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% ★ A LA H «! f I , "m / Atlanta, Georgia July A ls o in • 1964 t h is is s u e : ALABAMA'S ECONOMY EXHIBITS STRENGTH SIXTH DISTRICT STATISTICS DISTRICT BUSINESS CONDITIONS AM ilu Review A Bank Examiner Looks at the Quality of Credit The quality of commercial bank credit is a topic almost guaranteed to produce a spirited discussion, as well as newspaper headlines. Re cently, Congressional committees have questioned a number of our monetary and bank supervisory authorities, and from time to time leading bankers have expressed themselves on the subject. These opin ions have been quite varied and illustrate the dichotomy between those who believe that a significant deterioration has taken place and those who are quite satisfied with the general quality of loans found in our banks today. While the quality of bank credit is important to monetary authorities and to those charged with the responsibility for the nation’s economic welfare, it is of special significance to the supervisors of our banks. The quality of a bank’s loan portfolio bears a direct relationship to its inherent soundness. It is natural, therefore, that supervisory authorities should also take part in this discussion of whether or not there has been a tendency throughout various parts of the banking structure to relax the standards on which credit is granted. National banks are under the direct supervision of the Comptroller of the Currency, while state banks are supervised by state authorities. In addition, on the federal level, member banks are supervised by the Federal Reserve System and nonmember insured banks by the Federal Deposit Insurance Corporation. Each supervisory authority keeps well informed on the condition of the banks under its jurisdiction, principally by means of examinations. In most of the discussions of the supervisory authorities, the findings of their examiners thus have been, to a con siderable extent, the basis of their conclusions in regard to the quality of bank credit. purpose of Examinations The purpose of bank examinations is to develop information that will disclose (1) the soundness of a bank’s assets; (2) its ability to meet the demands of its depositors; (3) the adequacy of its capital structure; (4) its earning ability and future prospects; (5) the competence of management; and (6) compliance with laws and regulations. After developing this information, the examiner prepares a report that contains balance sheets, schedules of various types of assets and liabilities, com ments, criticisms, and recommendations. The report is prepared with great care because it must be correct in every detail if it is to perform its intended purpose— that of furnishing the supervisory agencies with accurate information on the condition of individual banks. This informa tion is also of considerable value to the board of directors of the bank being examined, which also receives a copy of the report. What Determines the Quality of a Loan? The appraisal of a bank’s loan portfolio is often considered the most important part of the examination. The examiner analyzes the bank’s credit policies, collection policies, and the general manner in which loans are administered. Collateral is valued, and financial statements and credit information on borrowers are re viewed. The examiner then weighs and evaluates all of this information in the light of economic conditions affect ing the borrower and the bank. Important advances, loans subject to criticism1, and loans on which more information is needed are usually discussed with the bank’s manage ment. After this thorough appraisal, the examiner com piles his report of the examination in which he lists and comments upon loans that for specific reasons he feels should be brought to the attention of the supervisory authority and to the attention of the directors and official management of the bank. Such loans will include those that the examiner believes involve a loss and those whose collection appears doubt ful. In addition, loans that involve more than a normal risk because of the financial condition or unfavorable record of the obligor, insufficiency of security, or other factors noted in the examiner’s comments are discussed. Such loans, whether “substandard,” “doubtful,” or “loss,” are generally described as “classified loans.” Bank supervisors generally consider a loan’s quality satisfactory when its characteristics reasonably assure its repayment according to schedule in the normal course of business. However, a loan must not only be made on a sound basis. If it is to be repaid on schedule, it should also receive the proper attention from management during the period it is outstanding. An examiner’s loan classifications may be considered as a fair measure of the quality of a bank’s loan portfolio. However, there is usually a lag of one or more years between the time a loan is made and the time it is classi fied adversely in a report of examination. Few loans be come problems immediately, but when trouble does de velop, it can go undetected for a time because, generally, examinations are made only once or twice a year. Perhaps this may explain why the lowering of loan standards, claimed by some authorities, has not been reflected to date in a significant increase in classified loans in reports of ex amination. Another reason is that some examiners may not be as critical of borderline or substandard loans as they formerly were. Has Loan Quality Deteriorated? Since the beginning of 1962, when the maximum interest rate banks were permitted to pay on savings and time deposits was raised to 4 percent, some banks have solicited savings and time deposits vigorously and, in most in stances, successfully. As a result, there has been a steady influx of these funds. The increase in interest-bearing de posits has come not only from individuals but from cor porations and businesses that are unwilling to let their funds remain on demand deposit and produce no income. The cost of these funds, however, has brought pressure to bear on bank officers to invest them profitably. Some banks have looked to nongovernment securities, but others have looked beyond the securities markets to mort gage loans and other lending fields where funds can be employed on a more or less permanent basis and return a higher yield. The result .has been that some banks have accepted lower down payments, extended the final maturi ties, accepted less margin in the collateral, and made ad U. S. Com m ercial Bank Deposits 1956 1958 1960 1962 1964 D e p o s it g r o w t h in r e c e n t y e a r s h a s b e e n c o n c e n t r a t e d in t im e d e p o s it s o n w h ic h b a n k s m u s t p a y i n t e r e s t , r a t h e r t h a n in i n t e r e s t - f r e e d e m a n d d e p o s it s . Interest Paid on Time Deposits at All U. S. M ember Banks 1 9 5 6 -6 3 I n t e r e s t p a y m e n t s o n t im e d e p o s it s h a v e r is e n a l o n g w i t h t h e g r o w t h in t im e d e p o s it s , t h u s c a u s in g i n t e r e s t c o s t s t o b e c o m e a g r e a t e r e x p e n s e f o r c o m m e r c ia l b a n k s . T h e r e s u lt h a s b e e n a n in c r e a s e d p r e s s u r e o n b a n k s t o s e e k o u t h i g h e r - y i e l d i n g lo a n s a n d i n v e s t m e n t s . U. S. Comm ercial Bank Loans and Investments Billions of Dollars la s t W e d n e s d a y o f Each 1 9 5 6 -6 4 M o n th Billions of Dollars B a n k c r e d i t g r o w t h in r e c e n t y e a r s , e s p e c i a l l y s in c e 1 9 6 2 , h a s b e e n c o n c e n t r a t e d in lo a n s a n d s e c u r it i e s o t h e r t h a n th o se o f th e U . S . G o v e rn m e n t. T h e se a r e g e n e r a lly co n s i d e r e d t o h a v e a g r e a t e r e le m e n t o f r i s k t h a n G o v e r n m e n t s e c u r it ie s . •2 • vances that require a larger proportion of a borrower’s income to service his indebtedness. Some lenders have entered entirely new fields, such as equipment leasing, in search of ways to invest bank funds and obtain a higher return. Whether such changes in credit standards are correctly described as deteriorating, lowering, or broadening, they are being carefully watched by all bank supervisors. If loans can be made in line with present-day standards and if losses can be kept within reasonable bounds, many feel that policies based on these standards are sound. The danger in accepting this view is that the quality and col lectibility of loans must be examined in the light of the Ratio of Net Losses on Loans* to Total Loans a t All U. S. Member Banks 1956-63 Percent______________________ .20- Ratio of Net Losses to Total Loans m PI 1956 M A ip m IS Pi m V 1957 1958 1959 Percent f t ip ii li i 1960 PH s i#g IB 19 6 1 1962 f t li m 1963 ♦Excludes transfers to and from bad debt reserves. C o m m e r c ia l b a n k lo s s e s o n le n d in g o p e r a t io n s , h o w e v e r , h a v e c o n t in u e d t o b e le s s t h a n .2 p e r c e n t . existing economic background and, if the country’s econ omy declines, a marginal credit may become overnight a problem loan. On the other hand, if bank supervisors are too severe in their analyses of credits, they may discourage the mak ing of many worthwhile loans. Back in. 1938, as the coun try was emerging from the 1937 recession, President Roosevelt expressed the hope that Federal bank super vision could be coordinated so as to facilitate the flow of commerce, industry, and agriculture.. Conferences were held with representatives of the three Federal supervisory agencies for the purpose of improving their policies and regulations to further the President’s objective and yet keep them consistent with sound banking principles, i.e., maintain the quality of loans and investments at a satisfac tory level. The supervisors agreed that they would treat loans and securities on a uniform basis and would relieve pressures tending to reduce or prevent extensions of credit to sound borrowers. The 1938 Agreement resulted in a revision of standards for judging credit quality. A change of equal importance was that banks were to be examined on the basis of going concerns rather than on the amount their loans, investments, and other assets would bring in a forced liquidation. These policies have been in effect for more than 25 years with little change. During this time, there have been few criticisms that bank supervisors have discouraged or prevented the extending of sound loans to worthwhile borrowers. „ ,, „ R. M. Stephenson Alabama’s Economy Exhibits Strength When, in April 1963, we described Alabama’s economic resurgence from the trough of the 1960 recession, we ended our review on a questioning note. Were the cross currents then evident signaling the end of the expansionary period or was the economy just catching its breath for a further uphill climb? Now, slightly more than a year later, the question may be answered: Alabama’s economy was simply girding for some additional expansion. During the intervening period, overall production, em ployment, and income increased substantially in Alabama. While these gains have lifted the state’s economy closer to desirable levels of activity, it still falls short of the na tional average on several counts, notably per capita per sonal income payments. Nevertheless, certain structural changes that have occurred in Alabama’s economy in the past few years probably have provided some additional strength and resiliency. Thus, even if the 41-month long national economic recovery should fade, these changes may dilute the impact that such a slowdown would have in Alabama. Output Expansion Taking a cue from the prime economic measures for the state, one cannot say that a galloping boom was develop ing in Alabama in 1963. The economy, however, was def initely on the upgrade, and the momentum has carried over into 1964. Most important, Alabamians boosted the output from their mills and factories last year, and this swift pace has not faltered much, if any. Producers of steel, pig iron, and coke increased their production sharply to supply a strong national demand, particularly for rail road cars and various types of pipe. Aluminum producers also turned out more metal for their customers. Southern pine lumber production, long in the doldrums caused by competition from western lumber producers, perked up slightly, as an increase in residential construc tion spurred demand for floor joists, studs, rafters, shor ing, and other products. Textile mill operators also stepped up their production, as measured by cotton consumed by mills in the state, although the expansion was modest. A spurt in ocean shipping and Alabama port activity has oc curred as well. Finally, increased demands for packaging, crating, and shipping materials brought about an upsurge in pulp and paper output. These trends in Alabama’s industrial economy have been mirrored by the sharp up turn in the consumption rate of electrical energy for in dustrial purposes. On the farm, the 1963 season closed in December with cash farm marketings at a higher level than they were in 1962. Sales of livestock and poultry products increased only one percent in 1963, but crop sales, principally in the fall months, topped the 1962 total 11 percent. A large •3 • cotton crop in 1963, especially in northern Alabama, brought a sizable increase in farmers’ incomes and spend ing and lifted business activity considerably. Northern Alabama also experienced an economic lift from the construction of the huge Saturn rocket boosters for the nation’s space exploration. These efforts are fo cused at the Marshall Space Center in Huntsville, a city containing about 72,000 people at last count in the 1960 Census of Population, or 4.4 times more than in the 1950 Census. Economic Indicators — Alabam a 1 9 5 9 -6 4 Employment 1957-59=100 - Seas. Adj. /V Employment and Income Increase The general expansion occurring in Alabama’s economy is reflected by an upward trend in employment and personal income. Nonfarm employment had pushed up to a higher plateau in late 1963 as manufacturing employment in creased; farm employment, however, continued its down trend. Since the farm work force now makes up only a small portion of the employment total, the effect of the decline was slight. The state’s unemployment rate was re duced by the end of 1963, and in early 1964 it dropped even further to the lowest point reached in several years. Although the state’s unemployment trend has been favorable, not every community is experiencing high-level employment. While Mobile and Birmingham were clas sified by the U. S. Department of Labor as areas with only a moderate unemployment rate— 3.0 to 5.9 percent in May 1963, the latest available designation— there were 15 labor market areas, mainly in northern Alabama, that had rates of 6 percent or more and were designated as areas with persistent and substantial unemployment. The upward trends in output and employment have persisted throughout recent months and have boosted the incomes of the state’s residents. Total personal income, which had risen steadily during 1962 and then more rapidly in early 1963, held at the advanced 1963 level early this year. According to estimates of this Bank for April 1964, the total personal income received by Ala bamians was about $6.0 billion at an annual rate, slightly greater than the $5.7 billion a year earlier and well above the 1961 recession low of $4.8 billion. Manufacturing payrolls have risen markedly since January 1964 as aver age hours worked increased, and the payroll total now stands well above the level prevailing in early 1963. Alabama’s recent overall gains in output, employment, and income have cheered the state’s tax collectors. Judg ing from the upsurge in sales tax collections in late 1963, tax revenues have jumped upward to totals much larger than those in earlier periods. Even though the gain re sults partly from a recent change in Alabama’s tax laws and levies, heightened economic activity undoubtedly is generating some new tax revenue. 1961 Manufacturing 1962 1963 1964 A verage W ee k ly Hours W orked in Manufacturing and Insured Unemployment as a Percentage of Covered Employment Adj 6-Mo. Moving Average Average Weekly Hours W orked in Mfg. J Industrial Use of Electric Power Thousands of Balss Cotton Consumption 4 .2 6-Mo. Moving Average Commercial and Financial Activity Hesitant While increased production, employment, and income from Alabama’s important primary industries have imparted considerable strength to the state’s economic resurgence, commercial and financial firms have turned in a more spotty performance. Retailers of hardware and farm im plements have experienced brisk sales in recent months, 1959 1960 1962 1963 Note: The shaded portion of the charts represents the recession of 1960-61. . 4 . and automobile sales also have been strong, according to the Bureau of Business Research of the University of Alabama. Lesser gains, however, were chalked up by general merchandise and apparel stores. Department store sales, which have been lethargic since 1961, remained on a subdued level in early 1964, as did sales by restaurants and drug stores. Meanwhile, furniture store sales slipped lower and currently show little, if any, buoyancy. On the financial side, a significant increase occurred in sales of life insurance, and such investment continues unabated. Alabama residents also are still placing a rising volume of funds in savings and loan accounts. Moreover, total bank deposits, which had risen steadily from the 1961 recession low to mid-1963 and then remained stable for a few months, jumped sharply to a peak in early 1964. A rise in time deposits contributed to the upswing. Bank lending increased notably in 1962, and the acceleration has held to the present time; meanwhile, bank investments in securities, which expanded erratically in 1962 and 1963, increased substantially in the first four months of 1964. All told, Alabama’s economic recovery, begun in mid-1961, has continued at a firm pace to the present time. ago. The increase has come as the state Legislature approved bonds for new roads, schools, hospitals, and state buildings. Among the most important of the current investments are those for education, particularly for junior colleges and additional trade schools. The state’s economic structure also is being altered by investments in transportation facilities. The Alabama State Docks on the Gulf Coast have been enlarged and modernized; roads are being overhauled; work on the Federal-state superhighways is being pressed ahead; and, not least, new dams and locks are being built to further the state’s river and river basin development. These structural adjustments may help reduce the chronic unemployment of largely unskilled labor in Ala bama’s industrialized areas. To assist in solving this prob lem, both state and local governments have concentrated on providing training programs for potential workers. Area trade schools have been developed, and curricula in vocational high schools have been adopted to teach stu dents the skills required by industrial employers. Mean while, in areas experiencing substantial unemployment, the Federal Government’s accelerated public works program is providing employment for some persons. New Investment A general air of economic optimism currently is pervading the state, judging from available evidence of business plans and intentions. Most important, investments in new plants and plant expansions will be large. According to the Alabama Chamber of Commerce, announcements of 283 plants in 1963 indicated that $337 million would be invested, the largest total since 1951. Announcements in early 1964 included a $2-million expansion of an alumi num rolling mill at Decatur and a $2.5-million construc tion and modernization program for a pulp and paper mill near Mobile. Numerous smaller investments, such as the $250,000 expansion of an electrical corporation in Leeds and a $150,000 plant expansion of a food canning plant in Uniontown, have been announced recently. In some measure, of course, these investments reflect na tional economic expansion and the local impact of na tional spending for defense, space exploration, and other public projects. Some Structural Changes Significant changes have occurred in Alabama’s economic framework that may have strengthened and broadened the state’s economic base and facilitated a further economic advance or at least greater resistance to economic stress and adversity. Alabama, of course, probably had further to go in this process than some other states and, con sequently, the impact on its economy from a given change may be larger than elsewhere. While private investment has involved large-scale plant modernizations by steel and textile firms and the wide spread application of new technology, public investment in Alabama represents a major effort to improve and ex pand vital public services. The tax structure was altered by the state Legislature in 1963 to increase tax revenues. This improvement offers a partial accommodation to a state debt that has risen rapidly to finance public needs in recent years. The state’s debt was about $307 million in 1963, compared with about $73 million ten years A Substantial Economic Base If an operating statement of Alabama’s economy could be computed today, it probably would reveal a reasonably solid economic base. Given that base, Alabama’s economy could advance even further in 1964. The possibility of this outcome would be appreciably enhanced if consumer incomes rise further and if the 1964 reduction in income taxes spurs private investment and spending in the state. In time, the efforts to train and employ more unskilled workers for more highly skilled jobs may be quite fruit ful. Then, too, continued growth in the national economy would be most conducive to the fulfillment of Alabama’s economic prospects. A r t h u r H. K a n t n e r This is one of a series in which economic developments in each of the Sixth District states are discussed. Develop ments in Florida’s economy were analyzed in the June 1964 R e v i e w , and a discussion of Georgia’s economy is scheduled for a forthcoming issue. A REVIEW OF ALABAMA'S ECO N O M Y 1960-64 This publication is a compilation of articles devoted to A la bama's economy that appeared in this Bank's Monthly Review during 1960-64, together with revised monthly figures of major business indicators for Alabama. The articles emphasize various aspects of Alabama's economic scene and often consider longer-run developments. Copies of this booklet, as well as copies of A Review of Georgia's Economy, 1960-63; A Review of Mississippi's Economy, 1960-63; A Review of Louisiana's Econ omy, 1959-63; A Review of Tennessee's Economy, 1960-64; and A Review of Florida's Economy, 1959-64, the first five publi cations in this series, are available upon request to the Research Department, Federal Reserve Bank of Atlanta, Atlanta, Georgia 30303. •5 • Debits to Demand Deposit Accounts Bank Announcements On June 1, the C a n t r e l l B a n k i n g C o m p a n y , E towah, Tennessee, a n on m em be r bank, began to rem it at par for checks drawn on it when received fr o m the Federal R e serve Bank. Officers are J. C. Cantrell, President; M rs. A . A . Moffitt, Vice President; and E. B. G arw oo d, Vice President and Cashier. The B a n k o f S p r i n g C i t y , Spring City, Tennessee, a non m e m b e r bank, began to rem it at par on June 15. Officers include J. K . H awkins, President; Sarah N e il Hilleary and H. B. Collins, Vice Presidents; and R . W. Rogers, Cashier. On June 15, the W e s t c h e s t e r N a t i o n a l B a n k o f D a d e C o u n t y , M iam i, Florida, a new ly organized m e m ber bank, open ed for business an d began to rem it at par. Officers are Phil Stephenson, C hairm an of the Board; H enry G. Sim monite, Vice Chairman; Charles M . Volk, President; and Charles W. M eyers, Vice P resident and Cashier. Capital is $ 30 0,000, and surplus and other capital funds, $ 30 0,000, as reported by the C om ptro ller of C u r rency at the tim e the charter was granted. The F i r s t N a t i o n a l B a n k o f S t . B e r n a r d P a r i s h , Arabi, Louisiana, a newly organized m e m b e r bank, open ed fo r business on June 18 and began to rem it at par. Officers include E dw in M . R o y , President; L. J. Folse, Executive Vice President and Cashier; and Joseph J. Davies, Jr., Vice President. Capital is $1 50,000, and surplus an d other capital funds, $ 30 0,000, as repo rted by the C o m p trolle r of Currency at the time the charter was granted. With the close o f business June 20, the conversion of the Bank of A uburn, A uburn, A labam a, to a national bank under the title of A u b u r n N a t i o n a l B a n k o f A u b u r n becam e effective. Officers are E m il F. Wright, President; R. F. Blake, Vice President; and P. C. Hudson, Cashier. Capital is $ 20 0,000, and surplus and undivided profits, in excess of $ 60 0,000, as repo rted by the C om ptro ller of C urrency at the time o f the conversion. The C o m m u n i t y B a n k o f R a c e l a n d , Raceland, Louisi ana, a newly organized n o n m em b er bank, o pen e d for business on June 2 0 and began to rem it at par. Officers include R o y Richard, President and Cashier; Allison R. K o lb , Chairman of the Board; and Clifton P. M orvan t, Vice President. Capital is $2 00,000, and surplus and un d ivid ed profits, $2 00,000. On June 22, the F i r s t N a t i o n a l B a n k o f B u t l e r , Butler, A la ba m a , a newly organized m e m b e r bank, open ed fo r business and began to rem it at par. Officers are R ich ard E. M cPhearson, President; J. Ben Steed, E xecutive Vice President; and Beatrice L. Sparrow, Cashier. Capital is $2 00,000, and surplus an d oth er capital funds, $3 00,000, as repo rted by the C o m ptro ller o f C urrency at the time the charter was granted. The F i r s t C o m m e r c i a l B a n k , St. Petersburg, Florida, a new ly organized n o n m em b er bank, o pen ed fo r business on June 23 an d began to rem it at par. Officers include R ich ard C. Johnson, Chairman of the Board; H enry Esteva, V ice Chairman; Ernest J. Winstead, President; D a n Chambers, Sr., Vice President; and R o b e r t G. Wagner, Cashier. Capital is $ 30 0,0 00, an d surplus an d undivided profits, $2 00,000. On June 27, the F i r s t N a t i o n a l B a n k o f D e n h a m S p r i n g s , D e n h am Springs, Louisiana, a new ly organized m e m b e r bank, o pen ed fo r business and began to remit at par. Officers are J. D ou glas N e so m , P resident and Chair man of the Board; Sebring B. Sim pson, E xecu tive Vice President and Cashier; and R ud olp h P. Easterly, Vice President. Capital is $2 00 ,0 00 , and surplus an d other capital funds, $ 30 0,000, as rep orted by the C om p troller o f Currency at the tim e the charter was granted. In s u re d C o m m e r c ia l B a n k s in t h e (In Thousands of Dollars) S i x t h D is t r ic t ______________ Percent Change Year-to-date 5 Months May 1964 from 1964 Apr. May from 1964 1963 1963 May 1964 Apr. 1964 May 1963 STANDARD METROPOLITAN STATISTICAL A R EA St Birmingham . . . 1,096,793 56,386 Gadsden . . . . 134,932 Huntsville . . . 393,586 Mobile . . . . Montgomery . . . 240,446 73,673 Tuscaloosa . . . 1,108,382 53,452 141,100 386,986 233,773 73,355 1,095,025 51,724 127,946 412,830 243,967 73,628 —1 +5 —4 + 2 +3 + 0 +0 +9 +5 —5 —1 +0 +9 + 10 +23 +5 +5 +5 Orlando . . . . Pensacola . . . Tampa-St. Petersburg W. Palm Beach . . 397,339 1,093,233 1,569,550 462,327 149,980 970,486 330,652 465,622 1,205,729 1,798,654r 496,039 147,293 1,076,493 354,087 387,436 1,062,843 1,612,979 451,943 136,404 949,809 288,960 — 15 —9 — 13 —7 +2 — 10 —7 +3 +3 —3 +2 +10 +2 + 14 + 14 +14 +6 +9 + 10 +8 +10 Albany Atlanta Augusta* Columbus Macon Savannah . . 67,972 3,110,023 149,984 157,399 181,119 217,861 65,748 3,376,705 147,647 157,438 176,417 211,494 65,349 3,052,459 149,579 151,404 167,277 203,554 +3 —8 +2 —0 +3 +3 +4 + 2 +0 +4 + 8 +7 +9 +5 +5 +13 +8 +8 Baton Rouge . . Lafayette . . . . Lake Charles . . New Orleans . . 341,838 82,039 95,873 1,857,363 377,689 85,208 88,338 1,885,466 379,654 86,351 93,837 1,799,652 -1 0 —4 +9 —2 — 10 —5 +2 +3 +4 +9 +4 + 10 Ft. LauderdaleHollywood . Jacksonville . . . . . . . . . . . . . . . . . . . . . . . . 423,105 416,491 422,769 +2 +0 + 11 Chattanooga . . . Knoxville . . . . Nashville . . . 408,005 353,779 1,038,374 430,710 364,012 1,073,741 392,561 351,712 974,932 —5 —3 —3 +4 +1 +7 +9 +7 +16 OTHER CENTERS Anniston . . . . Dothan . . . . S e lm a ......................... 51,410 45,696 37,047 51,058 44,986 32,795 51,267 43,471 32,447 + 1 +2 + 13 +0 +5 + 14 +7 +5 + 14 Jackson . . . . Bartow . . . . Bradenton . . . Brevard County . . Daytona Beach . . Ft. MyersN. Ft. Myers . . Gainesville . . . Key West . . . Lakeland . . . . O c a la ......................... St. Augustine . . St. Petersburg . . Sarasota . . . . Tallahassee . . . Tam pa......................... Winter Haven . . 28,260 46,348 154,929 65,803 27,076 52,705 165,024 75,371 27,594 49,256 134,215 67,884 +4 — 12 —6 — 13 +2 —6 + 15 —3 +10 + 2 +30 +7 59,123 61,281 19,989 90,881 45,883 15,629 231,009 86,256 87,242 519,596 49,755 65,864 64,450 21,090 100,366 52,563 17,664 266,847 102,022 86,509 548,975 53,965 58,859 56,590 19,070 92,936 43,244 15,032 222,645 81,487 85,289 508,960 45,611 — 10 —5 —5 —9 — 13 — 12 — 13 — 15 +1 —5 —8 +0 +8 +5 —2 +6 +4 + 4 +6 +2 +2 +9 +7 + 15 +9 +4 +4 n.a. +8 +7 +10 +8 + 12 Athens . . . . Brunswick . . . Dalton . . . . Elberton . . . . Gainesville . . . Griffin . . . . LaGrange . . . . Newnan . . . . R o m e ......................... Valdosta . . . . 51,356 34,770 76,236 10,620 59,215 25,375 18,151 22,058 56,587 42,796 51,454 37,315 84,472 12,301 57,517 24,063 19,129 22,120 56,644 39,961 50,649 38,534 62,647 12,263 59,623 22,241 16,811 20,700 54,528 37,278 —0 —7 — 10 — 14 +3 +5 —5 —0 —0 +7 +1 — 10 +22 — 13 —1 +14 +8 +7 +4 + 15 +9 +6 + 22 +7 +6 +8 + 11 +7 + 12 +10 Abbeville . Alexandria Bunkie . Hammond New Iberia Plaquemine Thibodaux 7,665 87,844 4,765 31,360 35,826 7,459 17,265 8,254 90,635 4,594 28,191 28,166 7,596 18,054 8,013 88,092 4,701 27,800 26,397 6,881 15,209 —7 —3 +4 + 11 +27 —2 —4 —A —0 + 1 + 13 +36 +8 + 14 +5 + 10 +0 +7 + 20 +16 + 10 . . 66,247 41,001 29,920 55,143 30,595 71,690 40,906 31,322 52,585 28,833 71,368 39,879 31,492 58,049 27,128 —8 +0 —4 +5 +6 —7 +3 —5 —5 + 13 +6 +5 +8 + 0 + 13 . . . 44,795 27,190 22,993 41,787 27,105 21,487 40,260 27,918 21,568 +7 +0 +7 +11 —3 +7 +6 +9 + 12 Bristol . . . . Johnson City . . Kingsport . . . 54,101 53,479 106,483 54,111 58,186 105,687 60,206 52,529 96,494 —0 —8 + 1 — 10 +2 + 10 —4 + 12 + 12 . . . . . . . . . . . . . . . . . Biloxi-Gulfport . Hattiesburg . . Laurel . . . . Meridian . . . . Natchez . . . . PascagoulaMoss Point . Vicksburg . . Yazoo City . . . . . . SIXTH DISTRICT,Total 21,845,254 23,277,963r 21,512,436 —6 +2 Alabamaf . . . 2,992,835 2,986,861 2,964,430 + 0 + 1 Floridaf . . . . 6,762,176 7,724,398r 6,742,818 — 13 +0 Georgiat . . . . 5,240,795 5,567,615 5,116,364 —6 + 2 3,147,638 3,211,876 Louisianat** . . —2 3,108,333 +1 Mississippif** . . 1,003,176 991,281 998,136 + 1 + 1 Tennesseef** . . 2,698,634 2,795,932 —4 2,582,355 +5 U.S., 344 Cities . . 329,700,000 349,900,000 318,000,000 —6 +4 ♦Richmond County only. **Includes only banks in the Sixth District portion of the fP artially estimated. n.a. Not available. r Revised. •6 • +8 +9 +8 +5 +9 +9 + 12 + 10 state S ix t h D is t r ic t S t a t is t ic s Seasonally Adjusted (All data are indexes, 1957-59 = Latest Month (1964) One Month Ago Two Months Ago One Year Ago S IX T H D IS T R IC T Latest Month (1964) One Month Ago Two Months Ago One Year Ago 8,232r 146 126 133 7,686 129 114 117 G E O R G IA INCOME AND SPENDING Personal Income, (M il. $, Annual Rate) . . Apr. 44,156 43,563r 43,373r Manufacturing P a y r o lls ..................................... May 142 143r 144 Farm Cash R e c e ip t s ........................................... Apr. 156 132 137 C r o p s ....................................................................Apr. 170 170 146 L iv e s to c k ..............................................................Apr. 116 117 116 143p Department Store S a l e s * / * * .........................June 132r 139 Instalment Credit at Banks, *(M il. $) 182 New Loans..............................................................May 179 188 167 R epaym ents........................................................May 164 166 PRODUCTION AND EMPLOYMENT Nonfarm Employment........................................... May M an u factu rin g ................................................. May Apparel ....................................................... May Ch em icals........................................................May Fabricated M e t a l s ..................................... May Food ..............................................................May Lbr., Wood Prod., Furn. & Fix. . . . May P a p e r ..............................................................May Primary M e t a ls ........................................... May Textiles ........................................................May Transportation Equipment . . . . May Nonmanufacturing........................................... May Construction..................................................May Farm Employment..................................................May Insured Unemployment, (Percentof Cov. Emp.) May Avg. Weekly Hrs. in Mfg., (Hrs.) . . . . May Construction C o n tra c ts *..................................... May R e s id e n t ia l........................................................May All O t h e r ..............................................................May Industrial Use of Electric Power . . . . Apr. Cotton C o n su m p tio n **..................................... May Petrol. Prod, in Coastal La. and Miss.** . May FINANCE AND BANKING Member Bank Loans* All B a n k s ..............................................................June Leading C i t i e s ................................................. June Member Bank Deposits* All B a n k s ..............................................................June Leading C i t i e s ................................................. June Bank D e b i t s * / * * ................................................. May 115 113 136 110 119 104 93 109 103 95 124 116 106 82 3.0 40.7 146 147 146 123 104 168 40,677 133 122 131 115 130 166 154 115 113 135 115 114 135 112 111 119r 104 93 109 103 95 125r 115 105 79 3.2 40.8r 145 152 139 119 104 94 111 102 110 110 134 106 110 93 108 163 174p 165 173 161 172 160 154 147 140p 136 152 141 133 149 139 131 148 133 128 137 122 102 INCOME AND SPENDING Personal Income, (M il. $, Annual Rate) . . Apr. Manufacturing P a y r o lls ..................................... May Farm Cash R e c e ip t s ........................................... Apr. Department Store S a l e s * * ............................... May 8,273 140 116 132 8,266r 143r 122 125 PRODUCTION AND EMPLOYMENT Nonfarm Employment...........................................May M anu factu rin g ................................................. May Nonmanufacturing...........................................May Construction................................................. May Farm Employment................................................. May Insured Unemployment, (Percentof Cov. Emp.) May Avg. Weekly Hrs. in Mfg., (Hrs.) . . . . May 117 113 119 122 74 2.2 40.0 116 112 118 119r 73 2.4 40.4r 117 113 119 117 71 2.6 41.0 114 109 116 123 85 2.7 39.6 FINANCE AND BANKING Member Bank L o a n s ........................................... May Member Bank D e p o s it s .....................................May Bank D e b it s * * ....................................................... May 175 149 159 174 145 158 173 150 156 153 134 142 102 103 96 126 115 104 81 3.3 41.3 162 176 150 124 105 168r 95 117 112 104 86 3.8 40.6 117 130 106 117 99 163 L O U IS IA N A INCOME AND SPENDING Personal Income, (M il. $, Annual Rate) Apr. May Apr. May 6,499 128 153 118 6,403r 126 118 118 6,440r 129 158 121 6,064 120 104 111 May May May May Farm Employment................................................. May Insured Unemployment, (Percentof Cov. Emp.) May Avg. Weekly Hrs. in Mfg., (Hrs.) . . . . May 104 100 105 89 90 3.6 42.1 104 100 104 88 80 3.7 41.8 104 101 105 88 78 3.9 42.7 102 98 103 87 97 4.2 41.9 May May May 159 125 140 158 124 137 153 125 131 139 118 126 Apr. May Apr. May 3,360 152 199 105 3,291r 148 130 101 3,311r 153 140 100 3,105 142 117 98 May May May May Farm Employment................................................. May Insured Unemployment, (Percentof Cov. Emp.) May May Avg. Weekly Hrs. in Mfg., (Hrs.) . . . . 118 121 116 118 74 3.7 40.3 117 120 116 116 76 4.2 40.1 118 121 117 113 77 4.3 40.7 116 118 116 125 78 4.2 40.5 May May May 194 156 156 198 153 152 187 152 152 170 146 143 Apr. May Apr. May 7,178 140 123 125 7,136r 142r 117 115 7,052r 142 109 116 6,602 133 119 113 May May May May May Insured Unemployment, (Percentof Cov. Emp.) May May Avg. Weekly Hrs. in Mfg., (Hrs.) . . . . 116 118 115 146 89 3.5 40.6 116 118 115r 140 84 3.9 40.5r 115 118 114 141 90 4.2 40.8 112 114 111 135 90 4.6 41.0 174 142 155 173 141 154 171 143 155 151 129 136 Department Store Sales*/** . . PRODUCTION AND EMPLOYMENT FINANCE AND BANKING Bank Debits*/** M ISS IS S IP P I ALABAM A INCOME AND SPENDING Personal Income, (M il. $, Annual Rate) Manufacturing P a y r o lls ......................... Farm Cash R e c e ip t s ............................... Department Store Sales** . . . . 100, unless indicated otherwise.) Apr. May Apr. May 6,038 132 136 118 5,946r 130 128 108 5,957r 130 136 114 5,677 126 120 103 May May May May May Insured Unemployment, (Percentof Cov. Emp.) May Avg. Weekly Hrs. in Mfg., (Hrs.) . . . . May 108 104 110 101 82 3.2 40.9 108 104 110 lO lr 79 3.4 40.4 108 104 111 101 78 3.5 40.9 107 103 108 97 85 4.1 40.8 170 142 150 170 139 146 171 142 148 153 131 134 INCOME AND SPENDING Personal Income, (M il. $, Annual Rate) Manufacturing P a y r o lls ......................... Farm Cash R e c e ip t s ............................... Department Store S ales*/** . . . PRODUCTION AND EMPLOYMENT PRODUCTION AND EMPLOYMENT FINANCE AND BANKING FINANCE AND BANKING May May May Bank Debits*/** F LO R ID A TEN N ESSEE INCOME AND SPENDING Personal Income, (M il. $, Annual Rate) . . Apr. Manufacturing P a y r o lls ..................................... May Farm Cash R e c e ip t s ........................................... Apr. Department Store S a l e s * * ............................... May 12,808 169 178 174 INCOME AND SPENDING Personal Income, (M il. $, Annual Rate) Manufacturing P a y r o lls ......................... Farm Cash R e c e ip t s ............................... Department Store S ales*/** . . . PRODUCTION AND EMPLOYMENT Nonfarm Employment........................................... May M an u factu rin g ................................................. May Nonmanufacturing........................................... May C o n stru ction..................................................May Farm Em ploym ent..................................................May Insured Unemployment, (Percentof Cov. Emp.) May Avg. Weekly Hrs. in Mfg., (Hrs.) . . . . May 124 127 124 97 89 2.6 41.1 41.9r 42.2 118 94 84 3.5 40.4 177 142 153 173 141 153 172 143 148 150 131 140 FINANCE AND BANKING Member Bank L o a n s ........................................... May Member Bank D e p o s it s ..................................... May Bank D e b i t s * * ....................................................... May 12,521r 12,381r 173 171 134 166 165 175 11,543 158 133 152 PRODUCTION AND EMPLOYMENT 123 127 122 97 88 2.6 123 126 122 97 95 2.6 119 122 FINANCE AND BANKING Bank Debits*/" May May May *For Sixth District area only. Other totals for entire six states. **Daily average basis. r Revised. 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. •7 • D IS T R IC T B U S IN E S S C O N D IT IO N S I he District's economic v itality continues unabated. Additional jobs a re lowering the rate of insured unem ploym ent, and construction re m ains an elem ent of strength. Dry w eather has slow ed the farm economy som ew hat, but cash receipts have been higher than last y ear's. Retail spending continues to move ahead on the strength of increased personal income and bank lending. Nonfarm em ploym ent expanded further in M ay, but the m anu facturing component provided little or no stimulus. Virtually all jobs — NT Average Weekly Hours* W o r k e d in M fg. added to District payrolls were in the nonmanufacturing industries. Construc tion employment provided a strong upward thrust, as building activity picked up in all states except Alabama and Florida. As a result of the employment gains, the rate of insured unemployment continued to fall. Employment gains and losses in the manufacturing industries neutralized each other; among them, a noticeable decrease in transportation equipment counterbalanced a similar increase in apparel. A shorter average workweek, however, contributed to a decline in manufacturing payrolls. New construction contract volum e in both the residential and nonresidential categories rem ains at a near-record level. Though new ad ditions are not as strong as during the earlier part of the year, backlogs con tinue to be high. The volume of residential building contracts, supported by strong apartment building, is still outpacing most other types. District trends appear about in line with developments in the nation as a whole. In both cases, new construction contract volume has receded to more sustainable levels from the very high volume of the closing months of 1963. )S W idespread hot, dry w eather is retarding crop and pasture growth in the southern portions of G eorg ia, A lab am a, and M ississippi. Field activity is still brisk, however. A step-up in shipments of beef and eggs has pushed beef prices down somewhat, but prices for eggs have held steady. Thus far in 1964, farmers’ cash receipts from farm marketings exceed the yearearlier total by a wide margin. Most m easures of retail spending continue to press upw ard. Bank debits rose in May for the fifth consecutive month, and department store sales were up in May and early June. District consumers during May continued to build up outstanding debt at instalment credit windows of District banks. Al though the volume of new loans extended during the first five months of 1964 has exceeded that of 1963, repayments during the same period have risen even faster, resulting in a smaller expansion of outstanding debt than in 1963. Latest available data show personal income expanding again in April. During the first four months of this year, the gain registered by each District state over the year-ago period was larger than that for the country as a whole. Year-toyear increases for the four-month period were sharpest in Florida and Ten nessee. Member Bank Deposits . PERCENT OF REQUIRED RESERVES Excess Reserves Borrowings from F. R. Bank 1961 1962 *Seas. adj. figure; not an index. 1963 Lending activity at District m em ber banks proceeded at a fast pace through the middle of June. Judging by banks in leading cities, loans to consumers and businesses accounted for most of the rise. Holdings of U. S. Government securities declined further, while investment in state and local securities increased. Preliminary figures indicate that member bank deposits declined slightly in June, as demand deposits failed to show their usual early summer upswing. N o t e : D a t a o n w h ic h s e a s o n a l in flu e n c e s. sta te m e n ts a re b a s e d h a v e b e e n a d ju st e d w h e n e v e r p o s s ib le t o e lim in a t e
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