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FEDERAL RESERVE BANK OF R IC HM OND



J U N E 1959

Paperwork Revolution by Electronics
The District is the scene of important progress
in the electronic revolution against the tedium of
routine paperwork. The number of electronic
computers in the District is substantial—a con­
servative estimate is 200. Their area of operation
is spread throughout the District—from Baltimore
south to Charleston, South Carolina, and from
Norfolk west to Huntington, West Virginia. The
greatest concentration of computers in the District,
and probably in the world, is in the Washington
area. The applications of the many District com­
puters are spectacular and varied—from tracking
satellites to keeping track of leaf tobacco. Each
computer, wherever its location, whatever its spe­
cific job, is a control over the vast amount of paper­
work—record-keeping and computations—that ac­
companies modern industry and government.
Significantly, the paperwork revolution now in
progress throughout the land had its beginnings
in this District. The very first of the electronic
computers—the Eniac—settled in Maryland as
early as 1946 to solve ballistic problems for the
Army. Also the first computer to make a living
by processing business-type data migrated to the
D istrict: this computer was a Univac I, installed
in the Bureau of the Census in 1951 to help the
final stages of the 1950 census tabulation.
Industry quickly followed these government
leads and jumped on the computer bandwagon.
The machines aroused the tremendous enthusiasm
of top management through their ability to figure
in seconds the engineering and research problems
that take weeks or months to solve with paper and
pencil and their ability to do the centralized book­
2




keeping for a large, diversified firm with thousands
of customers serviced by hundreds of branch
offices. Not only had clerical cost risen, but key
personnel were often bogged down by the great
amount of paper crossing their desks. Thus the
electronic computer—one of the most phenomenal
scientific and technical breakthroughs of the mid­
twentieth century—arrived on the business scene
at a time ripe for a paperwork revolution.
WHAT IS A COMPUTER?
The same fanfare that
fired the imagination of top management caused a
veil of mystery to surround this newest piece of
office or laboratory equipment. A whole new
language of computer equipment and computer
technology sprang into existence.
Yet the basic principles of an electronic com­
puter are the same as those for other data process­
ing systems—from completely manual operations
to the conventional punched card equipment. There
are four essential functions operating under a
focal control:
1. I n p u t - information is fed into the machine.
2. S to ra g e - this information is memorized by
the machine.
3. P ro cessin g - the machine processes the data
—adds, substracts, multiplies or divides.
4. O u tp u t - new information is produced.
These functions are coordinated by a series of in­
structions, called a p ro g ra m , which tell the machine
the exact order of operations to perform.
The electronic computer differs from conven­
tional data processing machines in two basic char­
acteristics. First, the electronic devices speed the

arithmetic operations to almost incredible rates:
for example, some machines can perform 5,000
multiplications of ten-digit numbers in one second.
But more importantly, the electronic components
give the machine an immense memory capacity.
By being able to store data and instructions and by
being able to make simple yes-no decisions based
on intermediate results, the machine automatically
carries the problem through to completion. The
“program” thus becomes extremely im portant:
since the machine cannot grasp the entire problem,
every individual step in the process and all con­
ceivable possibilities must be carefully considered
by the programmer. The machine must even be
told when to stop.
THE PRESENT GENERATION Today’s co m p u ter
comes in many sizes and shapes to fit every pur­
pose and purse. Some computers require newr
buildings to take care of their unusual weight,
power and space requirements; others may be
plugged into an ordinary wall socket and take
only as much space as a desk. The capacity of
some machines may be souped-up as computer
needs increase by adding accessory equipment and
new circuits within a basic machine.
Computer models also vary widely by type of
functional components—each having its own par­
ticular advantage in cost or function. The most
popular media for input and output are punched
cards, punched paper tape, and magnetic tape.

Often output is printed from an electric typewriter
or high-speed printer, the latter operating at 1,000
lines each minute. The output of one machine
may be the input of another machine located miles
away—the data being transferred by electric im­
pulses on telephone wires or radio circuits. Just
as varied are the storage devices of these fantastic
machines : most generally used are magnetic tapes,
drums, cores, or disks. The most common com­
ponents used in the computing circuits are elec­
tronic tubes, transistors, and diodes. The variety
of basic computer components and their combina­
tions into machine models reflect the varied uses of
these wondrous machines.
THE DISTRICT BRANCH OF THE FAMILY
From
the two early pioneers—one for scientific computa­
tions and the other for data processing—the num­
ber of computers in Government and industrial
offices and research labs throughout the District
has increased at least a hundredfold.
The majority of these computers are in the
medium-size class, defined rather arbitrarily as
those costing from $50,000 to $500,000. The num­
ber drops sharply at the two extremes—the giant
computer, costing over $1 million, and the small
desk-size computer, costing under $50,000.
Classifying the computers by user shows that
each of the District’s major employers is well rep­
resented. The Federal Government is by far the
biggest single electronic computer user in the Dis­

INPUT




THE ELECTRONIC COMPUTER

PROCESSING

+— X

•
•

OUTPUT

3

trict. This is natural since the country’s heaviest
concentration of Government agencies is in the
District of Columbia and its bordering states and
since the Government is the country’s biggest
record-keeper and researcher. State and local gov­
ernments in Maryland, Virginia, and W est V ir­
ginia also have put the computer to work.
In manufacturing—the top employer in the Dis­
trict—the computer field is dominated by the tex­
tile industry in the Carolinas; over 15 mills have
installed these electronic tools. Other manufactur­
ing industries important to the District’s economy
are also well represented; these include manufac­
turers of chemicals, paper, tobacco, furniture, pri­
mary metals, fabricated metal products, transpor­
tation equipment, and electrical machinery.
The wholesale and retail trade business, which
accounts for a fifth of the District’s employment,
does not have the same proportion of computers,
since the field is comprised mainly of relatively
small businesses. Two large general merchandise
stores, two retail grocery chains, and two whole­
sale drug firms, however, are among the District
firms which have put their accounting operations
on an electronic base. The computer is also
moving into District financial circles: three of the
larger banks have installed electronic data proc­
essors and six insurance companies are depending
on computers to handle a share of their paperwork.
Other major paperwork operations are being han­
dled by computers for transportation companies
and public utilities.
Universities are another primary user. The
newly formed Research Triangle has a computer
at each angle—a Univac Scientific recently in­
stalled at the University of North Carolina at
Chapel Hill and an IBM 650 computer at Duke
University and at North Carolina State College.
Johns Hopkins University with two computers—
a Univac Scientific and an IBM 650, Georgetown

University with a Burroughs E-101 and Virginia
Polytechnic Institute with a 650 complete the list.
Few organizations limit computer use to one
application or even to one general type of appli­
cation. These tools are expensive and most com­
panies, after a brief initiation period, transfer task
after task to the computer. In industry the most
popular application and the one usually first pro­
grammed is the preparation of the payroll. Soon
the computer is also aiding in billing operations,
dividend computations, sales and cost analyses, in­
ventory and production control. In contrast, uni­
versities focus their attention on scientific research
but may have some accounting work programmed.
KEEPING TABS
Electronic computers have the
gigantic task of keeping track of the approximately
80 million active social security insurance ac­
counts. Each year more than 250 million indi­
vidual quarterly earnings items must be posted,
3 million new accounts established, and over 2]/2
million claims processed at the Baltimore office of
the Bureau of Old Age and Survivors Insurance.
In the ten months prior to the installation of the
first large-scale computer used in this work, 18
man-years of programming were completed; 5,000
pages of programs and procedures were w ritten;
and a specially constructed area was prepared to
house the machine. In less than three years after
the initial installation, the expansion of applica­
tions necessitated a second large-scale computer.
Plans are now being completed to replace these
two with three somewhat more powerful machines.
A few of the other gigantic tasks of Government
record-keeping turned over to electronic computers
are the personnel accounting of the armed forces,
up-dating the inventory records of the armed
forces, editing and tabulation of income tax returns
and compilation of the mass of business statistics
published by the Bureau of the Census.
ECONOMIC RESEARCH
The computers at the
Census Bureau are also tackling economic research
problems. Their computer method for the season­
al adjustment of statistical series is used universalOPERATIONS RESEARCH

m

4




n

ly. The Board of Governors of the Federal Re­
serve System, with its need for up-to-the-minute
statistics on the nation’s economy, has utilized the
rapid calculating ability of a computer to speed up
its statistical processing.
A number of District industries are using com­
puters in operations research: these machines are
preparing sales analyses, market forecasts, labor
force projections, cost analyses, and studies in opti­
mum use of labor and materials. The Baltimore
Transit Company, for example, is feeding passen­
ger count data into a computer to reschedule its
bus lines for the most efficient service at the least
cost. The computer simulates a bus run under
various schedules and picks the best.
Both industry and Government depend on pri­
vate research organizations for the solution of
many of their management problems. The Institute
of Textile Technology in Charlottesville, Virginia,
has a small computer to handle linear programming
jobs for its member firms. The Corporation for
Economic and Industrial Research in Arlington
has just completed with its large-scale computers
a statistical study of the impact of the Federal
highway program on American business.
SCIENCE AND TECHNOLOGY
The computer is
also playing an integral part in the nation’s scien­
tific and technological development, and outstand­
ing work in this field is being performed at instal­
lations in this District.
The Martin Company—a leader in space-age
research and development—has at its Maryland
plant a large-scale computer devoted exclusively
to these problems. (Two medium-size computers
in another division perform the data processing
jobs needed by management.) The National
Aeronautics and Space Administration has giant
computers working on the conquest of space at
Langley Field, Virginia, and the Navy has a
powerful machine, NORC, at Dahlgren, Virginia.
This latter computer is incredibly fast; it deter­
mined the altitude of the first moon shot with only




40 seconds of data from the rocket’s transmitter.
One of the most fabulous of the digital computers,
however, is used in the SAGE air defense system.
This computer takes information fed directly into
it from outlying radars and combines it with infor­
mation already in storage to determine the best
defense measures and to guide interceptors to their
targets; it requires an area the size of a basketball
court in which to perform as many as 65,000 com­
putations per second. The Fort Lee, Virginia,
center, opened this year, is among the first in the
nation’s air warning network.
To speed the atomic navy, tens of thousands of
computer hours have been used by the scientists
and engineers at the Bureau of Ships. In solving
the problems of using the nuclear reactors for
shipboard power plants, the computers at the New­
port News Shipbuilding and Dry Dock Company
have proved invaluable. The computer at the
Babcock and Wilcox Company in Lynchburg, Vir­
ginia, has also played a substantial role in the
advancement of nuclear technology.
THE NEXT GENERATION
Recent strides in tech­
nology of computer equipment and in methodology
of computer use make the promise of the sixties
indeed dazzling. The trend in computer models
of increased capacity and speed and decreased
space and power requirements will be accelerated
by the use of smarter and smaller electronic com­
ponents introduced just this spring. The propor­
tion of smaller businesses with computers will
undoubtedly increase appreciably; greater empha­
sis will be placed on the computer as a manage­
ment tool going beyond basic accounting jobs.
In problems where hundreds of variables could be
used, the speed and capacity of the present-day
machines have been limiting factors that will be
pushed aside in the continuing surge of the paper­
work revolution.

5




Overlooking the historic Kanaw ha Canal paralleling the James
River is concentrated much of Richmond, Virginia's
mighty tobacco industry. Throughout the city are located a
total of 13 manufacturing plants and more than 100 warehouses,
giving employment to Just under 10,000
persons. Nearly one of every four cigarettes made in
the United States is produced in Richmond, and the city
lays claim to being the tobacco packaging
Digitizedcenter of the world.
for FRASER


P a rk s

w ith

trees

an d

flo w e r s

w ill

add

b e a u ty o f open sp a ce b etw ee n o ffice
b u ild in g s in C h a rle s C e n te r.

^

for

Heart Trouble
In 1904 a disastrous fire swept through Balti­
more destroying much of the central business
district. A Burnt District Commission was ap­
pointed to rebuild the damaged area. The com­
mission ran into numerous obstacles and most of
its plans were never put into effect. Much of the
same site has now been chosen for another renewal
plan—Charles Center, a forward-looking project
for rebuilding the heart of downtown Baltimore.
The citizens of Baltimore count on making this
second plan a reality.
DOWNTOWN DECLINE
Baltimore, like o th er
large cities, has experienced a population trek to
the suburbs and the growth of regional shopping
centers and office buildings far from the downtown
area. The Baltimore metropolitan area, in fact,
is one of the fastest growing of the major metro­
politan areas in the country. From 1930 to 1958
the Baltimore metropolitan area ranked sixth in
population increase among the eighteen largest
metropolitan areas in the country. But although
the metropolitan area has been expanding, down­
town Baltimore has failed to keep pace.
An estimated 94,000 people are employed in the
central business district. This is about the same
number as was employed there twenty years ago.
The amount of vacant loft and warehouse space in
the downtown area has become a serious problem.
About 6% of all floor space in the area is now
vacant and in some blocks the rate is 25%.
The business of downtown department stores
has also been adversely affected. Sales at these
stores have declined in almost every year since
1952. Although the assessed value of all real
8




property in the city has shown regular increases
since 1952, assessments in the central business dis­
trict reached a peak in 1952 and have declined
steadily since then. Along with these problems,
downtown Baltimore is harassed and hamstrung
by heavy traffic, narrow streets, and inadequate
off-street parking facilities.
This situation does not face Baltimore alone but
is repeated in metropolitan areas throughout the
country. Downtown is declining in other cities
too, and they must decide what they can and will
do to stop deterioration at the core of the urban
center. Baltimore believes that it must come up
with a dramatic plan to build a new downtown.
Charles Center is the first step.
PARTNERSHIP PLANNING The plans for Charles
Center have been made through the cooperation of
private organizations and the city government. In
1957 an organization of businessmen known as the
Committee for Downtown, Inc. commissioned The
Planning Council of the Greater Baltimore Com­
mittee, Inc. to prepare a master plan for the re­
newal of the downtown district. The Planning
Council is a private, non-profit organization.
Charles Center emerged as part of the master plan
and was announced first because it was felt that it
was the best possible site for the initial onslaught
against serious economic deterioration.
The Planning Council has worked closely with
city officials and with the Baltimore Urban Re­
newal and Housing Agency in planning Charles
Center. The responsibility for actually carrying
out the plan, however, rests with the latter organi­
zation. It has the authority to acquire the prop-

erty in the area from the present owners either
through purchase or condemnation proceedings.
The Agency will also have the imposing problems
of relocating the occupants, demolishing existing
buildings, and selling the cleared sites to private
redevelopers. The Urban Renewal and Housing
Agency will, of course, place certain restrictions
on the size and design of the buildings in keeping
with the Charles Center plan. Some of the cleared
land, three acres to be specific, will be retained by
the city for development as public parks.
NEW FOCUS FOR DOWNTOWN
Charles Center
is planned to include about 22 acres of downtown
Baltimore. At present, 371 business firms with
about 5,600 employees are located within its
bounds. These establishments are quartered in
some 250 buildings, many of which are worn out
or obsolete. Five of the buildings now in this
area will be allowed to stand : three office build­
ings, a hotel, and a parking garage. The plans
call for construction of eight office buildings, a
hotel, a TV theater center, a municipally-owned
transportation terminal, an underground parking
garage, retail space with pedestrian malls, and
three public parks.

O n e of the a ttra c tiv e e n tra n ce s to C h a rle s C e n ter w ill fe a tu re
e s c a la to rs to c a rry sh o p p e rs to a v / a lk w a y o ve r a b usy stre e t.

A fu tu re guest a t the n e w hotel loo ks out fro m a b a lco n y to ­
w a rd the pro posed T V th e a te r center an d tw o o ffic e b u ild in g s.




The eight office buildings will provide two mil­
lion square feet of office space. This is almost seven
times as much office space as has been built in the
downtown area since W orld W ar II. It is esti­
mated that this construction will meet the demand
that will arise over the next decade. W ithout
Charles Center the new buildings, if built at all,
would probably have been scattered throughout
the city. There will be 428,000 square feet of
retail space in Charles Center. This is only about
two-thirds of the retail space in the area at the
present time. It is, however, in line with projected
demand based on recent trends in retailing.
Employment in Charles Center is expected to be
19,000 people with visitors and shoppers swelling
the daytime population to 25,000. To take care
of the cars that some of these people will drive,
Charles Center will have 4,000 parking spaces—
all underground. The transportation terminal will
be built by the city and will serve local and out-oftown busses. The terminal will also be under­
ground, and escalators will provide passengers
access from a public park.
The three parks will continue the open space
principle which has been used by many ancient and
9

C h a rle s C e n ter w ill be in the h e a rt o f d o w n to w n B a ltim o re ,
lin k in g the m ain sh o p p in g a re a w ith the
fin a n c ia l d istric t.

WHOLESALING
AND
INDUSTRIAL

MA

CHARLES CENTER
OCK

U N IV E R
OF MA

teW HOLESALING
AND
INDUSTRIAL

modern cities. This is simply a plan to leave open
space between buildings for parks with trees,
fountains, and flowers. These open spaces are as
carefully planned as the buildings. Venice and
even older cities used open space to their advan­
tage. American examples can be found in New
York’s Rockefeller Center, Mellon Square in
Pittsburgh, and Penn Center in Philadelphia.
FINANCING AN INVESTMENT
The total cost of
Charles Center is estimated at $127 million. This
will be paid from private and city funds. The
cost to the city will be $17,205,000, or 13.5% of
the total. Private redevelopers will contribute
86.5%, or $109,965,000. The city is not holding
its hand out to Uncle Sam for any financial aid.
To qualify for Federal assistance under the Gov­
ernment’s urban renewal program, the project
would have to include residential slum clearance
or new housing construction. There are no resi­
dential quarters in the Charles Center site and
none are contemplated. Here the guiding principle
is provision of facilities for activities most able to
profit from a downtown location.
The city’s share of the cost will be spent for
land for the parks and development of the parks,
street widening and alteration, relocating public
utilities, and construction of the transportation
terminal. The latter is expected to be partially
self-supporting. The city plans to issue urban
renewal bonds to finance its part of the total cost.
10



INNER HARBOR

The increased tax revenue from Charles Center is
expected to be $2.1 million a year. This added
revenue would repay the city’s investment in about
nine years.
Of the $109,965,000 investment by private re­
developers, $92,735,000 will be for construction of
the office buildings, stores and TV theater, the
hotel, and the underground parking garage. The
rest of the cost will be for the purchase of the land
from the Urban Renewal and Housing Agency.
The Greater Baltimore Committee has set up a
special committee to work with people who may be
interested in investing in Charles Center.
THE CITY'S JOB Through this brief description
of the Charles Center have been numerous state­
ments of problems plaguing downtown Baltimore.
The present economic environment is not such as
to provide private enterprise much incentive to
invest in new facilities in downtown Baltimore.
Through its urban renewal powers and projects,
Baltimore hopes to provide opportunity and incen­
tive for investment in new buildings and equip­
ment in the downtown area.
The downtown district is the heart of the city.
Baltimore, along with many other cities, has heart
trouble. Its prescription to cure the disease is an
urban renewal program based on an effective part­
nership of private and public interests. Charles
Center is a vital project of this master plan.

The Fifth District

Last month brought new evidence of a strong
and continuing expansion of economic activity in
the Fifth District. Seasonally adjusted nonfarm
employment rose in April to continue a virtually
uninterrupted year-long rise, and man-hours rang
up yet another healthy increase. In the textile
industries, production has increased, order back­
logs have expanded, and mill inventories are down.
Further reports now confirm the earlier indications
of a good spring furniture market. Bituminous coal
output has registered very modest gains, and the
inventory situation there gives promise of further
increases.
EMPLOYMENT Substantial gains in April in man­
ufacturing employment led total nonfarm employ­
ment, after allowance for seasonal forces, to a rise
for the fourth consecutive month. Since Decem­
ber the total number of persons employed in the
District has risen by 1.5% as compared with 1.8%
for the national total. Among District states,
North Carolina has led the gain this year with an
increase of 2.5%, and it also had the largest gain
in April over the previous month.
All major industries registered month-to-month
rises except construction, mining and trade. The
increase in employment in durables manufacturing
was especially strong in each state, with West
Virginia posting the largest percentage gain of
1.2%. District nondurable employment showed
continuing strength also, with an increase of 0.7%.

Rising employment in April was accompanied
by longer work-weeks in manufacturing industries,
and man-hours, seasonally adjusted, added another
month of vigorous increase. All states posted
March-to-April gains. Among the industries, fab­
ricated metal products rose 2.8% ; textiles, 2.6% ;
apparel, 4.7% ; and chemicals, 4.5%.
BITUMINOUS COAL District coal production in
the week ended May 9 achieved its highest level
thus far this year. In the four weeks ended May
9, District production was 6% higher than in the
previous four-week period and one-fourth above
the same weeks last year. U. S. output was also
up from these periods, but District increases in
both instances were greater. District production,
however, was still 18% below the like 1957 level.
Overseas shipments through District ports re­
mained quite low in comparison with a year ago
and were down 60% from the 1957 level. Coast­
wise shipments, under a continuing glut of fuel
oil, were also down from a year ago and almost
one-fifth under the 1957 figure.
Consequently, employment in mining areas con­
tinued downward. This decline in employment is
not just a recent development. It has been most
severely felt in W est Virginia—the center of Dis­
trict mining operations— where the number of
miners has declined by 54,400 persons from 1951
through 1958, despite a temporary slowing of the
downward trend in 1956.

M a rve lo u s la b o r s a vin g m ach in es th a t dig and lo ad co al in one o p e ra tio n h a ve a lm o st d ou bled o u tpu t p er m a n -d a y since W o rld W a r II.
A t the sam e tim e , to ta l pro du ctio n o f co al in the D istrict h as been in a d o w n w a rd




tren d fro m

the

record le ve l a ch ie v e d

in

1 947.

Even greater declines in mine workers have
occurred since the ’40’s. Coal production in the
District and in West Virginia reached a peak in
1947, and although there have been good years
since then, output never regained the record level.
At the same time, heavy mechanization of coal
mines raised production per man per day from
6.42 net tons in 1947 to 10.73 net tons in 1957.
A bright spot in the outlook, however, is that
coal stockpiles in the hands of U. S. consumers
are estimated by the Bureau of Mines at 65.9 mil­
lion tons as of March 31. This is 5 million tons
under a year ago and is the lowest March figure
since 1956. Normally coal-consuming industries
add from 8 to 12 million tons to their inventories
between March and October, and the present low
level indicates that demand for rebuilding inven­
tories may provide a considerable push for produc­
tion before winter comes.
TEXTILES Backlogs of unfilled orders held by
many District cotton textile mills have reached sub­
stantial proportions. Orders continued to expand
during the past month as buyers placed an increas­
ing volume for delivery later this year. An im­
pressive amount of orders is held for fourth
quarter shipment, and availability of supplies of
many fabrics for delivery during the third quarter
has become quite scarce. There has even been
some limited buying for first quarter 1960 needs.
However, most mills have been wary of quoting
firm prices as far ahead as this.
Mills have continued to operate on a five-dayweek schedule, although in some cases they are
said to have lost business by doing so. The mill
margin (difference between the cost of a pound
of cotton and the selling price of a pound of cloth)
in April was 27.18 cents a pound—the highest level
since January 1957. The selling price of cloth
used in computing the mill margin rose for the
tenth month in a row. Mill inventories continued to
decline, and by March stocks on hand had declined
39% from the peak of May 1958.
Demand for industrial gray goods improved and
lengthened out during May. Most mills weaving
industrial fabrics entered June with substantial
backlogs of orders for third quarter delivery.
Synthetic yarn fabrics also shared in the active
buying last month, and production is substantially
sold through the third quarter. Prices have been
increased on spun rayon and acetate goods and
Dacron-cotton fabrics. Mills weaving rayon fila­
ment yarn goods have found the supply of yarn
becoming tighter, and yarn prices have been
12




strong. Backlogs of unfilled orders for third
quarter shipment of rayon and acetate filament
fabrics are substantial.
Business for knitting mills has been better than
seasonal with mills knitting cotton outerwear and
underwear having large backlogs of orders. Seam­
less hosiery mills generally are sold up 4-6 weeks
ahead with some having substantial backlogs of
orders for third quarter. Ordinarily, this is a
time of seasonal slack in orders and price softening.
FURNITURE Earlier general reports of a good
spring furniture market were confirmed by infor­
mation on new orders booked by District furniture
manufacturers. For the first four months of 1959
new orders have been one-third ahead of the same
period last year and almost one-fifth above both
1956 and 1957. Man-hours worked in District
furniture factories in April were up 3.5% from
March after seasonal correction, indicating that
the March-to-April seasonal letdown in production
was somewhat less than usual.
CONSTRUCTION
The April dollar value of con­
struction contracts awarded in the District broke
all previous records with the single exception of
May 1951. The upward push came from large
gains in both residential and nonresidential build­
ing awards. These strong increases evidence a
high level of building activity in coming months.
BANKING Nowhere is the rapid step-up in Dis­
trict business activity more evident than in the
loan activity of District banks. Loan demand—
already quite strong by historical standards— in­
tensified somewhat during the first three weeks of
May, forcing member banks to liquidate additional
Government securities and to lean more heavily
upon the discount window at the Federal Reserve.
The three most important types of loans—com­
mercial and industrial, real estate, and consumer—
continued to contribute impressively to the loan
expansion. Commercial and industrial loans of
District wreekly reporting banks climbed even more
rapidly the first three weeks of May than during
these weeks of the boom years, 1955 and 1956.
Both real estate and consumer loans showed signs
of hesitation but still turned in quite strong per­
formances in comparison with earlier years.
PH O TO C R ED ITS
C o v e r—W a sh in g to n A ir D e fen se Se cto r, U n ited S tate s
A ir Force

11. N a tio n a l C o a l A s s o c ia tio n .


Federal Reserve Bank of St. Louis, One Federal Reserve Bank Plaza, St. Louis, MO 63102