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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 ■ “""goldstoc ’ .s M M B B A N K RES EE R V EER BA L A N CES /[if [__ 1 L - T ' ■ — RES— ERV EB A N KCRO IT .... , TREAU 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.