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Monthly Review Atlanta, Georgia December o 1958 in t h is is s u e : IN TIME DEPOSITS YMENT PICKS UP IN THE FATS OILS INDUSTRY IAL SUM M ARY OF IESS CO N D ITIO N S n m DISTRICT HIGHLIGHTS DISTRICT DISTRICT Four Decades of Progress at The Nashville Branch of the latest additions to the blossoming skyline of Tennessee’s capital is an attractive two and three-quarter-million-dollar fourstoried structure located at the corner of Eighth Avenue and Union Street. This is the new home of the Nashville Branch of the Federal Reserve Bank of Atlanta. A composition in beauty, strength and utility, the limestone-finished building in modified classical style was designed by Toombs, Amisano and Wells of Atlanta and was built by the South eastern Construction Company of Charlotte, North Carolina. O n e The Branch . . . Earlier Homes On October 21, 1919, the last of the four branches of the Federal Re serve Bank of Atlanta to be established was launched in Nashville. The Branch’s start in life was as unpretentious as its subsequent growth was dramatic. Its staff of 21 was housed originally in a few rented rooms in the Fourth and First National Bank building, now occupied by the First American National Bank of Nashville. As operations expanded, these rented quarters proved unsatisfactory, and so three years later, on December 21, 1922, by which time the staff had grown to 31, a move was made. The building at 228 Third Avenue, North, was to be home for the next 36 years. That building, which cost approximately $250,000, was then aptly described as “thoroughly modern in every respect, the most up-to-date banking office in the city and one of the very best in the entire South.” For some time, the employees rumbled around in their spacious home. But as the work load grew, the old specter of space shortage once more appeared. To fulfill its duties during World War II, for example, the Branch at one time had to lease over 10,000 square feet of outside work space to house part of its record-peak force of 198 employees. Although some of its wartime responsibilities were eventually eliminated or curtailed, the Branch still had to rent some space. The pressing need for room culminated in 1952 in the purchase of the one-and-a-half-acre site on which the new home stands. Plans for the structure were approved in August 1956 by the Board of Governors of the Federal Reserve System. Ground was broken December 29, 1956. and the Building was occupied by the Branch’s 156 em ployees in November 1958. The Branch . . . Its People More important than capital resources of buildings and equipment in the development and progress of an institu tion are its people. Each of the twelve parent Federal Reserve Banks and its respective branches operates under the supervision of a Board of Directors. The Nash ville Branch has been fortunate in having as leaders men of knowledge, experience, and vision. At first, its Board consisted of five members; later the number was raised to seven. In all, from 1919 to the present, 47 distinguished Tennesseans have served the Branch through membership on its Board. Both capability and variety of background are evident from the following rundown of names and occupations of members of the earliest, as well as the most recent, Board of Directors of the Nashville Branch. The Chairman of the first Board was W. H. Hartford, President of the Hartford Hosiery Mills. Other members serving with him were James E. Caldwell, President of the Fourth and First National Bank in Nashville; Paul M. Davis, President of the American National Bank in Nash ville; T. A. Embrey, President of the Farmers Trust Company of Winchester; and E. A. Lindsey, President of the Tennessee-Hermitage National Bank of Nashville. Two of the original Board members served the Federal Reserve System in other capacities: Captain Hartford was a member of the Board of the Federal Reserve Bank of Atlanta; Mr. Davis (now Hon. Chm. First American National Bank of Nashville) served three terms as the Sixth District representative on the System’s Federal Ad visory Council. Dr. Frank B. Ward, Dean of the University of Tennes see’s College of Business Administration is now Chair man of the Nashville Branch Board. Other members are V. S. Johnson, Jr., Chairman and President of Aladdin Industries, Inc., of Nashville; W. N. Krauth, President and General Manager of the Colonial Baking Company of Nashville; Stewart Campbell, President of The Harpeth National Bank of Franklin; C. L. Wilson, President of The Cleveland National Bank of Cleveland; Jo H. Anderson, President of the Park National Bank of Knoxville; and P. D. Houston, Jr., President of the First American Na tional Bank of Nashville. In its nearly two-score years, the Nashville Branch has had four chief executive officers. Bradley Currey was first to serve as Branch head, known for many years as Managing Director but more recently as Vice President and Manager. He was succeeded by J. B. McNamara. Next to assume the helm and to hold it for more than a quarter of a century was Joel B. Fort, Jr., who began his career with the Branch in 1919 as a deferred debits clerk. Since November 1951, R. E. Moody, Jr. has held the chief executive post of Vice President and Manager. The Branch . . . What It Does The Federal Reserve System has vital responsibilities con cerning our country’s economic welfare. As the nation’s central bank, its main job is to provide for an adequate flow of money and credit so as to promote economic stability and growth. This involves some duties of a more or less routine nature, and they occupy the time of most of its employees. In this sphere lie the primary re sponsibilities of the Nashville Branch. Source o f $ $ $ Large sums of money continually cir culate within our economy. From the presses of the United States Treasury’s Bureau of Engraving and Print ing in Washington, D. C., and the mints at Denver and Philadelphia, currency and coin flow to the Federal Re serve Banks, then to commercial banks and the public. As money is spent, it is redeposited in commercial banks; from there excess cash is returned to the Reserve Banks. Money operations at the Nashville Branch have ex panded greatly in response to demands from Tennessee’s thriving economy. In 1920, the first full year of activity, the Branch paid out $22 million in currency and coin to banks located in its territory, the eastern two-thirds of Tennessee. In that same year it received $27 million from banks. As industrial, commercial, agricultural, and other business activities grew, so did the area’s need for money. By 1958, the Branch’s receipts totaled $185 million and payments, $191 million. In comparison, two months’ work in 1958 was greater than the volume for the entire year 1920. Perhaps a better comprehension of the work load of the Nashville Branch can be obtained from statistics on the number of individual pieces of currency and coin handled. All money received from commercial banks must be counted and verified, sorted to remove unfit, worn-out money as well as counterfeits, and finally strapped and consigned either to destruction or storage for future use. In 1930, the Federal Reserve Branch at Nashville processed nearly 16 million pieces of paper money. The volume doubled by 1950 and has since risen another 7 percent. The number of pieces of coin handled has grown far more dramatically, the 1958 volume being 15 times as large as the 5.3-million-piece volume of 1930. Processor o f Checks One consequence of our national progress has been an increasing reliance on more ecoCurrency and Coin Received and Counted N ashvill* Branch, 1930-58 COIN M illins if Pieces CURRENCY Millieas ef Pieces Check Clearings must be verified, sorted, and dispatched quickly for col lection to the banks on which they are drawn. In 1920, the Nashville Branch processed 2.8 million checks drawn on big city and small country banks. The number fluctu ated thereafter until 1936, when it began a climb that has continued to the present virtually without interruption. In 1958, the Branch processed 28 million city and coun try items, 10 times the volume of 1920. The trend in dollar value parallels rather closely that of the number of items processed, going from $746 million in 1920 to $8.5 billion this year. N ashville Branch, 1920-58 nomic means of payment. Although currency and coin are important ($31 billion of this form of money is currently in circulation), of far greater significance is still another form of money—demand deposits or check ing accounts. Check writers number in the millions and include individuals, businesses, and governmental bodies. Payment by check has become so popular because of safety and convenience and for other reasons that over 90 percent of the dollar volume of business transacted in the nation is now completed by check. The dollar value of checks written in the United States annually is esti mated at more than $1,000,000,000,000 (trillion). As to number of checks, in 1957 the Federal Reserve Banks handled 3,768,000,000. A well-organized and efficient collection system insures that the flood of checks will be processed with the speed and accuracy required. At the Reserve Bank the checks Number of Employees Nashville Branch, 1919-58 IM.1 Fiscal A gent for the Government Besides serving com mercial banks and the public generally, the Nashville Branch has performed since the 1940’s a number of services for the Federal Government. Most of the work is related in one way or another to the Federal debt. The debt may be enlarged, refunded, or retired in part; its composition and distribution may be altered, and so on. Whenever the Government embarks on any of these operations, a host of detail is involved and much of the work is handled by the Federal Reserve Banks. Thus, the Nashville Branch issues, exchanges, and redeems United States Government securities. Among other services it maintains Treasury Tax and Loan Accounts and holds in its vault securities pledged as collateral for various pur poses. Tennessee Banking Thrives The expansion in physical facilities, staff, and volume of work of the Nashville Branch stems largely from its efforts to meet the needs of a growing and changing commercial banking system in Tennessee. To be sure, long before the birth of the Federal Reserve, banking flourished in the Volunteer State, rising and ebbing with the economic tides. Indeed, it was back in 1807, scarcely a dozen years after Tennessee was admitted to the Union, that the first bank chartered opened for business. It was the Bank of Nashville. Tennessee’s history of banking tells of the subsequent mushrooming of privately owned banks in a sprouting economy, of over-issues of paper money driving specie out of circulation, of money panics and failures. It also re veals that because of the inadequacy of suitable banking facilities, Tennessee experimented with state-owned banks. The first of these, the Bank of the State of Tennessee, was established at Knoxville in 1811 and closed in 1828. Several others followed, the last going out of business shortly after the War Between the States. In 1828, too, an event of some interest took place, the opening of the Nashville Branch of the Second Bank of the United States. This in a way is a grandparent of the present Nashville Branch of the Federal Reserve Bank of Atlanta. Follow ing the expiration of the Second Bank’s charter, its branch in Nashville closed in 1837. So far as is known, the oldest existing bank in the state is the Northern Bank of Tennessee located in Clarks ville, which was established in 1854. In 1863, shortly after passage by the Federal Government of the National Bank Act, the First National Bank of Nashville was established. This was the first of the national banks to be opened in the deep South. Coming to more recent times, we find two seemingly • 3 • Number of Banks and Bank Assets Tennessee and Nashville, 1919-58 NUMBER OF BANKS TOTAL BANK ASSETS NUMBER OF BANKS TOTAL BANK ASSETS 19 M M M '51 contradictory banking trends emerging in Tennessee since the opening of the Nashville Branch of the Federal Re serve Bank of Atlanta. At the same time that banking activity has grown, the number of banks operating in the state has fallen. Deposits of all Tennessee banks rose, for example, from $467 million in 1919 to $3.1 billion in mid-1958. Loans, total assets, and number of em ployees are among a few other indicators measuring growth. On the other hand, at the latest count, there were only about half as many banks as there had been at the end of 1919. Mergers and extensive bank failures, of course, help explain the drop from 533 to 299. Number of Banks in Nashville Zone Member, Nonmember, Par, and Nonpar, 1919-58 On a reduced scale, essentially the same declining trend is apparent in the total number of banks that are members of the Federal Reserve System. In December 1919, in the Nashville Zone 82 banks were stockholders of the Federal Reserve Bank of Atlanta. The number fell to a low during the depression but since has climbed to 69. All banks that are members of the Federal Reserve Sys tem pay checks at par or face value, as well as do most nonmember banks. The number of par banks in the Nashville Branch territory has declined from a peak of 239 in 1923 to the present level of 165. Although the number of par-remitting banks is about the same as it was in 1919, percentage-wise there are nearly twice as many today as in the earlier period. Tennessee's Economic Progress The progress story of the Federal Reserve’s Nashville Branch, of course, ties in directly with the story of Tennessee’s economic development. The links binding the Branch with the Volunteer State in a way comprise an economic variation of the physical law of action and re action. The Branch has acted upon Tennessee’s economy and simultaneously has reacted to it. Accordingly, we may justly expect the fast pace recorded by the Branch to be duplicated by the state of Tennessee. The amount of income received is one of the best comprehensive measures of an area’s economic progress. As business booms, income tends to rise; as the economy recedes, income falters and declines. Like changes in a thermometer, therefore, changes in income signal changes in our economic health and well-being. That the state’s economy has over the long-run been vigorous and healthy is obvious from a glance at per capita personal income payments. In 1930, Tennesseans earned on the average $325 per person. World War II, the postwar exuberance, the Korean conflict, and a capital investment boom all helped boost per capita personal in come payments to $1,383 by 1957. Thus, for every one dollar of income he received in 1930, the average Ten nessean gets about four today. Higher incomes have meant greater purchasing power, even after allowance for the pronounced price increases of the last couple of decades or so. This in turn has led to greater spending and, as the circular flow continues, to business expansion. The net effect has been a steady and appreciable improvement in the level of living. More than ever before, Tennesseans are enjoying an abundance of homes, cars, deepfreezers and other products in the necessary as well as luxury classes. This development may be inferred from the trend in the state’s total retail sales. In 1929 sales amounted to $633 million. By 1954 they had soared to $2,760 million. Department store sales give some inkling of subsequent developments. Judging from them, by 1958 Tennesseans had upped their pur chases of consumers goods by another sixth. Tennesseans, of course, did not spend all their income for consumers goods. They saved a portion. They put their savings in banks, savings and loan associations, in surance companies, and other financial institutions. How much they set aside for a rainy day and for other pur poses may be judged from estimates of per capita long term savings prepared by the Research Department of the Federal Reserve Bank of Atlanta. In 1940 per capita savings amounted to $189. In 1947, savings had risen to $522 per person and thereafter increased year by year to $870 in 1957. These savings, to be sure, were not idly held by financial institutions. Instead, the dollars were put to work producing new homes, office buildings, fac tories, machines, and equipment; in a word, they went into capital goods that have formed the basis for further advancements in production, income, and levels of living. Per capita income payments to individuals expanded at the same time that Tennessee’s population surged for ward. The two events clearly are interdependent, for more people mean more producers, more income earners, and more consumers— indispensable ingredients in the growth mix. In 1920, Tennessee’s population stood at 2,338,000. At last official count in 1950, the number was almost a million higher. Estimates for 1957 show a further increase to 3,463,000. Following a trend visible in the Southeast as well as in the nation, Tennessee’s population has been on the move. Big towns and cities offering industrial and co m •4 • Population Tennessee and Metropolitan Nashville, 1920-58 mercial economic opportunities have beckoned people from farms and rural areas. As late as 1920, only a fourth of Tennessee’s people lived in urban centers. By 1950, the Census count records almost two-fifths of the state’s populace living in cities. The greatest gains have taken place in the large metropolitan centers. Between 1940 and 1955, population in these Tennessee areas grew an estimated 37 percent, in contrast with but 7 percent in nonmetropolitan areas. A Shifting Economic Structure Accompanying, and indeed accounting for, the sharp rise in income payments to individuals during the last quarter of a century or so were significant shifts in Tennessee’s economic make-up. The changes consisted of a broaden ing and strengthening of the state’s income-generating base. The increasing diversification, of course, is not un related to the flow of people from the country to the city. Rather, the flow emerges as a consequence of the rise in importance of manufacturing and service enterprises and the corresponding decline in agriculture. Manufacturing Jum ps A head The single most im portant source of personal income in Tennessee today is manufacturing, a sector that has steadily advanced in relative and absolute terms. Nearly a third of the state’s individual income from current production originated jn manufacturing in 1957, in contrast to only 19 percent m 1929. Couched in other terms, the growth appears even more impressive; manufacturing income jumped 663 Percent between 1929 and 1957. Compare this with the corresponding climb of merely 383 percent in Tennessee’s total civilian income. Today, moreover, 292,000 workers earn their daily bread and meat in manufacturing, double the number of three decades ago. Because of such a rapid advance, Tennessee now ranks as the second most im portant manufacturing state in the Sixth Federal Reserve District. An ample labor supply, abundant raw materials, and a blooming market for finished products, all have combined to make it a mecca for manufacturers. Along with the growth in manufacturing has come a change in the state’s industrial composition, a gradual shift away from industries using relatively small amounts of capital in relation to labor. In 1939, textiles, food, lumber, and apparel, ranking among the top six industries in the state, accounted for 45 percent of the wage and salary income earned by workers in manufacturing. In 1957, they contributed but 29 percent of the income. In contrast, chemicals and primary and fabricated metals climbed from 27 to 37 percent in the same period. Federal Reserve Bank of Atlanta tabulations of an nouncements of expenditures for new plants and expan sions of existing ones also indicate the shift. In the four year period 1954-57, well over 100 new or expanded manufacturing plant projects were announced, costing more than $100,000 each and representing an investment in capital goods of over a quarter of a billion dollars. The biggest investor was the chemicals and allied products in dustry. Following closely were the primary metals and paper industries. Textiles, the traditional industrial leader, accounted for a small fraction of the total, as did food processing. As a result of such changes, the textile in dustry has yielded leadership to the chemicals industry. As to manufacturing’s geographic distribution within Tennessee, the chemicals and allied products industry has tended to concentrate in the eastern part of the state, primarily in the tri-cities area of Bristol, Johnson City, and Kingsport. Approximately two out of five people engaged in manufacturing there are employed in the chemicals industry. The Chattanooga and Knoxville areas are the major textile centers in Tennessee. The Nashville vicinity has a rather broadly diversified manufacturing structure with no single industry accounting for as much as a sixth of the total manufacturing employment. Agriculture Slips As with manufacturing, conspicuous changes have occurred during the last few decades in agriculture, one time the state’s leading producer of in come. Tennessee’s cash farm income has advanced at a high but considerably slower rate than that experienced in other productive sectors. Because of the lag, agricul ture today accounts for an appreciably smaller proportion of the state’s income than in the past. In 1929, for example, 20 percent of the personal income received by Tennesseans came from agriculture. By 1950, it had dropped to 10 percent and by 1957, to 6 percent. Agriculture’s record is nevertheless decidedly impres sive. Tennessee’s cash receipts from crop and livestock production totaled $125 million in 1930. By the eve of World War II, $17 million was added to that figure. Farm cash receipts then peaked at $525 million in 1952 but slipped to $437 million in 1955 because of the agri cultural recession affecting farmers throughout the nation. Cash receipts in 1958 are estimated at half a billion dollars. Despite rising cash receipts, farmers’ per capita net income has failed to reach a parity with urban workers. Thus there has been a movement from the country to the city. Tennessee’s farm population in 1957 was • 5 • about half a million below the 1920 figure of 1,290,000. Too, there are fewer operators and farms. Although the average farm today is larger than in the past, it is still quite small and, consequently, yields a comparatively low income. Because of this, many farmers have found it necessary to seek part-time off-farm employment to supplement their incomes. Also, in the wake of these developments has come greater farm mechanization to improve productive efficiency and output. Tennessee farmers have taken to shuffling resources from less- to more-productive uses to boost income. This has meant primarily a movement away from crops to live stock. Acreage-control programs for cash crops have hastened the development by encouraging farmers to di versify and find better uses for their land and labor. Now income from livestock and poultry products equals that from crops. Cattle, hogs, dairy products, and poultry are the chief livestock items. Cotton and tobacco are the prin cipal cash crops, accounting in recent years for about two out of every five dollars of total farm income. The Summing Up One word—growth—characterizes the last 40 years of experience of both the Nashville Branch of the Federal Reserve Bank of Atlanta and the state of Tennessee. With out much stretch of the imagination, one can easily and reasonably envisage further progress resting upon capital development, exploitation of the state’s abundant natural resources, and an increased diversification in agriculture, manufacturing, and other areas. As in the past, the Nashville Branch of the Federal Reserve Bank of Atlanta will play an important role in this expected development. B asil A. W a p e n s k y The new Nashville Branch building was formally dedicated on Friday, December 12. For this occasion the Directors of the Federal Reserve Bank of Atlanta held a Joint Meeting with the Boards of the Nashville, Birmingham, Jacksonville and New Orleans Branches. At a luncheon preceding the dedication ceremonies, Governor Charles N. Shepardson, member of the Board of Governors of the Federal Reserve System, addressed the group. Many other distinguished bankers and businessmen were present at the opening. Upsurge in Time Deposits At a time when many other economic measures were showing declines as a result of the recession, time deposits at Sixth District member banks grew at an unprecedented rate. All the District states have shared in the sharp rise in time deposits at banks that began in early 1957. Judg ing from the latest data available, the growth in time deposits is continuing although at a slightly slower rate. Time deposits consist of a wide variety of accounts. Time Deposits at Sixth District Member Banks (Thousands of Dollars) June 6, 1957 June 23, Percent of 1958 Total Increase Individuals, partnerships, and corporations: . 1,800,678 2,216,142 Savings ................. 1,618,946 1,927,538 Christmas savings and similar accounts . . 18,646 19,176 Certificates of deposit . 117,114 193,361 Personal accounts . 77,892 103,150 Corporations and institutions . 39,222 90,211 Open accounts . . . 45,972 76,067 U. S. Government and Postal Savings . . 28,689 23,830 States and political subdivisions . . . 132,060 165,816 B anks.......................... 14,475 18,408 Total Time Deposits . 1,975,902 2,424,196 + 92.7 + 68.9 + .1 + 17.0 + 5.6 + 11.4 + 6.7 — 1.1 + 7.5 + .9 + 100.0 Some of them represent actual savings, since they are probably invested for long periods. Most regular savings accounts, on which the holder may be required to give advance written notice of withdrawals, are of this type. In addition, a large proportion of time certificates of deposit may be considered actual savings. State and local governments, foreigners, and some holders of “open ac count” balances, for example, keep funds temporarily in time deposit accounts but do not consider them as long term investments. Time deposits at all Sixth District member banks totaled $2,500 million at the end of October. This repre sented a rise of 20 percent since the end of December 1957. During 1957, time deposits rose at a slightly faster rate—22 percent. The annual change for previous years had been much smaller, averaging about 8 percent. Most of the rise in time deposits during the last two years is probably associated with the hike in early 1957 in rates banks pay on savings deposits, although we do not know all the reasons for the accelerated increase. The increase followed action by the Board of Governors of the Federal Reserve System and the Federal Deposit Insurance Corporation in late 1956 that raised the maxi mum rate insured banks are permitted to pay from 2 ^ percent to 3 percent. Time deposits began to rise sharply in January 1957, presumably as individuals, businesses, • 6 • Time Deposits Sixth District Member Banks 1955-58 and governments shifted funds from other types of sav ings to take advantage of the higher rates. Other types of savings undoubtedly were affected by this action, but it is difficult to determine which ones and to what extent. Although data on life insurance sales and savings and loan shares indicate that Sixth District residents were adding less rapidly to those forms of savings, part of the slower growth may reflect a re duction in income associated with the recession. It is possible that some individuals and corporations shifted funds from investment in Treasury bills or other securities to time deposits. In addition, the higher interest rates on time deposits may have prompted individuals and busi nesses to reduce their checking account balances by trans ferring funds to their savings accounts. Although each of the District states has shown an increase in time deposits during the last two years, most of the sharp gain has been accounted for by member banks in Mississippi and Florida. In Mississippi the rate of growth has been exceptional, 19 percent in 1957 and 59 percent so far in 1958. or 89 percent for the twoyear period. Time deposits at Florida member banks chalked up the next best record, with an increase of 62 percent since the end of 1956. Increases in the other states during the two-year period were somewhat less: Alabama and Georgia, 43 percent; Louisiana, 33 percent; and Tennessee, 30 percent. Reserve city and country banks shared in the time deposit growth. Reserve city banks—the larger banks located in Atlanta, Birmingham, Jacksonville, Miami. Nashville, and New Orleans—reported a 34-percent gain between the end of 1956 and October 1958. The remain ing banks—so-called country banks—gained 50 percent. The reports of condition that member banks prepare regularly provide information on the types of time deposit balances that are responsible for the recent growth trend. The accompanying table shows the degree to which each type of account contributed to the rise from June 6, 1957, to June 23, 1958, the two dates for which the most com prehensive data are available. The table also shows the total amounts of the various types of accounts. Although most types of savings rose significantly during this period, time deposits of individuals, partnerships, and corporations accounted for most of the increase. Within this category, savings deposits of individuals and non profit institutions, the largest component, were responsible for a large part of the rise. Time certificates of deposit, which are about equally divided between individuals and businesses, also rose appreciably as did time deposits held on open account. The only type of time deposits that declined at District member banks during the period was United States Government deposits. States and local governmental units, on the other hand, increased their deposits. W. M. D a v is Employment Picks Up The current employment picture in the Sixth Federal Reserve District enables us to draw a happy contrast with what was happening just a year ago. This year employment is increasing; last year it was decreasing. The direction of change differs, but the degree of change is similar; it was small last year and has been small so far this year. Looking back over this year and last we see that nonfarm employment in the District declined somewhat from August 1957 through May 1958 and has since partially recovered. Between the high and low points, employment dropped slightly less than 3 percent; it had regained about half the loss by October. Recovery in this District has been about equal to that in the nation, but the previous decline here was less. C r o s s Currents Although District employment has picked up in recent months, a look at the details of the developments reveals a lot of variation from one type of activity to another and from place to place. This, of course, is not unusual in the early stages of business recovery, since each type of activity is subject to its own market influences, and activities vary among the states. As recovery advances, of course, increases typically become more and more widespread. We have yet to see whether or not the cur rent recovery will continue to follow the typical pattern. Both manufacturing and nonmanufacturing employ ment have risen since last May, but manufacturing em• 7 • Nonagriculturai Employment Sixth District States 1955-58 1955 1956 1957 1958 ployment has shown the greater gain—2 percent, com pared with slightly more than one percent for nonmanu facturing. Previously, manufacturing employment had shown a greater decline. Employment changes in these two broad fields, therefore, have been in general accord with the typical pattern of fluctuations, in which manufac turing activity tends to show greater variations, both on the downswing and upswing of business activity. The increase in total manufacturing employment is also the net result of a variety of movements among different types of manufacturing activity. The overall District gain reflects widespread improvement among the various types of manufacturing activity with the exception of the fabricated metals and chemicals industries. Particu larly important are recent gains in the textile, apparel, and lumber industries. The food industry has also shown some recovery recently, and the transportation equip ment industry has been strong despite the decline in Octo ber, which came about largely because of strikes in the automobile industry. Employment in primary metals, at a reduced level for about eight months, improved mod erately in October. The person looking for neat generalizations about the Sixth District’s complex economy, however, would be frustrated to learn that not all employment figures every where are moving upward. Lumber employment, for example, has improved mostly in Florida, Georgia, Missis sippi, and Tennessee; Alabama and Louisiana have shown little change. Transportation equipment is another exam ple: we find strength in Alabama, Georgia, and particu larly Mississippi more than offsetting weakness in Louisi ana and Tennessee. The picture is no less varied among the District’s nonmanufacturing activities. As already noted, total nonmanufacturing employment has picked up in recent months, but this has been largely the result of continued increases in the number of government workers and employees in finance, insurance, and real estate. Employ ment in retail and wholesale trade, which provided about one out of every four nonfarm jobs last year and which showed a slight seasonally adjusted decline earlier this year, has changed little in recent months. Employment in construction, mining, and transportation, communi cations and public utilities has also stabilized recently below last year’s peaks. Where increases are not occur ring, therefore, we see that for the most part stability has replaced previous declines in the total District picture. Within each type of nonmanufacturing activity, one fre quently finds considerable variation in employment among District states. Construction employment is a good ex ample. Although the District’s seasonally adjusted total has been relatively stable over the last six or eight months, only in Mississippi and Tennessee, where changes have been about what one would expect for the time of year, has stability characterized employment. Florida, Georgia, and, more recently, Alabama, have shown increases, and Louisiana has reported a decline. In transportation, communications and public utilities one finds relatively little change recently in most District states after declines from last year’s peaks. Georgia, however, has shown some improvement; Louisiana has continued to show declines. The transportation industry in Louisiana, more dependent on foreign trade than other District states, has felt the effects not only of the national recession but also of a sharp decline in foreign trade from last year. S t a t e by State Although a person may be convinced that cross currents exist in the Sixth District employment picture, there is, as we saw earlier, an overall picture for the District. Similarly, there is an overall picture for each state that takes form from frequently diverse movements within its boundaries. The cross currents discussed above have an impact in each state that reflects its economic structure. Looking at the employment picture in each state, one sees that the overall recovery in the Sixth Federal Reserve District reflects mainly increases in employment in Florida, Georgia, and Mississippi. The recovery in Florida, be ginning in April, had been particularly sharp through Sep tember, but the upward movement that had set new rec ords in July, August, and September was halted in Octo ber. Georgia’s pickup in employment, which began in June, has been more modest, and the total number of nonfarm workers is still below the record set in late 1956. Tennessee has shown a slight upward tendency in season ally adjusted employment in recent months. Employment in Alabama improved in October after remaining at a re duced level for eight months or so. In Louisiana employ ment changed little in September and October. Previously* declines in a number of important activities such as petroleum production, construction, transportation, an shipbuilding and repair had combined to pull the number of workers on the job down more sharply in Louisiana than in other District states. P h i l i p M. W e b s te r The Monthly Review is published as a service to mem ber banks. Businessmen, firms, organizations, indi viduals, and others, however, may receive it regularly* Address requests to the Publications Section, Research Department, Federal Reserve Bank of Atlanta, Atlanta 3, Georgia. • a* Transition in the Tats and Oils Industry District Processors Seek Efficiency Problems that haunt an industry with excess capacity are exemplified by the fats and oils industry in the Sixth Fed eral Reserve District. During the Second World War the Government encouraged farmers to increase their soy bean, cottonseed, and peanut production to relieve a critical war-born shortage of fats and oils. Processors and manufacturers in the industry found it profitable to buy more and better equipment to handle the larger sup plies. Researchers worked unceasingly to find substitutes for those oils in critical demand. Their efforts were suc cessful and many states over the nation found new oil crops—the bread of life for this growing industry. Phenomenal growth records were made in vegetable oil production. Nationally, we shifted from one of the world’s largest importers of fats and oils before the war to the world’s largest exporter. Our annual production of fats and oils increased from 6.7 billion pounds of crude oil in 1936 to 14.5 billion pounds last year. After the war ended, American farmers and farm in dustries entered a transition period unequaled by any previous period in our history. Capital flowed to agri culture, and low-cost producing areas were able to rapid ly increase their production. With war demand gone, some plants in industries built on a war-time economy found themselves in trouble. Among such industries in the Sixth District was the fats and oils industry. Peanut and cottonseed output dropped and this District’s share of the nation’s industry declined. Today we find the District fats and oils industry still ad justing to these new conditions. Many individual vege table oil processors are re-evaluating their own operation, hoping to improve their relative position. The industry's S c o p e Products and Processes Fats and oils come from ani mals and oil-bearing crops and are used in making both edible and nonedible products. Most edible fats and oils are utilized in four products. Vegetable oil supplies the principal ingredient for shortening and margarine; animal fats are consumed as butter or lard. Although total con sumption per person of fats and oils in this nation has changed little since the war, people do use more vege table oils and less animal fats than they once did. Under existing legislation, the largest single market for our fats and oils is the export market. During the 1957 marketing year, for instance, about one-third of our total output was exported; over a billion pounds of this was soybean and cottonseed oil, and 70 percent of these moved under Government subsidies. Large exports were made to northwestern Europe and countries in the Mediterranean area under subsidy programs, which enable foreign na tions to use their own currency to buy our fats and oils. Most fats and oils are either by-products of other primary products or co-products. Animal fats are by products in meat packing, and meat processing in the Sixth District is increasing. Since the major product of plants processing animal fats is meat and not animal fats, however, those plants do not face the same problems con fronting the vegetable oil industry. Sixth District states, for example, have increased their edible animal fats and oil production about one-fourth since 1950. During that time, there has been little change in total vegetable oil production. The District’s vegetable oil industry is made up of three segments—crushing, refining, and manufacturing. Crush ers, who extract crude oil from oil seeds, perform a dual operation in that they produce two products from the seeds —oil and meal. Sold principally as a high protein feed for animals, meal is a finished product ready for sale on the retail market. The oil, however, is in crude form, and needs further processing. District crushing mills are small in size compared with those in other areas. Not only are they small in size but they extract less than 10 percent of the national supply of vegetable oils. They are, moreover, widely dispersed because they process locally grown oil seeds, which are grown in a wide area. Fats and Oils Domestic Production, Imports, and Exports United States, Selected Years, 1936-57 Year Production Million Lbs. Imports Million Lbs. Exports Million Lbs. 1936 1939 1942 1945 1948 1951 1954 1957 6,669 7,825 9,503 9,106 10,156 12,016 12,891 14,501 2,289 1,862 989 904 1,290 1,160 994 983 232 554 873 991 912 2,402 3,872 4,590 Source: 1958 issue. The Fats and Oil Situation, N o. 190, Table 19, Page 36, May Impurities are removed from crude oil in the refinery, the second step in processing fats and oils. Refineries, in general, are larger than crushing mills; often one refinery refines crude oil from several mills. Just where processing oil ends and manufacturing a finished product begins is difficult to determine. Some manufacturers are equipped to refine the oil they use, and some buy it already refined. In either case, most refined vegetable oil in this District is used in manufacturing shortening and margarine. Size The vegetable oil industry is much smaller in the District than in some other areas, although it is not so small when compared with related industries in the Dis trict. In 1954 it added 86 million dollars in value to vegetable oil products; the meat packing industry added 72 million dollars. Its size, however, can be measured in another way: by the 6,800 workers employed. This measure places it below meat packing, which employed 14,000 workers in 1954. Nevertheless, the industry’s pay •9 • roll pushed District workers’ incomes up 20 million dol lars that year. Technological Changes Tremendous technological changes in the vegetable oil industry have affected its de velopment. Before World War II, for example, most vegetable oils were extracted from seeds by hydraulic presses. Using these presses required large amounts of labor, about 14 man-hours per ton of seeds. In addition, the work was extremely unpleasant. In fact, many work ers found the heat unbearable. Furthermore, operators were unable to closely regulate temperatures and thereby control the quality of the oil they produced. Hydraulic presses are not used much now. Many have been replaced by more efficient screw press expellers or chemical solvent extractors. In some cases, these two machines are used together in what is called a prepress solvent extractor. The United States Department of Ag riculture estimated last year that 95 percent of all soy bean oil was extracted by solvent and prepress solvent extractors. Processors say that only four man-hours per ton of seeds are needed with a prepress solvent extractor. Improved extraction methods increase the oil yield. According to the USDA, the average recovery for cotton seed oil in 1957 was as follows: Solvent extraction, 376 pounds per ton of seeds; screw press, 327 pounds; and hydraulic press, 312 pounds. Investment and Plant Size As efficient as the new equipment may appear, it carries a big price tag, and small mill owners often find they simply cannot afford it. According to 1953 prices, a solvent soybean crushing mill with 25 tons a day capacity would cost a crusher over half a million dollars. The size of the mill could be increased fourfold by investing an additional half a million dollars. Research shows that it cost over 60 cents a bushel to extract soybean oil in small solvent plants in 1953. Large reductions in costs were possible when the mill size was increased to 100 tons a day. Still further increases in size, however, produced only small reductions in costs. Because most oil mills in this District are small, averag ing around 50 tons capacity a day, it would appear on first thought that crushers could lower their costs by in creasing their plant size. They know, however, that larger mills would be useless unless they could obtain sufficient oil seeds to crush. Their problem is basically this: Soy beans and cottonseed now account for over 90 percent of all edible vegetable oils produced in the United States. This year, for example, farmers grew enough soybeans to produce about 6 billion pounds of oil and enough cottonseed to yield iy 2 billion pounds. But most of this production was outside the Southeast. In fact, nine-tenths of the soybeans are now grown in Illinois, Iowa, Ohio, Indiana, Minnesota, Missouri, Kentucky, and Kansas! District farmers, once leaders in cotton production, will grow only about one-fifth of the national crop this year. These are important ratios to District crushers, as most oils are extracted near the producing area. Transporta tion costs for shipping oil seeds prohibit crushers in local markets from competing for oil seeds on a distant market. This pattern is worsening because freight rates in the nation have risen over 100 percent since 1946. This means in some District areas where smaller and smaller crops are grown each year crushers lacking raw materials are finding it hard to survive. Local oil seeds are simply not available. Some crushers, therefore, have sold or abandoned their plants and many others are operating at less than capacity. Only the most efficient crushing mills and those having a specific local market advantage with respect to supplies will be able to operate at capacity this year. Manufacturing of oil products, in contrast to the crush ing process, tends to be located near consuming markets. In 1957, for instance, 13 manufacturers in or around New York City made shortening, margarine, or both. Most oils used in those plants were shipped in from the Midwest. Many edible oil products used in this District are manufactured here. Sixth District states have 9 mar garine and 14 shortening manufacturers producing over 370 million pounds of margarine and shortening each year. Those manufacturers apparently find that they can ship raw oils cheaper than they can ship a finished product. Meanwhile, population is growing in this District and people are eating more vegetable oil products than ever before. Even now, large quantities of oil are shipped to the Southeast from other areas, especially from Illinois and other soybean producing states; and further gains may occur unless oil crop output here increases. Prospects for Grovfth are Dim Available facilities to crush more seeds and a rising de mand for vegetable oil in the District appear favorable for growth in the industry. Growth, however, will not be easily made. Competition is keen in all segments: Cotton seed oil is competing with soybean oil; butter is compet ing with margarine; small crushing mills are competing with larger ones; and manufacturers are competing for added sales. Farmers growing some oil-bearing crops are under acreage allotments and others have more profit able uses for their land, labor, and capital. Soybean growers in Mississippi and Tennessee, however, have in creased their plantings appreciably during the last few years and we may see some further growth in those areas. Consequently, as time goes on crushers in M is s is s ip p i and Tennessee likely will increase their plant size. N° rapid gain, however, is expected because i n c r e a s e d o ilcrop production comes gradually. Then too, if a c r u s h e r expands his plant more rapidly than oil-crop p r o d u c t i o n expands in his area, he stands to lose because his in creased transportation costs for drawing oil seeds fro m a larger area may outweigh the lower costs he obtains from operating a larger mill. All is not dark for crushers in other parts of the D is t r i c t ; a large number should remain in business and m a y b e even grow some in the years ahead. The p r o s p e c t s a re d i m , however, for inefficient and poorly located o p e r a t o r s . Manufacturers of oil products, on the other hand, p r o b ably will grow about proportionately with p o p u l a t i o n growth. One thing is certain: Increased efficiency in a ll segments is in prospect and greater efficiency should bet ter serve the economy and strengthen the industry as a whole. N. C arson • 10 • B r a n an National Summary of Business Conditions Industrial production advanced further in October. The gain was limited by work stoppages, however, which also caused manufacturing employment to decline moderately. Construction activity and new housing units started con tinued to increase, and retail sales advanced. From early October to early November prices of basic industrial ma terials increased further, but the average level of whole sale prices continued stable. Common stock prices rose sharply to record highs while bond yields showed little change. tained. The average factory workweek declined, contrib uting to a reduction in average weekly earnings. Both the workweek and weekly earnings remained somewhat above a year ago. Unemployment declined 300,000 fur ther to 3.8 million. The seasonally adjusted rate of un employment was 7.1 percent of the civilian labor force compared with 7.2 percent in September and 7.6 percent in August. Industrial Production Seasonally adjusted retail sales, which had declined in September, rose 2 percent in October almost to the peak reached in the summer of 1957. Department store sales changed little, but sales of most other groups of retail stores increased. Auto deliveries recovered somewhat following the introduction of new models, although sup plies were limited. Stability in the wholesale commodity price index con tinued in October and early November. While prices of nonferrous metals, hides, rubber, and some other basic materials advanced, most industrial commodities were unchanged. Prices of farm and food products declined slightly. Harvesting of the large crops was reflected in decreases in prices of feed grains, and wholesale prices of meats declined as meat production increased seasonally. The Board’s seasonally adjusted index of industrial pro duction rose one point in October to 138 percent of the 1947-49 average— 9 percent above the April 1958 recession low but 5 percent below the summer of 1957. Gains among non-durable goods continued widespread in October and output was at a record rate. Output of min erals declined slightly reflecting curtailments in crude oil and coal. Production of durable goods remained at the September level. Auto assemblies increased in October from the sharply reduced September level, but output continued to be held down by work stoppages and dealers’ stocks showed a contra-seasonal decline. Schedules for November indicate a doubling of output from the October seasonally adjusted level of 67 percent of the 1947-49 average. Production of glass, also affected by strikes, declined in October. Out put of most other construction materials was maintained, and nonferrous metals continued to increase. Steel mill operations rose about one-tenth to 74 percent of capacity in October and edged up in early November to 75 percent. Production of furniture and most other consumer durable goods was apparently maintained at advanced levels, while activity in most business equipment lines was unchanged. Construction Private housing starts increased further in October to a seasonally adjusted annual rate of 1,260,000 units, the highest level in three years. Total new construction put m place reached a record of nearly $51.5 billion, on a seasonally adjusted annual rate basis. The rise in Octo ber was accounted for mainly by gains in private residen tial and public highway construction. Commercial and public utility building increased slightly and industrial construction was unchanged following more than a year of continuous decline. Employment Nonfarm employment, seasonally adjusted, declined 120,000 in October to 50.7 million, reflecting the indus trial disputes in durable goods industries. In most other niajor industries, employment advanced or was main Distribution and Commodity Prices Bank Credit and Reserves Total credit at city banks increased somewhat between early October and early November reflecting largely growth in business and real estate loans. The increase in business loans, however, was less than usual for this time of year. Bank purchases of new Treasury issues in early October were about offset by subsequent sales, and hold ings of other securities declined. Member bank borrowings from the Federal Reserve have continued to average around $450 million, and ex cess reserves about $550 million. Reserves have been supplied by Federal Reserve purchases of U. S. Govern ment securities as currency in circulation, bank credit, and deposits have increased seasonally and the outflow of gold has continued. Security Markets Yields on intermediate- and long-term Treasury bonds were generally stable from mid-October to mid-November, and those on corporate and state and local government securities declined slightly. Yields on short-term Treasury issues declined substantially in late October but subse quently rose in response to a Treasury cash offering of $3.0 billion of June tax bills. Federal Reserve discount rates were raised from 2 to 2y2 percent, bringing them into closer alignment with money market rates. • 11 • Index for the Year 1958 MONTH PAGE AGRICULTURE Clouds Over the Cotton Economy N. Carson B r a n a n ............................... Sept. 3 Farmers More Prosperous in 1958 Arthur H. K a n t n e r ............................... Nov. 4 Farmers Use More Cash Arthur H. K a n t n e r ............................... April 2 BANK ANNOUNCEMENTS Jan. 4 Feb. 6 Mar. 6 April 6 May 3 June 6 July 6 Aug. 6 Oct. 6 Nov. 6 Dec. 14 BANK LOANS District Bank Lending Still High W. M. D a v i s ..........................................April 1 Flow of Bank Loans to District Business Alfred P. Jo h n so n ................................... Aug. 3 Loan Changes and the Business Upturn Harry B r a n d t ..........................................Sept. 4 Small Business, Tight Credit, and District Bankers, Harry Brandt and W. M. D a v i s ..........................................May 1 Term Loans Gain in Importance W. M. D a v i s ..........................................July 3 Member Bank Earnings Improve W. M. D a v i s ..........................................Mar. 1 Trust Department Earnings Up in 1957 W. M. D a v i s ..........................................June 5 5 3 COTTON 3 EMPLOYMENT Employment Picks Up Philip M. W e b s te r ................................ Dec. Nonfarm Employment (chart) . . . . June Oct. 7 6 6 FARM COSTS Farmers Use More Cash Arthur H. K a n t n e r ................................ April 2 Farmers More Prosperous in 1958 Arthur H. K a n t n e r ................................ Nov. 4 FOREIGN TRADE 5 INTEREST RATES Lower Interest Rates and Easier Credit Harry B r a n d t ...........................................June Spending for Better Roads Philip M. W e b s t e r ................................ SePt- 1 LIVESTOCK 6 ECONOMIC CONDITIONS, GENERAL “By the Light of the Silvery Moon . . . ” Earle L. R a u b e r .....................................Feb. 1 National Summary of Business Conditions . Mar. 5 Dec. 11 Four Decades of Progress at the Nashville Branch, Basil A. Wapensky . . . . Dec. 1 Marshaling Funds for Development Needs Philip M. W e b s t e r ................................ June 3 The Other Side of the Question, Where District Manufacturers Get Funds for Expansion, Charles T. Taylor . . . . Nov. 1 Whither Industrial Expansion This Year? Philip M. W e b s t e r ...................................... Jan. 3 INTERSTATE HIGHWAY PROGRAM DEPOSITS Upsurge in Time Deposits W. M. D a v i s ..........................................Dec. ECONOMIC DEVELOPMENT, SIXTH DISTRICT Farm Exports to Shrink Arthur H. K a n t n e r ........................................ Jan. CONSTRUCTION Clouds Over the Cotton Economy N. Carson B r a n a n ............................... Sept. Economic Characteristics of the Sixth Federal Reserve District Philip M. W e b s t e r ................................July 4 The Fruits of Diversity Charles T. T aylor..................................... Feb. 4 Loan Changes and the Business Upturn Harry B r a n d t .......................................... Sept. 4 Recession: Southern Style Charles T. T aylor..................................... July 1 FARM INCOME BANK OPERATIONS The Building Picture Philip M. W e b s t e r ............................... Nov. Charting the Course of Construction Contract Awards, Philip M. Webster . . Mar. MONTH PAGE ECONOMIC CONDITIONS, SIXTH DISTRICT Feed Manufacturing, A Growth Industry in the Sixth District, Arthur H. Kantner . . Aug. MANUFACTURING Feed Manufacturing, A Growth Industry in the Sixth District, Arthur H. Kantner . . Aug. Transition in the Fats and Oils Industry N. Carson B r a n a n ................................ Dec. • 12 • Q MONTH PAGE MONETARY POLICY Lower Interest Rates and Easier Credit Harry B r a n d t ..................................... Small Business, Tight Credit, and District Bankers, Harry Brandt and W. M. D a v i s ..................................... Tables June 1 May 1 Mar. 1 Oct. 1 OPERATING RATIOS Member Bank Earnings Improve W. M. D a v i s ..................... PUBLIC FINANCE Spending for Public Improvements Alfred P. Johnson . . . . MONTH PAGE SIXTH DISTRICT INDEXES Bank Debits Construction Contracts Cotton Consumption Department Store Sales Department Store Stocks Electric Power Production Farm Cash Receipts Furniture Store Sales Manufacturing Employment Manufacturing Payrolls Member Bank Deposits Member Bank Loans Nonfarm Employment Petroleum Production Turnover of Demand Deposits Jan. Feb.-Nov. 7 Dec. 15 Articles PULPWOOD Pulpwood Outlook Optimistic N. Carson Branan . . June 4 SIXTH DISTRICT BUSINESS HIGHLIGHTS 4 6 Jan. 7 Debits to Individual Demand Deposit Feb.-Nov. 6 Accounts c* Department Store Sales and Inventories SIXTH DISTRICT STATISTICS (Tables) REVENUE BOND FINANCING Spending for Public Improvements Alfred P. Johnson . . . . A Barometer of Sixth District Spending, New Indexes of Bank Debits Robert M. Y o u n g ............................... Oct. Department Store Sales and Stocks Indexes Leon T. K e n d a ll.....................................Jan. Oct. 1 Jan. 2 Feb.-Nov. 8 Dec. 16 UNEMPLOYMENT Variations in Unemployment Philip M. Webster . . . . April 5 Bank Announcements The Federal Reserve Bank of Atlanta is pleased to welcome to membership in the Federal Reserve Sys tem the First National Bank of Melbourne, Melbourne, Florida. The bank opened for business November 17. Its officers are Homer R. Denius, Chairman of the Board; C. Robert Brown, President; William C. Payne, Vice President and Cashier; V. Conger Brownlie, Vice President; Pearl Van Beveren, Assistant Cashier. Cap ital stock totals $400,000 and surplus $250,000. C. Covert, Jr. and L. A. Sanderson, Assistant Vice Presidents; Miss Pearl Gibson, Assistant Vice President and Assistant Trust Officer; A. L. Bates, Jr., Charles A. Curtis, Jr., and P. W. Davis, Jr., Assistant Cashiers. Capital stock totals $420,000 and surplus and un divided profits, $1,325,608. Debits to Individual Demand Deposit Accounts (In Thousands of Dollars) The Lake Region Bank of Commerce, Winter Haven, Florida, a newly organized norunember bank, opened for business November 18 and began to remit at par for checks drawn on it when received from the Federal Reserve Bank. Officers include Hart McKillop, Chair man of the Board; E. Clifton Lancaster, Executive Vice President; R. K. Harmon, President; Norman P. Judd, Vice President. Capital stock totals $465,000 and sur plus and undivided profits $155,000. On December 1, the Merchants and Farmers Bank, Meridian, Mississippi, a nonmember bank, began to remit at par. Officers are B. J. Carter, Jr., President and Trust Officer; R. E. Young, Executive Vice Presi dent; J. R. Waller, Jr., Vice President and Cashier; J. Department Store Sales and Inventories* Percent Change Place Sales Oct. 1958 from Sept. Oct. 1958 1957 10 Months 1.958 from 1957 Inventories Oct. 31,1958 from Sept. 30 Oct. 31 1958 1957 ALABAMA ................. Birm ingham .............. M obile..................... Montgomery.............. +9 +1 +23 +1 3 +5 — 0 +8 +9 — 1 —2 +1 — 1 +8 +7 — 10 — 11 F LO RID A ..................... Daytona Beach . . . . Jacksonville.............. Miami A r e a .............. M ia m i................. O r la n d o ................. St. Ptrsbg-Tampa Area . +3 5 +3 5 +53 +3 8 +4 0 +3 6 +2 3 +11 +1 5 +1 3 +6 +3 +16 +18 +3 +4 —1 +2 — 2 +2 +9 +7 —2 +1 +9 — 7 +2 +7 — 4 G E O R G IA .................. A t la n t a * * .............. A u g u s ta ................. Columbus.................. M aco n ..................... R o m e * * .................. Savannah ................. +1 — 4 +2 0 +1 3 +1 5 +2 2 +16 +4 +3 +3 +14 +13 —6 +2 +2 +3 —5 +7 +5 — 22 —5 +4 +4 — 3 +1 +8 +5 — 16 — 11 L O U ISIA N A .................. Baton Rouge .............. New Orleans.............. +2 1 +10 +2 3 — 2 — 1 — 2 M ISS ISS IP P I .............. J a c k so n .................. M e rid ia n **.............. +1 5 +14 +20 TENNESSEE .............. Bristol-KingsportJohnson City** . . . Bristol (Tenn. & Va.)** Chattanooga.............. Knoxville.................. +13 +15 +13 +12 +9 D IS T R IC T .................. +17 4 1 4 + 10 +7 — 2 +4 — 3 +10 —0 — 2 +1 +9 +1 2 — 2 — 1 +6 —3 +9 +3 +8 +6 — 12 __10 +5 —8 — 0 +1 — 4 +6 —5 +6 — 0 +7 — 4 +1 2 +9 +10 — — — +8 — 8 •Reporting stores account for over 90 percent of total District department store sales. **In order to permit publication of figures for this city, a special sample has been constructed that is not confined exclusively to department stores. Figures for nondepartment stores, however, are not used in computing the District percent -fa-gn Oct. 1958 Sept. 1958 Oct. 1957 Percent Change Oct. 1958 from 1958 Sept. Oct from 1958 1957 1957 ALABAMA 36,021 37,909 Anniston . . . . 40,098 748,469 733,013 Birmingham . . . 720,825 25,502 Dothan . . . . 26,747 29,265 Gadsden . . . . 34,452 31,459 32,536 Mobile . . . . 254,836 261,981 251,015 Montgomery. . . 148,628 165,178 167,039 Selma* . . . . 29,562 23,603 24,869 Tuscaloosa* . . . 51,588 47,110 45,849 Total Reporting Cities 1,360,593 1,301,876 1,305,085 765,554 Other Citiesf . . . 770,733r 681,400 FLORIDA 53,172 Daytona Beach* 53,968 49,185 171,544 180,500 192,742 Fort Lauderdale**. 38,686 33,296 Gainesville. . . 33,380 712,396 647,264 607,428 Jacksonville. . . Key West* . . . 13,762 12,225 13,828 56,721 69,721 Lakeland* . . . 68,075 Miami . . . . 754,877 676,112 726,087 1,040,482 Greater Miami* 1,145,156 1,087,656 Orlando . . . . 170,797 149,198 156,066 83.012 Pensacola . . . 88,410 77,473 St. Petersburg . . 165,422 159,062 152,064 Tampa . . . . 339,613 331,644 313,870 West Palm Beach* 117,766 103,261 112,261 Total Reporting Cities 3,107,709 2,905,157 2,788,240 Other Citiesf . . . 1,537,245 l,434,835r 1,344,407 GEORGIA Albany . . . . 61,509 53,819 66,159 Athens* . . . . 37,998 34,889 35.423 Atlanta . . . . 1,770,797 1,662,433 1,765,700 Augusta . . . . 101,134 86,408 94,768 Brunswick . . . 20,590 21,766 20,154 Columbus . . . 103,096 98.424 99,940 Elberton . . . . 8,650 8,462 8,519 Gainesville* . . . 50,114 50,958 51,936 Griffin* . . . . 17,% 3 17,021 16,876 LaGrange* . . . 20,786 22,865 17,710 Macon . . . . 114,862 105,929 112,926 Marietta* . . . 27,706 25,6% 26,321 Newnan . . . . 16,661 16,870 15,628 Rome* . . . . 43,994 39,664 41,876 Savannah . . . 194,638 190,182 175,669 Valdosta . . . . 24,146 22,176 25.030 Total Reporting Cities 2,614,644 2,586,402 2,445,795 Other Citiesf . . . 938,468 883,902 896,759r LOUISIANA Alexandria* . . . 70,714 72,624 69.030 Baton Rouge . . 209,447 200,334 196,370 Lafayette* . . . 60,795 55,461 57,619 Lake Charles . . 88,2S3 86,794 79,371 New Orleans . . 1,266,117 1,320,191 1,238,821 Total Reporting Cities 1,695,326 1,731,440 1,645,175 Other Citiesf . . . 620,256 586,287r 637,575 M ISSISSIP P I Biloxi-Gulfport* . 44,075 42,636 38,996 Hattiesburg . . . 34.442 31,384 32,918 Jackson . . . . 287,091 274,894 199,3% Laurel* . . . . 24,975 21,961 24,465 Meridian . . . . 42,386 40,845 37,816 Natchez* . . . 21,597 20,604 21,900 Vicksburg . . . 19,368 19,479 20,235 Total Reporting Cities 473,934 455,841 371,708 Other Citiesf . . . 231,805 233,834r 228,506 TENNESSEE Bristol* . . . . 44,711 37,919 41,726 Chattanooga . . 297,297 294,728 270,717 Johnson City* . . 41,940 38,261 38.012 Kingsport* . . . 80.442 72,742 71,635 Knoxville . . . 219,344 215,557 215,510 Nashville . . . . 732,846 606,997 658,314 Total Reporting Cities 1,416,580 1,320,174 1,241,944 Other Citiesf . . . 518,157 549,210 473,106r SIXTH DISTRICT 15,280,271 14,613,388r 14,206,003 Reporting Cities . 10,668,786 10,217,834 9,881,003 Other Citiesf . . 4,395,554r 4,325,000 4,611,485 Total, 32 Cities . . 9,123,632 8,777,924 8,458,519 UNITED STATES 344 Cities . . . 212,894,000 195,205,000 204,168,000 +1! +9 +6 —1 +2 +15 -0 ++5 1■2• +1 -6 -8 —1 +11 +8 +19 +10 +4 -1 +25 +13 +5 +4 +10 -1 +12 +1 —1 +8 +10 +12 , - + 16 + 10 +0 +2 +7 +16 +17 +13 +23 +4 + 5 +10 +9 +14 +3 +10 +10 +2 +12 +7 +12 i] +l + 8 +? +5 +14 1-14 +11 +? . ■ +11 Hi # +7 +14 _7 +9 +0 +7 +14 +7 +7 +17 +5 +§ +2 +7 il 3 3 ±5 ±l i\ +* +S t? A il ±! £ —4 ++.| +9 +5 +; -1 +1+Z + 6io —0 +5 i! +6 +9 +10 +9 +1 il 1-I 3-3 +3 ■5 +4 +2 +1 3 +1 0 +44 +’ +3 +22 +M +? ? *3 —3 il ±1 _ ±? ++1 +” H S S +; +7 +m +1 ++“ n il ti +4 i\ +8 % +3 +9 + 4____±5 •Not included in total for 32 cities that are pvt of the National Bank Debit Series. fEstimated. r * 14 • Sixth District Indexes Seasonally Adjusted (1947-49 = 100) 1957 SIXTH DISTRICT 1958 SEPT\ OCT Nonfarm Em ploym ent..................... 136 Manufacturing Em ploym ent.............. 120 Apparel................................... 166 Chem icals................................133 Fabricated M e t a ls ..................... 186 F o o d .......................................112 Lbr., Wood Prod., Fur. & Fix. . . . 77 Paper & Allied P ro d u c ts.............. 159 Primary M e t a ls ......................... 105 Textiles................................... 90 Transportation Equipment.............. 235 Manufacturing Payrolls .................. 198 Cotton Consumption**..................... 91 Electric Power Production**.............. 299 Petrol. Prod, in Coastal Louisiana & M ississip p i**.............. 164 Construction C o n tra c ts*.................. 315 Residential................................ 324 All O t h e r ................................ 308 Farm Cash Receipts......................... 89 ................................... 70 , • ............................ 152 Dept. Store Sa le s*/** .................. 168 A tla n ta ................................... 154 Baton R o u g e ............................ 181 B irm in gh am ............................ 134 Chattanooga............................ 147 J * * “ " ....................................I l l Ja ck so n v ille ............................ 134 K n o x v ille ................................ 156 ................................... 141 U ianJ , ................................... 249 New O r le a n s ............................ 151 Tampa-St. Petersburg........................ 189 Dept. Store Stocks* ..................... 205 Furniture Store S a l e s * / * * .............. 151 Member Bank D e p o s its * .................. 160 Member Bank L o a n s * ..................... 267 Bank D e b its*................................ 234 Turnover of Demand Deposits* . . . . 144 In Leading C itie s......................... 158 Ai * £ i2?.Le*ding C it ie s ..................H O ALABAMA 135 119 166 131 186 H i 78 161 106 89 220 195 84r 303 220 1% 84 299 167 283 334 241 99 84 158 156 161 261 288 239 104 90 152 163 187 131r 141 102 119r 139 136 246r 205 123 147 115 130 144 143 231 i 40 149 145 NO\T 135 118 166 131 185 in 76 159 101 88 154 177 195 211r 206 155 161 267 230 136 148r 160 267 232 138 145 101 144 99 Nonfarm Em ploym ent.................. 122 Manufacturing Employment . . . . 109 Manufacturing PayreHs.................. 186 Furniture Store S a l e s .................. 133 Member Bank D eposits.................. 139 Member Bank L o a n s..................... 223 Farm Cash Receipts..................... 83 Bank D e b it s ......................... 211 FLORIDA ............................ Nonfarm Em ploym ent..................181 Manufacturing Employment . . . . 177 Manufacturing Payrolls.................. 290 Furniture Store S a l e s ..................181 Member Bank D ep osits.................. 209 Member Bank L o a n s..................... 417 Cash Receipts..................... 180 . Bank D e b it s ..................... 340 GEORGIA ..................... Nonfarm Em ploym ent.................. 129 Manufacturing Employment . . . . 118 Manufacturing Payrolls..................191 Furniture Store S a l e s .................. 145 Member Bank D ep osits..................141 Member Bank L o u is ..................... 216 Cash Receipts..................... 121 123 112 188 128r 114 128 118 1% 149 141 213 127 u f i a s f .........................219 209 207 Nonfarm Em ploym ent.................. Manufacturing Employment . . . . Manufacturing Payrolls.................. Furniture Store S a le s * .................. Member Bank D e p o s its * .............. Member Bank L o a n s * .................. P ™ Cash Receipts..................... 134 122 112 185 133 138 138 223 222 82 196 ** 178 180 88 205 179 178 287 156r 210 420 165 34a 129 116 186 146r 140 215 133 287 175 212 423 184 332 132 101 101 99 173 205 153 269 69 172 183r 153 268 92 170 153 269 89 218 206 126 123 206 90r 151 293 77 125 w ssfssffw ’ . . . . . . . . . . . . . . . . . . . . . . . 224 Nonfarm Em ploym ent.................. 126 Manufacturing Employment . . . . 123 Manufacturing Payrolls.................. 212 Furniture store S a le s * .................. 98 "ember Bank D e p o s it s * .............. 150 "ember Bank L o a n s * .................. 290 Re ce ip ts..................... 53 ......................... 172 Nonfarm Em ploym ent.................. 120 Manufacturing Employment . . . . 119 E 2 !£ act“rin« PaS"<>«s.................. 191 Furniture store S a le s * .................. 109 ■ember Bank D e p o s it s * .............. 146 Member Bank L o a n s * .................. 234 E*nn Cash Receipts..................... 68 D e b its *.......................... 2 0 7 201 121 205 109 154 295 79 177 120 118 190 101 147 233 92 200 119 118 188 108 147 235 96 205 DEC. 134 118 164 132 181 111 76 159 100 89 226 194 78 295 175 259 294 229 128 103 172 170 156 201 126 145 117 133 156 149 255 147 207 207 151 161 269 240 149 160 113 121 107 173 132 139 JAN. FEB. MAR. APR. MAY JUNE JULY AUG. 134 117 167 130 181 114 75 158 133 115 167 129 177 113 74 156 91 87 133 115 165 127 174 132 114 161 131 176 132 113 167 133 176 109 72 157 93 85 172 183 75 297 133 115 170 131 183 109 72 158 91 84 133 115 166 131 186 133 115 164 130 183 108 73 158 89 85 % 88 200 215 187 82 317 182 79 325 169 264 272 257 119 97 161 157 151 181 170 298 293 303 118 92 156 147 147 171 121 142 109 127 146 139 234 132 192 202 151 162 269 244r 146 157 111 122 105 170 132 140 224 111 128 99 116 128 137 227 135 174 199 125 163 269 233 144 155 112 120 110 110 72 157 91 85 194 183 79 311 72 158 90 85 187 182 74 306 168 309 279 333 162 318 301 332 150 134 177 156 153 164 117 136 99 108 141 151 242 135 181 190 138 168 273 237r 141 160 106 164 369 324 406 157 145 176 166 154 172 130 145 107 201 192 80 312 167 387 365 405 165 146 184 176 169 199 129 144 106 126 137 165 259 145 111 73 157 90 84 198 176r 389 394 384 136 118 182 183 183 187r 147 161 124 138 156 183 285 147 219 192 153r 176 281 229r 148 166 114 184 n.a. n.a. n.a. 105r 82 185 167 158 179r 133 150 107 129 151 147 250 140r 209 198 145r 175 282 256r 147 161 118 174r 138r 152 234 97 230r 220 183 181 311 171 234 457 216 386r 183 182 315 153 235 463 n.a. 391 191 139 174 279 233r 147 168 110 140 224 128 199r 119 103 162 134 145 226 152 204r 119 104 166 135 146 230 142 200r 119 105 174 128 150 231 147 206r 119 106 175 130 150 235 143 209r 119 104 177 145 154 233 130 207r 176 167 271 153 216 444 239 337r 177 171 280 157 441 249 322r 180 174 292 155 227 447 305 354r 182 176 301 156 225 449 214 361r 182 182 307 172 233 456 125 114 182 136 152 217 167 212r 126 113 189 133 146 213 129 219r 122 139 148 233 125 186 193 132 166 270 230r 139 150 110 120 102 122 112 202 205 177 177 288 187 176 171 278 161 176 171 273 142 425 189 345 425 162 344r 426 178 326r 175 168 264 146 215 431 151 319r 128 117 190 149 142 213 140 215 128 115 183 137 142 213 143 222r 126 114 177 113 144 126 113 177 127 147 125 112 171 141 210r 150 202r 150 212r 124 109 167 139 148 213 157 207r 132 131 98 169 178 155 270 113 193r 130 96 168 193 156 269 221 131 98 171 177 153 266 116 205r 209r 129 % 171 171 154 269 96 206r 129 95 169 181 157 271 115 203r 127 94 166 178 159 272 148 211r 127 94 163 177 153 264 143 208r 125 126 125 125 125 124 124 123 226 113 186 337 145 191r 124 126 230 185 308 128 182r 125 123 221 107 186 334 143 190r 184 367 138 207r 118 117 112 112 178 106 156 242 116 197r 179 109 158 245 103 197r 117 114 181 104 161 249 113 199r 117 114 186 105 156 244 114 201r 111 202 212 % 172 203 153 270 114 120 210 119 157 299 107 178 118 116 186 113 147 237 96 206 120 212 122 211 104 164 302 100 177 119 116 179 106 148 239 92 205r 211 212 122 207 86 166 303 92 175r 117 112 179 89 149 238 86 196r 165 122 211 111 122 226 95 172 304 115 172r 118 113 181 101 155 239 104 197r 121 147 212 221 % 221 187 n.a. n.a. n.a. n.a. n.a. n.a. 165 154 185p 131 154 198 83 313 147 159 244 137 203 191 143 170 276 226r 141 155 121 134 116 166 126 180 109 76 159 95 85 193 197 87 n.a. 81 312 170 420 361 468 134 90 184 174 168 185 127 159 111 127 139 164 268 141 207 192 139 170 278 240r 151 166 116 87 160 158 157 175 132 141 97 OCT. 134r 116r 166r 127 182 108 75 157 90 85 211r 197r 89 1% 103 162 113 140 223 113 197r 222 212 SEPT. 101 201 343r 126 113 192 154 154 IUL 119 102 111 135 146 153 260p 142p 209 203 144p 175 285 249 144 149 107 121 106 179 136 153 239 n.a. 127 113r 189r 147r 155 219 158 235r 186 147p 154 223 n.a. 223 127 93 168 189r 157 273 109 127 93 167r 181r 155 265 72 234r 127 94 163 164 152 268 n.a. 213 125 127 238 123 192 352 127 128 240 194 359 59 219r 127 129 240 80 197 359 n.a. 208 118r 114 190r 103r 158 247 77 214r 118 115 191 103 159 251 n.a. 216 212 157 212r 200r 100 200r 117 113 192 105 159 250 112 200r 101 127 111 Sixth District area only. Other totals for entire six states. n.a. Not Available. p Preliminary. e Estimated. r Revised. e -fr fr »er»ae basis. Nonfarm and mfg. emp. and payrolls, state depts. of labor; cotton consumption, U. S. Bureau Census; construction contracts, F. W. Dodge Corp.; petrol, prod., U. S. Bureau <* M im s ; elec. power prod., Fed. Power Comm. Other indexes based on data collected by this Bank. All indexes calculated by this Bank. S I X T H D I S T R I C T B U S I N E S S H I G H L I G H T S ^ B u sin ess a c t i v i t y edged upward further in October, but recovery M tf. Em ploy m «rt still lags in some economic sectors and geographic areas. Em ploy ment rose slightly, but factory payrolls changed little and farm in come dropped. Consumer spending remained sluggish, and savings expanded further. Although member bank loans continued to ad vance, borrowings from the Federal Reserve Bank of Atlanta declined. Nonfarm employment, seasonally adjusted, continued to improve in October, although not enough to change the charted index. An upward re vision in the September index, however, gives further evidence of the persist ent though small gains being made. The improvement in October continued to reflect slight gains in both manufacturing and nonmanufacturing employ ment. Factory payrolls showed virtually no change after seasonal adjustment. The rate of insured unemployment/ declining about as usual for Octo ber, also revealed little significant change in the unemployment picture. Cotton mills reduced their activity slightly in October as shown by seasonally adjusted cotton consumption, which declined for the first time since last April. Crude-oil production in Coastal Louisiana and Mississippi rose slightly further. Steel mill operations picked up substantially in October, but lost some of that gain in early November. As indicated by seasonally adjusted bank debits, spending for both busi ness and consumer purposes remained high in October, but was slightly below the previous month. Other economic indicators show reductions in consumer spending were at least partly responsible for the decline in total spending. Sales at department stores, furniture stores, and household appliance stores declined slightly further in October after allowance for seasonal varia tions. At the same time, personal savings in the form of time deposits and ordinary life insurance sales continued to increase, although at a somewhat slower rate than in previous months. Consumer credit outstanding at Dis trict commercial banks, however, rose more than seasonally, reflecting pri marily a sharp rise in personal loans. Farm prices were lower for most items sold in October, but prices of milk, beef cattle, eggs, and Florida truck crops were higher. Farm expenses in creased largely because of higher wage rates. Excellent harvesting weather facilitated marketing but many District farmers were unable to seed their fall grains because of a lack of moisture. Member bank loans, seasonally adjusted, in October increased slightly in all District states except Mississippi, where they were unchanged. Member bank deposits, however, showed little change after seasonal adjustment, as decreases in Georgia and Louisiana were offset by increases in Alabama, Florida, Mississippi, and Tennessee. In early November, loans improved further, particularly at reserve city banks, which had previously experienced less vigorous credit demands than country banks. The loan advance at reserve city banks reflected in large part increases in consumer and real estate loans. Reserve city banks in November sold some of their investments and reduced their borrowings from the Federal Reserve Bank of Atlanta.