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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.