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ISTHLY
R eview
F E D E R A L R E S E R V E B A N K O F ATLANTA
Atlanta, Georgia, Ju ly 3 1, 1952
Volume X X X V II
A
n
I n v e s t m
U n i t e d
e n t
O
p p o r t u n i t y —
S t a t e s
Practically all of us agree that we ought to save. In our
efforts to do so, however, some of us, either because of cir
cumstances or will power, have been more successful than
others. But most of us have succeeded to some degree.
Indeed, about three out of every five spending units, during
the latest year for which we have data, were able to save
something. Even in the group that are the poorest among us,
one out of three has managed to save something.
But most Americans also want to spend. We work, not to
get money, but to get the things that money will buy. The
majority of us want more things than we have money to pay
for. It is no wonder that many times we fail to save as much
as we should; the wonder is that we save as much as we do.
Perhaps one of the reasons that we have done as well as
we have is that many of us have faced emergencies when
having a nest egg meant the difference between meeting them
with difficulty and accepting tragic consequences. Or per
haps we remember opportunities we missed because we lack
ed the necessary funds to take advantage of them. As we
have grown older, some of us have come to realize that one
of the reasons we never bought a home, took a trip to Eu
rope, or sent the children to college, for example, was that
we had never saved. Some of us want to become capitalists
— to have money work for us. If we are going to start a
business, invest in land, buy stocks or any other incomeyielding property, most of us must gradually accumulate
the capital needed by spending less than we earn.
These and other motives for saving are so strong that
many of us, even with small or moderate incomes, would
probably save something whether or not we received any
return in the form of interest. We have two primary desires
about the form in which we place our savings; we want to
be sure that they will obtain the same number of dollars at
a later date and we want to be able to convert our savings
into a spendable form at any time. In more technical terms,
we want safety and liquidity. In addition, we want to receive
the maximum reward for our savings consistent with this
safety and liquidity. We also want yields.
The U. S. savings bond program was conceived to meet
these general needs. It has, moreover, been designed to meet
not only these general needs, but the particular needs of
different groups of savers. Evidence that these needs have
been met is attested to by the fact that, according to the
latest data, at least 40 percent of the spending units in the
Number 7
S a v i n g s
B o n d s
United States held some form of savings bonds. With the
announcement of certain changes in the savings bond pro
gram, this program will satisfy these needs even more.
SERIES E BONDS
For the Saver of M oderate Means
This series was especially designed for persons with moder
ate incomes. Issued in denominations requiring a small pur
chase price of as little as $18.75, they could be bought by
most savers, especially if they were purchased through a
plan whereby the employer or bank withheld a certain
amount each payday. Because persons with moderate in
comes are generally more interested in building up a prin
cipal than in deriving a current income from their savings,
the interest earned by these bonds was not paid until matur
ity or redemption. In other words, they were issued at a
discount of 75 percent of the maturity value. Thus, the
purchaser paying $18 .75 for a bond received $25 ten
years later.
The designers of the Series E program, moreover, recog
nized the ever-present temptation most savers face to liqui
date their savings and weaken their savings program. The
provisions under which the bond was issued thus provided
that the bond would earn higher yields the longer it was
held so that at the end of ten years, the yield would average
2.9 percent compounded semi-annually. Because of the spe
cial advantages embodied in the provisions of the Series E
bond, individual purchases each year were limited to
$10,000 maturity value.
The new Series E bond placed on sale beginning with
May 1 of this year embodies all of these attractive features
and adds certain improvements. The bonds are still issued
in denominations having maturity values of $25 and up
ward, purchased at three-fourths of the maturity value be
ginning at $18.75. By shortening the term of the bond to
nine and two-thirds years, however, the yield for the life of
the bond has been raised to 3 percent on the basis of interest
compounded semi-annually. But there are even greater im
provements for the holder of the bond who must redeem it
before maturity. Formerly, the E bond had to be held for at
least one year before the holder could receive any interest.
Under the provisions of the new Series E bond, a return of
1.07 percent will be earned even if the holder is compelled
54
M o n t h ly
o f th e F ederal R e se rv e B a n k o f A tla n ta fo r J u ly 1952
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M o n t h l y 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 1952
to cash his bond at the end of six months. If he can hold
the bond for at least one year, he will earn 1.59 percent,
compared with .67 percent under the provisions of the
former Series E bonds.
Series E bonds still retain the desirable feature that the
longer they are held the higher rate of interest they earn.
A person buying a bond having a redemption value of
$100, for example, would purchase it for $75. Nine and
two-thirds years later, he would receive $100, thus earning
a rate of 3 percent over the whole life of the bond. If he
cashed it after two years, he would receive $78.20. The
additional dollars earned would provide him with a yield
of 2 .1 percent at that time. If he held it to maturity, how
ever, the $78.20 would yield an additional $21.80, and
would give an approximate investment yield of 3.23 per
cent on the basis of the redemption value at that time.
The desirability of continuing to hold the bond would be
even greater if he contemplated redeeming it after eight
years. At that time, he would collect $93.60, or $18.60 more
than he paid for the bond. But during the remaining life of
the bond, one year and eight months, the investment of
$93.60 would earn $6.40, or an investment yield of 4.01
percent. Balancing the higher yield the owner of a Series E
bond would earn by holding it to maturity against what he
had earned thus far, therefore, provides him with a deterrent
to the liquidation of his savings and a strong inducement
for continuing his savings program unimpaired.
An owner of a Series E bond has a further incentive— to
continue to hold the bond after maturity. Previously, if he
held the bonds for another ten years, he would receive a
yield of approximately 2.9 percent on the maturity value.
If he chose to keep his investment intact by extending his
Series E bond, he would earn during the earlier years ap
proximately 2^/2 percent.
Under the new extension provisions of the Series E bond,
the investor holding his bonds after maturity will also earn
an average return of 3 percent annually for the entire ad
ditional ten years. In case it is necessary to redeem the
bonds before the end of the extended ten-year period, how
ever, he will receive higher rates than prevailed under the
old provisions. After three years, for example, his extended
bond would have earned 2.96 percent in case he had to
redeem it, compared with 2.43 percent under the old pro
visions. Or if he wishes to convert the matured bond into a
security that will pay him a regular income, he may convert
it to a Series K bond, described later, for which he will
receive interest checks every six months for twelve years at
the rate of 2.76 percent per annum.
SERIES H BONDS
Current Income for the Saver of
M oderate Means
There are savers, however, who not only wish to preserve
their savings in a form assuring safety and liquidity but
also wish to receive interest currently from their holdings
rather than in a lump sum at some future date. The Treas
ury has announced a new type of bond for this group
called the Series H bond. Because the E and H bonds were
both designed to appeal to savers with similar desires, they
have many points of similarity.
The Series H bond is issued only to “ natural persons,”
55
thus corporations and associations are excluded. The Series
H bond during its entire life earns the same rate as the
Series E bond. The amount that may be purchased by an
individual during any calendar year is limited to $20,000.
One difference between the Series H and the Series E
bond is that the former is not issued at a discount but at
par. Interest is paid to the holder of a Series H bond by
check at the end of every six months after the bond has been
held for six months. Like the Series E bond, the Series H
bond becomes a more valuable investment the longer it is
held. The checks received are smaller during the first part
of the period than when the bond approaches maturity. At
the end of six months, for example, the holder receives a
check for $4 on a $1,000 bond. Beginning with the one year
and extending to the period of four years after the issue
date, he receives a check for $12.50 semi-annually. After
that period, he receives a check every six months for $ 17 . At
maturity the holder will, of course, receive the amount he
has invested. He may also redeem his bond at face value at
any time prior to maturity if he has held the bond for at
least six months, and after one month’s notice.
The H bond also differs from the E bond in that the low
est denomination offered is $500, with $1,000, $5,000, and
$10,000 denominations also available. The H bond also dif
fers in that there is no extension period after the original
nine and two-thirds year term. The investment yield on a
Series E bond is slightly greater during the earlier years
if the bond is redeemed before maturity.
SERIES J BONDS
Appreciation for Other Investors
For those persons who are unable to satisfy all their in
vestment requirements with Series E or H bonds in any
one year because of the $20,000 maturity value limitation,
the Treasury has provided other bonds which also afford
liquidity, safety, and stability. These bonds also may be
held by corporations and institutions other than banks.
The new Series J bond replaces the Series F bond. It re
sembles the Series E bond in that if the bond is held to
maturity, the interest earned is not paid until the maturity
date— twelve years after the issue date. A bond having a
$1,000 maturity value, for example, is issued at $720. Dur
ing the life of the bond, an investment accrues of 2.76 per
cent compounded semi-annually. Lesser yields are provided
if the bond is redeemed before maturity. The bond may be
redeemed six months after the issue date on one month’s
notice, but if it is redeemed at the first opportunity, the
investment yield on the issue price is 1 . 1 1 percent, whereas
if it is held for four years the yield averages 1.95 percent.
The yields become progressively greater the longer the bond
is held.
SERIES K BONDS
Current Income for Other Investors
The new Series K bond is designed to provide a current
income and to yield the same rates as provided by the
Series J bond. Interest is paid semi-annually equal to 2.76
percent per annum. The provisions of the bond, however,
56
M o n t h l y R e v ie w
encourage the owner to hold it to maturity. If the bond is
redeemed before maturity, the redemption value will be be
low par. For example, an investor pays $1,000 for a Series
K bond. If he holds it to maturity— twelve years after the
issue date— each six months he receives a check for $13.80
and twelve years later receives the full face value of the
bond. If, however, he redeems it two years after the issue
date, he receives only $975. The reduction in redemption
value at that time, of $25, is of course more than offset by
the interest received during the two years, but the net yield
would be only 1.52 percent instead of the 2.76 percent
earned if the bond were held to maturity.
The Series K bond replaces the Series G bond. The in
vestment yield over twelve years maturity, however, is raised
from 2.5 percent to 2.76 percent and the “ cut back” provi
sions applying to redemptions prior to maturity apply to a
lesser extent than in the case of the G bond. There is a limit
of $200,000 on the amount of Series K and J bonds that
any one holder may acquire during a year.
The Opportunity
The U. S. savings bond program thus affords an opportunity
to individuals, regardless of the size of their incomes and
investment programs, to invest their savings in a form that
provides safety and liquidity with an attractive yield. It also
provides an opportunity for institutions to invest part of
their funds in securities having desirable features provided
by no other type of security. The savings bond program is
especially appropriate for those persons who have regular
savings programs. Although the bonds may be converted
readily into cash before maturity without any market loss,
there are rewards for those who hold them to maturity. By
use of the payroll savings plan, moreover, the individual
can be assured of a constantly growing principal resulting
both from his own savings and from the appreciation of
compound interest.
To neglect this opportunity to enter upon a savings pro
gram, and to include the regular purchase of U. S. savings
bonds as a part of it, can mean a loss to the individual. It
is also to neglect an opportunity to participate in an impor
tant part of a sound program of Government finance. To the
extent that Americans participate in the savings bond pro
gram, the greater will be the chance that defense expendi
tures can be financed without inflationary consequences.
B a n k
A n n o u n c e m e n ts
On July 1, the Bank of Naples , Naples, Florida , a n&nmember bank, began to remit at par for checks drawn
on it when received from the Federal Reserve Bank .
The bank’s officers are R . Clarence Tooke, President;
E . L. Turner, Executive Vice President; W . Roy Smith
and E. H. Frank, Vice Presidents; Mamie B. Tooke,
Cashier; and Vera L . Storter, Assistant Cashier. It has
a capital of $50,000 and surplus and undivided profits
of $67,000.
o f th e F ederal R eserve B a n k o f A tla n ta fo r J u ly 1952
S ix th D is tr ic t S ta tis tic s
CONDITION OF 27 MEMBER BANKS IN LEADING CITIES
(In Thousands of Dollars)
Percent Change
July 23,1952, from
July 25
June 25
1952
1951
July 23
1952
June 25
1952
July 25
1951
. 2,856,145
. 1,130,037
. 1,149,848
2,776,925
1,121,016
1,140,862
2,543,982
1,071,127
1,089,419
+3
+1
+1
636,902
638,530
618,450
—0
+3
16,996
15,769
11,973
+8
+42
54,048
91,152
4,020
.
346,730
. 1,726,108
36,240
91,388
9,700
349,235
1,655,909
35,347
91,021
12,612
320,016
1,472,855
+49
—0
— 59
—1
+4
+53
+0
— 68
+8
+ 17
749,554
725,130
251,424
521,415
48,928
752,183
653,704
250,022
504,995
48,421
615,683
630,910
226,262
473,439
47,704
—0
+1
+1
+3
+1
+ 22
+ 15
+ 11
+ 10
+3
.
208,731
Demand deposits adjusted . 2,092,949
Time dep osits..................
554,385
U. S. Gov’t deposits. . .
202,181
Deposits of domestic banks .
536.996
Borrowings......................
287000
214,244
2,074,837
549,908
128*398
548,332
18,200
196,832
1,963,645
521,753
72,830
496,052
500
—3
+1
+1
+57
—2
+54
+6
+7
+6
*
+8
*
Item
Loans and investments—
Total ..............................
Loans— N e t ......................
Loans— G r o s s ..................
Commercial, industrial,
and agricultural loans
Loans to brokers and
dealers in securities .
Other loans for pur
chasing and carrying
securities..................
Real estate loans . . .
Loans to banks. . . .
Other lo a n s ..................
Investments— Total . . .
Bills, certificates,
and notes..................
II. S. bond s..................
Other securities. . . .
Reserve with F. R. Banks .
Cash in vault ..................
Balances with domestic
.
.
.
+ 12
+5
+6
DEBITS TO INDIVIDUAL BANK ACCOUNTS
(In Thousands of Dollars)
Place
ALABAMA
Anniston . . . .
Birmingham . . .
Gadsden . . . .
M o b ile ..................
Montgomery . . .
Tuscaloosa* . . .
FLORIDA
Jacksonville . . .
M ia m i..................
Greater Miami* . .
Pensacola . . . .
St. Petersburg . .
Percent Change
June 1952 from Yr-tn.natp
June
May
June 6 Mos. 1952
1951
1952
1951 from 1951
June
1952
May
1952
32,261
419,393
16,428
21,258
168,629
83,919
29,498
30,402
441,050
18,148
24,064
167,311
100,128
30,968
31,314
412,055
16,502
20,767
161,630
82,984
28,096
+6
—5
—9
— 12
+1
— 16
—5
+3
+2
—0
+2
+4
+1
+5
+3
+7
—1
+1
+3
+2
—1
391,352
321,660
487,699
76,381
48,180
78,004
174,614
396,066
337,194
527,138
86,581
50,392
88,475
170,534
375,926
295,147
449,340
77,848
42,498
73,770
166,409
—1
—5
—7
— 12
—4
— 12
+2
+4
+9
+9
—2
+ 13
+6
+5
+4
+7
+8
+6
+ 13
+8
+3
32,842
1,120,226
90,678
12,051
80,147
4,987
237298
12*312
76,216
10,839
23.397
1187552
17,081
34,161
1,093,403
93,865
12,178
80,188
3,713
24,694
13,689
79,787
10,532
23,785
127,890
17,744
31,077
1,035,712
76,249
12,082
74,857
4,131
21,500
12,661
76,574
11,242
22,250
121,928
13,813
—4
+2
—3
—1
—0
+34
—6
— 10
—4
+3
—2
—7
—4
+6
+8
+ 19
—0
+7
+21
+8
—3
—0
—4
+5
—3
+24
+7
+4
+13
+3
+ 10
+3
+ 13
+2
+3
+1
—5
+3
+20
48,842
115,865
53,118
864,408
45,206
112,525
53,992
903,083
42,149
109,035
44,285
823,059
+8
+3
—2
—4
+ 16
+6
+ 20
+5
+ 10
+3
+ 12
+8
19,481
163,396
30,120
28a676
20,325
170,974
32,235
30,110
18,959
158,322
29,050
24,258
—4
—4
—7
—5
+3
+3
+4
+ 18
+4
+5
+1
+ 27
181,625
1277041
417,092
5,396,520
180,154
121,985
395,227
5,484,416
201,257
139,652
429,437
5,191,829
+1
+4
+6
—2
— 10
—9
—3
+4
—1
—9
+6
+5
GEORGIA
Brunswick . . . .
Columbus . . . .
Gainesville*
. . .
Savannah . . . .
Valdosta . . . .
LOUISIANA
Alexandria* . . .
Baton Rouge . . .
Lake Charles . . .
New Orleans . . .
MISSISSIPPI
Hattiesburg . . .
Jackson ..................
Meridian . . . .
Vicksburg . . . .
TENNESSEE
Chattanooga . . .
Knoxville . . . .
Nashville . . . .
SIXTH DISTRICT**
M o n t h l y 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 1952
57
District Business Conditions
R e ta il T r a d e
The dollar volume of sales at weekly reporting department
stores in the District rose 5 percent in the period January 1
through July 19, compared with that period last year. This
gain merits attention because at these stores throughout the
entire country, sales were off 3 percent.
Since the District trend in consumer spending at depart
ment stores has diverged markedly from the national trend
for over a year, there is much speculation as to the causes.
Gains in the southern part of the country have outstripped
those in other sections, with the poorest sales records being
made in the Federal Reserve Districts bordering the Great
Lakes. As one moves geographically away from this area,
declines are replaced by gains, the largest ones being found
in the deep south. For the first six months of the year, com
pared with 19 5 1, sales at monthly reporting department
stores grew 7 percent in the Atlanta District and 5 percent
in the Dallas District.
E arly in 19 5 1, the trend of department store sales in
the Atlanta District began to diverge from the national pat
tern and that divergence has become more striking in recent
months. From the low point reached in April 19 5 1, depart
ment store sales, after seasonal adjustment, climbed to a
peak in November in both the District and the nation. The
decline that followed ended in February 19 52 for the Dis
trict but not until April for the United States. In the subse
quent recovery, moreover, District advances considerably
surpassed those for the nation.
Within the Sixth District, contrasts were even more pro
nounced, as is shown in the accompanying chart. At Augusta
department stores, for example, the dollar volume of con
sumer purchases in the first six months of 19 52 jumped 27
percent above corresponding year-ago figures, but in Bristol,
Tennessee, sales were down 4 percent. Since January 19 5 1,
most cities, nevertheless, have exhibited either relatively
stable or slightly rising sales trends.
Unless the divergences between District and national
department store sales trends, as well as the contrasts
within the District, are merely the results of consumer
whims, they must have some more fundamental cause.
Since purchasing power is essential for consumer spending,
an analysis of recent income changes may afford some
explanation. According to the Bank’s estimates, during the
first five months of 1952, personal income grew at a greater
rate in the District than in the nation. Reasons for this
growth may be found in an examination of changes in the
major sources of income in the District, that is, in manu
facturing, construction, agriculture, and government. In
addition, part of the explanation may lie in changes in the
rate of saving, in the use of credit, and in prices.
D e v e lo p m e n ts
Sources of Income
Changes in manufactur
ing income, which accounts for approximately 16 percent
of total District income payments, appear to have contrib
uted to the divergence between District and national depart
ment store sales trends. District manufacturing payrolls in
the first five months of this year were 5 percent larger than
in those months last year, compared with a national gain of
2.5 percent.
A ll District manufacturing industries, of course, did not
register uniform gains. Estimated payrolls in the transpor
tation equipment sector rose 32 percent in the period under
comparison, with gains in the aircraft industry more than
offsetting a slump in automotive output. Such a substantial
increase probably affected consumer spending somewhat
although the transportation sector is the source of only
a small proportion of total District income. In the nation
transportation equipment payrolls increased only 14 percent.
Another difference between national and District trends
arose in the paper and allied products industry, in that
payrolls dropped nearly 3 percent in the nation but rose
10 percent in the District. In the food processing industry,
which accounts for 12 percent of the manufacturing employ
ment in the District and for 9 percent in the United States,
the District showed a gain of about 10 percent, compared
with a national rise of only 4 percent. Chemicals payrolls in
the nation also showed a 4 percent rise, but increased 9 per
cent in the District.
The above-mentioned gains were only partly offset by
losses in other industries. In almost every instance, how
ever, declines were less in the District than in the nation.
The slackened demand that has plagued the textile in
dustry since the cessation of the second post-Korean buying
spurt reduced estimated payrolls in District textile mills
by 1 1 percent for the first five months of this year, but the
comparable decline throughout the nation amounted to 13
percent. A 9.5 percent drop in textile employment figures
in the nation loomed large against a 3.5 percent fall in the
District. Developments in the apparel sector followed a simi
lar pattern although the decreases were more moderate. As
national payrolls in this industry decreased 5 percent, Dis
trict payrolls declined slightly less than 3 percent.
Again, in the lumber and wood products industry, the
District fared better than the nation. Roughly the decline
in District payrolls amounted to 5 percent, whereas in the
nation it was slightly more than 6 percent. Only in the
primary metals group did the District decrease in the first
five months of 19 52 from that period of 19 5 1 exceed the
national decline. This industry’s payrolls fell 4 percent in
the District, but decreased less than 1 percent nationally.
Incomes have been boosted by gains in other segments
M AN UFACTURIN G AN D CO NSTRUCTION
58
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 1952
of the economy. District construction activity, for example,
was stimulated by a striking increase in contract awards
during the first five months of 1952, compared with those
months last year. The gain for all types of construction
awards in the District amounted to 16 percent, which takes
on added significance when compared with a 15 percent
drop in the thirty-seven eastern states for which data are
available. Residential awards showed more moderate move
ments— rising 9 percent in the District and falling less than
one percent in the larger area.
The first four months of 1952 marked a period
of relative stability in farm income when compared with the
same period last year, within the Sixth District as well as
nationally. In the District, cash receipts from crops showed
no change, but receipts from livestock and livestock products
increased 6 percent. Since cash crops are predominant in
District agriculture, however, total farm receipts increased
only 2 percent. And this was probably more than offset by
the continued rise in production costs, which for all farmers
throughout the nation amounted to 4 percent in the first
half of 1952. Except in the case of Florida, the first four
months of the year represent an off-season for crop market
ings in which farm income payments are small in proportion
to total annual income payments. Furthermore, receipts from
citrus fruits marketed in Florida early in the year were re
duced considerably because of lower prices.
Other states in the District have shown substantial gains
in cash receipts, such as Alabama with 24 percent and
Georgia with 14 percent. It can be assumed that these
increases are due to the proportionately larger marketings
of cotton in the first part of the year. Although reporting
department stores are not located in cities near principal
cotton producing areas, increases in cash receipts could
contribute indirectly to a growth in department store sales.
In this case, however, changes in District farm income ap
parently have not been a major causal factor in the diver
gence between District and national department store sales
trends.
GO VERN M EN T e x p e n d i t u r e s
Estimates indicate a substantial
growth in Government payrolls in the first quarter of 1952
over 19 5 1 in the District, but not as large as that in the
nation. Government payments on commercial accounts for
military purposes have added to the income stream. In
Georgia, Alabama, and Tennessee such payments were 34
percent higher in the first five months of 1952 than in that
period in 19 5 1. One indication that payments to military
personnel have also increased is the rise in currency ship
ments from the Federal Reserve Bank of Atlanta to major
military or defense areas in Georgia. These shipments in the
first half of 1952 advanced 6 percent above the like period
of 1 9 5 1 ; to Augusta alone, they jumped 48 percent. Although
these data indicate a sharp rise in Government income pay
ments, they are incomplete and moreover cannot be com-
YO RK
P H IL A D E L P H IA
AGRICULTURE
j- 0
TO - 3
| v x J - 4 AND UNDER
1.
For the first s ix m onths of 1 9 5 2 , p e rce n t ch an g es in d ep artm en t
sto re s a le s b y F e d e ra l R e s e rv e D istricts sh o w the g re a te st
g a in s ta k in g p la ce in the so uthern p a rt of the n atio n —-S ix th
an d Elev en th D istricts.
—i—i—i—i— —r-r.i—v | i i l I [— i—i—i— |-—|—|—|—
AUGUSTA
SAVANNAH
MOBILE
TAMPA
NASHVILLE
ST. PETERSBURG
NEW ORLEANS
MONTGOMERY
COLUMBUS
JACKSONVILLE
BIRMINGHAM
MACON
JACKSON
ORLANDO
BATON ROUGE
CHATTANOOGA
ATLANTA
MERIDIAN
MIAMI
ROME
KNOXVILLE
BRISTOL
i— —i—i— i— i—I— r r—i-1 -
B8888$8S$8$8$8888888888$8$8888888888888888888888I
m m m m sm
S8888888888888888888I
mmmma
mmmi
mmm
S8888I
&
m
&
SIXTH DISTRICT
-5
2.
+ 5
+10
+15
+20
+25
+30
During the sa m e p e rio d , strik in g co n tra sts occu rred in ch ang es
in d e p a rtm en t sto re s a le s in le a d in g citie s w ith in th e S ix th
D istrict.
PER
C EN T
JAN. 1951 > 100, UNADJ. INDEXES
1 9 4 7 -4 9 = 100, A D J U S T E D IN D E X E S
140
1
D e p a r t m en t
S to re
M f g . E m p lo y m en t
S a les
100
130
A s ix t h d is t r ic t
II
l> \
A
111
Ii V
N .
IT ------ / —
Mfg . Pa y r o l l s
1
Ji V / \V_/^ ' «-•
'-v* A V 7
■
a/I v7
100
I
no
*\
* V /
v U
1950
3.
y
U .S .
•b#un IITED STATES
1 11 1 1 1
P ER
CENT
105
............................................. .
Jr
\ V
----- ^ A
r
\
/ s iX T h i
^ D I S T R I CT
105
100
—11 1 1 1 1 .1 . 1-1—L _ l_ - u - L J v V '
l- 1
1951
1952
1951
I95»2
D ep artm en t sto re s a le s in th e S ix th D istrict h a v e g ro w n a t a
m o re ra p id ra te than th e n a tio n a l a v e r a g e sin ce e a r ly 1 9 5 1 .
D istrict s a le s g ain s du ring re ce n t m onths a r e p a rtly a ttrib u
t a b le to the r e la t iv e ly g r e a te r a d v a n c e s m a d e h e re in m an u
facturin g em p lo ym e n t a n d p a y ro lls than in the n atio n .
M o n t h l y 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 1952
pared with the national gains because such data are not
available.
Income tax refunds add to consumer purchasing power
and consequently influence consumer spending. These pay
ments in the first half of 1952 for Georgia and Florida were
the highest since 1949.
59
S ix th D is tr ic t S ta tis tic s
___
INSTALMENT CASH LOANS
Lender
Credit Buying
Southerners have traditionally used credit more extensively
than consumers elsewhere. At District department stores,
credit sales generally account for almost 60 percent of
total sales; the comparable figure for the nation is 50
percent.
Undoubtedly, a greater use of credit, particularly instal
ment credit, has contributed to the impressive sales perform
ance at District department stores. In the first five months
of this year, compared with that period of 19 5 1, the change
in District credit sales was in greater contrast with the
national change than it was in the case of cash sales. In
those months of 1952, cash sales at District department
stores grew 5 percent; throughout the country, these sales
declined 2 percent. Instalment sales in the District ran 16
percent higher than they did last year, whereas at the
nation’s department stores, they declined, although less than
one percent. Charge account sales in the District showed
little change from last year, but in the nation, they fell
6 percent.
Expanded business in April and May had pushed total
1952 sales in the District above the year-ago mark. May
increases may be attributed largely to the suspension of
Regulation W, which seems to have stimulated consumer
buying more in this region than nationally. Instalment
sales at District department stores climbed 24 percent in
April and 62 percent in May over last-year marks, com
pared with gains of 8 percent and 2 1 percent for the nation.
Federal credit unions . . .
.
State credit unions. . . .
Industrial banks..................
Industrial loan companies . . . .
Small loan companies . . .
Commercial banks . . . .
. . .
39
17
10
12
34
33
+ 18
—0
+1
— 19
—6
—1
+50
+33
+7
+4
+8
+38
+7
+6
+1
+1
+2
+5
+18
+22
+ 11
+ 12
+ 10
+ 10
RETAIL FURNITURE STORE OPERATIONS
Item
Total s a l e s ......................
Cash sales
......................
Instalment and other credit sales .
Accounts receivable, end of month
Collections during month .
Inventories, end of month .
.
.
. .
.
.
.
Percent Change
June 1952 from
May 1 9 5 2
June
—5
—7
—5
+7
Number
of Stores
Reporting
. . 138
. . 123
. . 123
, . 131
. . 131
. . 98
—2
1951
+ 41
—6
+ 49
+ 33
+ 12
—10
—5
WHOLESALE SALES AND INVENTORIES*
No. of
Firms
Report
Type of
ing
Wholesaler
4
Automotive supplies
. . .
4
Electrical—Wiring supplies .
“
Appliances . .
5
Industrial supplies
. . . .
.
Lumber and bldg. mat’ls . .
Plumbing & heating supplies.
Refrigeration equipment . .
Confectionery.................. .
Drugs and sundries . . . .
.
Groceries— Full-line . . . .
“
Voluntary group .
“
Specialty lines .
Tobacco products. . . . .
Miscellaneous.................. ,
13
4
8
4
6
5
7
16
40
3
10
10
14
Sales
Percent Change
June 1 9 5 2 from
May
June
1952
1951
—10
—15
—9
+3
+ 20
+ 79
—3
+9
—2 9
—25
+ 17
+ 20
—7
—10
+2
—14
+ 13
+6
— 18
—7
—5
+3
—13
—1
—7
+3
—15
+5
—0
+9
+ 14
—4
"Based on U. S. Department of Commerce figures.
No. of
Firms
Report
ing
4
4
3
6
3
3
5
3
6
.,
1*1
+2
+2
28
—1
+ 31
+5
+5
Inventories
Percent Change
June 3 0 , 1 9 5 2 , from
May 3 1 June 3 0
1952
1951
— 18
—10
+2
—3
—20
—5
—7
—3
—4
—2
+2
—15
—4
—10
—2
+4
—3
—3
—24
—5
6
—6
+6
+2
13
—5
—8
5
100
—2
+4
—9
DEPARTMENT STORE SALES AND INVENTORIES*
Percent Change
Savings
Consumer savings as reflected in time deposits at com
mercial banks mounted steadily and at about the same
pace in the District and nation in this 17-month interval.
By May 1952, time deposits had climbed 8 percent over
the January 19 5 1 mark in both the District and the nation.
Individual cities reporting the largest increases in time
deposits for May 1952 from January 19 5 1 generally re
ported biggest sales gains. This suggests that income in
certain areas was sufficiently high to permit consumers to
expand their purchases and at the same time to add to
their savings accounts at commercial banks.
While adding to savings accounts, the public simultane
ously dissaved by cashing their holdings of Series A-E
United States savings bonds. In each month from January
19 5 1 through May 1952, redemptions exceeded sales in
the District. With the exception of November, the same
applied to the United States. Net redemptions in the Dis
trict, however, were generally more constant throughout
the entire period than in the nation. On balance, changes
in savings probably add little to an explanation of the
sales phenomenon.
Outstandings
Percent Change
June 1952 from
May
June
1952
1951
Volume
Percent Change
June 1952 from
May
June
1952
1951
No. of
Lenders
Report
ing
Place
Birmingham..................
,
Montgomery..................
FLORIDA ......................
Jacksonville..................
.
. ,
St. Petersburg . . . .
.
.
. .
. .
.
GEORGIA ......................
A t l a n t a * * ..................
.
.
. .
Savannah** .................. . .
L O U IS IA N A .................. . .
Baton Rouge . . . .
. .
New Orleans
. . . .
M ISSISSIP PI...................
. .
Meridian**.................. . .
TENNESSEE .................. . .
. .
Bristol-KingspoVtJohnson City** . . . .
Chattanooga
. . . .
. .
D I S T R I C T ......................
Sales
June 1 9 5 2 from
May
June
1952
1951
—9
+ 14
—12
+9
+ 24
— 6
—12
+ 10
—10
+ 15
+ 17
—14
+ 11
+ 15
—4
+ 16
—3
+ 15
—15
+ 16
—19
+ 11
—3
+ 42
—8
+ 18
+ 13
—19
+8
—3
+ 31
—9
+ 16
—9
+ 17
+ 15
—12
—15
— 14
—8
—11
—15
. . —1 1
+8
+8
+8
+8
—1
—4
+4
+0
+ 21
+ 15
Yr.-to-Date
19521951
+8
+5
+ 15
+7
+5
+7
+1
+4
+8
+9
+5
+1
+ 27
+7
+5
+1
+ 19
+8
+4
+8
Inventories
June 3 0 , 1 9 5 2 from
May 3 1 June 3 0
1952
1951
—4
—8
—5
—7
—8
—7
—7
— io
+2
—4
—3
—i i
—16
—2
—8
—2
—7
—5
—9
—4
—9
—i7
—7
—13
—7
+4
+4
+1
—10
—4
—12
+2
—5
+1
—10
—21
—17
— 16
—20
—6
+2
—2
+9
+7
—5
—4
—6
—i 7
—10
—11
**ln order to permit publication of figures for this city, a special sample has been con
structed which is not confined exclusively to department stores. Figures for any such
non-department stores, however, are not used in computing the District percentage
changes.
60
M o n t h l y 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 1952
Prices
S ix th D is tr ic t In d e x e s
Among the important factors determining consumer spend
ing behavior are the current level of prices and consumer
attitudes toward possible price changes. The high and rising
level of consumer prices in 19 5 1 assuredly dampened con
sumer spending. The consumers price index in the District
hit its peak in October 19 5 1, two months before the na
tional all-time high was reached. The District index there
after slipped 2 percentage points to 194 in January 1952,
continuing at that point through May, in contrast to
modest fluctuations nationally.
Individual components of the index varied markedly
from the all-item averages. Beginning with October 19 5 1,
clothing prices in the District and the nation fell steadily.
The drop through April 1952 amounted to 4 percent for
the District and 3 percent for the nation. Prices of home
furnishings, after giving ground moderately for almost
a year, were off 3 percent in the United States and 2 per
cent in the District from their respective 19 5 1 high points.
Elaborate promotional campaigns, coupled with steady
price reductions, undoubtedly have stimulated sales at
department stores. But since they were as prevalent in the
District as in the nation, perhaps little weight can be at
tached thereto in explaining the District-national divergences
in department store sales.
Conclusions
Of the major forces possibly affecting the District depart
ment store sales record, three stand out in importance—
changes in manufacturing income, government expendi
tures, and credit buying. Increases have occurred in each,
and gains in manufacturing income and credijt buying have
outdistanced those for the country. Striking percentage gains
in instalment buying have continued down to the present
and have substantially exceeded increases in total depart
ment store sales. Lifting of consumer credit controls has no
doubt been a mainspring in this outstanding, but perhaps
temporary, drive. Although comprehensive data for military
expenditures in the District are not available, their impact
has undoubtedly been significant. So long as the District con
tinues to improve its income position, department store sales
here are likely to grow faster than in the nation.
1947-49 — IOO
DEPARTMENT
June
_________________________________ 1952
DISTRICT SALES . . . .
A tla n ta ^ ..........................
Baton R o u g e ..................
Birmingham......................
Chattanooga.......................
..........................
Jackson
Jacksonville......................
Knoxville............................
M acon...............................
M ia m i...............................
N ashville..........................
New Orleans.......................
T a m p a ...............................
DISTRICT STO CKS. . . .
STORE SALES AND STOCKS*
Adjusted**_______________________ Unadjusted
May
June
June
May
1952
1951__________ 1952
1952
138
135
122
118
129
135
125
122
164
136
130
128
129
125
127r
133
103
108
127
115
112
117
140
132
108
119
118
126
Item
Cotton, lb.
. . .
Cottonseed, ton . .
Peanuts, lb. . . .
Corn, bu..................
Rice, cwt.................
Oranges, box . . .
Beef Cattle, cwt. .
Hogs, cwt................
Chickens, lb. . . .
Eggs, doz.................
Milk, cwt.................
.
.
.
.
.
,
.
.
.
.
.
,
.
.
.
.
.
.
.
.
.
.
May
1952
June
1951
4 39.8
$ 66.00
4 9.5
$ 1.89
$ 5.70
$ 1.17
$ 23.73
$ 19,05
4 26.5
4 39.4
$ 5.49
38.3
66.17
9.6
1.89
5.50
1.08
24.30
18.50
24.9
37.5
5.53
42.9
91.17
10.4
1.70
5.70
1.63
25.16
19.88
29.5
45.9
5.32
Percent Change
June 1952 from
May 1952 June 1951
—4
—0
—1
0
+4
+8
—2
+3
+6
+5
—1
—7
— 28
—9
+ 11
0
— 28
—6
—4
— 10
— 14
+3
122r
126
107
111
127
114
119
118
134
114
119
112
111
127
98r
95r
86
93
105
98
91
104
116
93
89
92
97
135
GASOLINE TAX COLLECTIONS
Adjusted**
May
1952
June
1951
June
1952
May
1952
June
1951
. . 153
. . 145
153
149
153
150
170
171
154
149
137
133
156
146
166
156
154
151
147
151
167
172
146
155
152
154
150
157
167
154
151
143
133
160
149
171
157
Place
SIX STATES
Alabama . .
Louisiana
Mississippi
Tennessee .
.
.
.
.
.
.
.
.
.
148
164
167
144
COTTON1 CONSUMPTION*
ELECTRIC POWER PRODUCTION*
June
1952
May
1952
June
1951
May
1952
April
1952
May
1951
. 104
. 120
. 95
117
. 101
105
104
105
111
101
124
123
125
116
118
SIX STATES . 146
Hydro
generated .
84
Fuel
generated . 202
149
130
Place
TOTAL. . .
Alabama .
Georgia. .
Mississippi
Tennessee .
Unadjusted
June
1952
May
1952
Place
SIX STATES
Alabama .
Florida . .
Georgia . .
Louisiana .
Mississippi
Tennessee .
.
.
.
.
107
105
117
Ill
. 100
. 108
. 106
April
1952
107
105
120
110
98r
108r
105
May
1951
107
101
114
111
99
110
107
June
1952
May
1952
June
1951
. 195
. 231
. 209
194
228
208
191
229
210
143
143
143
. 204
. 175
204
175
209
166
.52
.52
Item
ALL ITEMS .
Food . . .
Clothing .
Fuel, elec.,
and refrig.
Home fur
nishings
Misc. . .
Purchasing
power of
dollar . .
.
.51
* Dai ly average basis
**Adjusted for seasonal variation
***1935-39 = 100
r Revised
110
99
185
158
CONSTRUCTION CONTRACTS
MANUFACTURING EMPLOYMENT
SIXTH DISTRICT STATES
June
1952
117
110
105
105
114
108
110
109
136
107
113
110
116
120
Hn order to permit publication offigures for this city, a special sample has been con
structed which is not confined exclusively to department stores. Figures for any such
non-department stores, however, are not used in computing the District index.
CONSUMERS PRICE INDEX***
FARM CO M M O D ITY PRICES IN THE
115r
115r
100
105
119
123
103
117
140
118
103
107
108
141
June
1951
June
1952
Place
DISTRICT .
Residential
Other . .
Alabama .
Florida . .
Georgia . .
Louisiana .
Mississippi
Tennessee .
.
.
.
.
.
.
.
.
.
242
189
282
193
229
281
166
110
347
May
1952
187r
199r
178r
150
169
242
160
218
168
June
1951
220
239
205
293
189
252
179
240
189
ANNUAL RATE OF TURNOVER OF
DEMAND DEPOSITS
June
1952
Unadjusted . . 22.8
Adjusted** . . 23.0
Index** . . . 119.5
May
1952
June
1951
21.8
23.6
122.7r
23.5
23.7
123.1
CRUDE PETROLEUM PRODUCTION
IN COASTAL LOUISIANA
AND MISSISSIPPI*
Unadjusted
Adjusted**
June
1952
May
1952
June
1951
133
134
120
118
127
128
@FedFRASER