little higher than what they would be for the oldstyle checks.

On January 1, 1960, the Federal Reserve Bank
of Richmond, in compliance with ABA specifica­
tions, began preprinting the routing symbol-transit
number in magnetic ink on its official checks. It
is currently supplying preprinted check forms to
member banks for use in drawing on their reserve
accounts. Commercial banks within the Fifth Dis­
trict have also begun imprinting checks supplied
to customers with magnetic ink.
American and banking ingenuity is meeting the
challenge. The common machine language of the
ABA constitutes a major break-through in the
problem of coping with a rapidly swelling volume
of bank checks. The costs involved are not only
an investment in which all banks may share in ad­
vancing the efficiency of banking, but also an
answrer to the challenge now before the commercial
bankers of America.

Check Form at Adopted by Technical Committee on M echanization
of Check Handling of Am erican Bankers Association
68-215

The Blank Bank and Trust Co
A nyw here, V a.

510
19

D a te .

(bo

Pay to
order of

Signature
3 / 1 6 ” clearance strip
■ :o s l o - o z i s» :

i e 3 f l » ' i <C ,5 ?K *

SU E,

,■ *0 0 0 0 n s s o o /

V 4 " M .l. coding strip
3 / 1 6 ” clearance strip

Routing SymbolTransit No. Field

Acc't No. & Transaction Code
Field (For D raw ee Bank's Use)

Amount Field

NOTE
In the m agnetic ink (M. I.) coding at the bottom in the routing sym bol-transit number field, the state prefix (68) of the dra w e e
bank's A. B. A. transit number is omitted for all par banks and the routing sym bol number (510) is used as the prefix.
Since eight
digits a re required for the combined routing sym bol-transit num ber, non-significant zeroes a re used to fill in the spaces that w ould
otherw ise be blank.
Since nonpar banks are not assigned routing sym bols, they should use their complete transit num bers but the state prefix should
be preceded by the figure "9 0 " w hich has been assigned by the A . B. A. to designate nonpar offices. Thus, in the sam ple check
above, if 68-215 w ere a nonpar bank, the eight digit number in the field designated w ould be 9068-0215.
SIZE OF C H EC KS
Listed below are the minimum and m axim um sizes of checks under the Am erican Bankers Association plan for m ag­
netic ink character recognition a s the common m achine lang uage.
W idth
Length
M in im u m .........................................................................

l?k "

6”

M axim um .........................................................................

3% ”

83
A”

If a check is more than 6 ” long, the common machine lang uage shall a lw a y s be printed within the 6 " overall dimension from the
right edge. Above and below the 1/ 4 ” magnetic ink coding strip is a 3/ 1 6 ” clearance strip as indicated.




9

F

F TH district

High in the thirties, low in the twenties, and
snow toward the end of the week. W ith that
forecast actually materializing in the middle of
February and each of the first three weeks of the
transitional month of March, the weather has had
little competition around the District when it
comes to subjects for discussion. W hat makes
the weather an unrivaled topic for conversation is
the simple fact that as yet it cannot be blamed on
human frailties or foibles in any form, nor are
human sensitivities likely to take offense at any
opinions which might be expressed about it. If,
then, there have appeared some crosscurrents of
economic uncertainty, the convenient thing to do
is just to blame it on the weather. An explanation
needs more tangible support than the mere fact of
its convenience in order to merit general accept­
ance. The mixture of evidence currently available
reflecting economic conditions in the Fifth Dis­
trict remains somewhat inconclusive. The District
economy, however, has been predominantly strong
and tends to give considerable support to an atti­
tude of cautious optimism.
PREVAILING STRENGTH In general, District pro­
duction continues at a high level. Retail sales and
outdoor activities, such as lumber and fishing
operations, have been hard hit by the weather.
Large backlogs continue to support textile and
furniture production in contrast to the rather slow
pace of retail sales. Construction contract awards

took an apparently better than seasonal upward
turn in February (following a rather low January
figure). W ith seasonal factors roughly taken into
account, February appeared to be but little lower
than the 1959 monthly average. W ith a good
volume of plans and projects already in process
the construction industry has remained an element
of current strength in the District economy even
though the weather has retarded construction
schedules. Increases have recently been recorded
in the prices of livestock products which compose
the bulk of current District farm marketings.
These factors suggest that District production and
employment have remained fairly stable, support­
ing a pretty good level of personal income. How
people will choose to use this income with the
arrival of spring weather and a late Easter season
will be a critical development this month.
THE RIDDLE OF RETAIL SALES Retail sales indi­
cate the consumer’s final and all-important ac­
ceptance or rejection of goods and services offered
in the market place. Here a single result, an un­
expectedly low volume, has been accompanied by
a variety of possible causes. January department
store sales, seasonally adjusted, were about even
with December at a level which had been exceeded
in only three months of 1959, namely, January,
July and August. Reports indicate that the down­
turn in the District came about the middle of Jan­
uary with sales levels declining thereafter over a

Retailers hope that the adverse effects of frequent M arch snows and unusually cold w eather w ill be larg ely offset in the month of April.




.....

iiS S s a s

J

i

A lthough snow retarded normal spring lumber production, inventories rem ained fa irly constant due to a sim ilar slow dow n in construction.

period of about eight weeks. Allowing for nor­
mal seasonal variations, department store sales in
February were about 8 % below the DecemberJanuary level. Even after taking the effects of
the late Easter season into account, March sales
were still about 20% below January, and 13% be­
low March 1959. Furniture and automobile sales
have also been disappointing.
It would appear that two factors in particular
suffice to explain much of the recent reluctance of
buyers. Certainly the weather has made shop­
ping most unattractive during much of one week
in February and three weeks in March. The late
date on which Easter falls this year has removed
the pressure which would otherwise have been
felt by this time to shop for Easter needs. The
period between the after-Christmas clearances and
Easter has apparently failed to develop any of the
special sales stimuli which most other periods of
similar duration now possess in some degree. This
is a time when buyers can stay home if they choose
to do so. This year their freedom of choice has
been unduly influenced by bad weather.
MINOR ADJUSTMENTS MARK MAN-HOURS To­
tal manufacturing man-hours in the District, sea­
sonally adjusted, declined about 1.5% between
January and February. This development partial­
ly offset the 1.9% increase between December and
January. Thus February man-hours, after cor­
rection for normal seasonal variations, compared
favorably with the December data. Lumber and
wood products, furniture and fixtures, and apparel
were the significant exceptions.
z\lthough total man-hours, seasonally corrected,
declined between January and February, primary
metals, nonelectrical machinery, stone, clay and



glass products, the broadwoven component of tex­
tile mill products, and printing and allied indus­
tries remained about the same or registered moder­
ate gains. Activity in yarn mills and knitting
mills measured by this indicator decreased between
January and February by about 3% and 6 %, re­
spectively. By the same token, transportation
equipment declined about 6 % following an in­
crease of more than 17% between December and
January. The reductions in the lumber and furni­
ture categories amounted to approximately 5%
and 4%, respectively.
LUMBER SLOW BUT PRICES FIRM The lumber in­
dustry has plodded along through its winter period
of seasonally low demand. District production in
January and February measured in man-hours,
however, exceeded output in the same months of
1959 by 6 % and 1%, respectively. Reports of
activity during the first half of March indicate that
the unusually bad weather served to reduce the
output of building lumber below normal seasonal
levels with the result that prices held up and in­
ventories remained fairly low in spite of low con­
sumption. Dealers are showing some reluctance
to replenish low inventories pending some indica­
tion of a spring pickup in sales. Lumbermen in
general, however, appear to be willing to wait for
a spell of real spring weather before forming any
firm opinions. Furniture lumber remains in good
demand at firm prices.
TEXTILE BACKLOGS STILL STRONG The textile
industry continues to serve as one of the principal
elements supporting the present favorable level of
District production and employment. Scattered
reports have indicated some lost productive time
due to the March weather. The resulting minor
11

delays in delivery have tended to retard the devel­
opment of slight downward pressures on prices re­
portedly being felt as a result of a continuing small
volume of goods offered for resale from dealers’
and converters’ stocks. In general, new orders
have been very slow. The declining backlogs have,
nevertheless, remained large enough to make price
cutting an unrealistic maneuver in the opinion of
most producers. Prices increased gradually but
considerably during the period of order accumula­
tion and are regarded by the trade as sufficiently
firm to permit companies to absorb wage increases
which have been averaging about 5*/c.
Yarn prices are reportedly firm with large
orders on the books for April, May and June de­
livery. Industry reports indicate a good year for
knit goods, and there are signs that full-fashioned
hosiery is at last showing some strength in compe­
tition with seamless. The largest backlogs are
still in print cloths and sheetings where unfilled
orders are reported equal to from 3 to 5 months
of production.
FARM PLANS SURVEYED
As the pace of District
farm activity quickens with the progress of spring,
indications of the level of 1960 farm income have
begun to appear. The prices received for most
District farm commodities are determined by vol­
ume of output and strength of demand on a nation­
al scale. Therefore, national developments must
be assessed in terms of their impact on prices.
Local factors serve as guides to the volume and
quality of regional farm output.
A survey made on March 1 by the United States
Department of Agriculture confirmed earlier re­
ports that Corn Belt farmers intend to reduce the
size of their spring pig crop considerably this year.
If this materializes, the reduced supply will exert
an upward pressure on prices. Reports indicate
that District hog producers plan to reduce the
number of sows farrowing, but by less than the
national average. This would tend to put Dis­
trict farmers in a relatively good position to benefit
from any price increases which may occur.
Broiler production in the nation started out
strong during January and February, but March
reports showed the decreases relative to last year
that had been anticipated as a result of fewer
hatching eggs being available this year. Prices
should continue at relatively favorable levels for
producers if the usual seasonal pickup in demand,
absent in 1959, materializes this year.
Declining egg prices have resulted in a marked
decrease in the number of chicks being hatched to
12




maintain laying flocks. Corresponding decreases
in egg supply are expected to lead to higher egg
prices this summer.
Reports from turkey growers indicate that the
shift from the small Beltsville to the heavier White
and Bronze turkeys is continuing both in the Dis­
trict and in the United States. Nationally, the
increase in the number of heavy turkeys more than
offsets the reduction in Beltsvilles. This may re­
sult in price declines as the new crop is marketed
in the late summer. In the District a 14% smaller
turkey crop is in prospect, about equally divided
between small and large turkeys.
The peak of the current cattle production cycle
is fast approaching, and downward pressure on
prices, seasonally adjusted, may develop as mar­
ketings increase later this year. District dairy
farms are continuing their recent role as an ele­
ment of strength in the District farm situation.
Increased production of milk continues to move at
prices satisfactory to dairymen.
LATE START MAY ALTER OUTLOOK
Late winter
storms and wet fields have delayed the planting
season. Seeding of tobacco beds is behind sched­
ule and may lead to delays in field plantings with
consequent threats to both quantity and quality of
the crop. Small grains planted last fall are gen­
erally in poor or only fair condition.
A U.S.D.A. survey of farmers’ intentions indi­
cates that 1960 plantings of 12 principal crops in
the District are expected to total about 14.7 million
acres, 2% below the 1959 figure. If farmers carry
out their March 1 planting expectations, this year
will witness some shifts in the acreage devoted to
the various crops. Soybean producers plan the
largest District acreage increase—nearly 200,000
acres more than in 1959. Hay, feed grain, and
sweet potato acreage will probably be down.
The foregoing summary provides ample evi­
dence that District factories and farms stand ready
to do their part in maintaining District prosperity
through 1960 if fine weather, Easter and various
other seasonal motives can induce consumers to
hold up their end of the market.
PH O TO CREDITS
Cover—W. V a . Industrial and Publicity Com m ission,
Charleston 5, W . V a . 3. Baltim ore Association of
Com m erce 4. The Richmond N ew sp ap ers, Inc. 5.
C hesopeian Builders 6. The Cole M anufacturing Co.
- N atio nal Cotton Council of Am erica - N. C . State
C olleg e 7. N ational Cotton Council of Am erica V a . Departm ent of Agriculture - N ational Cotton
Council of Am erica 11. V a . C ham ber of Com m erce.