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IN THIS ISSUE: MONTHLY REVIEW • A Federal Reserve Innovation: One-Week Settlement Period fi Country Banks • Farm Prices Have Trended Downward: Will Consumers Benefit? • District Business Conditions FED ER A L RESERVE BANK OF A T LA N T A D ECEM BER 1969 Monthly Review, Vol. LIV, No. 12. Free subscription and additional copies available upon request to the Research Department, Federal Reserve Bank of Atlanta, Atlanta, Georgia 30303. A F e d e ra l R e s e r v e In n o v a tio n : O n e -W e e k S e ttle m e n t P e rio d fo r C o u n t rB a n k s y September 12, 1968, is a date likely to be foot noted in banking textbooks for many years to come. This date marked the inauguration of several changes in reserve accounting procedures including the conversion of so-called country banks from two-week to one-week reserve settle ment periods. Compared with many other actions taken by the Federal Reserve System, this innovation passed relatively unnoticed except by the banks directly concerned. Though unspectacular, changes such as the conversion of country banks to one-week settlement periods are of interest. They illustrate the type of small, unspectacular innovation which the Federal Reserve System makes from time to time to improve the efficiency of the nation’s banking system. Accordingly, this article discusses the conver sion of country bank settlement periods in some detail, covering in the process—the basics of re serve settlement and the problems associated with the two-week settlement periods earlier re quired of country banks. The article concludes with a quantitative assessment of how successful last September’s conversion has proved to be. The Mechanics of Reserve Settlem ent As every banker and student of the Federal Re serve System knows, we have a “fractional re serve” banking system. Banking law requires every member bank to set aside assets at least equal to specified fractional proportions of deposit liabilities. Reserve assets are either bal D E C M E R 1969 DigitizedEforBFRASER ances held by the member banks at District Federal Reserve Banks or the cash each bank holds in its vaults. Implementing the law, the Board of Governors of the Federal Reserve System specifies the re serve accounting rules in its own regulations, which define both reserve assets and deposits that are subject to reserve requirements. In addition, the Board specifies, within legal limits, the frac tional reserve requirement applying to each class of deposit. The Board’s regulations not only spell out how required reserve totals and reserve asset totals are to be calculated but also specify the time period during which reserve accounts must be settled. Reserve regulations impose penalties against banks whose reserve assets fall short of their re serve requirements. Excesses are permitted, but they are costly simply because excess reserve assets earn no interest but may be exchanged for earning assets that do. In other words, every dol lar of excess reserve assets represents a dollar on which interest could have been earned but was not. Profit-conscious bankers, therefore, have an incentive to keep their excess reserve assets close to zero. Bankers can adjust their holdings of reserve assets in several ways: acquiring additional re serve assets, when necessary, to meet the reserve requirements against their deposits, or getting rid of reserve assets in excess of these requirements. The most important means for adjustment is the so-called Federal funds market, in which banks 147 lend reserve assets to each other overnight. The borrowing of reserve assets from the Federal Re serve’s discount window and the exchange of in terest-bearing securities for reserve assets are other ways in which bankers adjust their reserve asset positions. Bankers make these adjustments within the framework of the reserve settlement timing speci fied by the Board’s regulations. The reserve set tlement period is presently one week. This means that each member bank, regardless of size or loca tion, must maintain reserve assets each week suf ficient to cover the average of its required re serves.1 A bank may fail to meet its reserve re quirements for one or more days during the week, 1Since September 1968, reserve requirements have been calculated on the basis of deposit liabilities outstanding two weeks earlier; vault cash assets are also counted as of two weeks prior to the reserve settlement week. Chart I shows that during September 1967 to July 1968, (the period in which these banks had two weeks to settle their reserve accounts) the 5,796 country banks maintained excess reserve assets aver aging $342.3 million in single settlement weeks. In double settlement weeks, they averaged only $190.3 million. The difference—$152.0 million—was the alternating buildup and rundown of excess reserve assets. The biweekly pattern has disappeared since S e ttle m e n t P e r io d s F o r C o u n tr y B e fo r e a n d provided this deficiency is offset by an excess at some other point in the settlement week. Each bank’s level of reserve assets fluctuates from day to day for technical reasons associated with the cashing of checks through the teller’s window and the collection of checks through the Federal Reserve System. This type of fluctuation, though difficult for a banker to predict accurately on a day-to-day basis,tends to even out some what over longer periods. The length of the re serve accounting period determines both the de gree to which bankers feel they must guard against hard-to-predict fluctuations of reserve as sets and the amount of time bankers have to adjust their reserve asset positions. If reserve accounts had to be settled very frequently, bank ers would have to adjust their loan and deposit activity very quickly in order to respond to temporary changes in reserve assets. The result would be erratic behavior in the banking system. B a n k s A f t e r Before September 12, 1968, “country” banks settled their reserve accounts every two weeks; “re serve city” banks every week. This difference in reserve settlement timing, together with the tendency of country banks to maintain reserve assets well in excess of the reserve requirements, produced a per sistent biweekly pattern of excess reserves. Reserve city banks had a tendency to experience alternating weeks of reserve scarcity and reserve glut, complicating the reserve management activities of reserve city banks and the reserve stabilization activities of the Federal Reserve System. The change from two-week reserve settlement periods to oneweek reserve settlement periods was designed to eliminate these biweekly swings. Chart I U.S. (Million $) 342.3 152.0 214.6 190.3 Singlt Settlement W eeks Double Settlement W eeks KEY TO CHARTS □ P re -c o n v e rsio n tw o-w eek se ttle m e n t p e rio d s fo r c o u n try b a n k s — S e p t e m b e r 1 9 6 7 to J u ly 1968. □ A fter c o n v e rs io n of c o u n try b a n k s to on e-w ee k m e n t p e rio d s— S e p t e m b e r 1 9 6 8 to J u ly 1969. 148 se ttle M O N T H L Y R E V IE W On the other hand, the policy link between changes in reserve assets and changes in deposit and loan activity might be significantly weakened if the reserve settlement period were very long. For all these reasons, the timing of reserve settle ment importantly affects the way banks do business. The History of Reserve Settlem ent Timing Partly because the Federal Reserve Act of 1913 imposed no specific requirements for reserve set tlement timing, the individual Federal Reserve Banks set up requirements for themselves in the period from 1914 to 1919. Different Districts de cided on different specifications, ranging from daily settlements to settlements on the basis of daily averages calculated each month. Other Dis tricts required their banks to settle weekly or semi-monthly. These disparities were further complicated by conversion. No biweekly fluctuation is associated with this average. Chart II illustrates a similar pattern for the 546 country banks in the District. In the pre-change period, these banks’ excess reserves fell, on average, from $42.3 million in single settlement weeks to $33.5 million in double settlement weeks—a swing of $8.8 million. In the post-change period, excess reserve assets have averaged $30.2 million. Chart II the existence of three classes of member banks, each of which was subject to different reserve accounting rules. Larger banks in the cities with Federal Reserve Banks and branches, comprising the so-called central reserve city and reserve city bank classifications, were expected to settle their reserve accounts relatively frequently. Their size and their proximity to Federal Reserve facilities presumably offered them means to adjust their reserve balances more efficiently than other banks .2 The remaining banks were included in the reserve accounting category of so-called country banks. It was not until 1919 that the Board of Gov ernors published regulations designed to stan dardize reserve computation periods among the 2Central reserve city banks were absorbed into the reserve city classification in 1962. Chart III shows a comparable change in average excess reserve assets at a “typical” Sixth District country bank. Chart III twelve Federal Reserve districts. By 1923, all central reserve city and reserve city banks were settling their reserve accounts every week, where as country banks were required to settle over semi monthly periods. In 1962, country bank computa tion periods were made biweekly. All country banks settled every other week; all reserve city banks settled weekly. This was the situation im mediately prior to the reserve accounting changes put into effect in September 1968. Why the Change? The historical trend toward uniformity in the timing of reserve settlement suggests one reason why country banks were converted to one-week accounting periods last September: Reserve city banks were already settling weekly; therefore, the move made the reserve settlement timing uniform for the two groups of banks, country and reserve city .3 But uniformity of reserve accounting rules, as such, was not the main reason for the September conversion. The main reason was a persistent biweekly seesaw pattern in reserve availability, a pattern attributable to the difference in account ing periods. When country banks settled every other week, they piled up excess reserves during the “single settlement” week, so called because only the single class of reserve city banks settled their reserve accounts. Excess reserves that were stockpiled at country banks in the single settle ment weeks were withheld from the reserve city banks, who sought to balance their own reserve accounts. During the ensuing double settlement weeks, when both groups of banks settled their accounts, the country banks chose to release excess reserve assets accumulated in the previous week. This offset their excess reserve asset position in the first week of their accounting period with a re serve asset deficiency in the second half. Partic ularly toward the end of the double settlement weeks, excess reserves became plentiful as they flowed from the country banks into money market centers, and reserve city banks were likely to experience a glut of reserve assets. The difference, therefore, in settlement periods, coupled with a conservative approach to reserve management by the country banks, tended to produce alternating weeks of reserve scarcity and reserve plenty at the reserve city banks and in the money market. 3 D if f e r e n c e s r e m a in , h o w e v e r , in th e r e se r v e r e q u ir e m e n ts a p p ly in g t o r e se r v e c ity a n d c o u n tr y b a n k s . F o r e v e r y d o lla r o f d e m a n d d e p o s its in e x c e s s o f $5 m illio n , fo r in s ta n c e , a re ser v e c ity b a n k m u st m a in ta in 1 7 - 1 / 2 c e n ts o f r e se r v e a s s e ts , a c o u n tr y b a n k 13 c e n ts ( a s o f N o v e m b e r 3 0 , 1 9 6 9 ) . 150 The alternating pattern of scarcity and plenty was partially counteracted by the Federal Reserve System’s open market operations. During single settlement weeks when reserve assets moved out of the money markets and into the balances of cautious country banks, the System injected com pensating reserve assets by buying securities. When the piled-up reserves reentered the money markets in each double settlement week, the Sys tem then reabsorbed the injected reserves by sell ing securities. Although the rise and fall of re serves was regular, the sizes of the flows were not easily predictable. Therefore, one more signifi cant complication was added to the System’s management of total banking system reserves. It was hoped that the elimination of the reserve period disparity would remove the seesaw pattern and the problems associated with that pattern. The Results A study made at the Federal Reserve Bank of Atlanta helps to quantify this biweekly reserve availability pattern. During the 21 single settle ment weeks from September 1967 to July 1968, country bank excess reserves across the nation averaged $342 million per day. In the alternate double settlement weeks, however, their excess reserves were only $190 million per day—a sig nificant difference of $152 million per day on average. Nationally and on average, country banks built up their excess reserves by approxi mately $150 million during the first half of their settlement period. Then they ran them back down by a similar amount in the following double settlement week. An average of about $150 mil lion in reserve assets was withheld from reserve city banks in single settlement weeks, relative to the average amount of reserve assets available to reserve city banks in the ensuing double settle ment weeks. Analysis of the same period for Sixth District banks shows very similar results, although the pattern is not quite as striking as it is for the nation. District country banks’ excess reserves averaged $42.3 million per day in the 21 single settlement weeks and $33.5 million in the alter nate double settlement weeks, implying an aver age buildup and rundown in the District of ap proximately $9 million. It would be incorrect to say that this amount was alternatively made available and withheld from Sixth District re serve city banks, however, since the financial markets through which excess reserves are redis tributed are national rather than local in scope. This biweekly pattern of reserve availability, clearly evident before September 1968 in both the M O N TH LY R E V IE W nation and the Sixth District, was expected to be reduced when country banks converted to oneweek accounting periods. Was it reduced? The results of further studies suggest that it was. Analysis of the period from September 1968 to July 1969, a year later than the coverage of re sults mentioned earlier shows no significant buildup and rundown. The average swing was $3.5 million in the post-changed period, compared with the $152-million average buildup in the period prior to the change. Country bank excess reserves after the conversion averaged about $214 million, slightly higher than the pre-change double settle ment week average of $190 million but much less than the corresponding single settlement week average of $342 million. The results, in other words, make good sense. The post-change $214million average may be lower than “normal,” however, because excess reserves in the banking system as a whole have been scarce during the recent period of monetary restraint. Sixth District data yield the same conclusion: Conversion of the country bank settlement periods has successfully eliminated the earlier biweekly reserve pattern. After the change, the excess reserve buildup for country banks in the District was $0.3 million, compared with $8.8 million previously. W il l ia m N. C o x , III Appendix The results are shown in the accompanying table. Regression N-l, covering national country banks dur ing the September 1967 to July 1968 period prior to the conversion of country banks to one-week account ing periods, shows that the above model offers a highly significant explanation of excess reserve be havior. The biweekly pattern of buildup and run down, captured by the estimate of regression coeffici ent (b), is both large and significant. Results of similar quality were drawn from Sixth District data for the same period; these are shown in regression D-l. This study employed regression analysis of the simple model: (1) XRC= a + bD + e where XRC is weekly country bank excess reserves (averaged over the days in each week); D is a dummy variable equal to one in single settlement weeks and zero in double settlement weeks; and (e) is a stochas tic term. The model presumes that each week’s ag gregate of country bank excess reserves may be lin early decomposed into the constant (a), the adjust ment single settlement week status (b), and the random term (e). This study makes use of a fundamental property of regression analysis: that the mean of the residual —the regression estimate of (e)—is zero. This implies that the estimate of (a) is the average of country bank excess reserves during the double settlement weeks covered by the regression, and that (a+b) is the average of country banks’ excess reserves during the single settlement weeks. To see whether the biweekly pattern persisted after the reserve period change, the same model was ap plied to the September 1968 to July 1969 period. As expected, results of regression N-2 and D-2 for the nation and the District show that the biweekly co efficient (b), instead of being large and significant as it had been previously, had become small and insignificant. COUNTRY BANK EXCESS RESERVE BEHAVIOR— REGRESSION RESULTS Regression Number Number Estimate of of (a) Observations ($ millions) Period N-l Sept. ’67-July ’68 42 190.3 N-2 Sept. ’68-July ’69 42 212.9 N-3 Both Periods 85 Estimate of (b) ($ millions) 203.4 CHOW TEST OF NATIONAL DATA: D-l S ep t.’67-July’68 42 S ep t.’68-July’69 42 30.1 D-3 Both Periods 85 32.0 CHOW TEST OF DISTRICT DATA: * significant at 5% level. Digitized C E M B E R 1 9 6 9 D E for FRASER e2 R-’(adj.) DurbinWatson .65** 2.23 .00 1.07 .40** 2.22 .38** 2.03 14,099.7 .00 1.60 20,045.6 .10 1.63 308,957 86,360 580,027 F = 18.7** 33.5 D-2 152.0** (5.61) 3.5 (0.24) 75.3** (4.15) 2 8.8** (2.81) 0.3 (0.05) 4.6 (1.36) 4,083.5 F = 3.49* ** highly significant at 1% level. 151 F a r m P ric e s H a v e T r e n d e d D o w n w a r d : W ill C o n s u m e r s B e n e fit? A g r i c u l t u r a l p r ic e s a re s o m e t im e s r e g a r d e d a s a n fo r m e a t im p o r t a n t b e llw e th e r o f g e n e r a l b u s in e s s c o n d i s a t u r a t io n t io n s a n d of fa rm p ric e m o v e m e n t s . p ro d u cts h a v e H is t o r i c a l ly , p r ic e s o fte n d u r in g e c o n o m ic u p s w in g s f a lle n th ro u g h o u t p e r io d s been but of f ir s t have to rise t y p i c a lly re c e ssio n . T h us, and b e s c r u t in iz e d to d u r in g w hat lie s ahead p e r io d s had begun M ay, p o u lt r y P r ic e s in ro se w h o le s a le r a p i d ly p r ic e s d u r in g of W H O LESA LE o f b u s in e s s F arm P R IC E S P ro d u cts 1957—59=100 Ptrtant -115 Total Farm Products P ro d u c ts fa r m to r e Chart I fo r c lu e s a s T h e fir s t h a lf o f 1969 w a s m a r k e d b y s p e c t a c u la r changes th e p ric e s. 1969 F arm re a c h co n su m e rs v e rse A p r i l ’s s h a r p d o w n w a r d t u r n in w h o le s a le _ P r ic e s o f W h o le s a le to h o w e v e r, h a d a p p a r e n t ly s u b s t it u t e d a s u f f ic ie n t q u a n t i t y u n c e r t a in t y . 1969 By o f p o u lt r y fo r h ig h - p r ic e d b e e f a n d p o r k m o v e m e n t s o f a g r ic u lt u r a l p r ic e s a re a m o n g th o se in d ic a t o r s t h a t m a y p o u lt r y p o in t. -1 0 5 p ro d u c t s . -1 2 5 fiv e o f th e f ir s t s ix m o n t h s o f th e y e a r b u t b e g a n a n ir r e g u la r d e c lin e in J u ly . H a s t h is d e c lin e s ig n a le d a lo n g a w a it e d b r e a k in th e re c e n t i n f la t io n a r y p e r io d ? W h o le s a le p r ic e s in d e x e s w h ic h in c lu d e th e to ta l a n d c o m p o n e n t c o m m o d it y g r o u p s o f f a r m p ro d u c ts th ro u g h S e p t e m b e r 1969 a re s h o w n C h art J u ly — w hen I. B e fo re th e o v e r a ll in p ric e d e c lin e b e g a n — th e in d e x fe ll o n ly o n c e in 1969. Plant & Anim al Fibers -6 5 - 140 I n A p r i l, a d r o p in p o u lt r y , e g g s, a n d fr e sh a n d p r o c e s s e d f r u it s a n d v e g e t a b le s r e s u lte d in a o n e p e r c e n t d e c lin e in th e in d e x . D ip in A p r il. p r im a r ily T h e d e c lin e in p o u lt r y p r ic e s w a s p r e c ip it a t e d by h e a v ie r s u p p lie s -120 - 100 - SO but m a y h a v e a ls o re fle c te d a lo w e r ra te o f in c r e a s e in th e p r ic e s o f p o u l t r y ’s m a i n c o m p e t it o r s , b e e f a n d p o rk . I t a p p e a r e d a t t h a t t im e t h a t th e m a r k e t 152 M O N T H L Y R E V IE W Although the supply of poultry meat has grown steadily since February (See Chart II), the rate of growth was not large enough to account for the sudden price dip in April. Output during the first seven months of 1969 substantially ex ceeded that of the same period in 1968, however. Egg prices, although accounting for the small est proportion of the total index of wholesale prices, dropped more dramatically than other prices and continued falling through May. This was not unusual, however, since egg production tends to increase in the spring with an accom panying lowering of prices (Chart II). Prices of fresh and dried fruits and vegetables, the only other series to show a notable decline in April, also typically move downward with in creasing supplies as the season progresses. But in early 1969, supplies were down slightly from a year earlier, reflecting reduced plantings of most vegetable crops. Hence, the decline in prices may have signified that consumers were becoming more budget conscious and were attempting to trim food expenditures by reducing purchases of relatively high-cost items, such as fruits and vegetables. Rise in May. Wholesale farm prices rose sharply in May, reflecting abrupt increases in prices of livestock, fresh and dried fruits and vegetables, poultry, and grain. The sharp increase in May, as well as the rising trend in livestock prices throughout early 1969, was attributable to a brisk consumer de mand in the face of a shrinking supply of meat. Total livestock production in the first half of 1969 actually declined from the year-earlier level. Monthly cattle and calf slaughter decreased in February (See Chart II) and had not regained the January level by September. Monthly hog slaughter actually declined by 350 million pounds from January to August, largely because of dis ease losses and bad weather. In May, a sharp drop in slaughter accompanied the abrupt in crease in livestock prices. Farm prices of fruit and fresh market vege tables also rose dramatically in May from April. Exceptional price increases were registered for cabbage, carrots, celery, sweet corn, lettuce, and snap beans. Reduced acreages and unfavorable spring weather that delayed maturity of the smaller crop contributed to temporary shortages. Demand in May seemed to be strengthened largely because of increasing incomes and large Government purchases. Basically, the May increase in poultry prices appeared to be a correction of the excessive down ward adjustment that occurred in April. Poultry D E C E M B E R 1969 Chart II U .S . P R O D U C T IO N L IV E S T O C K AND 1 9 69 OF SELEC TED PRO D U CTS Millian 'Tetil Livtwaight supplies were actually increasing rather rapidly at this time, but hog slaughter was dropping. Farm prices of grain began advancing in April and contributed heavily to the rise in the total index in May. Dwindling free stocks of com, in the face of growing demands from the livestock feeding sector, were responsible for the price increases. Declines Since June. Prices of farm products reached a peak in June and began an irregular downward movement in July. Livestock prices exerted the major influence, turning downward when growing supplies began to finally overtake the rapidly increasing demand. As temporary shortages were alleviated, prices of fresh and dried fruits and vegetables were also falling sharply, returning to a more normal mid summer pattern. As expectations of a plentiful new crop materialized, grain prices also began dropping. The only other series trending downward noticeably at this point was hay and seed prices, reflecting primarily lower prices of soybeans. These lower prices were attributable to a large carryover in the 1968 crop and to an announced reduction in the support price. Egg prices have been moving counter to the total price index throughout most of the year. The July decline in the total index coincided with the sharpest jump in egg prices during the year. 153 A temporary shortage of eggs resulted from un usually hot weather. With the relief of cooler temperatures, an oversupply of eggs developed in August, causing prices to again drop sharply. This pattern of erratic fluctuation has continued through the fall months. The downturn in total wholesale farm prices was further strengthened in August by falling cotton prices (See plant and animal fibers, Chart I). Cotton prices began to decline when projec tions for the 1969 crop indicated an ample supply to meet domestic requirements and a substantial carryover from the 1968 crop appeared certain. Later revisions lowered the new crop estimates. Heavy August rains severely damaged the south eastern crop, stimulating rank growth—boll rot and insect damage. Drought in other areas re duced yields more than had been anticipated, and cotton prices turned up again. Toward the end of the year, the wholesale in dex has been pushed upward again by sharp price advances in eggs and fresh fruits and vegetables.1 Egg production has declined through the fall months, putting pressures on supplies. Brisk de mand, fed by excessive speculation in future con tracts, resulted in historically high prices. The supply of fruits and vegetables has also declined more than seasonally—contributing to unusual price increases. Relationship of Food Prices to Farm Prices The food items that consumers purchase are pro cessed farm products. Thus, it is reasonable to expect consumer food prices to reflect the down ward movement in wholesale farm prices since July. The index of consumer food prices, however, does not closely follow wholesale prices of either farm products or foodstuffs, as shown in Chart III. All three price series have moved upward since 1963, but the advance in consumer food prices has been the smoothest of the three. A rela tively close correlation is evident between whole sale prices of farm products and foodstuffs. That consumer food prices tend to stick at high levels is clearly demonstrated. Increases in whole sale farm prices are nearly always accompanied by rising consumer food prices. The latter are slow to decline, however, when wholesale prices drop. In fact, lower wholesale prices are usually reflected in the consumer price index by a slower rate of increase or by a sidewise movement. Since 1963, consumer prices have declined only after four or five consecutive months of falling whole sale farm prices. Cases in point are the sub1Preliminary data indicate a sharp rise in the November index of wholesale farm prices. 154 stantial declines in wholesale farm prices regis tered from February to June and September to December of 1966; and from January to April and July to November of 1967. From February to June 1966, for example, the index of farm wholesale prices declined three points, but only after the fourth consecutive month of falling wholesale prices did the con sumer food prices index decline. Farm prices regained the three-point loss in July 1966; in August, food prices jumped about three points .2 Beginning in September 1966, wholesale farm prices began a decline that continued for seven months, except for a brief rise in January 1967. Consumer food prices, however, did not decline appreciably until January 1967 and had only dropped less than two points when they reached their low in April. In comparison, the wholesale farm products index dropped more than ten points in the corresponding period. In May, when prices of farm products rose, food prices began to rise immediately. In The Months Ahead In much of 1969, food prices have led the rapid advance in the consumer price index. In addition, substantial declines in wholesale prices of farm products from July to October have not developed 2The first differences, as well as one, two, and three-month lags of monthly wholesale prices of both farm products and foodstuffs were regressed on the first differences of monthly consumer food prices. The best fit was obtained when the first differences of monthly wholesale farm prices, lagged by one month, were regressed on the first differences of con sumer food prices. The coefficient of determination (r2) obtained was 0.24. Although relatively low, it was statistically significant and 9 percent above that of the best alternative equation. Changes in consumer prices, therefore, were more closely related to changes in wholesale farm prices in the pre ceding month than in any other period tested and more closely related to wholesale farm prices than to wholesale food prices. M O N T H L Y R E V IE W at the retail level. Some leveling in food prices was evident, however, in early fall, although in late 1969 the housewife was faced with sharply higher prices for eggs, fruits and vegetables. B arring other unforeseen disturbances in agricultural products, such as the egg shortage, the consumer price index for food will probably continue its leveling tendency in early 1970. Past performance indicates that significant declines in food prices occur only after farm prices drop for a four- to five-month period. Further price declines are in prospect, since supplies of most food items are projected to build up in the months ahead. Specific projections for the predominant livestock group indicate that heavier marketings of fed cattle are anticipated through next spring. A larger supply—coupled with indications that consumers are substituting lower-priced meats for beef—would make for a continuation of the downward trend in meat prices that began in July. A further seasonal decrease in pork production is anticipated, reflecting reduced farrowings last spring that resulted in fewer pigs available for feeding during the summer and fall months. Be cause of more competition from projected larger supplies of beef and poultry, however, there is likely to be little increase in pork prices. Rather than pay higher prices for pork, consumers prob ably will buy increasing amounts of beef and chicken. Broiler production is expected to continue in creasing through the first half of 1970. With beef output also increasing, lower poultry prices are in prospect as a result of the more plentiful meat supply. Egg production will continue to increase be cause of a slight buildup in the size of the laying flock. Prices should decline from recent high levels as overall supplies of animal proteins be come more plentiful.' Grain and soybean prices are likely to show leveling tendencies through early 1970. Heavy demands for feeds from the livestock sector will provide some support to prices that would other wise decline in response to plentiful grain and soybean crops. If current signs of less exuberant economic advances continue, the demand for food products is also likely to slow its brisk pace, particularly for the more expensive food items. Demand pro jections beyond early 1970 are clouded by un certainties in the economic and fiscal outlook. The Recap In summary, wholesale agricultural prices rose rapidly during the first half of 1969 but began dropping at mid-year, essentially reflecting changes in livestock prices. Consumer food prices, though not closely following wholesale price movements, reflected falling Wholesale prices by leveling off in early autumn. Like most indicators of business conditions, agricultural price changes alone are not always a reliable indication of coming economic conditions. Nevertheless, the behavior in wholesale prices of farm products since July may have signaled a change in economic direction that apparently is being confirmed by other evidence as 1969 draws to a close. How profound and durable these changes will be are matters that remain to be seen. G e n e D. S u l l iv a n B a n k A n n o u n c e m e n ts On November 1, Bank of Clayton, Clayton, Georgia; Bank of Eastman, Eastman, Georgia; Bank of Warner Robins, Warner Robins, Georgia; and Citizens State Bank, Warner Robins, Georgia— all nonmember banks — began to remit at par for checks drawn on them when received from the Federal Reserve Bank. A newly organized nonmember bank, First Bank of South DeKalb, Decatur, Georgia, opened for business DECEMBER 1969 on November 3 and began to remit at par. Officers are Joseph C. Bagwell. Jr., president; Wilbur T. Tomberlin, vice president; and Martin C. Avery, cashier. Capital is $325,000; surplus and other capital funds, $325,000. On November 15, The Meigs County Bank, Decatur, Tennessee, a nonmember bank, began to remit at par. 155 IN D E X F O R T H E Y E A R 19 6 9 MONTH JANUARY MONTH PAGES 1-16 PAGES 85-96 JULY 97-108 FEBRUARY 17-32 AUGUST MARCH 33-44 SEPTEMBER 109-120 APRIL 45-56 OCTOBER 121-132 MAY 57-68 NOVEMBER 133-144 JUNE 69-84 DECEMBER 145-160 AGRICULTURAL CREDIT Southern Banks’ Changing Role in Farm Credit by R obert E. Sweeney , 76. A Federal Reserve Innovation: One-Week Settlem ent Period for Country Banks W il l ia m by N. Cox III, 147 Southern Banks’ Changing Role in Farm Credit AGRICULTURE by Farm Prices Have Trended Downward; Will Consumers Benefit? What Makes For Bank Profitability? 91 by G ene D. S u lliv a n , 152 A Good Year for Agriculture by R obert E. Sweeney , 76 R obert E. Sweeney , 8. BANK ANNOUNCEMENTS 11, 13, 23, 41, 53, 64, 81, 93, 101, 117, 129, 138, 155. BANK CREDIT BANKING STRUCTURE Absentee Ownership— Its Impact on Bank Hold ing Company Performance by J oe W. M cL eary, 99. Banking Structure and Deposit Concentration in the Southeast by J oe W. M cL eary, 86. Bank Credit Grows Uninterrupted by D orothy F. A rp , 12 BANK DEPOSITS BOARD OF DIRECTORS Federal Reserve Bank of Atlanta and Branches, Effective January 1, 1969, 28 Bank Deposit Growth and Income Change in the Southeast, 50 CONSTRUCTION BANK HOLDING COMPANIES Construction Stars by Absentee Ownership— Its Impact on Bank Hold ing Company Performance by J oe W. M cL eary. 99. H iram J. H onea, 10 CONSUMER ACTIVITY Consumer Surprises BANKING by Banking Structure and Deposit Concentration in the Southeast Is the Consumer Behaving? by J oe W. M cL eary, 86. 156 by J oe W. M cL eary, 4 E m e r s o n A t k in s o n , 122. M O N TH LY R E V IE W DISTRICT BUSINESS CONDITIONS 16, 32, 44, 56, 68, 84, 96, 108, 120, 132, 144, 160. INDUSTRY Prosperity Slows Industrial Growth by C. S. Pyun, 6. ECONOMIC CONDITIONS, General Our Greatest Economic Problem by M onroe K im brel, 46. INFLATION Our Greatest Economic Problem by M onroe K im brel, 46. The Unemployment-Inflation Trade-Off: W hat 1969 Forecasts Imply by Joe W. M cLeary and C. S. Pyun, 19. The Unemploy ment-Inflation Trade-Off: What 1969 Forecasts Imply by Joe W. M cLeary and C. S. Pyun, 19. Unemployment: Who It Hits by Joe W. M cLeary, 114. MONETARY POLICY ECONOMIC CONDITIONS, Sixth District States A Federal Reserve Innovation: One-Week Settlement Period for Country Banks Alabama’s Economy Grows but Loses Speed by W illiam N. Cox, III, 147. by Joe W. M cLeary, 24 The Money Supply Controversy 1968: Another Prosperous Year for Georgia by W illiam N. Cox, III, 70. by D o ro th y F. A rp, 39. Questions People Ask M e Mississippi Nonfarm Jobs in the Sixties: A Sneak Preview by W illiam N. Cox, III, 139. Prosperity Slows Industrial Growth by C. S. Pyun, 6 by M onroe K im brel, 134. MONEY SUPPLY The Money Supply Controversy by W illiam N. Cox, III, 70. Tennessee’s Pace Begins to Slacken by John M. G odfrey, 127 PAPER INDUSTRY W hat Kind of Year? The Southeast in 1968 The Southeast’s Booming Paper Industry by H a rry B ran d t, 2. by C. S. Pyun, 110. ECONOMIC FORECASTS PRICES The Unemploy ment-Inflation Trade-Off: W hat 1969 Forecasts Imply Farm Prices Have Trended Downward: W ill Consumers Benefit? by Joe W. M cLeary and C. S. Pyun, 19. by G ene D. S u lliv a n , 152. EXPORTS SIXTH DISTRICT STATISTICS Comparative Advantage and Structural Change in Regional Exports 14, 30, 42, 54, 66, 82, 94, 106, 118, 130, 142, 168. by John E. Leimone, 102. A Regional View of Export Patterns SPACE PROGRAMS by John E. Leimone, 34. Slowdown in Space Programs: Its Impact on the Southeast FINANCIAL INSTITUTIONS Growing Financial Resources in the Southeast by C. S. Pyun, 58. 65. UNEMPLOYMENT INCOME The Unemploy ment-Inflation Trade-Off: 1969 Forecasts Imply What by Joe W. M cLeary and C. S. Pyun, 19. Bank Deposit Growth and Income Changes in the Southeast Unemployment: Who It Hits by D o ro th y F. A rp, 50. by Joe W. M cLeary, 114. Digitized E M B E R 1 9 6 9 D E C for FRASER 157 S i x t h D is tric t S ta tis tic s S e a so n a lly Adjusted ( A l l d a t a a r e i n d e 1957-59 = I O O , u n l e s s xes, L a t e s t M onth 1969 One M on th Ago Two M o n th s Ago One Year Ago S IX T H D IS T R IC T IN C O M E A N D S P E N D IN G P e r s o n a l In co m e (M il. $, A n n u a l R a t e ) ........................... S e p t. M a n u fa c tu r in g P a y r o l l s ................................ O ct. F a r m C a s h R e c e i p t s ......................................S e p t. C r o p s ................................................................ S e p t. L i v e s t o c k ...........................................................S e p t. In s ta lm e n t C re d it a t B a n k s * (M il. $) N ew L o a n s ......................................................O ct. R e p a y m e n ts ................................................ O ct. N.A. 250 1 4 2.8 9 8.5 185.5 7 1 ,7 9 2 248 177.3 1 6 7.4 1 7 7 .9 7 1 ,7 1 7 248 196.1 15 4.3 6 5 ,1 1 0 233 1 33.5 9 2 .6 169.0 3 2 9.7 2 9 7.2 3 2 5 .8 2 8 7 .4 3 0 3 .9 3 0 0 .6 3 4 3.6 2 7 0.0 148 146 175 141 170 113 107 128 140 113 144 143 176 137 161 113 106 125 129 149 140 4 8 .5 148 147 175 141 169 114 106 129 139 113 217 149 137 5 8.3 195 142 133 54 .9 200.6 in d ic a te d o th e rw is e .) One M on th Ag o Two M o n th s Ago One Year Ago 373 260 293 374 258 282 374 260 277 320 243 242 N.A . 263 1 5 5.9 1 4 ,1 17 260 15 6.1 1 4 ,0 15 274 1 3 5.6 1 2 ,7 46 234 14 1.1 O ct. O ct. O ct. O ct. O ct. 149 142 152 149 5 1 .7 148 142 152 148 4 4 .7 149 144 152 147 5 7 .6 144 138 147 147 5 3 .7 . O ct. . O ct. 3 .2 4 2 .4 3 .4 4 2 .3 2 .9 4 0 .9 3.2 4 0 .9 . O ct. . O ct. . O ct. 34 3 236 327 338 242 308 305 242 264 . O ct. N.A. 192 1 1 5.7 10 ,1 25 191 2 4 4 .7 1 0 ,0 82 188 2 4 7 .0 9 ,4 1 0 179 108.1 O ct. O ct. O ct. O ct. O ct. 134 123 137 137 5 2 .0 134 123 137 135 45.1 134 122 137 132 50.1 132 123 134 143 5 8 .3 . O ct. . O ct. 5.2 4 2 .7 5 .0 4 1 .8 4 .9 4 1 .3 5.1 4 1 .5 . O ct. . O ct. . O ct. 274 178 204 275 178 203 268 179 208 244 177 192 N.A. 265 1 0 0.8 5 ,3 0 4 270 184.1 5 ,2 9 6 263 26 3.1 4 ,9 9 7 253 10 8.3 O ct. O ct. O ct. O ct. O ct. 148 158 143 156 3 8 .3 147 157 143 159 3 4 .0 147 156 143 148 4 9 .7 145 156 140 144 4 5 .1 . O ct. . O ct. 4 .5 4 0 .4 4 .7 4 1 .0 4 .6 40.1 4 .6 4 1 .2 . O ct. 403 268 283 396 272 301 388 270 259 349 247 237 L a t e s t M onth 19 69 M a n u f a c tu rin g ........................................... O c t. N o n m a n u f a c t u r in g ......................................O c t. C o n s t r u c t i o n ........................................... O ct. F a rm E m p l o y m e n t ........................................... O ct. U n e m p lo y m e n t R a te (P e rc e n t of W ork F o r c e ) t ......................O ct. Avg. W e e k ly H rs. in Mfg. (H rs .) . . . O ct. 169 170 131 8 3.6 2.7 4 1 .0 F IN A N C E A N D B A N K IN G M e m b e r B a n k L o a n s ......................................O c t. M e m b e r B a n k D e p o s i t s ................................ O ct. B a n k D e b i t s * * ......................................................O ct. P R O D U C T IO N A N D E M P L O Y M E N T G E O R G IA N o n fa rm E m p lo y m e n t ) - ................................ O ct. M a n u fa c tu r in g ...........................................O ct. A p p a re l ...........................................................O ct. C h e m i c a l s ......................................................O ct. F a b r ic a t e d M e t a l s ......................................O ct. F o o d ......................................................................O ct. Lb r ., W ood P ro d ., F u r n . & F ix . . . . O ct. P a p e r ................................................................ O ct. P r im a ry M e t a l s ...........................................O ct. T e x t ile s ...........................................................O ct. . . . . O ct. T r a n s p o r t a t io n E q u ip m e n t N o n m a n u f a c t u r i n g f ......................................O ct. C o n s t r u c t i o n ................................................ O ct. F a rm E m p l o y m e n t ...........................................O ct. U n e m p lo y m e n t R a te (P e rc e n t of W ork F o r c e ) t ......................O ct. In su re d U n e m p lo y m e n t (P e rc e n t of C o v . E m p . ) ...........................O ct. Avg. W e e k ly H rs. in M fg. (H rs.) . . . O ct. C o n stru c tio n C o n t r a c t s * ........................... O ct. R e s i d e n t i a l ......................................................O ct. A ll O t h e r ...........................................................O ct. E le c t r ic P o w e r P ro d u c t io n * * . . . . S e p t. Co tto n C o n s u m p t i o n * * ................................ S e p t. P e tro l. P ro d , in C o a s t a l L a . a n d M is s .* * O c t. 148 147 176 142 172 115 107 128 142 113 204 149 139 5 2 .2 3 .6 202 111 3.7 3.5 3.8 2 .0 4 1 .3 211 249 179 161 103 234 1.9 4 1 .3 196 217 178 160 99 251 1.9 4 0 .8 310 275 340 164 1.9 4 1 .0 2 28 271 191 149 104 256 331 276 330 272 294 2 58 227 189 275 226 189 271 229 191 269 190 2 35 . O ct. . S e p t. P R O D U C T IO N A N D E M P L O Y M E N T N o n farm E m p lo y m e n t ! . . . M a n u fa c tu r in g ........................... N o n m a n u f a c t u r in g ...................... C o n s t r u c t i o n ........................... F a rm E m p l o y m e n t ........................... U n e m p lo y m e n t R a te (P e r c e n t of W ork F o r c e ) t . . Avg. W e e k ly H rs. in Mfg. (H rs .) . . . . . 220 334 281 P e r s o n a l In c o m e (M il. $ , A n n u a l R a te ) . . . M a n u fa c tu r in g P a y r o lls . . . F a r m C a s h R e c e i p t s ...................... 102 F IN A N C E A N D B A N K IN G 341 236 319r F IN A N C E A N D B A N K IN G Loans* A ll M e m b e r B a n k s ..................................... O ct. L a r g e B a n k s ................................................ O ct. D e p o sits * All M e m b e r B a n k s ..................................... O ct. L a r g e B a n k s ................................................ O ct. B a n k D e b i t s * / * * ................................................ O ct. 220 A LA B A M A P e r so n a l In co m e (M il. $, A n n u a l P R O D U C T IO N A N D E M P L O Y M E N T N o n farm E m p lo y m e n tt . . . . N o n m a n u fa c tu r in g IN C O M E Pe rso n al In co m e N.A. 2 15 1 31.0 8,8 7 4 211 1 7 6.9 8 ,9 6 0 2 10 189.2 8 ,0 6 4 195 110.6 . O ct. 131 133 130 127 53 .5 130 132 130 126 5 1.1 130 131 130 126 6 4 .4 128 129 128 127 54 .7 . O ct. . O ct. 4 .0 4 1.1 4 .2 4 0 .9 4.1 4 0.7 4 .6 41.3 . O ct. 299 209 227 294 212 225 304 214 241 2 70 207 2 14 N.A. 322 195.7 2 2 ,3 03 329 178.2 22 ,2 61 337 1 79.9 19,847 297 187.1 . O ct. U n e m p lo y m e n t R a te (P e r c e n t of W ork F o r c e ) t . . Avg. W e e k ly H rs. in M fg. (H rs .) F IN A N C E A N D B A N K IN G P R O D U C T IO N A N D E M P L O Y M E N T . O ct. M a n u fa c tu rin g N o n m a n u fa c tu r in g . O ct. F a rm E m p lo y m e n t . U n e m p lo y m e n t R a te Avg. W e e k ly H rs. in M fg. (H r s .) . M I S S IS S IP P I IN C O M E P e r so n a l In co m e . Se p t. . O ct. F IN A N C E A N D B A N K IN G Bank D e b i t s * * ........................... . O ct. P R O D U C T IO N A N D E M P L O Y M E N T N o n fa rm E m p lo y m e n tt . . . . F L O R ID A IN C O M E P e r s o n a l In c o m e (M il. $, A n n u a l R a t e ) ........................... S e p t. M a n u fa c tu r in g P a y r o l l s ...........................O ct. F a rm C a s h R e c e i p t s ........................... . Sep t. P R O D U C T IO N A N D E M P L O Y M E N T N o n farm E m p lo y m e n t ! ........................... O ct. 158 . . . . . U n e m p lo y m e n t R a te (P e r c e n t of W ork F o r c e J t . . Avg. W e e k ly H rs. in M fg. (H rs .) F IN A N C E A N D . . . . . B A N K IN G M em ber B an k Lo an s* . . . . M e m b e r B a n k D e p o s its * . . . B a n k D e b i t s * / * * ................................ M O N TH LY R E V IE W L a t e s t M on th 1969 One M on th Ago Two M o n th s Ago One Year Ago L a t e s t M onth 1969 TEN N ESSEE N o n m a n u f a c t u r in g ................................ C o n s t r u c t i o n ...................................... F a r m E m p l o y m e n t ...................................... U n e m p lo y m e n t R a te (P e r c e n t of W ork F o r c e lt . . . . Avg. W e e k ly H o u rs in M fg. (H r s .) . IN C O M E P e r s o n a l In co m e (M il. $ , A n n u a l R a te ) . . . . M a n u f a c t u r in g P a y r o lls ...................... F a r m C a s h R e c e i p t s ........................... . . . S e p t. . O ct. N.A. 241 1 26.2 1 1 ,0 6 9 239 1 4 8.6 1 0 ,0 4 6 221 113.9 1 1 ,1 03 240 1 9 7.9 One M on th Ago Two M o n th s Ago One Year Ago . O ct. . O ct. . O ct. 142 165 51 .2 142 164 5 2 .7 140 161 5 8 .0 139 161 5 1 .9 . O ct. . O ct. 3 .8 4 0 .3 3.7 4 0 .5 3 .6 40.1 3 .8 4 0 .4 . O ct. . O ct. 319 20 6 2 73 312 203 279 304 205 286 284 195 255 F IN A N C E A N D B A N K IN G P R O D U C T IO N A N D E M P L O Y M E N T N o n fa rm E m p l o y m e n t t ..................... M a n u fa c tu r in g ................................ * F o r S ix th . , 147 156 .O c t . . O ct. 146 155 o n ly . O th e r t o ta ls fo r e n tir e D is t ric t a r e a s ix * " D a ily sta te s. M e m b e r B a n k L o a n s * ........................... M e m b e r B a n k D e p o s i t s * ..................... B a n k D e b i t s * / * * ........................................... 144 154 145 155 a v e ra g e b a s is . t P r e lim in a r y d a ta . r -R e v ise d . N.A. N ot a v a ila b le S o u r c e s : P e r s o n a l in c o m e e s tim a te d b y t h is B a n k ; n o n fa rm , m fg . a n d n o n m fg . e m p ., m fg . p a y ro lls a n d h o u rs , a n d u n e m p ., U .S . D ep t, of L a b o r a n d c o o p e ra tin g s ta te a g e n c ie s ; co tto n c o n s u m p t io n , U .S . B u r e a u of C e n s u s ; c o n s tr u c tio n c o n t r a c t s , F . W. D od g e C o rp .; p e tro l, p ro d ., U .S . B u r e a u of M in e s; in d u s tr ia l u s e of e le c . p o w er, F e d . P o w e r C o m m .; fa rm c a s h r e c e ip t s an d fa rm e m p ., U .S .D .A . O th e r in d e x e s b a s e d on d a ta c o lle c te d b y t h is B a n k . A ll in d e x e s c a lc u la t e d by t h is B a n k . D e b its to D e m a n d D e p o s it A c c o u n ts Insured C om m ercial B an ks in the Sixth District (In T h o u s a n d s o f D o lla r s ) Percent C hange Percent C hange Year to d a te 10 m o s. 1969 fro m 1 9 68 O c to b e r 1969 F ro m O c to b e r 1 9 69 Se p te m b e r 1 9 69 O cto b e r 19 68 S e p t. O ct. 1 9 6 9 1 9 68 O c to b e r 1969 S T A N D A R D M E T R O P O L IT A N G a in e s v ille S T A T I S T IC A L A R E A S t L a k e la n d B ir m in g h a m . . . . 1 ,9 1 9 ,1 6 6 1 ,8 1 0 ,4 5 4 1 ,8 9 4 ,2 6 2 G ad sden . . . . 7 2 ,5 0 5 6 7 ,2 3 4 6 7 ,7 7 4 H u n ts v ille . . . . 2 2 4 ,8 9 6 2 0 8 ,9 3 0 2 1 1 ,5 7 0 + 6 + 1 + 9 + 8 + 7 + 5 + + + 7 8 6 + 13 . . 1 1 5,42 5 1 0 8 ,9 0 4 1 0 5 ,6 7 9 + 6 + 9 . . 1 7 8 ,1 2 2 1 3 9 ,0 1 3 1 6 4 ,0 9 4 + 28 + 9 3 7 ,8 7 5 39 ,6 61 + 4 - 0 + 27 + 32 r 17 + 20 M o n roe C o u n ty . . 3 9 ,5 5 0 O c a l a ..................... . . 8 7 ,3 6 5 6 8 ,6 6 9 + S t. A u g u stin e . . 2 4 ,0 4 5 2 7 ,0 9 5 2 5 ,0 5 1 -1 1 S t. . . 4 8 0 ,6 3 0 3 9 8 ,8 2 3 4 0 8 ,4 3 9 + 20 P e te rsb u rg 6 3 8 ,5 7 0 6 0 8 ,4 1 6 5 5 6 ,5 7 3 + 5 + 15 3 9 5 ,0 6 6 3 6 4 ,2 9 1 3 5 8 ,0 0 2 + 8 + 10 +11 T u s c a lo o s a . . . 1 3 4 ,7 6 9 1 2 3,13 2 1 1 2 ,9 1 6 + 9 + 19 + 14 W in te r H av e n . . F t. L a u d e r d a le — H o lly w o o d . . . . 1 ,1 2 0 ,0 0 2 9 5 3 ,1 2 4 8 5 6 ,4 9 6 + 18 + 31 + 30 A th e n s . . J a c k s o n v ille . . 2 ,0 2 1 ,6 5 9 1 ,9 9 8 ,9 5 3 1 ,8 3 5 ,5 9 3 + 1 + 10 + 16 B r u n s w ic k . . . 3 ,7 0 7 ,0 1 9 3 ,2 9 8 ,0 2 2 2 ,9 8 4 ,0 1 6 + 12 + 24 + 19 D a lto n 7 7 7 ,7 3 9 6 9 4 ,3 4 4 6 4 0 ,7 6 0 +12 +21 + 12 E lb e rto n M iam i ..................... O r l a n d o ..................... S a r a s o ta Tam pa . . 2 4 8 ,2 0 8 2 1 9 ,4 0 6 + 5 + 19 + 12 G a in e s v ille T a lla h a s s e e . . . 1 8 7 ,4 9 7 1 7 8 ,9 8 9 1 5 2,40 7 + 5 + 23 + 18 G riffin T a m p a -S t. P e te . 2 ,1 9 9 ,8 1 1 1 ,8 9 2 ,1 5 3 1 ,7 6 0 ,1 9 9 + 16 + 25 +21 L aG ra n g e 6 1 6 ,7 8 8 5 6 6,03 6 5 1 6 ,1 0 7 + + 20 + 24 N ew nan + 15 + 4 + 15 . . . 1 8 5 ,2 1 4 1 7 1 ,2 6 2 1 4 0 ,9 1 0 + 8 +31 + 27 . 1 ,1 9 2 ,4 1 0 1 ,0 4 3 ,6 8 3 9 2 6 ,3 2 6 + 14 + 29 + 22 7 7 ,2 9 3 6 9 ,5 8 7 6 2 ,1 3 0 + 11 + 24 + 13 1 0 3 ,6 2 0 1 0 1 ,9 9 8 9 4 ,9 2 4 + 2 + 9 +14 5 4 ,1 31 5 2 ,8 2 7 4 6 ,1 6 7 + 2 +17 + 13 . . 1 2 9,76 7 1 3 3 ,0 0 5 1 2 2 ,5 6 9 - 2 + 6 + 16 . . . . 1 6 ,9 5 4 1 8 ,1 1 9 1 7 ,6 6 4 - 6 - 4 + 11 . . 2 6 1 ,7 9 7 . . 8 7 ,2 8 3 + 10 . . . . . . . . . . . . . . . . . . . . P e n s a c o la from 1 9 68 . . . S e p t. O ct. 1 9 6 9 19 68 . . . O c to b e r 19 68 . . ..................... S e p te m b e r 1969 . . M o n tg o m e ry M o b ile Year to d a te 10 m o s. O cto b e r 1969 Fro m . . . 9 1 ,8 4 5 8 7 ,5 8 5 7 9 ,6 2 3 + 5 + 15 + 11 . . 4 2 ,3 4 4 4 0 ,8 3 2 3 8 ,4 2 6 + 4 +10 + 4 . . 2 3 ,6 2 9 2 3 ,4 8 8 2 3 ,5 6 6 + 1 + 0 + 11 - 8 - 7 . . . . . . . . . 11 8 ,0 6 5 A tla n ta ...................... . A u g u s t a ..................... . . . . 10 5 ,5 0 4 + 1 + 12 +11 7 ,6 2 3 ,7 4 2 7 ,4 4 8 ,6 2 2 6 ,4 6 4 ,3 0 7 + 2 + 18 3 1 8 ,8 6 3 + 8 3 0 0 ,9 6 8 2 6 0 ,2 3 4 + 0 + 5 + 16 - 3 + 15 3 2 9 ,1 3 0 3 4 0,56 7 2 9 2 ,4 1 2 - 3 + 13 + 17 . . . . 3 5 7 ,8 0 8 3 4 6 ,8 2 8 3 2 0 ,3 0 8 + 3 + 12 + 10 B a to n R o u g e . . . 7 2 0 ,7 7 9 7 2 1 ,8 7 8 6 1 0 ,8 2 1 L afay ette . . . 1 7 2 ,2 5 0 1 6 5 ,8 1 7 1 5 0 ,3 6 8 + 4 + 15 + 17 1 7 8,30 2 1 6 5,84 3 1 7 3 ,5 9 4 + 8 + 3 + 2 ,8 7 2 ,7 9 5 2 ,6 3 0 ,6 5 8 2 ,7 9 2 ,2 5 4 + 9 + 3 + 4 M a co n ..................... Savannah . . . . . . 2 5 ,0 3 9 2 7 ,1 0 4 2 6 ,7 8 7 . 9 8 ,7 7 9 9 3 ,9 4 6 8 6 ,2 2 5 + 5 + 15 + 11 . . 6 4 ,2 4 7 6 8 ,3 4 0 r 5 6 ,2 2 6 - 6 + 14 + 7 - 9 - 2 + 20 3 0 9 ,7 8 6 3 0 1 ,1 1 7 ..................... 1 1 6 ,9 5 9 3 3 5 ,9 5 3 A lb a n y C o lu m b u s 9 . . W. P a lm B e a c h V a ld o s ta A b b e v ille 0 + 18 + 6 7 . . . B u n k ie . . . . 1 4 ,0 9 2 1 5 ,0 22 1 3 ,3 3 2 6 + 6 + . A le x a n d r ia . . . . 1 7 3 ,1 4 9 1 5 7 ,6 3 7 1 6 4 ,5 6 6 + 10 + 5 + 18 . . 9 ,7 4 9 7 ,5 6 2 7 ,7 7 2 + 29 +25 +16 . . . . . . . 4 6 ,0 3 0 4 2 ,3 3 4 4 1 ,6 5 6 + 9 + 11 + 11 . . 4 4 ,5 7 8 4 0 ,2 2 9 3 9 ,7 3 6 + 11 +12 + 10 . . . 1 4 ,8 78 1 4 ,2 75 13 ,5 88 + 4 + + . . . . 2 4 ,9 9 6 2 6 ,9 4 8 2 4 ,9 93 - 7 + . P la q u e m in e T h ib o d a u x . . . . Ib e ria . . H am m ond New - . . . . 8 2 ,8 2 8 8 4 ,9 2 9 7 0 ,2 8 9 - 2 + 18 + 17 . . 5 6 ,2 6 8 5 1 ,2 1 6 4 3 ,7 0 5 + 10 + 29 + 19 0 8 + 10 L a k e C h a r le s . . . N ew O r le a n s . . . . . 1 7 9 ,8 7 6 15 6,57 3 1 2 7 ,8 1 2 + 15 +41 + 17 M e rid ia n . . . . . . 9 5 ,4 9 8 8 9 ,5 3 5 7 6 ,3 6 2 + + 25 +24 ...................... 9 3 4 ,4 9 2 9 0 4 ,5 4 8 7 8 5 ,5 2 5 + 3 + 19 + 13 N a tc h e z . . . . . . 4 6 ,9 9 7 4 6 ,9 6 0 4 3 ,8 8 5 + 0 + + 12 +23 B ilo x i-G u lfp o rt Jackso n . H a ttie sb u rg L a u r e l ..................... 7 . . . 8 3 6 ,0 9 6 8 0 5 ,8 2 6 6 8 4 ,0 2 2 + 4 +22 + 20 P a s c a g o u la — M o ss P o in t . . . . 9 1 ,1 9 4 8 4 ,2 3 2 7 6 ,1 0 2 + 8 + 20 K n o x v ille . . . . 6 2 1 ,0 9 6 5 9 7 ,8 2 6 5 6 3 ,5 7 9 + 4 + 10 + 10 V ic k s b u r g . . . . . 5 1 ,4 4 6 4 8 ,2 4 6 4 5 ,3 0 7 + 7 + 14 + 6 N a s h v ille . . . . 2 ,0 1 9 ,1 1 7 1 ,8 5 9 ,6 2 3 2 ,0 9 2 ,7 5 6 + - 4 + 16 Y a z o o C ity . . . . . 2 8 ,7 2 3 3 2 ,1 5 5 2 8 ,6 1 7 -1 1 + - 4 . . 8 4 ,6 0 6 7 1 ,2 5 8 7 7 ,6 8 0 + 19 + 9 + C h a tta n o o g a . 9 B r is to l JTH ER C E N T E R S . . 6 . . 9 8 ,7 7 3 9 8 ,6 3 4 8 7 ,4 6 9 + 0 +13 +14 . . . . 1 0 8 ,6 2 5 1 0 3 ,1 9 9 9 1 ,8 4 0 + 5 + 18 + 16 . . . . 1 8 8 ,9 4 9 1 7 6,735 1 8 2 ,2 1 4 + 7 + 4 + 10 . . 4 3 ,5 0 9 ,0 7 7 3 7 ,5 2 6 ,5 9 4 + 9 + 16 + 15 . . 5 ,0 5 5 ,9 5 2 4 ,7 3 6 ,7 6 5 4 ,7 6 2 ,8 2 3 + 7 + 6 + 8 . . 1 3 ,8 1 4 ,2 4 2 1 2 ,4 7 4 ,2 0 7 1 1 ,4 3 4 ,6 5 6 + 11 + 21 + 19 . . 1 2 ,2 5 5 ,0 0 5 l l, 1 8 4 ,5 9 4 r 9 ,9 1 9 ,9 2 0 + 10 +24 +17 4 ,6 4 3 ,6 3 7 4 ,6 7 7 ,1 2 3 + 7 + 6 + 7 . . . . J o h n so n C it y A n n isto n K in g s p o rt . D o th an ...................... 9 3 ,2 2 6 8 6 ,6 1 1 8 1 ,2 7 6 + + 15 + 17 S e lm a ..................... 5 7 ,4 8 5 5 2 ,0 2 4 5 8 ,2 0 0 + 10 - 1 + B a rto w ..................... 3 5 ,5 5 9 3 4 ,1 1 9 3 3 ,2 3 9 + 4 + 7 + 10 A lab a m a^ . 9 8 ,2 8 0 9 4 ,7 7 7 8 7 ,2 8 3 + 4 + 13 + 17 F lo rid a^ . . . . + - . . . . B ra d e n to n . . . 8 6 S IX T H D IS T R IC T TOTAL ..................... . ■ . . . 2 2 3 ,5 9 9 2 0 9 ,5 2 2 2 4 1 ,3 6 8 D a yto n a B e a c h . . 1 1 4 ,1 4 2 9 3 ,3 9 9 9 7 ,4 8 8 F t. M y e rs — N. F t . M y ers . . 1 2 8,13 2 1 2 1,08 7 1 0 3 ,1 2 2 ‘ Includes only banks in the Sixth District portion of the state. DigitizedCfor FRASER9 D E E M B E R 196 - 2 G eorgia^ + 22 + 17 + 5 L o u is ia n a t * • ■ . M i s s is s ip p i! * B re v a rd C o u n ty . . + + 24 +31 . 7 6 7 fpartially estimated. T e n n e sse e t* . 4 0 ,0 2 6 ,8 2 7 r . 4 ,9 6 8 ,3 6 0 . . 2 ,0 3 4 ,5 4 2 1 ,9 6 5 ,0 7 8 1 ,7 0 1 ,4 2 2 + 4 + 20 + 14 . . 5 ,3 8 0 ,9 7 6 5 ,0 2 2 ,5 4 6 5 ,0 3 0 ,6 5 0 + + +17 7 7 JEsti mated. 159 D is tric t B u s in e s s C o n d it io n s R e c e n t e c o n o m ic in d ic a t o r s in th e D is t r ic t s h o w c o m p a r a tiv e ly little c h a n g e . N o n f a r m e m p lo y m e n t in O c to b e r w a s e s s e n t ia lly u n c h a n g e d , a lth o u g h m a n u f a c t u r in g p a y r o lls h ib ite d o n ly s lig h t g a in s . Lo w e r fa r m p ro d u c t io n a n d p r ic e s in d ic a te in c r e a se d . s h a r p ly C o n s u m e r c re d it ex red uce d in c o m e s a re p r o s p e c t fo r m o s t c ro p fa r m e r s. L e n d in g a c t iv it y a t m e m b e r b a n k s slo w e d c o n s id e r a b ly r e f le c t in g a d e c lin e in le n d in g at the la rge ban ks. T o ta l c o n s t r u c t io n c o n tr a c t in in N o vem ber, v o lu m e c o n tin u e d to in c r e a s e d u r in g O c to b e r. L o a n s a n d in v e s t m e n ts a t m e m b e r b a n k s w ere v irtu a lly u n c h a n g e d in O c to b e r a n d in the fir s t h a lf o f N o v e m b e r. Loan growth nearly offset sales of investments. After a large expansion in Octo ber, the large banks have curtailed their business loans during the first three weeks of November. Total deposits at all member banks increased after declining in October. E x t e n s io n s o f n e w c o n s u m e r in s t a lm e n t c re d it a t c o m m e r c ia l b a n k s in c r e a s e d s lig h t ly in O c to b e r b u t r e m a in e d b e lo w the y e a r-a g o fig u r e fo r th e Automobile loans ac counted for most of the increase, whereas other loan categories decreased or exhibited minor gains. s e c o n d c o n s e c u t iv e m o n th . in cotton and citrus outweighed increases in prices of vegetables. Lower broiler and beef cattle prices were mainly responsible for the reduction in livestock prices. M a n u f a c t u r in g e m p lo y m e n t in O ctob e r w as a b o u t th e s a m e a s in S e p te m b e r , b u t fa c to r y p a y r o lls in c r e a s e d . Other nonfarm employment also remained unchanged. With accelerated layoffs at the Kennedy Space Center and departures of idled workers to seek employment elsewhere, the labor force of Brevard County, Florida, di minished. The departures, however, were not enough to prevent a significant rise in the unem ployment rate there over last year. p ro d u c tio n F lo r id a ’s b o o m c o n t in u e d to p u s h th e D is t r ic t 's low er, m o s t D is t r ic t f a r m e r s fa c e a s iz a b le r e d u c to ta l c o n s t r u c t io n c o n tr a c t v o lu m e to n e w h ig h s . tio n in c a s h r e c e ip ts. The large reduction ex pected in the District’s com crop indicates a significant shrinkage in locally produced feed supplies for District livestock. Soybean produc tion is up but not enough to counteract the depressing effect of the lower soybean support price on farm incomes. Total farm prices in Oc tober continued to decline. Prices of crops as well as livestock moved lower. Price declines Through the first ten months in 1969, total volume was higher than during the same period in 1968. Residential building contracts, supported by the continuing heavy volume of large projects in Florida, were also up for the same period but to a lesser extent. Meanwhile, the pull of high yields on Aaa corporate securities and other direct investments increased the pressure on the District’s savings institutions. W ith NOTE: c o tto n , rice , and su garcan e D ata on w h ic h s ta te m e n ts are b a se d have been a d ju ste d w h e n e v e r p o s s ib le to e lim in a te s e a s o n a l in flu e n c e s. 160 M O N T H L Y R E V IE W