View original document

The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.

N um ber 4

A t la n t a , G e o r g ia , A p r i l 3 0 ,1 9 4 1

V o lu m e X X V I

T h e R is in g T r e n d

R e c o n n a is s a n c e

D is t r ic t S u m m a ry

PEH CENT DECREASE * PER CENT INCREASE

o f B u s in e s s C o n d itio n s

o f C u r r e n c y C ir c u la tio n

R e t a ii k a le s
T ra d e

and

in d u s t r ia l

a c t iv it y

in

O ne

th e

a t a h ig h

le v e l in

C o n tra c tJ

M a r c h . D is t r ib u t io n

c ir c u la t io n

th a n

e x p e c te d , a n d

lif e

m ig h t

h ave

in s u r a n c e

C o tto n C

been

s a le s

m o st

th e

p a st

p e r s is t e n t
d ecad e

in c r e a s e

in

been

c u r r e n c y in

in th e U n it e d S t a t e s . B e g in 1 9 3 1 , th e

u m e o f n o te s a n d c o in s o u ts ta n d in g
has

P ig I r o n

in ­

tre n d s

has

g w it h a s h a r p in c r e a s e in

s a le c h a n n e ls in c r e a s e d , b u t b y a m o u n ts
le s s

th e

th e c o n t in u in g

o f m e rc h a n d is e th ro u g h r e t a il a n d w h o le ­
s lig h t ly

of

th ro u g h o u t

S ix t h F e d e r a l R e s e r v e D is t r ic t c o n tin u e d

g ro w n

m o re

or

le s s s t e a d ily

b o th

c re a s e d s u b s t a n t ia lly . C o m m e r c ia l f a i l ­

d u r in g th e y e a r s o f b u s in e s s d e c lin e in

u r e s in c r e a s e d in

th e e a r ly

but

w e re

w e re a
m o n th
d a ys,

F e b ru a ry a n d M a rc h

s u b s t a n t ia lly

le s s

y e a r a g o . M a rc h
th a n
and

F e b ru a ry
t h is

th a n

w as a

b y tw o

d iffe r e n c e

th e y

lo n g e r

Pa

b u s in e s s

of

8 .3

Bank

in

p ig ir o n

fa c t,

th e

c o tto n

D is t r ic t m ills a n d

p r o d u c t io n . A s a m a t t e r o f

a c tu a l

co n su m e d

num ber
in

of

M a rc h

th a n h a d b e e n u s e d in

b a le s

g ro w t h

p r e s e n t . T h is

se a so n a l

s e r ie s , b y th e s h a r p

d u r in g

m o re
of

th e

p e a k m a r k in g

p a tt e r n

th e

b a n k in g c r is is o f 1 9 3 3 , a n d b y th e p a u s e

in d e x e s r e f le c t in g th e d a ily r a t e s o f c o tto n c o n s u m p tio n b y

th e y e a r s

th e

c h a r a c t e r is t ic
tm e n ts

B an k Lo an s

th e

d u r in g

th e m id d le 1 9 3 0 ’ s to

th a n a d e c a d e , p u n c tu a te d o n ly b y th e

per

c e n t a c c o u n ts f o r s m a ll d e c lin e s in

1 9 3 0 ’s a n d

o f re c o v e ry fro m

30

30

20

10

10

20

Sixth District Statistics for
Marcli 1941 coaputd with March 1940

of

a n y p r e v io u s m o n th , a n d th e a c t u a l
a n y o th e r

in

1937

and

e a r ly

1938,

s h o w s a t p r e s e n t n o s ig n s o f s to p p a g e
o r r e v e r s a l. T h e c ir c u la t io n

to d a y — a l­

m o s t $ 9 b illio n — i s a p p r o x im a t e ly tw ic e

w a s la r g e r

o u tp u t o f p ig ir o n in A la b a m a w a s la r g e r th a n in

n o t ic e a b le

th e a v e r a g e c ir c u la t io n o f t h e 1 9 2 0 ’ s . I t s h o u ld a ls o b e n o te d
t h a t , a s m a y b e s e e n in

th e c h a r t , th e d e n o m in a tio n a l c o m ­

m o n th e x c e p tin g th e m o n th o f D e c e m b e r 1 9 4 0 . C o a l p r o d u c ­

p o s it io n o f th e c u r r e n c y h a s b e e n g r e a t ly a lt e r e d th ro u g h th e

t io n

p e r io d , s in c e

a ls o

in c r e a s e d , b u t c o n s t r u c t io n

c o n tra c ts

a w a rd e d

in

th e c ir c u la t io n

o f n o te s o f $ 5 0 a n d

o ver has

in c r e a s e d m u c h m o re r a p id ly th a n t h a t o f th e t o t a l.

M a r c h d e c lin e d .
in c r e a s e d 2 4 p e r c e n t in

► T h e g ro w th in th e v o lu m e o f c u r r e n c y h a s b e e n s o p e r s is t e n t

t h is D is t r ic t in M a r c h o v e r F e b r u a r y , b u t o n a d a ily a v e r a g e

D e p a rtm e n t s t o r e s a le s a c t u a lly

a n d s o p ro n o u n c e d t h a t i t h a s a ttr a c te d c o n s id e r a b le a t t e n t io n ,

b a s is t h e g a in w a s 1 5 p e r c e n t. T h is r is e i s s lig h t ly le s s th a n

m o re , p r o b a b ly , th a n it s im p o r ta n c e s in c e 1 9 3 3 d e s e rv e s . T o

m ig h t h a v e b e e n e x p e c te d o n th e b a s is o f p a s t p e r fo r m a n c e ,

a p p r a is e it s s ig n if ic a n c e p r o p e r ly i t is n e c e s s a r y to r e c a ll t h a t

and

th e

in

o u r m o n e ta ry s y s te m

d e c lin e d

in

c ir c u la t io n o c c u r d ir e c t ly in

a f t e r a llo w a n c e

fo r

s e a s o n a l in f lu e n c e s , in c lu d in g

la t e r d a te o f E a s t e r t h is y e a r , th e a d ju s t e d in d e x

c h a n g e s in

th e v o lu m e o f c u r r e n c y

re s p o n s e to th e d e m a n d s o f

2 p e r c e n t . T h e M a r c h in d e x w a s , h o w e v e r , s t i l l a b o v e t h a t

th e p u b lic , a n d

f o r M a r c h la s t y e a r a n d w a s a t a le v e l t h a t h a d b e e n e q u a lle d

F e d e ra l R e s e rv e B a n k s

o n ly

th e f ir s t in s t a n c e h o w m u c h c u r r e n c y t h e re s h a ll b e in

o n ce, an d

n e v e r e x c e e d e d , in

M a rc h

o f any

p r e v io u s

y e a r . F o r th e c o u n t r y a s a w h o le , th e B o a r d ’ s a d ju s t e d in d e x

i t i s , t h e r e fo r e , th e p u b lic
o r th e T r e a s u r y

r a t h e r th a n

th e

t h a t d e te rm in e s in
c ir c u ­

la t io n a t a n y t im e . W h y t h e p u b lic m a y d e c id e to h o ld m o re

c o n tin u e d in M a r c h a t t h e F e b r u a r y le v e l a n d w a s 1 6 p e r c e n t

c u r r e n c y c a n o f c o u r s e b e t r a c e d to m a n y t h in g s , in c lu d in g

a b o v e th a t f o r M a rc h 1 9 4 0 . In

th e a c t io n s o f th e G o v e rn m e n t, th e R e s e r v e S y s t e m , th e c o m ­

w h ic h

in c lu d e d

re p o rt e d
in

p re - E a s te r

t h e f ir s t tw o w e e k s o f A p r i l,

b u s in e s s ,

in

t h is

D is t r ic t

t h a t in c lu d e d

th e m o n t h ly in d e x w e re 3 2 p e r c e n t g r e a t e r th a n in

c o r r e s p o n d in g
y e a r).

Fo r

p e r io d

th e

la s t y e a r

c o u n try

th e

( E a s t e r w a s in

g a in

fo r

w a s 2 7 p e r c e n t. W h o le s a le s a le s in
9 p e r c e n t fro m
u s u a l r is e
in

s a le s

b y a s m a lle r n u m b e r o f f ir m s t h a n

th e
th e

M a rc h

tw o - w e e k

th e
la s t

F e b r u a r y to M a r c h , s o m e w h a t le s s th a n th e

a t t h a t t im e , a n d w e r e 1 4 p e r c e n t g r e a t e r th a n




b e n o tic e d

b e lo w . I t

in t oc o m
c irecsu la t io n

r e m a in s
in

F e b ru a ry an d

t r u e , h o w e v e r, t h a t c u r r e n c y

a c c o rd a n c e

w it h

p u b lic

dem and.

T h e a u t h o r it y o f th e g e n e r a l p u b lic in t h is d o m a in i s e a s y

p e r io d

D is t r ic t in c r e a s e d

M a r c h 1 9 4 0 . B u s in e s s f a ilu r e s in c r e a s e d in

m e r c ia l b a n k s , o r o th e r g r o u p s , a n d so m e o f th e s e f a c t o r s w i l l

C u r r e n c y i n C ir c u la t io n
1 9 2 2 to D a te
B ill io n s o f D o lla r s

20

M o n t h l y R e v ie w o f t h e f e d e r a l R e s e r v e B a n k o f A t l a n t a f o r A p r i l 1 9 4 1

CONDITION OF FEDERAL RESERVE BAKE OF ATLANTA
(In Millions ol Dollars) Per Cent Change
April 16,1941,from
April 16 Mar. 12 April 17 Mar. 12 April 17
1941
1941
1940
1941 1940
Bills discounted...................... $ .06 $ .01 f .2
+500 — 70
Industrial advances........................ 2
.3
.8
— 33 — 75
U. S. securities........................ 94.9
91.1
104.2
+ 4 — 9
Total bills and securities........ 95.2
91.5
105.2
+ 4 — 10
F. R. note circulation............... 205.2
200.8
159.6
+ 2 + 29
Member bank reserve deposits... 288.7
277.3
235.1
+ 4 + 23
U. S, Gov't general deposits...... 26.9
11.5
32.2
+134 — 16
Foreign banc deposits.............. 27.8
26.9
13.4
+ 3 +107
Other deposits.......................
5.7
5.9
6.8
— 3 — 16
Total deposits...................... 349.2
321.5
287.5
+ 9 + 21
Total Reserves......................... 461.8
436.2
346.7
+ 6 + 33
Industrial advance commitments........
....
CONDITION OF 22 MEMBER BANKS IN SELECTED CITIES
(In Millions ol Dollars) per c«nt Change
April 16,1941,from
April 16 Mar. 12 April 17 Mar. lz April 17
1941
1941
1940
1941 1940
Loans and Investments—Total... £703.0 $702.8
$633.9
+ 0 + 11
Loans—Total.......................... 375.6
376.6
306.9
— 0 + 22
Commercial, industrial and
_
agricultural loans............... 198.5
198.1
159.6
+ 0 + 24
Open market paper............... 5.0
5.2
3.9
— 4 + 28
Loans tobrokers and dealers
7.1
5.4
— 0 +30
in securities...................... 7.0
Other loans for purchasing
11.4
10.7
•— 2 + 5
and carrying securities....... 11.2
Real estate loans.................. 35.8
35.5
31.3
+ 1 + 14
Loans to banks..................... 1.2
1.2
.6
+100
Other loans.......................... 117.0
118.0
95.5
— 0 + 23
Investments—Total.................. 327.3
326.2
327.0
+ 0 +0
153.4
151.5
+ 3 +4
U. S. direct obligations........... 158.2
Obligations guaranteed by
,
U.E....... ........................ 53.2
56.8
69.6
— 4 — 24
Other securities................... 115.9
116:1
105.8
— 0 +10
Reserve with F. R. Bank........... 172.4
173.8
139.7
— 0 + 23
16.3
13.0
— 9 +14
Cash in vault.......................... 14.8
Balances with domestic banks--- 268.2
250.9
237.7
+ 7 + 13
Demand deposits-adjusted........ 483.9
479.7
413.0
+ 1 + 17
Time deposits.......................... 193.0
189.6
190.3
+ 2 + I
U. S. Government deposits........ 34.3
28.7
43.4
+ 20 — 21
384.8
318.4
+ 0 + 21
Deposits of domesticbanks....... 386.4
Borrowings....................................
....
••••
••• • ...
DEBITS TO INDIVIDUAL ACCOUNTS
(In Thousands ol Dollars) per Cent Change
Mar.
Feb.
Mar.Mar. 1941from
ALABAMA
1941
1941
1940 Feb.1941Mar.1940
Birmingham............... $ 119,841 $ 101,951 $ 98,601
+ 18 + 22
Dothan.....................
3,963
3,297
2.966
+ 20 + 34
Mobile......................
54,569
45,741
40,978
+ 19 + 33
27,197
24,688
22,664
+ 10 + 20
Montgomery..............
FLORIDA
Jacksonville...............
122,035
102,718
89,519
+ 19 + 36
84,313
77,259
71,151
+ 9 + 18
Miami......................
Pensacola..................
12,013
10,400
9,533
+ 16 + 26
Tampa......................
40,522
36,504
35,366
+ 11 + 15
GEOBGIA
Albany......................
6,568
5,697
5,567
+ 15 + 18
Atlanta...................... 286,648
246.941
234,500
+ 16 + 22
Augusta...................
25,469
21,637
19,575
+ 18 + 30
Brunswick.................
3,174
2,893
3,047
+ 10 + 4
Columbus.................
24,417
22.337
16,579
+ 9 + 47
Elberton...................
1,345
1,233
1,143
+ 9 + 18
Macon......................
26,530
25,478
16,601
+ 4 + 60
Newnan...................
2,601
1,974
1,968
+ 32 + 32
Savannah..................
35,832
30,364
29,906
+ 18 + 20
Valdosta...................
4,312
4,020
4,378
+ 7 — 2
LOUISIANA
New Orelans.............. 270,115
219,188
245,215
+ 23 + 10
MISSISSIPPI
Hattiesburg...............
11,209
10,499 5,386 + 7
+108
Jackson.....................
31,923
30,765 31,432 + 4
+2
Meridian...................
15,385
13,59612,377 + 13
+ 24
7,877
7,293 7,948 + 8
— 1
Vicksburg..................
T E fM B S S E E

Chattanooga..............
56,267
46,964 44,449 + 20
Knozvill*... ............
37,483
33,581
32,276
+ 12
Nashville...................
104,371
87,917 86,948 + 19
SIXTH DISTBICT
........ 1.415,979 1,214,9351,170,073 + 17
26 Qttes....
UNITED STATES
274 Ciltos.. . . ............ 44,558,000 35,783.000 37,769,000 + 25

+ 27
+ 16
+ 20

h e ld in th e p o c k e t o r in th e s tro n g - b o x o f s o m e p e r s o n , b u s i­
n e ss* c o m m e r c ia l b a n k , o r o t h e r in s t it u t io n . I f th e c o m m u n ity
b e lie v e s t h a t t h e v o lu m e o f c a s h
th e

e x c e s s iv e

p o r t io n

b a n k s , h a v in g in

m ay

be

it

is

h o ld in g is

d e p o s ite d

in

e x c e s s iv e ,

b a n k s, and

th e

c o n s e q u e n c e m o re c a s h th a n t h e y c o n s id e r

n e c e s s a ry , m a y e x c h a n g e

th e e x c e s s f o r r e s e r v e

d e p o s its a t

th e F e d e r a l R e s e r v e B a n k s ,1 C o n v e r s e ly , w h e n th e p u b lic d e ­
s ir e s

a d d it io n a l c a s h , i t

d e p o s its in th e f o r m

m ay

o b t a in

m o re

by

w it h d r a w in g

o f c u r r e n c y , a n d th e b a n k s , w h o s e c a s h

h o ld in g s w i l l th e r e b y b e d e p le te d , m a y r e p le n is h t h e ir s to c k
b y c a llin g

u p o n th e F e d e r a l R e s e r v e B a n k s , e it h e r d ir e c t ly ,

a s in th e c a s e o f m e m b e r b a n k s , o r in d ir e c t ly in th e c a s e o f
n o n - m e m b e rs , to
d e p o s it s . T h e

p r o v id e

c u rre n c y

la r g e v o lu m e

in

exch an g e

o f c u rre n c y

f o r re s e rv e

p r e s e n t ly

in

c ir c u ­

la t io n th u s re p r e s e n t s th e d e s ir e s o f th e h o ld e r s o f c u r r e n c y ,
n o t o f th e c r e a t o r s o f c u r r e n c y .
It

is

in

t h is

c o n n e c tio n

h a s b e e n a b le

to

t h a t th e F e d e r a l R e s e r v e S y s te m

m a k e o n e o f it s

n o t a b le

c o n t r ib u t io n s

b a n k in g s t a b ilit y . U n d e r th e N a t io n a l B a n k in g S y s te m

to

a s it

e x is t e d b e fo r e 1 9 1 3 th e v o lu m e o f c a s h a v a ila b le to th e b a n k s
w a s r ig id ly lim it e d b y th e a m o u n t o f T r e a s u r y c u r r e n c y o u t­
s ta n d in g a n d th e s u p p ly o f c ir c u la t io n - p r iv ile g e b o n d s a g a in s t
w h ic h
of

N a t io n a l B a n k

th e

r e a d ily

F e d e ra l

n o te s m ig h t b e is s u e d . E s t a b lis h m e n t

R e s e rv e

a v a ila b le

in

S y s te m

m ad e

a d d it io n a l

c u rre n c y

e x c h a n g e f o r r e s e r v e d e p o s it s , th ro u g h

th e d is c o u n t o f e lig ib le p a p e r , th ro u g h d ir e c t b o r r o w in g , a n d
th ro u g h o p e n m a r k e t o p e r a t io n s u n d e rta k e n a t th e in it ia t iv e
o f th e

S y s t e m . E a s ie s t o f th e s e m e th o d s i s , o f c o u r s e , th e

e x c h a n g e o f e x is t in g r e s e r v e d e p o s its f o r c u r r e n c y , a n d s in c e
th e b a n k s a t p r e s e n t g e n e r a lly p o s s e s s la r g e e x c e s s r e s e r v e s ,
th e y h a v e b e e n e a s ily a b le to p a y o u t th e c a s h f o r w h ic h th e y
h a v e b e e n c a lle d

upon

w it h o u t in

a n y w a y r e s t r ic t in g

t h e ir

le n d in g a n d in v e s t in g a c t iv it ie s .

\

Fo r

c o n v e n ie n c e

in

d is c u s s io n ,

th e

h o ld e r s

m a y b e c la s s if ie d in t o t h r e e g r o u p s : ( 1 )
(2 )

o f c u rre n c y

th e g e n e r a l p u b lic ,

th e c o m m e r c ia l b a n k s , a n d ( 3 ) f o r e ig n in d iv id u a ls , b u s i­

n e s s e s , o r b a n k a . S in c e , t h e n , a l l c u r r e n c y in

c ir c u la t io n lie s

in th e p o s s e s s io n o f o n e o f th e s e g r o u p s , w h ic h b e tw e e n th e m
h o ld
to

th e c u r r e n c y

d o s o , th e

b e c a u s e it is

g ro w th

in

in

t h e ir

c ir c u la t io n

o p in io n

m ay

be

d e s ir a b le

e x p la in e d

by

p o in t in g o u t th e r e a s o n s t h a t h a v e le d e a c h g r o u p to d e s ir e
a d d it io n a l c u r r e n c y .
(1 )

T h r o u g h o u t th e

1 9 2 0 ’ s th e p u b lic a t la r g e e x h ib it e d

a g r o w in g p r e fe r e n c e f o r d e p o s it m o n e y r e la t iv e to c u r r e n c y ;
a c o n t in u o u s ly la r g e r p r o p o r t io n o f b u s in e s s t r a n s a c t io n s w a s
m a d e b y c h e c k , a n d s u c h id le b a la n c e s a s e x is t e d w e re h e ld
m o re a n d m o re c o m p le t e ly in

th e f o r m

d e p o s it s . A t th e o p e n in g o f th e

o f tim e o r d e m a n d

1 9 3 0 ’s , h o w e v e r , t h is

t re n d

w a s s h a r p ly r e v e r s e d ; id le b a la n c e s g re w a s a l l e le m e n ts o f
th e p u b lic s o u g h t to o b t a in liq u id

b a la n c e s , a n d a s , th ro u g h

f e a r o f b a n k f a ilu r e s , m o re a n d m o re o f th e s e id le b a la n c e s

+ 21

w e re w it h d r a w n f r o m th e b a n k s to b e h e ld in c u r r e n c y . I t h a s

+ 18

a b s o rb e d a b o u t $ 1 .8

BBTJUL TRADE— MABCH1941
(CitiMfor which 10 tedraMin conpiUd)
Sales for March compared with:
Fob. 1941 Mar. 1940
Feb. 1941 Mar. 1940
+25 + 7
Baton Rouge— +17
— 9
Knoxville........
Chattanooga.... + 48
+6
Macon.............
+33 — 1
Jackson......... +34
+5
Montgomery--+33 — 3
Jacksonville.— +25
+17
Tampa............
+27 +15



to u n d e r s t a n d . C u r r e n c y t h a t is in c ir c u la t io n i s a t a l l tim e s

been

e s tim a te d

c ir c u la t io n

th a t

in

F e b ru a ry

1933

c u rre n c y

b ill io n , o r a lm o s t 3 0

h o a r d in g

p e r c e n t o f th e

o f th a t d a te .

S in c e th e n th e c ir c u la t io n h a s c o n tin u e d to

inqretse, b u t ,

‘N on-m em ber b a n k s w o u ld ty p ic a lly d e p o sit e xc e ss c u rre n c y w ith a
m em ber co rre sp o n d e n t, an d th e e x c e ss c u rre n c y w o u ld th u s fin d
it s w a y in d ire c tly to th e F e d e ra l R e se rv e B a n k s .

M o n t h ly R e v ie w

21

o f t h e F e d e r a l R e s e r v e B a n k o f A t la n t a f o r A p r i l 1 9 4 1

h a n k in g d if fic u lt ie s h a v in g b e e n s tra ig h te n e d o u t a n d d e p o s it
in s u r a n c e h a v in g

b e e n e s t a b lis h e d , th e re a s o n s f o r th e c o n ­

tin u e d in c r e a s e a r e q u ite d if fe r e n t . F o llo w in g 1 9 3 3 th e v o lu m e
o f b u s in e s s a c t iv it y h a s b e e n g ro w in g a n d a d d it io n a l c u r r e n c y
h a s t h e r e fo r e b e e n n e e d e d f o r b u s in e s s t r a n s a c t io n s , b u t th e
c ir c u la t io n

h a s b e e n f a r la r g e r th a n th a t n e e d e d to s u p p o rt

in

th e

1 9 2 0 ’ s c o m p a ra b le

is

a p p a re n t t h a t th e p u b lic h a s c h a n g e d — h o w

le v e ls o f b u s in e s s a c t iv it y , a n d

it

p e r m a n e n tly

re m a in s to b e s e e n — th e p r o p o r t io n o f it s liq u id b a la n c e s th a t
it w is h e s to k e e p in th e fo r m o f c u r r e n c y , a s w e ll a s in c r e a s in g
it s d e m a n d f o r a l l ty p e s o f liq u id

b a la n c e s .

C le a r ly , th e p u b lic ’ s d e c is io n to h o ld
r a t h e r th a n a n o th e r d e p e n d s u p o n

(a )

o n e fo r m

o f m oney

th e r e la t iv e c o s ts a n d

( b ) th e r e la t iv e c o n v e n ie n c e s in v o lv e d in e it h e r c a s e . E q u a lly

Adjusted
Mar. Feb. Mar.
1941 1941 1940
RETAIL SALES* (1935-1939 Av. = 100)
DISTRICT (47 Firms)................... .125 127 120
Birmingham................................
NewOrleans..............................
RETAIL STOCKS
77
DISTRICT (21 Firms)................... . 83
83
Atlanta...................................... . 162 160 141
Birmingham................................ . 76
76
72
Nashville.................................. . 60
57
60
New Orleans.............................. . 71
67
66
WHOLESALE SALES
TOTAL......................................
Dry Goods.................................

c le a r ly , d u r in g th e p a s t d e c a d e th e p u b lic h a s b e e n e n c o u ra g e d
to h o ld c u r r e n c y b y a d e c lin e in th e r e la t iv e c o s t o f h o ld in g
th a t m e d iu m o n th e o n e h a n d a n d b y a n in c r e a s e in it s r e la t iv e
c o n v e n ie n c e o n th e o th e r h a n d .
(a )

The

r e la t iv e

co st o f c u rre n c y

a s a p a y m e n t m e d iu m

h a s b e e n re d u c e d b y th e g e n e r a l e s ta b lis h m e n t a n d in c r e a s e
o f b a n k s e r v ic e c h a r g e s , a n d b y th e lo w in t e r e s t r e t u r n s p a y ­
a b le o n tim e d e p o s its , to g e th e r w it h th e a b o lit io n o f in t e r e s t
p a y m e n ts o n d e m a n d d e p o s its . S e r v ic e c h a rg e s h a v e d e v e lo p e d
r a p id ly in th e p a s t d e c a d e , a n d th ro u g h p r o g r e s s iv e a d o p tio n
b y m o re a n d m o re b a n k s , a n d p r o g r e s s iv e in c r e a s e s o f r a t e s ,
h a v e m a d e th e h o ld in g o i d e m a n d d e p o s its c o n t in u o u s ly m o re
e x p e n s iv e , a n d c o n v e r s e ly th e h o ld in g
m o re a t t r a c t iv e . I n

1 9 3 3 r e c e ip t s fr o m

o f ca sh

c o n t in u o u s ly

s e r v ic e c h a rg e s o f a l l

m e m b e r b a n k s a m o u n te d to $ 2 0 .6 m illio n , o r .0 0 1 7 p e r c e n t
o f a l l d e m a n d d e p o s its o f in d iv id u a ls a n d c o r p o r a t io n s . B y
1939

r e c e ip t s

had

r is e n

d e s p ite th e d o u b lin g

to

$ 5 4 .4

m illio n ,

o f d e p o s its d u r in g

w h ic h

th e in t e r v a l, r e p r e ­

s e n te d .0 0 2 4 p e r c e n t o f s u c h d e m a n d d e p o s its . I n
p a r is o n

it

s h o u ld , o f

c h a rg e s

a re

d e p o s its in
p o r tio n

c o lle c t e d
d o lla r

c o u rs e ,

be

c h ie f ly

fr o m

a m o u n ts

o f th e t o t a l. T h e

re m e m b e re d
s m a ll

a cco u n t fo r

c o s t to

a m o u n t,

a

t h is c o m ­

th a t

d e p o s it s ,
v e ry

s e r v ic e
w h ic h

s m a ll

p ro ­

th e d e p o s ito rs a ffe c te d

t h e r e fo r e , s e v e r a l tim e s a s g re a t a s w o u ld

b e s u g g e s te d

is ,
by

th e p e rc e n ta g e s q u o te d .
( b ) S im ila r ly th e r e la t iv e c o n v e n ie n c e o f h o ld in g c a s h h a s
b e e n in c r e a s e d b y a n u m b e r o f f a c t o r s : b y th e c u r t a ilm e n t o f
b a n k f a c ilit ie s in

so m e c o m m u n itie s in

th e r e f u s a l o f so m e b a n k s to

th e e a r ly

a c c e p t la r g e

1 9 3 0 ’s , b y

s a v in g s d e p o s its ,

b y th e g ro w th o f c o in m a c h in e v e n d in g , a n d m o s t o f a l l , b y
th e in c r e a s e s in c e 1 9 3 3 o f th e in c o m e s o f th o s e — r e lie f r e c i­
p ie n t s

and

w ag e

e a rn e rs — w h o

t y p ic a lly

h o ld

ca sh

ra th e r

th a n d e p o s its .
(2 )

B a n k s , a s w e ll a s th e g e n e ra l p u b lic m u s t d e te rm in e

CONTRACTS AWARDED
DISTRICT..................................
Residential.................................
Others......................................
Alabama....................................
Florida.....................................
Georgia....................................
Louisiana..................................
Mississippi.................................
Tennessee.................................
BUILDING PERMITS
20 Cities...................................
Atlanta.....................................
Birmingham...............................
Jacksonville...............................
Nashville..................................
New Orleans.............................
MG IRON PRODUCTION*
COAL PRODUCTION (1935-1939 Av. ==100)
TWO STATES........................... . 146 134
Tennessee.................................
COTTON CONSUMPTION*
THREE STATES..........................
Alabama...................................
Tennessee.................................
EMPLOYMENT (1932 Av. = 100)
SIX STATES..............................
Alabama...................................
Florida.....................................
Georgia.................................
Louisiana..................................
Mississippi...............................
Tennessee
PAYROLLS (1932 Av. = 100)
SIX STATES..............................
Alabama...................................
Florida.....................................
Louisiana..................................
Mississippi...............................
Tennessee
ELECTRIC POWER PRODUCTION*
SIX STATES..............................
Alabama....................... ............
Florida.....................................
Georgia....................................
Louisiana..................................
Mississippi...............................
Tennessee.................................

117

Unadjusted
Mar. Feb. Mar.
1941 1941 1940
125 110 123
130 120 126
134 104 127
122 101 1IB
109 100 112
86
165
78
61
74

81
154
73
57
67

80
144
74
58
68

72
64
54
132
125

66
56
49
121
118

69
56
58
103
134

77
83
73
69
62
54
122
90
109

99
88
107
62
78
75
271
104
84

69
80
62
41
63
88
56
176
89

54
28
29
90
14
26

57
24
24
112
109
27

60
29
28
80
148
33

136

143

115

160
163
152

156
158
146

126
133
111

235
279
221
188

238
300
215
205

173
202
162
15b

146
159
124
162
130
116
140

146
157
128
160
130
116
137

136
140
122
148
121
112
132

221
312
123
247
167
160
220
Feb.
1941
486
702
710
254
636
118
338

217
307
125
240
164
156
214
Jan.
1941
467r
626
642
271r
646r
74r
359

184
232
111
204
145
150
170
Feb.
194U
397
535
610
219
626
71
260

Statistics
(000 Omitted)
Mar. Feb. Mar. Year to Date
COMMERCIAL FAILURES
1941
1941 1940
1941
1940
a n d in t h e ir c a s e , to o , th e b a la n c e h a s r e s u lt e d in s t e a d ily
Number(Actual, not thousands)..
44
40
55
124
177
la r g e r c u r r e n c y h o ld in g s . T h e v a u lt c a s h o f m e m b e r b a n k s ,
Liabilities.............................. $ 439 $ 331 $ 680 $ 1,073 $ 1,786
p r e s e n t ly a b o u t $ 1 b illio n , h a s m o re th a n d o u b le d s in c e 1 9 3 3 .
Feb. Jan.
Feb. Year to Date
FARM INCOME**
1941
1941
1940
1941
1940
(a )
T h e c o s t to m o s t b a n k s o f h o ld in g v a u lt c a s h h a s b e e n
SIX STATES........................... 54,257 64,700 51,381 118,957 102,556
re d u c e d to z e ro th ro u g h th e a c c u m u la tio n o f u n p re c e d e n te d
Alabama............................... 5,402 5,918 8,651 11,320 14,332
Florida.................................. 12,314 13,996 8,327 26,310 19,349
e x c e s s re s e r v e s a n d th ro u g h th e a b o lit io n o f in t e r e s t p a y m e n ts
Georgia................................. 9,543
8,590 6,823 18,133 12,679
Louisiana.............................. 6,533
9,201 6,552 15,734 13,187
o n in t e r - b a n k d e p o s it s . M o re th a n e n o u g h r e s e r v e fu n d s to
Mississippi............................. 9,430
9,398 10,980 18,828 20,829
Tennessee..............................
1
1
,0
3
5
1
7
,597 10,048 28,632 22,180
m e e t th e r e q u ire m e n t s o f la w a n d r e g u la t io n a r e a v a ila b le
to th e b a n k s , a n d s in c e n e it h e r d e p o s its a t th e R e s e r v e B a n k s
‘Indexes of retail sales, electric power and pigiron production, and of
cotton consumption are on a daily average basis.
n o r a t c o rr e s p o n d e n t b a n k s y ie ld a n in t e r e s t r e t u r n , b a n k s
**Includes Government benefit payments,
C o n tin u e d on P age 23
r = Revised.
b y a b a la n c e o f ( a )
tio n o f t h e ir liq u id

c o s ts a n d

(b )

c o n v e n ie n c e , th e p r o p o r ­

a s s e ts t h a t th e y w il l h o ld a s v a u lt c a s h ,




22

M o n t h l y R e v ie w o f t h e F e d e r a l R e s e r v e B a n k o f A t l a n t a f o r A p r i l 19*11

N a tio n a l S u m m ary o f B u sin e ss

INDUSTRIAL PRODUCTION

Prepared by the Board oi Governors oi tbe Federal Reserve System
Industrial activity increased further in March but declined somewhat in the first half
of April owing to temporary reductions in output of bituminous coal and automobiles.
Wholesale prices of many commodities advanced considerably and the Government took
steps to limit price advances of some additional industrial materials.
P r o d u c tio n

Volume of industrial output continued to increase in March and the Board’s seasonally
adjusted index rose from 141 to 143 per cent of the 1935-39 average. Activity increased
further in most durable goods industries, particularly in those producing machinery,
aircraft, ships, and armament. Steel production increased to about 100 per cent of
rated capacity.
Automobile production, which usually increases considerably in March, showed little
change from the high rate reached in February. In the first half of April output was
reduced considerably owing to a shutdown at plants of the Ford Motor Company during
an industrial dispute which was settled about the middle of the month. Retail sales of
new and used cars advanced to new peak levels in March and dealers’ stocks at the
beginning of April amounted to about a month’s supply at the current rate of sales.
Output of lumber, which had been sustained at unusually high levels during the winter
months, rose less than seasonally.
Activity in the textile and shoe industries increased further in March. Cotton
consumption rose to a record level of 854,000 bales and there was also an increase
in rayon deliveries. At wool textile mills activity was sustained at the peak rate reached
in February, not showing the usual large seasonal decline, and in the chemical and
rubber industries further advances were reported.
Bituminous coal production rose considerably, while output of crude petroleum was
maintained in March at about the rate that had prevailed in the four preceding months.
In the first half of April coal production declined sharply, however, as most mines were
closed pending conclusion of contract negotiations between mine operators and the
miners’ union. Production of nonferrous metals continued in large volume in March and
deliveries of refined copper showed a sharp rise as domestic production was supplemented
by supplies received from South America.
Construction contract awards rose sharply in March and were larger than in any
month since the middle of 1930, according to the F. W. Dodge Corporation data. The
rise was chiefly in awards for publicly-financed work, which had been reduced considerably
in January and February, and in private nonresidential projects, particularly factory
construction. Awards for private residential building, which had been unusually large
during the winter months, showed less than the customary seasonal rise in March.

Federal Reserve index oi physical volume oi production,
adjusted ior seasonal variation. 1935-1939 average = 100.
By months, lanuary 1935 to March 1941.
DEPARTMENT STORE SALES AND STOCKS

Federal Reserve indexes oi value oi sales and stocks,
adjusted ior seasonal variation, 1923-1925 average = 100.
By months, lanuary 1935 to March 1941.
WHOLESALE PRICES

D is tr ib u tio n

In March distribution of commodities to consumers was sustained at the high level
reached in February. Sales at mail-order houses and department stores increased seasonally
and variety store sales showed more than the usual seasonal rise.
Freight-car loadings increased by about the usual seasonal amount. Loadings of coal
and grain rose considerably, while shipments of miscellaneous freight, which in previous
months had risen steadily, on a seasonally adjusted basis, showed a smaller increase
than is usual at this time of year.
C o m m o d ity P r ic e s

Prices of basic commodities continued to advance sharply from the middle of March
to the middle of April. There were substantial increases in prices of domestic foodstuffs
and further advances in burlap, cotton, rubber, and lead. Increases were also reported
in wholesale prices of a number of manufactured products and the general index of
the Bureau of Labor Statistics rose two points to 83 per cent of the 1926 average.
Informal action was taken by the Government to discourage price increases of some
additional industrial materials and maximum price schedules were established for steel,
bituminous coal, secondary and scrap aluminum and zinc, and iron and steel scrap.
Sharp reductions in prices of some kinds of nonferrous metal scrap resulted. Announce­
ment of an expanded Federal purchase program for hog, dairy, and poultry products
was followed by price increases for these and related products.

Bureau oi Labor Statistics' indexes, 1926 — 100. "Other"
includes commodities other than iarm products and
food. By weeks, January 5, 1935, to April 12, 1941.
MEMBER BANKS IN IOI LEADING CITIES

B a n k C r e d it

Total loans and investments at reporting member banks in 101 cities increased during
March and the first two weeks of April. Commercial loans continued to rise substantially,
and holdings of United States Government securities increased further, reflecting purchases
of new Treasury offerings.
U n ite d S ta te s G o v e r n m e n t S e c u r ity P r ic e s

Prices of United States Government securities declined irregularly from March 15
to April 9 but subsequently rose slightly. The 1960-65 bonds showed a net loss of
about % of 1 point on April 15, following a rise of about 3Vi points in the previous
month. The yield on this issue on April 15 was 2.14 per cent, compared with 2.03 per cent
at the all-time peak in prices on December 10, and 2.30 per cent at the recent low
in prices on February 15.



Wednesday figures. January 3, 1935, to April 9, 1941.
Commercial loans, which include industrial and agricul­
tural loans, represent prior to May 19. 1937, so-called
"Other Loans" as then reported.'

M o n t h l y R e v ie w o f t h e f e d e r a l R e s e r v e B a n k o f A t l a n t a f o r A p r i l 1 H 1

23

D i s t r ic t S u m m a r y o f B u s in e s s C o n d it io n s
C ontinued, from, P age 19
M a r c h , f o llo w in g a th re e - m o n th s d e c lin e . I n M a r c h , h o w e v e r,
th e y w e re 3 5 p e r c e n t le s s th a n a y e a r a g o . I n th e f ir s t q u a r t e r
o f 1 9 4 1 th e n u m b e r o f f a ilu r e s in
b y 3 0 p e r c e n t th a n in

th e D is t r ic t w a s s m a lle r

th e f ir s t t h re e m o n th s o f 1 9 4 0 , a n d

lia b ilit ie s w e re le s s b y 4 0 p e r c e n t. F i r s t q u a r t e r l i f e in s u r a n c e
s a le s in

th e D is t r ic t w e re g r e a te r th a n a y e a r a g o b y 1 1 p e r

c e n t, a n d in

th e c o u n t r y b y 4 p e r c e n t.

C o n s t r u c t io n
D is t r ic t

w e re

c o n tr a c ts
dow n

22

a w a rd e d
per

in

M a rc h

c e n t in

v a lu e

a lth o u g h 1 2 p e r c e n t g r e a te r th a n in
d e n t ia l
32

a w a rd s

d e c lin e d

p e r c e n t fr o m

5

per

M a rc h

cen t

in

th e

fr o m

S ix t h

F e b ru a ry ,

la s t y e a r . R e s i­

and

o th e r

c o n tr a c ts

F e b r u a r y . F o r th e f ir s t q u a r t e r o f 1 9 4 1 ,

h o w e v e r, t o t a l a w a r d s w e re 1 9 p e r c e n t g r e a t e r th a n in
p a r t o f la s t y e a r . T h is f ir s t - q u a r t e r in c r e a s e

T h e R is in g T r e n d o f C u r r e n c y C ir c u la t io n
C o n tin u ed fro m P age 21

th a t

o f 19 p e r cen t

f o r th e D is t r ic t c o m p a re s w it h a g a in o f 5 8 p e r c e n t f o r th e

h ave

37

th e R e s e r v e B a n k s .

E a s te rn

year

S ta te s , b u t

1940

it

s h o u ld

th e D is t r ic t g a in

c o m p a re d

w it h

be

r e c a lle d

th a t fo r

o ve r 1939 w as 51

th e

B u ild in g p e r m it s in th e D is t r ic t d e c lin e d in
s o m e w h a t le s s

th a n

a

y e a r a g o , b u t th e

M a r c h a n d w e re
f ir s t - q u a r t e r

to t a l

n e w h ig h le v e ls s u c c e s s iv e ly in

th e D is t r ic t , w h ic h

re a c h e d

M a rc h , b u t w a s 3 6 p e r

F ro m

to

re tu rn

e xce ss

c u rre n c y

h o ld in g s to

th e s id e o f c o n v e n ie n c e , b a n k s h a v e h a d re a s o n

c ir c u la t io n a m o n g s t th e p u b lic — p a r t ic u la r ly th a t g ro w th a t ­
t r ib u t a b le to in c r e a s in g b u s in e s s a c t iv it y , in c r e a s in g p a y r o lls ,
in c r e a s in g

r e t a il

s a le s — h a s

in c r e a s e d

th e

v a u lt

ca sh

in v e n t o r y n e c e s s a ry to f a c ilit a t e th e b a n k s ’ b u s in e s s .
(3 )

O c to b e r, N o v e m b e r, J a n u a r y ,

a n d F e b r u a r y , d e c lin e d 2 p e r c e n t in

in c e n t iv e

to in c r e a s e t h e ir h o ld in g s o f v a u lt c a s h . T h e g ro w th o f c a s h

and

is s lig h t ly a b o v e t h a t f o r th e f ir s t t h re e m o n th s o f 1 9 4 0 .
T h e r a t e o f t e x t ile a c t iv it y in

(b )

p e r cen t as

a n in c r e a s e o f 1 3 p e r c e n t f o r th e c o u n t r y .

li t t l e

F o r e ig n

c o n s id e r a b le

in d iv id u a ls , b u s in e s s e s , a n d b a n k s a ls o

q u a n t it ie s

o f A m e r ic a n

c u r r e n c y , b o th

h o ld

a b ro a d

c e n t a b o v e t h a t f o r M a r c h la s t y e a r . I n a c t u a l b a le s o f c o tto n

a n d in d o m e s tic s a fe d e p o s it b o x e s . T h e ir h o ld in g s , h o w e v e r,

c o n s u m e d , h o w e v e r, b y m ills in A la b a m a , G e o r g ia , a n d T e n ­

c a n n o t b e e a s ily d e te rm in e d . T h e c o m p ila t io n s o f n e t c u r r e n c y

n e sse e , a n e w
M a rc h . In

h ig h

le v e l, a t 2 8 9 ,2 3 2

b a le s , w a s re a c h e d

in

th e c u r r e n t c o tto n s e a s o n , A u g u s t th ro u g h M a r c h ,

c o n s u m p tio n h a s b e e n 1 4 p e r c e n t g r e a t e r th a n in

s h ip m e n ts
in d ic a t e

to

th a t

th e

B irm in g h a m - G a d s d e n

c e r t a in

w e re

N ew

Y o rk

in c r e a s in g

t h e ir

A m e r ic a n c u r r e n c y a b ro a d m o s t r a p id ly

a re a

s e n te d

1 9 3 7 . S in c e
in

fr o m

th a t p a rt

o f la s t s e a s o n .
S t e e l m ill a c t iv it y

E u ro p e

fo r e ig n e r s

has

a

la t e

re tu rn

in

C it y

banks

h o ld in g s

1 9 3 8 th e n e t m o v e m e n t h a s la r g e ly
o f c u rre n c y

to t h is

of

1 9 3 3 , 1 9 3 4 , and

c o u n try . T h e

re p re ­

e x te n t to

p e r c e n t o f c a p a c it y

w h ic h f o r e ig n h o ld in g s o f c u r r e n c y c a n b e m e a s u re d is a d m it­

in M a r c h a n d th e f ir s t t h re e w e e k s o f A p r i l, a n d in th e c o u n t r y

t e d ly in a d e q u a te , b u t th e t o t a l o f s u c h h o ld in g s , m e a s u ra b le

b e e n re p o rte d b y T h e

Ir o n

A ge at 95

in

a n d n o n - m e a s u ra b le , is g e n e r a lly b e lie v e d to b e q u it e la r g e .

A la b a m a a c t u a lly in c r e a s e d in M a r c h to a t o t a l th a t h a d b e e n

► M u c h th e s a m e ty p e o f u n tr a c e a b le t r a n s a c t io n t h a t p r e v e n ts

e x c e e d e d o n ly b y t h a t f o r D e c e m b e r 1 9 4 0 , b u t th e d a ily r a t e

a d e q u a te m e a s u re m e n t o f th e c ir c u la t io n

o f o u tp u t w a s s lig h t ly

re n c y

it h a s b e e n a t a b o u t 1 0 0

m o n th

of

M a rc h

la s t y e a r . In

c u r t a ile d
dow n
p e r io d
The

F e b ru a ry ,
by

an

o f tw o

lo w e r in

a lth o u g h
th e

se co n d

e x p lo s io n

fu r n a c e s a n d

o f a t h ir d
ra te

p e r c e n t. P ig

M a rc h
18

per

w eek

th a t c a u se d
th e

ir o n

p r o d u c tio n

th a n
cen t

in

th e s h o r t e r

ab o ve

o f A p r il
th e

s h u td o w n

th a t

te m p o r a r y
fo r

fo r

o u tp u t w a s

an

s h u t­

in d e fin it e

fu rn a c e .

o f co al

a m o n g s t fo r e ig n e r s

m ent o f

th e

a ls o

t o t a l c ir c u la t io n

o f A m e r ic a n

p r e v e n ts
w it h in

a d e q u a te

any

c u r­

m e a s u re ­

F e d e ra l

R e s e rv e

D is t r ic t . C u r r e n c y is f r e e to m o v e a c ro s s D is t r ic t lin e s in th e
p o c k e ts o f t o u r is t s , in
and

th ro u g h

th e le t t e r s o f c it iz e n s a n d b u s in e s s e s ,

m a n y o th e r u n a c c o u n ta b le

r o u te s . F e d e r a l R e ­

s e rv e B a n k s , h o w e v e r, a r e n o t p e r m itte d to p a y o u t th e n o te s

p r o d u c t io n

in

A la b a m a

and

T e n n e sse e

o f o th e r F e d e r a l R e s e r v e B a n k s ; a n d F e d e r a l R e s e r v e n o te s

in c r e a s e d 3 p e r c e n t f u r t h e r in M a r c h , a n d w a s a t th e h ig h e s t

th a t

le v e l in m o re th a n e le v e n y e a r s . T h e D is t r ic t g a in s o f 3 p e r

c ir c u la t io n

ce n t o v e r F e b ru a ry

p a r is o n o f th e c ir c u la t io n o f t h is B a n k w it h t h a t o f th e o th e r

c o m p a re w it h

and

27

p e r c e n t o v e r M a rc h

in c r e a s e s f o r th e c o u n t r y o f 7

la s t y e a r

p e r cen t o ve r

F e b ru a ry a n d 3 8 p e r c e n t o v e r M a rc h 1 9 4 0 .
E le c t r ic p o w e r p r o d u c t io n in

c r o s s D is t r ic t

The
f a l l in

fig u r e s a v a ila b le ) b y 4 p e r c e n t a n d w a s a t a n o th e r a ll- t im e

a

p e a k . F e b ru a ry

m a in e d

c u rre n t

in

th e

th u s

r a p id ly

w ith d r a w n

to th e B a n k o f is s u e . A

fr o m
co m ­

F e d e r a l R e s e r v e B a n k s is t h e r e fo r e p o s s ib le , a n d in th e c h a r t

th e s ix s ta te s o f th e D is t r ic t ,

of

a re

a b o v e t h is c o m p a ris o n is s h o w n g r a p h ic a lly .

o n a d a ily a v e r a g e b a s is , in c r e a s e d f u r t h e r in F e b r u a r y (la t e s t
p r o d u c t io n

lin e s

b y b e in g re t u rn e d

D is t r ic t

w as

m o s t s t r ik in g

c o m p a ris o n

th e c ir c u la t io n

p e r io d

in

w h ic h

r e la t iv e ly

in

o f t h is B a n k

th e

c ir c u la t io n

s t a b le . T h is

t h is

c h a r t is

d u r in g
o f th e

d iffe r e n c e

th e s h a r p

1937 and
t w e lv e
is

th e

1938,

Banks

re ­

r e s u lt

of

C o n tin u e d on P age 24

2 3 p e r c e n t a b o v e t h a t f o r F e b r u a r y la s t y e a r , a s c o m p a re d
w it h a g a in o f 1 5 p e r c e n t f o r th e c o u n t r y .
C a sh fa rm
f u r t h e r in

in c o m e in th e s ix s ta te s o f th e D is t r ic t d e c lin e d

F e b r u a r y , a s i t n e a r ly a lw a y s h a s , b u t w a s 6 p e r

o v e r Ja n u a ry

b u t w e re

c e n t g re a te r th a n i t w a s in F e b r u a r y la s t y e a r , a n d w a s la r g e r

c r o p s , a n d liv e s t o c k a n d

th a n in F e b r u a r y o f a n y o th e r re c e n t y e a r w it h th e e x c e p tio n

c e n t fr o m

o f 1 9 3 7 . I n F e b r u a r y G o v e rn m e n t b e n e fit p a y m e n ts in c re a s e d

p a r t o f th e g a in .




27

p e r c e n t le s s

y e a r e a r lie r , so th a t F e b r u a r y
F e b ru a ry

r e c e ip t s

th a n

fr o m

th e y

liv e s t o c k p r o d u c t s , w e re u p

la s t y e a r .

B e tt e r

p r ic e s

w e re

a

m a r k e tin g s o f
18 p er

a cco u n t fo r a

M o n t h l y R e v ie w o f t h e f e d e r a l R e s e r v e B a n k o f A t l a n t a f o r A p r i l 1 9 4 1

24

T h e R is in g

to m o v e r o u g h ly in p r o p o r t io n to t h a t o f a l l F e d e r a l R e s e r v e

T r e n d o f C u r r e n c y C ir c u la t io n

n o te s , b u t a t a

C o n tin u e d fro m P a g e 23
t e c h n ic a l n o te

p o lic y , a n d

n o t th e r e s u lt — n o r in

in d ic a t io n — o f a n y u n e q u a l in c id e n c e
m e n ts b e tw e e n

th e

D u r in g th e e a r ly
b e g a n to

a d o p t th e

r a t h e r th a n

S ix t h

D is t r ic t

and

it s e lf a n

o f e c o n o m ic d e v e lo p ­
th e

n a t io n

a t la r g e .

1 9 3 0 ’ s in d iv id u a l F e d e r a l R e s e r v e B a n k s
p o lic y

o f p a y in g

F e d e r a l R e s e r v e n o te s in

o u t s ilv e r
th e

$5

c e r t ific a t e s

d e n o m in a tio n .

d is t in c t ly , lo w e r

t h a t th e c ir c u la t io n

le v e l. T h is

o f lo w e r d e n o m in a tio n

r e la t iv e ly m o re im p o r t a n t in

m ig h t

su g g e st

n o te s h a d

been

t h is D is t r ic t th a n in th e n a t io n ,

b u t th e e v id e n c e a v a ila b le fr o m a n a n a ly s is o f o u r c ir c u la t io n
a t s e v e r a l d a te s d o e s n o t s u p p o r t t h is e x p la n a t io n . I t is p e r ­
h a p s m o re p r o b a b le t h a t th e lo w e r le v e l o f o u r c ir c u la t io n
r e la t iv e

to

t h a t o f th e n a t io n

it s

o f a l l n o te s o v e r $ 5 c ir c u la t in g in

and

r e la t iv e ly

to

th e

o th e r

Cuba)

e ffe c t h a d f o llo w e d th e e s ta b lis h m e n t o f th e H a v a n a A g e n c y

a d o p tio n it s e lf a c c o u n ts f o r th e s h a r p f a l l f r o m

in

b u t in

m a t e ly c o m p le te d , th e c ir c u la t io n

to o v e r 9 p e r c e n t .




beg an

1938. Th e

o p p o s ite

1 9 2 3 . B e fo r e 1 9 2 3 t h is B a n k ’ s c ir c u la t io n h a d b e e n a b o u t

5 p e r c e n t o f th e t o t a l c ir c u la t io n

f o r F e d e r a l R e s e r v e n o te s in t h is d e n o m in a tio n w a s a p p r o x i­
o f t h is B a n k a g a in

in

a n d th e f in a l c lo s ­

B a n k s . O u r d e la y e d a d o p tio n o f th e p o lic y a c c o u n ts f o r th e
t h a t p o in t .

A g en cy

Bank

s lig h t r e la t iv e r is e o f o u r c ir c u la t io n u p to M a r c h 1 9 3 7 , a n d
t h is D is t r ic t o f s ilv e r c e r t ific a t e s

B a n k ’s H a v a n a

o f t h is

in g

A f t e r th e s u b s t it u t io n in

o f t h is

th o s e

s u b s t it u t io n

(n o te s o f t h is B a n k h a v in g p r e v io u s ly b e e n th e p r in c ip a l p a r t

a b s o lu t e ly

n o te s f o r

th e

a n d , u p o n a d o p tin g i t , in M a r c h 1 9 3 7 , s u c c e e d e d in r e d u c in g
b o th

1934 o f Cuban

fro m

b e g in n in g

c ir c u la t io n

in

r e s u lt s

T h is B a n k w a s o n e o f th e la s t to m a k e t h a t c h a n g e in p o lic y ,

th a t y e a r

it

ro s e

to

o f F e d e r a l R e s e r v e n o te s ,

o ver 6

per

c e n t, a n d

by

1925