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Fe d e r a l R eserve B ank OF ATLANTA. Released for publication Febuary 2, 1919, MONTHLY REPORT OF BUSINESS AND AGRICULTURAL CONDITIONS IN THE SIXTH FEDERAL RESERVE DISTRICT BY M. B. W E L L B O R N Chairman of the Board and Federal Reserve Agent, Federal Reserve Bank of Atlanta. Febuary 1, 1919. While general business seems to be good for this season of the year, it has not developed as was anticipated following the signing of the armistice. There seems to be a general disposition on the part of the business man, and more particularly the manufacturer, to proceed vith considerable caution. In viev of the high prices of labor and raw materials, manufacturers are inclined to reduce their output for fear of acquiring a surplus stock under a high cost of production. This, added to the fact that men are being rapidly released from the Army, has caused considerable relief in the labor market, and will gradually tend to a change in the general wage scale. The real estate business is showing a gradual improvement, though slow, with consideraoly increased activity in building, which will undoubtly increase further vith the coming spring. Passenger and freight traffic continue heavy . Prospects have brightened considerably in the wholesale dry-gcods and notions line, and travelling salesmen report that the January business is about normal for the month, which is conside 'ed the big month of the season. Ths.e is a tendency everywhere, among the merchants, alsc cn the part of the cust mers, to go on a cash basis. This condition has beun mere or ^ess ca-sed by war time experience! people have learned to economize and sa*e, and its effect has been marvelous upon the public, in that one only buys as necessity requires, cutting out extravagant purchasees of unnecessary articJes. Failures show a wonderful decrease, practically none being reported during the month of December. Bank deposits are reported as showing a steady im provement, with collections about the same as previous month. There is probably a more than usual demand for loans from merchants and from farmers. While the fanner is not borrowing to any great extent cn cotton being held, the fact of his not disposing of same brings about an increased borrowing on the part of the merchant. Bank dividends in the district show an increase in their reports of Dec eraser 3.1, as com pare! •with the previous year. There is given below a comparative statement of total clearings for the years 1917 and 1918, of the fourteen largest Clearing House Associations in this district: 1917 Birmingham, Ala. Mobile, Ala. Montgomery, Ala. Jacksonville, Fla. Tampa, Fla* 1918 $184,457,498.46 70,963,872.91 59,713,862.73 $350,176,657•29 77,258,107.56 30,426,536*89 207,077,841.07 59,582,510.65 282,876,729.07 73,926,741*66 ( No. 1 ) Fe d e r a l R e s e r v e B a n k OF ATLANTA. A tla n ta , Ga. Augusta, Ga. Macon, Ga. Savannah, Ga. $ 1 ,6 0 5 ,4 93,790.82 154,096,491.69 91,317,790.30 415,556,110.11 12,509,457,202.87 191,257,769.07 107.262.652.95 377,233,014.99 New O rleans, La. 1 ,2 6 8 ,0 2 3 ,8 1 1 .6 5 2 ,6 6 0,46 0,3 35.02 V ick sb u rg, M iss. 16,8 2 1 ,1 4 1 .7 1 2 1,217,764.61 205,456,856.07 125,097,419.84 532,907,289.87 258 ,822,628.48 139 ,393,356.04 746.156.610.95 $ 5,696 ,5 69,287.88 17,875,926,107.85 Chattanooga, Tenn. K n o x v ille , Tenn. N a s h v ille , Tenn. In crease $ 2 ,1 7 9 ,3 5 6 ,8 1 9 .9 7 In crease f o r year .3825 Not on ly do the bank c le a r in g s o f the d i s t r i c t show a la rge in c r e a s e , but the r e c e ip t s o f the p ost o f f i c e s have increased propor t i o n a t e l y . Part o f th is i s accounted f o r by the advance in postage ra te s , bu t r e p o r ts show th a t there was a g rea ter volume o f business han iled than in p rev iou s y ea rs , the in crea se in postage ra tes being more than o f f s e t by the tons o f franked government m ail handled during the y e a r. Although co tto n i s s t i l l the d i s t r i c t s * s grea test and most v a lu a b le c r o p , the aggregate value o f fo o d s t u ffs f o r man and beast ra ised during the year 1918 was fa r more than that o f the p r in c ip a l c r o p . In G eorgia the c o tto n crop i s valued at approxim ately $588,750,000; in M issip p i $161,058,000, and in Alabama OHS,000,000 . The value o f the corn crop alon e ran cotton a c lo s e second in a l l o f th ese s t a t e s . The t o t a l value o f Alabama crops fo r i918 is p la ced a t approxim ately $359,000,000; and in Georgia $590,000,000. From the standpoint o f the producer, the most in te r e s tin g item o f cou rse i s the value in d o lla r s and c e n ts, and not the acreage or p r o d u ctio n , and the past year is unprecedented in that la rg e crops have been accompained by high p r ic e s f o r n early a l l farm p rodu cts, with p o s s ib ly the e x cep tion o f co tto n and c o tto n seed, which at present i s r u lin g a t p r ic e s n ot equal to those o f l a s t y e a r. However, the most im portant p o in t in con n ection rcith the a g r ic u lt u r a l s itu a tio n is that the p la n te r has not only produced a good c o tto n cro p , but has paid most a l l o f h is debts in a d d itio n to s to r in g away s u f f ic ie n t food f o r man and b ea st f o r the coming e a r ly spring and summer work, and is a b le t o c a rry h is surplus c o tto n crop without heavy borrow ing. P r io r t o the sign in g o f the a r m is tic e , in d ic a tio n s pointed to a la r g e in e r ta s e in the wheat c r o p , but the apparent con clu sion o f the war caused many to abandon t h e ir proposed sow ing. At present the wheat i s in sp len d id c o n d itio n , w ith l i t t l e danger except from a heavy f r e e z e . P a ll plowing has f a lle n somewhat below normal, a ttr ib u te d la r g e ly to weather c o n d itio n s and a gen eral r e la x a tio n folj.ow ing the sign in g o f the a r m is t ic e . I t i s f e l t th a t should the coming seasons be a t a l l fa v o ra b le , the d i s t r i c t w i l l produce above normal cr o p s , as the farmers are planning e x te n s iv e op era tion s and w ith the war o v e r, and shipping f a c i l i t i e s im proved, they w i l l now be a b le to obtain s u f f i c i e n t n it r a t e o f soda which has been la ck in g s in c e the begin in g o f the war w ith Germany. ( No. 2 ) Fe d e r a l R e s e r v e B a n k OP ATLANTA. Of the citrus crop o f 1918 and 1919, it is probable that around 3,000,000 boxes o f oranges and g r a p e fr u it remain on the trees to be shipped. At th is time the market i s strong on both oranges and g r a p e fr u it a t higher p r ice s than p rev a iled a short time ago, and in d ic a t io n s p o in t to s a t is fa c t o r y p r ic e s during the remainder o f the s eason. Shipments from the sta te during the month t o t a le d 4,082 cars o f oran ges, and 863 cars o f g r a p e fr u it . The e a r ly veg eta b le crop o f F lo rid a was rep orted in splendid c o n d it io n . Tomatoes are brin gin g approxim ately $12 .00 per crate, and beans from $5.00 to $ 6 .0 0 . The ea rly le t t u c e crop i s estim ated at around 1500 c a r s . While le t t u c e began to move in December, the bulk o f the crop i s shipped during January and Febuary, with shipments con tin u in g through March, P rice s range from $ 3 .7 5 to $ 4 .0 0 . The a cre s in P otatoes f o r the coming season in d ic a te a d ecrea se. Rains have delayed p lan tin g in many s e c tio n s and the crop w i l l be from ten to f i f t e e n days l a t e . The c e le r y market i s reported e n t ir ly s a t is f a c t o r y , p r ic e s ranging as high as $ 5 .2 5 per cra te a t shipping p o in t . Though the acreage i s only about s ix t y per cent of that of the p reviou s yea r, the crop i s estim ated a t 1500 c a r s . Weather con d it io n s have been a lto g e th e r s a is fa c t o r y . There has been some damage from fr e e z e , but nothing very fa r reaching, the c it r u s crop not s u ffe r in g in the l e a s t . Naval s to r e s are again on the upward tren d , the p r ice s o f tu rp en tin e having advanced con sid era b ly sin ce l a s t r e p o r t . Rosin a ls o i s more a c t i v e . There seems to be no reason why p r ic e s f o r both com m od ities should n ot remain h ig h . The p r in c ip a l f a c t o r in the p r ice cou rse o f naval s to r e s w i l l be shipping c o n d itio n s . Should ample f r e ig h t room be obtained in the next few months and the ra tes have reached a reason able l e v e l , a very a c t iv e exportin g demand is a n t ic ip a t e d , but even i f fr e ig h t co n d itio n s should remain u n favorable, the in h eren t stren gth in r o s in and turpentine i s so f u l l y recogn ized th a t the returns which the producer w ill get f o r h is product w i l l be v e ry rem unerative t h is season* December i s u su a lly an o f f month in c c a l output, due to the Christmas h o lid a y s ; the extrem ely c o ld weather and -ick n ess caused by the in flu e n z a r e s u lte d in a con sid era b ly decreased output. Only 1,2 4 5 ,3 0 6 tons were mined in December, ag a in st 1,706,337 tons in November 1918. The produ ction o f c o a l in Alabama f o r the year 1918 shows an in crea se o f over the 1917 p rod u ction , or an in creased tonnage f c r the year o f 1,2 1 2 ,0 0 0 to n s . Coke produ ction o f the s t a t e in 1918 amounted to 5,242,00 0 to n s , Alabama ranking th ir d m the coke p rodu ction during the y ea r. The output o f pig ir o n Tor December was 198,263 to n s , f o r November 194,384 t o n s ; the p rodu ction in 1917 wap 2,953,705 to n s , and f o r 1918 2,438,390 ton s, a red u ction in 1918 o f 465,315 tons Labor shortage and i n f e r i o r raw materials; la r g e ly con trib u ted to decrease** p rod u ction in 1918, but a heavy in crea sed produ ction is exp ected during 1919, as la b o r shortage is r a p id ly improving and r a ilr o a d s e r v ic e i s much b e t t e r . There w i l l be a la rg e demand f o r p ig ir o n during the coming y ea r, and the op era tors are making n ecessa ry r e p a ir s and prepa ra tion s in ordeo to be a b le t o supply th e in c r e a s e d demands. With the lig h t in g o f f i r e s in the F a ir f ie ld S te e l M ills , and w ith the com pletion o f the Mobile— Birmingham Ship b u ild in g F a b r ica tin g S te e l P la n t, to g e th e r w ith the s t e e l m ills a t Gadsden and E n sley in f u l l o p e ra tio n , th ere w i l l be a la r g e in crea sed steel o u tp u t. The s t e e l in d u stry , although some orders were c a n c e lle d by the Government, a f t e r the sig n in g o f the a r m is t ic e , i s in good shape* U n fille d tonnage on hand i s s u f f i c i e n t t o keep the m ills op eratin g at full c a p a c it y . ( *o« 3 ) Fe d e r a l R e s e r v e B a n k OF A T L A N T A . The pipe manufacturing plants are not doing much at th is season. This i s u su a lly the case at t h is time o f the year, but w ith the coming o f spring and summer months they w ill be o p era tin g a t f u l l speed. There i s l i t t l e change sin ce my la s t rep ort on the Lumber in d u stry . The unusual amount o f ra in and the extrem ely c o ld weather has s e r io u s ly in te r fe r e d with the manufacturers; stock s remain low , probably not over 60% to 65% o f normal. C on siderable in q u ir ie s , but buying is l i g h t : buyers are w aiting f o r developments b e fo re stock in g up h e a v ily , the in d ic a t io n s , however, not p oin tin g to a d e c lin e in p r ic e s . The r e t a i l lumber b u sin ess, as is u su a lly the case a t th is season, is q u ie t , but developments p oin t to a la r g e in crea se in b u ild in g op eration s during the spring and summer months. (No. 4 )
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