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Review

MllTILI
F E D E R A L
Volume X X X V I

R E S E R V E

B A N K

O F

A T L A N T A

Atlanta, Georgia, August 31, 1951

Number 8

Influencing the A vailability o f Credit
“The Reserve System ’s fundam ental task, under the
law, is that o f influencing, so fa r as the means at its
disposal perm it, the availability o f credit. In a period
o f general inflation, the task calls fo r doing what we
can to lim it the availability o f credit. Conversely, in
a period o f general deflation the task calls fo r m aking
credit readily available .” (William McC. Martin,

Jr., Chairman of the Board of Governors of the Fed­
eral Reserve System.)
Because of the heritage of war financing, the means
at its disposal have not always been adequate for the
Federal Reserve System to carry out its task, espe­
cially since the end of World War II. The System,
however, has consistently utilized the tools it has had
available. In the following paragraphs and charts,
the most important postwar policy changes and their
economic setting are presented.
Quotations in the text material are taken directly
from the annual reports of the Board of Governors
and leading articles in the Federal Reserve B ulletin.
Space limitations prevent the listing or illustrating of
all the economic aspects that may have influenced
policy decision. The material given herein, however,
does partially answer the question, What has the
Federal Reserve System done to influence the avail­
ability of credit?
194b
At the beginning of the postwar period, the Board
of Governors stated that its primary duty at that time
was “adapting to peacetime requirements the mone­
tary and fiscal structure inherited from wartime
financing.” The national debt had grown from 69
billion dollars at the end of 1941 to 278 billion dol­
lars at the end of 1945. A large proportion of this debt
had been transferred to the Federal Reserve Banks
and the commercial banking system. That part owned
by the banks provided the basis for most of the mone­
tary expansion during the war.



The regaining of control over the volume of credit
and the exercising of some measure of flexibility in
credit policy were made difficult by a large public
debt and the unstable nature of its ownership in the
BILLIONS OF DOLLARS

300

BILLIONS OF DOLLARS

U .S . GOVERNMENT DEBT

_T 0 T A L D E P O S IT S AND
CURRENCY

300

200
OWNED BY
COMMERCIAL
AND
MUTUAL
SAVINGS BANKS

1941

1945

1941

1945

early postwar period. The Federal Reserve System
could not limit reserves at member banks and halt
credit expansion by ordinary open market operations
that would involve unsettling that market for Govern­
ment securities. Emphasis, therefore, was placed on
other steps to limit monetary expansion.
Increase in M argin R eq u irem en ts A 30-percent
advance in stock market prices during 1945 led the
Board to increase margin requirements for listed
stocks from 75 to 100 percent in 1946. This action
was taken to limit the extent of the continuing price
rise and to remove the pressure of the forced liquida­
tion in the decline. “The decline in credit offset to
some extent the inflationary pressures present in other
fields.” Margin requirements were reduced in Janu­
ary 1947 to 75 percent in recognition of the “ap­
parent abatement of many of the inflationary forces.”
D iscontinuance

of

P referen tia l

D iscount

R a te

During the war years, member banks had been able
to discount Government obligations maturing within
one year at a preferential discount rate of % of one
percent. The rate was discontinued on April 30,1946,

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 u g u st 1951

74

to discourage possible borrowing on this basis, with
the result that there was an increase in the charges
on commercial bank loans secured by Treasury issues.

imposed by the need for supporting the market for
Government securities.”
BILLIONS OF DOLLARS

240

19 4 7
An advance of 32 percent in wholesale prices during
1947 was evidence that inflationary pressures still
dominated the nation’s economy. Monetary and fiscal
policies were then directed toward reducing the influ­
ence that credit expansion might have in raising
prices. Member banks, however, were able to expand
their loans because of their ability to dispose of Gov­
ernment securities on a market supported by the
BILLIONS OF DOLLARS

1
!
WHOLE SALE PRICES
IS
>36-39 «100

220
/

X
1

_1 —1 ■ 1 1 l.-l l - —i -t.—
_ _ l
1
l
J A S O N D J

1947

FMAMJ

J ASONO

1948

1946

1947

1948

1949

The Treasury cash surplus, amounting to almost
8 billion dollars, was used to retire debts with the
greatest potential monetary expansion. Major policy
steps taken to restrain credit expansion during 1948
included:
R ed u ctio n in F ederal R eserve H o ldings o f G o v ­
ern m e n t S ecurities The Treasury cash surplus was

19 4 8

used to reduce securities held by the Federal Reserve
System rather than those held by individuals and
commercial banks. Thus, bank reserves which had
been reduced by the Treasury cash surplus did not
return to the banking system and banks were under
pressure to maintain their reserve position by selling
Government securities. Despite its obligation to sup­
port the Government securities market, the System
did not increase its holdings of securities, although
it was not able to absorb new reserve funds that banks
were acquiring from a gold inflow and a return of
currency from circulation.
Increase in Short-Term R a tes Federal Reserve
Banks raised their discount rates from one percent
to 1 % percent in January, and in August they in­
creased them to 1^/2 percent. Parallel increases were
permitted in rates on Treasury bills and certificates.
Increase in R eserve R eq u irem en ts The Board of
Governors increased member bank reserve require­
ments in February to the maximum allowed by law.
After Congress had given the System temporary au­
thority to further increase requirements, to expire on
June 30, 1949, the Board again raised them.

Inflationary tendencies prevailed during most of 1948,
with wholesale prices advancing monthly until Au­
gust. System policies, therefore, continued to be
directed toward “exercising as much restraint on
credit expansion as was possible under the limitations

Ex­
pansion of instalment sale credit during 1947 and
1948 had increased inflationary pressures by provid­
ing additional purchasing power. After Congress
granted authority to control consumer credit, a rein-

System’s open market operations. Inflationary effects
of such credit expansion were reduced by certain
steps initiated during the year by the Board.
On July 2, the Fed­
eral Reserve Banks discontinued the fixed buying
rate of % of one percent established during the war
for Treasury bills. As a result, rates on new Treasury
bills rose to one percent by the end of the year. Rates
on newly offered certificates rose from % to 1%
percent. Banks, as a result, became more reluctant
to increase reserves by selling short-term securities.

Increase in Short-Term R a tes

On December 24, the
System established a lower market support level to
which the price of long-term Treasury issues was
permitted to decline. The average price of United
States bonds having 15 or more years to run until
maturity was at 101.6 in December 1947; in January
1948 the price was 100.7.
Increase in Long-Term R a tes




R einstitution o f C onsum er C r e d it C o n tro ls

M o n t h l y R e v ie w o f the F ederal R eserve B a n k o f A tla n ta fo r A u g u st 1951
BILLIONS OP DOLLARS

PERCENT PER ANNUM

75

“direct purchases, sales, and exchanges of Govern­
ment securities by the Federal Reserve Banks with
primary regard to the general business and credit
situation.” Additional credit supplied under this
policy resulted in an increase in the general avail­
ability of credit and in the price of Government
securities.
Margin re­
quirements were reduced in March 1949 to make
buying of stocks on credit easier and to provide
increased support for equity financing.
R ed u ctio n in M argin R eq u irem en ts

stitution of controls in September 1948 slowed down
the advance in consumer credit.
High
margin requirements were retained on loans for pur­
chasing or carrying securities.

R e ten tio n o f H igh M argin R eq u irem en ts

19 4 9
A recession which started in late 1948 and continued
into early 1949 led the Board of Governors to shift
emphasis from a credit policy of restraint to one of
ease. As economic recovery became evident by the
end of the year, however, open market operations
were directed toward tightening credit once more in
that short-term money rates were permitted to rise.

19 5 0 a n d 19 5 1
In late 1949 and early 1950 the Federal Reserve Sys­
tem recognized that the slight recession was over. It
again directed its policy toward restraining inflation­
ary pressures which were mounting even before the
outbreak of the war in Korea and which became very
strong after that. Spending by businesses, by con­
sumers, and by the Government increased faster than
production, and commodity prices rose rapidly.
INDEXES OF INDUSTRIAL
- PRODUCTION AND GROSS .
NATIONAL PRODUCT

.

1
W H O LESA LE P R IC E S
1 9 3 5-3 9 * 100

1

240

j0
m
m

1 9 4 7 -4 9 » 1 0 0

GNP
PERCENT

PERCENT

--------------------- ! -------

220

BILLIONS OF OOLLARS
“

200

180
__ __ __ ___t
v J __ i__ i___i—J___i__ i___i__ i_ 1 __ 1 1 1 1 v
_ __

J F M A M J J A S O N D J F M A M J

1950

Measures taken toward easing credit during the
first part of the year included:
R e d u c e d R eserve R eq u irem en ts Reductions in
May, June, and August eased credit conditions.
Before
the Board’s authority expired on June 30, 1949, con­
sumer credit controls were first eased, then removed.

Elim ination o f C onsum er C r e d it C o n tro ls

1951

Part of the greater spending was made possible
by a rapid growth in bank loans, particularly in the
second half of the year. Not only banks, but also in­
surance companies and other lenders, provided them­
selves with funds for lending by disposing of their
Government securities. Under the market support
BILLIONS OF OOLLARS

70

r
LOANS OF A L L BANKS

CHANGES IN OWNERSHIP
OF U .S . S E C U R IT IE S
JAN. 1949 - FEB. 1951
-8 - 6 - 4 - 2 0 +2
+6+6
-

-i— i i— i— r
i —i i
— ——

SO

Institution o f a M o re F lexible O p e n M a rk e t Policy

On June 30, the Federal Reserve Open Market Com­
mittee stated that it would continue its policy of
“maintaining orderly conditions in the Government
securities market,” but that its policy would be to



v U - J —1 —1 —1 —1 —1 —1 —1^
—1 —1 —1 — —1 —1
J FMAMJ

J A S O N D J

1950

F MAMJ

1951

Li. l ,i__l__ I__l__I__ L
-2
0 +2 + 4 +6 +8

-8 - 6 - 4

BILLIONS OF OOLLARS

76

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 u g u st 1951

policy, a large part of these securities found their
way into the Federal Reserve System’s portfolio.
The System took as vigorous action as was possible
within the limitations of its powers and of its re­
sponsibilities with respect to the market for Govern­
ment securities.
O p e n M a rk e t O p e ra tio n s to Lim it Bank R eserve
Expansion The System started a policy of open

market operations to tighten the extremely easy mar­
ket for long-term credit, and absorbed part of the
money being offered for long-term investment by
selling some of its bonds. Its operations during the
first half of 1950 tended generally to exert a drain
on reserves, which resulted in a moderate decline in
Government bond prices.
S ta te m e n t o f Policy On August 18, the Federal
Reserve Open Market Committee stated that both it
and the Board of Governors were “prepared to use
all the means at their command to restrain further
expansion of bank credit consistent with the policy of
maintaining orderly conditions in the Government
securities market.”
Increases in Short-Term R a te s Rediscount rates of
the Federal Reserve Banks were raised on August
25 from 1% to 1% percent. Yields on short-term
Government securities were also allowed to rise.
R ein stitution o f C onsum er C r e d it C o n tro ls The
Defense Production Act of September 18 gave the
Board authority to control consumer credit as a
means of limiting credit expansion. Controls insti­
tuted on September 18 were tightened in October. In
July 1951, however, congressional action liberalized
controls.

R eq u ests fo r C r e d it R estra in t In a letter to all
member banks on November 17, the Chairman of the
Board of Governors requested further co-operation
in restraining credit expansion.

On December 28,
the Board instituted an increase in reserve require­
ments of all member banks to the maximum under
existing authority, except in the case of central re­
serve city banks, where the increase brought require­
ments to within 2 percentage points of the maximum.

Increase in R e q u ire d R eserves

On January 17,
1951, the Board increased margin requirements for
purchasing or carrying listed securities from 50 to
75 percent.

Increase in M argin R eq u ire m en ts

V oluntary C r e d it R e stra in t On March 12, the
Board announced a program for voluntary credit
restraint, authorized by the Defense Production Act.
A g r e e m e n t with Treasury on D e b t M a n a g e m e n t

On March 4, the Federal Reserve System reached
an accord with the Treasury in regard to debt man­
agement and monetary policy for the purpose of
minimizing monetization of the public debt, assuring
at the same time a successful financing of Govern­
ment requirements. Government security prices were
allowed to decline to a point where it became less
attractive for financial institutions to expand loans
by selling their securities.
BILLIONS OF DOLLARS
r ...........
- U .S . BOND PRICE • s
15 YEARS OR MORE

105

180

1
’ TOTAL D EPO SITS A D JU ST ED '
' AND CURRENCY OUTSIDE ‘
BANKS 1
\
-

175
___

100

170

On August 4, the
Board of Governors, jointly with the Comptroller of
the Currency, the Federal Deposit Insurance Cor­
poration, the Home Loan Bank Board, and the Na­
tional Association of Supervisors of State Banks,
issued a statement asking banks to help curb excessive
credit expansion.

S ta te m e n t o f C r e d it P olicy

R estrictions on R e sid e n tia l R ea l E sta te C r e d it

On October 12, the Board instituted controls on credit
for residential real estate, and on February 15,1951,
on credit for commercial building, as authorized by
the Defense Production Act of 1950.



_L .1..L
95 . j _ i i i i i i i i i
J F M A M J J A S O N O J F MA MJ
1950
1951

^ .i i i i i i i i i i
1 » 1 1 L_
J F M A M i l i l A S O N I > J F M A MJ
1950
1951

The interruption of monetary expansion in the first
half of 1951 reflected not only the actions of the Fed­
eral Reserve System but also certain other forces,
some of which were of a temporary or seasonal
nature. “The extent of any additional growth in the
privately held money supply in the second half of
the year will be determined largely by future devel­
opments in bank credit to both private borrowers
and the Government.”
Charles T. Taylor

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 u g u st 1951

D

i s t r i c t

B

u s i n e s s

S a le s o f C o n su m e r D u r a b le G o o d s

No rapid expansion in consumer durable goods buy­
ing has materialized, as many expected, following
the relaxation of Regulation W. In the Defense Pro­
duction Act Amendments of 1951, approved July 21,
Congress set minimum maturities of 18 months on in­
stalment purchases and maximum down payments of
33% percent for automobiles and 15 percent for
both household appliances and furniture. Fifteen
months to pay and down payments of 33% percent
on automobiles, 25 percent on household appliances,
and 15 on furniture had been required previously.
Obviously, it is too early to measure the impact of
the easing of instalment credit. Although optimism
has increased among retailers, many are not too en­
thusiastic over short-term prospects. Only limited
preliminary data for August 1951 are available to
appraise business conditions at consumer durable
goods stores. July sales at reporting household appli­
ance stores in the Sixth District were 45 percent below
the corresponding period of 1950, when sales had
climbed to an unprecedented level.
Furniture stores and housefurnishings departments
at department stores also reported substantial sales
reductions in July—34 and 26 percent, respectively.
Reports from a small sample of department stores for
the first three weeks in August show housefurnishings
sales off 38 percent from the comparable period in
1950. In the same period, registrations of new passen­
ger cars in the Atlanta area were down 41 percent.
Shortly after June 25, 1950, scare buying of major
consumer goods engulfed the country and emptied
retailers’ shelves. Sales at household appliance stores
jumped to levels considerably above those attained by
other consumer durable goods stores in the District.
Almost in accordance with Newton’s law of gravity,
sales at durable goods stores dropped sharply from
the July 1950 peak so that in November they approxi­
mated those of February. After a brief year-end re­
vival, appliance store sales continued to fall until
May 1951. At that time a moderate upward move­
ment occurred, a tendency in direct contrast with the
activity experienced at other durable goods stores.
Thus, the general sales pattern of major durable



C

77

o n d i t i o n s

consumer items in this District reveals rapid, steep
increases in the third quarter of 1950, followed by
equally severe movements in the opposite direction.
The beginning of the new year witnessed another tem­
porary wave of fear buying, but in the months fol­
lowing, sales fell far short of those in the immediate
post-Korean boom.
That retailers have not been swamped this year
seems to bear out consumer intentions expressed in
early 1951. The “1951 Survey of Consumer Fi­
nances,” published by the Board of Governors, indi­
cates a lower demand for major consumer goods in
1951 than the annual rate of purchases in the second
half of 1950. The first three instalments of this survey
appeared in the June, July, and August issues of the
Federal Reserve B u lletin . (Reprints of these articles
may be obtained from the Board of Governors of the
Federal Reserve System, Washington 25, D. C.)
The majority of consumers felt that buying would
be curtailed in 1951, primarily because of dissatis­
faction with the current high level of prices, and not
as a result of a general lack of purchasing power.
Thus, although personal disposable income has in­
creased, consumers, instead of spending, have been
saving at a high rate. The July Federal Reserve B u l­
letin article is especially pertinent since it relates to
consumer purchases of durable goods and houses in
1950 and to their buying plans for 1951. Needless to
say, a study of consumers’ buying intentions is a very
complex and difficult undertaking because of the
many variable factors, including uncertainties aris­
ing from the swiftly changing foreign and domestic
situation.
In addition to the high level of prices and instal­
ment credit restrictions, other explanations may be
advanced for the current slump in consumer purchas­
ing of major durable items. Heavy advance buying
last summer and in the early part of 1951 is one of
the most obvious. By then, too, consumers in general
had probably satisfied their most urgent needs. The
1951 market, therefore, has been more or less con­
fined to replacement demands and to demands arising
out of the creation of new households.
B.A.W.

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 u g u st 1951

78

M e a t P r o d u c t io n P r o s p e c t s

Sixth District Statistics

Early this year most observers, including the Depart­
ment of Agriculture, expected meat production in
1951 to exceed that of 1950 by two or three pounds
per capita. One reason was the size of last fall’s pig
crop—9 percent larger than that in 1949, and a 1951
spring crop that figured 7 percent larger than in 1950.
Pork production so far has been closely in line with
expectations. During the first half of this year, pork
made up 51 percent of commercial production, the
highest in the past six years for a January-throughJune period. Nine percent more hogs were slaugh­
tered than in the comparable period of 1950.
Estimates of a higher beef production for the entire
year were encouraged by the rapid increase in cattle
numbers that has occurred during the past few years.
Growth in the size of herds appeared sufficient to
permit an expansion in marketings and also allow a
continued increase in the numbers of cattle.
During the first quarter of this year, beef produc­
tion held up to last year’s level fairly well. Although
fewer cattle were slaughtered, unusually heavy weights
helped keep production up. Also, the proportion of
well-finished steers and heifers sold during the first
three months of the year was higher. Since March,
however, cattle marketings have dropped sharply. For
the period January through June, commercial cattle
slaughter was down 9 percent from the comparable
period of 1950 and calf slaughter was down 18
percent.
Slaughter of heifers and cows usually increases
during the spring. Such was not the case this year,
however, and combined cow and heifer slaughter in
June was the second smallest since 1932. Expected

INSTALMENT CASH LOANS

LIVE WEIGHT OF BEEF CATTLE SLAUGHTER
Janu ary through June

______________________ (In M
illions of P
ounds)______________________
_
C TTLE
A
C LV S
A E
P
ercent
P
ercent
________________ 1950
1951 C a g ________1950
hne
1951 D cre se
e a
Alabam
a............
53.2
45.6
—14
9.4
8.1 —14
Florida............
67.S
56.4 —17
7.7
4.1 -^7
G
eorgia . . . . .
89.2
72.9
—18
13.8
12.1 —12
Louisiana . . . .
50.7
41.4
—18
43.8
31.6 —28
M
ississippi . , . .
19.9
17.2
—14
7.7
6.1 —
21
Tne e . . . .
e n sse
86.4
87.0
1
29.1
26.8
—8
District States . .

367.2

U
nited States. . . 8,190.0

320.5

7,573.9

— 13
—8

111.5

970.9

88.8

773.0

— 20

—20

to cash in on previous increases in their herds by
selling young cattle, farmers instead turned this stock
back into a building-up of their herds. In addition,
uncertainties regarding price controls undoubtedly
affected cattle marketings.




Lender
Federal credit unions . . . .
State credit unions...........
Industrial banks.............. ,
Industrial loan com
panies . .
,
S all loan com
m
panies. . . .
,
C m
om ercial banks.............

N of
o.
Le ers
nd
R
eport­
in
g
. . 42
19
. . 10
. . 12
. . 34
. . 33

V e
olum
P
ercent C a g
hne
July 1951 from
June
July
1951
1950
—19
—9
—34
— 11
—7
—3
—
6
+3
+5
—3
—5
— 22

O
utstandings
P
ercent C a g
hne
July 1951 from
June
July
1950
1951
+2
+5
—0
+9
+2
+ 11
+0
—1
+3
+4
— 0
+4

RETAIL FURNITURE STORE OPERATIONS

N ber
um
of S
tores
Item
R
eporting
............108
............95
Instalm and other credit sa s . . ............ 95
ent
le
A
ccounts receivable, e d of m
n
onth . . ............69
C
ollections during month............ ............ 69
Inventories, e d of month...........................76
n

P
ercent C a g
hne
July 1951 from
June 1951
July 1950
—8
—34
—14
—13
—9
—38
— 2
—14
—5
—4
—3
+20

WHOLESALE SALES AND INVENTORIES*

N . of
o
Firm
s
R
eport­
in
g

S le
as
P
ercent C a g
hne
o
July 1951 from N . of
Firm
s
June
July R
eport­
1951
in
g
1950

T of
ype
W
holesaler
4
0
A otive supplies. . .
utom
5
+1
Electrical—Full-line . .
4
+28
“
W supplies
iring
—4
7
“
Appliances. .
11
—6
G n ra H are . . . .
e e l ardw
3
—9
Industrial supplies . . .
4
+9
—7
7
Lum & bldg. materials.
ber
4
— 24
P bing&heating supplies
lum
5
Confectionery............
+ 1
9
+6
D an sundries . . .
rugs d
18
+ 13
+4
G
roceries—Full-line . . . . 37
—9
“
Specialty lines . 13
T
obacco products. . . . . 12
—1
Miscellaneous............ . 16
—1
—1
Total..................... . 165
*B
ased o U S D
n . . epartm of C m e figures.
ent
o m rce

+ 15
— 38
+73
— 36
— 16
— 11
— 15
— 29
— 40
+12
+11
— 24
— 13
— 8
+0

Inventories
P
ercent C a g
hne
July 3 1 ,1 9 5 1 , from
June 30 July 31

3
5
4
6
6
3
3

5
3
3
13
24

7
9

+7

8

— 15

108

1951

1950

+4
— 18
+2
—5
—2
+0

+25
+65
+58
+88
+51
+26
+53
+46
+42

—
4
0
+6

—5
+4

+42

—0

+22

—6

+14

— A

+14
+39

+3
—3

+3
+6

___________ DEPARTMENT STORE SALES AND INVENTORIES*

P
ercent C a g
hne
S
tocks
S le
as
July 1951 from Yr. to D
July 31,1951, from
ate
1951June 30 July 31
June
July
1951
1950
1950
1951
1950
P ce
la
. — 11
—15
+2
—5
+23
—15
—6
+ 22
+3
Birm
ingham
............ . . — 11
—17
+4
— 1
M
ontgom
ery............ . . — 10
—
7
+2i
—16
+8
— 0
—15
+31
—2
—8
+7
Jacksonville............
+31
. . — 11
— 11
+10
—
5
+33
,,
..
—5
+13
St. P
etersburg . . . . . . — 12
— 21
+35
+16
+10
— 2
+30
—26
+1
+7
— 1
—16
G O G ...............
E R IA
+25
+23
+5
+0
—18
Atlanta............... . . —9
— 10
—4
+23
. . —19
+ 19
— 4
+8
+22
—13
. . —16
+30
— 11
+ 10
+3
—3
. . — 20
—19
+46
—5
— 11
+9
S nna ..............
ava h
—4
—5
+28
LOUISIANA.............. . . —9
—19
—7
— 10
+15
—26
— 2
—5
+32
N wO
e rleans............
—17
+ 20
—18
—2
MISSISSIPPI............
+1
+22
+3
— 22
—3
. . —14
..
+0
. . —4
—9
— 1
+23
— 12
+3
TE N S E ............ . . —13
NESE
—4
—2
+10
—18
— 21
Bristol-Kingsport+3
— 10
Johnson City . . . . . —16
+24
+6
+5
— 21
— 20
C
hattanooga ...........
—6
+17
—9
+5
—9
—2
+27
+0
. — 12
— 10
Nashville..............
+2
+21
—15
+5
OTHERCITIES** . . . . . — 10
+26
—2
+4
DISTRICT ............... . . — 12
—16
^ clu es rep rts fro 136 sto s in th Sixth Fed R se e D
In d
o
m
re
e
eral e rv istrict.
**W fe e th th e sto rep rt in a g e city, th sales o sto a g u e
hen w r an re
res o
iv n
e
r cks re ro p d
to e e u d r “o er cities.” Th are, h wv r, in d in state fig res.
g th r n e th
ey
o e e clu ed
u

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 u g u st 1951

For the entire year the amount of meat available
to consumers will be about the same as last year
although more of it will be pork. One important con­
sequence of the decline in cattle slaughter is that
breeding herds are being built more rapidly, which
assures a larger future supply of beef. The number
of cattle and calves on farms next January may be
five to six million larger than last January, for a new
record of about 90 million head. If slaughter figures
are a reliable indication, the build-up is occurring
even faster in the District than in the entire nation.
B.R.R.
E m p lo y m e n t T r e n d s

Industrial activity in general remained close to record
levels during the first half of 1951 throughout the
Sixth Federal Reserve District. Total manufacturing
employment in June was 8 percent above that of June
1950. Sluggish retail and wholesale sales, widely re­
ported during recent months, have resulted in some
cases in slight reductions in the number of employees
and in others in a shorter work-week.
Factories in the District states had 1.1 million
workers in June. This was 80,000 more than a year
earlier and only 12,000 less than the post-Korean
peak reached in March. Partly as a result of pro­
curement by defense agencies, employment in the
durable goods industries has remained close to the
March national level. Declines in District employment
have been largely limited to soft goods.
Significant increases in District employment since
March have taken place in those industries directly
affected by military buying. Manufacturers of trans­
portation equipment added 15,000 workers during
the past year, as a result of orders for aircraft and
ships. By June, the latest month for which District
information is available, employees in this field totaled
40,000.
An upward trend, although less pronounced, has
also been observed in other durable goods industries.
This has been particularly true in metal and machin­
ery lines, with the future clouded by possible short
supplies rather than by a declining market. Woodusing industries, particularly lumbering, have main­
tained a high level of employment because Govern­
ment construction projects have offset the decline in
private home and commercial building.
W.T.H.



79

Sixth District Statistics
CONDITION OF 27 MEMBER BANKS IN LEADING CITIES

______________ (In T
housands of Dollars)______________
P
ercent C a g
hne
A 22,1951, from
ug.
A 22
ug.
July 25
A 23 July 25 A 23
ug.
ug.
1951
1951
1950
Item
1951
1950
Lo n and investm
as
ents—
+2
+5
Total ..................... 2,596,493 2,543,982 2,477,672
Lo n
a s—Net.................. . 1,060,269 1,071,127 961,542
—1
+ 10
L an
o s—Gross..............., 1,078,639 1,089,419 975,379
— 1
+ 11
C m
om ercial, industrial,
a d agricultural lo s . 615,292 618,450 547,170
n
an
—1
+ 12
Lo s to broke a d
an
rs n
de le in securities . .
a rs
11,223
11,973
10,616
— 6
+6
O lo s for pur­
ther an
chasing and carrying
35,535
35,347
35,867
— 1
securities..............
+1
R a estate lo s . . . .
el
an
88,978
91,021
89,654
—2
—1
L an to banks...........
o s
12,612
6,993
5,453
-45
+28
O loans ..............
ther
320,618 320,016 286,619
+0
+12
Investm
ents—
Total . . . . 1,536,224 1,472,855 1,516,130
+4
+1
Bills, certificates,
666,521 615,683 551,809
a d notes ..............
n
+8
+ 21
U S b n s ..............
. . od
642,474 630,910 746,395
+2
—
14
O securities........... 227,229 226,262 217,926
ther
+0
+4
R s rv with F. R B k . . 506,608 473,439 419,525
ee e
. an
+7
+ 21
C s in vault...............
ah
47,704
41,590
—
4
+ 10
45,567
B la ce with dom
an s
estic
189,156 196,832 162,733
—
4
+ 16
D m n deposits adjusted . 1,969,941 1,963,645 1,841,154
e ad
+7
+0
Tim deposits............... 526,425 521,753 529,623
e
—1
+1
U S G v’t deposits . . . .
. . o
76,524
72,830
65,737
+5
+ 16
D
eposits of dom b n . 545,400 496,052 454,399
estic a ks
+ 20
+ 10
*
—24
14,400
500
1 1 ,0 0 0
*M than 100 percent.
ore
DEBITS TO INDIVIDUAL BANK ACCOUNTS

________ (In T
housands of D
ollars)________
P
ercent C a g _____
hne
•.
July 1951 x Yr.-to-Date
from 7 M
onths
July
June
July June
July 1951 from
1951
1951
1950 1951
1950
1950

P ce
la
ALABAM
A
31,314
26,747
A
nniston . .
21,955
B ingham .
irm
388,426
412,055
360,477
D
othan . . .
17,184
16,502
13,895
21,583
20,265
20,767
Gd e . . .
a sd n
121,762
162,379
161,630
M
obile . . .
82,984
76,781
M
ontgom .
ery
79,458
Tuscaloosa* .
27,941
29,827
28,768
FLO ID
R A
361,744
311,094
Jacksonville . .
317,781
256,494
M i . . .
iam
280,867
295,147
G
reater M i*
iam
421,130
437,589
375,371
63,122
77,848
60,839
O
rlando . . . .
40,426
37,579
P n co . .
e sa la
42,498
67,371
64,297
73,770
St. P
etersburg
143,104
166,409
134,115
T pa . . .
am
GOG
E R IA
Albany . . .
31,462
31,077
25,537
1,019,619 1,035,712
879,706
Atlanta . . .
A
ugusta . . .
77,387
76,249
62,279
B
runsw . . .
ick
9,364
1 2 ,0 2 0
12,082
65,924
74,857
C bus . . .
olum
69,055
4,131
3,804
E
lberton . . . .
3,793
G
ainesville* . ,
20,723
21,500
18,002
Griffin* . . .
11,132
12,661
11,075
M co . . . ,
a n
70,112
76,574
63,070
11,090
11,242
8,901
Nwa . . .
e nn
22,018
22,250
21,258
R e* . . . .
om
121,928
92,600
S va n h . . .
a na
106,298
Valdosta. . . .
23,426
13,813
16,707
LO
UISIANA
38,941
33,514
42,149
Alexandria* . .
102,341
112,965
109,035
B Ru e . .
aton o g
44,011
44,285
40,104
La C arles . .
ke h
N wO a s . .
e rle n
812,472
823,059
774,751
M
ISSISSIPPI
17,794
18,821
18,959
H
attiesburg . .
148,714
158,322
145,832
Jackson . . . .
28,552
28,181
29,050
M
eridian . . .
22,421
28,939
24,258
V
icksburg . . .
TE N S E
NESE
146,503
178,231
201,257
C
hattanooga . .
139,652
117,740
133,676
K
noxville . . .
375,641
429,437
334,788
N
ashville . . .
SIXTH D IC
ISTR T
32 C
ities . . . 4,913,334 5,177,647 4,439,298
U ITED S T S
N
TA E
342 C . . . 124,428,000 135,027,000 110,573,000
ities
♦ o in d inSixth D
N t clu ed
istrict to
tals.

—15 • + 2 2
—6
+8
+4
+ 24
+4
+6
+33
+0
—4
+3
—
3
—6
— 12

—
5
—
4
—19
—5
—9
—14
+
+

1
— 2
1
— 1
—8

—
S
—
4

— 12
—8
— 1
—1

—13
+70
—8

+4

—1
—1
—6
—6

—3
+ 19

+2

+9
+4
+8
+5
+7

+ 12

+23
+16
+24
+28
+5
— 0
+15

+35
+38
+ 13
+30
+17
+ 13

+20

+18
+ 17
+19
+ 15
+ 21
+ 19
+15

+ 11
+25
+4
+ 15
+40

+33
+37
+30
+ 20
+ 11
+40
+14
+26
+33
+ 19
+27
+23

+16
+ 10
+10
+5

+26
+ 10
+23
+ 13

—
5

+9
+17
+17
+7

+1

+2
— 1

+29

+22

+ 14
+ 12

+26
+23
+ 19

—5

+ 11

+19

—8

+13

+20

— 11

—
4
—13

+22

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 u g u st 1951

80

Sixth District Indexes
DEPARTMENT STORE SALES*

D E F U S E

BOND

D R IV E

BEGINS ON LABOR DAY
SEPTEMBER 3 ,1 9 5 1

BUY
D e fe n se B o n d s
This task before us is to keep the economy sound, to
have military preparedness, but if it is at the expense
of the economy of the country, at the expense of the
integrity of the dollar, it will be the greatest victory
the communists can achieve. We are working to main­
tain civilization for which mankind has fought and
died for generations. We are fighting to maintain the
American way of life, the system of private enterprise
and the dignity of the human being.
— D r . M a r c u s N adler , P r o fe sso r
o f F in a n c e , N e w Y o r k U n iv e r sity

July
1951
415
, 434
366
. 380
. 372
. 395
. 434
. 442
. 420
. 340
. 446
. 393
. 559

P
lace
DISTRICT . .
Atlanta. . .
B Ru e
aton o g
B ingham
irm
Chattanooga.
Jackson . .
Jacksonville
Knoxville . .
M
ontgom
ery
N
ashville . .
N wO a s
e rle n

Adjusted^*
June
July
1951
1950
402
494
441
532
366
488
386
453
407
464
398
477
433
469
402
464
420
483
443
529
333
432
407
496
359
472
562
758

July
1951
324
338
304
315
302
292
351
358
302
326
269
343
302
447

U
nadjusted
June
1951
353
358
318
340
367
338
377
374
352
354
283
374
319
495

July
1951
424
552
330
459
622
407

U
nadjusted
June
July
1951
1950
435
339
550
448
351
271
496
388
636
491
428
308

July
1950
386
415
405
376
376
353
380
376
348
370
341
382
363
607

DEPARTMENT STORE STOCKS

July
1951
. 451
. 600
. 358
. 494
. 641
. 424

P
lace
D
ISTRICT . .
Atlanta. . ,
Birm
ingham
M
ontgom
ery
N
ashville . .
Nw O
e rleans.

Adjusted^
June
July
1951
1950
453
360
604
487
382
294
506
418
677
506
419
321

GASOLINE TA X COLLECTIONS***

F o r th e S a k e o f Y o u r C o u n tr y !

They help to spread our huge national debt. How ably
we manage this debt and how effectively we control the
financing of our defense in the days ahead can very
well determine the outcome of the cold war which is
being relentlessly waged. As Dr. Harold Stonier has
so effectively said, “Our national debt is the rock upon
which Russia hopes to break our ship of state. If we
don’t win this struggle, our American way of life, our
economic system, our savings, our business, our free­
dom, all will be objects of discussion in concentration
camps, and it will be academic discussion at that.”
— W il l ia m H . N ea l , S e n io r V ic e
P r e sid e n t, W a c h o v ia B a n k a nd
T r u st C o m p a n y , W in sto n -S a le m , N . C.

F o r th e

S a k e o f Y o u r C h ild r e n !

Do we, as citizens of this country, want an inflationary
boom, followed by a serious deflation? W ill we want
to have all the economic, political and social disloca­
tions that inflation and deflation would bring to us? Is
this the kind of a world we want for our children? The
answer is, obviously, no. Therefore, we must do every­
thing to combat the forces of inflation.
—D r . N a d le r
F or Y ou r O w n

S ake !

To every family individual — man, woman, child —
there will come certain financial troubles and crises
during their life. The average family has a financial
crisis once every two years. You will need some money
during that period. This should always be a basic part
of your investment program: cash, insurance, United
States Government Bonds, your nest egg, your riskless
part. Therefore, you, as an individual, should buy and
should hold these bonds for your own self-protection
and financial self-interest.




— S y l v ia P orter , F in a n c ia l E d itor,

The New York Post

P
lace
SIX S TE
TA S
A
labam .
a
G
eorgia .
Louisiana.
M
ississippi
T n e e.
e n sse

Adjusted^*
June
1951
283
267
243
. . .
211
282
285
. . .
302
306
. . . 281
318
July
1951
, . . 276
. . . 271

.
.
.
.
.
.

COTTON CONSUMPTION*

P
lace
TO L . .
TA
A
labam .
a
G
eorgia .
M
ississippi
Tne e
e n sse

.
.
.
.
.

July
1951
. 143
. 147
. 147
. 78
. 114

June
1951
175
185
176
105
142

June
1951
. 152
. 155
. 146
. 152
. 141
. 151
. 158

M
ay
1951
152
149
148
153
140
154r
160

July
1951
270
264
241
268
289
293
284

U
nadjusted
June
July
1951 1950
286
253
279
240
243
216
289
256
290
277
315
312
321
252

ELECTRIC POWER PRODUCTION*

July
1950
141
140
147
83
115

MANUFACTURING EMPLOYMENT***

P
lace
SIX S TE
TA S
A
labam .
a
Florida. .
G
eorgia .
Louisiana.
M
ississippi
Tennessee.

July
1950
259
246
232
264
282
321
249

June
1950
143r
144
132r
144r
135r
143r
149

CONSUMERS PRICE INDEX

July
June
July
1951
Item
1951
1950
ALL ITEM . . 190
S
191
177r
F od . . . . 230
o
229
208r
C
lothing . . . 2 10
210
190
Fuel, elec.,
and refrig. . 143
143
140r
H m fur­
oe
nishings . , 2 1 0
.
184r
209
166
166
155
P
urchasing
pow of
er
.53
.52
.56
♦D a ra e b sis
aily ve g a
♦A
♦ djusted for se so a variation
a nl
*♦♦1939 m
onthly a e g i = 1 0 0 ;
v ra e
O indexes, 1935-39 = 100
ther
r R vise
e d

June
1951
SIX S TE
TA S 442
H
ydro­
generated 251
Fuel­
generated 691

M
ay
1951
433
279
634

June
1950
396
273
557

CONSTRUCTION CONTRACTS

July
P
lace
1951
DISTRICT . . 878
R
esidential . 1 ,2 0 2
O
ther . . . 721
A
labam . . 651
a
Florida . . 799
G
eorgia . . 872
Louisiana . 1,244
M
ississippi . 282
T n e e . 1,175
e n sse

June
1951
902
1,297
711
1,199
910
1 ,0 2 1
677
675
774

July
1950
654
1,207
386
694
802
473
854
260
672

ANNUAL RATE OF TURNOVER OF
DEMAND DEPOSITS

July
1951
U
nadjusted . . 2 1 .6
Adjusted^ . . 22.9
Index#* . . . 93.0

June
1951
23.5
23.7
96.1

July
1950
2 1 .lr
22.4r
91.0r

CRUDE PETROLEUM1 PRODUCTION
IN COASTAL LOUISIANA
AND MISSISSIPPI*

July
1951
U
nadjusted . . 369
Adjusted^* . . 369

June
1951
370
372

July
1950
344
344