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FEDERAL RESERVE BANK OF RICHMOND

MONTHLY
REVIEW

The American Textile Industry
State Revenues
Research In A Triangle: Part II
The Fifth D istrict




SEPTEMBER

1969

THE AMERICAN TEXTILE INDUSTRY
T he rapid rise of cotton mills in the South in the
period of 1870 to 1890 signaled the establishment
o f textiles as a dominant industry in the region.

45%

of the value added in the textile industry.

N orth Carolina, by m ost important measures, is
first in the nation in textile production. In 1966,

Despite the destabilizing effect of intermittent periods

N orth Carolina had 2 7 % of the production workers,

of prosperity and depression in the industry, it has

and accounted for 2 5 %
industry.

provided an im portant thrust over the past century
to the South’ s econom y, and has had a significant
influence upon its culture.
Northern textile men
argued in the early days that the southern climate
was unsuitable for spinning and that competent labor
and managerial talent could never be found. But

of the value added in the

T he textile industry accounts for 2 1 % of the
manufacturing payrolls in the Fifth District, 3 7 %
o f those in North Carolina, and 4 6 % of those in
South Carolina. O f production w orkers in manu­

southern mill towns grew , and a unique textile
econom y emerged. Since the industry’s emergence

facturing in the Fifth District, 2 9 % are in textiles.
In North Carolina that percentage is 44, and in
South Carolina, 51. O f total value added by manu­

in the South, the agricultural basis of its origin has

facturing in the Fifth District, 19% is in textiles.

diminished in im portance, and the closely related in­

In N orth Carolina the percentage is 32, and in
South Carolina, 43.

dustries, apparels, chemicals, and textile machinery,
have developed, providing econom ic stimulus o f al­
most equal im portance to the area.
T od ay, most m ajor segments of the textile in­
dustry— both cotton

and synthetic w eaving mills,

THE INDUSTRY'S PROBLEMS
T here are a number o f problem s and characteristics
which are unique to textile manufacturing in the

pally located in the Southeast. Others, such as w ool
weaving and finishing, narrow fabric mills, and

United States. T he A m erican textile industry has
historically been sensitive to changes in wage levels,
changes in tariffs and regulations governing the

knitting mills, are more evenly spread over both the

im port of textile products, and changes in G overn­

yarn and thread mills, and carpet mills— are princi­

ment price policies on cotton. T he com petitive nature

Southeast and the N ew England states.

of the industry explains the acute concern with input
costs and has been an important factor in the in­

TEXTILES AND THE FIFTH DISTRICT EC O N O M Y
The historical significance o f the textile industry
to the Fifth District— particularly N orth and South
Carolina— remains a fact today despite important
changes which have occurred in recent years, both in
the District econom y and in the textile industry.
T he im portance of the Fifth District to the textile
industry is even m ore striking.
T he textile industry occupies a unique place in the

dustry’s m igration to the low -w age, lightly unionized

development of the Fifth District econom y. From
the period immediately follow ing the Civil W a r to

unionization effort has been slight.
A n interesting aspect of the industry has been

the end of W o rld W a r II, in large areas of the D is­
trict, industrialization was chiefly a matter o f grow th

its transition over the years from an industry
characterized by a large number of small, prim arily

in textile production.

fam ily-owned firms to a somewhat smaller number

Even after the industrial d i­

southeastern states.
T he textile industry has experienced m ore than
the usual amount of difficulty in the labor relations
field. V iolen ce and bloodshed were not uncom m on
in the 1920’s when labor unions first began m ajor
efforts to organize textile w orkers in what were
then prim arily com pany towns.
Success o f the

versification of District states in recent years, the

of larger firms that are m ore highly diversified, m ore

industry remains the District’s most important manu­

capital

facturing activity.

sophisticated.

In fact, much of the diversifica­

tion represents the grow th
dustries.

of textile

M oreover, the southward

related

intensive,

and

much

m ore

technologically

W ith some notable exceptions, the

in­

ownership of most firm s is now widely distributed.

movement of

O ver the 40-year period from 1923 to 1963, there

the textile industry in the postwar period has in ­

was a 14% decline in the number o f operating manu­

creased the degree of concentration of the industry

facturing establishments and a 3 5 % decline in the

in Fifth District states.

number o f production workers.

T he year 1963 is

In 1966, the latest date for which data are avail­

used in this com parison because it is the most recent

able, the five states of the Fifth D istrict contained

manufacturing census year for which data are avail­

4 7 % of the production workers, and accounted for

able.




2

Value added figures are not available as far

back as 1923, but between the census years 1958
and 1963, value added increased 2 6 % while the
number of establishments and production w orkers
continued to decline.
Im p o rts Im p o rts o f tex tile s have been tr o u b le ­
some to A m erican textile producers due to low
wages abroad and the development of a large and e f­
ficient productive capacity in many foreign countries.
The industry has repeatedly sought protection under
peril-point, disruption of markets, and national se­
curity arguments. T h e United States negotiated the
L on g -T erm Arrangem ent on trade in cotton textiles,
through the General A greem ent on T ariffs and Trade
for a five-year period, beginning in O ctober 1962.
In 1967, the Arrangem ent ( L T A ) was extended to
September 30, 1970. U nder the L T A , provisions
were made for a m ore orderly rate of grow th o f im ­
ports of cotton textiles. T he L T A was an attempt
to satisfy textile men w ho were fearful o f the effect
of unchecked im ports upon the dom estic industry,
but at the same time to remain consistent with this
country’s overall policy of trade liberalization during
the past decade. T extile spokesmen have not been
completely satisfied with the result, however, and
today are pressing for additional im port controls.
Diligent efforts have been made to expand exports
through the E xp orters’ T extile A dvisory Committee,
made up of textile executives w ho advise the G ov ­
ernment on program s for expanding exports. These
efforts have failed to narrow the gap between im ports

tobacco, 3.7 for chemicals and allied products, 11.7
for lumber and w ood products, and 12.1 for paper
and paper products.
A substantial increase in demand due to military
procurem ent of textile goods has intensified the im ­
port problem since 1965. D uring that period the
industry’s capacity to meet total dom estic demand
has been severely limited. T here is some evidence
that a very close positive relationship exists between
im ports and the demand for domestically produced
textiles, as well as between im ports and the generally
rising level of aggregate demand in recent years.1
During the peak years o f textile production, begin­
ning with 1965, the productive capacity o f the in­
dustry was not increased rapidly enough to meet the
rising military com ponent of demand and the in­
crease in civilian demand due to general econom ic
prosperity. Thus im ports have had the effect, to
some degree, o f preventing sharp price increases.
Prices of textiles and apparels indeed remained
relatively stable from the K orean W a r until 1968.
O n e - and T w o -P r ic e C o tto n

A p ro b le m related

to im ports is that of cotton prices.

D uring the

period from 1956 through 1963, the dom estic in­
dustry was required to pay a higher price for U . S.
cotton than foreign purchasers paid. T he tw o-price
system resulted from surplus cotton production, and
took the form of a subsidy on foreign sales o f raw
cotton. Im ports of raw cotton were already severely
restricted. T he tw o-price system gave an added ad­

and exports, which in 1968 showed a net im port
balance of $528 million.
T he im port problem stems from both unfinished

vantage to foreign manufacturers of cotton textile

or semi-finished textile mill products and apparel
and related products manufactured abroad. O f
course, the dom estic textile industry itself is a large

substantial shift by the dom estic industry to synthetic
fibers and blends. A one-price cotton system was
restored in 1964. T he immediate effect was to
low er the price of raw cotton to dom estic textile p ro ­

goods, and was widely regarded as a factor co n ­
tributing to the rise in im ports of textiles, and to a

user of im ported grey g ood s and other unfinished
mill products. Recently, Japan, Korea, Taiwan, and
H on g K on g have supplied from 6 0 % to tw o-thirds
of the cotton, w ool, and man-made fiber textile p ro d ­

producers.

ucts im ported by the United States. Other nations
such as W est Germany, M exico, and Brazil have

T h e T e x tile C y c le

ducers by about one-fourth,
source

of

com petitive

eliminating a m ajor

disadvantage

with

foreign

C y c lica l flu ctu a tio n s in the

developed efficient textile industries, and are in­

output of textile mill products were a distinguishing

creasing their sales in the U . S. as well as their

characteristic of the industry for many years.

participation in w orld textile trade generally.

textile cycles represented a com plex set o f destabiliz­

These

It is difficult to determine the effect that im ported

ing influences to which the industry was susceptible,

textile good s have had upon the domestic industry.

and created serious problem s for textile management.

In 1966, the value of im ported textile mill products

Research on the nature o f the cycles, com pleted in

was 4 .8 % of the value of shipments of the domestic

1958, revealed that they were evident in textile ou t­

industry; in 1963, the percentage was 4.7.

put data, in fairly regular tw o-year durations, over

In the

case of apparel and related products, the percentage
was 3.2 in 1966, and 2.3 in 1963.

F or com parison,

these ratios in 1966 were 3.1 for food, beverages, and



1 W allace, W illiam H., N aylor, Thomas H., and Sasser, W . Earl.
“ A n E conom etric Model o f the Textile Industry in the U nited States,”
R eview o f E conom ics and Statistics, 50 (February, 1968).

3

the long period from 1919 to 1956.2
to be applicable to all important
textile output, and w ere apparently
industry. O f particular interest was

T hey appeared
com ponents of
unique to the
the consistency

which have tended to bring about the demise o f the
cycle.
These changes have not eliminated all the
problem s peculiar to this industry, but their effect
apparently has been to cause greater short-run sta­

o f the cycle in the face of a relatively stable end

bility in the industry’s level o f operations. W h ile
it is not possible upon exam ining empirical data alone

use demand.
T he textile cycle now seems to be a thing o f the
past. It is important, however, in an analysis of
the industry since it apparently was a significant
factor in the industry’s early instability.

Its disap­

pearance in fact reflects a number of fundamental
changes which have occurred in the nature o f the
textile industry in the past 10 to 15 years.
T here were a number of reasons for the existence
of the textile cycle. T he nature of the product was
a relatively hom ogeneous and standardized cloth.
T here were large numbers o f buyers and sellers. It
was a matter of relative ease, com pared to most

to state unequivocally that basic structural changes
have occurred, it is at least true that recent data on
textile production do not evince so clear a tendency
tow ard the characteristic cycle that existed earlier.
Observable changes which have taken place in the
structure of the industry, the nature o f the inputs,
and in technology, are the type which w ould be e x ­
pected to lessen cyclical sensitivity.
T hou gh it is
difficult to associate dates with these changes, the
changes constitute im portant differences between the
industry today and that of the 1950’s and earlier.

manufacturing operations, to change the nature of

T he importance of the function o f the independent
converter has been substantially reduced through the

the output by shifting loom s and spindles from the

process

production o f one type of product to another.

operations. T his trend, as well as the emergence
of larger firm s, has been noticeable in the past tw o

The

fabrics in their various end uses were highly com ­
petitive, particularly in garment production. There
there was the additional destabilizing influence o f the
industry in the earlier years.
These attributes
characterize an industry which is highly competitive,
and therefore very sensitive to destabilizing in­
fluences generally.
T o com pound the problem s already mentioned,
which were inherent in the nature o f the industry,
there was the additional destablizing influence o f the
converter. T he role of the converter was to buy the
output o f textile plants, and generally, to resell to
producers of garments or other finished products.
H e typically placed large orders in anticipation of
price rises or held back on orders in anticipation of

of

vertical

integration

textile industry accounts for less than 8 % o f the in­
dustry sales.

T extile producers are now concerned

with the production of m ore finished items and m ore
distinctive fabrics.

P roduct differentiation has had

the effect of introducing a higher degree o f m on op o­
listic com petition am ong textile producers.
A nother significant change in the industry has

END USE OF TEXTILE MILL PRODUCTS BY TYPE
OF USE, AS PER CENT OF TOTAL
Per Cent

T he presence and persistence of the textile cycle
tended to have undesirable effects upon firm s in the
industry, and was associated with the relatively high
It thus had detri­

mental effects upon localities in which the firms
were located.
BASIC C H A N C ES IN THE INDUSTRY
T here have been significant changes in some basic
characteristics of the textile industry in recent years
2 Stanback, Thomas M., J r. “ The Textile Cycle: Characteristics and
C ontributing F actors,” The Southern E conom ic Journal, 25 (O cto­
ber, 1958).




4

manufacturing

decades, even though today the largest firm in the

price declines. H e thus took advantage o f the textile
cycle and had the effect of aggravating it. There
was no organized futures market in textiles which
would ordinarily tend to moderate cyclical activity.

mortality rate of textile firms.

of

Source:

Textile O rgano n

been the introduction of new fibers. W ith few e x ­
ceptions, end uses of textile mill products have
changed relatively little. H ow ever, the change that
has occurred in the type of raw material used has
been significant (C harts 1 and 2 ) . T he inroads
made by man-made fibers have lessened the potential
impact of changes in the price o f cotton upon the

A ccord in g to Department of Com m erce estimates, the
net value o f plant and equipment in the textile in­
dustry in 1968 wras about $4 billion, with an esti­
mated $790 million being added to that by investment
last year.

textile industry, and have rem oved to a large degree

T he textile industry w ould not be classified as a
concentrated one. H ow ever, there has been an in­
crease in the degree o f concentration. Concentration

the uncertainty surrounding cotton supply. H eavier
reliance on the synthetic fibers has been a stabilizing

ratios for the census years 1947 and 1954 indicate
an increase from .243 to .265. These ratios are the

factor. Larger varieties of the given types o f outputs

percentages of the total value of shipments fo r the

are, o f course, n ow available, and quality im prove­

industry accounted for by the largest fou r firms.
A s such they are not perfect measures o f the change
in the degree of concentration, and probably under­

ments have been made.

T he change has been mainly

a matter of substitution of inputs to produce sub­
stantially the same range of basic types o f outputs.

state the actual increase in concentration which has

L argely as a result o f the econom ic prosperity o f
the 1960’s, as well as mill liquidations, excess ca­
pacity in the textile industry has been substantially
diminished. Since the late fall of 1968, a slump in

occurred. B y 1958, the ratio had increased to .288.
Comparable figures for later years are not available,
but there is evidence that the degree o f concentration
is continuing to increase. Som e recent research has

industry activity has occurred, associated with a d e­

revealed a significant correlation between the decline

cline in military demand.

H ow ever, this is probably

a short-run phenom enon.

A lso, since 1964, due to

in employm ent in the textile industry and the increase
in concentration.3 T o the extent that this relation­

the

introduction

of

one-price

cotton

and

other

changes, the profitability of textile firms has in­
creased significantly.

T he recent higher profits have

led to greater investment, but this investment has
gone

prim arily

into

m odernization

of

plant

and

equipment rather than to increases in capacity as
such.

T here has been a tendency to spend heavily

on research and development, and to invest in m ore
capital intensive manufacturing processes in order
to com pete with low er priced imported products.

ship, which was based on the change from 1947 to
1954, remains valid, it might be expected that the
continually

declining

textile

em ploym ent

would

signify further increases in concentration.
T here was, m oreover, an average decline in the
number o f textile m anufacturing establishments o f
1.8% per year over the period 1954 to 1963, and
for the same period an average decline in the number
of firms of 1.6% per year. These declines were ac­
companied by an average increase of 3 .3 % per year
in value added in textiles.

Even though there are

few er but larger establishments producing a greater
output, the average size o f the nearly 7,000 which
remain is still small.
FIBER USAGE IN TEXTILE MILL
PRODUCTS AS PER CENT OF TOTAL

T he increase in concentration has been facilitated
through better management skill in larger firms, as
well as by the development of patents and the intro­
duction of new techniques of production. A s in most
industries, breakthroughs along these lines are o f
necessity limited to the larger firm s which can af­
ford them. A transition from fam ily ownership to

Per Cent

public ownership and control of a number o f textile
firms has taken place.
T he U .S . textile industry is a fundamentally im ­
portant one, which in spite o f its severe problem s,
has remained essentially responsive to basic co n ­
sumer and industry needs.

W h ile many o f its d if­

ficulties persist, many have been resolved, and its
resiliency today is unquestionably im proved.
W illiam H . W allace
Source:

Textile O rganon




3 Nelson, Ralph L. C oncentration in the M anufacturing Industries o f
the United States. N ew H aven: Yale U niversity Press, 1963.

5

STATE

ENUES

TOTAL STATE REVENUES BY SOURCE

FIFTH DISTRICT REVENUES FROM
U. S. G O VERN M EN T BY PURPOSE

UNITED STATES
Fiscal Y e ars

$ Billions

$ Mill

u
<

1955
□
f~|
□
Q

1960

1965

1966

TOTAL STATE REVENUES BY SOURCE

1967

[j
□

►

□
□
□
□

Digitized for


1966

1967

O Public W elfare
EH All O ther

O n the national level the largest part of state revenue
from the Federal Government in 1967 was for public wel­
fare, $4.4 billion. Highways were next with $4.0 billion,
then education with $3.5 billion. In the District, however,
highways received the largest amount, $333 million, down
from $356 million in 1965. Education received $330 m il­
lion while public welfare receipts were nearly $100 million
below those for highways. Over a third of highway revenue
was accounted for by Virginia ($122 m illion).
In 1967 North Carolina received $281 m illion of Fed­
eral funds to lead the District. V irginia was a close sec­
ond ($254 m illion), followed by W est V irginia and M ary­
land ($175 million each) and South Carolina ($143 m illion).
North Carolina led the District states in Federal funds for
education ($104 m illion) and public welfare ($76 m illion).

1960

1965

1966

1967

Tax
Total Intergovernm ental
Insurance Trust
Total current charges and misc.
(Including liquor store revenue)

60

40

W .V A .*

Education
H igh w ays

1965

Fiscal Y e a r 1967

80
1955

VA.

1960

DISTRIBUTION OF REVENUES FROM
U. S. G OVERN M EN T BY PURPOSE
„
r .
Per Cent

S .C .

400

1955

100

N .C .

600

0

Fiscal Y e ar 1967

MD.

►

200

PRINCIPAL COMPONENTS
OF STATE TAXES

U .S .

800

Fiscal Years

$ Billions

Total revenues for the Fifth District states also tripled from
1955 to 1967 with taxes comprising the major source of revenue.
Taxes as a per cent of total revenue, however, declined about 5%
from 1955 to 1967. As a per cent of total revenues, intergovern­
mental revenue increased about 8%, while insurance trust revenue
stayed the same and current charges dropped slightly.

2 G e n eral Sales and G ross Receipts
Q Selective Sales and G ross Receipts
Q License
|~1 Individual and Corpo rate Net Income
□
FRASER All Other
* W . V a . has no Corpo rate Net Income Tax

1,000

FIFTH DISTRICT

Tax
Total Intergovernm ental
Insurance Trust
Total current charges and misc.
(Including liquor store revenue)

Per Cent

Federal aid to all state governments totaled $13.6 billion
in 1967, up from $2.8 billion in 1955. Over that period allo­
cations to District states for education rose from 12% to
32% of the District’s total receipts from the Federal Govern­
ment. As on the national level, the bulk of the District
increase occurred very recently with the ratio rising from
only 17% in 1965. District highway receipts rose from 21%
of the total in 1955 to 46% in 1965, but with a hiatus in
the growth of allotments across the country the District
suffered reduced flows and the District ratio fell to 32%
in 1967. Grants for public welfare fell from 48% to 23%
of the District total despite increased outlays over the
12-year period. In both the District and the nation the
large part of the decline was registered before 1960.

Total state revenues for the United States more than tripled
from 1955 to 1967. Taxes comprised the largest source of revenue
but as a per cent of total revenues taxes declined almost 7% dur­
ing this period. Intergovernmental receipts, which are dominated
by Federal grants, increased around 8% for the same period. I n ­
surance trust revenue and total current charges as per cents of
total revenues remained virtually unchanged over the period.

State tax receipts in the U. S. totaled nearly $32 billion in
1967, an 8.7% increase over the previous year. Selective sales
taxes yielded about $9.7 billion. The largest single selective tax
was on motor fuels and provided $4.8 billion, followed by tobacco
taxes, $1.6 billion, and taxes on alcoholic beverages, $1.0 billion.
General sales taxes accounted for $8.9 billion even though eight
states did not have such a tax. Income taxes, totaling over $7.1
billion, in most states were largely comprised of individual income
taxes. Fourteen states, however, had no individual taxes and
12 states collected no corporate income taxes.

20

0

D oroth y E. F errell
U .S .
□
□

MD.

Education
H igh w ays

N .C .

S .C .
□
□

VA.

W .V A .

Public W elfare
All O ther
Source:

U. S. Departm ent of Com m erce

DUKE UNIVERSITY

RESEARCH IN

DURHAM

A TRIANGLE:
PART II
NORTH CAROLINA
STATE UNIVERSITY
RALEIGH

RESEARCH O R G A N IZA TIO N S
IN THE RESEARCH TRIANGLE PARK
Research Triangle Institute
Federal Governm ent Research O rg an izatio n s
National Institute of Environmental Health
Sciences of the U. S. Public Health Service
National Air Pollution Control Administration of
the U. S. Public Health Service
National Center for Health Statistics of the U. S.
Public Health Service
Forestry Sciences Laboratory of the U. S. Forest
Service
Textile-Oriented Research Laboratories
Chemstrand Research Center, Incorporated,
Monsanto Com pany
Beaunit Corporation
Hercules, Incorporated
A merican Association of Textile Chemists and
Colorists
Com puter Research and
M anufacturing O rg anizations

In last m onth’s issue, P a rt I of this article offered
a general outline o f the history, structure, and
success of the R esearch Triangle.

This concluding

portion will deal specifically with the 18 research
organisations in the R esearch Triangle Park.
T he accom panying table reveals the w ide diversity
of the organizations and the relatively equal
balance betw een public and private interests.

The Research Triangle Institute R T I is u niqu e
am ong the organizations in the Park in that, unlike
the other research establishments, it provides a full
range of research services, making it a research center
within a research center. T he Institute provides re­
search services to clients on a contract basis, with
about 7 5 % of the contract volum e com ing from
governm ent and the rest from industry. O ver the
past ten years the Institute has com pleted, or is in
the process of com pleting, 440 research projects. T he
substantial amount o f technical research done at
R T I draws heavily upon the facilities o f the three
nearby

universities

and points

up

the vital

sig­

International Business Machines Corporation

nificance of these institutions to the Triangle.

Technitrol, Incorporated

physical facilities and libraries are within easy reach

O ther Research O rg anizatio ns
Becton, Dickinson and Com pany
Richardson-Merrell, Incorporated
Burroughs Wellcome & C om pany (USA)
Incorporated
Regional Education Laboratory for the Carolinas
and Virginia
Educational Testing Service
North Carolina Science and Technology Research
Center
Triangle Universities Computation Center



8

T he

o f the Institute, and the many recognized specialists
in num erous fields are readily available for consulting
services, either on an informal or fee basis.
T he Institute is located in the center of the Park
and employs a staff o f over 350 professional, tech­
nical, and support personnel.

Sixty per cent o f the

employees are professionally trained and represent
m ore than 40 different degree fields.
ganized into five m ajor research g ro u p s:

R T I is o r ­
operations

research and econom ics, statistics research, chemistry
and life sciences, polym er research, and engineering

and environmental health. In practice, m ost projects
raise questions and require skills that cut across the
lines of several disciplines, and accordingly the
groups are not functionally separate. Rather, in­
dividual research teams are usually multidisciplinary
units.
T he wide variety of research being done at R T I

Health Sciences Center, the National A ir Pollution
Center, and the Data P rocessing Laboratory of the
National Center fo r Health Statistics show the
emphasis placed on health-oriented research at the
Park. T he medical schools and hospitals in the T r i­
angle area conveniently provide personnel and fa­
cilities to supplement this type o f research.

scientists at the Institute have found that the rare

T od a y the National Environm ental Health Ser­
vices Center is located in interim facilities near the

Chinese Camptotheca tree may contain an alkaloid,
Camptothecin, highly effective in inhibiting the

center of the Park. A b ou t 200 em ployees are doing
basic research in environmental health sciences. By

is perhaps best illustrated by tw o examples. Recently,

grow th of tumors in mice infected with lym phoid

the m id-1970’s the new $25 million Center should

leukemia.

be well established on its permanent 500 acre site.
O ver 1,000 employees will be w orking in what is

Because Camptothecin is so difficult to

extract from the plant and because it is so scarce,
attempts are now being made to produce the sub­
stance synthetically.
S o far no evidence has been

envisioned to be a w orld center for the protection

found to indicate that the substance would be e f­
fective in preventing or curing cancer in humans,

and preservation o f m an’s health.
H eadquarters for the National A ir Pollution A d ­
ministration will be located in interim facilities which

but continued testing may

are now under construction.

unlock the secrets o f

Camptothecin and possibly uncover the prom ise of
a cure for human cancer.
A second p roject involves the intensive study of
witchweed, a root parasite which attacks corn, sor­
ghum, sugar cane, and other crops in the Carolinas.

B y 1971 about 9 0 % o f

the administrative end of the pollution control p ro ­
gram and 5 0 % o f the research will be centered in
the new facility.
600

and

will

Em ployees will number around

include

physicists,

epidemiologists,

chemists, engineers, physiologists, plant pathologists,

T he discovery of witchweed ten years ago led to

biostatisticians, as well as economists. These special­

expensive quarantine and control program s since its
potential hazard to domestic crops was estimated to
range into hundreds of millions o f dollars. Scientists

ists will be w orking to control air
problem of great national concern.

at R T I

have succeeded in isolating the chemical

which causes germination of the weed.

T he success

in isolating the germinating factor could possibly
lead to a method of eliminating the pest. T he w ork
may also provide a new opening for further studies
of seed germination in general.
The witchweed
p roject exem plifies R T F s regional involvement.
Subjects slated for increased attention at the In ­
stitute are analyses of population trends, econom ic
forecasting, civil defense, transportation, and traffic.
Health-related research, however, will continue to
be the area of greatest attention and grow th in all
Institute divisions.
Educational research will also
be of particular interest this year. F or exam ple, R T I
was given a $2 million contract to collect inform ation
for a nationwide survey designed to assess educa­
tional progress being made in the nation’s schools.
T his unprecedented national study is sponsored by
the Committee on A ssessing the P rogress o f E du ­
cation.

T he contract is the largest in R T I history

and covers the first 17 months of the three-year study.
F ed era l G o v e rn m e n t

Research Organizations

pollution— a

T he National Center for Health Statistics has a
permanent home in the Park and employs 140 people.
Principal activities of the Center involve operations
and research in processing inform ation on health,
training of health statistics personnel, and the c o ­
ordination of technical assistance to states.
T he U . S. Department of A griculture's Forest
Sciences Laboratory was one o f the P ark’s earliest
inhabitants.
Its opening in 1962 signaled a new
dim ension in research on forest soils and diseases.
T h e 45 employees at the Laboratory deal prim arily
with research on the life processes of trees and as­
sociated organisms, so that the Forest Service can
be prepared to solve the long-term basic problem s
of forest production and protection.
E ntom ology,
the study of insects, is an area of prim e im portance.
Textile-O riented

Research

Laboratories

C on­

sidering N orth Carolina’s history as a state long
associated with the textile industry, it is not sur­
prising to find that three of the cou ntry’s largest
textile corporations have research organizations in
the Park.

T h e Chemstrand Research Center, es­

tablished in 1960, was the P ark’s first m ajor in­

T he U . S. Department o f Health, Education, and

dustrial tenant.

W elfare is the parent organization of three of the

applied research arm of the M onsanto Company, one

P ark’s largest tenants.

of the w orld ’s largest manufacturers o f man-made

T he National Environmental




T he Center acts as the basic and

9

fibers.

T he 400 Chemstrand em ployees deal with

research and development of synthetic fibers, struc­
tural materials, and other products of interest to the
M onsanto Company. Beaunit Fibers, an affiliate of
Beaunit C orporation, is a research organization de­
voted to man-made fibers research.
Beaunit has
tw o buildings in the P a r k ; one houses executive and

Service, a corporate affiliate of Educational Testing
Service in Princeton, N ew Jersey, deals prim arily
with educational research, test development, and
consultation.
T he N orth Carolina Science and T echn ology R e ­
search Center is a state governm ent organization.

administrative employees, while the other is occupied

Created by the N orth Carolina General A ssem bly in
1963, the Center receives appropriations from the

by research personnel.

state to distribute as grants for scientific research

T he principal activities of

the third and newest textile-oriented lab, H ercules.

in N orth Carolina.

Incorporated, are research and development for fi­
bers, fiber sales, and technical sales service for fibers.
T he headquarters and testing laboratories o f the

tribution center for the findings of N A S A and other

A m erican

A ssociation

of

T extile

Chemists

and

Colorists are also part of the Park’s textile-research
comm unity.

T his technical and scientific society is

concerned with the chemistry of textiles.

Its 9,000

members are located in 47 states and 50 countries,
and

300

companies

are

affiliated

as

corporate

members.

Federal agencies

It also serves as a regional dis­
involved

research

and

T he Triangle Universities Computation Center, or
T U C C , is one of the most interesting organizations in
the Park.

Established by the three schools, its pu r­

pose is to support the educational, research, and ad­
ministrative

activities

of

the triangle

universities

through the use o f high-speed com m unications and
T U C C is a nonprofit c o r ­

Computer

Research and

nizations

In tern a tion a l B usin ess M a ch in es C o r ­

borne equally by the three universities.

poration’ s

$15

puter, I B M ’s S ystem /360 M odel 75, is connected by

million

O rga­

space

exploration.

data processing facilities.
Manufacturing

in

product-developm ent

and

poration, and the costs of operating the facility are
T he co m ­

manufacturing installation houses 2,800 employees.

direct lines to the schools. B y using either telephones

IB M is the largest em ployer in the Park and main­

or teletype machines located at each of the three

tains a staff of scientists and technicians w ho w ork

campus com puter centers, operators can share the

prim arily on data comm unications equipment and

services of the giant com puter which can add one

com ponents for I B M ’s 360 computer.

Technitrol,

million ten-digit figures in less than a second. T U C C

the only other Park facility engaged in manufactur­

had one of the first installations of the M odel 75,

ing,

and it remains one of the largest and m ost extensive

produces

pulse

transformers

and

com puter

components.

educational com puter centers in the country.

Other Research Organizations F u rth er em ph asis
will be placed on health-oriented research when three
nationally recognized drug companies becom e m em ­
bers o f the P ark’s research com m unity.

R ichardson-

M errell’s facilities are still in the early planning
stages.

Construction will start late this year on

Becton, D ickinson and C om pany’s new research fa­
cilities.

T he Com pany will conduct basic and ap­

plied research in the health sciences and biological
safety and control activities.

T he corporate head­

B efore T U C C became fully operational a plan was
developed to extend its services to other N orth C aro­
lina colleges. T he N orth Carolina Computer Orienta­
tion P roject was organized to carry out this idea.
T he p roject offers the 86 eligible institutions a oneyear trial period of com puter service without charge.
Each participating college is furnished a M odel 33
Teletype terminal.

A “ circuit rider” is also sent

to the interested schools to give instruction and as­
sistance to their faculty members.

quarters and pharmaceutical research laboratories

Summary

for

a vivid picture of the diversity and productivity of

Burroughs W ellcom e

being built.

and Com pany are now

T he beautiful, ultram odern building

T w o of the P ark’s tenants function as centers
educational

studies.

The

Regional

research in the 20th century.

T his com m unity of

thought and investigation, linked with the three uni­

will house around 250 employees.
of

T h e 18 in stitu tion s in the P ark p ain t

Education

versities, has created a research com plex unique in
both function and substance.

A s form er G overnor

Laboratory for the Carolinas and V irginia is a n on ­

H odges says, “ T here is nothing quite like it anywhere

profit private corporation whose principal activity

else, in fact, in spirit, or in purpose.”

is research in education.



10

The Educational Testing

Carla R. G regory

The Fifth District
BAN KIN G DEVELOPM ENTS

The pace of business activity in the Fifth District

year, but the rate of decline in the first half o f 1969

continued to expand throughout the first half of
1969. Construction activity increased, employment
was high, retail sales were quite strong, and most

was exceptionally high. Furtherm ore, the unusually
slow 3 .6 % rate of grow th in time deposits failed to

manufacturing industries experienced heavy demand.
Associated with this high level of business activity,

growth in time deposits largely reflects the $34 m il­
lion loss of large certificates of deposit at Fifth D is­

Fifth District banks realized continued strong loan
demand. In order to accom m odate this demand in

trict weekly reporting banks.
In spite of their limited deposit sources of funds

the midst of monetary restraint, banks increased their
borrow ings and liquidated a substantial amount of

banks have, to a great extent, been able to ac­
com m odate the strong loan demand prevailing in the

their investments.
Total deposits at Fifth District member banks fell
$156 million, or at an average annual rate of 2 % .

of interbank transactions, grew by $470 million. The

T his decline was due to a $296 million, or 7 .4 % ,
drop in demand deposits net of cash items in process
of collection and demand balances due from banks.
Such deposits normally drop in the first half o f the




offset the decline in demand deposits.

Fifth District.

T he slow

Loans adjusted, which are loans net

bulk o f the advance, $435 million, was in nonfinancial loans.

This increase, at an average annual

rate of 10.9% , is seasonal or a little stronger.

B usi­

ness loans showred exceptional strength, grow in g by
$212 million, or at an annual rate o f 15.1% .

C on­

sumer instalment and real estate loans also showed

11

great strength. Financial loans, an extrem ely volatile
series, reinforced the increases shown in nonfinancial loans.
Fifth District member banks were able to increase

MEMBER BANK BORROW INGS
FIFTH DISTRICT
$ Millions

the volume of their loans outstanding in the midst
of declining deposits by liquidating 6 .5 % of their in­
vestments. W eekly reporting banks’ holdings of
securities fell by $246 million, or 6 .9 % , contrary to
typical seasonal increases.

M ost of this decline, $152

million, came in over-one-year Governments, which
fell at a 2 0 .2 % annual rate.

Short-term municipal

holdings dropped significantly while short-term G o v ­
ernments and long-term municipals were virtually
unchanged.

Investments as a percentage o f Fifth

District bank credit fell from 3 0 .9 %

to 2 8 .5 % .

T he 18 largest banks in the District were large

Fifth District banks made frequent trips to the
Federal R eserve discount w indow . Daily borrow ings

net purchasers of Federal funds, particularly in M ay

were predominantly in the $40 million to $100 million

and June, even as rates soared.

range, levels rarely reached in the past ten years.

F or all Fifth D is­

trict member banks, sales to banks outside the D is­

B orrow ings reached a record high o f $138 million

trict exceeded purchases by Fifth District banks in

over the June 27-29 weekend.

the period from M arch through June.



12

W yn n elle W ilson

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