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d ecem b er deral R e se rv e Bank of Atlanta ■1 9 7 2 In this issue: S iz in g U p T e x t ile s T h e Im p a c t O n F a rm D is t r ic t In d e x o f In s u r a n c e L e n d in g B a n k in g fo r D is t r ic t C o m p a n ie s th e Y e a r B u s in e s s N o te s: In t e r n a t io n a l 1 9 7 2 C o n d it io n s A c t iv it ie s S i z i n g U p T e x t il e s b y B r ia n D . D it t e n h a fe r The present recovery in the national e c o n o m y is putting som e starch back into the textile industry. W ith consum er sp e n d in g increasing, dem and for all textiles has been grow ing. How ever, the d a m p e n in g effect o f im port com petition and long-term decline in cotton textile produ ction m ay prevent any real bo o m in the near future. Long-Term Trends The im portance of textiles relative to the entire U. S. e c o n o m y has been dim inishing. The techn ology o f textile production can be relatively simple, and this labor-intensive industry is one of the first that d e ve lo p in g countries attempt. Textile em p lo ym en t in the United States has declined since 1950, as w orkers have turned to better paying w ays o f earning a living. Between 1950 and 1970, textile jobs fell from 1,260,000 to 986,000. How ever, du ring this period Sixth District states enlarged their share o f the industry from 16 percent in 1950 to 21 percent in 1970 by sim ply m aintaining earlier e m plo ym en t levels. O f course, som e states suffered declines w hile others gained. For example, Louisiana, w hich had 2,000 w orkers in 1950, retained only 400 by 1970. M eanw h ile, G e o rgia w as a d d in g 7,000 w orkers to textile payrolls. Textiles' im portance to each state's e c o n o m y varies w idely. Jobs range from 7.2 percent of G e o rgia 's nonfarm total to virtually none in Louisiana and Florida. How ever, only a sm all portion of this em p lo ym en t is in large cities, and a particular m ill's im portance to a sm all tow n is hard to overestimate. Em p loym ent Trends Southeastern trends in textile e m plo ym ent are m erely the reflection of trends in the total econom y. Nationally, production o f w oven cottons has been on the decline w hile synthetics, carpets, and knits have been on the increase. Textiles have been influenced by im port com petition, increased popularity of synthetics and knit fabrics, and changes in dem an d caused by the recession of 1970. Industry em ploym ent in the Southeast seem s to have bottom ed out during 1971, reaching a lo w point in the late sum m er and early fall. Since that time, a gradual recovery in e m ploym ent and produ ction has been under way. A n additional 5,000 w orkers were added to payrolls in the Monthly Review, Vol. LVII, No. 12. Free subscription and additional copies available upon request to the Research Department, Federal Reserve Bank of Atlanta, Atlanta, Georgia 30303. 206 DECEMBER 1972, MONTHLY REVIEW tw elve m onths en d in g in September. However, jobs still have not returned to the high level reached in 1969. In Septem ber 1972, e m ploym ent w as still som e 6,000 b e low the 1969 average. Textile recovery has been uneven in the District d e p e n d ing upon w hich segm ent of the industry predom inates in each state. For example, the decline in cotton textiles in G e o rgia w as only partially offset by grow th in other segm ents; the result w as a net decline o f 5,000 textile w orkers between 1969 and the third quarter o f 1972. O n the other hand, A lab am a increased textile e m plo ym ent because it m aintained cotton w eaving w hile expan ding the yarn and thread and the knitting portions o f the industry. G e o rgia accounts for m ore than one-half of tex tile e m plo ym ent in the Sixth District, and exam ining m ajor sectors of the industry in that state may help explain the ch an gin g pattern of textiles in the Southeast. G e o rgia's em ploym ent in the industry is presently 4 percent below the 1969 average, although it has leveled off from a sharp drop in 1970. The 4-percent decline represents a loss o f 5,000 w orkers and average w eekly payrolls of m ore than half a m illion dollars. W ith in that fram ework, significant changes have been o ccurring in the co m po sitio n o f the industry in Georgia. Between 1970 and A u gu st 1972, the num ber o f persons em ployed in p ro d u cin g w oven cotton goods, G e o rgia 's largest segm ent of the industry, declined by 9 percent, or 3,500 workers. O ffsetting this loss, jobs in carpet m ills grew by m ore than 12 percent, or 3,200 workers. The third largest segm ent of G e o rgia's textiles, yarn and thread mills, m aintained em plo ym ent at about 21,000 du ring the same period. These three segm ents accounted for m ore than three quarters of G e o rgia's total textile jobs. But, m easured by the Industrial Production Index, textiles have recovered from 1970's w oe s m ore quickly in the Southeast than in the rest o f the nation. This Bank's regional index ju m ped 7.5 percent du ring the latest twelve m onths and nation ally the increase over the sam e period w as only 5.1 percent. The slight increase in District textile em ploym ent over the year has apparently been accom p anied by a longer average w orkw eek and expanded use o f capital equipm ent. Carpets T h o u gh textiles are not a grow th sector in the Southeastern econom y, carpet m anufacturing is grow ing, particularly in Georgia. D u rin g 1971, o f 27,000 persons in the Southeast p ro du cin g w oven and tufted floor coverings, all but 2,000 were in G eo rgia w hich claim s m ore than half the carpet w orkers in the U. S. The center for G e o rgia 's carpet industry is Dalton, hom e of m any producers of tufted carpets. This FEDERAL RESERVE BANK OF ATLANTA TABLE 1 T e x tile E m p lo y m e n t (Thousands) Average for Year 1969 1970 1971 1972* Alabama 43.6 44.7 44.0 45.1 Georgia 119.8 115.9 112.8 113.8 Mississippi Tennessee 36.4 7.1 36.0 6.4 5.7 34.0 6.4 34.2 *NOTE: 1972 figures represent 10 months of seasonally adjusted data. type of carpeting has taken over all but the highest priced segm ent of the U. S. carpet market. Start ing from n othing at the end of W o r ld W a r II, m akers of tufted carpets have captured 96 percent of the 1971 market, based upon valu e o f shipm ents. After increasing at an average rate of m ore than 8 percent du ring the Sixties, the value of carpet shipm ents grew only 3.2 percent during 1970. This slo w d o w n w as caused by a com bination of price w eakness in the industry and the national recession affecting quantity dem anded. D u rin g 1971, however, expansion of the national eco n o m y has caused an 11-percent increase in quantity and a 9-percent gain in value of shipm ents. In the first half of 1972, both quantity and value of carpet shipm ents have grow n by nearly 20 percent w hen com pared to the sam e period last year. M oreover, prospects for the carpet industry are quite good. A w idely-predicted strong eco n o m y in 1973, co up led with sustained record levels o f ho u sin g starts, provide a very bright short-run o u tlo o k for carpet dem and. Investment A s is expected in a market econom y, the pattern of capital expenditures in the textile industry follo w ed the pattern o f consum er dem and. O n the average, capital expenditures in textiles increased at an 11.3-percent annual rate from 1958 to 1970, but the rate for cotton weaving, largest segm ent o f the industry in the Sixth District, w as only 3.7 percent. Capital expenditures in knit fabric m ills ju m ped at a 23-percent rate d u ring the sam e period. Pro ducers of tufted carpets enlarged their capital at an annual rate averaging just under 20 percent du ring the Sixties. Thus, those segm ents sh ow in g a strong dem and grow th have been m aking the necessary capital expenditures; those segm ents sh o w in g declines in value o f shipm ents have been reluctant to invest. Recent D epartm ent of 207 Textile employment recovers gradually . but production rebounds sharply . and lending follow s s u it. chg., ann. rate * 1 0 m o n th s d a ta N o te : L o a n s o u ts ta n d in g a t 2 3 a p p a r e l, a n d le a th e r c o n c e rn s *7 m o n th s d a ta C o m m e rce data (Septem ber 1972) sh ow investments in textile m anufacturing occurring at an annual rate o f $770 m illion, 26 percent above the depressed level of 1971, but still b e lo w the 1966 record. A lth o u gh no inform ation on w hich segm ents are investing these funds is yet available, in all probability, m oney is flo w in g to those portions experiencing the strongest d e m an d — carpets, knits, and synthetics. Private estimates o f investm ents indicate a slight decline in planned capital expenditures for 1973 as com pared to 1972. Profits Textile profits have im proved substantially from the extremely low levels of 1970, but are still w ell under those for m anufacturing as a w ho le and 208 la rg e b a n k s to te x tile , for the industry itself in the late Sixties. After-tax profits averaged only 5.1 percent of stockholders' equity in 1970, reflecting that year's national eco n o m ic problem s. In 1971, profits crept back up to a 6 .6 -percent rate and in the first half of 1972 averaged 6.9 percent. How ever, for the five-year period e n d in g in 1969, after-tax profits averaged 9.0 percent of stockholders' equity; therefore, profit rates are still far from m atching those expansion years. Textiles generally are considered a low -profit m anufacturing field, and recent trends confirm this. D u rin g the first half of 1972, the profit rate for all industries averaged 10.4 percent, com pared with the 6.9-percent textile rate. The len ding o f Sixth District banks to textile and apparel firms over the last few years seem s to conform to the DECEMBER 1972, MONTHLY REVIEW relatively low profit pattern of textiles. These firms have increased their bo rro w in g from leading District banks only m oderately since 1967. Such bo rro w in g did pick up som ew h at in 1971 and 1972 as textile profits increased. of m ajor concern to Southeastern producers of cotton yarns and fabrics. The rise in im port com petition and a w an in g national market have com bined to force a drop in em ploym ent in this portion of the industry in the last few years. Im ports The O u tlo o k The long-term decline of cotton textile production in the United States can be partly explained by grow th in imports. Countries attem pting to expand m anufacturing find textile production easily introduced to a newly industrialized w ork force. C onsequently, for m any years Am erican m an u facturers have been troubled by low -priced im port com petition. A s m easured by volum e, im ports of all textile products increased by 7 percent du ring the first half of 1972. Im ports of m an-m ade fibers and textile products m ade from such fibers declined by 5 percent, reflecting trade agreem ents signed last year with South Korea, Japan, H o n g Kong, and Taiwan. These countries, largest exporters of m an-m ade fiber products to the U. S., agreed to limit exports of these go o d s to the U. S. market, and du ring the first half of 1972, im ports of these products from those four countries did decline by 10 percent. In contrast, cotton yarn, fabric, and apparel im ports increased du rin g the first seven m onths o f the year at an annual rate o f 46 percent. C otton textile im ports w ill certainly be higher in 1972 than in the previous peak year o f 1966, and this fact is The overall o u tlo o k for textiles seems to be for continued m oderate expansion in shipments. The Departm ent of C o m m e rce show s shipm ents of all textile products at a $27.6-billion annual rate for the first six m onths of this year, nearly 13 percent above 1971. Strong expansion of personal incom e du ring 1972 and its expected continuation in 1973 should create m ore dem and for textile products. In particular, the rate of new housing starts for m ost of 1972 has been significantly above two m illion, creating a strong dem and for textile-related household furnishings such as carpets, drapes, and upholstery. Bank A n n o u n c e m e n ts Long-term dem and for textile products grow s at about the sam e rate as disp o sable personal incom e, so long-term annual grow th o f about 4 percent is to be expected in production. However, value added per production w orker increased at an annual rate of about 5 percent during the decade of the Sixties, so the chances of overall grow th in em ploym ent are not too encouraging. In summary, a continued m oderate expansion in textile output seems probable, but significant gains in textile em ploym ent do n ot® Opened for business as a par-remitting nonmem ber. Officers: Willard S. Bowman, president; Harold F. Beyer, vice president. Capital, $700,000; surplus and other capital funds, $300,000. November 8, 1972 C IT IZ E N S N A T IO N A L B A N K O F FO RT LA U D ER D A LE Fort Lauderdale, Florida October 27, 1972 W EST D A D E BAN K Miami, Florida Opened for business as a par-remitting nonmem ber. Officers: Fred B. Dykstra, president; Calvin L. Clearly, vice president and cashier. Capital, $600,000; surplus and other capital funds, $400,200. November 1, 1972 E X E C U T IV E B A N K O F F O R T L A U D E R D A L E Fort Lauderdale, Florida FEDERAL RESERVE BANK OF ATLANTA Opened for business. Officers: Henry D. Perry, Jr., chairman; Charles W. Lantz, president and chief executive officer; C. Edward Hogg, vice president and manager; J. Robert Breen, vice president; Mrs. Loretta S. Pennell, vice president and cashier. Capital, $666,670; surplus and other capital funds, $333,335. November 10, 1972 F IR S T N A T IO N A L B A N K O F S E M IN O L E Seminole, Florida Opened for business. Officers: Robert G. Wagner, chairman and president; E. James Coulter, Jr., vice president and cashier; Julian B. Mathews, vice (Continued on p. 213) 209 T h e Im p a c t O f In s u r a n c e C o m p a n ie s O n F a rm b y G e n e D . L e n d in g S u lliv a n Insurance com panies do m ore than sell insurance. They also m ake loans, and they are an im portant source of long-term credit for farmers in Sixth District states. In fact, insurance co m p an y lending to District farmers has grow n rapidly since 1950, although the rate of grow th has been less constant than for m ost other lenders. Data published by the U S D A sh ow that insurance co m p an ies have accounted for m ore than one-tenth of the total credit sup plied to District farmers d u ring m ost of the past tw o decades. How ever, these data d o not reveal the loan vo lu m e of particular insurance com panies. T o determ ine the am ount of farm credit provided by com panies headquartered outside the District, loan data of individual insurance com panies were analyzed, using two sources: the insurance co m p an y yearbook, The S p e c ta to r, and annual reports filed with state insurance com m issioners. Relative Im portan ce of Insurance C o m p a n ie s A c c o rd in g to this analysis, m ore than 300 individual insurance co m panies have m ade m ortgage loans of som e type within the Sixth District in the period from 1950-1970. In each state, however, less than fifteen co m panies have accounted for m ore than 90 percent of the agricultural loan volum e. Individual co m p an y data further reveal that only a m inor portion of credit com es from com panies located within southern states. Table 2 sh ow s that of the total insurance co m p a n y credit in the District, 98 percent of farm loans and 74 percent of other m ortgage loans are sup plied by co m panies h ead quartered outside the South. Thus, farmers are provided with a significant source of funds from n onlocal lenders. In fact, a handful of 210 DECEMBER 1972, MONTHLY REVIEW TABLE 1 Agricultural Loans in Sixth District States Total $ Million Insurance Companies $ Million % of Total 1950 1954 874.1 1,296.6 72.1 146.1 11.3 1959 1964 1,625.0 225.3 13.9 2,912.6 380.0 13.0 1970 5,977.6 690.5 11.6 8.3 Source: Compiled from data furnished by the Economic Research Service, USDA. similar, increasing from less than $30 m illion to approxim ately $200 m illion in each state from 1951 to 1970. Louisiana w as the only other District state disp laying a pattern o f loan grow th sim ilar to Florida and M ississippi. Insurance com pany loans in Louisiana did not begin to increase dram atically, however, until 1963. This vo lu m e has since expanded by w ell over $100 m illion, sh ow in g the m ost spectacular grow th in 1966. In the other three District states, such loans have grow n m ore moderately. G e orgia's vo lu m e in 1970 w as twice that of Tennessee, with A lab am a 's falling between the two. Ratio o f Agricultural to O th e r Loans com panies headquartered in four northeastern states— N e w Jersey, N e w York, Connecticut, and M assachusetts— provide 90 percent o f the agricultural loan volum e. A lth o u gh agricultural loans have traditionally m ade up a very sm all portion o f the m ortgage Sixth D istrict sta te s have attracted varying am ounts of insurance com pany farm loans. Lending Trends r ' Million $ Farm Credit Outstanding Insurance co m p an y len ding has grow n with ex panded use o f agricultural credit. District farm loans by insurance com panies am ounted to $72 m illion in 1950, but increased 9 V 2 times to $690 m illion by 1970. Total farm credit increased slightly less, about 6.8 times. Insurance com panies tend to restrict loans to larger and m ore successful farms, especially to those with relatively low risk o f loss. In this District, farm loan departm ents have favored the m ore productive types of farm ing such as cotton, peanut, citrus, rice, and sugar production. Therefore, insurance com panies have not view ed District states as equals in potential for profit able use o f funds. They have show n strong preferences for operations in Florida and M ississip p i where loan grow th patterns have been TABLE 2 Head Office Locations of Insurance Companies Supplying Credit to Sixth District States, 1951-70 % of Dollar Volume Farm Loans Other Loans Sixth District States 1.10 18.73 Other Southern States 0.70 7.34 98.25 73.92 100.00 100.00 Location of Headquarters Outside South All Areas NOTE: Detail will not necessarily add to totals due to rounding. FEDERAL RESERVE BANK OF ATLANTA -800 1 eim . Ala. Ga. -600 La. -400 Miss. -2 0 0 Fla. 1951 1955 1960 1965 1970 ° loans extended by insurance com panies, they have fluctuated significantly over the years. W e can see this from exam ining the ratio of agricultural to other types of insurance com pany loans. This ratio grew about half the time over the 1951-1970 period; otherwise it declined or rem ained relatively stable. M o re specifically, the ratio rose rather sharply from 1951 to 1952, then trended do w nw ard through 1960. Beginn in g in 1961, it began to in crease again, and that grow th continued alm ost w ithout interruption for seven years. In 1969, this ratio again turned dow n, fo llow e d by a drop in actual dollar vo lu m e o f loans in 1970, a period rem em bered for extremely tight credit. The Influence o f M o n e y M arket C o n d itio n s Fluctuations in farm len ding are related to changes in credit condition s and interest rates. 211 Farm loans are a sm all proportion of total insurance com pany c r e d i t . . . ' Billion $ Sixth District States 10 Total L o a n s-h ^ ^ ^ Farm Loans Other 6 2 0 but that proportion has varied sig n ifica n tly from year to year. Ratio of farm to other loans .08 - — ___ - .06 .04 .02 ~ 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 I i ~ ’51 ’53 ’55 ’57 ’59 ’61 ’63 ’65 ’67 ’69 Since interest on loans is a prim e source of incom e to insurance com panies, they attempt to keep available funds em ployed where they earn the m ost m oney. W h e n interest rates are high and non-farm uses offer higher returns than agricultural loans, insurance com panies typically m ove rather quickly to divert new funds into fields other than agriculture.1 In contrast, local lenders such as bankers have a sense o f loyalty to custom ers in their com m unities and are usually m ore reluctant to shift funds to other areas du ring such periods. Those lenders w h o m ight be inclined to do so have fewer opportunities for alternate uses o f funds than do national insurance com panies. W h e n interest rates recede to a point where agricultural loans are again attractive com pared to other uses o f funds, insurance com panies typically resume farm lending. This vacillating pattern o f credit extensions is part o f the evidence indicating that agriculture experiences an increase ’Usury laws sometimes prohibit insurance companies from making agricultural loans at competitive interest rates. Emanuel Melichar in A gricultural Finance Review , Vol. 33, July 1972, mentions two other important influences on the volume of farm credit provided by insurance companies: (1) the trend in their cash flow, which depends in turn on trends in policy premiums, policy loans, and the repayment rate of previous loans and investments, and (2) that farm lending has relatively short commitment periods and so can be expanded or contracted on short notice when the cash flow of insurance companies either exceeds or falls short of outstanding commitments in commercial lending. 212 A gricultural Loans Related to Interest Rate V ariations 8 4 i i I I i i i i i i i i i i i i i i i ’51 ’53 ’55 ’57 ’59 '61 ’63 ’65 '67 ’69 or decrease in credit availability as a result of changes in m onetary policy and general credit conditions. The a cco m p an yin g chart sh ow s the relationship between agricultural loan vo lu m e of insurance com panies and long-term interest rates (corporate b o n d rates). W h e n interest rates m oved up, the grow th of insurance co m p an y len ding to Sixth District farmers tended to slo w dow n. Loan vo lu m e actually declined w hen interest rates w ere excep tionally high.2 The vo lu m e o f agricultural credit held by insurance com panies grew at a rather steady rate from 1951 through 1956. In 1957, an abrupt slackening in loan vo lu m e grow th co in cid ed with a sharp rise in long-term interest rates. In 1958, when long-term rates were rather steady and actually tended to pull back som ew hat, the grow th of agricultural loan vo lu m e sh ow ed a revival and that grow th rate even accelerated som ew hat until 1968. There were no significant increases in long-term interest rates du ring this period until Insurance com pany loans ten d to m ove op p osite to in terest rates. 1960 = 100 /* • /✓ 240 / / / / _ 200 Insurance Co. Loans / to Dist. Farmers--* / 160 ✓ 120 — Corporat e Bond Rates * 80 40 ~ 1 1 1 1 1 l l 1 1 1 1 1 1 1 i i i i i— ’52 ’54 ’56 ’58 ’60 *62 ‘64 ‘66 ’68 ’70 the latter portion of the Sixties. In fact, rates on long-term corporate b o n d s actually declined slightly from 1960 through 1965, the period w hen the vo lu m e of District agricultural loans held by insurance com panies w as m akin g the m ost rapid growth. A lth o u gh long-term rates began to clim b rapidly in 1966 and continued to rise irregularly 2Changes in the farm loan volume of insurance companies were negatively correlated with changes in long-term corporate bond rates although the coefficient of —.218 was not statistically significant. DECEMBER 1972, MONTHLY REVIEW through 1970, it w as not until 1969 that the grow th in insurance co m p an y farm loan v o lu m e appeared to be curbed. These loans show ed little grow th from 1968 to 1969 and actually shrank in 1970. It w as du ring 1969 and 1970 that the increase in policy loans and delay in som e loan repayments severely curtailed the flo w of funds available to insurance com panies. M a n y farm loan offices of insurance com panies virtually ceased operations, drying up a source of funds for new agricultural loans. T he F u tu re o f In su ra n c e L oans to C om pany A g ric u ltu re Fluctuations in farm len ding w ill u ndou bte dly c o n tinue to occu r as business condition s change, but farm loans are expected to offer a relatively safe and profitable investm ent for insurance com pany funds over the lo n g run. G row th in farm size and increased capitalization of com m ercial farm opera tions have enlarged credit dem an ds o f individual Bank Announcements (Continued from p. 209) farmers as well as of agriculture as a w hole. Insurance com p an y m anagem ent typically prefers to make large loans because of the econom ies involved in handlin g large am ounts of m oney in single transactions. Paper w ork connected with servicing and collecting large loans is in many cases no greater than that involved in servicing relatively sm all loans. Thus, the cost o f lending m oney is substantially reduced w hen loans are m ade to large farm ing operations and the o pportunity to m ake those large loans is increasing. Insurance com panies w ill continue to be a prime source of long-term credit for farmers, particularly in areas of well established and highly productive types o f agriculture. It is not likely, however, that farmers in the m arginal high-risk categories will enjoy any freer access to insurance co m p an y funds than in the past. The m anagem ent of farm loan departm ents w ill probably continue to avoid credit dem ands of such farm ing operations.® November 16, 1972 E X C H A N G E N A T IO N A L B A N K O F P IN E L L A S P A R K Pinellas Park, Florida president; John C. Matthews, vice president. Capital, $750,000; surplus and other capital funds, $750,000. Opened for business. Officers: H. E. Long, chair man and president; Edward C. Jenkins, vice presi dent; Richard M. Hayes, cashier. Capital, $500,000; surplus and other capital funds, $500,000. November 14, 1972 N O RTH W ESTERN BAN K O F BRO W A RD CO U N TY Margate, Florida Opened for business. Officers: Robert L. Kester, president and chairman; Paul E. Basye, assistant to the president; Samuel C. Phillips, executive vice president; Robert E. Hunnicutt, Jr., cashier. Capital, $500,000; surplus and other capital funds, $500,000. November 16, 1972 L IB E R T Y B A N K A N D T R U S T C O M P A N Y New Orleans, Louisiana Opened for business as a par-remitting nonmem ber. Officers: Alden J. McDonald, Jr., president; John S. Keller, vice president. Capital, $1,200,000; surplus and other capital funds, $950,000. November 15, 1972 November 16, 1972 S U N S H IN E S T A T E B A N K W A LK ER C O U N T Y BAN K South Miami, Florida Lafayette, Georgia Opened for business as a par-remitting nonmem ber. Officers: A. D. Harrison, Sr., president; Harry Joe King, executive vice president. Capital, $800,000; surplus and other capital funds, $400,000. Opened for business as a par-remitting nonmem ber. Officers: H. J. Middleton, Jr., president; K. Lamar Thomas, vice president. Capital, $350,000; surplus and other capital funds, $350,000. FEDERAL RESERVE BANK OF ATLANTA 213 Other Securities _ U.S. Govt. Securities - 4 l It I I i i i i i i I m J J DJ J 1971 1972 LATEST MONTH PLOTTED: OCTOBER Figures are for the last Wednesday of each month. Daily average figures S IX T H i I i i M I i it i I i l i i i i i i i I l I i I I i I i i i I i i l I I l i D J J A 1973 J 1971 DJ J 1972 D J A 1973 D IS T R IC T B A N K IN G N O T E S F O R E IG N DEPOSITS 0 D E P O S IT S , C L A IM S , 40 AND A CC EPTA N CES CLAIMS Million $ I Foreign Official Demand Loans to Official Institutions Foreign Official Time Loans to Foreign Banks Foreign Bank Demand Balances with Foreign Banks Foreign Bank Time Foreign Commercial & Industrial Loans Acceptances Note: 214 Figures cover 32 large Sixth District commercial banks DECEMBER 1972, MONTHLY REVIEW D IS T R IC T B A N K S ' IN T E R N A T IO N A L A C T IV IT IE S A C C E LE R A T E District international banking activity has surged to unprecedented levels du ring the past tw o years, despite the turm oil acco m p an yin g the breakdow n of the Bretton W o o d s w orld m onetary system. A c co rd in g to available data, international departm ents of large District m em ber banks have expanded acceptances (on U. S. residents and foreigners) and reported claim s on foreigners to nearly tw o and one-half tim es their level at the end of 1970. Foreign deposits are also up substantially. District banks also open ed four new branches outside the United States since the end o f 1970, brin ging the total to six. These branches, as of Septem ber 1972, added $111 m illion to the inter national assets o f their parent b..nks. Eight new Edge Act corporations established during the same period have further augm ented the volu m e of D is trict international banking activity. (Edge Act corporations are U. S. bank subsidiaries form ed to carry out international banking and investm ent activities exclusively.) The total num ber o f Edge Act units in the region stands at ten; six belo ng to banks outside the Sixth District. All international asset categories of large District m em ber banks advanced since the end of 1970, with com m ercial and industrial loans and loans to foreign official institutions registering the greatest vo lu m e o f these gains. This high rate o f expansion reflects several influences. A d d e d to the strong underlying grow th o f District foreign trade, plenti ful funds throughout m uch of the period en cou r aged District banks to enlarge international port folios. Com petitive forces unleashed by new Edge A ct subsidiaries open ed w ithin the Southeast by non -D istrict banks may have further increased in terest in international activity. Paradoxically, exchange rate uncertainties, espe cially du ring 1971, m ay have boosted dem and for U. S. d ollar credits as a m eans o f h ed gin g against a decrease in the foreign exchange value of the dollar. (As the dollar depreciated in value on foreign exchange markets, exchange costs of repaying dollar loans fell.) M oreover, these exchange rate uncer tainties probably account for sharp, but tem porary increases in District correspondent balances held with foreign banks in April, July, and D ecem ber 1971 and January 1972. Since early sum m er o f this year, international loan activity has grow n at a less exhilarating pace. In fact, bankers' acceptances held by District banks' portfolios have follo w ed a declin in g trend since early spring. So m e o f this deceleration represents repaym ents of U. S. bank credits by Japanese banks and trading com panies. These repaym ents resulted from Japan's encouragem ent o f capital outflow s in order to avert another revaluation of the yen. The revival of U. S. dem an d for bank credit, stem m in g from dom estic ec o n o m ic recovery, also may have induced District banks to redirect their atten tion tow ard dom estic loans. FEDERAL RESERVE BANK OF ATLANTA ACCEPTANCES AND FOREIGN LOANS Million $ 25 20 15 10 45 40 35 25 20 15 15 10 1972 FOREIGN DEPOSITS Million $ 5 0 35 30 25 20 15 10 5 Bank Time 0 l i J Note: i i I I J I i l l i D 1972 Figures cover 32 large Sixth District commercial banks W h ile total foreign deposits for large District banks expanded since 1970, this expansion w as m ore uneven than for international claims. Foreign official dem and deposits have declined moderately, and foreign official time deposits, w hile still above D e ce m b er 1970 levels, have fallen back this year. In contrast to foreign loans, w hich accelerated during the first half of 1972 but have dropp ed off in recent m onths, the level of foreign deposits has remained stable throu ghou t the year. J O H N L E IM O N E 215 IN D E X MONTH January February March April May June PAGES 2-16 18-36 38-52 54-72 74-92 94-108 FD R MONTH July August September October November December PAGES 110-128 130-148 150-164 166-184 186-204 206-220 ANNOUNCEMENTS Y E A R 1972 Consumer Loans By Joseph E. Rossman, Jr., 89 Consumer Time Deposits By John M. Godfrey, 29 International Activity By John Leimone, 215 Loans and Investments By Joseph E. Rossman, Jr., 161 Negotiable CD 's By Joseph E. Rossman, Jr., 123 SBA Guarantees By John M. Godfrey, 201 32, 124 Securities By John M. Godfrey, 69 A G R IC U L T U R E Term Credit By John M. Godfrey, 145 Agriculture: Another G ood Year By Gene D. Sullivan, 10 B A N K IN G S T R U C T U R E The Impact of Insurance Companies on Farm Lending By Gene D. Sullivan, 210 Concentration in Banking Markets: Regulatory Numerology or Useful Merger Guidelines? Southeastern Agriculture: A New Dress and a New Girl, Too One-Bank Holding Companies in the Southeast By Gene D. Sullivan, 150 By Charles D. Salley, 82 Where the Chickens Come Home to Roost By Gene D. Sullivan, 23 BANK ANNOUNCEMENTS 3, 32, 41, 81,103,124, 143,159, 175,199, 209 B A N K H O L D IN G C O M P A N IE S By Charles D. Salley, 186 B O A R D O F D IR E C T O R S 30 B R O IL E R IN D U S T R Y Where the Chickens Come Home to Roost By Gene D. Sullivan, 23 One-Bank Holding Companies in the Southeast CHECKS By Charles D. Salley, 82 The Georgia Tech Findings: Checks and the Payments Mechanism B A N K IN G By Charles D. Salley, 18 (see a lso B a n k in g N o te s, B a n k H o ld in g C o m p a n ie s , B a n k in g M a rk e ts , B a n k in g S tru c tu re ) Banking: Rapid Deposit Growth By Joseph E. Rossman, Jr., 12 COAL Coal: Roaring Again By Brian Dittenhafer, 42 District Banking: Ten Years of Growth and Change C O N S T R U C T IO N A C T IV IT Y By John M. Godfrey, 54 Construction: Vigorous Expansion Southeastern Banks and SBA Increase Lending To Minority Enterprises By Boyd F. King, 8 By John M. Godfrey, 166 What's in Store for Bank Credit Cards in the Southeast? By Emerson Atkinson, 99 B A N K IN G M A R K E T S Concentration in Banking Markets: Regulatory Numerology or Useful Merger Guidelines? By Charles D. Salley, 186 B A N K IN G N O T E S Bank Borrowings By Joseph E. Rossman, Jr., 181 Bank Profits By John M. Godfrey, 105 Business Lending By Joseph E. Rossman, Jr., 49 216 C O N S U M E R S P E N D IN G The Consumer: Spending More By Emerson Atkinson, 6 C R E D IT C A R D S What's in Store for Bank Credit Cards in the Southeast? By Emerson Atkinson, 99 D E B IT S T O D E M A N D D E P O S IT ACCOUNTS 15, 35, 51, 71, 91, 107, 127, 147, 163, 183, 203, 219 D IS C O U N T R A T E The Discount Rate: Problems and Remedies By William N. Cox, III, 94 DECEMBER 1972, MONTHLY REVIEW D IS T R IC T B U S IN E S S C O N D IT IO N S IN S U R A N C E C O M P A N IE S 16, 36, 52, 72, 92, 108, 128, 148, 164, 184, 204, 220 The Impact of Insurance Companies on Farm Lending By Gene D. Sullivan, 210 E C O N O M E T R IC M O D E L S The 1971 Forecasts Revisited and a Look at 1972 By Frederick R. Strobel and William D. Toal, 38 M A N U F A C T U R IN G G R O W T H Manufacturing Growth "Down South" By William D. Toal, 130 E C O N O M IC C O N D IT IO N S , 1971 M IN O R IT Y B A N K L E N D IN G Agriculture: Another G ood Year Southeastern Banks and SBA Increase Lending to Minority Enterprises By Gene D. Sullivan, 10 By John M. Godfrey, 166 Banking: Rapid Deposit Growth M O N E T A R Y P O L IC Y IN S T R U M E N T S By Joseph E. Rossman, Jr., 12 Construction: Vigorous Expansion By Boyd F. King, 8 The Discount Rate: Problems and Remedies The Consumer: Spending More By William N. Cox, III, 94 By Emerson Atkinson, 6 Industry: A Pale Recovery P A Y M E N T S M E C H A N IS M By William D. Toal, 4 The Georgia Tech Findings: Checks and the Payments Mechanism The Southeast in 1971— Out of the Woods By Charles D. Salley, 18 By Harry Brandt, 2 E C O N O M IC C O N D IT IO N S S IX T H D IS T R IC T S T A T E S IN Mississippi in 1972 By William N. Cox, III, 155 Smooth Sailing for Georgia's Economy By Emerson Atkinson, 119 Supercalif ragilisticexpialidocious Growth Returns to Florida By William D. Toal, 176 Tennessee's Economy Builds Up Momentum For Further Gains PETROLEUM Petroleum: A Gusher for the Southeast By Brian D. Dittenhafer, 137 R E C E N T P U B L IC A T IO N S 33, 125, 193 S A V IN G S A N D L O A N A S S O C IA T IO N S Savings and Loan Associations in a Changing Economy By Boyd F. King, 74 S IX T H D IS T R IC T S T A T IS T IC S By John M. Godfrey, 194 14, 34, 50, 70, 90, 106, 126, 146, 162, 182, 202, 218 E C O N O M IC The 1971 Forecasts Revisited and a Look at 1972 S O U T H E A S T E R N E C O N O M IC A N D F IN A N C IA L T R E N D S By Frederick R. Strobel and William D. Toal, 38 District Banking: Ten Years of Growth and Change F E D E R A L E C O N O M IC P O L IC IE S Manufacturing Growth "Down South" FORECASTS By John M. Godfrey, 54 Federal Economic Policies in Perspective By William D. Toal, 130 By Robert H. Floyd, 62 Savings and Loan Associations in a Changing Economy G E O R G IA T E C H S T U D Y The Georgia Tech Findings: Checks and the Payments Mechanism By Charles D. Salley, 18 By Boyd F. King, 74 Southeastern Agriculture: A New Dress and a New Girl, Too By Gene D. Sullivan, 150 IN D U S T R IA L A C T IV IT Y S M A L L B U S IN E S S A D M IN IS T R A T IO N Industry: A Pale Recovery SBA Guarantees By William D. Toal, 4 By John M. Godfrey, 201 IN D U S T R Y S T U D IE S Southeastern Banks and SBA Increase Lending to Minority Enterprises Coal: Roaring Again By John M. Godfrey, 166 By Brian D. Dittenhafer, 42 Petroleum: A Gusher for the Southeast By Brian D. Dittenhafer, 137 Sizing Up Textiles T E X T IL E S Sizing Up Textiles By Brian D. Dittenhafer, 206 By Brian D. Dittenhafer, 206 V A L U E -A D D E D T A X Where the Chickens Come Home to Roost The Very Controversial Tax on Value A dded By Gene D. Sullivan, 23 By Robert H. Floyd, 110 FEDERAL RESERVE BANK OF ATLANTA 217 Sixth D istric t S tatistics S e a s o n a lly A d ju s t e d (All data are indexes, unless indicated otherwise.) One Two Latest Month Month Months 1972 Ago Ago One Year Ago SIXTH DISTRICT INCOME AND SPENDING Manufacturing P a y r o lls ................ Farm Cash R eceip ts........................ C r o p s ............................................ Livestock .................................... Instalment Credit at Banks* (Mil. $) New Loans ................................... Repayments................................... 4.8 41.0 4.8 41.2 5.4 40.7 187 171 179 183 168 181 180 165 182 157 146 148 152 169 150 140 150 213 130 133 Oct. Oct. Oct. Oct. Oct. 129 114 133 139 99 128 113 131 135 106 128 112 131 133 100 123 109 125 130 99 ‘Oct. Oct. 3.3 41.5 3.3 41.4 3.3 41.2 4.1 40.6 Oct. Oct. Oct. 220 202 235 213 197 227 208 193 230 174 169 185 Oct. Sept. 145 105 145 115 140 133 135 126 Oct. Oct. Oct. Oct. Oct. 116 106 121 112 84 116 105 121 110 84 115 105 120 108 82 114 104 118 110 83 Oct. Oct. 4.2 40.6 3.9 41.2 3.9 40.2 3.9 40.4 Oct. Oct. Oct. 187 160 209 190 157 209 184 151 206 152 134 170 Oct. Sept. 141 95 140 173 141 166 118 89 Oct. Oct. Oct. Oct. Oct. 108 102 109 85 80 107 102 108 85 76 106 102 107 84 73 105 100 106 84 78 Oct. Oct. 6.5 42.2 6.3 42.6 6.5 42.6 6.8 41.7 Oct. Oct. Bank D eb its* /* *................................ Oct. 170 161 167 158 166 157 144 146 167 99 166 161 163 206 144 75 116 115 115 112 149 138 140 142 147 167 191 158 132 104 96 123 FINANCE AND BANKING Member Bank L oan s........................... Oct. Member Bank D e p o sits .................... Oct. Bank D eb its* *.................................... Oct. . Oct. , Oct. 505 424 444 388 455 381 411 347 FLORIDA 118 110 109 103 106 107 111 117 105 111 105 113 110 119 130 103 120 112 118 120 127 125 99 127 85 117 109 109 102 105 107 110 116 105 110 104 112 110 118 128 103 120 111 116 119 127 125 99 127 84 116 109 108 102 104 106 110 116 104 110 103 111 108 118 128 104 119 109 116 119 126 124 98 126 82 113 106 107 101 103 108 no 114 105 105 101 108 102 115 118 104 115 109 112 116 122 121 101 119 86 4.1 4.1 4.2 4.7 2.0 41.0 310 358 263 179 80 122 279 234 185 275 275 221 161 297 332 199 188 183 214 268 444 750 428 2.1 41.2 218 320 119 174 78 129 275 235 185 271 282 220 161 295 323 198 188 182 213 267 449 713 405 2.2 40.9 228 309 150 173 87 126 277 237 187 272 290 218 163 298 325 197 187 182 208 268 428 720 423 2.7 40.6 177 195 159 170 87 120 255 219 175 252 269 200 161 252 298 189 178 170 197 247 413 626 384 Oct. Oct. 196 180 193 179 189 175 160 146 Oct. Oct. Oct. 178 157 202 174 154 199 171 150 198 151 135 165 ALABAMA EMPLOYMENT Nonfarm Employment......................... Manufacturing ................................. Nonmanufacturing........................... C onstruction............................. Farm Employment............................... Manufacturing P a y r o lls .................... Oct. Farm Cash R eceip ts........................... Sept. EMPLOYMENT Unemployment Rate (Percent of Work Force) Avg. Weekly Hrs. in Mfg. (Hrs.) FINANCE AND BANKING EMPLOYMENT Unemployment Rate (Percent of Work Force) . . Avg. Weekly Hrs. in Mfg. (Hrs.) FINANCE AND BANKING EMPLOYMENT Unemployment Rate (Percent of Work Force) Avg. Weekly Hrs. in Mfg. (Hrs.) FINANCE AND BANKING MISSISSIPPI INCOME Manufacturing Payrolls........................ Oct. Farm Cash R eceip ts............................ Sept. 218 4.7 40.8 151 122 94 154 FINANCE AND BANKING Loans* All Member B an k s............................ Large Banks ..................................... Deposits* All Member B a n k s .................... . Large Banks ................................. . Bank D eb its* /* * ............................ . Ona Yaar Ago Unemployment Rate (Percent of Work F o r c e )................ Oct. Avg. Weekly Hrs. in Mfg. (Hrs.) . . . Oct. . Oct. . Sept. EMPLOYMENT AND PRODUCTION Nonfarm Employment.................... . Oct. Manufacturing ............................ . Oct. Nondurable G ood s................... . Oct. F o o d ....................................... . Oct. T e x t i le s ................................ . Oct. Apparel................................... . Oct. Paper .................................... . Oct. Printing and Publishing . . . Oct. C h e m ica ls............................ . Oct. Durable G o o d s ........................ . Oct. Lbr., Wood Prods., Furn. & Fix. . Oct. Stone, Clay, and Glass . . . . Oct. Primary M e ta ls.................... . Oct. Fabricated M e ta ls ................ . Oct. M achinery............................ . Oct. Transportation Equipment . Oct. Nonmanufacturing....................... . Oct. C onstruction ........................ . Oct. Transportation .................... . Oct. T r a d e .................................... . Oct. Fin., ins., and real est. . . . . Oct. S e r v ic e s ................................ . Oct. Federal Government . . . . . Oct. State and Local Government . Oct. Farm Employment........................... . Oct. Unemployment Rate (Percent of Work Force) . . . . . Oct. Insured Unemployment (Percent of Cov. E m p .)................ . Oct. Avg. Weekly Hrs. in Mfg. (Hrs.) . . . Oct. Construction C ontracts*................ . Oct. R esid en tial................................... . Oct. All O th er....................................... . Oct. Electric Power Production** . . . . June Cotton Consumption**.................... . Sept. Petrol. Prod, in Coastal La. and Miss.** Nov. Manufacturing Production . . . . . Aug. Nondurable G ood s....................... . Aug. F o o d ....................................... . Aug. T e x t i le s ................................ . Aug. Apparel ................................ . Aug. Paper .................................... . Aug. Printing and Publishing . . . Aug. C h e m ic a ls............................ . Aug. Durable G o o d s ............................ . Aug. Lumber and W ood............... . Aug. Furniture and Fixtures . . . . Aug. Stone, Clay, and Glass . . . . Aug. Primary M e ta ls .................... . Aug. Fabricated M e ta ls ............... . Aug. Nonelectrical Machinery . . . Aug. Electrical Machinery . . . . . Aug. Transportation Equipment . Aug. One Two Latest Month Month Months 1972 Ago Ago Oct. Oct. Oct. Oct. Oct. 145 131 109 109 110 100 80 144 157 109 108 109 100 72 142 176 108 108 108 96 76 131 112 INCOME Manufacturing P a y r o lls .................... Oct. Farm Cash R eceip ts........................... Sept. 107 107 107 104 78 EMPLOYMENT Nonfarm Em ploym ent........................ Oct. Manufacturing ................................Oct. Nonmanufacturing........................... Oct. C onstruction................................ Oct. Farm Employment............................... Oct. 121 113 121 112 121 112 115 111 DECEMBER 1972, MONTHLY REVIEW Month Months Ago Ago 1972 One Two Month Months Ago Ago One Year Ago EMPLOYMENT Unemployment Rate (Percent of Work Force) . . . . . Oct. Avg. Weekly Hrs. in Mfg. (Hrs.) . . . Oct. 3.9 40.9 3.9 40.7 4.2 40.6 4.6 40.3 FINANCE AND BANKING Member Bank L oan s*................ . . Oct. Member Bank Deposits* . . . . . . Oct. Bank D eb its* /* * ........................ . . Oct. 197 172 196 198 173 183 189 172 187 165 145 154 158 164 156 148 153 152 135 98 TENNESSEE INCOME Manufacturing Payrolls............... . . Oct. Farm Cash R eceip ts.................... Latest Month 1972 Year Ago **Daily average basis •For Sixth District area only; other totals for entire six states Oct. Oct. Oct. Oct. Oct. 117 111 120 116 85 116 110 120 117 91 115 109 119 117 88 112 106 115 112 86 Oct. Oct. 3.3 41.0 3.4 41.2 3.7 40.8 4.2 40.4 FINANCE AND BANKING Member Bank L o a n s* ........................ Oct. Member Bank D ep osits*................ . Oct. Bank Debits*/**............................... . Oct. 193 172 177 190 167 177 185 165 166 160 143 151 Nonfarm Em ploym ent........................, Manufacturing ............................... . Nonmanufacturing............................ C onstruction............................,. Farm Employment............................. Unemployment Rate (Percent of Work F o r c e )................. Avg. Weekly Hrs. in Mfg. (Hrs.) . ■ . fPreliminary data r-Revised N.A. Not available Note: Indexes for bank debits, construction contracts, cotton consumption, employment, farm cash receipts, loans, petroleum production, and payrolls: 1967=100. All other indexes: 1957-59=100. Sources: Manufacturing production estimated by this Bank; nonfarm, mfg. and nonmfg. emp., mfg. payrolls and hours, and unemp., U.S. Dept, of Labor and cooperating state agencies; cotton consumption, U.S. Bureau of Census; construction contracts, F. W. Dodge Div., McGraw-Hill Information Systems Co.; petrol, prod., U.S. Bureau of Mines; industrial use of elec. power, Fed. Power Comm.; farm cash receipts and farm emp., U.S.D.A. Other indexes based on data collected by this Bank. All indexes calculated by this Bank. D e b it s to D e m a n d D e p o s it A c c o u n t s I n s u r e d C o m m e r c i a l B a n k s in t h e S ix t h D is t r ic t (In T h o u s a n d s o f D o lla r s ) Oct. 1972 Sept. 1972 Oct. 1971 Percent Change Year to Oct. date 1972 10 mos. From 1972 Sept. Oct. from 1972 1971 1971 + + + + + + + + 14 21 16 24 7 10 1 35 15 14 15,170 8,943 55,409 48,006 13,141 29,265 - 6 +52 + 3 + 6 +25 -1 3 - 4 +48 + 8 +11 +39 + 1 + 5 + 12 + 11 + 7 + 13 + 6 112,619 62,295 112,006 48,586 91,622 54,770 90,422 44,313 + 3 + 11 - 1 + 5 +27 +27 +22 +15 + + + + 157,138 68,061 40,609 135,940 57,297 38,417 93,966 66,537 31,803 + 16 +67 + 19 + 2 + 6 +28 + 36 + 2 + 3 128,625 143,641 225,401 119,099 136,450 212,975 117,171 121,493 190,503 + 8 + 10 + 5 + 18 + 6 + 18 + 8 + 18 + 14 . 62,047,089 57,007,751 49,415,082 + 9 +26 + 17 . 7,183,268 21,130,133 17,020,965 . 6,591,936 . 2,803,264 . 7,317,523 6,884,239 18,886,800 15,873,460 6,126,864 2,507,491 6,728,897 5,802,623r 16,091,740 13,526,487 5,723,119r 2,175,262 6,095,851r + 4 + 12 + 7 + 8 + 12 + 9 +24 + 20 +31 + 20 +26 + 18 + 15 + 9 +29 + 17 +20 + 12 15,448 8,718 58,099 50,019 14,576 34,047 . . 116,005 69,359 110,578 50,960 . . Bristol . . . Johnson City Kingsport . . 1,164,322 200,204 172,707 2,488,391 + 19 + 5 + 10 + 12 +47 + 17 +24 +36 + 25 + 8 + 18 + 26 356,517 . 5,599,451 . 1,260,926 391,017 385,244 591,182 . 3,077,531 933,709 335,656 4,914,849 1,179,575 356,157 341,505 546,053 2,823,042 817,312 275,921 4,291,435 1,015,909 328,869 258,457 394,054 2,445,896 727,745r + 6 + 14 + 7 + 10 + 13 + 8 + 9 + 14 +29 +30 +24 + 19 +49 +50 +26 +28 + + + + + + + + 16 14 25 14 29 82 20 16 A lb a n y ................ 187,010 Atlanta . . . . . 11,633,008 Augusta . . . . 456,140 402,086 Columbus . . . M a c o n ................ 466,195 Savannah . . . 474,635 162,943 10,902,473 420,688 390,459 437,722 420,133 145,785 9,008,406 390,131 376,767 407,397 422,746 + 15 +28 + 7 +29 + 8 + 17 + 3 + 7 + 7 + 14 + 13 + 12 + + + + + + 17 19 14 10 14 12 221,804 . . . 1,125,578 . 255,391 . 199,538 . . 3,680,063 201,833 1,002,584 229,605 190,117 3,473,298 Biloxi-Gulfport 218,712 Jackson . . . . . 1,272,787 215,613 1,076,601 178,781 + 10 +24 1,030,040 + 12 + 9 205,645 + 11 +24 191,404 + 5 + 4 3,142,234 + 6 + 17 96,176 + 7 + 18 + 16 +14 +20 + 18 15 +59 + 17 + 17 14,568 13,241 60,043 53,125 18,220 29,630 1,438,348 223,965 194,598 3,017,220 93,706 + 6 + 18 + 11 + 10 + 1! + < + 1< + : + X + 5 149,337 68,984 145,122 16,636 100,938 52,118 30,043 38,477 110,901 77,748 . 1,716,641 234,365 214,205 . 3,380,509 99,782 20 re 45 6r 21 14 150,850 69,154 151,198 17,190 105,929 56,575 31,385 49,988 128,550 87,228 + 23 + 31 OTHER CENTERS Anniston . . . . + + + + + + 159,570 81,299 167,643 18,923 121,337 61,630 34,508 61,155 129,482 91,195 +39 +33 946,956 738,809 2,264,577 +15 +31 +31 -1 0 +35 +14 Athens . . . . Brunswick . Dalton . . . . Elberton . . Gainesville Griffin . . . . LaGrange . Newnan . . Rome . . . . Valdosta . . +20 - 7 964,233 745,035 2,736,730 123,077 + 12 44,327 + 9 120,826 + 9 24,476 - 1 604,621 + 13 1,229,263 + 2 126,079 52,954 145,832 22,214 726,117 1,369,727 463,341 238,345 Chattanooga . . . 1,013,028 Knoxville . . . 827,056 Nashville . . . . 2,931,020 + 15 + 15 141,334 57,947 158,305 21,979 817,121 1,398,670 537,024 342,110 177,756 988,904 +22 +31 Bradenton . . Monroe County Ocala . . . . St. Augustine . St. Petersburg Tampa . . . 643,000 317,796 . . . . . + 4 +16 + 3 +34 + 27 + 8 + 10 + 4 + 8 + 14 + 9 + 3 + 19 + 18 + 11 + 17 + 9 + 2 + 18 + 11 2,254,465 83,997 247,261 760,533 470,387 145,893 Alexandria . Baton Rouge Lafayette . Lake Charles New Orleans 120,618 56,784 141,601 64,232 2,946,912 86,094 261,306 878,565 496,033 168,911 Bartow-LakelandWinter Haven Daytona Beach Ft. LauderdaleHollywood . . Ft. Myers . . . Gainesville . . . Jacksonville . . MelbourneTitusvilleCocoa . . . . Miami ................ Orlando . . . . Pensacola . . . Sarasota . . . . Tallahassee . . Tampa-St. Pete W. Palm Beach Oct. 1971 146,627 74,529 Dothan . . . 3,023,461 . . . 92,580 . . . 283,066 . . . 907,283 . . 548,489 . . . 171,510 Sept. 1972 . . . STANDARD METROPOLITAN STATISTICAL AREAS Birmingham Gadsden . Huntsville Mobile . Montgomery Tuscaloosa Oct. 1972 + 1 +23 + 18 +29 + 15 + 11 + 16 + 8 + 8 + 17 + 15 + 5 + 7 + 11 + 12 + 7 +29 + 1 + 8 + 21 + 6 + + 4 9 Abbeville Bunkie . Hammond New Iberia Plaquemine Thibodaux . . . . . . . . . . . . . . . Hattiesburg Laurel . . . . Meridian . . Natchez . . PascagoulaMoss Point Vicksburg . Yazoo City . District Total Alabama Florida . Georgia . Louisiana' Mississippi1 Tennessee1 . . . . . . . . Percent Change Year to Oct date 1972 10 mos. From 1972 Sept. Oct. From 1972 1971 1971 2 18 18 21 10 1 District portion only r-Revised Figures for some areas differ slightly from preliminary figures published in "Bank Debits and Deposit Turnover" by Board of Governors of the Federal Reserve System. F E D E R A L R E SE R V E B A N K O F A T L A N T A 219 D is t r ic t B u s in e s s C o n d it io n s Economic growth in the Southeast remains brisk and broadly based. Every major industry reported employ ment gains in October. Bank loan demand strengthened, consumer borrowing hit new highs, and construc tion contracts increased once again. Farmers are receiving higher prices and income than a year ago, though wet weather has caused some crop deterioration'. Every major industry posted employment gains in October, a circumstance which normally would have reduced the District's (4.1-percent) rate of unemployment. Nevertheless, the unemployment rate held steady because of similar gains in the labor force. Factory payrolls posted increases from the previous month. Loan demand has developed considerable strength at member banks in recent months. A large part of the lending advance is centered in the leading cities where all major phases— business, consumer, and real estate loans— are strong. With increasing loan demands, banks, partic ularly the larger ones, have lightened their hold ings of U. S. Government securities. Banks continue to make moderate use of the discount window as a source of reserves. October's increase in consumer instalment credit outstanding was slightly greater than September's. All loan categories shared in the increase. Newly extended auto loans and unit auto sales rose sharply in tandem in October; auto sales were well above year-ago totals. Department store sales apparently remain strong. Overall construction activity, as measured by contract awards, increased sharply in October for the third straight month. Monthly residential awards again rose to a record level, with the major impetus coming from Florida. Residential mortgage rates in major cities dropped slightly. Nonresidential awards rose to the second highest monthly level ever with a boost from power plant contracts in Georgia and Florida. Prices received by farmers continued to move upward in October, led by strong advances in grain and citrus prices. Sharp declines in the prices of eggs, broilers, and vegetables partially offset this rise. Preliminary data for November indicate that egg prices have recovered, but that livestock prices trended downward. Higher average prices and in creasing production have contributed to a substan tial rise in cash receipts from 1971's level. Farm employment has also increased more than seasonally as farmers harvest an enlarged output. Excessive rainfall has delayed the harvest of cotton and soy bean crops and resulted in some crop deterioration. NOTE: D ata on w h ich s ta te m e n ts a re b a s e d hav e b e e n a d ju s t e d w h e n e v e r p o s sib le to e lim in a te s e a s o n a l in flu e n c e s. 220 DECEMBER 1972, MONTHLY REVIEW