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Monthly FEDERAL RESERVE V o lu m e X X X V R eview BANK OF ATLANTA A tlan ta, G eorgia, A p r il 30, 195 0 N um b er 4 M arketing Southern Products A n a d d re ss b y R o b e r t D . C a lk in s , D ir e c t o r 9 G e n e ra l E d u c a tio n B o a r d , d e liv e re d at L o u is v ille , K e n tu c k y , N o v e m b e r 2 9 , 1 9 4 9 , b e fo re A s s o c ia tio n o f S ta te P la n n in g h o s e o f us w ho are in tim a tely concerned w ith it h ave reason to take heart over the g ra tify in g p rogress that is b ein g m ade in the develop m en t o f the S outh. T h e im p ro v e m ent o f agriculture, the u se o f w ater p ow er and other natural resou rces, the d evelop m en t o f in d u stry and trade, the m od ern ization o f h ou sin g, the advances o f ed u cation , the grow th o f recreation and cu ltu ral a ctiv ities are a ll testim o n ia ls o f better liv in g fo r a grand p eo p le. T T hese advances, how ever, su b stan tial th ou gh th ey m ay be, are but the ea rly stages o f th in g s to com e. T h ey are but w e l com e sig n s on the th resh old o f w hat can be b rou gh t to p ass r a p id ly if the southern p e o p le a p p ly th em selves in te llig en tly , w isely , and en erg etica lly to the task o f d e v elo p in g the re sou rces and m anpow er o f the area. T he southern p eo p le need and deserve a greater abundance o f m any th in gs o f w h ich th ey h ave had fa r too little — h ealth , ed ucation, incom e, cap ita l, recreation al fa c ilitie s, and c u l tu ral advantages. T he pro b lem o f p ro v id in g these th in g s in greater abundance is said to be econ om ic. In co n sid era b le m easure, it is econom ic. P er cap ita in co m e in the fifteen southern states is s till o n ly 65 p ercent o f that in the rest o f the country. In ten southern states the per cap ita in co m e is o n ly from 4 8 to 65 percent as h ig h as elsew h ere. A lth o u g h per cap ita in com e is risin g m ore r a p id ly than in other sec tion s, the South s till has a lo n g u p h ill clim b b efo re its p eo p le w ill overtake the rest o f the cou n try in h a v in g fu n d s a v a il a b le fo r the enjoym ents o f life and, I m ay add, fo r the g e n erous su p p ort o f the F ederal budget. Our concern here is w ith the qu estion o f how to raise in com es so that the advantages o f life in th is so ciety m ay be f u lly a v a ila b le to the southern p e o p le . T here is but on e w ay to raise southern incom es and that is to p rod u ce m ore per w orker. E igh ty-five years ago the South w as le ft ravaged and d esti tute. It has taken alm ost a century to overcom e the h an d icap s w ith w h ich reconstruction began. In recent years a new sp irit h a s sp ru n g up, and the South is a d van cin g as it h as never ad vanced b efore. Y et the South s till has a system w e ll d e sign ed to keep its p eo p le p oor. It h as a larger p ercen tage o f its w ork ing fo rce engaged in the lea st prod u ctive o ccu p ation s th e S o u th e rn a n d D e v e lo p m e n t A g e n c ie s . than an y other section o f the country. W e ll over h a lf o f the w ork in g fo rce is en gaged in u n sk illed and sem i-sk illed o ccu p a tio n s in w hich, at best, o n ly lo w in co m es can b e earned. T he South em p lo y s less ca p ita l, less pow er, le ss scien ce, and less m an agerial know -how than an y p rosp erou s region co u ld afford to do. So lo n g as it con tin u es to use so m uch lab or in un p rod u ctive w ays, it w ill rem ain p o o r and no am ount o f h elp fro m the ou tsid e w ill m ake it otherw ise. W e m ust rem em ber that no p e o p le ever becam e p rosp erou s b y w ork in g o n ly w ith its h ands and feet and back instead o f its head. T h e task b efo re the South is to substitute b rain s fo r braw n, and sk ill fo r sw eat, and to o ls fo r the good righ t arm . T he lab or fo rce can be m ade h ig h ly p rod u ctive if the w orkers are trained and sk illed . It can in crease its p ro d u ctiv ity i f it has m ach in ery w ith w h ich to w ork. P ro d u ctiv ity can be further in creased if the w orker is su p p lied w ith electric p ow er and other form s o f en ergy to su p p lem en t the strength o f h is ow n back. A nd p ro d u ctiv ity can be still fu rther in creased if the w orker can h ave at h is d isp o sa l scien tific k n o w led g e and tech n o lo g y and m an agerial know -how . A nd it can be increased s till fu rther if , th rou gh in g en u ity and sk ill, b u sin ess lead er sh ip esta b lish es new in d u stries that use a h ig h com ponent o f scien ce and hum an sk ill. T he job o f southern lead ersh ip is to b rin g th ese th in g s to p ass— to create the sort o f econ om ic a ctiv ities in w h ich m ach in ery, pow er, and k n ow led ge are p u t to w ork fo r the southern p eo p le. N o w , you m ay say, “T h ose are fine w ords, but how do w e do it? W e’re p oor. It costs m on ey to m ech an ize agricu ltu re and exp an d in d u stry and d ev elo p trades. W e can’t afford these th in gs. W e h aven ’t the c a p ita l.” T he re p ly is that the South can ’t afford to do w ith out these th in gs. It is now sacrificin g over 2 0 b illio n d o lla rs a year fo r b ein g w ith ou t the sk ill and a b ility that w o u ld m ake it p ro s p erou s. I f the South w ere abreast the rest o f the country, in com es w o u ld be at least 5 0 percent h igh er than th ey are tod ay. A s a sh eer b u sin ess p ro p o sitio n , that p o ten tia l m arket is w orth a con sid era b le investm ent. M oreover, the S ou th can find w ays to m ake its econ om y p rod u ctive. A g ood start in the righ t d irection h as been m ade in a gricu ltu re. A good start has been m ade in industry. Som e 3 4 M o n t h l y R e v ie w o f th e F ederal R eserve B a n k o f A tla n ta fo r A p r il 1950 start has been m ade in trade. T he S ou th h as an abundance o f p o o rly used resources. It h as som e p ock ets o f ca p ita l— m ore than it su sp ects. F in a lly , and m ost im p ortan t, it h as a ru gged p eo p le, fu n d a m en ta lly as a b le as an y to b e fo u n d anyw here. O f a ll th ese factors, p e o p le are the m ost im portant. T h ey are the on e resource w ith o u t w h ich n o th in g co u ld b e done. T h ey are the resou rce that w ill do w hatever is done. A nd the co ld fact is that th ey are the m ost n eg lected resou rce o f a ll. T h ey and th ey a lo n e govern the ad van ce and th e sp eed w ith w hich it com es. Southern p e o p le h ave had so little fo r so lo n g that they scarcely know their ow n cap a city . S ou th ern lead ers go N orth and W est and do great th in g s. T h ey sh ow great ca p a city in in du stry there. B y no m eans do a ll a b le lead ers o f th e South m o v e out to m ake record s elsew h ere. M an y rem ain. Som eh ow the latent ta len ts o f th ose w ho rem ain m ust be relea sed . T h eir a b ilities m ust be p u t to u se fo r th e d ev elo p m en t o f the South. S om e w ay m ust be fo u n d to create th e sp irit o f en terp rise that w ill attract m en lo o k in g fo r op p o rtu n ity . T h e S outherner needs m ore con fidence in h is ca p a city to do th in g s in the South — b ig th in gs now g e n era lly con sid ered im p o ssib le . S om eh ow there m ust be aroused m ore o f a w ill to do, m pre o f an u rge to b u ild and reb u ild the S outh. W ords are n ot en o u gh . In th is en terp rise action a lo n e sp eak s c o n v in c in g ly . I h ave often fe lt that the Sou th n eeds to ad op t th e fr ie n d ly in q u iry o f the W est, “W hat do you d o ? ” in p la ce o f its ow n, “W here are you fr o m ? ” T h e first requirem ent is p u rp o se and determ in ation . W hen en ou gh p e o p le in the Sou th are su fficien tly determ ined to go forw ard, th ey w ill get the know -how , p ro v id e the sk ills, at tract the ca p ita l, and m arsh al the m ach in ery and p ow er n eeded to b u ild an econ om y o f w h ich the b ou n ty w o u ld a sto n ish a ll o f us. T here are a lread y som e fine ex a m p les o f w hat can be done. T h e w a y in w h ich B irm in gh am has d ev elo p ed th e C oosa R iver N ew sp rin t m ill is a g lo r io u s e p iso d e that n eed s to be repeated a ll over th e S outh. In tex tile s, in p etroleu m p ro d ucts, and in a score o f other in d u stries a sim ila r story co u ld be to ld . A d m itted ly the Sou th h a sn ’t ev ery th in g it n eed s fo r its in d u strial d evelop m en t. But it has p e o p le ; and w hen th ey w ill, th ey can get w hat is need ed to do the job . D e v e lo p in g L e a d e r s T h e first step then, is to fire m ore p ro m isin g lead ers w ith en thusiasm and determ ination to sp en d th eir liv e s in the d e velop m en t o f the southern reg io n b y b u ild in g up in d u stry and trade. E nterprise is the on e active agen t w ith o u t w h ich the South can not go forw ard . T he so cia l con trib u tion o f th ose who prom ote in d u stria l im p rovem en t is in c a lc u la b le . T h ey m ake other m en, and in d eed th e w h o le w ork in g fo rce, m ore p rodu ctive than th ey w o u ld oth erw ise be. T h ey do fo r others w hat others cannot do for th em selv es. It is th ey w ho p rovid e o p p ortu n ities fo r a better life . I sh a ll em p h asize a gain and a g a in that p e o p le w ho w ill p io neer in th is d evelop m en t are the first and the m ost essen tia l requirem ent. In fact, w hat the S ou th needs m ost is a gen era tio n o f cou rageou s and in g en io u s m en, not u n lik e that h ardy race o f Y an kees w ho m ade N ew E n glan d thrive w hen th ey had Jittle to w ork w ith ex cep t th eir w its. S am u el M orison in h is History of Massachusetts Ports te lls how th o se h ardy fo lk , w ith fewfor er FRASER resources than the S ou th p o ssesses, m ade a m arvelou s Digitized com eb ack three tim es in a h u n dred years as th eir trade w as d isru p ted or destroyed b y w ar or co m p etitio n . T h rou gh d o g ged d eterm in ation and sa g a city th ese Y an k ees restored the eco n o m y o f N ew E n g la n d . T hat, gen tlem en , is w hat the South m ust do and m ust do fo r itse lf. I f it is to be m ad e p rosp erou s, it w ill b e m ade so b y th e p e o p le w ith that k in d o f zeal, and th ose p e o p le m ust com e from th e S ou th . S ou th ern p e o p le a lo n e can or w ill m ake S ou th ern ers p ro sp ero u s. O utsiders m ay h e lp . T h ey can be in d u ced to con trib u te ca p ita l and kn ow h ow and other fo rm s o f a ssistan ce, b ut fu n d a m e n ta lly what the S ou th reap s it first m ust sow , and w hat it d oes n ot sow itse lf, it w ill n o t reap. S e l l i n g Its P r o d u c t s N ex t to m en o f en terp rise and com p eten ce to p io n eer the e co n o m ic d ev elo p m en t o f the S outh, p erh a p s the greatest need is fo r a larger co n cep tio n o f the m ark etin g jo b that m ust be d on e if th e S ou th is to rea lize the f u ll p o ten tia l o f its in d u s trial op p o rtu n ities. E v en tu a lly , th e S o u th m ust find out w hat it sh o u ld p rod u ce and fo r w hat m arkets, and it had better face this q u estion e a rly than late. It is better to b u ild so u n d ly in the first in sta n ce than later at the risk o f fa ilu r e. T r a d itio n a lly the S ou th is n ot a great tra d in g area. It has never m ade its liv in g b y trad in g as d id the north ern seaboard, nor b y m an u fa ctu rin g fo r the w o rld as h as th e in d u strial N orth . It h a s n ever shaken o ff th e c o lo n ia l pattern o f ex p o rt in g low -p riced raw m ateria ls and im p o rtin g h ig h -p riced m an u factu res. It suffers g r ie v o u sly fro m an an tiq u ated m arketing system that r e lie s on others to p ro cess and d istrib u te its p ro d ucts. T here are som e c h a lle n g in g ex cep tio n s, but b y and large the o ld p attern s till p rev a ils. E ven m an y o f the n ew er in d u s tries th at p ro cess sou th ern m a teria ls lo o k o n ly to lo c a l m ar kets. I find as y et no w id esp read in terest in the en orm ous p o te n tia lities o f th e n a tio n a l or in tern a tio n a l m arkets. I find little k n o w led g e o f the custom ers or o f th eir req u irem ents in th ose m arkets. In a sen se, too m an y sou th ern firm s h a vin g so m eth in g to s e ll are sa y in g , in effect, “ Sure, w e h a ve a good prod u ct. W h y d o n ’t y o u find ou t a b ou t it, com e dow n here and b u y i t ? ” T h e S ou th h as n ot g o n e out to s e ll. I can assure y o u that i f N ew E n g la n d , the great in d u stria l M idw est, and the F ar W est had e m p lo y ed su ch “ lo w -p ressu re” m ethods, th ey w o u ld never h ave arrived w here th ey are tod ay. T he Sou th can learn and can ben efit fro m the ex p erien ce o f these great trad in g areas. L et m e illu stra te w ith th e case o f C a lifo rn ia , w h ich has d one p erh a p s th e m ost sp ecta cu lar m ar k etin g jo b o f an y state. It h ad s o il and clim a te su ita b le fo r a g ricu ltu re and lim ited p ow er fo r in d u stry . It fa c ed a barrier o f h ig h freig h t rates to the E ast that m ak es th e southern freigh t-rate p ro b lem lo o k in c o n seq u en tia l. It co u ld have ch osen to rem ain a rem ote and self-su fficien t little isla n d . In stead, it ch ose the m ost difficu lt o f a ll a ltern a tiv es— to se ll in eastern m arkets. In order to p a y th e fr e ig h t and have any th in g le ft over fo r th e p rod u cer, it h ad to offer su p erior q u al ity at p rem iu m p rices. It in d u ced its farm ers to grow fru its and v eg eta b les o f h ig h q u a lity and in la rg e q u an tities. Care fu lly elim in a tin g p o o r grad es, it sh ip p ed its p rod u ce fresh or p rocessed and so b u ilt up a rep u tation fo r d ep en d a b le q u ality and grades. W hat w as th e r e su lt? T h e ch a n n els o f trade are now so w e ll d ev elo p ed that C a lifo rn ia oran ges, other fruits, and v eg eta b les are so ld a ll over the cou n try and in effective M o n t h l y R e v ie w o f th e F ederal R eserve B a n k o f A tla n ta fo r A p r il 1950 competition with locally grown products. The same has been done with Hawaiian pineapples, Washington apples, and nu merous other products. Hence, when I go into South Carolina and order peaches, I get California peaches. In Atlanta I get California oranges. In Virginia I get Washington apples. In Birmingham I get New England fish. The South will never meet this sort of compe tition with little trickles of locally grown products. Its only salvation is to go forth and do likewise and do it on a grand scale. The first obstacle to be overcome is the prevailing notion that the South is unable to compete and to fill the channels of trade all over the country with its products. Some time ago I was talking with a businessman who saw no prospect of distributing southern products nationally. As he talked he was looking out of the window at a great cigarette factory and down the street at a large Coca-Cola sign. You will un derstand why I was not impressed with the knowledge, the vision, and the enterprise of this man who was doing all right himself andl merely wanted to be left undisturbed. The South can do a marketing job if it will. The first rule of good marketing is to know your customer and his wants. The second rule is to supply the customer with what he wants. This the South has not done on any adequate scale. If my information is reliable, very few southern firms are studying their markets and very few have any market research special ists or close contacts with their distributing outlets beyond the South. As one businessman put it, “I know of no southern firm in my area which has a market analyst, but every north ern firm operating in this area has a swarm of them here fig uring out how to sell us more.” Atlanta calls itself the distribution center of the Southeast. When I asked how many market consultants operate there serving southern firms, I was told there was one and that he couldn’t make a living, and that now there is another trying to make a living. Just look at the classified directory of any large northern city, and see what you find. I say these things not to be critical, but because the first step in any cure is diagnosis, and one of the South’s ailments is that it isn’t try ing to sell on a large enough scale to permit its industry to grow. I m p r o v in g Q u a l it y The blunt fact is that for food products and for many others the South has a reputation for irregular quality, irregular and undependable supply, and very few recognized brands. Florida has lost a good portion of its market for fresh oranges, and it is now selling over 50 percent of its crop in the form of orange juice. It is doing an excellent job of research on orange juice and orange concentrates, but it hasn’t yet devel oped a reputation for dependable quality. The South pro duces pecans in quantity, but it hasn’t begun to do the mar keting job that California has done on walnuts. Virginia pro duces marvelous Smithfield hams, but the rest of the country rarely sees them. If Californians produced Smithfield hams, Virginians would eat more of them than they now do. Cases could be multiplied but the point needs no further reinforce ment. Southern industry ought to set out to do a nation-wide mar keting job for its best products. It ought to stress high qual 3 5 ity, dependable quality, reliable brands. It ought to build a reputation for its products and never risk this reputation with goods below standard. In agriculture this will mean a great deal of work with growers to induce them to grow what can be used. It will mean co-operation among distributors to in sist on grades and quality. It will mean national advertising and quantity shipments so that it becomes easier to buy a southern product in Idaho than to buy a local product. The effort to build a reputation for quality among southern products would doubtless be assisted if there were some sort of southern agency to certify quality, an agency similar to the Good Housekeeping Institute with its Brand of Approval. Such an agency might have a Seal of Quality that could be stamped on any southern product endorsed for national dis tribution as meeting high standards of quality. The stamp could advertise the article as a southern product. The agency could carry on advertising for the South. To be effective it ought to serve all the southern states. It should probably be a private agency and its standards and rulings would have to be rigorous so as to command confidence. It could do much to encourage southern business to produce products of high quality and to sell nationally. The South needs such an agency. There are good economic reasons for urging the national distribution of southern products. Such distribution would bring southern industry directly into competition with the best producers and so would put southern business on its toes. I have no fear of its ability to play the game if ever we can get the South out on the playing field. But there are other reasons why this development is eco nomically desirable. It would be a great encouragement to the development of the very industries that the South most needs. It would help in the agricultural revolution that is now under way. Cotton is giving way to diversified farming, for estation, cattle raising, and scientific farming. Southern agri culture could become a great supplier of produce for the fresh, frozen, and canned food industry. Such a development awaits the creation of marketing channels for mass distribu tion. The mechanization of farming will require fewer people on the farm and more real farmers. If better farm practices are to be introduced successfully, there must be many farm consolidations—fewer farms of larger size, and fewer and more competent farmers. These trends are wholesome in spite of the handicaps and hardships they may cause for people who are driven into other pursuits. In the end, they will create a more prosperous agriculture that better serves the people and the nation. D e v e lo p in g In d u stry As more and more people leave farms, cities grow and job opportunities must be found there for them. This calls for the encouragement of industry and other occupational pur suits. The South has less than its share of people in trade, industry, and the professions. If the South sets out to serve the nation industrially, it will find many fields in which its raw materials can be processed to serve the needs of distant, as well as of local, buyers. It will also find products that are mainly the creation of its particular skills and these too should be encouraged. Communities with the highest incomes are those with the most skilled workers. The South needs to de velop skills. Sound industrial development requires far more 3 6 M o n t h l y R e v ie w o f th e F ederal R eserve B a n k o f A tla n ta fo r A p r il 1950 than m erely the attraction o f branch fa cto ries o f distant firm s. I am confident that the S ou th h as hu n d red s o f little p la n ts that cou ld do a n a tio n a l b u sin ess i f th ey w o u ld o n ly interest th em selves in th e n a tio n a l m arket. T h ese sh o u ld be giv en every encouragem ent. N a tio n a l m arkets fo r m an y o f them w o u ld m ean th e m u ltip lica tio n o f p a y r o lls and p la n ts m anyfo ld . In b rief, I w ant to see southern b u sin ess do som eth in g b ig w ith w hat it has. N o th in g w ill g iv e it m ore co n fid en ce in its cap acity to do w h at it sets ou t to do. S e l l i n g I t s e lf N ow let m e turn to another m ark etin g jo b — that o f s e llin g the South to the rest o f the country. P r o b a b ly n o reg io n o f the country h as m ore u n fa v o ra b le p u b lic ity or is so u n co n v in cin g in an sw erin g criticism . It is a serio u s m istak e to try to answ er som e o f th e criticism , and fo r som e o f it there is no answ er. I f there isn ’t a g o o d rep ly , it’s b est to ch an ge the su bject. S om e rep lies n ow b ein g g iv en ou t are m erely co n v in cin g p ro o f to the outsid er that the criticism is v a lid . A l th ough th e Sou th sh o u ld n ot b e content to take a ll o f th is criticism ly in g dow n, I do u rge yo u to te ll and to sh ow the cou ntry ex a ctly w hat y o u are d o in g to im p ro v e and d ev elo p the Sou th. T h e rest o f th e cou n try is fe d up w ith d iscou ra g in g attacks th at g iv e the im p ressio n that th e S ou th is h o p eless. It w ill w elcom e new s o f w hat is r e a lly b ein g d on e to carry the S ou th forw ard . It w ill n ot be im p ressed b y v a g u e g en era liza tio n s to the effect that the S ou th h as com e a lo n g w ay and that co n d itio n s are im p ro v in g . It m u st b e g iv en chapter and verse on sp ecific im p rovem en ts— on w hat B irm ingham h as d o n e; on w hat T u lla h o m a h a s d o n e; on w hat B risto l has d o n e; on w hat th is corp oration is d o in g and w hat that m an h a s done. A nd th ose in stan ces m ust b e p u lle d togeth er so that their real sign ifican ce can b e seen . In other w ords, g iv e the coun try som eth in g to talk ab ou t b esid es d eficien cies. Show the w orld w hat is r e a lly b ein g d on e to rem ed y the cau se o f criticism and criticism w ill then b ecom e le ss o f a p o p u la r fad . In th is con n ection a w ord sh o u ld a lso b e said ab ou t a grow in g new in d u stry in th e S ou th — the tou rist trade. T h is is a sort o f com e-and-get-it b u sin ess. T o u rist ex p en d itu res in several states n ow ex ceed the v a lu e o f th e cotton crop , and are gro w in g ra p id ly . W ith en cou ragem en t, th is trade co u ld b ecom e on e o f the S ou th ’s lea d in g in d u stries. T h e m ou n tain s and th e seashores, the h isto ric sig h ts, the recreation al a ctiv i ties, and a h o st o f other attraction s can b e so ld every year. In order to exp an d , th is trade m ust be c a r e fu lly and th ou gh t fu lly cu ltivated . R em em ber th at w hat y o u r a d vertisin g b ro chures sa y ab ou t the attraction s o f the S ou th can b e la r g e ly offset b y the u n co n tro lla b le w eather, or b y accom m od ation s w h ich som e p rop rietor h a sn ’t sen se en ou g h to keep clea n , or b y d iscou rteou s treatm ent. In n o in d u stry is it m ore difficult to m ain tain standards. S u re ly m uch can be d on e to raise the lev el o f com fort fo r the tou rist. I know o f no state that w o u ld n ot benefit; fro m a cam p aign to im p rove and to clea n u p h o tel and other accom m od ation s. E very traveler co m p la in s o f p o o r and in ad eq u ate restaurants, dirty h o tels, ill-k ep t tow n s, d irty and d ecrep it fillin g station s. M any tou rists are d isa p p o in ted b y th e a b sen ce o f p ictu resq u e lu n chroom s sp e c ia liz in g in ch o ice lo c a l d ish es an d sh o p s that d isp la y the best south ern p rod u cts. T h ese th in g s, o f course, are b ein g im p roved , but so m u ch m ore c o u ld b e done, w ith p rofit to th o se w ho do them , and w ith en jo y m en t fo r those w ho v isit the lan d o f h o sp ita lity . O ne im p rovem en t that is u rg en tly n eeded is the la n d sca p in g and b e a u tify in g o f p rin ci p a l h igh w a y s. T he sou th ern la n d scap e can be p e rfectly beau tifu l, but the tou rist w ho d rives fo r m ile s and days through g u llie d areas, p a st ab an d on ed sh ack s an d w eed -grow n field s is d ism ayed . A s h e drives dow n a m od ern h ig h w a y betw een two barren sh o u ld ers o f raw red c la y , covered o n ly h ere and there w ith scra g g ly w eed s that are n ever m ow ed , y ou can ’t b lam e h im if h e acq u ires th e im p ressio n that the S ou th is ju st in d if feren t to such co n d itio n s. T h e S o u th co u ld m ake n o better h ig h w a y in vestm en t than to la y ou t a p la n fo r m a k in g lo v ely p arkw ays o f its h e a v ily tra v eled h ig h w a y s. I f y o u ever start sh o w in g off the b eau ties o f the S ou th , y o u w ill b e aston ish ed at the am ount o f b eau ty th ere is to be sh ow n . W i d e H o r iz o n s F in a lly , let m e sa y that i f tKe th in g s that h a v e been m en tion ed h ave seem ed g en era l, it is b ecau se n o o n e co u ld do ju stice to their sp ecific a sp ects. T h ey m u st b e w orked out in each p a rticu la r in stan ce. A t th is tim e I c o u ld w ish n oth in g m ore than to lift yo u r e y es to the p o ss ib ilitie s o f the South and to stir y o u r m in d s w ith th e c h a llen g e that a w aits th ose w ho w ill rise to m eet it. M ore tim e co u ld w e ll h ave been sp en t on the rew ards that w ill flow to ev ery o n e from go in g forw ard in a cru sad in g sp ir it to b u ild th e n ew S o u th that m en h ave talk ed o f fo r six ty years, and w h ich can n ow b e brough t to rea liza tio n . P erh ap s the m ost en co u ra g in g th in g ab ou t the n ew S outh is that resu lts w ill com e ev e n tu a lly in sp ite o f th o se w ho lift no hand to h e lp . In the n ex t quarter cen tu ry th e S ou th w ill do fa r m ore than it n ow ex p ects to do. It w ill grow m ore, im prove m ore, so lv e m ore o f its p ro b lem s, and b e le ft w ith m ore th in gs to w orry ab ou t than p e o p le n ow g e n e r a lly ex p ect. That has been the h isto ry o f th is cou n try. I f in 1 9 0 0 a n yon e had said that in a few d ecad es th e S ou th w o u ld h ave b u ilt a system o f p u b lic sc h o o ls fo r w h ites and an oth er on e fo r n egroes, he w o u ld h a v e b een con sid ered a crack p ot or a ra d ica l tryin g to stir up trou b le. Y et the S ou th h a s d on e w hat, in 1 9 00, it did not even in ten d to do. I f a n y o n e h ad sa id th en th at a little c o lle g e in B aton R ou ge w o u ld b ecom e a th riv in g u n iversity w ith an an n u al b u d get o f over 1 4 m illio n d o lla r s, h e w ou ld h ave seem ed ou t o f h is m in d . B u t th ere is th e resu lt, m atched in other states, and y et p e o p le fo r ty y ea rs a g o d id n ’t even in tend to b u ild su ch u n iv ersities. If, in 1 9 1 0 , a n y o n e had de scrib ed the p aved h ig h w a y s that ex ten d a ll over th e South, h e w o u ld h ave b een la u g h ed at as d rea m in g th e im p o ssib le. I f a n yon e h ad pred icted d iv ersified fa rm in g , m ech an ized ag ri cu ltu re, in d u stria liza tio n , th e la r g e an d th riv in g cities, the great p ow er d ev elo p m en ts, an d lite r a lly sco res o f other ch an ges, w o u ld yo u r fath ers h ave listen ed or b eliev ed these p o ssib le ? T h e S ou th h a s a im ed b elo w its fu tu re fo r h a lf a century, and I b e lie v e it is s till sh o o tin g fa r b elo w th e target it can h it. W e can finance m ore, an d do m ore, and ben efit m ore than now seem s p o ssib le . I w o u ld , th erefo re, u rg e y ou to aim h ig h er, to p la n b ig g er, to undertake m ore, and, if necessary, go d ow n fig h tin g . B ut d o n ’t set s a il o n a ten -m ile jou rn ey w hen y ou k now y o u can m ake a d istan t p ort. M o n t h l y R e v ie w o f th e F ederal R eserve B a n k o f A tla n ta fo r A p r il 1950 3 7 District Business Conditions C o tto n a n d P e a n u t A c r e a g e A llo t m e n t s D u r in g the w ar, w hen there w ere no acreage allo tm en ts or m arketing quotas on cotton and peanuts, som e farm ers increased their acreage o f th ese crop s and others d e creased it. W hen it becam e n ecessary to re-im p ose con trols, the form u las fo r a llo ttin g acreages to in d iv id u a l farm ers had to be changed because o f sh ifts in p rod u ction w h ich had var ied from farm to farm and from area to area. T h e C ongress, th erefore, d evised new fo rm u la s w h ich took in to account the sh ifts as w ell as the p rod u ction o f w ar crop s, or th ose crops that farm ers w ere asked to grow w ith the un d erstan d in g that their base acreage fo r cotton and pean u ts w o u ld not be decreased. Last year th e new fo rm u la fo r pean u ts w as used w ith no m ore protests from grow ers than w o u ld o rd in a rily be exp ected w hen acreage o f an y crop is re-con trolled . P rotests to the new form u la fo r the 1950 cotton acreage a llo tm en ts w ere so strong, how ever, that le g isla tio n w as enacted to rem ove the m ost serious ob jection s. T he p ro v isio n s o f law w h ich becam e effective on M arch 31 w ere used in d eterm in in g acreage a llo t m ents fo r th is year’s cotton and p eanut crop s. A s a result, a l lotm ents o f cotton acreage w ere increased from 21 m illio n to abou t 2 2 .2 m illio n acres and allo tm en ts o f p eanut acreage w ere raised from 2.1 m illio n to 2 .2 m illio n acres. N ot a ll cot ton and peanut grow ers w ill receive ad d itio n a l acreage. It w ill be a llo ca ted to those farm ers w ho had the m ost severe cuts under the o ld law . For cotton, the m ain p ro v isio n s are that the m in im u m a l lotm ent fo r a p articu lar farm er sh a ll not be less than 65 p er cent o f the average acreage p lan ted in 1946, 194 7 , and 1948, or 4 5 percent o f the h igh est acreage p lan ted in an y o f these years. In determ in ing the a creage p lan ted , credit w ill be given fo r the so-called “war cro p s” grow n in these years. T he total fo r any farm w ill be lim ited to 4 0 p ercen t o f the acre age tille d an n u a lly or in regu lar rotation . To receive m ore acre age, the farm er m ust a p p ly in w ritin g to h is P M A com m ittee. T he extra acreage to be a llo tted is in ad d ition to the county, state, and n ation al allotm en ts p ro cla im ed b y the S ecretary o f A g ricu ltu re fo r the 1950 crop. T he p rod u ction from the extra a creage is to be in addition to the m arketing quota a lread y e s ta b lish ed . T h e add ition al acreage, how ever, cannot be taken into accoun t in esta b lish in g fu tu re state, county, or farm a llo t m ents. T h is m eans that the recent law m erely a llev ia tes som e o f th e difficulties that arose out o f the acreage reduction this year and that it does n oth in g to m ake the allo tm en t and quota system m ore w orkable in the future. P e r c e n t of C o t to n A c r e a g e State A llotm en t P lan te d — 1938, 1941 1938 1941 A l a b a m a ................................................ .....92.6 F lo r id a ...........................................................79.8 G eo rg ia...........................................................94.3 L o u is ia n a ................................................ .....91.4 Mississippi................................................ .....98.2 T en n e sse e ................................................ .....90.3 78.6 58.8 82.1 84.5 91.2 85.9 C otton p la n tin g s are alm ost certain to be less than the acre age allotted . Som e farm ers w ill n ot use a ll o f their a llo tm en t b ecause o f u n favorab le w eather or b ecau se o f ch an ges in th eir farm in g system s or fo r a variety o f other reason s. T he effects o f allotm en ts upon a creage p lan ted can o n ly be esti m ated at th is tim e, but ex p erien ce w ith a llotm en ts in earlier years g iv es som e in d ica tio n o f w hat farm ers m ay do. In 1938, w hen allo tm en ts w ere re-im posed after a year o f unrestricted p la n tin g , farm ers in the D istrict states p lan ted 9 4 p ercent o f their a llo tted acreage. I f th ey p la n t about the sam e p rop or tion o f their allo tm en ts that th ey p lan ted in ea rlier years, the total 195 0 cotton acreage w ill be about 2 0 m illio n acres. Som e farm ers m ay quit g row in g cotton rather than be su b ject to the u n certain ty that h as alw ays been ch aracteristic o f a p rod u ction restriction p rogram . F or ex a m p le, the cotton acreage fo rm u la m ost lik e ly w ill have to be revised a gain fo r the 1951 crop and an y rev isio n is apt to be accom p an ied by a further restriction . U n d er these circum stances, farm ers w ho h ave o n ly a few acres o f cotton and w ho can p ro fitab ly e x pand other en terp rises m igh t ga in b y n ot g row in g cotton. In gen eral, how ever, the need fo r a cash crop is so great that m ost farm ers w ill con tin u e to p la n t a ll the cotton th ey can. P e r c e n t o f A l l o t t e d A c r e a g e P l a n t e d to C o t t o n i n 1 9 4 0 Farms withAllotments State A ll Cotton Farms A la b a m a ..................................................86.1 F l o r i d a ..................................................64.0 G e o r g i a ..................................................85.0 Louisiana..................................................89.9 M ississip p i................................ ............93.6 Tennessee ................................ ............87.9 of Less than Five Acres 58.9 39.6 54.1 53.3 67.0 63.5 T he m ost im p ortan t new p ro v isio n w ith resp ect to peanuts is that no state sh a ll h ave its a llo tm en t fo r 1 9 5 0 reduced by a percen tage larger than the p ercen tage b y w h ich the 1950 n ation al peanut acreage a llo tm en t o r ig in a lly an nounced is b elow the 194 9 allo tm en t. In the D istrict states th is p rovision is im portant o n ly to A lab am a grow ers, to w hom it gives an other 4 3 ,0 0 0 acres. T h e acreage added, how ever, cannot be taken into accou n t in e sta b lish in g allo tm en ts in fu ture years, w hich m eans that no b asic corrections have been m ade in the a llo tm en t fo rm u la . A u th ority fo r a tw o-price system on pean u ts is also restored in the new law . Grow ers can overp lan t their acreage a llo t m ents and not receive a m arketing p en a lty if the peanuts from the excess acreage are so ld fo r cru sh in g fo r o il in a m anner p rescribed b y the Secretary o f A gricu ltu re. Grow ers can se ll excess peanuts fo r o il and get fu ll p rice su p p ort on their quota peanuts o n ly i f their total acreage p icked and threshed does not exceed th eir 194 7 acreage. One in terestin g feature o f the authority fo r a tw o-price system is that it is in effect o n ly so lo n g as m arketing quotas are n ot in effect on soyb ean s. M ar k eting quotas fo r soyb ean s seem lik e ly fo r the 1951 crop. A creage allo tm en ts and m arketing quotas represent the righ t to grow a crop. A fter th ey have been used fo r a few years as they h ave on tob acco, th ey tend to b ecom e associated w ith the other righ ts h eld b y the ow ners o f p rivate p roperty. M ost form s o f eco n o m ic regu lation s becom e difficult to a d m in ister w hen th ey attem pt to m o d ify the rights that are com m o n ly regarded as b e lo n g in g to the h o ld ers o f private p ro p erty. The current efforts to con trol cotton and p eanut p rod u c tion cannot esca p e th is difficulty. F or m any farm ers the a d d i tion al acreage a llo tted under the new le g isla tio n w ill m ean m ore d o lla rs in 1950. T he long-run p rob lem s fa c in g cotton and p eanut farm ers, how ever, h ave n ot been ch an ged. B. R. R. 3 8 M o n t h l y R e v ie w o f th e F ederal R e se rv e B a n k o f A tla n ta fo r A p r il 1950 I n d u s t r y a n d E m p lo y m e n t A record lev el w as reached in th e first quarter o f 1 9 5 0 in the v a lu e o f con stru ction contracts aw arded in the S ix th D istrict. In each o f the first three m onths o f the year, the d o lla r v alu e w as larger than it had ever been in that m onth. T he M arch total o f slig h tly less than 2 4 0 m illio n d o lla rs, w as secon d o n ly to the to ta l fo r A u gu st 194 3 , w h ich in clu d ed a large am ount fo r w ar p ro jects. In clu d ed in th e M arch 1 9 5 0 total w as 103 m illio n d o lla r s fo r an atom ic en ergy p roject to be constructed in eastern T en n essee. N o t o n ly w as the M arch total n ea rly th ree tim es as great as the February total, but it w as a lso that m uch greater than the total for M arch 1949. T he total fo r th e quarter w as n ea rly d o u b le that fo r the first quarter o f last year. R esid en tial contracts aw arded in M arch to ta led 8 4 m illio n d o lla rs, a larger am ount than has ever b een reported b efo re fo r this D istrict. T h ey w ere up 92 p ercen t from February and n early tw o and o n e-h a lf tim es th e resid en tia l total for M arch a year ago. F or the quarter, the resid en tia l to ta l o f 174 m illio n d o lla rs, accou n tin g fo r 4 1 .5 percen t o f to ta l aw ards, w as 9 7 .6 percent greater than in th e first quarter o f 1 949. A ll the six states shared in these in creases and in a ll six states first-quarter aw ards, both total and resid en tia l, were greater than a year ago. In creases in resid en tia l contracts am ounted to 8 0 .5 percent in F lo rid a , 9 4 .6 p ercen t in L o u isi ana, 103 percen t in A lab am a, 113 percen t in M ississip p i, 1 1 6 percent in G eorgia, and 1 3 0 percen t in T en n essee. In M arch, te x tile m ills in th e D istrict u sed n ea rly 3 2 3 ,0 0 0 b a les o f cotton. T h e d a ily average rate o f con su m p tion w as up 8 p ercent fro m F ebruary and w as 2 5 p ercen t la rger than fo r M arch la st year. It w as th e h ig h est rate recorded fo r any m onth in about three years w ith the ex cep tio n o f January 1948. F o llo w in g the J u ly lo w o f last sum m er, the con su m p tion rate h as increased each m onth ex cep t D ecem b er— the M arch rate b ein g up 85 p ercen t from that fo r Ju ly . S teel m ill op eration s in the B irm ingham -G adsden area, dow n to 43 p ercent o f cap a city b y M arch 5. recovered ra p id ly the fo llo w in g w eek and sin ce M arch 19 h a v e been reported ab ove 100 p ercent o f rated cap acity. O il p rod u ction in coastal L ou isia n a and M ississip p i w as off a little less than 7 p ercent fro m F ebruary, but w as slig h tly greater than in M arch la st year. In F ebruary, p rod u ction o f elec tric p ow er b y p u b lic u tility p lan ts in the D istrict increased 6 .6 p ercent over January and w as 9 .5 percent greater than in F eb ru ary la st year. T he d a ily average rate o f a little m ore than 9 9 m illio n k.w . h ours w as 1 5 .4 percen t greater than the a v erage fo r the year 1949. T h e in crease from January w as about th e sam e in h y d ro electric p la n ts a s in fu e l p la n ts; but in com p a riso n w ith F ebruary 1949, hyd ro-electric p ow er in creased o n ly 1.5 p er cent and fu el-gen erated p ow er in creased 1 9 .4 p ercen t. H yd ro electric pow er accou nted fo r 5 1 .5 p ercent o f the total th is F ebruary com pared w ith 5 5 .6 p ercen t in F ebruary, 1 9 4 9 . M an ufactu ring em p loym en t in F eb ru ary in the D istrict states averaged abou t the sam e as in January. A lth o u g h d e creases w ere reported in L o u isia n a and A lab am a, th ey w ere offset b y sm a ll in creases in the other fo u r states. E m p loym en t in con stru ction w ork w as o ff in som e p la c es b ecau se o f bad w eather. M in in g em p loym en t in A lab am a and T en n essee w as g reatly reduced b y the co a l strike. In L ou isian a, there w as a 3.2-p ercen t d e clin e from Janu ary to F ebruary. T h is represented a lo ss o f an estim ated 4 ,1 0 0 w orkers, w h ich num ber w as fa ir ly e v e n ly d istrib u ted in the d u rab le and n on d u ra b le g o o d s g ro u p s. In the d u ra b le good s g rou p , tran sp ortation eq u ip m en t and lu m b er an d w ood p ro ducts togeth er released a p p r o x im a te ly 2 ,0 0 0 w orkers during the m onth. M uch o f th is la y o ff w as rep orted to b e tem porary and w as m a in ly b ecau se o f bad w eath er. In th e n on d u rab les g rou p , m ost o f the 3 ,1 0 0 w orkers la id o ff w ere in the fo o d p rod u cts in d u stry, w here the d ec lin e w as sea so n a l. E m p lo y m ent in th is in d u stry sh o u ld sh ow an in crea se soon . Bad w eather in A la b a m a and the effects o f th e new m in i m um w age law con tributed to the lo ss o f 1 ,2 0 0 w orkers in sa w m ills and p la n in g m ills. T h e sh ip b u ild in g in d u stry lost 6 0 0 w o r k e r s; te x tile em p lo y m en t w as off 4 0 0 ; and there w ere sm a ller lo sses in a p p a rel and ch em ica l p la n ts and p lan ts m an u factu rin g p etroleu m and c o a l p rod u cts. In F lo rid a , a sm a ll e m p lo y m en t g a in over Jan u ary resulted from in creases in tran sp ortation eq u ip m en t, ch em ica ls and a llie d p roducts, a p p a rel, and fo o d that w ere c o m p le tely offset b y decreases in lu m b er and w ood p rod u cts. A num ber o f contracts fo r the o v erh a u lin g and rep a ir o f N a v y v essels w as ch iefly resp o n sib le fo r th e 9 .7-p ercen t g a in s at p la n ts m anu fa ctu rin g tran sp ortation eq u ip m en t. E m p lo y m en t in citrus ca n n in g and p reserv in g w as n o t as h ig h as w as exp ected , but sm a ll ga in s w ere m ad e at p la n ts m an u fa ctu rin g other fo o d prod u cts. A lack o f n ew orders and a d ec lin e in prices, attrib u tab le to decreased dem and fo r citru s crates, caused cu rtailm ent o f o p era tio n s in lo g g in g cam p s and sa w m ills. A sm a ll net g a in in G eorgia em p lo y m en t resu lted from a sea so n a l in crea se in th e fer tiliz e r in d u stry and sm a ll gain s in fab ricated m etal p roducts, in pap er, tran sp ortation eq u ip m ent and fo o d , p a r tia lly offset b y lo sses in a p p a rel p lan ts. T en n essee reported lo sses in tob acco m an u factu rin g, in leather, a p p a rel, and te x tile p la n ts w h ich w ere offset o n ly in part b y g a in s in p rim ary m eta ls p rod u cts, lu m b er, and w ood products, fo o d , and ch em ica ls. d .e .m . S a l e s in t h e F ir st Q u a r t e r S a les m ade b y D istrict d epartm ent stores d u rin g the first quarter o f th is year to ta led 1 88 m illio n d o lla r s and w ere a bout 3 percen t greater than th ey w ere d u rin g the first three m onths o f 1 9 4 9 . T h e g a in w as la rg er th an w o u ld b e expected m erely b ecau se E aster w as a w eek e a r lie r th is y ear. M arch sa les sh o u ld h a v e been ab ou t 3 p ercen t ab ove those o f th e p reced in g M arch and th e q uarter’s sa les abou t one p ercent greater b ecau se o f the e a r ly E aster. A c tu a lly , they w ere 7 percen t greater than th o se o f la st M arch. I f the first quarter h as set a p reced en t, sa le s fo r th e y ea r w ill be about 2 percen t greater than 1 9 4 9 sa les. A s w o u ld be exp ected , sa les at the w ee k ly rep o rtin g stores d u rin g the w eek im m ed ia tely p reced in g E aster, w h ich ended A p r il 8, w ere h igh er than in the co rresp o n d in g w eek last year w hen E aster w as tw o w eek s aw ay. F or the w eek ended A p r il 15, th ey w ere m uch lo w er and fo r th e fo u r w eeks ended A p r il 2 2 , th ey w ere on e p ercen t greater. N ew E aster outfits, h ow ever, do n ot w h o lly accou nt fo r the g a in over la st year. R ep orts fro m th e la rg er departm ent stores show that sa le s o f w om en ’s and m en ’s clo th in g were low er th is M arch than last. T h e fu rn itu re and h ou seh old a p p lia n c e departm ents, on the other h an d , sh ow ed sizab le sa les in creases. S a les at fu rn itu re stores d u rin g M arch, w h ich w ere 12 p ercen t h ig h er than th ey w ere in M arch la st y ear, confirm M o n t h l y R e v ie w o f th e F ederal R eserve B a n k o f A tla n ta fo r A p r il 1950 this trend. H ou seh old a p p lia n c e store sa les w ere up 23 percent. T hese and other reports show that consum ers are sp en d in g m ore to b u ild and equ ip their h o u ses; th ey are sp en d in g m ore for au tom ob iles and the g a so lin e w ith w h ich to run them . T hey are, how ever, cutting dow n on their sp en d in g fo r cloth in g, and lim itin g their b u y in g o f other a rticles. SALES EXPA N D . E stim ates based u p on D epartm ent o f Com m erce data on the sa les o f in d ep en d en t stores in selected areas o f the D istrict sh ow that fo r the first tw o m onths o f the year m otor v e h ic le d ealers had d o lla r sa les a p p roxim ately 30 percent greater than th ose o f the corres p o n d in g period in 1949, and that fillin g station sa les w ere up 5 percent. D ealers o f lum ber, b u ild in g m aterials, and h ard w are had sales averagin g 2 0 p ercen t h ig h er th is year than last year. On the other hand, ap p a rel store sa les w ere dow n a p p roxim ately 9 percent. S a les at both fo o d stores and drug stores averaged 4 percent h igh er. AUTOM OBILE c o n s u m e r CREDIT AND BA N K LO A N S. T he p resen t ty p es o f co n sum er sp en d in g account in part fo r the con tin u ed h igh lev el o f loan s at D istrict banks. O rd in arily, b y the end o f M arch m em ber bank loan s are about 3 percent low er than at the first o f the year. T his year th ey w ere 2 p ercen t h igh er. R etailers are the largest group o f borrow ers from com m er c ia l banks. E ven in 1946, w hen accu m u lated cash b alan ces w ere h igh , lo an s to retailers constituted 38 p ercen t o f the total num ber o f com m ercial and in d u strial lo a n s and 18 p er cent o f the d ollar volu m e. Banks often su p p ly retailers w ith the fu n d s to carry their expanded in ven tories in the last quarter o f the year. T hese loan s are u su a lly repaid soon after the first o f the year w hen the borrow ers’ cash b alan ces, alrea d y b olstered b y h o lid a y cash sales, are increased b y co lle c tio n s on charge accounts. T otal loan s, th erefore, w o u ld n o rm a lly be reduced at th is tim e o f year. T h e R etail Credit S u rvey recen tly com p leted by SIX T H D IST R IC T C R ED IT G R A N T IN G RETA ILERS, A C C O U N T S RECEIV A B LE AND IN V E N T O R IE S Charge Accounts Receivable, End of Year No. Kind of Business Report Per As Percent of ing Annual cent Stores Ch’ge Charge Ac 1948- count Sales 49 1949 1948 Department............... 105 + 8 28 25 Men's Clothing.......... 33 4- 7 27 26 Women's Apparel---26 — 7 27 25 Furniture.................. 117 4- 27 33 24 Hardware.................. 61 — 5 17 16 Household Appliance. 185 + 19 17 13 Jewelry..................... 53 4- 6 36 32 Automobile Dealers.. 53 — 7 8 9 Auto. Tire and Accessory.............. 55 4- 5 12 11 Weighted Average... 688 4- 2 19 18 Source: Retail Credit Survey for 1949. Instalment Receivables, End of Year Per As Percent of Annual cent Ch’ge Instalment Sales 194849 1949 1948 4- 46 66 50 + 1 26 25 — 0 29 26 45 + 17 54 + 33 27 30 22 4- 44 31 43 + 8 48 + 98 7 6 + 27 + 29 22 30 Inventories, End of Year Per cent Turn Ch’ge over 1948- 1949 49 — 6 5.0 — 5 3.3 — 1 5.7 — 12 3.2 — 3 3.4 — 19 4.2 — 1 1.6 — 3 10.8 18 — 5 5.0 28 — 7 5.4 the Bank show ed, how ever, that in v en to ries w ere low er at the b eg in n in g o f th is year than th ey w ere at th e first o f la st year. M oreover, in m ost lin es o f b u sin ess, op en credit sa les in 1949 w ere low er than in 1 9 4 8 . R eports fro m the departm ent, furniture, and h o u seh o ld a p p lia n c e stores fo r the first three m onths o f th is year show that these trends are con tin u in g. T he survey did show , on the other hand, that d esp ite their low er open credit sales, retailers w ere carrying accounts fo r lo n g er p eriod s than th ey were a year ago. C onsequently, they hadforgreater am ounts o f op en credit accounts ou tstan d in g even Digitized FRASER 3 9 S ix t h D is t r ic t S t a t is t ic s CONDITION OF 28 MEMBER BANKS IN LEADING CITIES (In Thousands of Dollars) Percent Change April 19 Mar. 15 April 20 Apr. 19,1950, from Item 1950 1950 1949 March 15 April 20 1950 1949 Loans and investments— 2,466,622 2,482,677 2,276,619 — 1 4- 8 Loans—(Net........ 889,142 890,842 820,491 — 0 4- 8 Loans—Gross. . . 902,584 904,111 831.476 — 0 4- 9 Commercial, industrial, and agricultural loans.. 519,798 532,712 518.385 — 2 + o Loans to brokers and dealers in securities.... + 62 11,545 9,105 7,142 4- 27 Other loans for purchasing and carrying securities. . . . — 21 33,968 42,905 4- 2 33,256 Real estate loans............. 4- 15 77,784 77,055 67,863 4- 1 Loans to banks — 15 4,570 4,602 5,418 4- 1 Other loans. . . 254,887 246.565 190,611 4- 3 4- 34 Investments—Total............. 1,577,480 1,591,835 1,456,128 — 1 4* 8 Bills, certificates and 4- 69 619,049 627,175 366,525 — 1 U. S. bonds. .. , — 17 746,779 756,996 901,028 — 1 Other securities............. 211,652 207,664 188,575 4- 2 4- 12 Reserve with F. R. Bank. ... 402,055 405,282 486,353 — 1 — 17 Cash in vault — 3 40,352 39,738 41,534 4- 2 Balances with domestic banks............. — 5 178,107 208,100 186,627 — 14 Demand deposits adjusted. 1,773,671 1,776,869 1,766,526 — 0 4- 0 Time deposits. . . 540,069 536,967 535,021 4- 1 4- 1 U. S. Gov't deposits........... 4- 38 60,671 41,355 — 6 56,922 Deposits of domestic banks. 523,264 569,006 466,563 — 8 4- 12 Borrowings........ 2,000 1,500 Place DEBITS TO INDIVIDUAL BANK ACCOUNTS (In Thousands of Dollars) Percent Change March March 1950, from 1950 from March Feb. 1949, 1950 1950 1949 Mar. First Feb. 1949 Quarter 1950 ALABAMA Anniston........ Birmingham... Dothan............ Gadsden........ + + 4444- 20 4- 2 22,374 358,026 13,529 19,589 126,863 85,141 18,722 289,188 11,891 17,934 114,547 69,890 21,983 333,599 12,658 19,302 141,350 71,514 321,898 321,155 477.222 72,456 36,508 73,516 164,085 280,145 265,906 395,067 64,303 31,774 63,788 139,807 290,537 4- 15 284,196 4- 21 429,481 + 21 59,506 4- 13 34,364 + 15 65,666 + 15 141,677 4- 17 GEORGIA Albany............ Atlanta............ Augusta.......... Brunswick...... Columbus....... Elberton........ Gainesville*. .. Griffin*........... Macon............. Newnan.......... Rome*............. Savannah....... Valdosta........ 24,635 921,833 54,583 9,171 60,679 4,024 15,327 11,673 58,405 8,151 21,879 96,251 11,078 22,177 778,384 50,646 7,895 50,666 3.339 12.731 9,764 52,905 8,158 18,679 79,153 10,667 24,198 848,351 62,972 8,597 52,043 3,586 14,057 10,456 56,234 7,859 19,787 92,566 10,763 LOUISIANA Alexandria*... Baton Rouge... Lake Charles.. New Orleans. . 33,239 106,493 38,674 771,419 29.433 96,851 32,966 647,957 30,201 128,232 36,834 871,912 MISSISSIPPI Hattiesburg. . . Jackson.......... Meridian........ Vicksburg....... 18,336 161,854 28,171 26,360 16,582 132,665 23,472 22,021 16,967 4- 11 151,153 + 22 26,901 + 20 25,313 4- 20 TENNESSEE Chattanooga.. Knoxville........ Nashville........ 151,291 106,547 338,440 128,677 96,600 294,183 146,901 4- 18 108,180 4- 10 299,638 4- 15 Montgomery.. FLORIDA Jacksonville... Miami............. Greater Miami* Orlando......... Pensacola....... St. Petersburg. SIXTH DISTRICT 32 Cities.......... 4,611,535 3,923,859 4,455,552 UNITED STATES 333 Cities........ 115,738,000 96,236,000r 109,741,000 * Not included in Sixth District total 24 14 9 11 22 444— 4- 7 7 1 10 19 4- 11 4- 13 4- 11 4- 22 4- 6 4- 12 4- 16 — 4 4- 3 4- 1 4- 2 — 9 4- 10 444* 4444- 11 7 7 26 4 12 17 1 6 6 3 12 — + 4 4- 2 4- 9 — 13 4- 7 4- 17 4- 12 4- 9 4- 12 4- 4 4- 4 4- 11 4- 4 4- 3 + 13 + 10 + 17 + 19 4- 10 — 17 4“ 5 — 12 4- 10 — 5 4- 2 — 2 7 4- 5 4- 4 8 4- 9 4- 4 4- 1 — 0 + 3 — 2 4- 13 4- 2 4- 13 18 4- 4 4- 5 4- 20 4- 5 4- 5 4- 11 18 + 8 + 16 + 20 + 21 4- 20 4- 20 4- 10 4- 0 4- 17 4- 22 — 4- 4- 4- 4— 4444444444- 3 4 2 4 7 8 1 1 4- 4 M 4 0 o n t h l y R e v ie w o f th e F ederal R eserve B a n k o f A tla n ta fo r A p r il 1950 S ix t h D is t r ic t In d e x e s Place DISTRICT.......... Atlanta.......... Baton Rouge.. Birmingham... Chattanooga.. Jackson.......... Jacksonville... Knoxville....... Macon............ Miami............ Montgomery.. Nashville....... New Orleans.. Tampa............ DEPARTMENT STORE SALES* Unadjusted Adjusted* Feb. March March March March Feb. 1950 1949 1950 1950 1949 1950 359r 322 339 374n 365r 383 363 365 416r 399? 434 399r 393 341 352 363 401 418r 341 343 353 284 360 355r 274 339 278 377 343 312r 338 370 356 307 370 360r 312 366 367r 349 355 381 375' 360r 289 324 349 361 266 281 250r 265 346 303 404 416 396 373r 375 428 322r 274 317r 289 334 306i< 385r 366 409 409 319 388 366 358r 308 326 362 348 491 465r 437 451 471 466 DEPARTMENT STORE STOCKS Adjusted* Unadjusted Place March Feb. March March Feb. March 1950 1950 1950 1949 1950 1949 DISTRICT............ 353r 350 371r 354 348r 365 Atlanta............. 424 461 429r 449447 455 Birmingham__ 266 261 295r 282 271 313 Montgomery... 386 402 424r 386 406 424 Nashville........ 538 527 512r 554 500 527 New Orleans... 342r 338 366r 325r 335 348 Place SIX STATES. Alabama... Florida__ Georgia... Louisiana.. Mississippi Tennessee. GASOLINE TAX COLLECTIONS*** Adjusted* Unadjusted March Feb. March March Feb. March 1950 1950 1949 1950 1950 1949 235 228 206 219 228 191 222 221 197 205 210 181 228 216 204 239 233 214 240 239 182 220 228 167 276 243 218 254 238 201 230 180 174 207 173 157 201 269 238 177 258 210 Mar. 1950 TOTAL.......... 166 Alabama... 174 Georgia__ 167 Mississippi. 99 Tennessee. 140 Place Feb. 1950 154 162 154 91 134 Mar. 1949 132 141 132 79 lllr MANUFACTURING EMPLOYMENT*** Place SIX STATES.. Alabama... Florida....... Georgia__ Louisiana.. Mississippi. Tennessee. Feb. 1950 140 140 140 140 130 135 146 Jan. 1950 140 142 139 139 134 134 146 Feb. 1949 146 150 145 141 139 138 148 CONSUMERS PRICE INDEX Mar. Feb. Mar. 1950 1950 1949 169 173 ALL ITEMS... 171 195 Food............ 198 203 192 198 Clothing__ 191 Fuel, elec., 140 and refrig. 141 139 Home fur nishings ... 184 185 192 Misc............. 154 154 154 Purchasing power of dollar.......... .58 .59 .58 * Daily average basis ** Adjusted for seasonal variation *** 1939 monthly average = 100; indexes, 1935-39 = 100 Digitized for Other FRASER Item Feb. 1950 SIX STATES.. 419 Hydro generated 381 Fuelgenerated 469 Jan. 1950 393 Feb. 1949 383 357 375 439 393 CONSTRUCTION CONTRACTS March Feb. March Place 1950 1950 1949 DISTRICT.... 1181 Residential 1275 Other........ 1135 Alabama... 608 Florida__ 816 Georgia__ 711 Louisiana.. 627 Mississippi. 319 Tennessee. 2991 433 663 321 503 472 502 391 262 351 403 531 341 352 497 482 303 202 401 ANNUAL RATE OF TURNOVER OF DEMAND DEPOSITS March Feb. March 1950 1950 1949 Unadjusted.. 20.7 20.4 20.4 Adjusted**... 20.7 20.2 20.4 Index**........ 83.7 81.7 82.6 CRUDE PETROLEUM PRODUCTION IN COASTAL LOUISIANA AND MISSISSIPPI* March Feb. March 1950 1950 1949 Unadjusted.. 300 322 300 Adjusted**... 300 317 299 r Revised th ou gh th eir sa les d eclin ed . T h ese am ou n ts h a v e not been la rg e en o u g h , how ever, to e x p la in th e e x p a n sio n in bank b orrow in g. T hat consum er b u y in g h a s sh ifted to durab le g o o d s financed in la rg e part b y in sta lm en t cred it h as, h ow ever, been im p ortan t. A la r g e n u m ber o f the auto m o b iles and a g o o d p ro p o rtio n o f the other d u ra b le consum er go o d s now b ein g b ou gh t are b ein g p u rch ased on th e in s ta l m ent p la n . Instead o f w a itin g fro m th irty to six ty d ays fo r th eir m on ey as th ey do in the case o f ch arge accou nt credit, retailers m ay h ave to w ait several m on th s fo r fin a l c o llectio n . S om e reta ilers are lik e ly to c a ll u p o n b an k s fo r h e lp in carryin g th is cred it lo a d , eith er b y b o rro w in g d ir e ctly or by se llin g the in sta lm en t p ap er. A u to m o b ile d ea lers u su a lly se ll th eir in sta lm en t pap er and la st y ear, a cco rd in g to th e R eta il C redit S u rvey, other retailers a lso financed a larger p art o f th eir in sta lm en t sales in th is m anner than th ey had been accu stom ed to d o in g. A bout six out o f every ten hardw are stores m a k in g in sta lm en t sales, fo r e x a m p le, so ld in sta lm en t p ap er. T h e p ap er so ld b y hard w are stores d u rin g 1 9 4 9 am ounted to 6 2 p ercen t o f their in stalm en t sa les, com p ared w ith 4 7 p ercen t d u rin g 1948. C om m ercial banks are to d a y th e c h ie f sou rce o f a u tom ob ile in sta lm en t-sa le cred it and an im p ortan t sou rce o f other ty p es o f in sta lm en t-sa le credit. In th e U n ited States, au to m o b ile in sta lm en t-sa le cred it ou tsta n d in g at th e banks now am ounts to ab ou t 5 5 p ercen t o f th e to ta l 3 .3 b illio n d o lla rs ou tstan d in g. In sta lm en t-sa le cred it gran ted b y the banks fo r the p u rch ase o f other ty p es o f g o o d s am ounts to alm ost a third o f a ll such credit. In creased b u y in g , th erefore, is r e sp o n sib le fo r the grow th o f in sta lm en t cred it h eld at the D istrict com m ercial banks. N o t o n ly h ave th ese b anks b o u g h t m ore reta il in stalm en t lo a n s than th ey had h ereto fo re, but th ey h a v e a lso m ade a larger v o lu m e o f lo a n s d irectly to con su m ers. T h eir total consum er in sta lm en t credits ou tsta n d in g at th e en d o f M arch are estim ated at 3 0 6 m illio n d o lla r s, 7 4 m illio n d o lla rs greater than a year ago. SALE O F INSTALMENT PAPER. SALE OF INSTALMENT PAPER Sixth District Stores Making Instalment Sales Stores Selling Instalment Paper No. Per Report- cent Paper Sold, ing as Percent of Stores Rofe Instal port ment Sales ing Stores 1949 1948 Department............... 1 4 1 50 11 8 5 91 62 62 47 26 Household Appliance. 137 87 62 54 Jewelry...................... 6 7 5 36 Automobile Dealers.. 47 100 62 58 Auto. Tire and Accessory............... 41 47 37 59 Source: Retail Credit Survey for 1949. Kind of Business Stores Not Selling Instalment Paper Per Receivables, cent Receivables, as Percent of of as Percent of Instalment Re Instalment Sales Sales port ing 1949 1948 Stores 1949 1948 54 96 71 66 50 43 44 89 55 45 33 19 38 39 26 10 13 62 48 16 49 64 94 54 49 7 7 19 16 41 35 34 O f course, other fa cto rs h a v e b een im p ortan t in k eep in g up th e dem and fo r loa n s. In D ecem b er la st year consum er in stalm en t lo a n s at the D istrict m em ber b anks am ounted to o n ly 15 percen t o f a ll lo a n s o u tstan d in g. H ow ever, the in crease in in sta lm en t lo a n s b etw een Ju n e and D ecem ber o f last year accou n ted fo r ab ou t 2 5 percen t o f the in crease in total lo a n s. A t the cou n try b anks a th ird o f th e in crease in total lo a n s w as fro m that sou rce. c tt M o n t h l y R e v ie w o f th e F ederal R eserve B a n k o f A tla n ta fo r A p r il 1950 S ix t h D is t r ic t S ta t is t ic s O w n e r s h i p o f D e m a n d D e p o s it s D esp ite the greater use o f consum er credit, p erso n a l dem and d ep osits throughout the D istrict have not d eclin ed from la st year. On January 31, accord in g to estim ates m ade in co n n ection w ith the B ank’s survey o f ow n ersh ip o f dem and d ep osits, in d iv id u a ls h eld 1,922 m illio n d o lla rs in dem and d ep osits at a ll D istrict banks. T h is w as 32 m illio n d o lla rs m ore than they h eld a year ago. T he figure, o f course, obscures b oth the ga in s and d eclin es that occurred in certain areas o f the D istrict. F arm ers in creased their d ep osits b y an estim ated 3 m illio n d o lla rs betw een the tw o survey dates. T h is in crease, h ow ever, w as e n tirely accounted fo r by ga in s in the d ep o sits o f F lorid a and T ennessee farm ers. D ep o sits in other ty p es o f p erson al accoun ts increased du ring the sam e p eriod in each o f the D istrict states. D ep o sits o f n on fin an cia l b u sin esses show ed little change betw een the survey dates. T h o se o f both m an u factu rin g and m in in g concerns and p u b lic u tilitie s d eclin ed 6 percent. T here w as a 2-percent increase in d ep osits o f trade concerns. F in an cial establishm ents ex p erienced an in crease o f 10 p er cent. On the w h ole, how ever, the p icture obtained from the su rvey w as one o f relative sta b ility . C .T .T . ESTIMATED DEMAND DEPOSITS OWNED BY INDIVIDUALS, PARTNERSHIPS, AND CORPORATIONS IN ALL COMMERCIAL BANKS IN THE SIXTH FEDERAL RESERVE DISTRICT (In Millions of Dollars) Dollar Percent Percent January Change Change Distribu Type of Ownership 1950 From Jan.1949 tion Jan.1949 Jan. 1950 Jan. 1950 Manufacturing and mining 476 — 33 10.9 — 6 Public utilities, transportation, and communications.......... 242 5.6 — 16 — 6 Retail and wholesale trade... 882 20.3 + 17 + 2 All other nonfinancial*.......... 6.6 4- 26 4- 10 Total nonfinancial............ 43.; — 6 — 0 Insurance companies............. 95 2.2 4- 14 4- 17 Trust funds of banks............. 46 1.0 — 22 — 13 All other financial**............... 285 6.6 4- 14 4- 36 Total financial................ 426 4- 10 4- 37 2,314 TOTAL BUSINESS.......... 53.2 Nonprofit organizations.... 109 2.5 + 1 4- 1 Personal........ ..................... 386 8.9 Farmers.......................... 4- 3 4- 1 1,536 35.3 Others............................ 4- 29 4- 2 3 .1 — 1 Foreign.............................. TOTAL INDIVIDUALS, PARTNERSHIPS, AND CORPORATIONS........ 100.0 4,348 4- 63 + 1 Type of Ownership Feb. 1944 Jan. 1945 Jan. 1946 Feb. 1947 Jan. 1948 4 1 Jan. 1949 Jan. 1950 Manufacturing and mining............................ 365 494 509 380 476 475 429 Public utilities, transportation, and communications............. 174 235 242 258 226 209 246 Retail and wholesale trade............................... 575 884 855 865 882 712 878 All other nonfinancial*....... 210 259 255 262 288 222 245 Total nonfinancial........ 1,324 1,523 1,798 1,811 1,872 1,894 1,888 Insurance companies........ 79 65 72 95 81 53 74 Trust funds of banks.......... 65 53 37 51 59 46 41 All other financial**........... 239 222 285 93 249 139 199 Total financial............. 211 426 229 314 345 383 389 TOTAL BUSINESS.......... 1,535 1,752 2,112 2,156 2,255 2,283 2..314 Nonprofit organizations__ 77 122 108 109 74 106 115 Personal.............................. 1,192 1,561 1,918 2,048 2,031 1,890 1,922 Farmers.......................... 409 383 386 385 400 353 Others............................ 1,208 1,533 1,648 1,622 1,507 1,536 Foreign.............................. 2 2 2 4 3 2 TOTAL INDIVIDUALS, PARTNERSHIPS, AND CORPORATIONS........ 2,804 3,389 4,138 4,321 4,410 4,285 4,348 *Including construction-contracting establishments, theaters, and hotels, laundries, garages, repair shops, and other service establishments. IrIncluding investment, loan, and insurance agencies; real estate busi nesses, etc. INSTALMENT CASH LOANS Volume No. of Percent Change Lenders Lender March 1950, from Report March Feb. ing 1949 1950 Federal credit unions........ 36 4- 27 4- 34 State credit unions............. 20 4- 52 4- 27 Industrial banking com panies.............................. — 9 11 4- 8 — 8 Industrial loan companies.. 17 4- 29 Small loan companies........ 41 4- 24 4- 7 33 + 20 Commercial banks............. 4- 18 Outstandings Percent Change March 1950, from March Feb. 1949 1950 4- 48 4- 2 4- 45 4- 1 44— 4- 4- 28 — 1 4- 5 3 0 2 4- 36 2 RETAIL FURNITURE STORE OPERATIONS Number Percent Change of March 1950 from Item Stores Feb. 1950 Mar. 1949 Reporting 4- 15 124 4- 12 — 5 107 4- 24 Instalment and other credit sales.. 107 4- 9 4- 11 — 1 118 4- 22 Accounts receivable, end of month 118 Collections during month............. 4- 5 4- 3 — 2 90 Inventories, end of month............. 4- 6 WHOLESALE SALES AND INVENTORIES* INVENTORIES SALES No. of Percent Change No. of Percent Change Type of Wholesaler Firms March 1950, from Firms Mar. 31,1950, from Mar. Report Feb. 28 Mar. 31 Report Feb. ing 1949 1950 1949 1950 ing 3 — 18 Automotive supplies. — 2 4 4- 6 4- 1 Electrical group 3 4- 13 4- 3 Wiring supplies---- 3 3 4- '9 + '2 4- 6 + li — 3 Appliances............ 3 — 32 4 4- 15 4- 1 6 — 5 General hardware... 10 4- 15 4- 1 4* 1 Industrial supplies... — 37 3 — 8 — — ii 3 *0 — 24 5 4- 21 Plumbing and heat ing supplies.......... — 13 — 1 3 4 4- 24 4- 3 Confectionery.......... — 5 4 4- 14 Drugs and sundries.. 9 4 4- 20 4- 16 4- *6 4- i 19 13 4- 21 4- 19 4- 2 4- 0 Farm supplies.......... 3 4- 10 4- 23 Grocery group Full line................. 42 30 4- 2 4- 14 4- 2 4- 8 Specialty lines....... 9 + 5 3 — 23 + :20 4- 15 Shoes and other footwear................ — 6 3 4- 17 — Tobacco products.... 6 9 ’o 4- 15 4- i2 4- 3 Miscellaneous.......... 12 12 — 4 4- 14 4- 8 4- 7 89 146 2 4- 14 + 0 44- 1 *Based on U. S. Department of Commerce figures. DEPARTMENT STORE SALES AND INVENTORIES Place ALABAMA Birmingham.. Stocks Number of Sales—Percent Change Percent Change Stores Year to Mar. 1950 March 31, 1950, Reporting from from Date Feb. 28 Mar. 31 Mar. 1950Feb. Sales Stocks 1950 1950 1949 1949 1949 4- 40 4- 30 Montgomery.. + 26 FLORIDA Jacksonville.. 4- 28 Orlando........ Tampa.......... GEORGIA 4- 16 4- 11 4- 20 4- 23 444- 4 4 6 — 4- 4 1 1 4 5 3 44- 2 8 0 3 — 2 3 0 3 4 4 3 5 + 4- 4- 10 + + + 4- 8 6 3 4- 4 — 10 3 —1 5 —. *9 3 3 + — 2 2 4- 17 4- 21 3 4- 2 5 4- 0 4- 10 4 Augusta........ 4- 32 *.4- 1 0 3 4 Columbus---- 4- 22 4- 9 4- 8 6 Macon........... 4- 27 4 4- 14 4- 8 4 Rome............. + 30 4- 2 4- 0 6 Savannah....... 4- 23 4 + 10 4- 6 LOUISIANA — — Baton Rouge.. + 17 10 6 4 4 New Orleans. + 27 5 4 + 7 + 3 MISSISSIPPI Jackson.......... 4- 30 4 4 4- 5 4- 2 — — 5 5 Meridian....... 4- 29 3 TENNESSEE — Bristol............ 4- 35 2 3 3 4- 5 Chattanooga.. 4- 39 3 4 + 22 4- 11 Knoxville...... 4- 36 1 4 4- 8 Nashville....... + 37 6 5 4- B 4- 2 OTHER CITIES*. 4- 14 22 22 4- 6 + 5 DISTRICT......... 4- 26 113 76 4- 6 4- 3 ' When fewer than three stores report in a given city, are grouped together under ‘ other cities." + *2 — 4- 1 2 4- *8 4- i9 4- 27 4- 5 9 9 44- 3 5 4- 14 4- 5 5 0 — — 2 9 4-4- + — 4- io 4- 4 4-' 5 the s a le s or 4- *5 — 8 4- 2 stocks 4 2 M o n t h l y R e v ie w o f th e F ederal R eserve B a n k o f A tla n ta fo r A p r il 1950 Deposit Growth at Florida Member Banks l o r i d a ’s clim ate, togeth er w ith its g eo g ra p h ica l lo ca tio n , has been cap italized u p on u n til it is one o f the state’s m ost im portant econ om ic resou rces. T h is p rocess has created a d is tin ctive econ om ic structure in F lo rid a . C hanges in m em ber bank d ep osits over the la st th irty years reflect, in g en eral, h ow the ca p ita liza tio n o f climate h as affected th e greater part o f the state’s im m ed ia tely a v a ila b le p u rch a sin g pow er. B e cause b an k in g is so c lo s e ly tied to the eco n o m ic a ctiv ities o f any region, this d iscu ssio n , th erefore, m igh t b e c a lled “ C li m ate and Bank D ep o sits.” A g ricu ltu ral in com e is less im p ortan t to to ta l in co m e in F lo rid a than in an y o f the other S ix th D istrict states. Indeed, agricu ltu re is o f less sig n ifica n ce in rela tio n to total in com e there than it is to total in com e th rou gh ou t the n ation , d esp ite the over 2 0 0 m illio n d o lla r s in net in com e w h ich agricu ltu re contributes to the state. F lo rid a ’s in co m e fro m m an u factu rin g has alm ost q u ad rupled in th e la st ten years. T h e state is less in d u strialized , how ever, than an y o f the other southeastern states in the S ixth D istrict if the ratio o f m an u factu rin g in com e to total in com e is used as a m easure. R eceip ts from trade and service activities are o f p rim ary im p ortan ce. Other section s o f the cou n try m ay h ave a clim a te com p ara b le to F lo rid a ’s, but F lo rid ia n s b eliev e that the com b in ation th ey have o f clim ate, g eo g ra p h ica l lo ca tio n , and over one thousand m iles o f gen eral coast lin e is un iq u e. M oreover, fo r a good m an y years th ey h ave b een c o n v in cin g m an y other p eo p le that th ey too can and sh o u ld en jo y th ese b en eficen t g ifts o f nature during the w inter m onths. A lth o u g h the su n sh in e and sea breezes are “free g o o d s,” the w inter v isito rs m ust h ave fo o d , lo d g in g , tran sp ortation , and other services. It is in the p ro v id in g o f th ese th in g s that the trade and service in d u stries flourish and su p p ly so m an y p erson s in the state w ith incom es. T h e W i n t e r ’s G o l d e n F lo o d F M any visito rs b rin g actu al com es, m on ey lite r a lly flow s flow that com es in the fo rm som e extent m easu rab le and cash w ith them . W hen w inter into the state. T h e part o f th is o f F ed eral R eserve n otes is to it is a lso p o ssib le to determ ine fro m w h ich sectio n s o f the cou n try th ese n o tes com e. T he w inter v isito r fro m the N orth , fo r ex a m p le, m a y b rin g w ith h im currency in the fo rm o f n o tes o f th e F ed eral R eserve B ank o f N ew Y ork . A fter h e and oth er v isito rs h ave spent their m on ey in F lo rid a , it ev e n tu a lly w in d s up at com m ercial banks and sw e lls the d ep o sits o f F lo r id a banks. F ed eral R eserve B anks are req u ired b y la w to return the F ed eral R eserve n otes to the B ank o f issu e. T hus, w h en m em ber banks, b ecau se th eir cu rren cy on hand ex ceed s their needs, send the n otes to the J a ck so n v ille B ranch o f th e F ed eral R e serve B ank o f A tlan ta, it returns th e n otes to th e F ederal R eserve B anks that issu ed them . L ast year, a cco rd in g to the op era tio n s o f the J a ck so n v ille B ranch, at lea st 2 4 5 m illio n d o lla r s cam e in to the state in that w ay. T h e greater part cam e d u rin g the w inter season , w ith 4 9 p ercen t b ein g received in the fo u r m onths ended w ith A p r il. T h e to ta l am ount o f a ll ty p es o f currency en terin g the state w as p ro b a b ly as m uch as 3 0 0 m illio n d o lla r s. O f course, n ot a ll w in ter v isito rs carry cash w ith them . N o estim ate is p o ssib le , h ow ever, o f the m il lio n s o f d o lla rs tran sferred b y check. A g la n ce at the m o n th ly data on th e chart sh ow s how this tran sfer o f fu n d s b u ild s up d ep o sits each y ear. In the p o st w ar p eriod , the sea so n a l ex p a n sio n o f d ep o sits h as begun in O ctober. A fter that, as in crea sin g n u m b ers o f w inter visitors com e into the state, d ep o sits grow fro m m on th to m onth u n til b y the end o f A p r il, th ey are g e n e r a lly ab ou t 11 p ercent greater than at th e end o f the p reced in g O ctober. A lth ou gh the num ber o f sum m er v isito rs h as tended to in crease, d e p o sits d eclin e after A p r il u n til th e w in ter v isito rs return. T he clim a te is th e b a sis o f another im p ortan t econ om ic activ ity w h ich attracts d o lla r s to the state d u rin g the w inter. A s the citrus and w in ter v eg eta b le crop s are sent to region s w ith less fortu n ate w in ter clim a tes, cash farm in com e in creases. In recent years, it has reached its p eak in A p ril, after ha v in g clim b ed each p reced in g m on th b eg in n in g w ith O cto ber. In the other D istrict states, a g ricu ltu ra l in co m e attains its h eig h t in the f a ll o f each y ear. INDEX OF TOTAL MEMBER BANK DEPOSITS 1935-39 = 100 PERCENT PERCENT M o n t h l y R e v ie w o f th e F ederal R eserve B a n k o f A tla n ta fo r A p r il 1950 Land B o o m a n d D e p r e s s io n D esp ite the interest these season al ch an ges m ay h ave fo r F lo r id a bankers who have p ecu lia r lo a n and in vestm en t p rob lem s b ecause o f them , long-term d evelop m en ts m ay be o f m ore g en eral interest. B ecause 77 p ercen t o f a ll d ep o sits in the state are in m em ber banks, the trend o f m em ber bank d ep osits in the last thirty years g en era lly te lls the story o f w hat has h ap p en ed at a ll banks. T he m ost sp ectacu lar grow th in d ep o sits took p la ce about fifteen years b efore W orld W ar II. A t the b eg in n in g o f 1925, F lo rid a m em ber banks had 2 1 0 m illio n d o lla r s in d ep o sits on th eir books. By the end o f the year, the total had a lm ost d ou b led to 4 0 3 m illio n d o lla rs. T hat w as the year in w h ich clim ate m ay have been “ over ca p ita lized ” and w h ich m arked the peak o f the lan d b oom o f the 1 9 2 0 ’s. T otal D e p o s it s F lo rida M e m b e r at B a n k s , C lass ified by Area Percent Change# E n d of Year 1948 -49 1946 -48 1939 - 45 1945 .46 Area* J a c k s o n v i l l e A r e a .................. . C i t y o f J a c k s o n v i l l e ......... O u t s i d e J a c k s o n v i l l e ......... M i a m i A r e a . . . . . . . . . . . . . . . . . . . . . . .. G r e a t e r M i a m i .................... O u t s id e G r e a t e r M i a m i . . O r l a n d o A r e a .......................... P e n s a c o la A r e a ...................... T a m p a -S t. P e te rsb u rg A re a . C i t y o f T a m p a ................... O u t s i d e T a m p a ................. F l o r i d a T o t a l .......................... S i x t h D i s t r i c t T o t a l ............. U n i t e d S t a t e s .......................... + 249 + 239 + 371 + 412 + 400 + 444 + 490 + 418 + 347 + 303 + 392 + 337 + + 254 163 — 14 17 + 9 — 0 + 0 — • 2 — 3 13 2 + — — ■ 1 + 4 — 5 — 8 9 — — 11 12 — 2 — 1 + 1 — 8 — 6 — 6 5 — — ■ 7 4 — — 5 + 1 + 2 — + 1 --+ + + + + + + + + + + 8 10 5 2 2 3 8 0 15 4 23 5 0 2 * Areas include several counties surrounding each city. A lth o u g h the d eclin e in d ep osits im m ed ia tely after the b oom w as n ot as rapid as the rise had been, th ere w as a 98m illio n -d o lla r drop in 1926. B y the end o f 1 928, d ep osits w ere at just about their pre-boom le v el and th ey con tin u ed to d eclin e u n til 1933. T his trend p revailed th rou gh ou t th e entire cou ntry. H ow ever, because the d ep ressio n o f the 1 9 3 0 ’s u n d o u b ted ly affected F lo rid a ’s tou rist b u sin ess m ore than it did b u sin ess elsew here, the d ep o sit d eclin e o f the d ep ression years w a s som ew hat m ore severe in F lo rid a . T h e year-end totals in d ep osits b egan to show in creases in 1 9 3 4 and continued to do so fo r several years ex cep t fo r a d ip d urin g the 1937 recession . O nce b u sin ess recovered in 1 9 38, d ep osits at the F lorid a banks rose m ore ra p id ly than th ey did throughou t the country. T h eir rate o f grow th ou t strip p ed that fo r the nation as a w h o le each year u n til 1946. W a r t i m e E x p a n s io n F lo r id a ’s p ecu lia r clim atic advantages resu lted in a flow o f fu n d s into the state during the w ar years. B ecause year-round m ilita ry train in g there w as p o ssib le, arm y and n avy in sta lla tio n s w ere exp an d ed and new airfield s and tra in in g centers ap p eared alm ost overnigh t. F lo rid ia n s and p eo p le from other states w ent to w ork in the new sh ip yard s in J a ck so n v ille, T am pa, and P anam a City. T hese yards em p lo y ed over 6 6 ,0 0 0 w orkers d u rin g the period o f h igh est em p loym en t, m ore em p lo y e e s than had been w orking at a ll o f F lo rid a ’s m an u fac tu rin g estab lish m en ts b efore the war. T h ese and other w artim e d evelop m en ts com b in ed to raise F lo r id a ’s m em ber bank d ep osits 3 3 4 percent betw een the end o f 1939 and the end o f 1945. Every section o f the state shared 4 3 in the increase, but the rate o f grow th w as e sp e c ia lly ou t stan d in g at banks o u tsid e the m ajor cities o f Jack son ville, M iam i, and T am pa. T he end o f the w ar a lso m eant an end to m ost o f the sh ip b u ild in g in the state and a drastic cut in m ilita ry ex p en d i tures. F lo r id a ’s w ar in d u stry p la n ts, m oreover, w ere less read ily con vertib le to peacetim e uses than those located in m any other states. A s a result, 194 6 in co m e paym ents to in d iv id u a ls in F lo rid a as estim ated b y the U n ited States D epartm ent o f C om m erce w ere slig h tly less than th ose o f 194 5 , w hereas th rou gh ou t the cou n try th ey increased 14 percent. R e t e n t i o n o f W a r t i m e G a in s In com e p aym en ts w o u ld p ro b a b ly have d eclin ed m ore than th ey d id in 1 9 4 6 i f F lo rid a businessm en had been less su c c e ssfu l in con vertin g their c h ief econ om ic resource, the c li m ate, to a p eactim e use. T h e state’s p o p u la tio n increased about 4 0 0 ,0 0 0 betw een 1939 and 1945, accord in g to census estim ates. M ost o f the n ew com ers decided to stay or others cam e to rep la ce those w ho left. F lo rid a ’s busin essm en expected others to com e and b egan a h u g e construction program to accom m odate n ot o n ly the tou rists but perm anent residen ts as w e ll. P e o p le settled in the state in sufficient num bers so that b y 1 949, cen su s estim ates show ed about 1 5 0 ,0 0 0 m ore persons in the state than in 1945, a gain o f 9 percent. P o p u la tio n had in creased a third in a p p ro x im a tely a decade. But F lo rid a is a lso ca p ita lizin g on its clim ate to p rovid e an in com e base that w ill be m ore stab le than that o f the sp ectacu lar 1 9 2 5 p erio d . F ast-grow in g p in e trees are the b asis fo r an ex p a n d in g lum ber and pap er and p u lp m an u facturing industry. N ew m ethods o f can n in g and p ro cessin g its citrus fo o d products offer a new source o f in com e. P la n ts m aking ap p rop riate ap p a rel fo r the clim ate are sp rin g in g up. Y earround g razin g fa v o rs th e g ro w in g cattle industry. Its g eo g ra p h ic lo ca tio n h as m ade th e state a center fo r the aviation servin g the A m erican R ep u b lics to the South. T h is ty p e o f p ostw ar con version has h elp ed to stem the p re cip ito u s d eclin e that oth erw ise m igh t have occurred in d ep os its at m em ber banks. T h e job w as m ade m ore difficult, h ow ever, in 1 9 4 7 and 194 8 b y a slu m p in a gricu ltu ral incom e. T he clim ate perhaps did too good a job fo r th e citrus grow ers; the u n u su a lly h ea v y su p p ly o f fru it resulted in g rea tly reduced p rices and in com es. A better ag ricu ltu ra l in com e in 1 949 and a good tourist sea son p ro b a b ly raised the state’s total in com e above that o f 1948. A t lea st at the end o f the year, total d ep osits had ex p anded 5 percent. P er cap ita d ep osits at the F lorid a m em ber banks w ere over three tim es as great as th ey w ere at the end o f 1939. T h ey had started at a ratio o f 4 7 percent o f the U n ited States average and ended at 6 7 percent. A t the end o f M arch 1 9 5 0 , d ep o sits exceed ed th ose o f the correspond ing date in 1 9 4 9 b y 8 percent. A s lo n g as the state is dep en d en t up on tou rists fo r a large part o f its in com e, there w ill be a con sid erab le variation from year to year in its bank d ep osits. T hese d ep osits, o f course, dep en d n ot o n ly on eco n o m ic con d ition s th roughout the n a tion , but a lso on the su ccess the state has in attracting tou r ists. But after h a v in g p ro fita b ly converted the cap italization o f its clim ate from w ar to p eacetim e uses, the state is in a p o sitio n to add to the perm anent gain s m ade in recent years. C harles T . T aylor This article is the second in a series in which deposit trends in the individual Sixth District states are being discussed . 4 4 M o n t h l y R e v ie w o f th e F ederal R eserve B a n k o f A tla n ta fo r A p r il 1950 National Business Conditions I n d u s t r ia l output in M arch in creased co n sid era b ly and in the reduced v o lu m e o f a p p a rel sa le s. S e a so n a lly ad justed A p ril w as at or slig h tly ab ove th e M arch rate. R esid en tial sa le s o f h o u sefu rn ish in g s, w h ile d ow n som ew h at fr o m the ex construction exp an d ed furth er and consum er dem and fo r c e p tio n a lly h ig h le v e l reached in Jan u ary and F eb ruary, w ere a u tom ob iles and h o u sefu rn ish in g s con tin u ed strong. s t ill su b sta n tia lly a b ove y ear-ago le v e ls. P rices o f som e lea d in g in d u stria l m aterials advanced from A u to m o b ile d ea lers’ sa le s h a v e b een at record le v e ls in M arch to A p ril, w h ile w h o le sa le p rices o f liv esto ck and p ro d sp ite o f th e w ork sto p p a g e at p la n ts o f a m a jo r producer. ucts d eclin ed sea so n a lly and p rices o f m ost fin ish ed p roducts R eflectin g ea sier cred it term s as w e ll as th e r e la tiv e ly h igh con tin ued to show little ch an ge. C om m on stock p rices ad le v el o f d u rab le g o o d s sa les, the v o lu m e o f in sta lm en t credit vanced further to the le v e l o f m id -A u gu st 1 9 4 6 . F irst quarter ou tstan d in g h a s exp an d ed m ore r a p id ly than d u rin g th e sam e reports o f a num ber o f m ajor co m p a n ies show ed a m arked p erio d a year a g o . rise in net earn in gs. C o m m o d i t y P r ic e s T h e g en era l w h o le sa le p rice le v e l con tin u ed to sh ow little I n d u s t r ia l P r o d u c t io n T h e B oard’s p rod u ction in d ex advanced 5 p o in ts in M arch to 186 p ercent o f th e 1 9 3 5-39 average as co a l m in in g w as resum ed and ou tp u t o f m ost d u rab le g o o d s in creased . In A p ril, a ctiv ity in d u rab le g o o d s in d u stries has exp an d ed fu r ther, but d eclin es are in d icated in ou tp u t o f som e n on d u rab le ch an ge fro m the m id d le o f M arch to the third w eek o f A p ril. P rices o f liv esto ck and p rod u cts d eclin ed som ew h at reflecting m a in ly sea so n a l in crea ses in su p p lie s, w h ile p rices o f grains rose o w in g p a rtly to reduced crop p ro sp ects. C urtailed d e m and fo r certain n o n d u ra b le g o o d s led to som e p rice redu c tion s. On th e other h and, m arked in crea ses in dem and fo r good s and m in erals. O utput o f steel reached ca p a city le v e ls in m id -A p ril and fo r the m onth w as about 11 percen t h ig h er than in F ebruary and M arch and about th e sam e rate as at the peak in M arch 1 9 4 9 . A ctiv ity in m ost steel co n su m in g lin e s h as a lso e x pan ded further in recent m onths but, w ith the m ajor ex c ep tion s o f con struction and h o u seh o ld a p p lia n ces, is still b elow ea rlier peak le v e ls. E xp orts o f steel th is year h ave been at a co n sid era b ly low er rate than la st year. m aterials, la r g e ly in th e d u ra b le g o o d s and co n stru ction in dustries, con trib u ted to a d van ces in n o n ferro u s m etals, steel scrap, and b u ild in g m ateria ls. N a tu ra l rubber p rices rose con sid era b ly fu rth er to a p o in t m ore than 5 0 p ercent above last autum n’s le v el. C onsum ers’ p rices rose .3 p ercen t in M arch, reflecting m a in ly a sm a ll ad van ce in reta il fo o d p rices to the January le v el. B a n k C r e d it R efinery outpu t o f n o n ferro u s metals., w h ich show ed no e x p an sion d u rin g the secon d h a lf o f la st year, o w in g in part to in d u strial d isp u tes, h a s risen su b sta n tia lly sin ce D ecem ber. D em and s from the b u ild in g in d u stry and m ost consum er d u rable good s in d u stries h a v e con tin u ed to in crease and large p u rch ases h ave b een m ade fo r G overnm ent sto ck p ilin g . R e finery stocks o f n on ferro u s m etals have been reduced further, w h ile stocks in con su m in g in d u stries h ave in creased . O utput o f n on d u rab le go o d s in M arch con tin u ed at ad vanced le v e ls, d esp ite sm a ll decreases in te x tile in d u stries. In A p ril, a ctivity at te x tile m ills has a p p a ren tly d eclin ed further, reflecting m a in ly the reduced le v e ls th is year o f ap p a rel sa les and exp orts o f te x tile p rod u cts. O utput o f m ost other n o n d urable good s h as been m ain tain ed . A ctiv ity in th e rubber p rod ucts in d u stry h as advanced to the h ig h est le v e l sin ce late 1 948 ow in g in part to the h ig h rate o f au to m o b ile p rod u ction . D is t r ib u tio n V a lu e o f departm ent store sa les rem ained som ew hat b elo w year-ago lev els in M arch and the first h a lf o f A p r il, o w in g to T reasu ry d ep o sits at the R eserve B anks, w h ich h ad increased in the la st h a lf o f M arch, w ere draw n d ow n d u rin g the first three w eeks o f A p r il. A p art o f the reserve fu n d s th us su p p lie d to b anks w as ab sorb ed b y F ed era l R eserve sa les o f G overnm ent secu rities. A t banks in le a d in g cities, b u sin ess lo a n s d eclin ed som e w hat in M arch and the first h a lf o f A p r il, but the reduction con tin u ed to be less th an sea so n a l and m u ch le ss than last year. L oan s to real-estate ow n ers, con su m ers, and security d ea lers in creased m od era tely , and h o ld in g s o f m u n icip a l and corp orate secu rities ro se fu rth er. H o ld in g s o f G overnm ent secu rities w ere reduced, reflectin g la r g e ly sa le s o f b ills and certificates. S e c u r it y M a r k e t s C om m on stock p rices rose in th e first th ree w eeks o f A p ril in in c r e a sin g ly a ctiv e m arkets to the h ig h est le v e ls sin ce 1946. Further m od erate in crea ses in y ie ld s o f lon g-term T reasury b on d s narrow ed th e sp read betw een th ese y ie ld s and th ose o f h igh -grad e corp orates. TH E BO ARD OF GOVERNORS
@FedFRASER