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M o n th ly

FEDERAL RESERVE
V o lu m e X X V I I I

R e v ie w

^

BANK OF ATLANTA

A t la n t a , G e o r g ia , J u ly

31, 1943

N um ber 7

Food Subsidies and Inflation
h e n P ric e A d m in is tr a to r P re n tis s B ro w n a n n o u n c e d o n

W

th a t th e

p u m p in g

o u t o f ex cess p u rc h a s in g

pow er be

p re ­

A p r i l 1 t h a t t h e O ffic e o f P r i c e A d m i n i s t r a t i o n w a s
a b o u t to e x te n d th e s c o p e o f p r ic e c o n tr o l, h e r a is e d is s u e s

v e n te d , if p o s s ib le ; o r , i f t h a t c a n n o t b e d o n e , th a t s u c h e x ­
cess p u r c h a s in g p o w e r b e s ip h o n e d o ff b y m e a n s o f d ra s tic

o f a p e c u lia rly th o rn y c h a ra c te r. T h e a n n o u n c e d p ro c e d u re

ta x

in c lu d e d th e e s ta b lis h m e n t o f d o lla rs -a n d -c e n ts c e ilin g p ric e s
a t t h e r e t a i l l e v e l , t h e r o l l i n g b a c k to t h e l e v e l o f S e p t e m b e r

m a in in g in th e h a n d s o f c o n s u m e rs is c o m m e n s u ra te w ith th e

1942

o f c e rta in

p ric e s th a t h a d

got out

of hand, and

th e

s u p p o r t o f th e r o llb a c k b y th e u se o f su b s id ie s p a y a b le f ro m
fu n d s o f th e R e c o n s tru c tio n F in a n c e C o rp o ra tio n .
F e w s t e p s i n i t s c a r e e r h a v e c a l l e d d o w n u p o n t h e O ffic e
o f P ric e A d m in is tr a tio n th e c o n c e n tra te d h o s tility o f so m a n y
g r o u p s a s h a s th e r o llb a c k -s u b s id y p r o g r a m . O p p o s itio n c a m e
fro m

m any

q u a rte rs :

fro m

C o n g ress, fro m

p ro c e sso rs

and

d is tr ib u to r s in v a r io u s b r a n c h e s o f th e fo o d in d u s tr y , f ro m
f a rm o r g a n iz a tio n s , a n d fro m so m e q u a r te rs w ith in th e A d ­
m in is tr a tio n its e lf o n th e g r o u n d s th a t s u c h a u se o f s u b s id ie s

and

sa v in g s

p ro g ra m s

u n til

th e

p u rc h a s in g

pow er

re­

v o lu m e o f g o o d s a n d se rv ic e s a v a ila b le f o r p u rc h a s e .
A lth o u g h

th e s e

tw o

p ro p o s itio n s

m ay

be

a c c e p te d

in

g e n e r a l, th e q u e s tio n m a y s till b e r a is e d a s to w h e th e r th e y
a r e n o t c o u n s e ls o f p e r fe c tio n , e s ta b lis h in g g o a ls th a t c a n b e
a c h ie v e d o n ly im p e r fe c tly
c o n c re te s itu a tio n .
I t w o u ld se em

to

and

to

a

lim ite d

b e q u ite im p o s s ib le in

d eg ree

in

any

a n y so c ie ty

re ­

ly in g u p o n e c o n o m ic in c e n tiv e s f o r its m o tiv a tio n to a v o id
th e p u m p in g o u t o f a n e v e r-s w e llin g s tr e a m o f p u r c h a s in g
p o w e r u n d e r e x is tin g

c irc u m s ta n c e s . A s lo n g a s m e n

m u st

b e p a id f o r th e ir la b o r , th e e m p lo y m e n t o f la r g e r n u m b e rs

w a s a d a n g e r o u s a n d d e lu s iv e e x p e d ie n t. L a b o r o r g a n iz a tio n s

o f p e o p le f o r lo n g e r h o u r s , to s a y n o th in g o f p a y m e n t f o r

s u p p o r te d th e p r o g ra m

o v e rtim e w o rk , m e a n s a n in e v ita b le in c r e a s e in th e p u r c h a s ­

b u t in d ic a te d th e b e lie f th a t it w as

h o p e le s s ly

in a d e q u a te

liv in g .
I n s p ite

o f o p p o s i t i o n , h o w e v e r , t h e O ffic e o f P r i c e A d ­

m in is tra tio n

to

check

th e

ra p id ly

ris in g

cost

of

i n g p o w e r f l o w in g i n t o t h e h a n d s o f t h e p u b l i c .
I f , a t th e sa m e tim e , a n d in s o f a r a s th e r e is n o s la c k in

has

gone

ahead

w ith

its a n n o u n c e d

p ro g ra m ,

th o u g h w ith so m e d e la y s a n d m o d ific a tio n s . I t h a s d o n e so ,

t h e e c o n o m i c s y s t e m , t h e c h a r a c t e r o f t h e G o v e r n m e n t ’s w a r
e x p e n d itu re s b r in g s a b o u t a n in c re a s in g d iv e rs io n o f p r im a ry

to o , w ith th e s u p p o r t o f th e P re s id e n t. O n th e s id e o f th e

r e s o u r c e s f r o m c iv ilia n to w a r p r o d u c tio n , th e v o lu m e o f
c iv ilia n g o o d s m u s t n e c e s s a rily d e c lin e . T o c h e c k th e p u m p ­

P r e s i d e n t a n d t h e O ffic e o f P r i c e A d m i n i s t r a t i o n , t h e s u b s i d y

in g

o u t o f p u rc h a s in g

p o w e r u n d e r th e s e c ir c u m s ta n c e s , it

p r o g r a m , w h i c h is n o w a s s u r e d o f a t r i a l b y t h e p a s s a g e o f

w o u ld b e n e c e s s a ry to

d e c re a s e r a te s o f p a y b y e n o u g h to

th e b ill e x te n d in g th e life o f th e C o m m o d ity C r e d it C o r p o r a ­

o ffse t th e e ffe c t o f in c r e a s e s in n u m b e r s o f w o r k e rs a n d th e

tio n , is d e f e n d e d a s a w e a p o n a g a in s t in f la tio n . O n th e s id e

le n g th e n in g o f th e w o rk w eek . W h ile th is a c tio n m ig h t c o n ­
c e iv a b ly b e ta k e n in a s e v e re ly r e g im e n te d s ta te , it is u t t e r ly
in c o m p a tib le w ith th e p r in c ip le s u p o n w h ic h a n e c o n o m ic a lly

of

its

c r itic s ,

fla tio n a ry ,

th e

p ro g ra m

sin c e th e

p o u rin g

is

a tta c k e d
out

of

as

b e in g

its e lf

G o v e rn m e n t fu n d s

in ­
in

th e f o r m o f s u b s id ie s s w e lls th e s tr e a m o f p u r c h a s in g p o w e r
flo w in g in to th e p o c k e ts o f th e p u b l i c a n d th u s p u ts f u r t h e r
p r e s s u re o n p ric e s a n d n e c e s s ita te s s till la r g e r s u b s id ie s . A
p r i c e - s u b s i d y s p i r a l t h u s c o m e s to b e s u b s t i t u t e d f o r t h e
p ric e -w a g e s p ir a l, s a y th e c r itic s o f th e p r o g r a m .
O p p o n e n ts o f th e p r o g r a m r e a liz e d t h a t th e b e s t w a y to
s t o p t h e p r o p o s e d s u b s i d i e s w o u l d b e to c u t o f f t h e f u n d s w i t h
w h ic h th e y w o u ld b e p a id . V a r io u s p la n s w e re u n d e r c o n ­
s id e r a tio n , b u t a s m a tte r s tu r n e d o u t, it w a s th e m u c h d e b a te d C o m m o d ity C re d it C o r p o r a tio n

f re e so c ie ty re s ts .
A s f o r c o n tr o llin g in f la tio n b y s ip h o n in g o ff e x c e s s p u r ­
c h a s in g p o w e r b y ta x a tio n a n d sa v in g , th e r e is s till m u c h
t h a t c a n a n d m u s t b e d o n e . T h e U n i t e d S t a t e s is f a r f r o m
a c h ie v in g th e g o a l th a t C a n a d a , f o r e x a m p le , se t f o r its e lf
in 1 9 4 2 w h e n s e v e n -e ig h th s o f its w a r e x p e n d itu r e s , i n c l u d ­
in g e x p e n d itu r e s f o r G r e a t B r ita in , w a s to c o m e f r o m ta x e s .
D e s p ite th e su c c e ss o f th e S e c o n d W a r L o a n D riv e la s t
A p r il in w h ic h th e 1 3 - b illio n - d o lla r g o a l w a s s u r p a s s e d b y
m o re

th a n

5

b illio n

d o lla rs ,

no

re a lly

b ill th a t b e c a m e th e v e h ic le f o r th e a tta c k
o n th e s u b s id y p r o g r a m . T h e q u e s tio n o f

s e rio u s in r o a d s w e re m a d e o n c o n s u m e r
p u r c h a s in g p o w e r. O n ly 7 p e r c e n t o f th e

c h ie f c o n c e rn is w h e th e r o r n o t th e u se o f
s u b s i d i e s i s r e a l l y a n e c e s s a r y e l e m e n t in

1 8 b i l l i o n d o l l a r s , a b o u t 1 ,2 5 0 m i l l i o n d o l ­

a n y c o m p r e h e n s iv e p la n to c h e c k th e in f la ­
tio n a r y te n d e n c ie s n o w a t w o rk in th e
n a tio n a l eco n o m y .

16

la r s , c a m e f r o m th e s a le o f E b o n d s , a n d

C ritic s o f th e s u b s id y p r o g r a m p o in t o u t
q u ite g e n e ra lly , a n d q u ite r ig h tly , th a t
t h e r e a r e b u t tw o w a y s i n w h i c h i n f la ti o n
c a n r e a l l y b e p r e v e n te d . T h e y u r g e , firs t,




p e r c e n t, s o m e 2 ,9 0 0

m illio n

d o lla rs ,

f r o m a ll s a le s to in d iv id u a ls . S in c e b a n k
p a r tic ip a tio n w a s lim ite d to 5 b i l l i o n d o l­
la r s , a la r g e p a r t o f th e p ro c e e d s o f th e
d riv e m u s t n e c e s s a rily h a v e c o m e fro m c o r ­
Main Oiiice
Federal Reserve Bank oi Atlanta

p o r a tio n s , in s u r a n c e c o m p a n ie s , tr u s t fu n d s ,
a n d s i m i l a r n o n b a n k in g s o u r c e s . I t is tr u e

M o n t h ly

50

o f th e F ederal R eserve B a n k o f A tla n ta fo r J u ly 1943

R e v ie w

th a t s e c u rity p u rc h a s e s b y su c h in s titu tio n s a re n o t im m e d i­

re c t c o n tr o l o f p ric e s i f th e p ric e -w a g e s p ir a l is to b e p r e ­

a te ly a s in f la tio n a r y a s a r e p u r c h a s e s b y b a n k s , sin c e th e y
in v o lv e f o r th e m o s t p a r t m e r e ly a s h if t to G o v e rn m e n t

v e n te d f r o m ta k in g its u n r u ly c o u rs e .

is s u e s o f f u n d s th a t w o u ld o th e r w is e b e in v e s te d e ls e w h e re .
N e v e r th e le s s , s u c h p u r c h a s e s d o n o t s e rv e to c lo s e th e in f la ­

— th e p o in t, in o th e r w o r d s , w h e r e th e c o s t o f liv in g is m a d e

T h e p o in t o f c o n ta c t b e tw e e n g o o d s a n d p u r c h a s in g p o w e r
— is a t th e r e t a i l le v e l. D ir e c t c o n tr o l o f p r ic e s , th e r e f o r e ,

tio n g a p , f o r th e y r e p re s e n t n o r e c a p tu r e b y th e G o v e rn m e n t
o f p u r c h a s in g p o w e r c o m p e tin g f o r c iv ilia n g o o d s a n d s e rv ­

m a y ta k e th e fo rm

ic e s . T h a t th e r e is m u c h to b e d o n e b y w a y o f s u c h r e c a p t u r e

c e r ta in sp e c ifie d c o m m o d itie s ;

is o b v io u s , a n d th e d e v ic e s a v a ila b le a r e ta x a tio n a n d a
g r e a tly e x p a n d e d in v e s tm e n t in G o v e r n m e n t s e c u ritie s b y
in d iv id u a ls .

b y s to re o r c o m m u n ity ;

W h ile th e

re c a p tu re

o f a ll

ex cess p u rc h a s in g

pow er by

th o s e tw o d e v ic e s m a y b e th e o r e tic a lly p o s s ib le , i t is n e v e r ­

of

se v e ra l

w ays:

m in is tra tio n . In

w h ic h

ta x a tio n

and

o th e r

m o re o r le s s f o r c ib le c o n tr o ls o v e r in c o m e b e c o m e im p o s s ib le .
A s lo n g , th e r e f o r e , a s th e r e is a n y s p r e a d w h a te v e r b e tw e e n

o v e r th e

p ric e s

of

g e n e r a l m a x im u m p ric e s ,

(3 )

f ix e d m a r k - u p s o v e r c o s t, u n i ­

( 4 ) fix e d d o lla r s - a n d - c e n ts c e ilin g p r ic e s s u c h a s th o s e c o n ­
t e m p l a t e d i n t h e p r e s e n t p r o g r a m o f t h e O f f ic e o f P r i c e A d ­
m u s t b e s ta b iliz e d .

beyond

c o n tro l

(2 )

f o r m o r v a r y in g w ith th e s iz e a n d k in d o f e s t a b l is h m e n t ; o r

a re

lim its

s e le c tiv e

u n if o rm f o r a ll d e a le r s o r a ll c o m m u n itie s , o r in d iv id u a liz e d

th e le s s d o u b tf u l th a t it w o u ld b e p o litic a lly fe a s ib le . T h e re
p s y c h o lo g ic a l

o f c o n tro l o v e r re ta il p ric e s in a n y o n e
(1 )

o n e w a y o r a n o th e r , th e

re ta il

p ric e

le v e l

I f , h o w e v e r, r e t a i l p r ic e s a r e s ta b iliz e d a n d c o s ts c o n tin u e

th e g ro w th o f p u r c h a s in g p o w e r a n d th e a m o u n t r e c a p tu r e d

to r is e , a d e a le r is s u b je c t to w h a t h a s b e c o m e k n o w n a s a
“ sq u e e z e ” th a t m a y w ip e o u t h is p r o f it m a r g in a n d e v e n tu a lly

b y th e G o v e r n m e n t, a n d a s lo n g a s th e r e is n o in c r e a s e in

f o r c e h im o u t o f b u s in e s s . E ff o rts m a y b e m a d e , o f c o u rs e , to

th e v o lu m e o f c iv ilia n g o o d s a n d s e rv ic e s , th e r e w ill e ith e r

r o ll b a c k th is sq u e e z e b y c o m p e llin g d is tr ib u to rs o r p ro c e s ­

b e th e th r e a t o f p o te n tia l in fla tio n in h e r e n t in in c r e a s e d c a s h
c re a s e d p u r c h a s in g p o w e r is a llo w e d to p r o d u c e its n o r m a l

s o r s f a r t h e r b a c k to c u t th e ir p r ic e s in o r d e r to m a in ta in
th e r e ta il c e ilin g . I f th is p o lic y w e re p u r s u e d to its c o n ­
c lu s io n , th e s q u e e z e w o u ld u ltim a te ly b e r o lle d b a c k to th e

e ffe c ts o n p r ic e s .

s u p p lie rs o f ra w

h o ld in g s , o r th e r e w ill b e th e a c tu a lity o f in f la tio n i f th e i n ­

I t is in p e r m i tt i n g in c r e a s e d p u r c h a s i n g p o w e r to b id u p

m a te ria ls a n d

s tr u c tu r e w o u ld th e n

la b o r, a n d

th e w h o le p r ic e

p re s u m a b ly h a v e b een fro z e n . In d e e d ,

p ric e s , h o w e v e r, th a t th e in f la tio n a r y s p ir a l b e g in s . A n y i n ­

o n e o f th e m a in c r itic is m s

c re a s e a t a ll in s p e n d in g p o w e r, o r in d e e d th e m a in te n a n c e
o f a c o n s ta n t le v e l o f p u r c h a s in g p o w e r, a c c o m p a n ie d b y a

S ta te s h a s b e e n th a t th e p r ic e s o f f a r m c o m m o d itie s a n d
w a g e s h a v e b e e n e ith e r u n c o n tr o lle d o r v e ry in a d e q u a te ly

d w in d lin g s u p p ly o f g o o d s , w ill te n d to c a u s e p r ic e s to ris e .

c o n tr o lle d . T h is s itu a tio n , it h a s b e e n s a id , is th e b a s ic r e a s o n

A ris e in p ric e s , in tu r n , b y in c r e a s in g th e c o s t o f liv in g ,
p re c ip ita te s

dem ands

fo r

h ig h e r

w ages.

H ig h e r

w ages,

if

g r a n te d , in c r e a s e c o s ts w h ic h a g a in in c r e a s e p r ic e s , a n d th e
n o t- s o - m e rr y d a n c e is o n . I t is o b v io u s o n p u r e ly th e o r e tic a l
g r o u n d s a s w e ll a s o n g r o u n d s o f e x p e r ie n c e th a t a f u n c tio n a l
c o n tr o l o f th e p r ic e le v e l m u s t b e s u p p le m e n te d b y th e d i­

o f p ric e

c o n tro l

in

th e

U n ite d

w h y it h a s b e e n d iffic u lt, i f n o t im p o s s ib le , to c o n tr o l p r ic e s
o n th e r e ta il le v e l; in
a d e q u a te ly c o n tr o lle d .

o th e r

w o rd s,

c o s ts

have

not

been

T h e r ig id ity , h o w e v e r, th a t w o u ld p r e s u m a b ly c h a ra c te riz e
th e p r ic e -c o s t s tr u c tu r e i f a ll p r ic e s , b o th o f c o m m o d itie s a n d
o f th e f a c to rs o f p r o d u c tio n , w e re fro z e n , w o u ld b e m o re o f
a n illu s io n th a n a r e a lity . T h e p r ic e s y s te m is n o t s o m e th in g
th a t c a n b e re d u c e d to s u c h a s ta tic c o n d itio n . T h e re a s o n
f o r th is lie s in th e f a c t t h a t c o s ts c a n n o t b e c o n tr o lle d
c o n tr o llin g th e r a te s a t w h ic h th e c o s t f a c to r s a r e p a id .

by

C o s ts a r e a f u n c t i o n o f t w o v a r i a b l e s : ( 1 ) r a t e s o f p a y a n d
(2 ) o u tp u t. F o r in d u s trie s w o rk in g a t o r b e y o n d th e p o in t o f
m a x im u m e ffic ie n c y , a d d i t i o n a l o u t p u t c a n b e s e c u r e d o n ly
a t h i g h e r u n i t c o s ts e v e n t h o u g h p r ic e s a n d w a g e s b e fix e d .
A f a r m e r , f o r e x a m p le , m u s t u se m o r e f e r tiliz e r f o r e a c h
u n it o f o u tp u t w h e n c u ltiv a tio n is p u s h e d to p o o r e r s o ils ,
a n d h e n c e h is u n it c o s t in c r e a s e s , e v e n th o u g h th e p r ic e o f
f e r t i l i z e r is f ro z e n . I n m a n u f a c tu r in g , t h e u s e o f in c r e a s in g
n u m b e r s o f le s s s k ille d w o r k e r s ; th e in c r e a s e in f a tig u e o f
th e m e n w h e n w o rk is s p e e d e d u p b e y o n d a c e r ta in p o in t;
th e in c re a s e in m e c h a n ic a l b re a k d o w n s , s p o ila g e a n d w a s te ;
and

th e

consequent

in c re a s e d

cost

of

in s p e c tio n

have

th e

e ffe c t o f in c r e a s in g u n it c o s ts a s o u tp u t e x p a n d s , e v e n th o u g h
w a g e ra te s a n d th e p ric e s o f ra w m a te ria ls a n d s u p p lie s b e
fro z e n .
T h ese

ris in g

real

c o s ts e x e r t a

p re ssu re

th a t

w ill

th a w

Since December 1942, new offerings of 3-month Treasury bills

o u t th e m o s t r ig id ly f ro z e n p r ic e s tr u c tu r e , f o r th e r e is n o

have exceeded maturities by about 200 million dollars. W ith

e s c a p in g th e m . T h e y m u s t b e b o r n e b y so m e o n e . I f th e y a r e

the issue of July 21, 1943, however, the margin was only 100

p u s h e d a ll th e w a y u p to th e r e t a i l le v e l, th e c e ilin g w ill b e

million dollars, and if the present level of offerings is main­

u ltim a te ly a n d ir r e p a r a b ly b ro k e n . T h e y c a n n o t b e a b s o rb e d

tained, maturities will equal offerings by mid-September.




a t th e s ta g e o f p r im a ry

p r o d u c tio n , f o r th a t is w h e re th e y

o r ig in a te a s a n e ffe c t o f e x p a n d e d p h y s ic a l o u tp u t. I f th e s e

M o n t h ly

R e v ie w

o f th e F ederal R eserve B a n k o f A tla n ta fo r J u ly 1943
S ix th D is tr ic t In d e x e s

in c r e a s in g c o s ts a r e p u s h e d b u t p a r t w a y u p th e l a d d e r , th e n
p ro c e sso rs a n d

d is trib u to rs m a y b e fo rc e d

o u t o f b u s in e s s

DEPARTMENT STORE SALES*
(1935-39 Average=100)
Unadjusted
Adjusted**
June
May
June
May
June
June
1943
1943
1943
1942
1942
1943

a s th e ir m a rg in s d is a p p e a r.
H e re s e v e ra l e q u a lly im p o s s ib le a lte r n a tiv e s m u s t b e f a c e d :
( 1 ) th e in c r e a s in g c o s ts in c id e n t to e x p a n d e d o u tp u t m u s t b e
a llo w e d to d o th e ir in f la tio n a r y w o r k o n p r ic e s ;

(2 )

so m e

v ita l lin k in th e c h a in o f p ro c e s s in g a n d d is tr ib u tio n m u s t b e
a llo w e d to b r e a k ; o r ( 3 ) th e in c r e a s in g o u tp u t u p o n w h ic h
su c c e ss in th e w a r so v ita lly d e p e n d s m u s t b e g iv e n u p .
B u t th e r e is r e a l l y a f o u r t h a l t e r n a tiv e . T h e s e c o s ts m a y b e
re c o g n iz e d a s s o c ia lly n e c e s s a ry to th e w in n in g o f t h e w a r
a n d b e a c c e p te d a s a s o c ia l o b lig a tio n . I n s te a d , th e r e f o r e , o f
e x p e c tin g a n y

p a rtic u la r g ro u p

to

a b so rb

th e sq u e e z e , th e

G o v e rn m e n t, r e a liz in g th e v ita l im p o rta n c e o f a s ta b le p r ic e
le v e l, m a y e x e r c is e its ta x in g a n d b o r r o w in g p o w e r to p r o ­

51

DISTRICT
A tlanta...........
Baton Rouge.
B irm ingham ...
C hattanooga..
Jackson...........
Jacksonville...
Knoxville........
M acon.............
Miami.............
M ontgom ery..
Nashville........
New O rleans.
Tam pa.............

196
162
191
172
190
216
249
173
247
176
213
153
177
277

205
176
224
183
190
229
285
194
259
194
228
151
183
269

143
116
158
134
146
164
176
136
162
133
176
119
137
174

178
153
193
163
185
213
252
175
233
132
197
136
165
235

124
100
136
120
143
153
156
123
146
91
152
107
124
152

193
165
205
169
196
224
262
181
258
145
219
164
174
262

v id e s u b s id y f u n d s . T h e s e f u n d s m a y b e u s e d to s u b s id iz e

DEPARTMENT STORE STOCKS
(1935-39 Average=100)
Unadjusted
Adjusted**
June
May
May
June
June
June
1942
1943
1942
1943
1943
1943

th o s e p r o d u c e r s o r d is tr ib u to r s w h o s e s e rv ic e s a r e v ita l in
m a i n t a i n i n g t h e f lo w o f g o o d s u p o n w h i c h t h e w a r e c o n o m y
a s w e ll a s th e c iv ilia n e c o n o m y re s ts .
T h e G o v e rn m e n t h a s n o w r e a c h e d th e p o in t w h e re it h a s
e m b a rk e d u p o n a p r o g ra m o f s u b s id y p a y m e n ts in its e ffo rt
to s e c u re e c o n o m ic s ta b iliz a tio n , b u t it is p r e c is e ly th is p o lic y
o f s u b s id iz a tio n t h a t is b e in g so v io le n tly c r itic iz e d . I t is e a s y
to

p o in t o u t d a n g e rs in

th e

u se

o f su b s id ie s , su c h

a s th e

d a n g e r o f b a d ju d g m e n t a n d m is m a n a g e m e n t a n d th e d a n g e r
o f p o litic a l

p a tro n a g e a n d

c o rru p tio n . S u c h

DISTRICT
A tlanta...........
Birmingham...
M ontgom ery..
N ashville.......
New O rleans.

COTTON CONSUMPTION*
(1935-39 Average = 100)
June
May
June
1943
1943
1942

w h a ts o e v e r.
A m o re c o g e n t a r g u m e n t a g a in s t s u b s id ie s h a s a lr e a d y b e e n
m e n tio n e d ; n a m e ly , th a t th e y m a y b e c o m e u n c o n tr o lla b le a d ­
d itio n s to th e v o lu m e o f s p e n d in g p o w e r in th e h a n d s o f th e
p u b lic a n d th u s p r o v e to b e in f la tio n a r y r a th e r th a n th e o p ­
p o s ite . W h a t th is v o lu m e m a y a m o u n t to in th e e n d is u n c e r ­
P ric e A d m in is tr a to r sp o k e in te rm s o f 4 5 0

to 5 0 0 m illio n d o lla r s . L a te r , th e P r e s id e n t s p o k e in te r m s o f
2 to 3 b illio n d o lla rs .
T h e r e is r e a s o n a b le n e s s in th is a r g u m e n t, b u t i t o v e r lo o k s
tw o

s ig n ific a n t

fa c to rs .

The

am ount

of

p u rc h a s in g

pow er

w o u ld b e in c r e a s e d b y a r is e in p r ic e s a t le a s t a s m u c h a n d
p e r h a p s m u c h m o re th a n u n d e r s u b s id y a r ra n g e m e n ts , A ls o ,
in f la tio n d o e s n o t a r is e e n tir e ly f r o m a m e c h a n ic a l o r m a th e ­
m a tic a l r e la tio n s h ip b e tw e e n g o o d s a n d p u r c h a s in g p o w e r ;
it m a y a r is e a ls o f r o m p s y c h o lo g ic a l f a c to r s . T h e c o n fid e n c e
th a t th e b u y in g p u b lic h a s in th e p u r c h a s in g p o w e r o f its
m o n e y , i . e ., i n e f f e c t , i n t h e a b i l i t y o f t h e G o v e r n m e n t t o
c o n tr o l p r ic e s , is a p o te n t c h e c k a g a in s t in f la tio n . I f th e r e
s h o u ld b e a n y b r e a k in th is c o n fid e n c e , th e n a t u r a l r e a c tio n
w o u ld b e f o r p e o p le to c o n v e rt d o lla r s in to g o o d s a t a m o re
r a p id r a te th a n b e f o re . A n in c r e a s e in th e r a p id ity w ith w h ic h
m o n e y c ir c u la te s , h o w e v e r, te n d s to h a v e th e s a m e e ffe c t o n
th e p r ic e le v e l a s w o u ld a n in c r e a s e in th e v o lu m e o f m o n e y
its e lf . T h is in c r e a s e in

th e v e lo c ity w ith w h ic h m o n e y a n d

c r e d it c i r c u la te is a m o s t u n m a n a g e a b le f a c t o r . I n s o f a r a s
th e u s e o f s u b s id ie s , o n w h a te v e r s c a le m a y se e m n e c e s s a ry ,
c o n v i n c e s t h e p u b l i c o f t h e G o v e r n m e n t ’s d e t e r m i n a t i o n t o
m a in ta in p r ic e s ta b ility , it s e rv e s to c h e c k th e v e lo c ity o f
c ir c u la tio n a n d th u s to m in im iz e th e in f la tio n a r y te n s io n .
W h ile th e c a s e a g a in s t s u b s id ie s m a y c a ll a tte n tio n to th e
d a n g e r in h e r e n t in th e ir u se , th e c a se f o r th e m m a y b e s u m ­
m a riz e d b y s a y in g th a t th e y a re a n e c e s s a ry a n d in e v ita b le
w e a p o n a g a in s t in f la tio n i f e ffo rts a t s ta b iliz a tio n a r e to b e
a n y for
t h i nFRASER
g m o re th a n p re te n s e .
Digitized


201
250
186
167
223
228

162
193
137
205
237
120

189
228
174
152
208
214

153
177
133
185
221
115

d a n g e rs, h o w ­

e v e r, a r e i n h e r e n t m o r e o r le s s in th e a d o p tio n o f a n y p o lic y

ta in . A t firs t th e

152
174
130
182
218
111

172
211
146
224
254
128

TOTAL...............
Alabam a.........
G eorgia.........
T ennessee___

167
173
164
158

172
174
173
150

CONSTRUCTION CONTRACTS
(1935-39 Average = 100) 1**
June May June
1943 1943 1942
SIX STATES.
Residential
O thers. . . .
A labam a...
F lorida___
G eorgia...
Louisiana..
M ississippi
Tennessee.

198
172
211
138
215
66
143
33
388

192
115
230
133
373
110
139
116
90

855
450
1051
1298
972
664
890
1638
1004

COST OF LIVING
(1935-39 Average = 100)
June May June
1943 1943 1942
ALL ITEMS.
F ood.........
C lo th in g ..
Rent.........
Fuel, elec­
tricity,
and ic e ...
Home fur­
nishings. .
Miscel­
laneous . ..

128
147
129
114

129r
146r
130r
114

118
125
126
114

107

106r

104

123

123

118

117

121
112

ANNUAL RATE OF TURNOVER OF
DEMAND DEPOSITS
June May June
1943 1943 1942
U n ad ju sted .. 17.9
18.5
22.4
A d ju ste d ....
18.5
19.9
23.1
Index (193539 = 100).
71.4
77.0
89.4
‘ Daily average basis.
^A djusted for seasonal variation.

180
186
180
160

COAL PRODUCTION*
(1935*39 Average — 100)
June
May
June
1943
1943
1942
97
101

156
166

171
177

89

133

158

GASOLINE TAX COLLECTIONS
(1939 Monthly Average = 100)
June May June
1943 1943 1942
SIX STATES.
A labam a...
F lorida. . . .
G eorgia...
L ouisiana..
Mississippi
Tennessee.

95
103
85
89
103
92
102

88
103
81
87
91
78
91

117
126
93
99
110
130
136

ELECTRIC POWER PRODUCTION*
(1935-39 Average = 100)
May April May
1943 1943 1942
SIX STATES
Hydro­
g enerated
Fuel­
generated

235

236

253

277

128

210

182

265

187

MANUFACTURING EMPLOYMENT*
(1939 Monthly Average = 100)
June May June
1943 1943 1942
SIX STATES.
A labam a..
F lorida. . . .
G eorgia. ..
L ouisiana..
Mississippi
T ennessee.

154
192
168
140
150
135
140

154
192
166r
140
144r
142
139

140
183

122
126
133
133
131

‘ New base. Back figures on request.
=Revised.

M o n t h ly

52

o f th e F ederal R eserve B a n k o f A tla n ta fo r J u ly 1943

R e v ie w

District Business Expansion Slackens
A

f t e r a r e c o r d e x p a n s io n d u r in g th e la s t h a lf o f 1 9 4 2 , th e

s tr in g e n c y e x is ts o r w h e r e a g e n e r a l l a b o r s h o r ta g e m a y b e

S ix th D is tr ic t e c o n o m y d u r in g th e firs t h a lf o f 1 9 4 3 h a s

a n tic ip a te d a f te r s ix m o n th s .
T h e in c r e a s in g la b o r s h o r ta g e in A la b a m a le d th e G o v e rn o r

s lo w e d its p a c e . D r a w in g u p o n a r e s e r v o ir o f m a n p o w e r a n d
r a w m a te r ia ls , th e S ix th D is tr ic t in 1 9 4 2 w a s a b le to m a in ­

o f t h a t s ta te to a p p o i n t a S ta te L a b o r S u p p ly C o m m itte e to

ta in a r e c o r d c o n s tru c tio n p r o g r a m , to c r e a te a n e w in d u s tr y

in v e s tig a te th e p r o b le m . I n

in s h ip b u ild in g , a n d to u n d e r ta k e a n e x p a n s io n in p e a c e tim e

c o m m i t t e e s t a t e d t h a t A l a b a m a n e e d s m o r e t h a n 1 0 0 ,0 0 0
a d d itio n a l w o rk e rs a n d re c o m m e n d e d th e u n d e rta k in g o f a

in d u s tr ie s c o n v e rte d to
r e p e a te d in

w a r. T h a t p e rfo rm a n c e w ill n o t b e

1 9 4 3 o n th e sa m e s c a le o f e x p a n s io n .

its r e p o r t to

th e G o v e rn o r, th e

m a te r ia ls is n o

s ta te - w id e c a m p a ig n to u r g e a d d i t i o n a l p e r s o n s to a p p l y f o r
w o r k . I n J u n e t h e r e g i o n a l o f fic e o f t h e W a r M a n p o w e r

lo n g e r a v a ila b le f o r o v e r -a ll e x p a n s io n . N o t a l l n e w i n d u s tr ia l

C o m m is s io n a d d e d G a d s d e n a n d A n n is to n , A la b a m a , to th e

f a c ilitie s h a v e b e e n c o m p le te d a n d to b r in g th e m in to f u ll
p r o d u c tio n u p o n c o m p le tio n w ill c a ll f o r s k illf u l c o n tr o l in

f ie d t h e B i r m i n g h a m

v ie w

l a b o r a n d o r d e re d im m e d ia te s u s p e n s io n o f r e c r u itm e n t o f
th a t c la s s o f la b o r f r o m J u l y 1 5 to A u g u s t 1 5 .

The

re s e rv o ir

o f un u sed

o f in c re a s in g

m anpow er and

m a n p o w e r s h o rta g e s . E q u a l

s k ill

is r e ­

q u i r e d t o s h i f t a c t i v i t y f r o m t h o s e p h a s e s o f t h e e c o n o m y in

lis t o f la b o r s h o rta g e a re a s . I n J u ly th e sa m e a u th o r ity c la s s i­
d is tric t a s a c ritic a l a re a

in

com m on

w h ic h th e w a r p r o g r a m h a s b e e n c o m p le te d to th o s e in w h ic h

T e x tile

fu rth e r

w ar

S i x t h D i s t r i c t ’s m o s t i m p o r t a n t m a n u f a c t u r i n g i n d u s t r y , h a s

w e a p o n s f lo w in g in th e c o m in g m o n th s is a ta s k s e c o n d in

s u ffe re d a d e c lin e in o u tp u t in re p e n t m o n th s . T h is in d u s tr y ,

d iffic u lty

o n e o f th e f irs t to e x p a n d

e x p a n s io n
o n ly

is

to

needed.

To

c o n v e rs io n

keep

fro m

th e

s tre a m

p e a c e tim e

of

to

w a rtim e

p ro d u c tio n .

D e c lin e s :

The

te x tile

in d u s try ,

th e

p r o d u c tio n in th e S ix th D is tric t,

a ls o w a s o n e o f th e f irs t to a p p r o a c h f u l l p r o d u c tio n a n d to

M a n y e v id e n c e s in d ic a te th e s lo w in g p a c e , th o u g h c e r ta in
s e c to rs

P r o d u c tio n

of

th e

econom y

s till

m a in ta in

a

h ig h

ra te

of

ex­

e x p e r ie n c e d iffic u ltie s in

m a in ta in in g

peak

p ro d u c tio n . T h e

f irs t s ix m o n th s o f 1 9 4 3 f o u n d th e m ills o f A la b a m a , G e o r g ia ,

p a n s io n . A c c u s to m e d to th e g a in s o f 1 9 4 2 a n d a w a r e o f th e

and

h ig h

s u m p tio n 4 p e r c e n t b e lo w th a t o f th e la s t h a l f o f 1 9 4 2 , a n d

ra te

of

consum er

s p e n d in g

in

1943, m any

n o tic e d th e s lo w in g d o w n o f p r o d u c tio n
e m p lo y m e n t N e a r s P e a k : O ne

have

not

1 .5 p e r c e n t b e l o w t h a t o f t h e c o r r e s p o n d i n g p e r i o d i n 1 9 4 2 .

e x p a n s io n .

e v id e n c e

of

T e n n e s s e e c o n s u m i n g 1 ,9 1 1 ,8 2 3 b a l e s o f c o t t o n , a c o n ­

th e

s lo w in g

p a c e is th e s lig h t d e c lin e in m a n u f a c tu r in g e m p lo y m e n t— a
d e c r e a s e o f 1 1 ,0 0 0 w o r k e r s i n th e S ix th D i s tr ic t S ta te s f r o m
D e c e m b e r 1 9 4 2 th r o u g h J u n e o f th is y e a r . I n th e la s t s ix
m o n t h s o f 1 9 4 2 , t h e n u m b e r o f e m p l o y e d i n c r e a s e d 9 3 ,0 0 0 ,
o r 9 p e r c e n t— th e s a m e p e r c e n ta g e in c r e a s e r e g is te r e d
th e f irs t h a l f o f 1 9 4 2 .

fo r

T h e in a u g u r a tio n o f th e w a r p r o g r a m f o u n d th e te x tile in ­
d u s tr y in a p o s itio n to e x p a n d its o p e r a tio n s b y f u l le r u tiliz a ­
tio n

o f e x is tin g

e q u ip m e n t a n d

m a n p o w e r w ith o u t a

g reat

d e a l o f c o n v e rs io n . W a r o r d e rs e x p a n d e d th e in d u s tr y r a p id ­
ly d u r in g 1 9 4 2 . T h e v o lu m e o f c o tto n c o n s u m e d b y th e m ills
d u r i n g t h e l a s t h a l f o f t h e y e a r a m o u n t e d t o 1 ,9 9 2 , 2 1 8 b a l e s ,
th e h ig h e s t c o n s u m p tio n v o lu m e o f a n y s ix -m o n th p e r io d .
L a c k o f c iv ilia n o r m ilita ry d e m a n d d o e s n o t e x p la in

M a n u f a c tu r in g e m p lo y m e n t in F lo r id a w a s th e e x c e p tio n

th e f a i l u r e to e x p a n d b e y o n d th e p r e v io u s le v e ls o f c o tto n

to th e g e n e r a l d e c lin e . P r o b a b l y b e c a u s e o f th e g r o w in g
s h i p y a r d e m p l o y m e n t , t h e r e w e r e 3 0 ,0 0 0 m o r e m a n u f a c t u r i n g
w o rk e rs in F lo r id a a t th e e n d o f J u n e th a n a t th e e n d o f
D e c e m b e r 1 9 4 2 . T h e in d e x o f e m p lo y m e n t in J a n u a r y w a s
1 3 0 ( 1 9 3 9 = 1 0 0 ) a n d h a s r is e n r a p i d l y m o n th b y m o n th . In

c o n s u m p tio n o r th e d e c lin e r e g is te r e d in r e c e n t m o n th s . D e ­
m a n d f o r te x tile s is in e x c e s s o f s u p p l y a n d th e s u p p l y o f ra w

J u n e th e in d e x w as 1 6 1 .
in

T h e in a b ility o f m ill m a c h in e r y to h a n d le m o r e c o tto n h a s
b e e n o n e o f th e c h ie f c a u s e s o f f a i l u r e o f c o n s u m p tio n to c o n ­

A la b a m a a n d r o s e d u r in g 1 9 4 2 to h ig h e r le v e ls , c o m p a r e d
w ith th e 1 9 3 9 b a s e , th a n in o th e r s ta te s o f th e D is tr ic t a n d in
th e U n ite d S ta te s a s a w h o le . S h ip y a r d s , ste e l m ills , a n d

tin u e to r is e , w h ile th e la b o r s itu a tio n h a s b e e n l a r g e ly r e ­
s p o n s ib le f o r th e re c e n t d e c lin e in c o tto n c o n s u m p tio n . M ili­
ta r y d e m a n d s m a d e a s h if t to h e a v ie r f a b r ic n e c e s s a ry a n d

o th e r w a r in d u s trie s c re a te d

th e

th u s c r e a te d a b o ttle n e c k in c e r ta in ty p e s o f m a c h in e ry . T h e

in d e x to 1 9 9 in D e c e m b e r 1 9 4 2 w h ile th e in d e x f o r th e S ix
S ta te s h a d r is e n to o n ly 1 5 3 a n d th e in d e x f o r th e n a tio n to

u n in te r r u p te d o p e r a tio n o f m a c h in e r y a t c a p a c ity h a s a ls o
m a d e te m p o r a r y s h u td o w n s n e c e s s a ry in so m e m ills in o r d e r

1 6 5 . E v e r s in c e th e

to m a k e r e p a ir s . T h is l a t t e r f a c to r a c c o u n ts to so m e e x te n t

E x p a n s io n

o f m a n u fa c tu rin g

e m p lo y m e n t

cam e

e a rly

la b o r d e m a n d s th a t ra is e d

firs t o f th e

year

th e

in d e x

of

m anu­

c o t t o n is a d e q u a t e . I n s t e a d o f c a l l i n g f o r d e c r e a s e d p r o d u c ­
tio n , th e W a r P r o d u c tio n B o a rd a s k s f o r a n in c r e a s e o f 10
p e r c e n t in 1 9 4 3 p r o d u c tio n o v e r th e 1 9 4 2 o u tp u t.

f a c tu rin g e m p lo y m e n t in A la b a m a h a s b e e n d e c lin in g s lig h tly

f o r th e d e c lin e in th e in d e x o f c o tto n

a n d in J u n e h a d d e c lin e d to 1 9 2 , th e le v e l o f S e p te m b e r 1 9 4 2 .

(1 9 3 5 -3 9 = 1 0 0 )

A s e c o n d e v id e n c e th a t D is tr ic t e m p lo y m e n t is r e a c h in g its

c o n s u m p tio n to

in J u n e o f th is y e a r f r o m

167

1 7 2 in M a y a n d

1 8 3 in J a n u a r y .

a reas. T h e

T e x tile m ills h a v e b e e n e x p e r ie n c in g in c r e a s in g d iffic u ltie s

d e s ig n a tio n o f a c ity a s a la b o r s h o r ta g e a r e a is m a d e b y th e
W a r M a n p o w e r C o m m is s io n w ith th e r e c o m m e n d a tio n th a t

in r e ta in in g th e ir la b o r fo rc e s . T h e m o n th ly l a b o r tu r n o v e r

peak

is th e

g ro w in g n u m b e r o f

la b o r s h o rta g e

n o f u tu r e c o n tra c ts b e p la c e d in th a t a r e a so lo n g a s th e la b o r

r a t e f o r e a c h 1 0 0 e m p l o y e e s w a s 8 .5 2 f o r M a r c h 1 9 4 3 c o m ­
p a r e d w i t h 7 .4 3 f o r t h e p r e c e d i n g m o n t h , a c c o r d i n g t o t h e

th e

B u r e a u o f L a b o r S ta tis tic s . I n M a r c h 1 9 4 2 t h e r a t e w a s 4 .3 8 .

D is tric t w e re in th a t c a te g o ry . I n J u n e o f th is y e a r th e n u m ­
b e r h a d in c r e a s e d to 1 1 . N in e o th e r a r e a s a r e in th e c la s s i­

A t th e c u r re n t r a te , th e m ills m u s t m o re th a n r e p la c e th e ir

s h o r ta g e e x is ts . B y

f ic a tio n s

w h ic h

la s t S e p te m b e r o n ly

d e s ig n a te




th e m

as

th r e e c itie s in

areas

w h ere

la b o r

w o rk in g fo rc e s e a c h 1 2 m o n th s . T h e tu r n o v e r r a te in te x tile
in d u s tr ie s w a s e v e n h ig h e r in M a rc h th a n th e r a te in th e

M o n t h ly

o f th e F ederal R eserve B a n k o f A tla n ta fo r J u ly 1943

R e v ie w

R e c o n n a is s a n c e
Sixth District Statistics lor June 1943 compared with June 1942
PER CENT DECREASE 'W' PER CENT INCREASE

D e p a rim e n .||ii« |ili||B ||B IIIIIB llillllliil

D e j| iliilji| | S to re Stocks

Furm tuIlliBIIIIIIIIIIllI

53

y e a r a n d w h ile o u tp u t o f th e c h ie f a g r ic u ltu r a l s ta p le s w ill
a p p a r e n tly b e b e lo w th e r e c o r d p r o d u c tio n o f 1 9 4 2 , s till th e
D i s t r i c t ’s a g r i c u l t u r a l p r o d u c t i o n w i l l b e l a r g e r t h a n i n m a n y
re c e n t y e a rs if a v e ra g e w e a th e r o b ta in s f r o m n o w u n til h a r ­
v e s t tim e . I n M is s is s ip p i, f o r e x a m p le , th e A g r ic u ltu r a l A d ­
ju s tm e n t A d m in is tr a tio n e s tim a te s t h a t o v e r 9 9 p e r c e n t o f th e
f a r m e r s o f th e s ta te a r e c o - o p e ra tin g in th e A A A p r o g r a m o f
w a r p r o d u c tio n g o a ls a n d th a t a ll c r o p a c r e a g e g o a ls , w ith th e
e x c e p tio n o f th e g o a l f o r p e a n u ts , w ill b e a tta in e d .
P e r h a p s th e m o s t s ig n if ic a n t d e v e lo p m e n t o f th e firs t h a l f

»lilllSIII[®IIIIIIIIIIIIII!llllliililllliin Contracts
C o tto ilin s m n p tio n
■ ■ H I * Collections

o f 1 9 4 3 w a s th e re d u c tio n in p la n te d c o tto n a c re a g e . F o r
y e a r s th e p r o b le m o f th e S o u th h a s b e e n o n e o f s u r p lu s c o t­
to n . N o w , h o w e v e r, tr e m e n d o u s w a r d e m a n d s f o r te x tile s a n d
n e w i n d u s tr ia l u s e s f o r c o tto n h a v e p u s h e d d o m e s tic c o tto n

Bank MiiilflWnnillllUB

c o n s u m p tio n a b o v e 11 m illio n b a le s a n n u a lly , w h ile , a t th e

i n U l ll i ii i g i a n k Lo an s

M en.be, Ban|iiiiiiiiHiiBgiiiiugiigg«igiHfli
Demand D e p iiig iiiiiin ig g g u g ig g g g iii
+
20
10
0
10
20
30
40

—

40

30

sa m e tim e , S o u th e r n f a r m e r s h a v e b e e n d iv e r tin g a c re a g e
f r o m c o tto n to f o o d c r o p s a n d s tr a te g ic w a r c r o p s s u c h a s
p e a n u ts a n d so y b e a n s . T h e 1 9 4 3 A A A m a r k e tin g q u o ta s a l ­
lo w e d a p p r o x im a te ly 3 0 m illio n a c re s o f c o tto n b u t f a r m e r s
a c tu a lly p la n te d o n ly so m e 2 2 m illio n a c re s . A s a r e s u lt th e
W ar

Food

A d m in is tra tio n

has

su sp en d ed

th e

m a rk e tin g

q u o ta s . I n th e n a tio n a s a w h o le , c o tto n a c r e a g e , a s e s tim a te d
tra n s p o rta tio n

e q u ip m e n t in d u s try , in c lu d in g th e

s h ip a n d

p la n e in d u s tr ie s , u p o n w h ic h s o m u c h a tte n tio n h a s re c e n tly
b e e n fo c u se d . W ith th e p u rp o s e o f h a ltin g th e d r a in u p o n
m a n p o w e r , th e W a r M a n p o w e r C o m m is s io n in A p r il c la s s i­
fie d th e p r o d u c tio n o f te x tile s f o r n e c e s s a r y c iv ilia n u s e s a s
a n e s s e n tia l a c tiv ity s u p p o r tin g th e w a r e ffo rt.
T h e r is e in m a te r ia l a n d la b o r c o s ts a p p a r e n t l y h a s n o t
b e e n p a r a l l e l e d b y in c r e a s e d p r ic e s .f o r th e f in is h e d p r o d u c ts .
A s a c o n s e q u e n c e , m a n y m ills h a v e b e e n slo w to u n d e r ta k e
n ew p ro d u c tio n .
W ith

p ro d u c tio n

d e c lin in g , c o n s u m e r d e m a n d

f o r te x tile

p r o d u c ts is a t a h ig h le v e l. E x p a n d e d c o n s u m e r p u r c h a s in g
p o w e r h a s in c re a s e d th e d e m a n d f o r m o re a n d b e tte r c lo th ­
in g . S in c e th e p r o d u c tio n o f te x tile s f o r c iv ilia n s u p p ly w a s
s o m e w h a t le s s in 1 9 4 2 th a n in 1 9 4 1 , th e p r e s e n t d e c lin e s h a v e
le d s o m e to p r e d ic t t h a t r a tio n in g o f c lo th in g m a y b e in e v i­
ta b le . T o a v o id th e p o s s ib ility o f r a tio n in g c lo th in g , a w a r ­
tim e c o d e o f s e llin g p r a c tic e s w a s la id d o w n f o r te x tile d e a l­
e rs o n J u ly 1 5 b y th e W a r P ro d u c tio n B o a rd . T h e c o d e w as
w o rk e d o u t w ith re p re s e n ta tiv e s o f la r g e a n d s m a ll r e ta ile r s
a n d w a s d e s ig n e d to e lim in a te s c a re a d v e r tis in g a n d o th e r
p r o m o tio n a l d e v ic e s f o r e n c o u r a g in g b u y in g . I n a d d itio n , it
is th e o p in io n o f th e W a r P ro d u c tio n B o a rd th a t th e n u m b e r
o f c iv ilia n c lo th in g u n its p r o d u c e d f r o m e v e n th e lim ite d
q u a n tity o f m a te ria l a v a ila b le c a n b e s u b s ta n tia lly in c re a s e d

o n J u l y 1 b y th e C ro p R e p o rtin g B o a rd o f th e U n ite d S ta te s
D e p a r t m e n t o f A g r i c u l t u r e , w a s 2 5 .5 p e r c e n t b e l o w t h e a v e r ­
a g e o f th e p a s t 1 0 y e a rs . I n G e o rg ia th e 1 9 4 3 in d ic a te d c o tto n
a c re a g e is th e s m a lle s t s in c e 1 8 7 2 .
T h e a g r ic u ltu r a l o u tlo o k a s c o m p a re d w ith la s t y e a r, h o w ­
e v e r, is n o t e n tir e ly le s s f a v o r a b le . T h e f irs t s ix m o n th s o f
1 9 4 3 sa w F l o r i d a c itr u s in c o m e a t a ll- tim e h ig h le v e ls . T h e
c itr u s se a s o n e n d in g w ith th e s p r in g o f 1 9 4 3 r e s u lte d in s h ip ­
m e n t o f 3 6 m illio n b o x e s , a 1 0 - m illio n - b o x in c r e a s e o v e r th e
p r e v i o u s y e a r ’s s h i p m e n t s , a n d p r i c e s w e r e m a i n t a i n e d a t t h e
h ig h e s t le v e l in 1 3 y e a rs .
B a n k O p e r a tio n s :

I n th e firs t h a lf o f 1 9 4 3 , c h e c k c le a rin g s

th r o u g h th e F e d e r a l R e se rv e B a n k o f A tla n ta a n d its f o u r
b r a n c h e s a t B ir m in g h a m , J a c k s o n v ille , N a s h v ille , a n d N e w
O r le a n s w e re o n ly s lig h tly la r g e r th a n c le a rin g s in th e la s t
s ix m o n th s o f 1 9 4 2 . S im ila r ly , c u r re n c y

re c e ip ts a n d

s h ip ­

m e n ts h a n d le d b y th e B a n k a n d its b r a n c h e s w e re b u t s lig h tly
l a r g e r in th e firs t h a l f o f 1 9 4 3 th a n in th e la s t h a l f o f 1 9 4 2 .
T o b e s u r e , a llo w a n c e h a s to b e m a d e f o r th e f a c t th a t D e c e m ­
b e r is th e s e a s o n a l p e a k f o r c h e c k a n d c u r r e n c y p a y m e n ts
b u t, n e v e r th e le s s , th e r a te o f in c r e a s e in th e s e ite m s h a s s la c k ­
e n e d q u ite d e f in ite ly in th e f irs t h a l f o f 1 9 4 3 . T h is is a n o th e r
i n d i c a t i o n t h a t t h e p e a k o f t h e D i s t r i c t ’s w a r b o o m i s n e a r i n g .

In J u ly th e D e p a rtm e n t o f

I n th e la s t h a lf o f 1 9 4 2 th e tr a n s it d e p a r tm e n ts o f th e
A t l a n t a B a n k a n d i t s b r a n c h e s h a n d l e d 3 8 .5 m i l l i o n p i e c e s ,
i n v o l v i n g t r a n s f e r s o f 1 5 .5 b i l l i o n d o l l a r s . I n t h e f i r s t h a l f o f
1 9 4 3 t h e n u m b e r o f p i e c e s h a n d l e d t o t a l e d 3 9 .5 m i l l i o n , a n
i n c r e a s e o f 1 .0 m i l l i o n , w h i l e t h e d o l l a r v o l u m e r o s e b y o n l y

A g ric u ltu re r e p o rte d th a t fo o d a n d fe e d c ro p p ro s p e c ts im ­

2 3 m illio n . T h e re w a s a 5 p e r c e n t in c r e a s e in th e d o lla r v o l­

p r o v e d d u r in g J u n e , b u t a g g r e g a te c r o p o u tp u t is e s tim a te d
a t 5 .9 p e r c e n t b e lo w th e r e c o r d h a r v e s t in 1 9 4 2 . N e v e r th e le s s ,

u m e o f c u r re n c y r e c e ip ts a n d s h ip m e n ts h a n d le d b y th e A t­
la n ta B a n k a n d its b ra n c h e s in th e firs t h a lf o f 1 9 4 3 , a s c o m ­

th is r e d u c tio n is d u e c h ie fly to a d v e r s e w e a th e r c o n d itio n s in
th e e a r ly p a r t o f th e 1 9 4 3 g ro w in g s e a so n , f o r to ta l a c re a g e

p a r e d w ith th e la s t h a l f o f 1 9 4 2 . I n th e la s t s ix m o n th s o f

b y a p r o g r a m o f s im p lific a tio n a n d s ta n d a rd iz a tio n .
C ro p O u tp u t L o o k s S m a lle r :

th is

year

is

e x tre m e ly

la rg e .

The

u n u s u a lly

c o ld

s p rin g

1 9 4 2 t h e o p e r a t i o n i n v o l v e d 1 .3 b i l l i o n
f i r s t h a l f o f 1 9 4 3 , 1 .4 b i l l i o n d o l l a r s .

d o lla r s a n d in th e

w ro u g h t se v e re d a m a g e in th e o r c h a r d s o f th e D is tr ic t a n d

F e d e r a l R e s e r v e n o te c ir c u l a t i o n a t th is B a n k c o n tin u e s to

t h e G e o r g i a p e a c h c r o p , f o r i n s t a n c e , i s e s t i m a t e d a t o n l y 1 .5

in c re a s e in r e s p o n s e to th e e x p a n d in g d e m a n d f o r c u r re n c y

m illio n b u s h e ls . I n th e 1 0 S o u th e a s te rn S ta te s , th e 1 9 4 3 c r o p
i s d o w n t o 5 . 6 m i l l i o n b u s h e l s , a s c o m p a r e d w i t h 1 9 .6 m i l l i o n

f o r p a y r o l l a n d o th e r p u r p o s e s . T o ta l c i r c u la tio n in m id J u l y a m o u n t e d t o 7 2 8 .7 m i l l i o n d o l l a r s , a n e w h i g h l e v e l .

b u s h e ls in 1 9 4 2 .

T h is le v e l r e p re s e n ts a r is e o f o n e - th ird in 1 9 4 3 a n d is a b o u t

W h ile s o m e c o n c e r n is f e l t f o r a g r i c u l t u r a l p r o d u c tio n th is




d o u b le th e to ta l a y e a r a g o .

54

M o n t h ly

o f th e F ederal R eserve B a n k o f A tla n ta fo r J u ly 1943

R e v ie w

S ix th D is tr ic t S ta tis tic s

P a y

UNITED STATES TREASURY BILLS
Dated
Tenders
June
July
July
July

30, 1943.........................................................
7, 1943............................................................
14, 1943..........................................................
21, 1943..........................................................

Allotments

$ 7,224,000
4,550,000
56.425.000
24.410.000

$ 6,957,000
4,300,000
51.774.000
23.429.000

INSTALMENT CASH LOANS

Federal Credit U nions...................
State Credit U nions.........................
Industrial Banking C om panies...
Personal Finance Com panies........
Commercial Banks..........................

50
29
42
57
36

+
+
+
+

+
+
+
+

12
12
27
16

4
2
4
1

6

B

22

78

4,030

C

48

284

16,552

512

s t i m a t e s o f in c o m e p a y m e n ts re c e n tly r e le a s e d b y th e D e ­
p a r tm e n t o f C o m m e rc e ( S u r v e y o f C u r r e n t B u s in e s s ,

J u n e 1 9 4 3 ) a p p e a r to b e a r o u t w h a t m a n y h a v e s u s p e c te d a ll
a lo n g ; n a m e ly , th a t th e S ix th D is tr ic t S ta te s h a v e n o t k e p t
p a c e w ith th e re s t o f th e c o u n tr y in w a r tim e in d u s tr ia l g a in s .
T h e e v id e n c e , w h ile b y n o m e a n s c o n c lu s iv e , is b a s e d u p o n a

th e S ix

S ta te s w e re e s tim a te d

to h a v e 4 .8

p e r c e n t o f th e

n a t i o n ’s m a n u f a c t u r i n g p a y r o l l s . F o r 1 9 3 9 t h e e s t i m a t e w a s

(ris in g fro m

169

192

1,029

1,520

178

3,524

6,013

163

35

1 . I n p r o p o r t i o n t o t h e n a t i o n a l t o t a l , t h e r e g i o n ’s m a n u ­
f a c tu r in g p a y r o lls d u r in g re c e n t y e a r s h a v e d e c lin e d . I n 1 9 3 3

0 .9 p e r c e n t t o

1 .2 p e r c e n t ) ; L o u i s i a n a a n d

M is s is s ip p i n e ith e r g a in in g n o r lo s in g ; a n d F lo r id a , G e o rg ia ,

Per Cent
Balances
Deposits Due from War Loan Actual Actual to
of Banks Other Banks Deposits Reserves Required

A

P a y m e n ts

a l l s ta te s o f th e D is tr ic t. E s tim a te s f o r 1 9 4 2 a s c o m p a r e d
w ith 1 9 3 9 sh o w A la b a m a g a in in g in p e r c e n t o f n a tio n a l to ta l

For reserve city banks figures are averages of seven-day period ending
July 2; for country banks they are averages of fifteen-day period ending
June 30.

No. of
Banks

In co m e

4 .6 p e r c e n t a n d f o r e a c h o f th e y e a r s 1 9 4 0 , 1 9 4 1 , a n d 1 9 4 2 ,
it w a s 4 .5 p e r c e n t. T h is r e tr o g r e s s io n d id n o t ta k e p la c e in

RESERVES AND RELATED ITEMS OF
SELECTED SIXTH DISTRICT MEMBER BANKS
(In Thousands of Dollars)

Group*

a n d

n u m b e r o f c o m p a ris o n s :

Per Cent Change
May 1943to June 1943
Outstandings
Volume
+ 2
+ 43

Number
Reporting

Lender

E

R o lls

a n d T e n n e ss e e lo s in g s lig h tly .

2 . F o r 1 9 4 2 a s c o m p a r e d w ith 1 9 3 9 m a n u f a c tu r in g p a y
r o lls o f th e S ix th D is tr ic t s h o w e d a s m a lle r p e rc e n ta g e in ­
c re a s e th a n d id th e U n ite d S ta te s a s a w h o le . E s tim a te s f o r
t h e tw o y e a r s g a v e t h e D i s t r i c t a n i n c r e a s e o f 1 2 5 . 8 p e r c e n t
a s c o m p a r e d w ith a n i n c r e a s e f o r t h e n a t i o n o f 1 3 2 .4 p e r
c e n t. T h r e e o f th e D is tr ic t s ta te s s h o w e d a g r e a te r p e r c e n ta g e
g a in th a n d id th e n a tio n a s a w h o le , w h ile th e r e m a in in g th r e e
s ta te s s h o w e d a s m a lle r g a in . A la b a m a h a d a g a in o f 2 0 1 .2 p e r

D

74

6,065

39,512

9,515

17,263

152

E

68

5,904

66,448

18,609

36,428

142

c e n t . F l o r i d a h a d a g a i n o f 1 1 0 .6 p e r c e n t ; G e o r g i a , 8 2 . 6 p e r

c e n t ; M i s s i s s i p p i , 1 5 0 .3 p e r c e n t ; a n d L o u i s i a n a , 1 3 7 . 7 p e r

F

30

19,189

58,942

21,559

36,892

138

c e n t ; a n d T e n n e s s e e , 1 0 0 .0 p e r c e n t .

G

42

622,751

292,216

188,516

376,563

112

Total

290

654,271

478,212

242,787

474,848

117

3 . O f th e e s tim a te d in c r e a s e f o r 1 9 4 2 o v e r 1 9 3 9 in to ta l
in c o m e p a y m e n ts , m a n u f a c tu r in g p a y r o l ls r e p r e s e n te d a

*Group A: 1942 average deposits up to $250,000; G roup B: $250,000 to
$500,000; G roup C: $500,000 to $1,000,000; G roup D: $1,000,000 to
$2,000,000; G roup E : $2,000,000 to $5,000,000; G roup F : $5,000,000 to
$10,000,000; G roup G : O ver $10,000,000.

CONDITION OF 20 MEMBER BANKS IN SELECTED CITIES
(In Thousands oi Dollars)
Per Cent Change
July 14, June 16, July 15. July 14. 943 from
1943
1942 June 16, July 15,
1943
Item
1943
1942
Loans and Investm ents—
Total.................................... 1,477,858 1,398,686
Loans—Total.........................
286,466 285,011
Commercial, industrial
and agricultural loans. 171,792 171,973
Loans to brokers and
dealers in se c u ritie s..
4,683
5,788
Other loans for pu r­
chasing and carrying
securities.........................
9,779
8,952
Real estate lo a n s...........
27,045
25,487
Loans to b an k s.................
330
232
Other lo an s.......................
73,586
71,830

905,607
363,393

+
+

6
1

+ 63
— 21

202,601

—

0

— 15

+ 24

+ 29

4,472

a s a w h o l e . O n l y 2 1 .2 p e r c e n t o f t h e i n c r e a s e i n t o t a l i n c o m e
p a y m e n ts f o r th e D is tr ic t w a s r e p re s e n te d b y m a n u f a c tu rin g
p a y r o l ls . F o r t h e U n ite d S ta te s a s a w h o le , i n c o n tr a s t, 4 0 .2
p e r c e n t o f th e in c re a s e w a s r e p re s e n te d b y s u c h p a y m e n ts .
H e re a g a in im p o r ta n t d iffe re n c e s e x is te d a m o n g th e i n d i­
v id u a l s ta te s o f th e D is tr ic t. F o r 1 9 4 2 o v e r 1 9 3 9 , m a n u f a c t u r ­
in g p a y r o lls in A la b a m a
g a in in in c o m e p a y m e n ts .
c e n ta g e g a in w a s 1 2 .4 ; in
in M is s is s ip p i, 1 1 .7 ; a n d

a c c o u n t e d f o r 3 2 .9 p e r c e n t o f t h e
In F lo rid a th e c o rre s p o n d in g p e r ­
G e o r g ia , 1 7 .5 ; in L o u is ia n a , 2 2 .7 ;
i n T e n n e s s e e , 2 5 .5 .

4. C e rta in in d u s trie s o f th e D is tric t in c re a s e d th e ir re la tiv e
s h a re s in th e n a tio n a l to ta l o f m a n u f a c tu rin g p a y r o lls , b u t
o th e r in d u s trie s e x p e rie n c e d m o re th a n c o u n te rb a la n c in g d e ­
c lin e s . D is tr ic t p a y r o lls in th e t r a n s p o r ta tio n e q u ip m e n t i n ­

8,272
29,714
1,324
109,509

9
6
30
— 2

Investm ents—Total............... 1,191,392 1,113,675
U. S. direct obligations. 1,025,236 948,714
Obligations g uaranteed
by U. S ..........................
52,405
53,393
Other secu rities...............
112,556
112,763

542,214
390,180

+
+

43,633
108,401

+
+

Reserve w ith F. R. B a n k ..
C ash in v a u lt.......................
Balances w ith domestic
t a n k s ..............................

291,236
25,830
190,752

Demand deposits-adjusted.
Time d ep o sits.....................
U. S. Gov't, d ep o sits.........
Deposits of dom estic banks

970,956
228,329
244,590
465,322




s m a lle r p r o p o r tio n f o r th e D is tr ic t th a n f o r th e U n ite d S ta te s

18
9
82
34

in c re a s e d f ro m 5 m illio n d o lla r s in 1 9 3 9 to 2 2 3 m illio n d o l­

7
8

+ 120
+ 163

s h a re o f th e n a tio n a l m a n u f a c tu rin g p a y r o lls f o r th e tr a n s ­

2
0

+ 22
+ 4

c e n t to 4 .4 p e r c e n t. O th e r D is tr ic t i n d u s t r y c la s s e s s h o w in g

228,543
19,009

+ 2
+ 10

+ 27
+ 36

187,646

193,495

+

2

946,672
222,146
165,967
482,992

648,226
192,624
63,910
367,074

+ 3
+ 3
+ 47
4

285,714
23,576

+
+

+
—
—
—

—
+
+
+
+

1
50
19
283
27

d u s tr ie s ( p r in c ip a lly th e a ir c r a f t a n d s h ip b u ild in g in d u s tr ie s )
l a r s i n 1 9 4 2 , a g a i n o f 4 , 4 6 0 p e r c e n t . E v e n s o , t h e D i s t r i c t ’s
p o rta tio n e q u ip m e n t in d u s trie s in c re a s e d o n ly fro m

1 .5 p e r

g a in s in p e rc e n ta g e o f n a tio n a l m a n u f a c tu rin g p a y r o lls w e re
fo o d

and

k in d re d

p ro d u c ts ,

te x tile

p ro d u c ts ,

lu m b e r

and

tim b e r b a s ic p r o d u c ts , p a p e r a n d a llie d p r o d u c ts , p e tr o le u m
a n d c o a l p ro d u c ts , a n d n o n fe rro u s m e ta ls a n d th e ir p ro d u c ts .
D is tric t in d u s try
n a tio n a l

c la s s e s s h o w in g d e c lin e s in

m a n u fa c tu rin g

tu re s , f u rn itu r e

and

pay

fin is h e d

r o lls

w ere

p e rc e n ta g e o f

to b a c c o

m an u fac­

lu m b e r , p r in tin g a n d p u b lis h ­

M o n t h ly

R e v ie w

o f th e F ederal R eserve B a n k o f A tla n ta fo r J u ly 1943
S ix th D is tr ic t S ta tis tic s

in g , c h e m ic a l a n d a llie d p r o d u c ts , m a c h in e r y o th e r th a n e le c ­
tr ic a l, a n d a u to m o b ile s .
W h ile th e D is tr ic t h a s n o t k e p t p a c e w ith th e re s t o f th e

RETAIL FURNITURE STORE OPERATIONS

n a tio n w ith re s p e c t to th e p r o p o r tio n o f in c o m e p a y m e n ts r e p ­
re s e n te d b y m a n u f a c tu rin g p a y r o lls , th is f a ilu r e s h o u ld n o t

Item

of
Stores

Total S ales...........................................
C ash S ales...........................................
Instalment and Other Credit S ales..
Accounts Receivable, end of month.
Collections during m onth.................
Inventories, end of m onth...............

104
92
92
102
102
77

o b s c u re th e f a c t th a t s u b s ta n tia l g a in s h a v e b e e n r e c o r d e d in
th e D is tr ic t in to ta l in c o m e p a y m e n ts . A s a m a tte r o f f a c t,
th e e s tim a te s o f th e D e p a r tm e n t o f C o m m e rc e in d ic a te a g a in
o f 8 0 .5 p e r c e n t in t o t a l in c o m e p a y m e n ts in th e D i s tr ic t f o r
1 9 4 2 o v e r 1 9 3 9 a s c o m p a r e d w i t h a g a i n o f 6 1 .5 p e r c e n t f o r
th e U n ite d S ta te s a s a w h o le . M is s is s ip p i le d th e s ta te s o f th e

55

Per Cent Change
June 1943 from
May 1943
June 1942
—
—
—
—
—
—

14
11
14
3
9
6

+ 32
+ 48
+ 31
38
__ 13
— 5

g r o u p w i t h a g a i n o f 1 1 4 .2 p e r c e n t f o r t h e p e r i o d . A l a b a m a
w a s n e x t w i t h a g a i n o f 1 1 0 .1 p e r c e n t , f o l l o w e d b y G e o r g i a
w i t h 7 9 . 4 p e r c e n t , T e n n e s s e e w i t h 7 0 .2 p e r c e n t , L o u i s i a n a
w i t h 6 6 .1 p e r c e n t , a n d F l o r i d a w i t h 6 5 .2 p e r c e n t .
P e rc e n ta g e

g a in s

are,

of

c o u rse ,

so m ew h at

m is le a d in g .

S m a ll in c re a s e s in d o lla r a m o u n ts m a y r e p r e s e n t l a r g e p e r ­
c e n t a g e g a i n s i f t h e b a s e is s m a l l . M i s s i s s i p p i , f o r e x a m p l e ,
s h o w e d a g a i n o f 1 0 2 .5 p e r c e n t i n p e r c a p i t a i n c o m e p a y ­
m e n ts f o r 1 9 4 2 a s c o m p a r e d w ith 1 9 3 9 , w h ile f o r th e
p e r io d th e p e r c a p ita p a y m e n ts f o r th e U n ite d S ta te s
w h o l e i n c r e a s e d o n l y 5 8 .1 p e r c e n t . I n a c t u a l a m o u n t s ,
e v e r , M i s s i s s i p p i ’s p e r c a p i t a i n c o m e p a y m e n t s r o s e

sam e
as a
how ­
fro m

$ 20 1 i n 1 9 3 9 t o $ 4 0 7 i n 1 9 4 2 , w h i l e f o r t h e U n i t e d S t a t e s a s a

SALES OF UNITED STATES SAVINGS BONDS IN THE
SIXTH FEDERAL RESERVE DISTRICT
June 24-July 23, 1943. at Issue Price (In Thousands of Dollars)
Area
Series E Series F and G
Total
DISTRICT....................................
A labam a......................................
F lorida.........................................
G eorgia........................................
Louisiana*..................................
M ississippi*................................
Tennessee*................................

36,058
7,141
8,940
7,449
6,454
2,476
3,598

11,953
1,765
2,647
2,884
1,618
720
2,319

48,011
8,906
11,587
10,333
8,072
3,196
5,917

*These figures apply only to that part of the state lying w: thin the Sixth
Federal Reserve District. Te nnessee figures do not incluc e Post Office
sales.

w h o le th e p e r c a p ita in c o m e p a y m e n ts ro s e f r o m $ 5 3 9 to $ 8 5 2 .
B e fo re th e in a u g u r a tio n o f th e w a r p r o g r a m , th e S ix S ta te s
r a n k e d w e ll to w a r d th e b o tto m in p e r c a p ita in c o m e s . I n s p ite

DEBITS TO INDIVIDUAL BANK ACCOUNTS
(In Thousands of Dollars)

o f w a r tim e in c r e a s e s in in c o m e p a y m e n ts , th e s e r e la tiv e p o ­
s itio n s h a v e n o t c h a n g e d

m a te ria lly . P e r c a p ita

in c o m e in

M is s is s ip p i in 1 9 4 2 w a s s till th e lo w e s t in th e n a tio n . I n c o m ­
p a r i s o n w ith th e p e r c a p i t a in c o m e s f o r 1 9 4 2 o f a l l th e s ta te s ,
in c lu d in g th e D is tr ic t o f C o lu m b ia , A la b a m a ra n k e d
s ix th ; T e n n e s s e e , f o rty - f if th ; G e o rg ia , f o r ty - f o u r th ;

f o rty L o u i­

s ia n a , f o rty - fir s t; a n d F lo r id a , th irty -s e v e n th .
D e s p ite th e f a c t t h a t th e S ix S ta te s s t i l l r a n k lo w in c o m ­
p a r is o n w ith th e s ta te s o f o th e r s e c tio n s , t h e i r in c o m e p o s itio n
f o r 1 9 4 2 r e p r e s e n te d a s u b s ta n tia l r e la tiv e im p ro v e m e n t. I n
1 9 2 9 th e p e r c a p ita in c o m e p a y m e n ts o f th e S ix S ta te s w e re
5 1 .2 p e r c e n t o f t h e U n i t e d S t a t e s t o t a l . I n 1 9 3 3 t h i s p e r c e n t ­
a g e w a s 5 1 . 4 ; i n 1 9 3 9 , 5 6 . 2 ; a n d i n 1 9 4 2 , 5 9 .5 .
G a in s in D is tr ic t in c o m e p a y m e n ts f o r 1 9 4 2 o v e r 1 9 3 9 w e re
c h ie fly r e p r e s e n te d b y in c r e a s e s in m a n u f a c tu r in g p a y r o lls ,
in G o v e r n m e n t p a y m e n ts , a n d in in c o m e s o f f a r m o p e r a to r s .
O f th e s e th r e e c a te g o rie s o f in c o m e p a y m e n ts , th e m o s t im ­
p o r t a n t to th e D is tr ic t w a s th e in c r e a s e in G o v e r n m e n t p a y ­
m e n t s . I n 1 9 3 9 , G o v e r n m e n t p a y m e n t s a c c o u n t e d f o r 9 .3 p e r
c e n t o f D is tr ic t in c o m e p a y m e n ts , w h ile in 1 9 4 2 th is p e r ­
c e n t a g e h a d r i s e n t o 1 7 .0 p e r c e n t . M a n u f a c t u r i n g p a y r o l l s i n
c o n t r a s t r o s e f r o m 1 3 .6 p e r c e n t o f t h e t o t a l i n 1 9 3 9 t o 1 7 .0
p e r c e n t in 1 9 4 2 . N e t in c o m e o f f a r m o p e r a to r s ro s e f ro m
1 2 .9 p e r c e n t t o 1 4 .5 p e r c e n t f o r t h e s a m e p e r i o d . T h e p r o ­
p o r t i o n o f a l l o t h e r i n c o m e p a y m e n t s d e c l i n e d f r o m 6 4 .2 p e r
c e n t in 1 9 3 9 to 6 1 .5 p e r c e n t in 1 9 4 2 .
T h e h e a v y d e p e n d e n c e in th e D is tr ic t u p o n G o v e rn m e n t p a y
r o lls , p a y r o l ls l a r g e ly p e r ta in in g to th e a r m e d fo rc e s , is e x ­
tr e m e ly s ig n if ic a n t to th e e c o n o m y o f th e D is tr ic t. A c u r t a i l ­
m e n t in to ta l in c o m e p a y m e n ts w ill a lm o s t c e r ta in ly a c c o m ­
p a n y a n y s la c k e n in g in th e m ilita r y tr a in in g p r o g ra m . I n s o ­
f a r a s th e y a ris e fro m

s tric tly w a rtim e p ro d u c tio n , D is tric t

m a n u fa c tu rin g p a y r o lls a re o f a n e q u a lly te m p o ra ry n a tu re .
I f th e D is tr ic t is to m a in ta in its w a r tim e in c o m e g a in s d u r ­
in g th e p o s tw a r p e r io d , se v e re a d ju s tm e n ts w ill b e n e c e s s a ry .




Per Cent Change
June 1943from
May 1943June 1942

June
1943

May
1943

June
1942

13,818
170,630
6,171
9,450
113,657
33,144

12,071
164,341
5,696
9,475
114,272
33,759

13,632
146,028
5,170
7,425
93,904
31,641

165,504
105,373
22,901
21,427
17,619
62,214

162,901
90,646
23,702
19,814
18,461
75,198

120,602
60,790
14,369
17,324
10,947
51,608

+
— b
— 17

+ 61

7,608

N ew nan...................
Savannah.................
V aldosta...................

7,355
340,876
39,368
12,841
34,367
1,427
36,353
4,296
91,171
5,176

351,378
30,264
13,936
33,048
1,495
37,445
4,343
73,122
5,449

7,199
302,008
30,095
5,595
32,136
1,373
34,052
3,416
48,721
4,479

—
—
+
—
+
—
—
—
+
—

+
+
+
+
+
+
+
+
+
+

LOUISIANA
Baton R ouge...........
Lake C harles.........
New O rleans.........

36,614
19,992
378,801

41,392
20,703
348,987 ,

34,426
9,645
314,016

_ 17.
— 3
+ 9

+ 6
+ 107
+ 21

MISSISSIPPI
H attiesburg.............
Jackson.....................
M eridian...................
V icksburg.................

12,489
50,106
14,168
17,387

11,558
41,451
15,974
18,752

10,648
35,320
16,152
9,004

+ 8
+ 21

+
+
—
+

TENNESSEE
C hattanooga...........
Knoxville.................
Nashville.................

82,228
58,146
166,011

77,197
55,520
164,501

69,130
41,671
144,468

+
+
+

7
b
1

+ 19
+ 40
+ 15

SIXTH DISTRICT
32 C ities...................

2,151,080

2,084,459

1,726,994

+

3

+ 25

UNITED STATES
274 C ities................. 63,202,000

60,708,000

50,107,000

+

4

+ 26

Area
ALABAMA
Anniston...................
Birmingham.............
D othan.....................
G ad sd en ...................
M ontgomery...........
FLORIDA
Jacksonville.............
Miami.......................
O rlando...................
P ensacola.................
St. P etersb u rg ........
GEORGIA
A lbany.....................
A tlanta.....................
A ugusta...................
Brunswick...............
Colum bus...............
E lberton...................

+
+
+

14
4
8
0

— 1
— 2
+
+

2

16
3
8

3
3
30
8
4
b
3

1

2b
b

11

— 7

+
+
+
+
+

17
19
27
21
5

+
+
+
+

37
73
59
24

+ 21

2
13
31
130
7
4
7
26
87
16

17
42
12
93

M o n t h ly

5 6

o f th e F ederal R eserve B a n k o f A tla n ta fo r J u ly 1943

R e v ie w

The National Business Situation

M

a n u f a c t u r in g a c t i v i t y w a s m a i n t a i n e d a t a h i g h le v e l i n

June

w h ile

m in e ra l

p ro d u c tio n

d e c lin e d

re fle c tin g

m a in ly re d u c e d o u tp u t o f c o a l. I n th e e a r ly p a r t o f J u ly c o a l

p a r t o f J u ly , w h ile s a le s o f d u r a b le g o o d s , m a n y o f w h ic h
a r e b e c o m in g in c r e a s in g ly s c a rc e , w e re g e n e r a lly b e lo w
p r e v io u s p e a k le v e ls .

p r o d u c tio n w a s r e s u m e d in la r g e v o lu m e . T h e v a lu e o f r e ta il

I n d u s tr ia l p r o d u c tio n :

The

B o a r d ’s s e a s o n a l l y

a d ju s te d

in d e x o f to ta l in d u s tr ia l p r o d u c tio n d e c lin e d s lig h tly in J u n e
fro m

th e h ig h

le v e l

C a r lo a d in g s o f re v e n u e f r e i g h t d e c lin e d in J u n e , r e fle c tin g
th e d r o p

tr a d e c o n tin u e d la rg e .

o f o th e r

r e c e n t m o n th s . A c tiv ity

con­

in c o a l s h ip m e n ts . L o a d in g s o f g r a in s h o w e d th e

u s u a l in c re a s e a t th is s e a s o n a n d th e m o v e m e n t o f m o st o th e r
c o m m o d itie s w a s m a in ta in e d in
C o m m o d ity

p r ic e s :

W h o le s a le p r ic e s o f m o s t c o m m o d itie s

tin u e d to in c r e a s e a t p la n ts p r o d u c in g w a r p r o d u c ts in th e
c h e m ic a l, r u b b e r , a n d tr a n s p o r ta tio n e q u ip m e n t in d u s tr ie s .

show ed

T h e s e in c re a s e s w e re m o r e th a n o ffse t b y a s h a r p d r o p in
c o a l p ro d u c tio n a n d a te m p o ra ry re d u c tio n in o u tp u t o f co k e,

T h is

d e c lin e

m um

p ric e s o f b u tte r a n d

p ig ir o n , a n d s te e l.
F in is h e d a i r c r a f t p r o d u c tio n , in te rm s o f a ir f r a m e w e ig h t,

p ric e s o f fre s h
A g r ic u ltu r e :

w a s 3 p e r c e n t h ig h e r in J u n e th a n in M a y . D e liv e ry o f s u p ­

p e c te d to b e

a

little c h a n g e

la r g e v o lu m e .

in

th e

e a rly

p art

o f J u ly ,

d e c lin e d u r in g J u n e o f 1 p e r c e n t in th e
r e fle c te d

c h ie fly

fru its a n d
A g g re g a te

re d u c tio n s

f o llo w in g

g e n e r a l in d e x .

o rd e re d

m eat a n d seaso n al

in

m a x i­

d ecreases

in

v e g e ta b le s .
cro p

p ro d u c tio n

10 p e r c e n t s m a lle r th a n

th is

y e a r is e x ­

la s t y e a r b u t 5 p e r

p lie s f o r th e A rm y g ro u n d fo rc e s ro s e 1 p e r c e n t o v e r M a y .

c e n t a b o v e th e a v e ra g e o f th e p r e c e d in g 5 y e a rs , a c c o rd in g

T o n n a g e o f c a rg o v e s s e ls d e liv e r e d f ro m m e r c h a n t s h ip y a r d s

t o t h e J u l y 1 o f f ic ia l r e p o r t . O f t h e m a j o r c r o p s , p r o d u c t i o n

w a s n o t u p to th e r e c o r d M a y l e v e l ; it w a s, h o w e v e r, h ig h e r

p ro s p e c ts f o r g r a in s a r e th e lo w e s t c o m p a r e d w ith la s t s e a ­

th a n in a n y o th e r m o n th .
In in d u s trie s m a n u fa c tu rin g

so n , w h ile th e r e a re in d ic a tio n s o f c o n s id e ra b ly la r g e r h a r ­
n o n d u ra b le g o o d s o u tp u t as

a w h o le sh o w e d l ittle c h a n g e f r o m
c o tto n

m ills

M a y to J u n e . A c tiv ity a t

d e c lin e d — c o n s u m p tio n

of

9 1 7 ,0 0 0

b a le s

of

c o tto n w a s 5 0 ,0 0 0 le s s th a n in J u n e 1 9 4 2 .
O u tp u t a t c o a l m in e s in J u n e w a s 3 0 p e r c e n t b e lo w M a y
d u e to th e w o rk s to p p a g e s , b u t e a r ly in J u l y b o th a n th r a c ite
a n d b itu m in o u s c o a l p r o d u c tio n r e c o v e r e d to a b o v e th e le v e ls
p re v a ilin g a y e a r a g o . C ru d e p e tro le u m p ro d u c tio n w as m a in ­
ta in e d in J u n e a n d m o v e d u p w a r d in J u l y p a r t l y in a n tic ip a ­
tio n

o f th e c o m p le tio n

o f th e

p ip e lin e fro m

T e x a s to

th e

E a s t C o a st. L a k e s h ip m e n ts o f ir o n o r e in J u n e w e re 6 p e r
c e n t b e lo w

th e

sam e

m o n th

la s t

w e a th e r c o n d itio n s .
T h e v o lu m e o f c o n s tru c tio n

year

due

c o n tra c ts

to

u n f a v o ra b le

aw a rd ed

in

Ju n e

w as a b o u t th e sa m e a s in M a y . T h e v a lu e o f a w a rd s in J u n e
w a s a t th e lo w e s t le v e l f o r th is m o n th sin c e 1 9 3 6 , a c c o r d in g
to th e F . W . D o d g e C o r p o r a tio n .
D is tr ib u tio n :
V a lu e o f c o n s u m e r n o n d u r a b le g o o d s s o ld
a t r e ta il w a s in n e a r - re c o r d v o lu m e in J u n e a n d th e e a r ly

v e s ts f o r d r y b e a n s a n d p e a s , fla x s e e d , a n d p o ta to e s . O u tp u t
o f liv e s to c k

p ro d u c ts

h a s c o n tin u e d

in

la r g e r v o lu m e th a n

a y ear ago.
B a n k c r e d it:

D u r in g J u n e a n d th e firs t th r e e w e e k s o f J u ly

t h e r e w a s a n i n c r e a s e o f a b o u t 1 .4 b i l l i o n d o l l a r s i n R e s e r v e
B a n k h o ld in g s o f U n ite d S ta te s G o v e rn m e n t s e c u ritie s . C o n ­
tin u e d

c u rre n c y

o u tf lo w , a n d

in c re a s e

in

re q u ire d

re se rv e s

d u e to th e g r o w th o f d e p o s its , w e r e re fle c te d in th e in c r e a s e d
d e m a n d f o r R e se rv e B a n k c re d it. T h e e x p a n s io n in R e se rv e
B a n k c r e d it w a s in th e f o rm o f T r e a s u r y b ills s o ld b y m e m ­
b e r b a n k s to th e F e d e r a l R e s e rv e B a n k s u n d e r o p tio n s to r e ­
p u r c h a s e . H o ld in g s o f b i l l s sh o w e d w id e f lu c tu a tio n s d u r in g
th e p e r io d a s m e m b e r b a n k s a d ju s te d th e ir re s e rv e p o s itio n s
th r o u g h s a le s a n d r e p u rc h a s e s . A la r g e p a r t o f th e T r e a s u r y
b ills c a m e f r o m N e w Y o r k C ity b a n k s w h e re e x c e ss re s e rv e s
c o n t i n u e d t o b e lo w . T o t a l l o a n s a n d i n v e s t m e n t s o f N e w
Y o r k C ity b a n k s h a v e d e c lin e d r e c e n tly . O th e r r e p o r tin g
m e m b e r b a n k s h a v e s h o w n a c o n tin u e d g r o w th in d e p o s its
a n d U . S . G o v e rn m e n t se c u ritie s .

(This page was written by the staff of the Board of Governors of the Federal Reserve System)
IN D U STRIAL PRODUCTION

CO NSTRUCTIO N C O N TR AC TS AWARDED

M EM B ER B AN K R E S E R V E S AND R E L A T E D

IT E M S

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RYDEPOSITS
1938

Federal R eserve indexes. Groups are expressed
in terms of points in the total index. Monthly
figures, latest show n are for June 1943.




F. W. Dodge data for 37 Eastern states, total
includes state and local governm ent and private
nonresidential building not show n separately.
Monthly figures, latest show n are for
June 1943.

-

1939

1940

1941

1942

1943

W e d n e s d a y f ig u r e s , la te st s h o w n are for
J u ly 14, 1943.