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1EBAL RESERVE BANK OF Pi

o

W

O

d

W

AN ECONOMIC SU R VEY
Federal Reserve Bank
of Atlanta
April 1 9 7 7

Theof the Federal
Southeastern
Duringthe Recovery
District Business
Conditions

Federal Reserve Bank of Atlanta
Federal Reserve Station
Atlanta, Georgia 30303

Bulk Rate
U S. Postage

Address Correction Requested

Atlanta, Ga.
Permit 292




PAID

FEATURES:
The South’s Share
of the Federal
P ie
An examination of federal
expenditures provides no
clear-cut proof that the
Sunbelt states draw dis­
p r o p o r t i o n a t e l y large
sums of U. S. government
monies.

Southeastern
Banking During
the Recovery . . . .
update —
A New Periodical
This is the last issue in
which Sixth District Statis­
tics, Debits to Demand
Deposit Accounts and Dis­
trict Business Conditions
will appear. These three
features will now be carried
in update, a new monthly
publication. To receive up­
date, fill in the card insert
between pages 52 and 53 of
this issue.




.

54

The improvement in Dis­
trict banking that began
in 1975 resulted in a mod­
erate but solid recovery
during 1976, and the pros­
pects for further improve­
ment in 1977 are encour­
aging.

District Business
C o n d itio n s.....................

60

Business activity has re­
covered from the adverse
effects of cold weather
and associated fuel short­
ages.

Director of Research: Harry Brandt
Editor: Teresa Wright Wiggins
Graphics: Susan F. Pope, Eddie Lee, Jr.
M onthly R eview , V o l. LX II, No. 4. Free subscription
and additional copies available upon request to the
Research Departm ent, Federal Reserve Bank o f Atlanta,
Atlanta, Georgia 30303. M aterial herein may be reprinted
or abstracted, provided this Review , the Bank and the
author are credited. Please provide this Bank's Research
Department w ith a copy of any publication in w h ich
such material is reprinted.

THE SOUTH’S SHARE
OF THE FEDERAL PIE
by William D. Tool
The Sunbelt had caught the public's fancy
even before Jimmy Carter's rise to prominence.
Economists, too, have joined the throng of
curious investigators to see just what's going
on there. Facts show that this region, stretch­
ing from Atlantic to Pacific, has paced the
nation's growth for the last 15 years. As a re­
sult, the South, which is a sizable part of the
Sunbelt, no longer holds the distinction of
being the number one economic problem of
the United States.
There are many hypotheses offered for the
Sunbelt's growth surge, but one of the most
often cited is that the alleged net inflow of
federal funds has spurred an economic boom.
Take the following quote from the popular
book, Power Shift, as an example:
“ Thus it can be said that the basis for the
Southern Rim's sweeping economic develop­
ment— the cement under the pillars, if you
w ill— is the huge federal treasury, a source
of capital unlike that of any known previous­
ly in the w o rld ."1
The Sixth Federal Reserve District, comprised
of all or parts of Alabama, Florida, Georgia,
’ Kirkpatrick Sale, Power Shift, (New Y o rk : Random House, 1975)




Louisiana, Mississippi and Tennessee, lies in the
southeastern corner of the Sunbelt, and rapid
economic growth has been a characteristic
here, too, over the past 15 to 20 years. This
study concentrates on the Sixth District and
explores the importance of federal government
spending there. The basic question we ask is
"D o Sixth District states receive more or less
than their share of federal government ex­
penditures?"
The basic data we used come from special
tabulations of federal government outlays by
states developed by the Community Services
Administration of the Executive Office of the
President.2 Several warnings are necessary
about these data. They are not uniformly ad­
justed to measure the incidence of the ex­
penditure; in other words, these data do not
always reflect the place where the final eco­
nomic impact of the federal government
spending occurs. A notable example is the
subcontracting of federal projects by the major
prime contract recipient. Also, these data are
^Federal Outlays in Summary, 1973, 1974, 1975, and 1976, Executive
O ffice of the President, Com m unity Service Adm inistration and
O ffice of Econom ic O pportunity.

UNCLE SAM’S EXPENDITURES AND TAX RECEIPTS
T H E S O U T H E A S T ’S SH A R E

TENN ESSEE

MISSISSIPPI
LOUISIANA

U. S. Average Per
Capita Federal
Outlays or Tax
Payments

*Per $1 of Per Capita Federal Government Outlays and Taxes
Fiscal Year 1974

GEORGIA
FLORIDA

Per Capita
Outlays

Per Capita
Tax Payments

Source: Office of Economic Opportunity,
National Tax Foundation

not, in every case, “ hard." That is, in some
cases, outlays have been allocated to states and
regions by some subjective standard when ac­
tual outlays by states or regions were unavail­
able. But, while the data must be used cau­
tiously, they do provide a relatively clear in­
dication of the geographic dispersion of federal
funds.
Chart 1 compares the federal taxes paid by
the average resident of Sixth District states
in fiscal year 1974 and what he or she received
back in federal expenditures with payments and
receipts of the average U. S. citizen.8 The
average resident of each District state except
Florida paid out less in federal taxes than he
received back in federal expenditures. This
resulted in a net inflow of federal funds, or a
net surplus for these five Sixth District states.
This pattern of net surpluses is also characteris­
tic of most other Sunbelt states. Thus, there is
a net inflow of federal budget dollars into the

Sunbelt and, more specifically, into the Sixth
District states. The Sunbelt economies, ap­
parently, are on a net basis benefiting from the
federal treasury, a finding that is not at all
surprising or unexpected. With a progressive
federal personal income tax and lower-thannational per capita incomes in Sixth District
states, per capita federal tax payments would
necessarily be lower than in other parts of the
country.4 So it is the tax side, then, that makes
the Sixth District states net gainers of federal
funds. This, however, is an automatic means of
distributing federal funds and is not discre­
tionary, as some analysts of the Sunbelt econ­
omy imply.
Tax payments aside, what about federal
spending in Sixth District states? Flow large are
these expenditures? Do these states get their
share of these outlays? After all, it is the ex­
penditures side of the federal budget where
the discretionary decisions on geographic dis-

^Fiscal year 1974 was used here instead of more recent years
because it was the latest fiscal year for w hich tax burden data were
available.

JThe co rrelation between state per capita personal income and per
capita federal tax receipts is very high (.98).




\

TA B LE 2

Location Quotients

TA BLE 1

Federal Government Expenditures*
Fiscal Years
1975
1974

1976
Alabama
Florida
Georgia
Louisiana
Mississippi
Tennessee
U. S.

Alabama
Florida
Georgia
Louisiana
Mississippi
Tennessee

$5.5
13.0
7.2
4.9
4.1
6.7
358.9

1.5
3.6
2.0
1.3
1.1
1.8

$5.1
11.7
7.0
4.8
3.9
5.6
326.7

$4.4
9.5
5.6
3.9
3.7
4.8
281.5

Percent of Total Federal
Government Expenditures
1.5
1.5
3.5
3.3
2.1
1.9
1.4
1.3
1.1
1.3
1.7
1.7

1973
$3.9
8.4
5.2
3.5
2.7
4.3
260.6

1:4
3.2
1.9
1.3
1.0
1.6

*The data reported here are slightly less than reported in
the U. S. budget itself.
Source: Community Services Administration

V_________________________ J
persion of federal funds are made. Table 1
shows the approximate size of federal expendi­
tures, in each of the Sixth District states for
fiscal years 1973 through 1976, both absolutely
and as a share of total federal expenditures. No
District state earns over four percent of U. S.
government expenditures, and except for
Florida, the shares are generally two percent or
less. These percentages have remained fairly
steady in recent years.
Per Capita Expenditures. One question
immediately arises — "how do we define
a state's fair share of federal expendi­
tures?" The simplest measure is to adjust fed­
eral outlays by a state's or region's population.
In other words, we will consider federal expen­
ditures on a per capita basis. If these per capita
figures are below the national average, we will
say that the state does not receive its share. This
method may be somewhat biased since the
national average includes the extremely high
level of per capita federal expenditures oc­
curring in the District of Columbia. Conse­
quently, we also rank each of the U. S. states
by per capita outlays to examine where in the
hierarchy of states the Sixth District states lie.
Table 2 shows location quotients of per
capita outlays for the fiscal years 1973-1976 for
each of the Sixth District states. These location
quotients measure the per capita federal ex­
penditures in a state relative to per capita fed­
eral expenditures for the entire nation. A loca-




Alabama
Florida
Georgia
Louisiana
Mississippi
Tennessee

Per Capita Federal Government Outlays
Fiscal Years
Average
1974
1976
1975
1973 1973-76
.900
.898
.913
.896
.895
.902
.927
.881
.874
.925
.887
.934
.861
.876
.876
.781
.767
.824
.780
.755
1.062
.954
1.078
1.183
1.033
.867
.858
.851
.880
.943

Alabama
Florida
Georgia
Louisiana
Mississippi
Tennessee

Federal Outlays Per$1 of Personal Income
1.164
1.142
1.175
1.166
1.175
.954
.886
.926
.973
.890
1.078
.983
.996
1.016
1.009
1.001
.976
.965
.923
.960
1.352
1.438
.149
1.540
1.671
1.136
1.046
1.035
1.031
1.062

tion quotient of less than one indicates that per
capita expenditures are below the national
average. In other words, based on its popula­
tion size, that state is not getting its share of
federal disbursements. The table indicates that
in each of the past four fiscal years the average
resident of each District state except Mississippi
received an amount well below the national
average of federal expenditures. Mississippi's
quotient was above one in fiscal 1974,
1975 and 1976. But in 1973, per capita
federal expenditures in Mississippi also fell
below the U. S. average. According to this
measure, five of the Sixth District States are
not receiving their share of federal funds
from the more discretionary expenditure
side of the federal budget.
Federal Expenditures and State Personal In­
come. Another measure of the impact of
federal expenditures on a state is the relation­
ship of this spending to personal income. The
bottom portion of Table 2 compares federal
outlays per one dollar of state personal income.
By this measure, only Mississippi has a location
quotient substantially above one. Alabama and
Tennessee also show federal outlays per dollar
of state personal income slightly above the na­
tional average. This comparison shows four of
the six Sixth District states in fiscal years 1973
through 1976 on average received their share
or more than their share of federal expendi­
tures. The discrepancy between the per capita
and personal income measures of federal out­
lays stems from the South's lower per capita
incomes, particularly in Sixth District states.
Per capita incomes range from 68.5 percent of

U. S. per capita income in Mississippi to 95.5
percent in Florida. Because of lower per capita
incomes, this second measure of federal ex­
penditures gives a biased view of the shares
going to District states. It shows that Alabama,
Georgia and Tennessee are receiving their
shares of federal outlays when, on a per capita
basis, they are not.5
State Rankings. Another way of looking at the
dispersion of federal government expenditures
is to examine the rankings of per capita spend­
ing for the fifty states and the District of Co­
lumbia, as Table 3 shows. Only one Sunbelt
state is among the top 10 states in this listing—
New Mexico. On the other hand, and not sur­
prisingly, the District of Columbia and the
neighboring states of Maryland and Virginia
rank in the top 10. New York and Connecticut,
as well as the outliers, Hawaii and Alaska, also
are in this group. None of the Sixth District
states rank in the top 10 in per capita federal
government expenditures. But Mississippi
comes the closest, ranking 15th over fiscal years
1973 through 1976. The other five District states
ranked in the lower half of states. Louisiana was
lowest of the District states, finishing 45th.
These state rankings of per capita federal out­
lays again confirm that Sixth District states,
with the exception of Mississippi, are missing
out on their share (based on population) of
federal expenditures. The Midwestern states
apparently received the smallest per capita
federal government outlays.
Just why do Sixth District states receive less
than the national average in per capita federal
expenditures? Certainly, we would not expect
'T h e extent of federal outlays or expenditures in a state, of course,
does not necessarily coincide w ith the extent of federal government
em ploym ent or federal government wage and salary income in a
state. Federal outlays for salaries of government employees are only
a fraction of total federal outlays (about 17 percent); a much larger
portion of expenditures is not related at all to federal government
employment (e.g ., government purchases, transfer payments,
grants-in-aid to state and local governments, and interest on the
p ublic debt). Therefore, looking at federal em ploym ent and income
by states gives an incomplete picture of the impact of the federal
government sector on a region or state. For exam ple, federal
government em ploym ent per capita is higher than the national
average in Alabama, Georgia and Tennessee. Per capita federal
wage and salary income is above the national average in Alabama
and Georgia. But none of these three states received the national
average in per capita federal government expenditures, according
to Table 2. A lso, M ississippi, w hich does receive above the national
average in per capita federal expenditures, does not have (on a
per capita basis) its share of federal employment or wage and salary
incom e. It is apparent that the federal government expenditures
data give us a much broader measure of the impact of the federal
sector on regions and states than does federal employment or
income inform ation. Furtherm ore, this more inclusive measure
does not indicate the same impact of the federal sector on regions
and states since much of federal government outlays is not
connected w ith federal em ployment and salaries.




TABLE 3
Ranking of Per Capita Federal Expenditures by State
(Average Fiscal Years 1973-76)
1.
2.
3.
4.
5.
6.
7.
8.
9*
10.
11.
12.
13.
14.
*15.
16.
17.
18.
19.
20.
21.
22.
23.
24.
25.
26.
*27.
*28.
29.
*30.
31.
*32.
33.
34.
35.
36.
37.
38.
39.
40.
41.
42.
43.
44.
*45.
46.
47.
48.
49.
50.
51.

District of Columbia
Alaska
Hawaii
New York
New Mexico
Maryland
Washington
Virginia
Wyoming
Connecticut
North Dakota
California
Colorado
Missouri
Mississippi
Utah
Arizona
New Jersey
Montana
Nevada
South Dakota
Massachusetts
Oklahoma
Kansas
Rhode Island
Idaho
Alabama
Florida
New Hampshire
Georgia
Kentucky
Tennessee
Texas
Vermont
Maine
South Carolina
Oregon
Pennsylvania
Nebraska
West Virginia
Arkansas
Delaware
Illinois
Minnesota
Louisiana
North Carolina
Iowa
Ohio
Indiana
Michigan
Wisconsin

$13,563
3,678
2,260
1,958
1,942
1,842
1,834
1,785
1,784
1,674
1,667
1,657
1,624
1,562
1,548
1,536
1,530
1,521
1,508
1,501
1,459
1,440
1,435
1,355
1,332
1,321
1,319
1,317
1,303
1,293
1,291
1,287
1,284
1,265
1,252
1,220
1,220
1,218
1,212
1,210
1,197
1,172
1,171
1,145
1,140
1,092
1,057
1,005
1,000
975
959

Source: Community Services Administration
*Sixth District states

them to rank with the District of Columbia and
surrounding states. The states of Hawaii and
Alaska also would be expected to have large
per capita spending ratios because of the ex­
tensive federal and defense installations there.
But it is surprising that five of the six District
states are in the bottom half of states by the
above measure. After all, the Southeast contains
a larger-than-average number of military bases
and is the center of the nation's aerospace

TA B LE 4

Location Quotients of Per Capita Federal Outlays by Departments and Selected Agencies
(Average Fiscal Years 1972-75)
DEPARTMENTS
Total

Agri.

Com­
merce

Labor

State

Trans.

Alabama

.908

1.027

.646

.935

.946

1.118

.288

.745

.704

.015

.982

.404

Florida

.906

.486

.439

.951

1.129

.720

.188

.958

.526

.112

.818

.369

Georgia

.900

1.263

.338

1.119

.850

1.194

.308

1.071

.696

.024

1,268

.467

Louisiana

.774

1.248

3.345

.724

.831

.642

.244

.875

.824

.009

.986

.477

Mississippi

1.062

2.150

1.307

1.466

1.061

.729

.528

.601

.789

.004

.704

.536

Tennessee

.864

1.536

.293

.520

.841

.970

.214

.515

.678

.007

.760

.467

OEO
&
CSA

EPA

Gen’l
Ser.

NASA

Post’l
Ser.**

RR
Retire.
Board

.935

.313

.590

4.091

.677

.865

De­
fense

HEW

HUD

In ­
terior

Jus­
tice

Treas.

AGEN CIES
Internat’l
Dev.

Atom.
Energy*

Civil
Ser.

Alabama

.553

.001

.787

Florida

.274

.230

1.316

.551

.670

.236

2.214

.799

Georgia

.351

.016

.727

1.185

.975

1.049

.072

.832

1.643

.005

.414

.981

.350

.345

.926

Mississippi

.594

.002

.559

1.506

.328

.426

Tennessee

.521

6.518

.479

.824

.681

.392

Louisiana

TVA

VA

5.452

1.124

1.140

.019

1.170

.833

2.049

1.008

.683

.736

.343

.958

.429

.641

.820

.365

1.061

.031

.848

1.041

15.656

1.079

♦Average of 1972, 1973, and 1974
**Average of 1973, 1974, and 1975
Code:

HEW— Health, Education, and Welfare
HUD— Housing, Urban Development
OEO— Office of Economic Opportunity
CSA— Community Services Administration
EPA— Environmental Protection Agency
NASA— National Aeronautics and Space Administration
TVA— Tennessee Valley Authority
VA— Veterans Administration

Source:

Community Services Administration

program. This may be the chief reason writers
concerned with regional growth and the Sun­
belt economy continue to point out the im­
portance of the federal government in this
surge. But, at least on the expenditure side, our
findings suggest that this is a misconception.
Federal Expenditures by Departments and
Agencies. We can draw some general conclu­
sions about why five of the six Sixth District
states receive less than the national average in
per capita federal expenditures and why Missis­
sippi receives above the national average by
examining individual federal department and
agencies spending. Table 4 gives location
quotients of per capita outlays (average of fiscal
years 1972-75) for 11 major federal depart­
ments and for 11 of the 36 major federal
agencies.6
The three federal departments spending far
"M ore detailed inform ation and location quotients for each of
the fiscal years 1972-75 are available from the author upon request.




below the national average per capita levels in
Sixth District states are the Departments of
State, Interior, and Treasury, ranking last,
seventh and second, respectively, in terms of
their overall importance in expenditures
of the 11 departments in the U. S. budget.
Most of the State Department's functions take
place in the Washington, D. C., area, so spend­
ing by this department in Sixth District states is
generally a very small fraction (about one
percent in each District state except Florida) of
the national per capita average. Per capita
spending by the Interior Department in Sixth
District states ranges from about 20 to 50 per­
cent of the national average. Much of what this
department spends goes for the open areas
and national lands in the West. The second
largest federal department, the U. S. Treasury,
spends, on a per capita basis, approximately
35 to 55 percent of the national average in this
District's states. The largest single expenditure

of this department goes toward interest on the
public debt. As may be expected, most of these
monies go initially to financial centers, New
York in particular. In fiscal 1975, approximate­
ly one-half of the $21.5 billion in interest pay­
ments of the federal debt was recorded as paid
initially in New York State. Much of this
amount probably was quickly dispersed from
these financial centers. However, these federal
outlays data measure only the initial location
of the federal monies. As such, this may over­
state the impact of the federal treasury and fed­
eral government in general on New York State
and understate it for other areas. However, re­
moving Treasury Department outlays from
total federal expenditures only slightly im­
proves Sixth District states' rankings. But re­
moval of treasury expenditures does drop New
York State from the fourth largest recipient of
per capita federal government expenditures
to the 25th position.
The more people-oriented departments,
Labor, Health, Education and Welfare, and
Housing and Urban Development, also general­
ly spend less per capita in Sixth District states
than they do nationally on average. Table 4
shows that the Labor Department, the sixth
largest federal department in dollar outlays,
spends on a per capita basis well below the na­
tional average in each District state. Expendi­
tures by the mammoth Health, Education and
Welfare, the federal government's largest de­
partment, are below the national average (per
capita) in four of the six District states. How­
ever, they are slightly above national average
levels in Florida and Mississippi. Per capita
spending by HUD (the eighth largest gov­
ernment department) is well below the na­
tional average in Florida, Louisiana and Missis­
sippi, slightly below in Tennessee but some­
what above the national average in Alabama
and Georgia.
Per capita spending by the Department of
justice (10th largest), Transportation (fifth)
and Commerce (ninth), shows considerable
variation among Sixth District states, but in
general, these states receive slightly less per
capita from these departments. The Transpor­
tation Department's per capita expenditures
are above the national average in only one
Sixth District state, Georgia. This reflects work
on the state's interstate highway system, as well
as construction of a rapid transit system in At­




lanta. Four of the six District states receive far
less than the national average in per capita out­
lays from the Commerce Department. How­
ever, as Table 4 shows, in Louisiana this de­
partment spends considerable sums of money
on subsidies for ship construction and opera­
tion. In Mississippi, the Commerce Depart­
ment's Economic Development Administration
(EDA) and National Oceanic and Atmospheric
Administration maintain sizable programs.
W hile we think of the Southeast as a center
of government defense spending, four of the
Sixth District states actually receive below the
national average in per capita expenditures
from the Defense Department, the second larg­
est federal department in terms of money
spent. Louisiana and Tennessee are way below
the national average in this regard. Only Geor­
gia and Mississippi among District states rank
above the national average in per capita ex­
penditures from this department.
Sixth District states are most favored by the
Department of Agriculture (the fourth largest
department). Only Florida receives less than the
national average in per capita expenditures
from it. Several federal subsidy programs
relate specifically to crops grown in the Dis­
trict, such as cotton and peanuts. Per capita
spending by the Agriculture Department is
especially large in Mississippi (over twice the
national average) and is a major reason why
that state is the only Sixth District state where
total per capita federal expenditures are above
the national average.
None of the 11 federal agencies shown in
Table 4 (the larger agencies in terms of total
outlays) appear to spend significantly more per
capita in Sixth District states than they do
nationally. Only the Veterans Administration,
the largest of these agencies in terms of money
spent, allocates slightly more per capita than
the national average in most District states.
The VA's spending is spread quite evenly across
most states of the nation. Disbursements by
other agencies vary considerably from one Dis­
trict state to another. Naturally, spending by
the Tennessee Valley Authority is centered in
Tennessee (about one-fourth of the authority's
nearly $2-billion disbursement), but Alabama
and Georgia also receive large shares of TVA
money. Tennessee, the home of Oak Ridge
Laboratories, is the only Sixth District state
to receive a large share of money spent by the
A PRIL 1977, M O N THLY R EV IEW

Atomic Energy Commission. Spending by the
National Aeronautics and Space Administration
(NASA) is, on a per capita basis, well above the
national average in only two District states,
Alabama and Florida, and approximately
matches the national average in Louisiana.
These three states each have large aerospace
complexes. Greater-than-national average per
capita outlays in Florida by the Civil Service
Commission, the third largest agency, and the
Railroad Retirement Board, stem from the large
number of retirees in that state. Per capita ex­
penditures by the Postal Service, the second
largest federal agency in terms of expenditures,
fall well below the national average in each
Sixth District state.
In general, we find that per capita spending
by the various departments and agencies of the
federal government varies considerably among
Sixth District states. However, only Mississippi
captures enough federal dollars from the
Departments of Agriculture, Commerce, and
Defense to obtain total per capita federal
spending above the national average.
Growth in Federal Expenditures Among the
States. Another measure of the importance of
federal expenditures in states is the growth of
these outlays. In other words, even if spending
is below national levels in Sixth District states,
the growth of these amounts may have helped
spark the region's rapid economic advance.
Unfortunately, there are little consistent past
data to examine the long-term growth in
federal outlays. Table 5 shows percent changes
in some data (roughly adjusted for definitional
and conceptual differences) on both a total
and per capita basis, covering fiscal years 1968
to 1975. It is clear, based on these statistics,
that the growth in federal expenditures was not
consistently above the national average growth
in the Sixth District states. Only in Florida and
Mississippi did total federal outlays outpace
the national average percentage gains. (On a
per capita basis, growth in federal outlays was
above the national average in Alabama, Florida
and Mississippi). The growth in federal outlays
(either total or per capita) was lowest in Geor­
gia among the Sixth District states. In fact, in
fiscal year 1968, per capita federal spending
was 14 percent above the national average in
Georgia, but by fiscal year 1973 it had shrunk
to slightly over six below the national average
because of its much slower growth in the state.
Summary and Conclusion. The basic




\
T A B LE 5

Percent Change in Federal Government Outlays
(Fiscal Years 1968-1975)
Total
(percent change)

Per Capita
(percent change)

Alabama
83.1%
92.7%
Florida
143.5
84.7
Georgia
84.6
65.6
Louisiana
77.1
68.8
Mississippi
130.7
116.7
Tennessee
94.0
78.5
U. S.
94.4
79.6
Source: Unpublished data provided by Lillian Rymaronicz
of the Library of Congress, Congressional Re­
search Service

V______________________

J

conclusion of this study is at odds with
much of today's popular conception of the
Sunbelt's economy. W hile on a net basis,
five of the six District states do receive more
from the federal treasury than they pay in, this
is simply the result of lower per capita incomes
in the District and, therefore, lower-than-national per capita tax payments. On the discretionary-spending side, we find that five of the
six Sixth District states receive less than their
share of federal spending (based on popula­
tion). We find that only the U. S. Department of
Agriculture consistently spends more on a per
capita basis in the District than it does nation­
ally. When we examined the growth in federal
expenditures, once again we could find no
clear-cut proof that the rise in federal expendi­
tures has been centered at all in Sixth District
states.
The picture we draw from this analysis runs
counter to current explanations of the Sunbelt's
economy. At least for the Sixth Federal Reserve
District, there is no "Second War Between the
States" over the U. S. Treasury's sources of
funds.7 It would be incorrect to conclude that
political power has drawn into this District dis­
proportionately large sums of federal monies.
Rather, the economic boom of the Sunbelt, par­
ticularly the Sixth Federal Reserve District, is
a result of natural forces at work there— the
abundance of resources and the growth of
regional markets. ■

7"T h e Second W ar Between the States," Business W eek, May 17,
1976, pp. 92-95.

SOUTHEASTERN BANKING
DURING THE RECOVERY
by John M . G odfrey

During the last two years, Southeastern banks
experienced one of their worst years on
record— 1975— followed by a moderate but
solid recovery in 1976. In 1975, District mem­
ber banks suffered record loan losses, strained
liquidity positions, a drop in overall lending and
a reduction in earnings of almost 40 percent.
The banking environment improved greatly in
1976, as loan demand picked up and deposits
flowed in from more traditional and stable
sources, liquidity positions improved markedly
and loan losses were reduced. Earnings at
most banks appear now to have rebounded.
Compared to the more halcyon years of 1972
and 1973 when loans were advancing nearly
25 percent a year, 1976 seems bland. However,
after the extremely dismal year of 1975, last
year was quite an improvement. The extent of
this recovery in banking and the prospects for
1977 are the subject of this article.
Stronger Deposit Gains. During 1976,
total member bank deposits increased
slightly more than $2.5 billion, up nearly
seven percent. This growth contrasts with
only a 4.7-percent rise the previous year.
Deposit gains were strongest in Alabama and




the District portion of Mississippi, where re­
covery has generally been the strongest. And
through early 1977, deposit inflows have
continued.
Demand deposits, net of interbank deposits,
advanced more in 1976, rising nearly six per­
cent, almost twice the 1975 rate. Renewed
demand deposit inflows have enabled banks to
reduce their dependency upon expensive
borrowed funds.
Time and savings deposit gains also
strengthened in the past year, as consumers
and businesses added to such deposits. Pass­
book savings deposits rose nearly $2 billion, a
25-percent advance, which has resulted in a
nearly 50-percent increase in the last two years.
Several special situations, however, accounted
for last year's exceptionally strong growth.
In late 1975, profit-making businesses were
allowed to hold savings accounts at banks;
this probably accounted for about $300 mil­
lion of the increase. Also, in June and July,
many Mississippi banks had savings funds flow
to their institutions as a result of publicity as­
sociated with problems at a large state
savings and loan association. Both factors were

Figure 2

DEPOSIT GAINS
I-------1 1975

TIME DEPOSIT CHANGES

BIL. $

-

2.0

-

—

0.5

1976

Note: Year ago figures for Sixth District member banks.

transitory and are not likely to occur again
this year, although savings deposit gains con­
tinue to be strong.
Time deposits other than the money market
CDs advanced moderately again during 1976.
During the last two years, however, there has
been a decided shift in the composition of
these "other" time deposits. These time de­
posits maturing in under four years have
declined, while those maturing in over four
years have nearly doubled. Longer maturing
deposits generally return in excess of seven
percent and, therefore, have put pressure on
banks to add earning assets.
The larger banks, however, let nearly $900
million in large-denomination CDs run off as a
result of a generally weak loan demand and
strong deposit gains from other sources. Since
late 1974, these banks have reduced the volume
of CDs outstanding by about one-third and
have thereby vastly improved their strained




liquidity positions. Deposit inflows from more
traditional and stable sources have enabled
banks to reduce greatly their use of borrowed
funds during the last two years.
Bank Lending Recovery. After having
posted a small decline in outstanding
loans in 1975, District bank loans advanced
about $1.5 billion in 1976. W hile last
year's five-percent loan advance was modest
compared to the nearly 25-percent jump
recorded in both 1972 and 1973, it does
mark a decided recovery in bank lending
from the overall decline of the previous
year. Loans had begun rising at small- and
medium-sized banks in the spring of 1975, but
sustained lending did not develop at larger
banks until mid-1976.
Most of the strength in bank lending last
year centered around consumer, real estate
and business loans. Large District and national
firms have probably continued to pay down
their bank lines.
Since late last summer, business firms have
stepped up their borrowing at the District's

LOANS REBOUND

BIL. $

largest banks. This trend has continued through
early 1977. Business loans rose nearly $120 mil­
lion in 1976, compared to a net reduction of
nearly $300 million in the previous year. Most
of the increase has centered around loans to
wholesale and retail trade firms and textile and
apparel goods manufacturers. Loans to mining
firms and other extractive industries continued
to rise, as did loans to foreign business firms.
Firms in the service industries which had
repaid large amounts of loans in 1975 increased
their borrowing slightly in 1976. Loans to
construction firms, transportation, communica­
tion and other public utilities, and durable
goods manufacturers continued to decline
through 1976.
Securities Portfolios Add Income and Liquid­
ity. With weak loan demand and strong inter­
est-bearing deposit gains, District banks have
purchased considerable amounts of U.S. Trea­
sury securities in order to generate taxable in­
come and rebuild liquidity. During the last two




SECURITIES

years, District banks have more than doubled
their holdings of government securities. In 1975,
they added $1.8 billion and in 1976, $1.4 bil­
lion. In 1975, nearly 60 percent of their increase
came in short-maturities issues— Treasury bills
and notes maturing in less than a year. These
holdings vastly improved the liquidity position
of the banks. Last year, however, they stepped
up their purchases of longer-dated notes and
bonds in an attempt to increase earnings, since
rates on short-maturity issues were low. As
loan demand strengthens, they will be able
to reduce these Treasury holdings and obtain
the funds to lend to their traditional customers:
business firms, consumers and real estate
mortgage customers.

'

Table 1
BUSINESS LOANS RECOVER
32 LARGE SIXTH DISTRICT BANKS
Million $

Cumm. 1975
(1/75-12/75)

Durable Goods
Manufacturing
Nondurable Goods
Manufacturing
Mining
Wholesale and Retail
Trade
Transportation,
Communication and
Other Public Utilities
Construction Firms
Service F: -ms
Foreign Businesses

Cumm. 1976
(1/76-12/76)

— 17

—50

— 6
+ 29

+55
+30

— 96

+82

— 58
—113
—127
+ 25

—53
—53
+10
+42

Up until 1975, District banks had been sub­
stantial purchasers of "other" (mostly munic­
ipal) securities, which had provided them with
considerable tax-exempt income. However,
with sharply higher provisions for loan losses
developing in 1975 and early 1976, the banks




had less use for nontaxable income and, there­
fore, cut back or even reduced their municipal
holdings. This was especially true in Georgia
and Florida. Since mid-1976, the loan loss
situation has improved for many banks so that
they have again begun building up their
municipal holdings to once again take maxi­
mum advantage of tax-exempt earnings.
Prospects. As bank deposit inflows con­
tinue to be strong and with bank liquidity posi­
tions vastly improved, District banks are in a
good position to meet increased loan demand.
They have curtailed their use of expensive and
interest-sensitive borrowed funds and have ac­
quired sizable securities portfolios that can be
reduced when they are able to add new loans.
Since most banks appear to have made ade­
quate provisions for most identified problem
loans, earnings should rise as the expense of
providing for loan losses declines. And since
making loans is usually more profitable than
holding securities, a higher loan demand will
boost earnings even if lending margins come
under pressure because of increasing costs of
funds during the year. The improvement in
District banking that began during 1975 should
continue in 1977 with more and more banks
sharing its benefits. ■

SIXTH DISTRICT STATISTICS
Seasonally Adjusted
(All data are indexes, unless indicated otherwise.)
L a te s t M onth

O ne
M onth
Ago

Tw o
M o n th s
Ago

One
Year
Ago

S IX T H D IS T R IC T

L a te s t M o nth
U n e m p lo y m e n t R a te
(P e rc e n t of W ork F o rc e )* * * . . . .
Ja n .
A ve rag e W e e k ly H o u rs in M fg. (H rs .) . Ja n .

IN C O M E A N D S P E N D IN G
M a n u fa c tu rin g I n c o m e - ............................... Ja n .
F a rm C a sh R e c e i p t s ............................................ Nov.
C r o p s ........................................................................... Nov.
L iv e s to c k
...............................................................Nov.
In s t a lm e n t C re d it a t B a n k s 1 (M il. $) .
N ew L o a n s ...............................................................D ec.
R e p a y m e n ts
.........................................................Dec.
R e ta il S a l e s .........................................................D ec.

147.3
229 .7
2 63 .7
2 06 .6

146 .4
2 2 9 .6
2 1 9 .4
198 .0

144.5
190.7
172 .8
2 18 .5

212.6

915
804
157 .5

875
767
155 .0

840
753
149 .2

855
788
137.1

135 .5
186 .9
124.4

One
M o n th
Ago

Tw o
M o n th s
Ago

O ne
Year
Ago

6.3
3 9.7

6 .4
4 0 .3

317
256
349

318
252
376

309
251
359

278
231
302

157 .2
243 .1

152 .0
3 1 8 .2

149.8
2 6 3 .6

1 37 .0
2 2 8 .5

111 .0
101.8
112 .5
6 3.9
7 4.7

110 .3
100 .2
1 11 .9
6 2 .8
7 3.3

109.7
9 9 .8
1 11 .3
6 2 .9
7 6 .6

110 .5
9 7 .2
112 .7
7 0.5
8 5 .8

7 .6
4 2 .0

7 .9
4 0 .9

9 .4
4 0.7

1 0.6
4 1 .4

308
270
3 96

302
2 69
417

306
268
385

285
247
321

1 35 .4
2 8 8 .9

134 .6
3 1 0 .2

1 3 5 .8
2 08 .1

1 3 0 .0
2 8 8 .7

104 .7
9 8 .2
107 .2
7 5 .5
5 8.4

103 .4
9 6 .5
106.1
74.1
5 6 .4

1 03 .3
9 6.0
106.1
7 4.2
5 1 .4

103 .2
9 6 .2
105 .9
77.1
6 5 .2

7.0
3 9 .7

7 .2
4 0.3

6 .3
4 0.5

8 .8
4 1.1

264
207
431

259
204
430

257
211
4 46

2 48
189
380

NA
189.2

NA
188 .2

1 58 .2
163 .5

1 49 .5
2 1 7 .6

1 0 7 .4
103 .0
108.3
112.1
6 2 .5

106 .3
101 .6
107 .2
105.1
5 7.3

106 .2
100 .9
107 .2
104 .4
5 2 .2

1 07 .2
1 01 .6
108 .3
112 .5
5 6 .6

7.2
NA

6 .7
NA

8 .2
4 1.1

6 .6
4 1 .9

260
228
291

2 68
233
307

255
229
294

244
2 14
263

157.1
192.9

154.1
161.1

142 .9
138 .3

1 39 .6
7 3 .3

109 .2
101.1
113.1
1 10 .0
4 2.1

1 07 .8
100 .0
111 .6
1 0 6 .4
4 4 .3

107.1
9 9 .3
1 10 .9
102 .2
4 6 .3

1 07 .3
100 .1
1 10 .8
106.1
5 1 .8

7 .0
4 0 .8

F IN A N C E A N D B A N K IN G
M em b er B a n k L o a n s ............................................ Ja n .
M em b er B a n k D e p o s i t s ......................................Ja n .
B a n k D e b i t s * * .........................................................J a n .
F L O R ID A
IN C O M E

E M P L O Y M E N T AN D P R O D U C T IO N
N o n fa rm E m p l o y m e n t ................................
............................................
M a n u fa c tu rin g
N o n d u ra b le G o o d s ......................................
F o o d ...............................................................
T e x t ile s
..................................................
A p p a re l
.........................................................
Paper
.........................................................
P r in tin g a n d P u b lis h in g . .
C h e m i c a l s ............................................
D u ra b le G o o d s ......................................
L b r ., W oods P ro d s ., F u rn . & F ix .
S to n e , C la y , a n d G la s s . . .
P rim a ry M e t a l s ................................
F a b ric a te d M e t a l s .........................
M a c h i n e r y ............................................
T ra n s p o rta tio n E q u ip m e n t
N o n m a n u f a c t u r in g ......................................
C o n s tru c tio n
......................................
T ra n s p o rta tio n
................................
T r a d e ........................................................
F in ., in s ., an d re a l e s t. . .
S e r v i c e s ..................................................
F e d e ra l G o v e rn m e n t . . . .
S ta te an d L o c a l G o v e rn m e n t
F a rm E m p l o y m e n t ............................................
U n e m p lo y m e n t R a te
(P e rc e n t of W o rk F o rc e ) . . . .
In su re d U n e m p lo y m e n t
(P e rc e n t of C ov. E m p . ) .........................
A ve rag e W e e k ly H o u rs in M fg. (H rs .)
C o n s tru c tio n C o n t r a c t s * .........................
R e s i d e n t i a l .........................................................
A ll O t h e r ...............................................................
C otto n C o n s u m p t i o n * * ...............................
P e tro le u m P r o d u c tio n * / * *
. . . .
M a n u fa c tu rin g P ro d u c tio n
. . . .
N o n d u ra b le G o o d s ......................................
Food
.........................................................
T e x tile s
..................................................
A p p a re l
..................................................
Paper
.........................................................
P r in tin g a n d P u b lis h in g . .
C h e m i c a l s ............................................
D u ra b le G o o d s ............................................
Lu m b e r and W o o d .........................
F u rn itu r e an d F ix t u r e s . . . .
S to n e , C la y , a n d G la s s
. .
P r im a ry M e t a l s ...............................
F a b ric a te d M e t a l s .........................
N o n e le c tric a l M a c h in e ry . .
E le c tr ic a l M a c h in e ry
. . .
T ra n s p o rta tio n E q u ip m e n t

Ja n .
Ja n .
Ja n .
Ja n .
Ja n .
Ja n .
Ja n .
Ja n .
Ja n .
Ja n .
Ja n .
Ja n .
Ja n .
Ja n .
Ja n .
Ja n .
Ja n .
Ja n .
Ja n .
Ja n .
Ja n .
Ja n .
Ja n .
Ja n .
Dec.

110.1
100.1
9 9.9
100 .4
9 7.2
9 7.4
9 8.7
108 .8
105.5
100.3
9 1.8
95.1
101.0
9 9.7
111.7
98.7
113.3
90.1
106 .9
1 10 .4
115 .4
122 .9
104 .9
106.5
6 0.9

109.2
9 9.5
100 .0
9 8.8
9 6 .9
9 6.5
9 8 .4
108.1
105 .9
9 8 .9
9 0.8
9 4.5
100.5
9 8.1
110.8
9 6.3
112.2
8 7.9
107 .0
108 .9
114.9
122.2
107.3
106.5
5 7.8

107.1
9 7.8
9 8.3
9 7.5
9 5.7
94.1
9 9.3
106.6
102.3
9 7 .0
8 9.0
9 0.5
9 7.7
103.3
108 .9
9 5.7
110 .0
8 1 .9
105 .2
107.8
1 14 .4
1 18.0
1 07 .4
119.1
55.8

107 .4
9 7 .9
9 9 .8
9 8.6
9 6.8
9 8.3
9 7.5
105.1
103.6
95.5
89.3
9 1.8
93.1
9 6.2
105 .9
9 4 .0
110.5
88.7
104.1
108.3
1 14.0
117 .8
106 .8
117 .8
5 0 .8r

Ja n .

6.8

7 .0

7 .6

8.3

Ja n .
Ja n .
Ja n .
Ja n .
Ja n .
Dec.
Feb.
Dec.
Dec.
Dec.
Dec.
Dec.
Dec.
Dec.
Dec.
Dec.
Dec.
Dec.
Dec.
Dec.
Dec.
Dec.
Dec.
Dec.

3 .8
4 0.3
208
220
196
7 0.9
8 3.6
149 .9
149.1
133.0
148 .4
1 22 .9
147.6
129.0
163.2
151.9
169.2
133.1
139.1
105.3
107.9
167.5
2 5 6 .8
1 47 .9

3 .9
4 0.5
203
194
212
65.9
8 3.6
149.5
148.1
132.0
145.1
1 21.3
1 48 .6
126.8
1 64 .0
152.3
1 68 .0
132.6
1 38.5
1 06 .0
107 .2
166.1
2 6 2 .4
148 .4

4.1
4 0.6
174
205
144
7 3.1
8 5.3
149.1
1 47 .9
130.3
143.8
121.1
1 48.2
1 29.3
165.1
1 51.4
1 66 .4
1 34.5
1 34 .9
104 .8
107 .4
166.1
2 62 .6
147.3

4 .2
4 0.2
163
137
189
7 5.6
8 7.3
1 47 .4
1 49.9
1 34.0
146.8
134 .4
144.6
132.1
160 .6
143.4
145.7
138.8
141.3
102.9
113 .4
150.5
2 27 .3
139 .8

a n k s ......................................Ja n .
........................................................ Ja n .

287
228

287
226

284
224

268
224

a n k s ......................................Ja n .
........................................................ Ja n .
..................................................Ja n .

242
203
372

243
202
385

243
204
370

225
191
315

F IN A N C E A N D B A N K IN G
Lo a n s*
A ll M e m b er B
La rg e B a n k s
D e p o sits*
A ll M em b er B
L a rg e B a n k s
B a n k D e b its * / * *

M a n u fa c tu rin g I n c o m e - ................................J a n .
F a rm C a sh R e c e i p t s ............................................Nov.
EM PLO YM EN T
N o n fa rm E m p l o y m e n t ......................................J a n .
M a n u fa c tu rin g
.................................................. Ja n .
N o n m a n u f a c t u r in g ............................................ J a n .
C o n s t r u c t i o n .................................................. J a n .
F a rm E m p l o y m e n t .................................................. Dec.
U n e m p lo y m e n t R a te
(P e rc e n t of W ork F o rc e )* * * . . . .
Ja n .
A ve rag e W e e k ly H o u rs in M fg. (H r s .) . Ja n .
F IN A N C E A N D B A N K IN G
M em b er B a n k L o a n s ............................................ Ja n .
M em b er B a n k D e p o s i t s ................................Ja n .
B a n k D e b i t s * * .........................................................J a n .
G E O R G IA
IN C O M E
M a n u fa c tu rin g I n c o m e - ................................Ja n .
F a rm C a sh R e c e i p t s ............................................ Nov.
EM P LO YM EN T
N o n fa rm E m p l o y m e n t ......................................J a n .
M a n u fa c tu rin g
.................................................. j a n .
N o n m a n u f a c t u r i n g ...........................................j a n .
C o n s t r u c t i o n .................................................. j a n.
F a rm E m p lo y m e n t
............................................D ec.
U n e m p lo y m e n t R a te
(P e rc e n t o f W ork F o r c e ) ......................... Ja n .
A ve rag e W e e k ly H o u rs in M fg. (H rs .) . Ja n .
F IN A N C E A N D B A N K IN G
M em b er B a n k L o a n s ............................................Ja n .
M em b er B a n k D e p o s i t s ................................J a n .
B a n k D e b i t s * * .........................................................J a n .
LO U IS IA N A
IN C O M E
M a n u fa c tu rin g I n c o m e - ................................J a n .
F a rm C a sh R e c e i p t s ............................................Nov.
EM P LO YM EN T
N o n fa rm E m p l o y m e n t ......................................J a n .
M a n u fa c tu rin g
.................................................. Ja n .
N o n m a n u f a c t u r i n g ...........................................Ja n .
C o n s t r u c t i o n .................................................. Ja n .
F a rm E m p lo y m e n t
............................................ D ec.
U n e m p lo y m e n t R a te
(P e rc e n t o f W o rk F o rc e )* * * . . . . J a n .
A verag e W e e k ly H o u rs in M fg. (H rs .) . Ja n .
F IN A N C E AN D B A N K IN G
M em b er B a n k L o a n s * ......................................J a n .
M em b er B a n k D e p o s i t s * ................................J a n .
B a n k D e b its * / * *
...................................................J a n .

A LA B A M A

M IS S IS S IP P I

IN C O M E

IN C O M E

M a n u fa c tu rin g I n c o m e - ............................... Ja n .
F a rm C a sh R e c e i p t s ............................................Nov.

148.1
2 6 9 .9

148.3
216 .1

148.8
207 .1

137.6
162.9

111 .9
101.2
116.6
121 .9
5 8.4

111 .2
100.8
115 .8
121.0
5 5.8

110 .9
100.2
115.6
121.7
53.5

109.7
100.0
114.1
123.1
6 3 .6

EM P LO YM EN T
N o n fa rm E m p lo y m e n t . . .
M a n u fa c tu rin g
.........................
N o n m a n u fa c tu rin g
. . .
C o n s t r u c t i o n .........................




M a n u fa c tu rin g In c o m e 2 ................................Ja n .
F a rm C a sh R e c e i p t s ............................................ Nov.
EM P LO YM EN T

.
.
.
.
.

Ja n .
Ja n .
Ja n .
Ja n .
Dec.

N o n fa rm E m p l o y m e n t ......................................J a n .
M a n u fa c tu rin g
.................................................. J a n .
N o n m a n u f a c t u r i n g ...........................................J a n .
C o n s t r u c t i o n ...................................................J a n .
F a rm E m p lo y m e n t
............................................ D ec.

O ne
M onth
Ago

L a t e s t M onth
U n e m p lo y m e n t R a te
(P e rc e n t o f W o rk F o rc e )* * * . . .
A verag e W eek ly H o u rs in M fg. (H rs .)

Tw o
M o nth s
Ago

One
Year
Ago

O ne
M o nth
Ago

Tw o
M o nth s
Ago

1 06.0
9 4.0
112.1
8 3 .2
6 1 .4

105 .4
9 5.8
110.3
8 4.8
58.9

104 .8
9 4.7
1 09 .9
8 2.9
5 9 .8

105 .7
9 6.3
110.6
9 6 .6
6 2.9

5.7
4 0.3

5 .7

6 .9
4 0 .6

4 1 .2

267
220
3 48

280
235
324

281
2 34
321

279
228
274

L a t e s t M onth

O ne
Year
Ago

EM P LO YM EN T
Ja n .
Ja n .

6.2
4 0 .0

N o n fa rm E m p l o y m e n t ......................................J a n .
M a n u fa c tu rin g
.................................................. J a n .
N o n m a n u f a c t u r i n g ...........................................J a n .
C o n s t r u c t i o n ...................................................J a n .
F a rm E m p lo y m e n t
............................................ D ec.
U n e m p lo y m e n t R a te
(P e rc e n t of W ork F o r c e ) ......................... J a n .
A ve rag e W eek ly H o u rs in M fg. (H rs .) . J a n .

F IN A N C E AN D B A N K IN G
M em b er B a n k L o a n s * ................................
M em b er B a n k D e p o s i t s * ...............................
B a n k D e b its * / * *
............................................ .....

305
256
324

296
250
315

290
251
306

264
229
296

6.6

TEN N ESSEE
F IN A N C E A N D B A N K IN G

IN C O M E
M a n u fa c tu rin g In co m e*
F a rm C a sh R e c e ip ts .

Ja n .
Nov.

141.5
2 43 .5

143.5
1 68 .8

* F o r S ix th D is t ric t are a o n ly ; o th e r to ta ls fo r e n tire s ix sta te s
•♦‘ S e a s o n a lly a d ju ste d d a ta su p p lie d by sta te a g e n c ie s .

Note:

M em b er B a n k L o a n s * ...................................... Ja n .
M em b er B a n k D e p o s i t s * ................................J a n .
B a n k D e b its * / * *
...................................................J a n .

130.1
153.2
* * D a ily a ve ra g e b a sis

f P r e lim in a r y data

■-Revised

N .A. Not a v a ila b le

All indexes: 1967 = 100, except mfg. income, employment, and retail sales, 1972 = 100.

S o u rc e s : M a n u fa c tu rin g p ro d u ctio n e stim a te d by th is B a n k ; n o n fa rm . m fg. an d non m fg. e m p .. m fg. in co m e an d h o u rs, and u n e m p .. U .S . Dept, o f La b o r and c o o p e ra tin g
sta te a g e n c ie s ; cotto n c o n su m p tio n . U .S . B u re a u of C e n s u s ; c o n stru c tio n c o n tra c ts . F . W. Dodge D iv.. M cG ra w -H ill In fo rm a tio n S y s te m s C o .; pet. p ro d ., U .S . B u re a u of
M in e s; fa rm c a s h re c e ip ts an d fa rm e m p ., U .S .D .A . O tn er in d e x e s b ased o n ‘ d a ta c o lle c te d by th is B a n k . A ll in d e x e s c a lc u la t e d by t h is B a n k .
‘ Data h a ve been b e n ch m arke d an d new tra d in g d a y fa c to rs an d se a so n a l fa c to rs c o m p u te d u sin g D ec e m b e r 3 1 , 1974 a n d Ju n e 3 0, 1975 R e p o rt of C o n d itio n d a ta a s b a se s.
♦ P a rtia lly e stim a te d
M a n u f a c t u r in g

In co m e d a ta h a s been

re b e n c h m a rk e d

to th e

m ost re c e n t U .S .

D ept, of C o m m e rce

m a n u fa c tu rin g in co m e se r ie s .

T h is is th e la s t tim e th is fe a tu re w ill a p p e a r in th e M O N T H L Y R E V IE W . S e e ca rd in s e rt in t h is is s u e fo r d e t a ils .

DEBITS TO DEMAND DEPOSIT ACCOUNTS
Insured Commercial Banks in the Sixth District
(In Thousands of Dollars)
P e rc e n t C h a n g e

Ja n u a ry
1977

Ja n u a ry
1976

P e rc e n t C h a n g e

J a n u a ry
1977
Fro m
D ec.
Ja n .
1976
1976

J a n u a ry
1977
F ro m
Ja n .
D ec.
197 6
1976

S T A N D A R D M E T R O P O L IT A N
S T A T IS T IC A L A R E A S 2
i r m i n g h a m .........................
G a d sd e n ..............................
H u n t s v i l l e .........................
M o b i l e ....................................
M o ntg o m ery . . . .
T u s c a l o o s a ........................
B a rto w -La k e la n d W in te r H a ve n . . .
D ayto n a B e a c h . . .
F t. L a u d e rd a le H o llyw o od
. . . .
F t. M y e r s .........................
G a i n e s v i l l e ........................
J a c k s o n v ille
. . . .
M elb ou rne T itu s v ille - C o c o a
M i a m i ....................................
O r l a n d o ..............................
P e n s a c o l a ........................
S a r a s o t a ..............................
T a lla h a s s e e
. . . .
T a m p a - S t. P e te
. .
W . P a lm B e a c h . . .
A lb a n y
................................
A tla n ta
...............................
A u g u s t a ..............................
C o l u m b u s .........................
M acon ....................................
Savannah
.........................

6 ,8 8 5 ,5 5 8
1 38 ,7 07
5 5 0 ,7 9 8
l,7 1 7 ,0 8 0 r
1 ,3 7 0 ,1 0 7
3 4 7 ,2 8 6

5 ,4 0 0 ,8 3 8
1 1 8 ,5 60
4 6 4 ,0 3 6
1 ,4 96 ,5 84
1 ,0 23 ,0 06
3 0 6 ,5 01

-11
- 9
-1 0
-11
-1 0
-1 0

+ 13
+ 6
+ 7
+ 3
+ 21
+ 2

1 ,0 88 ,5 31
5 2 6 ,9 0 7

1,1 38 ,4 51
5 7 2 ,8 9 6

1 ,0 34 ,0 53
5 1 5 ,0 1 3

-

4
8

+ 5
+ 2

3 ,2 0 1 ,8 4 5
5 8 0 ,8 68
3 3 4 ,1 1 0
8 ,0 0 6 ,3 0 5

.

3 ,4 6 4 ,5 8 6
515 ,2 21
3 5 2 ,8 5 3
7 ,5 3 9 ,4 1 6

2 .9 3 5 ,7 4 2
4 8 8 ,8 9 4
2 9 1 ,7 2 4
5 ,1 7 9 ,7 4 8

+
+

8
13
5
6

+ 9
+ 19
+ 15
+55

4 8 4 ,0 4 2
1 1 ,0 6 4 ,0 8 3
2 ,2 3 2 ,4 2 7
7 2 8 ,6 7 3
6 4 3 ,0 8 6
9 4 6 ,0 25
4 ,8 6 3 ,9 8 2
1 ,6 9 5 ,9 5 9

5 3 6 ,1 6 0
1 3 ,1 0 8 ,4 5 2
2 ,4 0 4 ,5 7 7
84 7 ,3 8 7
6 3 6 ,2 6 7
9 2 0 ,8 6 2
5 ,7 8 3 ,9 7 2 r
1 ,6 4 2 ,7 8 0

4 5 4 ,1 4 7
8 ,6 9 2 ,1 2 8
1 ,9 47 ,9 11
7 8 7 ,3 06
5 17 ,6 25
8 4 5 ,3 73
5 ,0 3 4 ,9 2 5
1 ,3 75 ,4 50

-1 0
-1 6
- 7
-1 4
+ 1
+ 3
-1 6
+ 3

+ 7
+ 27
+ 15
- 7
+ 24
+ 12
- 3
+ 23

2 5 8 ,6 3 8
2 4 ,5 0 8 ,3 1 7
9 1 4 ,3 7 3
5 6 3 ,6 5 2
8 7 2 ,0 3 3
1 ,3 1 3 ,4 9 4

2 5 9 ,3 5 8
2 1 5 ,6 40
2 7 ,0 6 3 ,162 r 2 2 ,1 8 8 ,0 0 5
9 7 0 ,7 1 4
6 0 0 ,9 24
6 4 8 ,9 1 7
5 34,407
9 6 9 ,6 4 2
8 9 1 ,7 20
1 ,5 2 6 ,5 9 0
1 ,2 35 ,5 32

- 0
- 9
- 6
-1 3
-1 0
-1 4

+ 20
+ 10
+ 52
+ 5
- 2
+ 6

-

A l e x a n d r i a ........................
B a to n R o u ge . . . .
L a fa y e tte
.........................
L a k e C h a r le s . . . .
N ew O rle a n s . . . .

3 9 3 ,1 5 9
2 ,4 1 6 ,7 0 6
5 5 9 ,6 2 4
4 7 0 ,6 4 5
6 ,2 6 5 ,6 2 4

4 0 2 ,0 1 2
2 ,4 6 0 ,7 0 4
5 5 6 ,9 6 7
4 6 2 ,7 4 5
6 ,9 0 8 ,7 3 5

3 47 ,4 33
2 ,0 6 3 ,1 5 3
4 7 5 ,1 33
3 5 7 ,5 02
6 ,1 99 ,0 11

2
2
+ 0
+ 2
- 9

+ 13
+ 17
+ 18
+32
+ 1

B ilo x i- G u lfp o rt
. . .
Ja c k s o n
..............................

4 0 2 ,9 7 2
2 ,2 2 1 ,7 7 8

4 2 3 ,0 2 8
2 ,4 0 9 ,103r

3 0 4 ,6 0 4
2 ,1 1 2 ,9 7 2

-

5
8

+ 32
+ 5

C h atta n o o g a
. . . .
K n o x v ille
.........................
N a s h v ille
.........................

1 ,5 5 3 ,7 7 8
1 ,7 9 2 ,8 2 6
5 ,9 3 7 ,8 0 0

1 ,5 74 ,7 71
1 ,9 9 6 ,0 8 0
6 ,3 0 8 ,4 8 6

1 ,2 39 ,6 01
1 ,5 49 ,6 41
4 ,7 7 4 ,0 1 1

- 1
-10
- 6

+ 25
+ 16
+ 24

1 5 1 ,7 64

1 8 1 ,6 8 4

137,266

-1 6

+ 11

TH ER C EN TER S
A n n isto n

.........................

D ecem ber
1 97 6
2 9 8 ,9 7 9
1 1 8 ,4 7 2

- 8
-1 5

+ 23
+ 2

2 4 6 ,1 5 0
1 0 2 ,4 60
2 3 0 ,7 5 8
4 3 ,4 2 6
1 ,1 7 8 ,8 7 7
2 ,6 4 0 ,9 8 7

-1 0
-1 1
- 8
-1 3
- 3
-1 7

+
+
-

1 9 8 ,7 77
1 49 ,9 64
1 9 3 ,1 4 8
3 1 ,7 1 9
2 0 4 ,7 1 6
8 3 ,8 8 0
4 6 ,8 2 1
5 1 ,4 1 0
2 7 5 ,8 6 1
120 ,8 43

-1 4
- 4
-20
-1 2
- 3
- 6
- 2'
-2 4
-1 6
- 3

- 5
-1 2
+ 8
+ 8
+ 8
+ 12
+ 11
+ 1
-3 8
+ 18

2 7 ,8 3 6
2 2 ,4 0 7 r
1 03 ,5 02
112 ,8 36
3 4,55 5
7 2 ,2 5 8

2 2 ,9 1 5
18,09 3
9 3 ,8 1 6
1 0 2 ,6 1 9
2 6 ,3 6 6
7 5 ,2 1 7

-2 0
+23
- 8
- 3
+ 7
+ 2

- 3
+ 53
+ 2
+ 6
+ 41
- 2
+
+
+
+

‘ D is t r ic t po rtio n o n ly .
2C o n fo rm s to S M S A d e fin itio n s a s o f D e c e m b e r 3 1, 1972.




.
.

.
.

.
.

2 7 5 ,2 5 6
1 0 0 ,4 25

B ra d e n to n
. .
M onroe C o u n ty
O ca la . . . .
S t. A u g u stin e
S t. P e te rs b u rg
Tam pa
. . .

.
. .
.
.
.
.

.
.
.
.
.
.

.
.
.
.
.
.

2 5 1 ,6 0 3
1 03 ,0 29
2 2 6 ,8 71
5 0 ,3 2 8
1 ,3 4 9 ,8 1 8
2 ,4 3 0 ,2 2 6

A th e n s
. . .
B ru n s w ic k
. .
D alto n
. . . .
E lb e rto n
. . .
G a in e s v ille . .
G riffin
. . . .
L a G ra n g e
. .
N ew n a n
. . .
R o m e ........................
V a ld o sta . . .

. . .
. . .
. . .
. . .
. . .
. . .
. . .
. . .
. . .
. . .

1 8 8 ,6 38
132 ,2 93
2 0 7 ,9 5 6
3 4 ,3 9 0
2 2 0 ,1 0 6
9 3 ,6 7 7
5 1 ,9 0 9
5 1 ,6 8 3
1 7 1 ,3 26
1 4 3 ,1 85

2 1 9 ,5 4 3
138 ,4 77
2 5 9 ,7 7 5
3 9 ,0 8 2
2 2 5 ,8 5 3
9 9 ,6 1 0
5 2 ,8 1 6
6 7 ,7 0 4
2 0 2 ,9 4 6
1 4 7 ,3 3 8

A b b e v ille
.
B u n k ie
. .
H am m ond . .
N ew Ib e ria
P la q u e m in e
T h ib o d a u x
.

.
.
.
.
.
.

.
.
.
.
.
.

.
.
.
.
.
.

2 2 ,3 3 2
2 7 ,6 5 0
9 5 ,6 3 3
1 0 9 ,2 36
3 7 ,0 5 7
7 3 ,4 4 4

.
.
.
.
.
.

.
.
.
.

Ja n u a ry
1976
2 2 3 ,9 2 5
9 8,75 1

D o than
. . .
S e lm a . . . .
6 ,1 2 1 ,1 9 3
125 ,9 93
4 9 6 ,4 8 0
1 ,5 3 4 ,5 1 2
1,2 38 ,3 61
3 1 1 ,1 3 3

.

J a n u a ry
1977

28 0 ,9 5 3
115 ,1 86
2 4 7 ,5 4 5
5 7 ,7 6 2
l,3 9 4 ,0 9 8 r
2 ,9 1 3 ,8 9 8

H a ttie sb u rg
. .
L a u r e l ........................
M e rid ia n . . . .
N a tch e z
. . . .
P a sca g o u la M o ss P o in t . .
V ic k s b u rg
. . .
Y a zo o C ity . . .

.
.
.
.

.
.
.
.

.
.
.
.

1 8 4 ,7 1 0
9 1 ,0 8 4
144 ,3 63
7 7 ,1 4 7

1 80,731
9 6 ,4 5 8
1 5 7 ,1 43
7 0 ,5 7 3

1 7 6 ,7 77
8 8 ,9 0 9
141 ,9 09
7 1 ,1 7 4

+
+

.
.
.

.
.
.

.
.
.

1 4 8 ,7 67
103 ,8 25
6 7 ,7 2 7

1 7 4 ,4 65
1 0 3 ,9 85
6 3 ,2 2 3

159 ,0 22
1 0 6 ,1 0 9
6 4 ,6 0 7

-1 5
- 0
+ 7

- 6
- 2
+ 5

B ris to l
. . . .
Jo h n so n C ity . .
K in g sp o rt
. . .

.
.
.

.
.
.

.
.
.

2 8 3 ,4 1 9
1 6 3 ,6 4 6
3 9 7 ,2 11

3 0 5 ,2 4 0
1 7 6 ,1 54
4 75 ,4 51

2 0 7 ,3 3 9
1 8 5 ,1 7 4
3 5 5 ,7 8 8

- 7
- 7
-1 6

+ 37
-1 2
+ 12

.

.

. 1 1 7 ,9 1 7 ,5 4 5 1 2 7 ,0 2 2 ,8 8 7 r 1 0 2 ,4 1 2 ,8 3 l r

D IS T R IC T T O T A L

.

A la b a m a . . . . . . .
.................... . . .
F lo rid a
G eo rg ia
. . . . . . .
L o u is ia n a '
. . . . . .
M is s is s ip p i’
. . . . .
T e n n e s s e e 1. . . . . .

1 4 ,0 8 1 ,4 1 3
3 9 ,5 5 9 ,9 7 5
3 3 ,4 7 7 ,1 4 1
1 2 ,2 1 5 ,4 9 3
4 ,4 8 5 ,0 9 1
1 4 ,0 9 8 ,4 3 2

1 5 ,7 2 2 ,6 6 9 r
4 2 ,2 8 2 ,7 4 2 r
3 6 ,8 5 0 ,6 4 6 r
1 2 ,9 6 0 ,7 3 4 r
4 ,7 9 5 ,0 9 7 r
1 4 ,4 1 0 ,9 9 9

12 ,3 4 3 ,3 5 1
3 2 ,7 8 9 ,0 4 7
3 0 ,4 0 0 ,152r
1 1 ,3 0 7 ,2 5 6
4 ,2 0 4 ,6 9 7
1 1 ,3 6 8 ,3 2 8

-

2
6
8
9

+ 2
+ 1
2
16
15
8

4
2
2
8

7

+ 15

-1 0
- 6
- 9
- 6
- 6
- 2

-1 4
+21
+ 10
+ 8
+ 7
+ 24

is fe a tu re w ill a p p e a r in th e M O N T H LY R E V IE W . S e e ca rd
d e ta ils .

DISTRICT BUSINESS CONDITIONS
1 9 72 -10 0

— Seas. Adj.
Mfg. Income

— 1967=100

/ v Seas. Ad|.

1974

Farm Cash Receipts

1975

1976

* S e a s . a d j. fig u re ; not an in d ex
L a te s t p lo ttin g : J a n u a ry , e xce p t m fg . p ro d ., an d re ta il s a le s , D e ce m b e r, an d fa rm c a s h re c e ip ts , N o vem b e r.

Although the Southeast was adversely affected by cold weather and associated fuel shortages, business
activity has now largely recovered. Weather-related weaknesses temporarily slowed consumer spending
and construction activity. Farmers suffered considerable crop damage from the severe cold; as a result,
agricultural prices rose sharply. Bank lending continues to advance.
Manufacturing income and consumer spending
rebounded after the severe weather. Prior to the
cold snap, manufacturing income growth had
slowed. Led by substantial increases in auto and
bank credit card loans, bank consumer installment
credit extensions rose rapidly in late 1976. Auto
registrations jumped 10 percent in December. Fol­
lowing a very large gain during November, total
retail sales increased moderately.
Although bad weather depressed construction
activity and employment in late January and early
February, there were signs of underlying strength
in the industry. The value of construction contracts
rose in January because of a sharp increase in re­
sidential contracts, especially in Florida and Louis­
iana. The value of nonresidential contracts declined.
Deposit inflows at savings and loan associations in
January were strong, although below rates of a
year ago.
Prices received by farmers rose abruptly in Jan­
uary and showed a strong upward trend in Feb­
ruary. Prices for broilers, hogs, feeder calves and
most grains continued to rise. They were joined by
brisk advances for citrus fruit and vegetables, re­
flecting the impact of subfreezing temperatures in
Florida. An unusually harsh winter nationwide has
Note:

increased livestock feed demands and boosted
prices of hay and other feed ingredients, resulting
in some forced livestock marketings. Projected
farm cash receipts have risen above the year-ago
pace, reflecting the combination of improved
prices and more marketings in the livestock sector.
Bank lending is advancing briskly. Commercial
and industrial customers of the larger banks in­
creased their borrowing during February. The
largest loan take-downs were from retail trade and
construction firms and durable goods manufac­
turers. Deposit inflows remain strong, especially
household and business savings. Bank holdings of
Treasury securities have increased during the last
two months after declining in December.
Total nonfarm jobs in the region as a whole rose
in early January. Job gains in the construction sec­
tor boosted nonmanufacturing employment. Even
though employment in nondurables slowed some­
what, large employment gains in the durable in­
dustries led the manufacturing sector to moderate
job growth. Reflecting plant closings during low
natural gas supplies, factory hours and earnings
declined. Labor market conditions weakened in
the latter half of January but have improved with
better weather and more plentiful fuel supplies.

Data on which statements are based have been adjusted whenever possible to eliminate seasonal influences.
This is the last time this feature will appear in the MONTHLY REVIEW. See card insert in this issue for details.