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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
