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A tla n ta , G eo rg ia
J u ly
•
1965
Bank Lending in the
Southeast: Still Booming
T h e ca su a l reader, sca n n in g th e fin an cial p a g es in A p r il, p ro b a b ly saw
th e h e a d lin e: “B o rro w in g from B a n k s B o o m in g .” T h e n in M a y h e ran
Also in this issue:
REGIONAL CORPORATE
FIN A N C IN G : LO SIN G ITS
IM PO R TAN CE?
CH A NG ING
HA BITS
OF THE
D IST R IC T C O N SU M E R
SIXTH
D ISTRIC T
ST A T IST IC S
D ISTR IC T B U S I N E S S
C O N D IT IO N S
across q u ite a d ifferent o n e : “H e c tic L o a n D e m a n d S la ck en in g .” B etter
th an a th o u sa n d w o rd s, th ese tw o h ea d lin es d escrib e b a n k len d in g
d ev e lo p m e n ts in th e n a tio n th rou gh the spring. B u t w h a t ab o u t b an k
cred it in this part o f th e S o u th , th at is, A la b a m a , F lo rid a , G eo rg ia , th e
sou th ern h a lv es o f L o u isia n a and M ississip p i, and th e ea stern tw o-th ird s
o f T en n e ssee ? D id b an k s in th is F ed era l R e se rv e B a n k D istr ic t e x p e
rien ce th e sam e sw in gs in cred it d em a n d s as th o se n ation ally?
A lth o u g h th e gen era l co u rse o f e c o n o m ic a ctiv ity in th e S ou th east
resem b les th at o f the rest o f th e co u n try , it varies so m e tim e s fo r sh ort
p eriod s. E v e n if this w ere n o t so , lo a n activ ity m ig h t still b e different
b e c a u se certa in k in d s o f b orrow ers rely m o re h e a v ily o n b a n k s in certain
reg io n s th an in oth ers. T h u s, b a n k s in so m e areas m ig h t b e affected
m o re b y an u p su rge in cred it d em a n d s e m a n a tin g fro m o n e or tw o typ es
o f b u sin esse s th an w o u ld th o se in an oth er area. D o m e stic b u sin esses
fin an cin g large p la n t and eq u ip m en t o u tla y s and fo reig n co n c e rn s, for
ex a m p le , o ften r eceiv e b a n k fin an cin g th rou gh a “term lo a n ,” w h ich
is a lo a n w ith a m atu rity o f a year or m o re. T erm len d in g , a cco rd in g to
p a st stu d ies, is less im p o rta n t h ere th an in th e U n ite d S tates as a w h o le.
A n d w h ile a v a ila b le d ata d o n o t d istin g u ish b e tw e en term lo a n s m a d e to
d o m e stic and fo reign firm s, b a n k s in this D istr ic t u n q u estio n a b ly ex ten d
less cred it to foreign ers, rela tiv e to their to ta l lo a n v o lu m e , th an do
N e w Y o r k C ity b an k s.
V ig o r o u s L e n d in g by D istr ic t B a n k s
%
s e tv e
IB anltof
jS /a n ta
B e c a u se a rapid rise in fo reig n len d in g and oth er sp e c ia l fa cto rs ex p la in
a su b sta n tia l p o rtio n o f th e h ea v y len d in g at th e n a tio n ’s b an k s in early
1 9 6 5 , o n e m ig h t ex p e c t b a n k s h ere to h a v e ex p e rie n c ed o n ly m o d est
lo a n d em a n d . T h is h as n o t b e en so. L en d in g b y this reg io n ’s b a n k s has
a ctu ally b e e n q u ite h e a v y this year. A fte r a llo w a n ce fo r th e n orm al
sea so n a l ch a n g e, lo a n s at D istrict m em b er b a n k s c lim b ed at an ann ual
rate o f 18 p ercen t in th e first five m o n th s o f this year. M o r eo v er, w h ile
th e e x c e p tio n a lly fa st p a c e sla c k e n e d n a tio n a lly this spring, b an k s in
m ajor D istrict cities did n o t ex p e r ie n c e su ch a letu p .
H o w ca n w e e x p la in th e sharp rise in b orro w in g in this part o f the
Sou th ? W h ile it is hard to tell fro m th e figures w h y b a n k s lo c a te d o u tsid e
th e b ig D istrict cities (A tla n ta , B irm in g h a m , C h a tta n o o g a , J a ck so n ,
J a ck so n v ille , K n o x v ille , M ia m i, M o b ile , N a sh v ille , N e w O rlean s, St.
P etersb u rg, and T a m p a ) sh o u ld h a v e ex p e r ie n c e d a stron g lo a n d em an d ,
d a ta for th ese tw elv e cities su g g est w h a t did h ap p en . O f prim ary im
p o rta n ce w ere th e ex tre m e ly rap id e x p a n sio n in real esta te len d in g and
th e u n u su a lly h e a v y b u sin ess d em a n d fo r credit.
B u s in e s s
B o r r o w in g S u r g e s
In crea sin g b y n early $ 1 7 0 m illio n during th e first six m o n th s o f 1 9 6 5 ,
b u sin ess lo a n s e x p a n d e d o v er th ree tim es as m u ch as th e avera g e grow th
In early 1965, a sharp increase in LENDING and a leveling off in
investments took place at District banks.
1962
1963
1964
1965
Although they experienced vigorous loan demands, especially
from BU SIN ESS,
Billions of D ollars
Millions of Dollars
fo r th e sa m e p e rio d o f th e p r e v io u s th ree y ea rs. A lth o u g h
so m e sp e c ia l fa cto rs co n tr ib u ted to th is u p su rg e, in crea ses
in th e lo a n v o lu m e o f p ra c tica lly e v ery m a jo r ty p e o f
b u sin ess su g g est th a t an en la rg ed u se o f b a n k cred it w a s
w id esp rea d .
S o m e o f th e h e a v ie st cred it d em a n d s c a m e fro m m a n u
factu rers o f te x tile s and ap p arel, serv ice esta b lish m en ts,
and fro m co n c e r n s en g a g e d in m e ta ls an d m eta l fa b rica
tio n . U n d er sta n d a b ly , a su b sta n tia l p o r tio n o f th is m o n e y
w a s u sed to fin a n ce a b u ild u p in ste e l in v e n to r ies b e ca u se
o f th e p o ssib ility o f a ste e l strik e. A fte r an in terim c o n
tract at lea st d ela y e d th e p o ssib ility o f a strik e, fin an cin g
n eed s fo r b u ild in g u p in v en to r ie s ap p a ren tly d im in ish ed .
T h is p r o b a b ly a cco u n ts fo r th e sla c k e n in g off in M a y and
J u n e o f lo a n s o u tsta n d in g to m eta l u sers.
L en d in g to fo reig n ers co n trib u ted o n ly slig h tly to th e
lo a n e x p a n sio n in ea rly 1 9 6 5 . A fte r th e turn o f th e
y ear, fo reig n ers did step u p th eir b o rro w in g , p erh ap s in
a n ticip a tio n o f restrictio n s ev e n tu a lly im p o se d o n su ch
lo a n s. T h is lo a n v o lu m e , h o w e v e r , w a s su b seq u e n tly
w h ittled d o w n , as b a n k s c u t b a c k th e le v e l o f th eir
fo reig n lo a n s in lin e w ith th e V o lu n ta r y R estr a in t P rogram .
W ith an e y e to h o ld in g d o w n fo r e ig n b a n k fin a n cin g u n d er
th e P re sid e n t’s b a la n c e -o f-p a y m e n ts p ro g ra m , th e su g
g ested c e ilin g o n fo reig n b a n k len d in g h a s b e e n set at 5
p e r ce n t a b o v e th e y ea r -e n d figure fo r 1 9 6 4 .
C o n tin u ed e x p a n sio n in to ta l le n d in g su g g ests th a t sla ck
en in g in th is and o th er so u r c e s o f d em a n d h as b e e n offset
b y in crea ses elsew h er e . C o n su m e r len d in g , fo r ex a m p le,
ro se c o n sid e r a b ly in M a y . S o m e o f th is in crea se, h o w ev er,
se e m s to h a v e b e e n tem p o ra ry as u n d er-w ith h o ld in g o f
in c o m e ta x es le d ta x p a y ers to b o rro w fu n d s to m e e t A p ril
15 ta x p a y m en ts.
F in a n c in g t h e
District banks managed to meet them from extraordinarily
large increases in their TIM E AND SAVINGS DEPOSITS.
Billions of Dollars
Billions of Dollars
♦Includes primary metals, machinery, and other fabricated metal
products.
**This category includes mainly services and all classified loans
other than durable goods and nondurable goods manufacturing, min
ing, trade, transportation, communication, public utilities, and con
struction.
L oan
E x p a n sio n
W ith o u t a su b sta n tia l in crea se in tim e and sa v in g s d e
p o sits, b a n k s m ig h t n o t h a v e a c c o m m o d a te d th e se v ig o r
o u s lo a n d em a n d s so ea sily . B y a n o th er m e a su re — m em b er
b a n k b o rro w in g fro m F e d e r a l R e se r v e B a n k s— it w o u ld
a p p ear, o n th e o th er h a n d , th at b a n k s w er e u n d er so m e
p ressu re. B o th th e n u m b er o f b a n k s b o rr o w in g and th e
average a m o u n t b o rro w ed fr o m th e F e d e r a l R e se r v e d is
co u n t w in d o w w ere h ig h er th ro u g h J u n e 1 9 6 5 th a n in th e
sa m e p erio d la st y ear. S o m e o f th e a d d ed b o rro w in g ca n
b e traced to a p refer e n c e fo r th is m ea n s o f ad ju stin g re
serv e p o sitio n s to th e altern a te o f b u y in g F ed era l fu n d s
{i.e., b o rro w in g e x c e ss reserv es fr o m o th er b a n k s ) . S in ce
ea rly M a rch , th e rate o n F e d e r a l fu n d s h a s o fte n b e e n
a b o v e th e F e d e r a l R e se r v e d isc o u n t rate. T h e co m b in ed
am o u n t o f F e d e r a l fu n d s and R e se r v e B a n k b o rro w in g re
m a in ed q u ite sm a ll, h o w e v e r .
I f b a n k s h a d fin a n ced th e lo a n e x p a n sio n to a sign ifican t
d eg ree th ro u g h su c h m e a n s, o n e m ig h t b e c o m e alarm ed
a b o u t th e e x p a n sio n in b a n k len d in g . T h a t th is h a s n o t
h a p p en ed , th erefo re, is reassu rin g. W h eth er su rgin g cred it
d em a n d s h a v e b e e n all to th e g o o d is a n sw ered le ss ea sily ,
h o w e v e r , b e c a u se th e sta tistics p r o v id e u s w ith o n ly an
in sig h t in to th e q u a n tity o f cred it, and n o t in to its sta n
dards o f q u ality.
H arry B ra nd t
•2 •
Regional Corporate Financing:
Losing Its Importance?
C o rp orate fin an cin g th rou gh the issu e o f secu ritie s b y
firm s h ead q u artered in this D istr ic t w a s la st rev iew ed as
o f m id -1 9 6 3 . A t th at tim e, so m e em erg en t tren d s su g
g ested th at this so u rce o f ca p ita l w a s b e c o m in g less im
p o rtan t as th e e c o n o m ic e x p a n sio n o f th e S ix ties p ro
c eed ed . A m o n g th ese trends, w h ich w ere still regarded
as ten ta tiv e b e ca u se o f the sev ere d isru p tio n o f th e eq u ity
m ark ets in M a y and June o f 1 9 6 2 , th e fo llo w in g seem ed
m o st firm ly e s ta b lis h e d : ( 1 ) S in ce rea ch in g a p ea k in
1 9 5 8 , total v o lu m e o f secu rities offered b y p rivate re
g io n a l firm s h ad co n tin u e d to d ec lin e e a ch year. ( 2 ) A
sim ilar d eclin e in the v o lu m e o f secu rities offered b y m a n u
factu rin g firm s w as evid en t. ( 3 ) Sharp cu tb a ck s w ere ta k
ing p la ce in the fin an cin g o f rela tiv ely n ew , sp ecu la tiv e,
or q u a si-sp ecu la tiv e co m p a n ie s in “ o th er” fields.
S in ce the sev ere d isru p tio n o f the co rp o ra te secu rities
m arkets in 1 9 6 2 , reco v ery in th e n a tio n a l v o lu m e o f
n ew secu rities issu ed and in p rice lev els h as b e en su b
stantial. C ash offerings in th e U n ited S tates in crea sed
fro m $ 1 0 .7 b illio n in 1 9 6 2 to $ 1 2 .2 b illio n in 1 9 6 3 . L a st
y ea r’s v o lu m e reach ed $ 1 4 .0 b illio n , m o re th an 3 0 p er
c e n t h igh er th an th at o f 1 9 6 2 . D o lla r p rices o f m o st sto ck s
also had reco v ered sh arp ly from their 1 9 6 2 lo w s b y th e
en d o f 1 9 6 4 . A lth o u g h th e reco u p m e n t in a v erage price
earn in gs ratios o f o u tsta n d in g c o m m o n sto c k h ad n o t re
tu rn ed th em to the high le v els o f la te 1 9 6 1 , th ere still
had b een a su b stan tial c o m e b a c k fro m th e d ep ressed
lev els o f m id -1 9 6 2 . C o rp o ra te b o n d y ield s rem ain ed
virtually stab le during 1 9 6 4 , after h a v in g d eclin e d th ro u g h
o u t th e last h alf o f 1 9 6 2 and the first quarter o f 1 9 6 3 .
U n d er th ese im p rovin g c o n d itio n s, reco v ery in to ta l v o l
u m e o f corp orate secu rities issu es in this D istric t m igh t
h a v e b e e n ex p ected . T h is e x p e c ta tio n w a s n o t realized ,
h o w ever.
W hy S u c h
a D rop in t h e
D istr ic t?
T h e d ollar v o lu m e o f D istrict sales d eclin e d fro m $ 5 7 5
m illio n in 1 9 6 0 to $ 2 6 2 m illio n in 1 9 6 4 , a d rop o f 5 4
p e rcen t in th e lev el o f an n u al sales. M o r eo v er, fro m th e
1 9 6 0 h igh o f 5 .6 p ercen t o f to ta l U . S. v o lu m e, th e D is
trict’s sh are in total v o lu m e d ec lin e d to 1 .9 p ercen t in
1 9 6 4 , as sh o w n in th e a c c o m p a n y in g ta b le. T h e relative
d e c lin e , a m ou n tin g to 6 6 p ercen t b e tw e e n 1 9 6 0 and
1 9 6 4 , w as th us m ore sev ere th an th e v ery steep d eclin e
in d ollar v o lu m e itself.
S everal factors that in flu en ced th e sh rin k age in v o lu m e
o f ca p ita l raised through co rp o ra te secu ritie s sin ce 1 9 6 2
ca n b e iden tified . T h e y m a y c o n v e n ie n tly b e g ro u p ed u n d er
tw o h ead in gs: th o se th at red u ced th e filing o f p r o sp ectiv e
secu rities issu es as a n ecessa ry first step in raisin g n ew
c a p ita l and th o se th at co n trib u ted to a lo w e r ratio o f
a ctu al sales to in ten d ed sales.
R e d u c e d f ilin g s . S in ce 1 9 5 5 , th e D istr ic t’s p u b lic u tilities
h a v e w ith o u t e x c e p tio n a cco u n te d for o v e r h a lf o f th e
reg istration s o f n ew secu rities. T h eir p e a k year w a s in
1 9 6 0 , w h en th ey so ld o v er $ 4 0 0 m illio n in secu rities and
a cc o u n ted for o v er tw o-th ird s o f th e D istr ic t’s to ta l. S in ce
th at tim e, so m e red u ctio n in their ap p aren t n eed s for
o u tsid e fin an cin g has occu rred e a ch year. In v estm en t
sp en d in g , o f co u rse, h as co n tin u e d to ex p a n d , b u t m ore
efficien t u se o f e x istin g fa cilitie s, gro w th in internal
so u rces o f fu n d s rela tiv e to e x p a n sio n o f n e e d for n ew
fa cilities, and o th er factors cu t their secu rities issu es to
just over $ 2 0 0 m illio n in 1 9 6 4 .
In crea sed ca sh flow and m o re read y av a ila b ility o f term
lo a n s, private p la cem en ts o f secu rities, and b a n k credit
in gen era l u n d o u b ted ly p la y ed a role in th e red u ctio n o f
S E C filings o f secu rities b y m a n u fa ctu rin g firm s. Such
filings had averaged $ 5 5 m illio n p er year b e tw e e n 1 9 5 8
and 1 9 6 1 . T h e average for 1 9 6 3 -6 4 w a s a sc a n t $ 1 3 m il
lio n . T h is d eclin e w a s a ccen tu a ted b e c a u se o n ly o n e o f th e
eig h t D istr ict b u sin ess firm s th at are a m o n g th e 5 0 0 largest
U . S. m an u factu rin g c o n cern s w as en g a g ed in o u tsid e p u b
lic fin an cin g in 1 9 6 3 and 1 9 6 4 .
T h e se rea so n s also ex p la in so m e o f th e r ed u ctio n in
filings o f “o th er” co rp o ra tio n s. H o w e v e r , o th er e x p la n a
tion s are at h an d fo r th e d eclin e in th e a v erage an nual
le v e l o f th ese filings from $ 1 3 8 m illio n fo r 1 9 5 8 -6 1 to a
$ 6 9 -m illio n a v erage for 1 9 6 3 -6 4 .
L o ss o f id en tity as in d ep en d en t b u sin e sse s h a s im p arted
a sign ifican t d o w n w a rd b ias in aggregate filings fo r o u tsid e
fin an cin g b y D istr ic t n o n -u tility firm s. F a ilu res and re
o rg a n iza tio n s o f h ig h ly sp ecu la tiv e v en tu res a lso h ave
p la y ed a part in this drop. H o w e v e r , a m u ch greater im
p act has c o m e fro m m ergin g or ou trigh t p u rch a se o f D is
trict firm s b y larger n a tio n a l firm s. M a n y in sta n ces o f
su ch lo ss o f id en tity th rou gh sale or m erger h a v e occu rred
w ith in th e p a st five or six years. In m a n y c a ses, the
form er D istr ic t b u sin ess w a s rela tiv ely large in its field or
w ith in its lo c a l m ark et and during th e 1 9 5 0 ’s or early
1 9 6 0 ’s had issu ed siza b le d o lla r a m o u n ts o f secu rities.
D ir e c t issu es o f private co rp o ra te secu rities also ap pear
to h a v e b e e n in h ib ited b y in crea sed u se o f ta x -ex em p t
C o r p o ra te S e c u r it ie s I s s u e s ,
by B u sin e s s Firms H eadquartered in th e
Sixth Federal R eserve D istrict
Total U. S. Ratio of
Total Sold *
Issues Sold* District
Total Registered with SEC
Sales
(Bil. of
(Mil. of Dollars)
(Mil. of Dollars)
All Public Reg. A A ll Public Reg. A Dollars) to U. S.
Year
4.9
5.5
9.8
476.6
471.1
495.1
484.8 10.3
1959
10.2
5.6
575.0 564.2 10.8
599.7
579.1 20.6
1960
2.9
13.1
377.7
366.4 11.3
453.4 430.9 22.5
1961
3.Or
10.7
394.5r 382.5r 12.0r 318.3r 314.8r 3.5r
1962
12.2
2.3
281.4 278.9
2.5
302.6
296.7 5.9
1963
1.9p
14.0
262.4p 261.3p l.lp
294.3
288.5 5.8
1964
3.3
70.0
2,539.6 2,462.5 77.1 2,291.4 2,256.7 34.7
Total
Percentage
1.5
100.0
98.5
Distribution 100.0
97.0 3.0
Percentage of Filings
90.2
91.6 45.0
Actually Sold
*A11 sales recorded in year filed, even though partial sales occurred in subse
quent years, p Preliminary, r Revised.
Sources: Tabulated from data supplied by Securities and Exchange Com
mission, Investment Bankers’ Association, M oody’s Industrial Manual, M oody’s
Bank and Finance Manual, and The Commercial and Financial Chronicle.
•3 •
fin an cin g o f fa cilities for n ew b u sin e ss and e x p a n sio n o f
e x istin g b u sin ess by in d u strial d e v e lo p m e n t b o d ie s in
som e D istrict states. O f so m ew h a t less im p o rta n ce h a v e
b een the grow in g u se o f sa le -a n d -le a se -b a c k te ch n iq u es
to relea se cap ital and th e d e v e lo p m e n t and e x p a n sio n o f
b an k serv ices, su ch as fa cto rin g , r e v o lv in g cred it p la n s,
and sim ilar services.
O u tsid e the p u b lic u tility and m a n u fa ctu rin g ca teg o ries,
the m o st significant facto r in the sharp red u ctio n o f secu ri
ties filings during 1 9 6 3 and 1 9 6 4 w a s the la c k o f m ark et
recep tivity. P oor m ark eta b ility a lso affected q u ite sev erely
the ratio o f sales to total filings.
S e c u r it ie s s a l e s b e c o m e m o r e d iffic u lt. In m id -1 9 6 2 ,
this B an k stu d ied the tim e lag b e tw ee n in itial filings and
sales o f corp orate secu ritie s by D istrict firm s. E v a lu a tio n
o f quarterly d ata for first quarter 1 9 5 9 th rou gh fou rth
quarter 1 961 d isclo sed sign ifican t lags b etw ee n filing d ates
and sales d ates in o n ly tw o o u t o f tw e lv e quarters. T h u s,
the ratios sh o w n in the tab le th rou gh m id -1 9 6 1 largely
reflect d isp o sitio n o f registration s w ith in th e year in w h ich
th ey w ere filed. H o w ev e r , fo r filings du rin g the latter h a lf
o f 1 9 6 1 , w ith d raw als and su sp e n sio n s o f registration s
o ccu rring after 1961 red u ced the ratio o f sa les to registra
tion s for fu ll-y ea r 1 96 1 co n sid era b ly . T h is trend w as
a ccen tu a ted in 1 9 6 2 in b o th the p u b lic issu e and R e g u S a le s of Corporate S e c u r itie s
a s a P ercen ta g e o f R eg istra tio n s,
by Year and by Type of F ilin gs
S ix th
F e d e ra l
R e se rv e
D istrict
Exempt,
Regular
Regulation A
A ll Issues
Public Issues
Issues
96.3
53.2
97.2
95.9
97.4
52.3
83.3
85.0
50.3
80.7r
82.3r
29.2r
42.4
93.0
94.0
19.0
89.2
90.6
Sources: Tabulated from data supplied by Securities and Exchange Com
mission, Investment Bankers’ Association, M oody’s Industrial Manual,
M oody’s Bank and Finance Manual, and The Commercial and Financial
Chronicle. Computations by this Bank. Data for 1962 revised.
Year
1959
1960
1961
1962
1963
1964
la tio n A issu e c a teg o ries. In e a c h y ea r, an in crea sin g tim e
la g b e tw e en filin g o f reg istra tio n s and sa le o f secu rities
b e ca m e evid en t.
A s in itia l reg istra tio n v o lu m e sh ran k in 1 9 6 3 and 1 9 6 4 ,
the ratio o f sa les to reg istra tio n s ro se from th e d ep ressed
lev e ls o f 1 9 6 1 and 1 9 6 2 . H o w e v e r , th e tim e la g b etw een
filing and final d isp o sitio n c o n tin u e d to b e w id e, so th at
so m e o f th e sa les reflected in th e ta b le fo r 1 9 6 2 w ere n o t
m a d e until 1 9 6 3 or 1 9 6 4 . In turn, a su b sta n tial am o u n t
o f 1 9 6 3 ’s reg istra tio n s w ere n o t so ld u n til 1 9 6 4 , and so m e
issu es o rig in a lly filed in 1 9 6 3 an d 1 9 6 4 are still in reg is
tration .
I m p lic a t io n s
T h e se d e v e lo p m en ts m u st b e ev a lu a te d a g a in st a b a c k
g rou n d o f v ig o ro u s grow th in em p lo y m e n t and in d u strial
e x p a n sio n in th e S ixth D istrict. A recen t stu d y b y th is B a n k
sh o w s th at n on farm em p lo y m e n t ro se 8 .3 p e rcen t b e tw e e n
1961 and 1 9 6 4 , a rate su b sta n tia lly a b o v e th e n a tio n a l
rate o f 5 .2 p ercen t. It is o b v io u s th en th at th e reg io n ’s
grow th w as n o t cru cia lly d e p e n d e n t u p o n in d ig en o u s firm s
h a v in g c o n tin u o u s a ccess to ca p ita l m a rk et fu n d s. T h is is
n o t to sa y , h o w ev er, th at su ch firm s d id n o t c o n tin u e to
p rosp er or th at th e reg io n did n o t c o n tin u e to b e n efit from
th e fo rm a tio n o f n ew sm a ll b u sin e ss firm s. It d o e s seem to
m ea n , h o w ev er, th at o th er so u rc e s o f c a p ita l in flow h ave
b e c o m e rela tiv ely m o re im p o rta n t in th e o v era ll e x p a n sio n
o f th e 1 9 6 0 ’s. In a d d itio n to th e g ro w th in b a n k cred it,
e x p a n sio n o f d irect p la n t and d istrib u tio n fa cilities b y
n a tio n a l firm s and firm s h ea d q u a rtered in o th er region s
has lo o m e d large in th e to ta l p ictu re. F e d e ra l G o v ern m en t
d irect in v estm en t in d e fe n se an d sp a c e fa c ilitie s a lso h as
b een a n et e x p a n sio n a ry fo rce. Im p o r ta tio n o f ca p ita l
th rou gh th e e x p o r t o f sta te and lo c a l secu ritie s has c o n
tin u ed to g row larger ea ch year. A n d , o f c o u rse , the g ro w
ing e x p o rt o f private m ortg a g e secu rities h as b ro u g h t in
large su p p lies o f ca p ita l fu n d s. R e c e n t d e v e lo p m e n ts in the
latter tw o so u rces o f D istrict cap ita l fu n d s w ill b e su rv ey ed
in a fo rth c o m in g issu e o f this Review.
H ir a m J. H o n e a
Changing Habits of the District Consumer
O ver the p ast nine years, retail sa les in th e S ixth F e d era l
R eserv e D istrict h ave in crea sed ab o u t 5 4 p ercen t, w h ile
in the U n ited States as a w h o le th ey w en t up ab o u t 4 8
percent. T o so m e ex ten t, th is reflects th e faster e c o n o m ic
grow th o f this region and its d e v e lo p m en t in to a lu crative
m ass co n su m p tio n m arket. T h e co m p a riso n c o n c e a ls so m e
other in terestin g ch a n g es, h o w ev er.
A lth o u g h D istrict retail sa les h a v e in crea sed rela tiv e to
th e U . S., p erson al in co m e in th e Sixth D istr ict sta tes has
in creased m u ch m o re— 7 3 p ercen t in th e D istric t states
as o p p o sed to 5 8 p ercen t n a tio n a lly . T h is m ea n s th at th e
relative im p ortan ce o f retail sa les as a u se o f p erso n a l in
c o m e has d eclin ed in the S ixth D istrict rela tiv e to the
n ation . In early 1 9 5 6 , D istric t retail sa les w ere 6 0 .2
p ercen t o f p erson al in c o m e , b u t in th e first quarter o f
1 9 6 5 th ey w ere o n ly 5 3 .7 p ercen t. N a tio n a lly , this ratio
has d eclin ed also, but rather less, from 5 7 .5 p ercen t to
5 4 .0 p ercen t.
R e ta il S a l e s , a s a P e r c e n t a g e o f P e r s o n a l I n c o m e
Sixth District States and United States
Percent
Percent
Retail sales as a percentage of personal income have declined
more in the Sixth Federal Reserve District than in the nation
since 1956 and have fluctuated more widely.
•4 •
T h e d eclin e in the ratio o f retail sa les to p erso n a l in
c o m e in b oth the D istrict and the n a tio n m a y h a v e re
sulted from several p o ssib le d e v elo p m en ts. In th e n a tio n a l
in co m e acco u n ts o f the D ep a r tm en t o f C o m m erce, five
p rin cipal u ses o f p erson a l in co m e are d istin g u ish ed :
( 1 ) p u rch ases o f durable co n su m er g o o d s (s u c h as a u to
m o b iles and h o m e furniture and a p p lia n c e s); ( 2 ) pur
c h a ses o f n on d u rab le con su m er g o o d s (su c h as fo o d and
c lo t h in g ); ( 3 ) p u rch ases o f serv ices (s u c h as en terta in
m en t, d o m estic services, etc.)", ( 4 ) p erso n a l ta x p a y m en ts;
and ( 5 ) p erso n a l savin g. T h e retail sa les figures co rre
sp o n d rea so n a b ly w ell to to tal p u rch a ses o f d u rab le and
n o n d u rab le co n su m er g o o d s, w h ich m ea n s th at th e d e
c lin in g ratio o f retail sales to p erso n a l in c o m e m u st b e
e x p la in ed largely b y in crea ses in the o th er th ree u ses o f
p erso n a l in co m e.
W e k n o w th at co n su m er p u rch a ses o f serv ices in th e
n a tio n as a w h o le h a v e grow n faster th an o th er ty p es o f
c o n su m er exp en d itu res. F ro m 3 0 p ercen t o f p erso n a l in
c o m e in early 1 9 5 6 , su ch p u rch a ses clim b ed to 3 3 .6 p er
cen t in the first quarter o f 1 9 6 5 . P e rso n a l ta x es and p er
so n a l sa v in g ch a n g ed hard ly at all as a p ercen ta g e o f
p erso n al in co m e in th at p eriod . T h u s, th e d e clin e in th e
ratio o f national retail sales to p erso n a l in c o m e is alm o st
w h o lly e x p la in ed b y th e gro w in g im p o rta n ce o f serv ices
in h o u se h o ld b u d gets. F o r th e Sixth D istrict, th e e x p la n a
tio n is n ot q uite so sim p le. T h ere are n o n a tio n a l in c o m e
a cc o u n ts for in d ivid u al states, so ou r an alysis m u st p ro
c ee d by m ean s o f in d irect ev id en ce.
S ervices h a v e p rob ab ly in crea sed in im p o rta n ce as a u se
o f p erso n a l in co m e in the Sixth D istr ic t in a b o u t th e sam e
p ro p o rtio n as th ey h a v e in the n ation . A co m p a r iso n o f
the last tw o C en su ses o f B u sin e ss, th o se fo r 1 9 5 8 and
1 9 6 3 , sh o w s that ex p en d itu res on certain se lec te d serv ices
(th e C en su s d o es n ot co v e r all ty p es o f se r v ic e s) h a v e
in creased as a p ro p o rtio n o f p erso n a l in co m e b y a b o u t the
sam e p ercen ta g e in D istrict sta tes as in th e n a tio n as a
w h o le. T h is ev id en ce a lon e sh o u ld in d ica te th a t th e ratio
o f retail sales to p erso n a l in co m e sh o u ld h a v e d eclin ed
ab ou t th e sam e am o u n t in th e D istr ic t as in th e n ation .
F o r an ex p la n a tio n o f w h y it d eclin e d more in th e D istrict,
w e m u st lo o k to the tw o rem a in in g u ses o f p e rso n a l in
c o m e — p erso n al ta x es and p erso n a l saving.
P erso n a l ta x es in each sta te ca n b e d eriv ed from a
C o m m erce D ep a rtm en t ta b u la tio n in th e A u g u st 1 9 6 4
Survey of Current Business that sh o w s to ta l p erso n a l in
c o m e and d isp o sa b le p erson a l in co m e. P erso n a l ta x p a y
m en ts o f resid en ts o f th e S ixth D istrict states h a v e risen
faster th an th o se o f the w h o le co u n try b e ca u se per ca p ita
p erso n al in co m e has risen faster in th ese sta tes th an in
the n a tio n (a lth o u g h it is still b e lo w th e n a tio n a l a v e r a g e ).
T h u s, the im p ortan ce o f p erso n a l ta x es in th e d isp o sitio n
o f p erson al in co m e has grow n in D istrict sta tes, w h erea s
it h as rem ain ed a b o u t the sa m e n atio n a lly .
T h e la st u se o f p erso n a l in c o m e is p e rso n a l savin g.
W e h a v e n o d ata o n this m ea su re b y sta te, b u t w e d o
h ave figures on h o ld in g s o f lo n g -term fin an cial assets by
in d ivid u als. S uch h o ld in gs, w h ich c o n stitu te m o st o f th e
form s in w h ich p eo p le sa v e, h a v e in crea sed m o re in
D istrict states than in the n ation . It seem s rea so n a b le to
b e lie v e, th erefore, th at co n su m ers in th e D istr ic t states
are savin g a h igh er p ercen ta g e o f their p erso n a l in c o m e ,
w h ereas n a tio n a lly th ey are not.
T o su m m a rize, th e p ercen ta g e o f p e rso n a l in co m e d e
v o ted to th e p u rch a se o f c o n su m er g o o d s at retail h as
fa llen over the la st n in e years in b o th th e D istrict and
n a tio n , b u t th e drop has b een sharp er in th e D istrict.
T h e n a tio n a l d eclin e is e x p la in ed prim arily b y th e in
crea sin g im p o rta n ce o f serv ices in th e co n su m e r b ud get.
T h is is a lso true o f the S ixth D istrict; but, in ad d ition ,
ta x es h a v e ta k en a slig h tly larger b ite b e c a u se o f m ore
rap id ly in crea sin g p ro sp erity in this region , an d co n su m ers
in this area h a v e a p p aren tly in crea sed their rate o f savin g
faster th an in th e n a tio n as a w h o le.
C y c lic a l S e n s it iv it y
Sixth D istrict retail sa les h a v e flu ctu a ted m o re w id ely
during the co u rse o f the b u sin ess c y c le th an h a v e n a tio n a l
retail sa les, as ca n b e se en from th e chart. P erso n al inR e ta il S a l e s a n d P e r s o n a l I n c o m e
United States and Sixth District States
less striking, and fluctuations have been larger.
c o m e rarely has actu a lly d ecrea sed in eith er area, partly
b e ca u se u n em p lo y m e n t c o m p en sa tio n p a y m en ts to so m e
ex ten t tak e up th e sla ck th at w o u ld o th erw ise o ccu r dur
ing recessio n s. R eta il sa les, h o w ev er, resp o n d q u ite rapidly
to ch a n g es in em p lo y m en t o p p o rtu n ities and b u sin e ss c o n
d itio n s in g en eral, and this is p a rticu larly true in th e
Sixth D istrict.
T h ere seem s to h a v e b een a ch a n g e in th e D istrict
co n su m er ’s resp o n se p attern in th e cu rren t p r o lo n g ed
b u sin ess e x p a n sio n th at b eg a n in F eb ru a ry 1 9 6 1 . In pre
v io u s e x p a n sio n p erio d s, for ex a m p le , 1 9 5 5 -5 7 and 1 9 5 8 6 0 , D istrict co n su m ers a llo ca ted a h igh er p ercen ta g e o f
the increase in p erso n a l in co m e to retail sa les th an did
co n su m ers n a tio n a lly . In the la test e x p a n sio n p erio d , h o w
ever, this p ercen ta g e has so far b e e n sm a ller in th e D is
trict. T h is m ay p o rten d a ch a n g e in th e o ld p attern o f
lo w in c o m e — h igh c o n su m p tio n — lo w sa v in g th at has in
th e p ast ch a ra cterized th e D istric t as a reg io n in the
p ro cess o f e c o n o m ic d e v elo p m en t. A s th e reg io n reach es
higher stages o f e c o n o m ic d ev e lo p m e n t, th e ratio o f sa v
ing to p erso n a l in co m e ca n b e e x p e c te d to rise. I f our
g u esses ab o u t th e ch a n g e in th e sa v in g ratio are correct,
this stage m a y b e a lread y in p ro cess.
L a w r e n c e F . M a n s f ie l d
T e c h n i c a l N o t e : The Bureau of the Census currently provides this Bank with
a special monthly tabulation of retail sales in this Federal Reserve District.
This series started with April 1962. Census also provides, starting with Janu
ary 1955, a District series on retail sales of Group I stores (those with one
to ten outlets). A regression run between the two series from April 1962 to
February 1965 revealed a high degree of correlation between them. The re
gression equation was:
Y (District Retail Sales) = 60.7 + 1.267X (District Group I Sales)
The coefficient of determination was .91; the standard error of estimate was
39.5, compared with average retail sales of 1,845; and the b coefficient was
significant at the .01 level. On the basis of this regression equation, District
total retail sales were projected backwards to 1955.
•5 •
Bank Announcements
On June 3, the
C o m m e rc ia l G u a ra n ty
B a n k o f M o b ile ,
Debits to Demand Deposit Accounts
Insured Commercial Banks in the Sixth District
(In Thousands of Dollars)
M obile, A labam a, a new ly organized n o n m em b er bank,
o pen ed for business a nd began to rem it at par fo r checks
draw n on it when received fro m the F ederal R eserve Bank.
Officers are M arion E. Ward, P resident and Chairman of
May
1965
Percent Change
Year-to-date
5 Months
May 1965 from
1965
Apr.
May
from
1965
1964
1964
Apr.
1965
May
1964
1,258,211
60,696
177,125
435,455
247,804
78,986
1,096,793
54,448
143,695
386,383
237,927
73,673
—3
—9
— 10
—7
+9
—2
+ 12
+1
+ 11
+5
+ 13
+5
+11
+9
+11
+9
+9
+6
556,642
1,360,391
1,886,192
457,633
194,247
1,101,273
398,245
87,728
3,718,872
162,888
182,944
198,131
224,083
419,528
110,962
124,091
1,992,229
480,399
501,852
402,742
1,292,563
430,835
1,096,306
1,569,550
411,175
164,147
943,301
342,781
67,972
3,156,961
161,067
161,145
183,098
222,351
338,894
82,039
107,239
1,826,482
430,833
410,783
349,021
1,036,378
— 18
—4
— 11
—9
—5
—9
— 15
—3
+7
+1
—4
+2
—4
— 11
— 13
+3
+1
— 11
+1
— 11
+6
+ 19
+7
+2
+ 13
+7
—2
+ 24
+ 14
+8
+ 15
+4
+3
+ 19
+20
+1
+ 12
+ 12
+9
+ 16
+11
+6
+ 13
+6
+1
+ 15
+6
+6
+ 23
+ 12
+4
+ 12
+ 12
+5
+ 19
+ 17
+6
+ 11
+ 11
+10
+9
+7
53,206
47,926
33,602
33,694
53,986
188,674
77,582
51,410
45,696
37,047
28,260
46,348
156,055
65,803
—2
+4
+7
—9
— 15
+6
—5
+1
+9
—3
+8
—1
+28
+ 12
+5
+8
+1
+19
+1
+ 14
+3
68,686
70,290
32,076
110,728
51,545
17,447
276,336
105,732
109,317
604,857
63,185
59,970
38,501
89,581
10,847
62,903
26,121
21,205
23,924
60,351
43,654
8,913
99,910
5,061
32,619
31,107
7,963
18,350
77,458
44,456
34,666
57,102
30,347
59,123
61,281
23,539
90,881
45,883
15,629
231,009
86,256
87,242
519,596
49,755
51,356
34,770
76,236
10,620
59,215
25,375
18,151
22,058
56,587
42,796
7,665
87,844
4,765
31,360
35,826
7,459
17,265
66,247
41,001
29,920
55,143
30,595
— 11
—4
— 18
—8
—6
—6
— 12
— 20
—6
—5
—5
—1
—7
— 15
+ 36
+1
+7
— 12
—0
+1
—1
—1
+5
+8
+1
—3
+7
+3
—0
—0
+0
+2
+ 10
+3
+ 11
+ 11
+ 12
+5
+5
+5
—1
+ 18
+ 10
+21
+ 16
+3
+0
+39
+7
+ 10
+3
+8
+8
+1
+ 15
+ 19
+15
+5
— 15
+15
+ 10
+ 17
+9
+ 16
+5
+9
+4
+ 11
+19
+9
+5
—2
+5
+1
+ 14
+11
+9
+ 14
+5
+ 14
+ 14
+6
+ 10
+5
+2
+5
+ 10
+ 10
+11
+13
+ 10
+0
+8
+3
+8
+7
+2
+5
+3
45,022
33,834
20,270
62,051
62,752
120,333
44,795
27,190
22,993
54,101
53,479
106,483
—1
—3
+ 48
—1
—3
+6
—0
+ 21
+31
+ 13
+ 14
+ 20
+8
+ 17
+ 14
+10
+9
+ 14
25,080,576r 21,584,298
3,230,375
2,946,025
8,008,905r 6,616,673
6,055,684
5,219,027
3,329,399
2,971,884
1,069,107
974,541
3,387,106
2,856,148
—5
—2
— 11
—2
+1
+2
—7
+10
+7
+8
+ 13
+ 13
+ 12
+10
+9
+8
+8
+ 13
+ 12
+9
+6
the Board; M ario R . Bottesini, Vice President; an d William
STANDARD METROPOLITAN
STATISTICAL AREASf*
Birmingham . . .
1,226,447
undivided profits, $500,000.
Gadsden . . . .
55,094
Huntsville
. . .
159,645
T h e F a r m e r s a n d M e r c h a n t s B a n k , H urts boro, A la
Mobile
. . . .
405,997
Montgomery . . .
269,212
bama, a n o n m em b e r bank, began to rem it at par on June
Tuscaloosa . . .
77,090
Ft. Lauderdale14. Officers are R o y M . Greene, President; and Hugh W.
Hollywood . . .
456,315
Jacksonville . . .
1,300,402
Vann, Sr., Cashier.
1,671,651
Orlando . . . .
418,471
Pensacola
. . .
184,820
Tampa-St. Petersburg 1,006,054
W. Palm Beach .
337,355
Albany
. . . .
84,122
Atlanta . . . .
3,593,980
Augusta . . . .
174,239
A REVIEW OF GEORGIA’S ECONOMY, 1 9 6 0 -6 5
Columbus . . . .
184,580
189,663
T h is p u b lic a tio n
h a s r e c e n t l y b e e n e x p a n d e d t o i n c l u d e t h eMacon.......................
m o s t
Savannah . . . .
228,071
re c e n t M o n th ly R e v ie w
a rtic le d e v o te d
t o G e o r g i a ’s e c o n o m y , a s
Baton Rouge . .
402,832
w ell a s
re v is ed
m o n th ly fig u res of m a jo r b u s in e s s
i n d i c a t oLafayette r . . .
rs fo
98,596
107,925
G e o rg ia fro m
1 9 6 0 t o 1 9 6 5 . T h e a r t i c l e s i n t h i s c o l l e c t i o n d Lake u Charles . .
is c s s
. .
2,053,227
v a r i o u s a s p e c t s o f G e o r g i a ’s e c o n o m i c s c e n e a n d
o fte n
c oNew i Orleans
n s d e r
483,712
l o n g e r - r u n d e v e l o p m e n t s . C o p i e s o f t h i s b o o k l e t , t h e f i r s t Jacksonh e . . . .
in t
447,948
s e r i e s o f p u b l i c a t i o n s d e v o t e d t o t h e D i s t r i c t s t a t e s t o b e r Chattanocga . . .
e v ised ,
Knoxville
405,148
a re a v a ila b le u p o n
r e q u e s t to th e
R e s e a rc h
D e p a r tm e n t, F e d e r a l. . . .
Nashville . . . .
1,145,514
R e se rv e
B a n k of A tla n ta , A tla n ta , G e o rg ia 3 0 3 0 3 .
OTHER CENTERS
Anniston . . . .
52,120
Dothan
. . . .
49,667
35,858
Se lm a .......................
Bartow . . . .
30,552
Bradenton
. . .
46,091
Brevard County . .
199,940
Daytona Beach . .
73,726
Ft. MyersN. Ft. Myers . .
61,148
Gainesville . . .
67,804
Monroe County . .
26,223
Lakeland . . . .
101,840
48,304
St. Augustine . .
16,333
St. Petersburg . .
242,779
Sarasota . . . .
85,038
Tallahassee . . .
102,564
Tampa
. . . .
573,010
Winter Haven . .
60,115
Athens
. . . .
59,321
Brunswick
. . .
35,898
Dalton
. . . .
76,563
Elberton . . . .
14,718
Gainesville . . .
63,637
Griffin
. . . .
27,865
LaGrange . . . .
18,642
Newnan . . . .
23,884
R o m e .......................
61,073
Valdosta . . . .
43,023
Abbeville . . . .
8,827
Alexandria . . .
104,553
Bunkie
. . . .
5,482
Hammond
. . .
32,800
New Iberia . . .
30,317
Plaquemine . . .
8,543
Thibodaux
. . .
18,943
Biloxi-Gulfport . .
77,381
Hattiesburg . . .
44,499
La u re l.......................
34,688
Meridian . . . .
58,156
Natchez . . . .
33,471
PascagculaMoss Point . .
44,636
Vicksburg
. . .
32,907
Yazoo City . . .
30,058
Bristol
. . . .
61,372
Johnson City . .
60,705
Kingsport
. . .
127,331
R. Culver, Cashier. Capital is $5 00,000, and surplus and
SIXTH DISTRICT, Total 23,819,278
Alabamaf
. . .
3,161,255
Flcridaf . . . .
7,144,325
Georgiat . . . .
5,920,186
Louisianaf**
. .
3,351,435
Mississippif** . .
1,088,584
Tennesseef** . .
3,153,493
—A
*Year-ago data have revised for all states and for all SMSA's except Birmingham,
Tuscaloosa, Miami, Albany, Lafayette, and Lake Charles.
r Revised.
**Includes only banks in the Sixth District portion of the state. fPartially estimated.
•6 •
S i x t h D i s t r i c t S ta tis tic s
Seasonally Adjusted
(All data are indexes, 1957-59 =
Latest Month
(1965)
One
Month
Ago
Two
Months
Ago
100, unless indicated otherwise.)
One
Year
Ago
Latest Month
(1965)
SIXTH DISTRICT
INCOME AND SPENDING
Personal Income, (Mil. $, Annual Rate)
Two
Months
Ago
One
Year
Ago
G EO R G IA
INCOME AND SPENDING
Personal Income, (Mil. $, Annual Rate) . . Apr. 46,859 46,458r 46,339r 43,583
Manufacturing P a y r o lls .................................. May
157
143
158r
156
132
137
Farm Cash R e c e ip t s ........................................ Apr.
125
149
Crops ............................................................... Apr.
194
158
158
163
Livestock ......................................................... Apr.
114
122
119
118
Department Store S a l e s * / * * ....................... June
143p
143
140
144
Instalment Credit at Banks, *(Mil. $)
New Loans......................................................... May
199
220r
178
205
Repayments.................................................... May
188
185
178
164
One
Month
Ago
PRODUCTION AND EMPLOYMENT
Nonfarm Employment........................................
M anufacturing..............................................
Apparel.........................................................
Chem icals...................................................
Fabricated M e t a ls ..................................
Food...............................................................
Lbr., Wood Prod., Furn. & Fix. . . .
Paper .........................................................
Primary M e t a ls ........................................
Textiles.........................................................
Transportation Equipment
. . . .
Monmanufacturing........................................
Construction..............................................
Farm Employment..............................................
Insured Unemployment, (Percentof Cov. Emp.)
Avg. Weekly Hrs. in Mfg., (Hrs.) . . . .
Construction Contracts*..................................
R e sid e n tia l...................................................
All O th e r.........................................................
Industrial Use of Electric Power . . . .
Cotton Consum ption**..................................
Petrol. Prod, in Coastal La. and Miss.**
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 C i t i e s ..............................................
Bank D e b it s * / * * ..............................................
May
May
May
May
May
May
May
May
May
May
M
ay
May
May
May
May
M
ay
May
May
May
Apr.
May
May
122
121
149
115
129
107
100
109
112
98
144
122
121
76
2.3
41.3
147
155
139
128
113
176
122
121
148
115
130
108
100
108
112
98
142
122
119r
73
2.4
41.5
181
174
188
126
115
173
121
121
147
115
124
108
100
109
111
97
140
121
120
73
2.5
41.5
139
148
131
127
115
175 r
117
116
140
111
121
105
97
106
106
96
123
118
111
82
3.0
40.7
146
147
146
123
104
167
May
June
203
189
199
184
197
181
174
163
May
June
May
158
151
165
155
146
164
156
143
159
142
133
150
Apr.
May
Apr.
May
8,710
157
125
144
8,682r
157r
116
139
8,635r
160
124
145
8,119
142
116
133
May
May
May
May
Farm Employment.............................................. May
Insured Unemployment, (Percentof Cov. Emp.) May
May
Avg. Weekly Hrs. in Mfg., (Hrs.) . . . .
121
118
123
135
67
1.7
40.9
121
119
122
129
64
1.8
40.8r
121
119
122
127
63
1.9
41.2
117
114
119
122
73
2.2
40.1
May
May
May
208
171
179
205
166
172
206
168
171
177
149
158
Apr.
May
Apr.
May
7,030
141
137
127
6,980r
143r
113
132
6,932r
138
122
121
6,423
131
162
117
May
May
May
May
May
Insured Unemployment, (Percentof Cov. Emp.) May
May
Avg. Weekly Hrs. in Mfg., (Hrs.) . . . .
114
109
115
124
77
3.2
40.9
114
109
115
125
69
3.1
41.5r
114
109
115
130
72
3.1
42.5
107
104
108
104
90
3.6
42.1
May
May
May
187
139
149
179
136
143
179
137
145
160
126
132
Apr.
May
Apr.
May
3,510
174
121
100
3,547r
169r
134
101
3,578
162
185
93
3,369
149
194
105
May
May
May
May
May
Insured Unemployment, (Percentof Cov. Emp.) May
Avg. Weekly Hrs. in Mfg., (Hrs.) . . . .
May
126
133
123
127
68
2.4
41.6
125
132
122
128
62
2.8
41.2r
124
130
122
126
66
3.2
40.7
120
123
119
123
74
3.7
40.4
May
May
May
220
168
170
213
165
164
214
167
163
193
155
152
Apr.
May
Apr.
May
7,491
153
107
129
7,445r
150
111
120
7,434r
150
113
122
6,974
139
114
123
May
May
May
May
May
Insured Unemployment, (Percentof Cov. Emp.) May
Avg. Weekly Hrs. in Mfg., (Hrs.) . . . .
May
122
125
121
144
80
2.6
41.4
122
125
120
136r
80
3.0
41.0
121
125
119
140
77
3.3
41.0
117
120
115
138
89
3.5
40.5
203
159
181
199
157
186
197
157
165
177
144
164
PRODUCTION AND EMPLOYMENT
FINANCE AND BANKING
LO U ISIA N A
INCOME AND SPENDING
Personal Income, (Mil. $, Annual Rate)
Manufacturing P a y r o lls .......................
Farm Cash R e c e ip ts .............................
Department Store Sales*/** . . .
PRODUCTION AND EMPLOYMENT
FINANCE AND BANKING
Bank D e b it s * / * * ...................................
M ISSISSIPPI
ALABAM 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 S a l e s * * .............................
Apr.
May
Apr.
May
6,286
145
126
114
6,239r
148
117
110
6,210
145
129
115
5,801
131
133
117
PRODUCTION AND EMPLOYMENT
IM
onfarm Employment........................................
Manufacturing.............................................
Nonmanufacturing........................................
Construction.............................................
Farm Employment..............................................
Insured Unemployment, (Percentof Cov. Emp.)
Avg. Weekly Hrs. in Mfg., (Hrs.) . . . .
May
May
May
May
May
May
M
ay
115
114
115
113
79
23
41.5
115
114
115
113
76
2.5
42.1
114
113
115
113
73
2.6
41.8
111
108
113
112
83
3.2
40.9
FINANCE AND BANKING
Member Bank L o a n s ........................................
Member Bank D e p o s its..................................
Bank D e b its * * ...................................................
May
May
May
197
157
155
194
155
158
192
155
151
171
142
145
INCOME AND SPENDING
Personal Income, (Mil. $, Annual Rate)
Manufacturing P a y r o lls .......................
Farm Cash R e c e ip ts .............................
Department Store Sales*/** . . .
PRODUCTION AND EMPLOYMENT
Nonfarm Employment.............................
FINANCE AND BANKING
FLORIDA
Bank D e b it s * / * * ..................................
TENNESSEE
1MC0ME 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 S a l e s * * .............................
Apr. 13,832
May
189
164
Apr.
May
173
PRODUCTION AND EMPLOYMENT
Nonfarm Employment........................................
Manufacturing..............................................
Nonmanufacturing........................................
Construction..............................................
Farm Employment..............................................
Insured Unemployment, (Percent of Cov. Emp.)
Avg. Weekly Hrs. in Mfg., (Hrs.) . . . .
May
May
May
May
May
May
M
ay
132
132
131
108
97
2.1
41.8
130
132r
130
109
96
1.9
42.6
130
131
129
109
95
1.9
42.5
126
128
126
102
85
2.6
41.1
FINANCE AND BANKING
Member Bank L o a n s ........................................
Member Bank D e p o s its ..................................
Bank D e b its * * ....................................................
May
May
May
206
158
161
204
155
163
200
156
157
177
144
149
13,565r 13,550
193
188
150
143
171
172
12,897
175
174
171
INCOME AND SPENDING
Personal Income, (Mil. $, Annual Rate)
Manufacturing P a y r o lls .......................
Farm Cash R e c e ip ts .............................
Department Store Sales*/** . . .
PRODUCTION AND EMPLOYMENT
FINANCE AND BANKING
♦For Sixth District area only. Other totals for entire six states.
* * Daily average basis.
Bank Debits*/*
r Revised.
May
May
May
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.
•7 •
D IS T R IC T
B U S IN E S S
C O N D IT IO N S
I h e D is t r ic t’s e c o n o m y c e le b r a t e d a n o th e r m o n th o f in c r e a s e d e c o n o m ic
a c tiv ity . A g g r e g a te n o n a g r ic u ltu r a l e m p lo y m e n t c o n t in u e d to r is e in M ay,
h e lp in g to d riv e t h e in s u r e d u n e m p lo y m e n t r a te e v e n lo w e r . C o n s u m e r
s p e n d in g , a id e d by h ig h e r p e r s o n a l i n c o m e s , r e m a in e d s tr o n g . B a n k in g
o p e r a tio n s a ls o w e r e b risk , a s a fu r th e r e x p a n s io n in lo a n s w a s a c c o m
p a n ie d by a d v a n c e s in to ta l d e p o s i t s a n d liq u id a tio n o f s o m e in v e s t m e n t
s e c u r i t ie s . Im p r o v e d cro p p r o s p e c t s a n d h ig h e r liv e s t o c k p r ic e s h a v e
s t im u la t e d t h e fa rm e c o n o m y . H o w e v e r , c o n s t r u c t io n c o n t r a c t s h a v e fa lle n
s o m e w h a t b e lo w la s t y e a r ’s le v e l s .
A verage W e ek ly Hours*
Worked in Mfg.
Mfg. P a y r o l l s
J C onstruction
[
Contracts
I n d u s t r ia l U s e of E l e c t r i c P o w e
C otton C onsu m p tio n
E m p lo y m e n t a d v a n c e d fu r th e r in M ay. N o n m a n u fa c tu r in g e m p lo y m en t
p ro v id ed th e g rea test stim u lu s, w ith all sta tes e x c e p t A la b a m a sh o w in g in
crea ses. M a n u fa ctu rin g e m p lo y m e n t p resen ted a m o re m ix ed p ictu re: A la
b a m a , M ississip p i, and T e n n e sse e sh o w e d ga in s, w h ile F lo r id a , G e o rg ia , and
L o u isia n a registered sligh t d eclin es. C o n str u c tio n em p lo y m e n t fe ll in fou r o f
th e six sta tes, b u t th e ga in s in G eo rg ia and T e n n e sse e w ere grea t en o u g h to
g iv e th e D istric t a fa ir-sized in crea se. M a n u fa ctu rin g p a y ro lls d ip p ed sligh tly,
reflectin g a sh orter a verage w o rk w eek . T h e in su red u n e m p lo y m e n t rate d e
^
^
clin ed still further to 2 .3 p ercen t. ^
R e ta il s a l e s in M ay a p p a r e n tly r e m a in e d a t a b o u t t h e s a m e h ig h le v e l
a s in April to ju d g e fro m s c a n t y a n d in c o m p le t e in fo r m a tio n . D e b its to
d em a n d d ep o sits c h a n g ed v ery little in M a y ; fu rn itu re sto re sa les reco v ered
so m e o f th e g rou n d lo st in A p ril; and d ep a rtm en t sto re sa les m o v e d up n icely.
A d v a n c e e stim a tes in d ica te th at d ep a rtm en t sto re sa les w ere w e ll m a in ta in ed
in June. P e rso n a l in c o m e a p p a ren tly c o n tin u e d to rise in M a y , w h ile p erson al
sa v in g s seem to h a v e reb o u n d ed from th e A p r il slu m p , w h ic h w a s p erh ap s
o c c a sio n e d b y in c o m e ta x p a y m en ts. T h e in crea se in in sta lm en t cred it o u t
sta n d in g at co m m er c ia l b a n k s w a s c o n sid e r a b ly sm a ller th a n in A p ril. H ere
again , th e A p ril figures m a y h a v e b e e n in flated b y b o rro w in g to m eet ta x
p a y m en ts.
^
^
^
T h e p e r fo r m a n c e o f t h e b a n k in g c o m m u n ity r e m a in e d r e la t iv e ly s t r o n g
d u r in g t h e fir st fo u r w e e k s o f J u n e . L o a n s g a in ed so m e w h a t at b an k s in
lea d in g citie s, as th e in crea se in real e sta te and b u sin e ss lo a n s co u n tered a
m o d era te d e clin e in c o n su m e r lo a n s. In v e stm e n ts fe ll b e c a u se a sharp drop
in U . S. G o v e rn m en t secu ritie s— m o stly T r ea su ry b ills— m o re th a n offset a
siza b le g ain in h o ld in g s o f o th er secu ritie s. T o ta l d e p o sits at th ese ban k s
a d v a n ced m o re th an is u su a l for this p erio d , reflectin g stren g th in b o th d em an d
and tim e d ep o sits.
S h a r p ly h ig h e r liv e s t o c k p r ic e s in J u n e s t im u la t e d t h e r e g io n ’s fa rm
e c o n o m y . B e e f ca ttle and h o g p rices ro se as th e n a tio n ’s farm ers slo w e d the
rapid e x p a n sio n in b e e f ca ttle o u tp u t and red u ced p o rk p r o d u c tio n to lev els
w e ll b e lo w la st y e a r ’s. B ro iler p rices a lso h a v e stren g th en ed d esp ite an in
c r ea se in p ro d u ctio n b e c a u se o f th e h igh er p rice le v e ls fo r red m eat. F arm em
p lo y m en t in M a y w a s m o d e ra te ly h igh er th an it w a s a m o n th ago.
]S
- P E R C E N T OF REQUIRED R E SE R V E S
B o r r o w i n g s f r o m F. R. B a n k s
^
Excess Reserves
....................................... .... i r, ■i
1962
1963
1964
*Se a s. adj. figure; not an index.
iS
C o n s tr u c tio n c o n tr a c t v o lu m e c o n t in u e d to la g b e h in d la s t y e a r ’s le v e l
d e s p i t e a s tr o n g u p s u r g e in A p ril. If th e agg reg a te v o lu m e o f co n stru ctio n
fo r th e first fo u r m o n th s o f 1 9 6 5 w ere p ro jected to a y ea rly to ta l, th e 1 9 6 5
v o lu m e o f co n str u c tio n w o u ld b e so m e w h a t lo w er th a n la st y e a r’s. D a ta
th ro u g h A p r il 1 9 6 5 a lso in d ica te th at th e v o lu m e o f n o n r e sid e n tia l b u ild in g
co n tra cts fo r large m etro p o lita n areas w a s lo w er th an in earlier p eriod s.
N o t e : D a t a o n w h ic h 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 to
s e a s o n a l in flu e n c e s.
e lim in a t e
