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Monthlti Review Hitting the Target in 1965-66 A tla n ta , G eorgia t ls o January • 1966 in t h is is s u e : W ith the N ew Y ear, the V oluntary F oreign Credit R estraint Program m oved into its secon d year. B efore the 1 9 6 6 program gets into full sw ing, let us lo o k back on the first year o f operation. T h e program w as form ulated at the request o f the President in his B alance o f Paym ents M essage to C ongress on February 10, 1 9 6 5 , to provide tem porary relief to the persistent deficit in our b alance o f p ay m ents. A dm inistration o f the program for financial institutions w as assigned to the Federal R eserve System and responsibility for other b usi ness concerns w as delegated to the D ep artm en t o f C om m erce. B oth agencies prom ptly form ulated and issued G uid elin es for 1965. STATE AND LOCAL BORROWING IN A CHANGING MARKET M IS S IS S IP P I’S ECONOMY: ‘FIVE IN A ROW’ SIXTH DISTRICT ST A T IST IC S DISTRICT B U S IN E S S N a tio n a l A im s T he voluntary program for banks and n onbank financial institutions has fulfilled its m ain ob jective o f curbing financial loan s and investm ents. T h e table show s a com parison o f foreign credits outstan d in g at financial institutions since D ecem b er 3 1 , 1 9 6 4 . T h ese credits form ed the basis for the 1 0 5-p ercen t target established for the program in 1 9 6 5 . T otal foreign credit outstanding at m ajor banks in the U n ited States has actually declined steadily since February 1 965. T he total am ount ou t standing has been b elow the program ’s target each m onth sin ce its beginning. F inancial institutions other than banks have also abided by the G u id elin es. N o n b an k financial institutions w ere requested under G u id e line 1 to reduce their liquid holdings o f under on e-year m aturity to the level o f the end o f 196 3 or 1964— w h ich ever w as low er. G u id elin e 2 called for an increase o f no m ore than 5 percent in investm ents w ith C O N D IT IO N S Foreign Credit O utstanding at Financial Institutions in Relation to the G uidelines of the Voluntary Foreign Credit R estraint Program D ecem ber 1964 Septem ber N ovem ber (Base) 1965 1965 Percent Change United States (In M illions of Dollars) O feferaf ffysenv 9,517 Banks (Total) 11,998 Nonbank Financial Institutions 470 Guideline 1—Liquid investments Guideline 2—Credits under 10 years maturity and financial 1,187 investment in affiliates abroad Guideline 3—Credits final ma turities of more than 10 years 10,341 9,503 - 0.1 12,538 271 + 4.5 -42.4 1,203 + 1.3 11,064 + 7.0 Sixth District (In Thousands o f Dollars) IB a n k o f j^ tfa n ta 19,724 Banks (Total) 33,159 Nonbank Financial Institutions 1—Liquid investments 88 2—Credits under 10 purity and financial 771 [>t in affiliates abroad its final mamore than 10 years 32,300 16,664 34,394 75 -15.5 + 3.7 -14.8 934 +21.1 33,385 + 3.4 m atu rities o f from 1 -1 0 years, in clu d in g in v estm en ts in affiliates abroad. In v estm e n ts w ith m atu rities o f over 10 years w ere n o t su b ject to a sp ecific target, b u t co m p a n ies w ere asked to e x ercise restrain t in in crea sin g th em . A s the tab le sh o w s, n o n b a n k fin an cial in stitu tio n s h a v e p u lled b a ck their liq u id fu n d s (w h ic h in clu d e d e p o sits h eld in fo reig n b an k s an d h o ld in g s o f m o n e y m ark et in stru m e n ts) b y m ore th an 4 0 p ercen t. C red its c o v ered u n d er G u id elin e 2 h av e in crea sed m u ch le ss th an the 5 -p ercen t target. C red its u n d er G u id e lin e 3 , w h ich are n o t su b ject to a sp ecific target, in crea sed b y 7 .0 p ercen t b etw een D e c e m b e r 3 1 , 1 9 6 4 , and S ep tem b er 3 0 , 1 9 6 5 . B a n k s and n on b a n k fin a n cia l in stitu tio n s w ere ask ed to g iv e p riority to ex p o rt fin an cin g and to lo a n s to less d e v e lo p e d cou n tries. U n d u e restriction s o f in v estm en t fu n d s in G rea t B ritain w ere to b e a v o id ed b e c a u se o f th at c o u n try ’s o w n b a la n ce o f p ay m en ts p ro b lem . C red it to Jap an and C an ad a w as to be red u ced o n ly to get w ith in the G u id e lin e s’ target. T h e m o d erate rise in cred it to fo reig n ers b y b a n k s and n o n b a n k in stitu tion s during th e first th ree quarters o f 1 9 6 5 con trasts w ith a sharp ex p a n sio n , e sp ec ia lly in b an k lo a n s, in 1 9 6 4 . T h e effect o f th e m o d era te rise is reflected , o f co u rse, in ou r b a la n ce o f p a y m en ts p o sitio n in 1 9 6 5 as co m p a red w ith 1 9 6 4 . T h e to ta l d eficit, at a sea so n a lly ad ju sted annu al rate, a m o u n ted to $ 5 .5 b illio n in th e fourth quarter o f 1 9 6 4 and $ 2 .8 b illio n for th e w h o le year. T h e deficit w as $ 2 .8 b illio n during th e first quarter o f 1 9 6 5 . In the seco n d quarter, our b a la n ce sw u n g to a $1 b illio n surp lus p o sitio n , but in th e third quarter, the d eficit re ap p eared in th e am ou n t o f $ 1 .9 b illio n at an annual rate. N o t all o f the im p ro v em en t in our b a la n ce o f p a y m en ts p o sitio n is attributable to th e V o lu n ta r y F o reig n C redit R estra in t P rogram . M u ch o f it is, h o w ev er. T h e program d o es n o t appear to h a v e a ffected a d v ersely e c o n o m ie s o f oth er cou n tries, and ex p o rts from the U .S . h a v e n o t su f fered from la ck o f fin an cin g. C o o p era tio n b y b o th b a n k s and n o n b a n k fin an cial in stitu tio n s has b een gratifyin g. B y th e tim e th e program w as form u lated and m ad e p u b lic, so m e b an k s w ere al ready ab o v e the 1 9 6 5 target. M o st o f th em h ave b een able to red u ce their cred it as req u ested , d esp ite b in d in g c o m m itm en ts to foreign ers for future fin an cin g. S o m e n on b an k fin an cial in stitu tio n s w ere ab le to u tilize fu n d s acq u ired abroad to ex p a n d or carry o n o p era tio n s in stead o f relyin g o n d o m e stic fun ds. A p p a ren tly , th e V o lu n ta r y F o reig n C red it R estra in t P rogram has n o t sev erely d isru p ted fo reig n o p era tio n s o f fin an cial in stitu tio n s, a lth o u g h in d iv id u a l co m p a n ie s have b een affected. B a n k s h a v e had n o d ifficu lty in finding d o m estic o u tlets for th eir fu n d s b e c a u se o f a d em a n d for b an k credit. In fa ct, th e cred it d em a n d s h a v e p ressed this y ea r’s su p p ly o f fu n d s. F o r this rea so n , b a n k s m ay n o t h ave in crea sed their fo reig n cred it up to th e ceilin g su g g ested b y th e G u id elin es. D is t r ic t E ffo rts T h e D istrict has b e e n a b o u t as su c c e ssfu l as th e n a tio n in h ittin g th e target. T h e tab le sh o w s th at b an k s w ith to ta l fo reig n cla im s o f o v er $ 5 0 0 ,0 0 0 w ere su b sta n tia lly b e lo w the 1 0 5 -p e r c e n t target as o f N o v e m b e r 3 0 . T h e am ou n t o f le e w a y w a s $ 4 m illio n in th e aggregate. A s in th e n ation , to ta l fo reig n cred it o u tsta n d in g at th o se b an k s has d ec lin e d ste a d ily sin c e th e p ro g ra m ’s in itiation . F in a n cia l in stitu tio n s o th er th a n b a n k s lo c a te d in th e S ix th D istr ic t g en era lly h a v e fe w fo reig n o p era tio n s. M o st o f their fo reig n h o ld in g s rep resen t lo n g -te rm in v estm en ts for w h ich a sp ecific target w a s n o t esta b lish ed . T h e stru ctu re o f fo reig n fin a n cin g at b a n k s in th e D is trict is u n lik e th at o f th e larger b a n k s in th e p rin cip al fin an cial cen ters: F o r e ig n o p era tio n s ten d to b e sm a ll, and m a n y b an k s h a v e o n ly re cen tly e x p a n d e d in to th at typ e o f activity. A n o th e r u n u su a l fea tu re o f in tern a tio n a l o p era tio n s in th e S ix th D istr ic t is th a t a ctiv ity ten d s to b e cen tered arou n d th e fin a n cin g o f ex p o r ts— m a in ly to S o u th and C en tral A m e r ic a — w ith a siza b le p o rtio n o f th e rem ain d er in th e fo rm o f d irect lo a n s. O n th e o th er h a n d , a few D is trict b a n k s, p rin cip a lly th o se in p o r t c itie s, h a v e h ad in tern a tio n a l ties th ro u g h d e p o sit rela tio n sh ip s fo r m a n y years. In fa ct, to ta l d e p o sits to th e cred it o f fo reig n ers at p resen t e x c e e d th e to ta l a m o u n t o f cred it to foreign ers b y a lm o st a 3 -1 ratio at b a n k s in clu d e d in th e tab le. R efle c tin g th e n atu re o f th eir fo r e ig n o p e r a tio n s, S ixth D istrict b a n k s h a v e h ad little flex ib ility in c o n fo r m in g th eir fo reig n o p er a tio n s to th e p ro g ra m ’s 1 0 5 -p e r c e n t target. M a n y b a n k s fo u n d th at th e a llo w a b le 5 -p e r c e n t ex p a n sio n w as sm aller in d o lla r a m o u n t th an an y o f th e lo a n req u ests. T h u s, th ey h a v e h a d d ifficu lty in u tilizin g th e ex p a n sio n p ro v id ed in th e p rogram e x c e p t th ro u g h th e r e p la ce m en t o f m atu rin g cred it. T h e sa m e fa cto r h a s p r e v en ted sm all b a n k s th at w ere o v er th e ta rg et fro m red u cin g fo reig n cred it sm o o th ly to g e t w ith in th e p rogram . T h o s e b an k s did n o t h a v e a su fficien t v o lu m e o f fo reig n cred it m atu rin g to a llo w th em to red u ce c red it lin es. A further in flex ib ility in d u ced b y th e stru ctu re o f fo reig n b a n k in g is th e c o n c en tr a tio n o f cred it to less d e v e lo p e d co u n tries or th e fin a n cin g o f ex p o rts. T h e V o lu n ta r y F o r eign C red it R estra in t P rogram ask ed fin a n cia l in stitu tio n s to g iv e to p p rio rity to cred it o f th o se ty p es. A lth o u g h th e 5 -p er c e n t in crea se in fo reig n cred it w a s esta b lish ed in v iew o f a n o rm a l e x p a n sio n o f ex p o rts, so m e b a n k s in this D istrict h a v e b e e n hard p ressed to a c c o m m o d a te ex p o rt fin a n cin g req u ests fro m th eir c u sto m ers. T h e ir p ro b lem has b e e n a m elio ra ted c o n sid e r a b ly sin ce lo a n s fo r ex p o rt p u r p o se s g u a ra n teed b y th e E x p o r t-Im p o r t B a n k or in su red by th e F ed era l C red it In su ra n ce A g e n c y are n o t su b ject to th e G u id e lin es. T h e to ta l a m o u n t o f su ch cred it in the n a tio n , h o w ev er, has n o t in crea sed sin c e th e e n d o f 1 9 6 4 . A s th e tab le in d ica tes, b a n k s in th e D istr ic t and th e U .S . h a v e b e e n ab le to fit th eir fo reig n o p e r a tio n s in to th e req u ests m a d e u n d er th e v o lu n ta ry p rogram . A few b an k s w ill c lo s e ou t th e y ea r w ith fo reig n cred it w e ll b e lo w the target. T h e p rogram fo r 1 9 6 6 w ill p ro v id e D istr ic t b an k s so m e relief fro m th ese p ro b lem s. B a n k s w ith sm a ll b a se s m ay e x ten d a d d itio n a l cred it fo r e x p o r t fin a n cin g and for u se in less d e v e lo p e d co u n tries. T h o se b a n k s, th erefo re, sh o u ld find this p rogram m o re to lera b le th a n th a t fo r 1 9 6 5 . T h e 1 9 6 6 p rogram is la rg ely u n c h a n g e d from 1 9 6 5 . T h e esta b lish ed target is 1 0 9 p er c e n t o f th e D e c e m b e r 1 9 6 4 b a se in q u arterly in crem en ts. T h is p ro v id es for ab ou t th e sa m e ex p a n sio n in cred it d u rin g 1 9 6 6 as in 1 9 6 5 . T h e p rogram fo r n o n b a n k fin a n cia l in stitu tio n s rem ain s co m p a tib le w ith th e b a n k p rogram . W . M . D avis M O N T H L Y R E V IE W State and Local Borrowing in a Changing Market F o r the first tim e in m od ern h isto ry th e d ollar v o lu m e of state and lo c a l g o v ern m en t p u rch a ses o f g o o d s and serv ices e x c e e d e d th at o f th e F ed era l g o v ern m en t in 1 9 6 5 . In sp ite o f in creasin g state g o v ern m en t rev en u es, aid ed in m a n y c a ses b y F ed era l ta x cu ts, th e gap b etw e e n cap ital n eed s and rev en u es rem ain ed w id e. C o n se q u e n tly , for the third su ccessiv e y ea r the v o lu m e o f n ew lo n g -term taxex e m p t issu es c o m in g to m ark et e x c e e d e d $ 1 0 b illio n . A n o th er n ew record w as set w h en at y ea r’s en d th e o u t stan d in g d eb t o f th ese g o v ern m en ta l b o d ies, their a g en cies, and au th orities clim b ed a b o v e $ 1 0 0 b illio n . T h is large v o lu m e o f n ew secu rities offerin gs fo u n d its w a y in to a m ark et w h ich g rad u ally b e c a m e tigh ter as th e year p rogressed. C ap ital d em a n d s from o th er secto rs, m o st n o ta b ly from co rp o ra te b u sin e ss, grew sharply. R ea l sa v ings flow s, alth ou gh still at h ig h le v e ls, p roved in a d eq u a te to a cco m m o d a te th e rise in aggregate ca p ita l deiw^xiu. R isin g in terest rates and greater d ifficulty in p la cin g a c o n tin u in g h igh v o lu m e o f state and lo c a l secu rities en su ed . B y late D e cem b er, y ield s o n h ig h est grade sta te and lo c a l g o v ern m en t secu rities had risen to m id -1 9 6 0 lev els, and m ed iu m grade y ield s w ere at their F eb ru ary 1 9 6 2 lev els. E v id e n c e su g g ested that th e lo n g e st p eriod in recen t h is tory o f h igh ly fa vorab le b o rro w in g co n d itio n s fo r the S ixth D istrict’s state and lo ca l g o v ern m en ta l b o d ie s and their a g en cies m igh t be en d in g. D istr ic t V o lu m e R is e s In 1 9 6 0 , the year b efo re th e cu rrent e x p a n sio n p eriod b eg an , g o v ern m en ta l b o d ie s and their in stru m en ta lities in th e six D istrict states m ark eted ab ou t 1 0 p ercen t o f the to tal d ollar v o lu m e o f ta x -e x e m p t secu rities offerin gs in th e U n ited S tates. R e g io n a l offerings o f lo n g -term b o n d s for n ew cap ital, am o u n tin g to $ 7 5 5 m illio n th at year, a c c o u n ted for 1 0 .5 p ercen t o f n a tio n a l to ta ls. T h e r e sp e c tive region al shares for 1 9 6 5 , th rou gh S ep tem b er, rose to 1 1 .5 and 1 5 .0 p ercen t. D u rin g th e 1 9 6 1 -6 5 p erio d , the reg io n ’s aggregate offerin gs a m o u n ted to 1 1 .6 and 12.1 p ercen t, resp ectiv ely . T h e q u arterly b eh a v io r o f d ollar am ou n ts, as d ep icted in C hart I, d em o n stra tes th e strength o f this rising trend. W h o w ere the largest grou p o f issu ers o f ta x -e x e m p t secu rities in the six D istrict states? C hart II in d ica tes that L o c a l H o u sin g A u th o rities ty p ic a lly a cco u n te d for ab ou t on e-th ird o f tota l issu es. H o w ev e r, as th e lo w er p o rtio n o f th e chart sh o w s, p erm a n en t or lo n g -term fin an cin g o f p u b lic h ou sin g rep resen ted o n ly ab o u t o n e-eig h th o f the to tal fo r h o u sin g secu rities. T h e rem a in d er o f issu es o f L o ca l H o u sin g A u th o rities w as m a d e up o f sh ort-term tem p orary n o tes, rep resen tin g co n tra cts for a d v a n ces from th e P u b lic H o u sin g A d m in istra tio n . M a n y o f th ese n o tes, h o w ev er, w ere m erely “ro ll-o v e r s,” or refu n d in g s, o f m a turing n o tes, w h ich m ay b e su c c e ssiv e ly rolled o v er several tim es p en d in g c o m p letio n o f a p ro ject or w h ile aw aitin g m ore favorab le m arket co n d itio n s for the sale o f lo n g term b on d s. F o r ex a m p le, during the p ast five years, the six sta tes’ lo ca l h o u sin g ag en cies issu ed a to tal o f a p p ro x i m a tely $ 2 .5 b illio n h o u sin g secu rities, o f w h ich o n ly ab ou t $ 3 0 0 m illio n w ere lo n g -term b o n d s. JANUARY 1966 C ities w ere th e n ex t largest su p p liers o f ta x -ex em p t secu rities and during 1 9 6 1 -6 5 a c co u n ted for rou gh ly o n efifth o f th e reg io n a l total. T h e sharp b u lg e in 1 9 6 3 , sh ow n in the ch art, w a s c a u sed b y an e x c e p tio n a lly large a d van ce refu n d in g issu e o f a m ajor T e n n e sse e city. N o clear trend is ev id en t for th e ch a n g in g im p o rta n ce o f city issu es. Chart I: S a le s of S ta te and Local G overnm ent S e c u r itie s Sixth District States and United States The District’s securities-issuing bodies offered a growing share of the tax-exempt securities shown. Even sharper growth oc curred in the offerings of long-term bonds for new capital. High levels of issuance of new and refunding short-term hous ing and urban renewal notes continued, and refundings of long-term issues grew substantially during the last three years. Chart II: Borrowers of S ta te and Local G overnm ent S e c u r itie s Sixth District States 1960 1961 1962 1963 1964 1965 (9mos.) Tax-exempt issues by state governments declined in relative importance. City issues showed some growth, with sharp gains in 1962 and 1963. Issues for housing and urban renewal held steady in volume. Source for all charts: Computed from basic data supplied by the Investment Bankers Association of America, The Bond Buyer, and M oody’s M unicipal and G overnm ent Manual. A d eclin in g share o f to ta l reg io n a l v o lu m e is clea rly in d ica ted for state g o v e r n m en t issu es. In 1 9 6 0 the issu es o f th e six state g o v ern m en ts a m o u n ted to ab o u t 17 per c en t o f total issu es. H o w e v e r , b y 1 9 6 4 th eir sh are w as d o w n to 5 p ercen t and fo r th e first th ree q uarters o f 1 9 6 5 had d eclin ed to 3 p ercen t. G ro w th o f S p ecia l A u th o rity fin an cin g, d eclin e in th e v o lu m e o f issu es fo r road b u ild in g , and sh iftin g o f sc h o o l b o rro w in g to city , co u n ty , and s c h o o l b oard s ap p ear to b e the p rin cip al fa cto rs in flu en c ing this d eclin e. largely to rapid g ro w th in in d u stria l d e v e lo p m e n t b on d s. M o re th an o n e -fo u r th o f th e n ew ca p ita l secu red throu gh issu a n c e o f lo n g -term b o n d s w as d e v o te d to sc h o o ls and o th er e d u ca tio n a l n e e d s o f this re g io n du rin g th e 1 9 6 1 1 9 6 5 p erio d , as it is sh o w n in C h art IV . A fifth o f su ch ca p ita l w a s d e v o te d to ro a d s, b rid ges, and streets. T o g eth er, th ese u ses o f b o rro w ed ca p ita l a c c o u n te d fo r a lm o st o n eChart IV: S h a r e s o f R egional Bond S a le s by P u rp ose of Issu e Sixth District States, 1961-65 C h a n g in g C a p ita l N e e d s T h e n eed for b orrow ed ca p ita l, w h ic h for th e D istr ict’s state and lo c a l g o v ern m en ts g en era lly m ea n s im p orted c a p ita l, v aried co n sid er a b ly w ith in a g ro w in g to ta l, as is illu strated in C hart III. P rim ary co n trib u to rs to th ese variation s w ere differen tial g row th rates in p o p u la tio n , rate o f n ew indu stry a cq u isitio n s, and sh iftin g em p h a sis u p o n m ajor p u b lic g o a ls. C h a n g in g p attern s o f ta x a tio n and im p ro v em en t in ta x c o lle c tio n s and p u b lic ex p en d itu re m eth o d s also in flu en ced b o rro w in g patterns. G o v ern m en ta l u nits in A la b a m a an d T e n n e sse e appear to h a v e co n tin u ed in 1 9 6 5 a stron g u p w ard trend in their sh are o f total lo n g -term b o rro w in g s w ith in th e six state region . G eo r g ia ’s 1 9 6 5 sh are ap p ears slig h tly sm aller than its five-year average. F lo rid a , th e la rg est b orrow er o f the six, and L o u isia n a sh o w b u lg es in 1 9 6 4 and 1 9 6 3 , resp ectiv ely , bu t on b a la n c e red u ced their 1 9 6 5 sh are o f borrow in gs, relative to th e reg io n a l to ta l. M ississip p i sh o w s a clear d ow n tren d in share. Chart III: S h a res of R egional T ax-Exem pt Bond S a le s .......... Sixth District States Fairly sharp shifts occurred in the share of total volume of long-term bond issues for new capital. No pronounced trend was evident for Georgia, Louisiana, and Tennessee. Florida and Mississippi declined slightly in importance, while Alabama’s share increased sharply from the low of 1962 partly because of the growth in industrial development issues. T h e b u lg es for v ario u s sta tes in certa in years are largely e x p la in a b le by th e lu m p in g o f m ajor secu rity flo ta tio n s for sp ecific p u b lic g o a ls. F o r e x a m p le , sta te and lo c a l u n its in A la b a m a w ere rela tiv ely h e a v y b o rro w ers in 1 9 6 0 , w h en tw o very large offerin gs to ta lin g $ 7 0 m illio n w ere m ad e for ed u ca tio n a l p u rp o ses. H e a v y b o rro w in g for road s a c co u n ted for G eo r g ia ’s b u lg es in 1 9 6 1 -6 2 . A sin g le large issu e o f $ 1 5 7 m illio n in 1 9 6 1 b y th e F lo r id a T u rn p ik e C o m m issio n and an oth er o f $ 1 3 5 m illio n b y th e J a c k so n v ille E x p ressw a y A u th o r ity in 1 9 6 4 la rg ely ex p la in s the e x c e p tio n a l share o f F lo rid a fo r th o se years. T h e 1 9 6 2 and 1 9 6 3 e x p a n sio n sh o w n for L o u isia n a in clu d ed h ea v y b o r row in g for ports, h arb ors, and in tern a tio n a l trade fa cilities in 1 9 6 2 and for road s and p u b lic u tilities in 1 9 6 3 . A la b a m a ’s stron g u ptrend b eg in n in g in 1 9 6 3 ca n be attributed • 4 • Borrowing for education and transportation purposes continues to dominate in the use of long-term capital. Water and sewer, public utility, industrial development, and housing still require large increments of funds. h a lf o f th e total. T h e rem a in d er w a s d istrib u ted am o n g w ater, sew ers, p u b lic u tilities, and o th er u ses. G eo rg ia led th e six sta tes in b o rro w in g fo r e d u ca tio n a l p u rp o ses, d e v o tin g a lm o st tw o -fifth s o f its b orrow in g to this u se. L o u isia n a , T e n n e sse e , and M ississip p i e a ch d e v o ted u p w ard s o f o n e -fo u r th o f lo n g -te r m b o rrow ed ca p ita l to ed u ca tio n . F lo rid a ran k ed first in th e p ro p o r tio n o f b orrow in g for ro a d s, b rid ges, and street im p r o v e m en ts, w ith m ore than 3 0 p ercen t o f lo n g -term b o rro w in g s for this p u rp ose. G e o rg ia and M ississip p i e a ch d ev o te d m o re th an 2 0 per cen t o f b o rro w ed ca p ita l to road s and streets. B o rro w in g fo r w a ter sy stem s, sew er sy stem s, an d d rain age w as h ea v y , w ith all sta tes e x c e p t A la b a m a d ev o tin g m o re th an 1 0 p e r ce n t to th is p u rp o se. M ississip p i led the region , w ith 1 5.1 p ercen t. P u b lic u tility issu e s b y m u n ic i p a lities w ere h e a v iest in F lo rid a , L o u isia n a , T e n n e sse e , and A la b a m a . U se o f ta x -e x e m p t secu ritie s for in d u strial d e v elo p m en t p u rp o ses grew sh arp ly du rin g th e p a st five years. A la b a m a and M ississip p i h a v e lo n g led th e six sta tes in this ty p e o f issu e and w ere th e m ajor b o rro w ers during the p eriod . A la b a m a d ev o te d o v er o n e-th ird o f to ta l lo n g term b o rro w in g s to th is p u rp o se. F lo r id a , L o u isia n a , and G eo r g ia are rela tiv e n e w c o m e r s to this ty p e o f b o rro w in g and d ev o ted o n ly 0 .7 , 0 .9 , and 1.3 p ercen t o f th eir to ta ls to in d u strial d ev elo p m e n t. O n b a la n ce it ap p ears th at sta te and lo c a l en tities in this reg io n h a v e ta k en rather full a d v a n ta g e o f fa v o ra b le b orro w in g c o n d itio n s in th e p a st five years. S in ce p o p u la tio n grow th , in d u strial d e v e lo p m e n t, and rising in co m es co n tin u e to p la ce h ea v y d e m a n d s u p o n p u b lic services, further e x p a n sio n o f b o rro w in g n eed s se e m s lik ely. In terest c o sts h ave risen sh a rp ly du rin g th e p a st fe w m o n th s, and it is d ifficult at this tim e to d eterm in e w h eth er th ey h ave sta b ilized . In any c a se, this r e g io n ’s b o rro w in g p o w er is e x p a n d in g a lo n g w ith its e c o n o m ic gro w th , so th at c o n tin u ed a ccess to th e c a p ita l m a rk ets seem s assured. H ir a m J. H o n e a MONTHLY R E V IE W Mississippi’s Economy: 'Five in a Row’ M ississip p i has so m eth in g to b o a st a b ou t: H er e c o n o m ic g ro w th has g en era lly eq u a led or su rp a ssed th e U . S. record during the current e x p a n sio n p erio d , w h ich w ill reach the ad v a n ced age o f five years in F eb ru ary. In th e la st tw elv e m o n th s, the rate o f im p ro v em en t in n o n a g ricu ltu ra l e m p lo y m en t, average w eek ly h ou rs w o rk ed , average h ou rly earnings, and in su red u n e m p lo y m en t w a s greater in M is sissip p i than in the U . S. B y N o v e m b e r , th ese fo rces, c o m b in ed w ith record ca sh receip ts fro m farm m a rk etin g s, had h elp ed drive p er ca p ita in c o m e s in th e so u th ern state to o n e o f the h ig h est lev els ev er record ed . factu rin g firm s th at p ro v id ed o n ly 3 8 p ercen t o f the n a tio n ’s n ew p o sitio n s. T h e b u lk o f th e gain s in th e G u lf C o a st sta te w a s c o n cen tra ted in th e m a n u fa ctu re o f trans p orta tio n eq u ip m en t, fu rn itu re and fixtures, and apparel. N o n m a n u fa ctu rin g e m p lo y m e n t a d v a n ced prim arily in lo c a l g o v ern m en ts, fo llo w e d b y state g o v ern m en t and w h o le sa le trade. Economic Indicators —Mississippi U . S . E c o n o m y G row s E v en th ou gh e c o n o m ic activ ity in so m e parts o f M ississip p i h as ex ce e d e d th e U . S. le v e l, th e n a tio n a l e c o n o m y sh o w ed o u tstan d in g grow th in 1 9 6 5 . P artial ev id e n c e o f this grow th w as a sharp rise in to ta l e m p lo y m e n t. In N o v e m b e r 1 9 6 5 , to tal e m p lo y m en t in the U . S. a p p ro a ch ed 7 3 m illio n w o rk ers, or a p p ro x im a tely 2 m illio n m o re th an a year earlier. M ea n w h ile, in su red u n e m p lo y m e n t d ro p p ed stea d ily . O n ly 2 .7 p ercen t o f th e n a tio n ’s w o rk ers, co v ered b y so m e typ e o f u n em p lo y m en t c o m p e n sa tio n , w ere u n e m p lo y ed in N o v em b er. L a st y ea r’s rate w a s 3 .4 p ercen t. G reater p r o d u ctio n , resu ltin g from an in crea se in to ta l e m p lo y m en t and th e lo w u n e m p lo y m e n t rate, h elp ed p u sh th e F ed era l R e serv e in d ex o f in d u strial p ro d u ctio n to a record lev el o f 1 4 5 .5 in N o v e m b e r , or 8 p ercen t a b o v e 1 9 6 4 ’s lev el. P erso n a l in c o m e s h a v e c o n tin u e d to ex p a n d o n th e h eels o f greater e m p lo y m e n t and p ro d u ctio n , as w ell as w a ge in creases. D u rin g th e la st tw e lv e m o n th s, p a y ch eck s for p ro d u ctio n w ork ers in m a n u fa ctu rin g in d u stries grew b e c a u se o f lo n g er h ou rs and h igh er w a g es. M ea n w h ile , u n u su a lly high ca sh receip ts fro m farm m ark etin g s b o o ste d farm in co m es, and m a n y b u sin e sse s d isp la y ed gen era lly fa v o ra b le profit m argins. H e n c e , th ere is little w o n d er th at p erson al in co m e h as clim b ed n ea rly 8 p ercen t sin ce la st N o v em b er. T h e A m erica n c o n su m e r h as ex p e r ie n c e d an in crea se in real in c o m e or p u rch a sin g p o w er, sin c e c o n su m er p rices, as m easu red b y th e co n su m er p rice in d ex , h a v e risen far less th an in c o m e . M is s is s ip p i P a r tic ip a te s in G row th G en era lly , M ississip p i has b e e n a part o f th e n a tio n a l e c o n o m y ’s rapid ex p a n sio n . In th e M a g n o lia state, th e N o v em b er in sured u n e m p lo y m e n t figure sto o d at 1.8 p er cen t, w e ll b e lo w the n a tio n a l average. T h is lo w u n e m p lo y m en t rate, w h ich is 1.1 p ercen t b e lo w la st y ea r ’s, w as a c h iev ed at a tim e w h en to ta l n o n a g ricu ltu ra l em p lo y m e n t ad van ced b y 2 2 ,0 0 0 p erso n s, or o v er 5 p ercen t. A lth o u g h m o st m ajor secto rs o f th e sta te ’s e c o n o m y , e x c e p t m in in g and tran sp o rta tio n , h a d in crea ses in e m p lo y m e n t in the last year, m a n u fa ctu rin g in d u stries p ro v id ed th e stron gest p u sh to th e e m p lo y m e n t rolls. T h e se in d u stries, w h ich curren tly su p p ly a b o u t 3 2 p ercen t o f th e sta te’s n on agricu ltu ral job s, ad d ed a p p ro x im a tely 1 5 ,0 0 0 m o re w ork ers durin g th e year en d in g N o v e m b e r 1 9 6 5 . M ississip p i m an u factu rin g firm s a cco u n te d for 6 8 p ercen t o f all n ew job s crea ted , co m p a red w ith sim ilar U . S. m a n u J A N U A R Y 1 9 66 *Seasonally adjusted figure; not an index. N o t o n ly d id th e m an u fa ctu rin g in d u stries em p lo y m ore w ork ers, b u t th ey also e x te n d e d th e w o rk w eek . In N o v e m ber 1 9 6 5 , th e a verage w e e k ly h ou rs w o rk ed w ere 4 1 .4 , or o n e -h a lf h ou r lo n g er th an la st year. T h e se lo n g er w o rk w ee k s, c o m b in ed w ith a 4 -p e r c e n t in crea se in average h o u rly earn in gs, h elp ed raise a v erage w e e k ly p a y ch eck s to $ 7 7 .6 1 , or $ 4 .2 2 m o re th an a year earlier. T h e agricu ltu ral secto r o f e c o n o m ic a ctiv ity in M issis sip p i a lso e x h ib ited progress. T h ro u g h th e first 11 m on th s o f 1 9 6 5 , c a sh receip ts fro m farm m a rk etin g s w ere ab ove p rev io u s record lev els. W h ile b o th cro p and liv esto ck sa les e x c e e d e d la st y ear, m o st o f th e ga in c a m e from h igh er liv e sto c k p rices, p articu larly fo r ca ttle an d h ogs. T h e n et effect o f th ese a d v a n ces in w a g es, e m p lo y m en t, and o u tp u t is a b road e c o n o m ic e x p a n sio n in M ississip p i— as reflected in th e p e rso n a l in c o m e s o f resid en ts. T h e F ed era l R e se r v e B a n k o f A tla n ta ’s estim a te o f th e sta te’s p erso n a l in co m e , e x p ressed in a se a so n a lly ad ju sted annual rate, fo r O cto b er w a s $ 3 .5 b illio n , or n early 8 p ercen t a b o v e la st year. T h is rate o f g ro w th in p e rso n a l in c o m e eq u a led the n a tio n a l rate; h o w e v er , th e a b so lu te d ollar in crea se in per ca p ita in c o m e w a s le ss th a n for th e U . S., b e c a u se M ississip p i started fro m a lo w e r b a se in ca lc u la t in g th e p ercen ta g e ch an g e. W h a t are th e p ro sp ec ts fo r fu tu re grow th ? T h e o u tlo o k fo r 1 9 6 6 ap pears q u ite g o o d . T h ro u g h th e first th ree qu arters o f 1 9 6 5 , an n o u n ced p la n s fo r th e c o n str u c tio n o f n ew and ex p a n d ed p lan ts to ta led a p p ro x im a tely $ 3 0 0 m il lio n . C o m p le tio n o f th e se p la n s— w h ic h in clu d e th e p ap er and a llied p rod u cts, lu m b er and w o o d p ro d u cts, electrica l m a ch in ery , tran sp ortatio n e q u ip m en t, c h e m ic a l and allied p ro d u cts, and ap p arel in d u stries— w ill p ro v id e e m p lo y m en t fo r co n stru ctio n w o rk ers, in a d d itio n to crea tin g n ew p erm a n en t p o sitio n s. C o n tin u ed stren gth is e x p e c te d in th e sta te ’s agricultural e c o n o m y , as p rices and ou tp u t for th e n ex t year are lik ely to rem ain stron g. T h e co n sta n t d iversified grow th in M ississip p i’s e c o n o m y w ill m ark 1 9 6 6 as th e six th y ear o f ex p a n sio n in a row . R o bert E . S w e e n e y This is one o f a series in which econ om ic d evelo p m en ts in each o f the Sixth D istrict states are discussed. D ev elo p m en ts in A la b a m a ’s e co n o m y were an alyzed in the O ctober 1965 R e v i e w , and a discussion o f G eorgia ’s eco n o m y is sched uled for a forth com in g issue. This article on Mississippi’s e c o n o m y will be included in the revised edition of A R e v i e w o f M i s s i s s i p p i ’ s E c o n o m y , 1960-65. Copies are available upon request to the Research D epa rtm en t, Federal Reserve Bank o f Atlanta, Atlanta, Georgia 30 30 3. Bank Announcements T h e F i r s t S t a t e B a n k , fo r m e r ly th e G e o r g ia B a n k in g C o m p a n y , M a r sh a llv ille , G eo rg ia , a n o n m e m b e r b a n k , b eg a n to r e m it a t o n D e c e m b e r 1 fo r c h e c k s d r a w n o n it w h e n re c e iv e d fr o m F e d e ra l R e s e r v e B a n k . O fficers a re R u f u s W . G o sn e ll, C h a irm a n P re sid e n t; J. R . A lle n , E x e c u tiv e V ic e P re sid e n t; a n d J a m e s G o o d m a n , S r., V ic e P r e sid e n t a n d C a sh ier. par th e and H. O n D e c e m b e r 6, th e B a n k o f W i l d w o o d , W ild w o o d , F lo rid a , a n o n m e m b e r b a n k , b eg a n to r e m it a t p a r. O fficers in c lu d e G . O. W a tk in s , P re sid e n t; P a u l B . W a tk in s , E x e c u tiv e V ic e P re sid e n t; M . S . W a tk in s , V ic e P re sid e n t; a n d M r s. H e lo ise B . B a rn es, C ashier. T h e B e s s e m e r B a n k a n d T r u s t C o m p a n y , B e sse m e r, A la b a m a , a n e w ly o rg a n ize d n o n m e m b e r b a n k , o p e n e d fo r b u sin e ss o n D e c e m b e r 6 a n d b eg a n to r e m it a t p a r. H . E d w a r d N o r to n is P re sid e n t, a n d J o h n n y E . J o rd a n is V ic e P r e sid e n t a n d C a sh ier. C a p ita l to ta ls $375,00 0 , a n d s u rp lu s a n d o th e r c a p ita l fu n d s , $ 3 7 5,000. A ls o o n D e c e m b e r 6, th e F l o r i d a B a n k a t B u s h n e l l , B u sh n e ll, F lo rid a , a n o n m e m b e r b a n k , b e g a n to r e m it a t p a r. O fficers are R . J. E u b a n k s , P re sid e n t; M is s L o u is e S ells, V ic e P re sid e n t; a n d C h a rle s B . N o r to n , C a sh ier. T h e E x c h a n g e B a n k , M ille d g e v ille , G eo rg ia , a n o n m e m b e r b a n k , b eg a n to r e m it a t p a r o n D e c e m b e r 13. J o h n E . G a rn e r, Jr., is P re sid e n t; O tto C o n n M o r r is o n , E x e c u tiv e V ic e P re sid e n t; a n d A u b r e y H . S im p s o n , V ic e P r e sid e n t a n d C a sh ier. O n D e c e m b e r 15, th e M i d - C o u n t y C o m m e r c i a l B a n k , L a rg o , F lo rid a , a n e w ly o rg a n ize d n o n m e m b e r b a n k , o p e n e d fo r b u sin ess a n d beg a n to r e m it a t p a r. O fficers in c lu d e J o h n A . J e n k in s , C h a ir m a n a n d P re sid e n t; D a v id E . K e r n , V ic e P r e sid e n t a n d C a sh ier; a n d H a r o ld L . M c B r id e , V ic e P r e sid e n t a n d L o a n O fficer. C a p ita l is $360,00 0 , a n d s u rp lu s a n d o th e r c a p ita l fu n d s , $ 1 80,000. T h e B a n k o f O s c e o l a , K iss im m e e , F lo rid a , a n e w ly o r g a n ize d n o n m e m b e r b a n k , o p e n e d fo r b u sin e ss o n D e c e m b e r 16 a n d began to r e m it a t p ar. O fficers are R u f u s W . S u h l, P re sid e n t; W illia m F . B a k e r, E x e c u tiv e V ic e P r e sid e n t a n d C a sh ier; a n d A l fr e d L . H a m m o n d , V ic e P re sid e n t. C a p ita l a m o u n ts to $3 5 0 ,0 0 0 , a n d s u rp lu s a n d o th e r c a p ita l fu n d s , $ 1 05,000. T h e E l b a E x c h a n g e B a n k , E lb a , A la b a m a , a n o n m e m b e r b a n k , b eg a n to r e m it a t p a r o n D e c e m b e r 27. O sca r V a u g h a n , Jr., is P re si d e n t; F r e d D . C la rk , V ic e P re sid e n t; a n d M a r y A . L e e , C ashier. Debits to Demand Deposit Accounts Insured Commercial Banks in the Sixth District (In Thousands of Dollars) Nov. 1965 STAMDARD IVIETROPOLITAN STATISTICAL AREASt Birmingham . . . 1,382.067 63,610 Gadsden . . . . 180,697 Huntsville . . . 437,330 Mobile . . . . 276,285 Montgomery . . . 82,278 Tuscaloosa . . . Oct. 1965 Percent Change Year-to-Date 1 1 months Nov. 1965 from 19^5 Oct. Nov. from Nov. 1964 1965 1964 1964 1,257,351 60,489 163,941 440,980 268,373 80,722 1,136,681 57,693 171,917 391,113 243,076 72,625 + 10 +5 + 10 +22 + 10 +5 —1 + 12 +3 +2 + 14 + 13 Ft. Lauderdale— Hollywood. . . Jacksonville . . . M iami....................... Orlando . . . . Pensacola . . . . Tampa-St. Petersburg W. Palm Beach . . 499,043 1,476,567 1,888,494 415,097 193,235 1,120,714 359,866 461,394 1,421,614 l,732,877r 393,736 181,881 1,014,216 326,544 440,572 1,141,546 1,563,083 389,767 168,852 964,530 309,808 +8 +4 +9 +5 +6 + 11 + 13 + 29 + 21 +6 + 14 + 16 + 16 Atlanta . . . . Augusta . . . . Columbus . . . . 85,327 3,852,056r 192,867 179,884 202,928 225,659 75,073 3,308,325 186,650 176,863 189,109 205,504 +2 +7 +8 +8 +2 +3 + 16 + 24 +11 Savannah . . . . 87,118 4,111,421 208,041 194,012 206,931 233,322 Baton Rouge . Lafayette . . Lake Charles . New Orleans . 472,601 106,781 108,081 2,165,412 452,754 108,053 112,494 2,093,690 380,644 86,834 90,820 1,796,175 +4 —1 —4 +3 + 24 + 23 + 19 +21 . . . . . . . . + 10 + 10 +9 + 14 + 11 +5 4-5 4*8 + 10 +5 +9 + 17 +9 4-1 + 10 +8 +9 + 18 + 12 +4 +7 +9 +5 + 20 + 19 +9 + 12 581,030 558,500 478,958 +4 +21 + 12 Chattanooga . . . Knoxville . . . . Nashville . . . . 523,978 432,328 1,412,805 494,125 408,741 1,201,281 429,384 340,444 1,206,544 +6 +6 + 18 + 22 + 27 + 17 + 12 +11 +11 OTHER CENTERS Anniston . . . . Dothan . . . . Selm a....................... 59,605 50,473 40,488 58,971 54,640 45,434 53,905 44,943 35,248 +1 —8 — 11 +11 + 12 +15 38,990 50,298 199,822 78,561 36,343 44,569 193,911r 74,998 27,516 39,074 163,114 66,061 +7 + 13 +3 +5 + 42 + 29 + 23 + 19 +7 +6 +5 +26 4-4 +18 +7 57,206 67,474 29,629 98,654 47,109r 16,582 258,270 85,250 103,776 562,908 48,542 + 13 +11 + 45 + 24 + 19 + 16 +20 +18 + 16 + 16 —4 Athens ....................... Brunswick . . . Dalton....................... Elberton . . . . Gainesville . . . G riffin....................... LaGrange . . . . Newnan . . . . R o m e....................... Valdosta . . . . 66,069 39,119 80,322 12,361 66,116 31,684 22,082 22,209 73,100 48,780 60,930 37,087 84,940 15,012 68,303 28,589 19,894 22,141 65,931 47,061 56,850 63,606 22,257 87,408 42,133 15,812 247,847 80,414 97,568 526,817 48,657 53,004 34,452 77,814 12,338 56,945 27,001 17,122 24,539 62,628 43,641 + 12 +5 +9 . . 64,013 70,818 32,301 108,506 50,031 18,357 298,454 94,579 113,303 611,624 46,801 Abbeville . . . . Alexandria . . . Bunkie....................... Hammond . . . . New Iberia . . . Plaquemine . . . Thibodaux . . . 11,353 113,966 N.A. 31,153 34,256 9,097 21,433 10,453 117,163 6,561 30,194 34,142 8,152 19,500 9,800 96,227 6,853 26,408 30,419 7,848 17,342 Biloxi-Gulfport . . Hattiesburg . . . Laurel....................... Meridian . . . . Natchez . . . . Pascagoula— Moss Point . . Vicksburg . . . . Yazoo City . . . 88,310 53,006 35,844 61,298 29,993 84,890 48,997 37,460 58,118 29,944 72,785 40,665 31,304 56,076 29,511 52,344 35,617 27,436 45,592 35,415 27,630 Bristol....................... Johnson City . . . Kingsport . . . . 62,269 66,126 128,129 61,457 63,659 118,875r Jackson . . . . Bartow . . . . Bradenton . . . Brevard County . . Daytona Beach . . Ft. Myers— N. Ft. Myers . . Gainesville . . . Monroe County . . Lakeland . . . . Ocala ....................... St. Augustine . . St. Petersburg . . Sarasota . . . . Tallahassee . . . Winter Haven SIXTH DISTRICT, Total 26,101,493 Alabama}: . Florida! . . Georgia! . . Louisiana*+ . Mississippi*t Tennessee*+ . . . . . . . . . . . . . 3,447,589 7,915,313 6,276,599 3,602,014 1,246,783 3,613,195 + 10 +6 +11 +16 + 11 +9 +9 —4 +8 +5 —5 — 18 —3 + 11 + 11 +0 + 11 +4 + 25 + 14 +3 +0 + 16 + 17 + 29 —9 + 17 + 12 +7 +9 +21 + 11 +7 +6 +6 +6 + 16 + 11 +7 + 16 +3 +11 +7 +9 +11 +8 —2 +7 + 12 + 16 + 18 N,A. + 18 + 13 + 16 + 24 + 12 +4 +8 —4 +5 +0 + 21 + 30 + 15 +9 +2 +11 +11 +8 +6 43,613 31,945 26,707 +15 +1 —1 + 20 + 11 +3 +6 +13 +11 55,046 57,528 109,510 +1 +4 +8 + 10 24,895,499r 22,211,716 +5 + 13 +15 + 17 + 18 3,055,314 6,638,204 5,420,466 2,974,489 1,053,296 3,069,947 +5 +7 +1 +2 +5 3,287,346 7,374,424r 6,235,510r 3,519,955 1,190,477 3,287,787r +9 —3 N.A. +3 +0 + 12 + 10 + 10 +13 + 19 + 16 + 21 +18 + 18 + 10 N.A. +8 +7 + 10 +9 +0 +9 + 13 + 10 +7 + 10 +12 +13 + 10 +9 ♦Includes only banks in the Sixth District portion of the state. fPartially estimated : Estimated. r-Revised. N.A. Not available M ONTHLY R E V IE W Sixth District Statistics Seasonally Adjusted (All data are indexes, 1957-59 = Latest Month (1965) One Month Ago Two Months Ago Oct. 48,528 50,295r 48,708r 45,089 Nov. 175 171 168 155 Oct. 144 142 143 131 134 144 Oct. 143 136 Oct. 143 130 119 133 Dec. 157p 157 151 142 Nov. Nov. 226 203 225r 1% 217 205 183 182 125 125 152 120 135 111 101 111 111 101 156 125 124 69 1.9 41.9 173 175 171 128 115 188 125r 124 151 118 133 llO r 100 110 110 100 153 125 122 70 2.1 41.8r 166 167 165 130 112 188 124 123 149 118 130 109 100 110 111 100 152 124 120 66 2.4 41.4 139 142 137 132 109 152 119 118 142 113 126 109 98 107 110 97 132 120 116 74 2.5 41.3 184 142 219 122 104 168 Nov. Dec. 215 198 214 198 211 198 186 172 Nov. Dec. 166 153 165 154 162 152 150 138 INCOME AND SPENDING Personal Income, (Mil. $, Annual Rate) . . Oct. Manufacturing P a y r o lls .................................. Nov. Farm Cash R e c e ip t s ........................................ Oct. Department Store S a l e s * * ............................. Nov. FINANCE AND BANKING Member Bank L o a n s ........................................ Member Bank D e p o sits.................................. Bank D e b it s * * ................................................... One Year Ago 9,148 178 143 156 9,430r 171 151 153 9,236r 168 128 144 8,489 154 151 141 125 122 126 139 62 1.5 41.7 124 121 126r 136r 69 1.7 41.2 123 120 125 136 65 2.1 41.1 119 116 120 128 67 2.2 40.6 Nov. Nov. 225 177 223 178 219 174 189 156 Oct. Nov. Oct. Nov. 7,428 159 113 152 7,543r 159r 135 139 7,388r 146 185 138 6,697 143 115 123 Nov. Nov. Nov. Nov. Nov. Insured Unemployment, (Percentof Cov. Emp.) Nov. Nov Avg. Weekly Hrs. in Mfg., (Hrs.) . . . . 117 111 119 132 76 2.1 42.6 117 108 119 134 81 2.3 43.0r 115 107 117 128 69 2.7 40.2 111 107 112 114 78 2.8 42.3 Nov. Nov. 199 147 201 144 200 142 169 134 Oct. Nov. Oct. Nov. 3,522 192 174 114 3,798r 190r 147 122 3,647r 182r 132 108 3,273 163 168 100 Nov. Nov. Nov. Nov. Nov. Insured Unemployment, (Percentof Cov. Emp.) Nov. Nov. Avg. Weekly Hrs. in Mfg., (Hrs.) . . . . 129 139 125 133 57 1.8 41.4 127 136 124r 125r 65 2.0 41.7 127 135r 123 128 54 2.1 40.8 122 126 121 132 59 2.9 40.9 Nov. Nov. 228 178 226 175 223 170 205 163 Oct. Nov. Oct. Nov. 7,613 169 136 132 7,956r 166r 119 129 7,750r 167 122 126 7,153 154 124 123 Nov. Nov. Nov. Nov. Nov. Nov. Nov. 126 131 124 144 70 2.2 41.5 125 129 124r 139 66 2.3 41.2r 125 129 122 136 66 2.5 41.9 120 123 118 139 80 3.0 41.2 Nov. Nov. 216 167 213 165 209 161 190 153 INCOME AND SPENDING Oct. Personal Income, (Mil. $, Annual Rate) Manufacturing P a y r o lls .................................. Nov. Nov Oct. Farm Cash Receipts ........................................Oct. Nov. Department Store S a l e s * * .............................Nov, PRODUCTION AND EMPLOYMENT Nov. Nov. Nov. Nov. Nov. Insured Unemployment, (Percent of Cov. Emp.) Nov. Nov. Avg. Weekly Hrs. in Mfg., (Hrs.) . . . . FINANCE AND BANKING Bank D e b its * * ........................................ LO U ISIAN A INCOME AND SPENDING Personal Income, (Mil. $, Annual Rate) Manufacturing P a y r o lls ....................... Farm Cash R e c e ip t s ............................ Department Store Sales*/** . . . PRODUCTION AND EMPLOYMENT FINANCE AND BANKING Member Bank L o a n s *........................................ Member Bank D eposits*.................................. Bank D e b it s * / * * .............................................. MISSISSIPPI ALABAM A PRODUCTION AND EMPLOYMENT Nonfarm Employment........................................ M anufacturing.............................................. Nonmanufacturing........................................ Construction.............................................. Farm Employment.............................................. Insured Unemployment, (Percentof Cov. Emp.) Avg. Weekly Hrs. in Mfg., (Hrs.) . . . . Two Months Ago Latest Month (1965) G EO RG IA PRODUCTION AND EMPLOYMENT Nonfarm Employment........................................ Nov. Manufacturing.............................................. Nov. Apparel......................................................... Nov. Chemicals................................................... Nov. Fabricated M e t a ls .................................. Nov. Food............................................................... Nov. Lbr., Wood Prod., Furn. & Fix. . . . Nov. P a p e r ......................................................... Nov. Primary M e t a ls ........................................ Nov. Textiles......................................................... Nov. Transportation Equipment . . . . Nov. Nonmanufacturing........................................ Nov. Construction.............................................. Nov. Farm Employment.............................................. Nov. Insured Unemployment, (Percent of Cov. Emp.) Nov. Avg. Weekly Hrs. in Mfg., (Hrs.) . . . . Nev. Construction Contracts*.................................. Nov. Residential ................................................... Nov. All O th e r......................................................... Nov. Industrial Use of Electric Power . . . . Sept. Cotton Consum ption**.................................. Oct. Petrol. Prod, in Coastal La. and Miss.** Nov. FINANCE AND BANKING Member Bank Loans* All B a n k s ......................................................... Leading C i t i e s .............................................. Member Bank Deposits* All B a n k s ......................................................... Leading Cities .............................................. Bank D e b it s * / * * .............................................. One Month Ago One Year Ago SIXTH DISTRICT INCOME AND SPENDING Personal Income, (Mil. $, Annual Rate) . . Manufacturing P a y r o lls .................................. Farm Cash R e c e ip t s ........................................ Crops ............................................................... Livestock ......................................................... Department Store Sales*/ * * ....................... Instalment Credit at Banks, *(MiI. ) New Loans......................................................... Repayments................................................... 100, unless indicated otherwise.) 6,595 162 144 123 6,862r 159 149 115 6,617r 160 123 115 6,167 141 137 118 Nov. Nov. Nov. Nov. Nov. Nev. Nov. 116 116 115 113 69 2.5 41.6 115 114 115r 112 63 2.6 41.8 115 115 115 112 69 2.6 41.7 112 110 113 114 71 2.6 41.3 Nov. Nov. 204 168 204 166 198 164 180 151 INCOME AND SPENDING Personal Income, (Mil. $, Annual Rate) . . Manufacturing P a y r o lls .................................. Farm Cash Receipts ........................................ Department Store S a l e s * / * * ....................... PRODUCTION AND EMPLOYMENT FLORIDA TENNESSEE INCOME AND SPENDING Personal Income, (Mil. $, Annual Rate) . . Oct. 14,222 200 Manufacturing P a y r o lls .................................. Nov. Farm Cash Receipts ........................................Oct. 141 Department Store S a l e s * * .............................Nov. 191 PRODUCTION AND EMPLOYMENT Nonfarm Employment........................................Nov. M anufacturing..............................................Nov. Nonmanufacturing........................................Nov. Construction..............................................Nov. Farm Employment............................................. Nov. Insured Unemployment, (Percentof Cov. Emp.) Nov. Avg. Weekly Hrs. in Mfg., (Hrs.) . . . . Nov. FINANCE AND BANKING Member Bank L o a n s ........................................Nov. Member Bank D e p o s its .................................. Nov. Bank D e b its * * ................................................... FINANCE AND BANKING Member Bank L o a n s*........................................ Member Bank D eposits*.................................. Bank D e b it s * / * * .............................................. 14,706r 198r 151 184 14,070r 13,310 196 181 120 142 185 174 INCOME AND SPENDING Personal Income, (Mil. $, Annual Rate) Manufacturing P a y r o lls ....................... Farm Cash R e c e ip t s ............................. Department Store Sales*/** . . . PRODUCTION AND EMPLOYMENT 134 137 134 110 99 1.8 43.0 134 137 134 llO r 90 1.9 42.7r 133 136 133 106 129 130 129 105 41.8 42.5 219 168 216 167 216 162 190 150 88 2.2 101 2.2 Insured Unemployment, (Percentof Cov. Emp.) Avg. Weekly Hrs. in Mfg., (Hrs.) . . . . FINANCE AND BANKING *For Sixth District area only. Other totals for entire six states. **Daily average basis. Bank Debits*/** r Revised. p Preliminary. Sources: Personal income 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 Corp.; 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. http://fraser.stlouisfed.org/ J A N U A R Y 1 9 66 Federal Reserve Bank of St. Louis •7* D IS T R IC T B U S IN E S S A s C O N D IT IO N S t h e c u r ta in c a m e d o w n o n D istr ic t w ere e b u llie n t . 1 9 6 5 , e c o n o m ic c o n d it io n s w ith in th e E m p lo y m e n t, s p e n d in g , and in c o m e sh ow ed in c r e a s in g s t r e n g th . S iz a b le g a in s w e r e e v id e n t in b o th c o n s t r u c t io n e m P e rso n a l Incom e p lo y m e n t a n d n e w c o n tr a c t a w a r d s . A g r ic u ltu r a l c a s h r e c e ip t s h a d r e a c h e d a n a ll-tim e h ig h . T o ta l c r e d it a t m e m b e r b a n k s h a d r is e n fu r th e r , e v in c in g b o th a h e a v y lo a n d e m a n d a n d a g a in in in v e s t m e n t s . A f e w b a n k s o ffe r e d h ig h e r in t e r e s t r a te s o n t im e d e p o s i t s . ^N onfarm E m ploym ent is Mfg. E m p l o y m e n t iS G a in s in n o n m a n u f a c tu r in g e m p lo y m e n t a n d in a ll te n s e a s o n a lly a d ju s te d c o m p o n e n t s o f m a n u fa c tu r in g e m p lo y m e n t , c o m b in e d w ith a ju m p Average W eekly Hours in a v e r a g e w e e k ly h o u r s , h e lp e d p u sh th e D is t r ic t’s e c o n o m y to new h ig h s . In su red u n e m p lo y m e n t d ro p p ed fro m 2 .4 p e rcen t in S ep tem b er to 1.9 p ercen t in N o v e m b e r . T h e in su red u n e m p lo y m e n t rate in e a c h D istr ict state re m a in s su b sta n tia lly b e lo w th a t in th e n a tio n . P relim in a ry estim a te s in d ica te that p erso n a l in c o m e m o v e d h igh er in N o v e m b e r , reflectin g th e la rg est m o n th ly in crea se o f th e year in m a n u fa ctu rin g p a y ro lls. B a n k d eb its figu res su g g est sp en d in g a lso rose. Mfg. P a y r o l l s C onstruction C ontracts V* i A 5-mo. moving A avorog* / D istr ic t c o n s t r u c tio n c o n tin u e d t h e s t r o n g r e b o u n d r e c o r d e d la s t fa ll. I n d u s t r i a l U s e of E l e c t r i c P o w e r C o n stru ctio n e m p lo y m e n t a scen d ed , w ith th e sh a rp est in c re a se s in M ississip p i and T e n n e ssee . G a in s in co n stru ctio n c o n tr a ct aw ards w ere w id esp read in resid en ta l b u ild in g , oth er b u ild in g , an d n o n b u ild in g ca te g o r ie s. L arge p roject aw ards w ere n u m ero u s, in clu d in g sev era l a p a rtm en t p ro jects in F lo r id a and G eo rg ia . Street and h ig h w a y co n tra cts b o o ste d to ta l n o n b u ild in g v o lu m e in L o u isia n a , M ississip p i, and A la b a m a . E v id e n c e o f further p ressu re to raise m ortgage m a rk et rates ap p eared , as c o m p e titio n fo r sa v in g s co n tin u ed . v* C otton C o nsum ption \s D istr ic t fa r m e r s e n jo y e d a r e c o r d le v e l o f c a s h r e c e ip t s , m a n if e s t in g b o th a fa v o r a b le g r o w in g s e a s o n fo r m o s t m a jo r c r o p s a n d h ig h p r ic e s fo r liv e s t o c k a n d liv e s t o c k p r o d u c ts . C u rren tly, farm w o rk c o n sists o f w in ter ch o r e s, sin ce m o st m ajor field cro p s h a v e b e e n h a rv ested . T h e h a rvestin g o f w in ter v eg e ta b les is p ro c e ed in g o n sc h e d u le , w ith p r o d u ctio n g en e ra lly a b ove la st y ea r’s rela tiv ely sm a ll crop . B ank Debits Farm C a s h R e c e ip ts a 6-mo. moving av«rog« v* M em ber banks e x te n d e d th e v* y e a r -lo n g e x p a n s io n in lo a n s th r o u g h D e c e m b e r , d e s p i t e s m a lle r th a n s e a s o n a l g a in s a t b a n k s in le a d in g c i t i e s . M em ber Bank Loans M em ber Bank D eposits .P E R C E N T OF REQUIRED RE SERV ES — B o r r o w i n g s f r o m F. R. B a n k s 1963 1964 In v estm en ts, e sp ec ia lly G o v e rn m en t secu rities, in crea sed su b sta n tia lly for the third c o n se c u tiv e m o n th , as b a n k s to o k a d v a n ta g e o f fa v o r a b le rates in b u ild in g u p their p o rtfo lio s. T im e d ep o sits e x p a n d e d furth er in D e c e m b e r , alth o u g h a red u ctio n in n e g o tia b le tim e certifica tes c u t b a c k th e g ro w th rate so m ew h a t. E ffectiv e D e c e m b e r 6 , th e B o a rd o f G o v e rn o r s a p p ro v ed d isc o u n t rate in crea ses to 4 Vi p ercen t at th e F e d era l R eser v e B a n k s o f N e w Y o r k and C h ica g o and v o te d to raise th e c e ilin g rate o n tim e d ep o sits to 5Vi p ercen t, le a v in g th e m a x i m u m rate o n sa v in g s d ep o sits at 4 p ercen t. T h is B a n k raised its d isc o u n t rate from 4 to 4 Vi p ercen t, e ffectiv e D e c e m b e r 8. Im m e d ia te r e sp o n se to th e h igh er in terest rate ceilin g s in this D istrict w a s m o d era te, as m o s t b a n k ers w a ited for th eir co m p etito r s to a ct first. A few b a n k s rep o rted n e w rates o n certificates o f d e p o sit greater th an th e old m a x im u m o f 4 V i p ercen t, and so m e raised their rates o n savin gs certificates to AV2 p ercen t. S ev era l b a n k s in d ica ted th at th ey w o u ld n o w p a y th e 4 -p e r c e n t m a x im u m o n sa v in g s d ep o sits. 1965 N o t e : D a t a o n w hich statem ents are b ased have been adjusted w henever possib le to elim inate se aso n al ♦Seas. adj. figure; not an index. influences.
@FedFRASER