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Atlanta, Georgia June • 1958 1Iso in this issue: MARSHALING FUNDS FOR DEVELOPMENT NEEDS PULPWOOD OUTLOOK OPTIMISTIC TRUST DEPARTMENT EARNINGS UP IN 1957 DISTRICT BUSINESS HIGHLIGHTS SIXTH DISTRICT STATISTICS SIXTH DISTRICT INDEXES 'jfystm I B im S / a k o f n ta Lower Interest Rates and Easier Credit ( C h a n g e s in e c o n o m i c a c t i v i t y u su a lly a r o u se co n tro v e r sy o v er in - terest rates. The present recession has been no exception. Differences of opinion, however, have not been confined merely to how low interest rates ought to be and what should be done to lower them. There has even been confusion as to the changes in rates and their implication. One thing is certain: Interest rates have declined from their peak of last fall. The United States Government, for example, has found it much cheaper to raise money. Last October, it paid 3.66 percent to borrow for ninety-one days; by late May the rate at which it sold three-month Treasury bills had fallen below one percent. Corporations with high credit ratings that sell commercial paper in the open market now pay about 2y2 percent less than they paid last autumn. Commercial banks have shaved the rates they charge their customers. Long-term rates, like mortgage rates and yields, or net income to maturity of U. S. Treasury and corporate bonds, have likewise come down. Many find it signifi cant that these have declined less sharply than short-term rates, that is, the price of borrowing for less than one year. Drop in Short-Term Rates Dramatic That interest rates have declined is not surprising, because they usually do so in a recession. What is unique is how much short-term rates have fallen since last October. Not even in the corresponding months of 1929 and 1932, did short-term rates drop so much. The spark setting off the spectacular decline in short-term rates was the lowering of the discount rate by the Federal Reserve Banks in midNovember from 3y2 to 3 percent. Reducing the fee the Reserve Banks charge on loans to member banks at that time was a way of saying that the Reserve System regarded recession as a more immediate danger than inflation. Many persons thought that the Federal Reserve System would follow up the reduction in the discount rate with actions that would supply the banks with additional reserves, which would in turn bring about a general decline in interest rates. These expectations made for a greater drop in yields than that which would ordinarily follow from a change in the discount rate. The recent decline in interest rates would have slowed down if the System had not increased the amount of loanable funds to the banks. The Reserve System contributed to further declines by adding to mem ber bank reserves in two ways: First, it bought Government securities, and, secondly, on three separate occasions it reduced the reserves which member banks are required to keep with Federal Reserve Banks. Yields and the Prime Rate 1953-54 and 1957-58 Banks React to Easier Credit With their extra funds, commercial banks have repaid most of what they owed the Federal Reserve Banks and have bought Government and municipal securities. From November 1957 to April 1958, their holdings of these securities expanded about 7.8 billion dollars. That is a large sum of money considering that in the like period of the previous year these same banks sold 300 million dollars of securities. Apart from Federal Reserve policy, loanable funds be came more plentiful when borrowing fell off. From last November to April loans at all commercial banks fell some 200 million dollars; the previous year, they went up 1.5 billion. Banks in the larger cities felt the drop in de mand for loans most of all, whereas the country banks experienced increases this year. Loans probably would have declined more than they did had it not been for the easier reserve positions of the banks. Banks in major cities moved more quickly in lowering the prime rate (the fee charged their customers with the best credit rating) after the drop in interest rates in this recession than in the 1953-54 one. The January reduction in discount rates was followed by a 0.5 percent decline in the prime rate. A second cut in the prime rate in April, from 4 percent to 3 ^ percent, came after the discount rates were lowered for the fourth time. Long-Term Rates Come Down Too For long-term rates to have dropped less than short-term rates in this recession is not unusual. Long-term rates are to some extent influenced by what investors think short term rates will be during the life of a bond. It is partly because such expectations seldom change from week to week that long-term rates fluctuate less than short-term rates. Another reason is that demands for long-term funds usually change less sharply during booms and recessions than demands for short-term funds. By comparative standards, the drop in long-term rates has been sizable. Indeed, yields on long-term Treasury and corporate securities have already dropped more from their peak of last autumn than in the entire 1953-54 stretch of falling interest rates. There have been, since World War I, only two comparable periods of general in terest rate declines— 1921 and 1932— during which the recent seven-month old decline in corporate bond yields was surpassed. Often overlooked is that corporate treasurers have found that the cost of borrowing has come down more than the yields on bonds they sold some years ago. Re offering yields on newly issued Aaa corporate bonds, for example, averaged 1.09 percent less in April than in mid-1957, when the high point was reached; yields of outstanding issues of like quality were quoted at only 0.58 percent below their peak. That long-term rates have dropped so much is all the more remarkable because capital markets have had to ab sorb large amounts of new public and private bond offer ings. After having stayed out of the long-term market since 1955, the Treasury has raised cash through the sale of bonds four times since September. This has held down declines in yields on bonds previously sold by the Treasury. Yields on short-term obligations might not have dropped as much had the Treasury not refinanced part of the short term debt that came due with securities of over five years maturity. Between January and April, corporations sold stocks and bonds in an amount only slightly smaller than in the same period last year. State and local governments ac tually borrowed one-fifth more than in the like period of 1957. The easing in long-term money, in the face of large cap ital offerings, suggests that the System, even though il bought only short-term securities, can take credit for bring ing long-term rates down a notch. The funds that the Re serve System put into the hands of the banks and those ob tained from the repayment of bank loans found their waj into Government and municipal securities, at lower yields and have eased strains in the investment markets. More over, credit ease encouraged state and local government: to borrow and stimulated housing activity. Of additiona significance is that monetary policy avoided any semblanc* of setting either the prices of securities or interest rate that are associated with direct intervention in the long term market. H arry B ran dt •2 • M a r s h a l i n g F u n d s f o r Businessmen actively promoting industrial development in the Sixth Federal Reserve District believe business opportunities and living standards in their state or local community can be improved if people will only marshal available resources and use them to better advantage. Believing their resources can be put to better use, they may try to aid expansion of existing business, to help entirely new business develop, or to attract new firms from other areas, either in the form of branches of national organizations or of industries that find it advantageous to move to a new location. The problems of such businesses will vary with their type, but the problem of adequate financing is common to all of them. Well-established firms wanting to expand or enter an area ordinarily can obtain the necessary fi nancing through usual channels without difficulty. New firms that might provide employment opportunities, how ever, may not be able to get credit so easily. They may not measure up to the credit standards required by banks and other financial institutions. Perhaps they need credit for longer periods of time than they can get at the banks. New businesses may not be able to borrow money simply because they have not had time to build up satisfactory credit records. Bankers would be the first to admit there are such instances in which extensions of credit by them simply are not warranted because the risk is too high. Thus, there is a credit gap, the closing of which might well provide new industries and jobs. A New Method People concerned about closing this credit gap in the Sixth Federal Reserve District will be interested in learn ing about the privately financed development credit cor poration, even though they may find it is not appropriate to their particular needs. This type of corporation origi nated in Maine in 1949 to help provide credit to promising businesses unable to borrow from banks and other finan cial institutions. Similar corporations have since been established and have become active in four other New England states, North Carolina, and New York. It was thought best in each case to organize on a state-wide basis to assure the maximum diversification of loans and to ob tain the largest possible pool of funds for development purposes. The New England corporations, active for the longest time, have made 230 loans totaling 14 million dollars since starting operations. At the end of 1957, loans out standing amounted to 8.7 million dollars and represented credit being used by almost 200 New England businesses. Over 90 percent of these loans were granted with original maturities of five years or longer; the average maturity is about seven years. Through 1957, the New England cor porations had suffered losses of less than 0.5 percent of ;heir loans. In many cases, the credit they extended has enabled businesses to borrow additional funds from banks and other financial institutions. Their contribution to in dustrial development, therefore, has been greater than ndicated by the figures on their own extensions of :redit. D e v e l o p m e n t N e e d s It takes money, of course, to lend money, and develop ment credit corporations have obtained their operating funds by selling stock and by borrowing. Their unique character is reflected in how they do this. Stock has been sold to those businesses and individuals who are primarily interested in promoting industrial developments rather than in earning dividends. Stockholders may expect to receive indirect benefits from the anticipated industrial develop ment, but the public interest nature of the New England corporations has, so far, discouraged reliance on dividend payments as a means of attracting funds. The major part of the funds is obtained by borrowing from so-called members, usually limited to banks, insur ance companies, and other financial institutions. In becom ing members, these institutions commit themselves to lend a small percentage of their capital and surplus (or similar fund) when needed as the credit corporation’s business expands. Borrowings from members, however, are usually limited to about eight times the corporation’s paid-in capital. Generally, members are not permitted to buy stock, thus avoiding any conflict of interest arising from a dual position as both owner-borrower and creditor. A moment’s thought shows that the ownership capital of the credit corporation provides a base for borrowing much larger amounts from banks, insurance companies, and other financial institutions than could otherwise be obtained. The development corporation thus is able to tap what is usually an area’s largest potential source of funds for development purposes. Previously prevented from lending to high-risk borrowers, other financial in stitutions are enabled to do so indirectly through the development credit corporation. Their risk exposure is re duced, for the credit corporation’s equity capital is present to absorb any losses that might occur. The credit corporation, when first begun in each area, was itself a new and untried business. In such a situation, the authorities regulating financial institutions quite natu rally might be reluctant to permit banks and others to lend to development credit corporations for the same rea son that they would be reluctant to permit lending to any other new business. Because of this, it has been con sidered advisable to obtain legislation that specifically permits banks and other financial institutions to become members of such corporations. As a result, the New England corporations were organized under special char ters granted by the various state legislatures. Besides giving official sanction to such activities, permissive legis lation, of course, is advantageous in that it provides pub licity to a new type of organization and enhances the chances of success in obtaining the necessary funds, both through selling stock and obtaining loan commitments from members. The Potential in the Sixth District You may wonder what funds for development purposes could be marshaled in Sixth District states through the organization of development credit corporations. This would, of course, depend on how much stock could be sold and the success in soliciting membership. Let’s look, •3 • however, at what bankers alone could provide if all be came members and enough stock were sold to other busi nesses and individuals to permit full use of bankers’ commitments to lend. Assuming member pledges would be limited to 2y2 percent of their capital and surplus, the usual limit in New England, commercial banks could provide funds for industrial development purposes totaling over 23 million dollars, based on figures available for the end of 1957. The potential in each state ranges from over 2 million dollars in Mississippi to nearly 6 million dollars in Florida. To realize such a potential, however, credit corporations established along the lines of those in New England would have to sell nearly 2.9 million dollars in stock. This would be true if the corporations were required to have one dollar of paid-in capital for every eight dollars they borrow from members. Stock sales would have to range from 264,000 dollars in Mississippi to 727,000 dollars in Florida if commercial bank resources were to be utilized to the fullest. Limitations on borrowing in relation to capital are necessary, of course, if the risk exposure of members is to be reduced by providing a reasonable equity cushion between them and the firms who borrow, in turn, from the credit corporation. These limitations may be selfimposed or determined by the legislation granting the corporate charter. In some cases, specific dollar limitations are placed on borrowings from members. Some banks, of course, might prefer not to commit themselves to lend to development credit corporations by becoming members. This has been the case in New England, yet in that area actual membership pledges at the end of 1957 amounted to nearly 75 percent of the potential total. Most of the large commercial banks have become members. If bankers in the Sixth District states would do as well as those in New England have done, they would provide development funds totaling about 17 million dollars. Attention has been focused on banks as a potential source of loan funds for development credit corporations because they have been the main source in New England, providing over 60 percent of the amount pledged as of December 31, 1957. Insurance companies have been another important source of funds there, and perhaps could be expected to be so in the Sixth District states. If the experience in New England can be considered typi cal of what could happen in this region, life insurance companies in Sixth District states might pledge an addi tional 3 million dollars. W idespread Support Required Experience with development credit corporations in New England suggests that any effort to divert more of a state’s financial resources toward industrial development would require widespread business and public support. Naturally, the active interest and support of bankers and other financial leaders would be necessary if funds at their disposal were to be used. Yet, active support by others in providing the basic capital is a first requirement. This is also shown by the experience in New England, where lack of basic capital has presented the greatest difficulty in obtaining sufficient operating funds. In several cases, funds pledged by members cannot be fully utilized because not enough capital stock has been sold. The problems presented, however, should not prevent interested individuals from considering the privately financed development credit corporation as a possible method of aiding industrial development in their area. Whether or not it is the best method, or even an appropri ate method, depends on how well it can be adapted to the particular needs of each state. P h i l i p M. W e b s t e r Pulpwood Outlook Optimistic Income from pulpwood production in Sixth District states amounted to 182 million dollars in 1956, one-fourth as much as was received from cotton. Although that record was not matched in 1957, indications are that the industry enjoyed a good year: The volume of pulpwood harvested was only 3 percent less than the 1956 volume. Prices paid by Southeastern pulpwood manufacturers, however, were unchanged, and pulpwood producers’ income for the year came to about 176.5 million dollars, according to esti mates by this Bank. The slight cut last year in pulpwood production may seem to indicate a weaker pulpwood market, yet the mar ket can hardly be called weak when the consumption de clined only 0.2 percent from the record established in 1956. Some impressive gains in pulpwood utilization were recorded in the industry nationally. Despite an over all drop in paper and board output, newsprint production increased 11.4 percent. Other individual paper grades— machine-coated papers, sanitary papers, and tissue papers — also showed increases from 1956. Consumption ol wood pulp in rayon, acetate, cellophane, and plastic pro duction was up 10.6 percent. In addition, exports in creased 18.5 percent from 1956 and imports dropped al most 10 percent. With pulpwood consumption remaining high, it is nc wonder that mill buying prices remained unchanged a $15.25 a cord. District growers received between $2.5( and $6.00 a cord, stumpage, and pulpwood dealers an( those logging the wood got between $9.25 and $12.75 ; cord, depending on their production cost. Because mil buyers are becoming more selective, the quality of woo< pulp is improving. Mill demand for pulpwood has not increased this sprin; over that last year and inventories are high. Productioi this year, therefore, probably will not exceed the 195' volume. Nevertheless, although inventories are high, the account for only one-fifth of annual consumption, and the could quickly be consumed by an upsurge in sales. •4 • Looking ahead we see increased incomes from the sale of pulpwood and optimism in the industry. A United States Department of Commerce report projects 1965 paper and board production 42 percent above that in 1957. According to the report, existing supplies of stand ing timber in the United States, together with prospective growth, appear adequate to meet those increasing de mands for pulp and paper. A short supply, therefore, will not cause a sharp upward pressure on pulpwood prices, and yet producers’ income from the sale of pulpwood should rise above the 1956 amount. The slight weakening in demand that began last year may bring temporary price dips. N. C arson B ranan FINANCING SMALL BUSINESS The first two parts of a three-part study on the financing problems of small business conducted by the Research staffs of the Board of Governors and the Federal R e serve Banks have been submitted to the Committees on Banking and Currency and the Select Committees on Small Business, United States Congress. Copies of this report may be secured by addressing requests to either the Senate or House Committee, Washington, D. C. The report, entitled F in a n c in g S m a l l B u s in e s s , includes a number of background studies and surveys of credit and capital sources. Trust Department Earnings Up in 1957 Trust departments of Sixth District commercial banks had a better net earnings record in 1957 than they did in 1956. Information collected in a Special Survey of Trust Department Earnings and Expenses revealed that last year net earnings of the 24 banks reporting in the Survey both years, adjusted for deposit credits, amounted to 16.1 per cent of total commissions and fees; in 1956 their earnings totaled 14.6 percent. The principal reason for improved earnings was the higher allowance for deposits with the banking department, which rose from 16.4 percent of total commissions and fees in 1956 to 17.8 percent in 1957. The rate allowed for these deposits increased from 1.95 percent to 2.10 percent. The Survey also revealed that total trust assets amounted to 2,061 million dollars at the end of 1957. This was 3 percent higher than the 2,006 million a year earlier. The number of accounts increased somewhat less rapidly— from 13,596 to 13,704, a gain of one percent. Total commissions and fees amounted to 5.7 million dollars during 1957, a gain of 10 percent from the previ ous year. Total expenses, on the average, exceeded total income, however, resulting in a net loss before taxes of 1.7 percent of total income. Only after allowance for deposit credit, which was somewhat larger than in 1956, were these departments able to get into the black; four remained in the red even after this adjustment. Management of estates and personal trusts was a major source of trust income during 1957; both estates and per sonal trusts contributed 34.4 percent of the total. Fees for handling agency accounts supplied 21.0 percent of the total. The remainder came from pension and profitsharing accounts and from corporate trusts. Salaries, including insurance and retirement allowances, formed about two-thirds of total trust department ex penses during 1957, the same as in 1956. Overhead charges, trust departments’ share of general costs for the bank as a whole, came to 12.8 percent of total expenses. W. M. D avis NOTE; M ore detailed results o f the Survey m ay be obtained fro m the Research D epartm ent, Federal Reserve B ank o f A tlanta, A tlanta 3, Georgia. Trust Department Earnings and Expenses 24 Banks Reporting in Both 1956 and 1957 Surveys Percent of total commissions and fees Commissions and fees from: Personal accounts.............................. Corporate accoun ts........................... Pension and profit-sharing trusts . . . A g e n c ie s ................................................. Personal accounts.............................. Corporate accounts........................... Total commissions and fees . . . Total expenses.............................................. Net earnings before income taxes . . . . Income tax charges (— ) or credits ( + ) . Trust department net earnings . . Allowed credits for d ep o sits................... Trust department net earnings . . (adjusted for deposit credits) Percent of total expenses Direct expenses: Salaries and wages: Officers................................................. E m p loyees.......................................... Pensions and retirem en ts................... Personnel insurance.............................. Other expenses related to salaries . . . Total expenses related to salaries . Occupancy of q u a r te r s....................... Furniture and eq u ip m en t................... Stationery, supplies, and postage . . . Telephone and te le g r a p h ................... A dvertising.............................................. Directors’ and trust committee fees . . Legal and professional f e e s ............... Periodical and investment services . . Exam inations.......................................... Other direct ex p en ses........................... Total direct ex p en se s....................... Overhead .......................................... Total ex p en ses.................................. Related items: Average rate allowed on deposit credit...................................... Dollar amount of total commissions and fees (th ou san d s)....................... Dollar amount of total expenses (thousands) ...................................... Average number of o ffic er s............... Average number of employees . . . . 1956 1957 36.9 39.2 32.4 6.8 3.9 20.0 13.7 6.3 100.0 101.3 — 1.3 — 0.7 — 2.0 16.4 14.6 34.4 39.8 34.4 5.4 4.8 21.0 13.3 7.7 100.0 101.7 — 1.7 + 0.0 — 1.7 17.8 16.1 1956 1957 35.2 23.9 4.3 1.2 1.1 65.7 5.4 2.0 3.3 1.0 2.6 0.9 1.2 1.9 1.0 2.4 87.4 12.6 100.0 32.9 26.6 3.8 1.4 1.0 65.7 5.0 2.2 3.0 1.1 2.4 0.9 0.9 1.8 1.0 3.2 87.2 12.8 100.0 1.95 2.10 5,184 5,688 4,799 5.7 16.9 5,295 6.0 17.5 • 5 • Nonfarm Employment Bank Announcement Sixth District States and United States 1955-58 On May 12, 1958, the State Bank and Trust Company, Brunswick, Georgia, a newly organized nonmember bank, opened for business and began to remit at par for checks drawn on it when received from the Federal Reserve Bank. Officers are Ray W. Whittle, President; E. B. Moore, Executive Vice President and Cashier; and Harry duB. Parker, Vice President. Capital stock of the bank amounts to $225,000 and surplus and un divided profits to $75,000. Percent Percen t Debits to Individual Demand Deposit Accounts (In Thousands of Dollars) Percent Change April 1958 March 1958 32,324 698,608 24,042 27,521 246,037 131,240 20,083 43,009 32,955 699,175 25,393 28,101 247,407 134,061 20,164 42,210 32,422 652,306 24.707 30,392 277,624 126,440 19,463 38,922 57,103 200,447 33,420 737,389 ]6,245 66,333 797,389 1.209.11] 183,562 80,409 165,369 330,643 120,026 53,350 197,919 34,879 664,451 15,676 70,431 794,617 1,185,834 167,378 78,361 165,456 336,490 107,732 54,176 198,887 29,380 617,037 14,5] 8 60,176 748,783 1,173,801 161,364 80,908 157,511 309,594 106,787 52,908 32,887 1,632,422 88.059 19,614 90,114 7,672 49,382 15,524 18,787 100,765 25,264 15,446 36,593 171,311 21,271 52,047 32,075 1,586,858 86,687 18,920 89,738 8,230 45,469 15,994 18,834 101,561 24,234 15,363 36.688 168,311 22,470 54,892 31,314 1,627,646 83,918 18,508 93,818 64,046 201,563 54,720 84,926 1,234,678 62,695 180,363 45,632 75,319 1,272,165 —1 . . 63,165 183,323 50.843 80.628 1,243,487 +1 —2 MISSISSIPPI Biloxi-Gulfport* . . Hattiesburg . . . Jackson .................... Lau rel*.................... Meridian . . . . Natchez* . . . . Vicksburg . . . . 39,141 30,519 207,076 22.783 33,918 18,7?9 16,811 38,330 29,080 190,497 21.878 34,910 19,961 16,572 37,322 29.036 198,826 20,250 33,641 19,460 18,653 +2 +5 +5 +4 + 13 TENNESSEE Bristol* . . Chattanooga . Johnson City* . Kinqsport* . . Knoxville . . Nashville . . 38,803 262.015 38.7R6 64.152 lo f iio a 602,197 37,479 27^,322 37,9^8 79.785 200.838 588,647 43.867 +4 —4 277,660 35 927 + 2 67,932 —20 __ 1 209,660 580,265 +2 8,512,287 8,379,063 ALABAMA Anniston . . . . Birmingham . . . Dothan.................... Gadsden . . . . M o b ile .................... Montgomery . . . S e lm a *.................... Tuscaloosa* . . . Employment has fallen off less since last summer in the Sixth District than in the United States. Department Store Sales and Inventories* Apr. 1958 from Mar. Apr. Place ALABAMA .................... Birmingham . . . . M o b ile ......................... Montgomery . . . . FL O R ID A ......................... Daytona Beach . . . Jacksonville . . . . Miami Area . . . . M ia m i.................... Orlando......................... St. Ptrsbg-Tampa Area. St. Petersburg . . T a m p a .................... G EO R G IA......................... A tla n ta ** .................... A u g u s t a .................... Columbus.................... M a c o n ......................... R o m e * * .................... Savannah . . . . . LO U ISIA N A .................... Baton Rouge . . . . New Orleans . . . . MISSISSIPPI . . . . Jackson......................... Meridian** . . . . TENNESSEE .................... Bristol-KingsportJohnson City** . . Bristol (Tenn.&Va.)** Chattanooga . . . . K n o x v ille .................... D ISTRIC T......................... 1958 —1 —7 —2 +6 —2 + 13 +5 —1 —2 —3 —5 —5 —A +3 +1 + 15 +4 +9 +4 + 10 +2 —8 +2 +8 +8 + 12 +8 +3 +6 +2 +7 +2 1957 —5 —7 —2 —5 —1 +1 —12 +1 —1 —3 +4 —6 +14 —1 +1 —13 +1 —4 —31 —5 —11 —12 —11 —4 4 n/|0nths 1958 from 1957 —4 —4 —2 —3 —1 —1 —5 +1 —3 —4 +3 —9 +16 —1 +1 —10 +0 —3 —22 —5 —5 —2 —6 —4 —2 —6 —10 —5 —2 —6 — 21 — 13 —14 —7 —2 —6 —8 — 10 —5 —3 . . . . Greater Miami* . . West Palm Beach* . ________Inventories Apr. 30,1958 from Mar. 31, Apr. 30, 1958 —7 —14 —2 +i —1 1957 —14 —16 —5 —7 —5 —i —2 +3 Athens* —10 —9 — i2 —7 —5 —2 —5 —6 —8 —5 +3 —6 +2 +3 —15 +0 —6 —2 —8 —7 —1 ^953 from 1957 —0 —4 +7 —3 —9 —0 +0 +5 +10 +1 +10 —7 —2 —1 —11 —12 —2 +4 +2 —0 +3 +1 +8 + 2 + 11 +7 +1 +1 —4 +14 + 11 +20 +12 +10 +6 +4 —6 +0 +2 + 10 +3 —0 —2 + 11 +3 +14 —1 +5 +7 +12 +13 +1 +9 +5 +3 +7 —1 +1 +6 +8 — i“, . . . . Augusta . Brunswick . Columbus . Flberton . Gainesville* Griffin* . LaGrange* . . . . . . . . . . . . . . . . . . . . . . Marietta* . . . . Savannah Valdosta — io —3 —3 —2 —0 —5 GEORGIA •Reporting stores account for over 90 percent of total District department store sales. **In order to permit publication of figures for this city, a special sample has been constructed that is not confined exclusively to department stores. Figures for non department stores, however, are not used in computing the District percent changes. FLORIDA Daytona Beach* . Fort Lauderdale* Gainesville* . . Jacksonville . . Key West* . . . . Lakeland* . . . . Pensacola . . . . St. Petersburg . . Percent Change ___________ Sales_______________ April 1958 from April March April 1957 1958 1957 . . . . . . . . LOUISIANA Alexandria* Baton Rouge Lafayette* . Lake Charles New Orleans . . . . . . . . . . . . . . . . . . . . . . . . . SIXTH DISTRICT 32 Cities . . . . UNITED STATES 344 Cities . . . . . 8,261 45,484 15.122 20,196 99,147 24,926 14,472 39,561 177,476 22,040 +2 +3 +3 —4 +5 +0 —1 +6 +3 +5 —1 +4 +6 —7 +9 —3 +0 —4 —7 +9 +3 —7 +13 —3 +4 +4 +2 +1 +2 —0 —1 +1 —0 +2 —5 —9 —7 —5 +5 +9 +4 —3 +7 —8 —3 —3 +1 +2 + 11 +7 +1 —6 —A + 1 —10 +2 +3 —4 —0 +0 +4 —2 —2 —9 +0 +10 +7 +6 —2 +4 +1 +1 +8 —0 +0 —2 —12 —6 +8 —6 —3 —5 +4 —3 +3 —2 + 5 +2 8,294,854 +2 +3 +2 204,100,000 203,844,000 192,628,000 +0 +6 +4 * Not included In Sixth District totals. •6 • Sixth District Indexes Seasonally Adjusted (1947-49 = 100) SIXTH DISTRICT 1957 MAR. | APRIL MAY JUNE JULY AUG. SEPT. 134 120 170 136 175 116 81 162 108 91 218 194 88 308 135 121 171 136 179 117 80 163 107 90 231 198 89 310 135 121 164 136 185 118 80 156 108 89 235 201 87 298 135 120 164 133 180 113 80 161 107 89 243 200 89 297 1958 OCT. NOV. DEC. JAN. FEB. MAR. APR. 134 119 165 133 177 113 81 159 104 89 230 197 90 299 134 120 166 131 178 113 80 161 105 88 216 194 86 303 134 120 166 131 176 114 78 159 100 88 216 196 85 299 133 118 164 131 172 115 78 159 99 88 225 194 79 295 134 117 167 129 173 117 77 158 95 87 211 187 83 317 133 116 167 129 169 117 76 156 90 86 197 182 . 78 325. 132 113 165 127 166 114 74 155 90 84 191 183r 78 311 131 113 162 130 168 112 74 158 89 85 184 182 74 n.a. . . , . . 131 166 116 80 161 106 . . . . 206 190 86 298 134 120 168 134 172 117 81 163 107 91 209 191 84 297 . . . , . 203 319 293 339 115 102 139 161 160 170 139 143 102 124 144 160 247 132 166 143 204 107 156 258 216 139 148 109 195 313 268 350 129 120 149 158r 141 167 118 140r 98 119r 146 141 231r 140 182 148 206r 113r 160 259 223 138 156 102 195 311 291 327 132 135 146 172 163 183 134 141 112 127 154 149 252 142 185 157 198 106 160 260 224 144 159 109 170 320 325 315 142 150 145 176 158 186 131 146 107 128 148 151 251 148 187 165 198 111 159 261 223 140 160 103 172 330 319 340 148 149 158 175 159 177 128 149 119 127 151 147 267 148 183 159 204 114 162 263 231 152 168 111 160 330 341 321 109 74 152 179 167 194 138 151 121 135 158 166 274 148 185 167 203 110 160 268 225 147 166 106 164 315 324 308 83 62 147 172 154 181 132 147 111 132 156 141 267 151 189 165 201 105 161 268 231 144 158 110 167 283 334 241 93 76 157 159 149 187 128 141 102 118 139 136 244 145 177 147 208 103 159 265 221 138 145 101 161 261 288 239 102 82 151 166 154 205 123 147 115 130 144 143 231 140 195 180 206 108 159 263 216 136 144 99 175 259 294 229 123 108 173 173 156 201 126 145 117 133 156 149 255 147 207 201 207 113 162 269 235 149 160 113 169 264 272 257 124 103 160 157 151 181 121 142 109 127 146 139 234 132 192 185 202 107 161 270 227 146 157 111 170r 298 293 303 129 1 111 160 1 147 147 171 111 128 99 116 128 137 227 135 174 171 199 93 161 269 226 144 155 112 168 309 279 333 115 85 160 158 157 175 132 141 97 122 139 148 233 125 186 180 193r 95r 166 272 220 139 150 110 166 n.a. n.a. n.a. 128e n.a. n.a. 155p 153 161 p 117 136 99 108 141 151 242 135 181 168 190p 103p 170 275 229 141 160 106 ALABAMA Nonfarm Employment . . . Manufacturing Employment . Manufacturing Payrolls . . . Furniture Store Sales . . . Member Bank Deposits . . . Member Bank Loans . . . . 122 110 178 118 137 211 122 111 177 108 143 214 123 113 181 117 140 215 123 114 185 113 140 219 123 114 187 131 140 219 123 113 193 125 139 223 122 109 187 100 139 226 123 112 188 111 136 223 122 112 185 120 136 218 121 107 173 117 139 222 122 105 171 123 139 224 120 103 162 99 139 221 120 102 165 104 140 223 119 103 162 109p 150 226 FLORIDA Nonfarm Employment . . Manufacturing Employment Manufacturing Payrolls . . Furniture Store Sales . . Member Bank Deposits . . Member Bank Loans . . . . . . . . . 170 169 258 110 196 396 171 172 264 124r 201 401 175 174 273 112 201 404 177 177 280 118 201 405 179 177 286 124 206 410 179 180 290 114 207 414 180 179 293 111 211 415 178 180 291 106 212 416 176 182 290 111 213 417 175r 179 292 126 213 423 175 174 281 100 210 427 174 173 276 99 206 428 173 170 267 95/ 213 436 174 169 274 109p 218 448 GEORGIA Nonfarm Employment . . Manufacturing Employment Manufacturing Payrolls . . Furniture Store Sales . . Member Bank Deposits . . Member Bank Loans . . . . . . . . . 130 122 192 104 140 213 131 122 192 107r 144 214 130 122 194 105 142 214 129 123 196 105 142 216 130 122 198 106 145 218 130 120 199 107 141 219 130 118 192 107 141 217 130 117 187 103 138 212 130 119 198 111 137 208 129 118 191 110 142 212 129 116 184 107 141 210 128 115 178 86 141 208 127 114 178r 91r 147 212 127 112 173 92 150 214 LOUISIANA Nonfarm Employment . . Manufacturing Employment Manufacturing Payrolls . . Furniture Store Sales* . . Member Bank Deposits* Member Bank Loans* . . . . . . . . 130 102 173 141 155 259 131 102 174 137r 155 259 130 101 174 117 155 262 131 103 173 139 155 261 130 101 173 139 156 267 131 100 174 147 155 272 130 100 173 133 154 271 130 100 172 133 153 268 130 99 171 135 151 265 130 97 173 148 153 274 129 98 172 135 151 268 129 98 170 116 154 269 128 96 169r 137r 156 266 127 96 171 123p 155 267 MISSISSIPPI Nonfarm Employment . . . 125 Manufacturing Employment . 124 Manufacturing Payrolls . . . 210 Furniture Store Sales* . . . 89 Member Bank Deposits* . 145 Member Bank Loans* . . . 276 125 125 207 94 r 152 278 124 122 207 89 155 280 123 124 211 92 155 283 124 126 219 83 157 286 123 124 217 75 158 288 125 124 213 85 154 282 124 123 208 80 147 293 124 122 206 95 149 294 124 121 212 107 154 296 125 123 212 88 163 302 124 123 208 77 164 305 124 123 228r 79 167 308 123 125 222 90 187 309 120 119 189 91 144 226 119 118 188 87 144 229 120 118 187 86 144 233 119 117 189 85 148 236 119 117 190 82 148 236 120 116 186 82 147 236 119 115 185 82 146 230 120 115 183 80 147 233 118 114 181 87 148 236 117 113 175 85 146 239 115 110 175 72 148 233 115 110 177 75 155 236 115 111 176 84 156 242 Nonfarm Employment . . . Manufacturing Employment . A p parel.............................. C h e m icals......................... Fabricated Metals . . . F o o d ................................... Lbr, Wood Prod., Fur. & Fix. Paper & Allied Products Primary Metals . . . . T e x tile s.............................. Transportation Equipment . Manufacturing Payrolls . . Cotton Consumption** . . . Electric Power Production** . Petrol. Prod, in Coastal Louisiana & Mississippi** Construction Contracts* . . Residential......................... All o t h e r ......................... Farm Cash Receipts . . . . Crops . . . . . . . . Livestock ......................... Dept. Store Sales*/** . . . A tla n ta .............................. Baton Rouge .................... B irm ing ham ..................... Chattanooga .................... Jackson .............................. Ja c k so n v ille .................... K n o x v ille ......................... . 134 . 119 . . . . . . M i a m i .............................. New O r le a n s .................... Tampa-St. Ptrsbg. . . . Dept. Store Stocks* . . . . Furniture Store Sales*/** Member Bank Deposits* . . Member Bank Loans* . . . Bank D e b its* ......................... Turnover of Demand Deposits* In Leading Cities . . . . Outside Leading Cities . . . . . . . . . ENNESSEE Nonfarm Employment . . . 120 Manufacturing Employment . 118 Manufacturing Payrolls . . . 188 Furniture Store Sales:* . . . 84 . 143 Member Bank Deposits* Member Bank Loans* . . . 223 *For Sixth District area only. Other totals for entire six states. **Daily average basis. n.a. Not Available. p Preliminary. e Estimated. r Revised. Sources: Nonfarm and mfg. emp. and payrolls, state depts. of labor; cotton consumption, U. S. Bureau Census; construction contracts, F. W. Dodge Corp.; petrol, prod., U. S. Bureau of Mines; elec. power prod., Fed. Power Comm. Other indexes based on data collected by this Bank. A ll indexes calculated by this Bank. SIXTH DISTRICT BUSINESS HIGHLIGHTS Stotonally Adjusted characterized the D istrict business picture in A pril. Bank credit expanded further. T otal em ploym ent continued to drift dow nward, and factory payrolls declined, reflecting prim arily a shorter average w ork week. Influenced by favorable weather and higher prices, farm incom e rose. Consum er spending show ed som e im provem ent although it still rem ained below a year ago. J V ^ ix e d t r e n d s Mfg. P o yro lls Mfg. Employm ent E le c tr ic P o # e r Production Nonagricultural em ploym ent, after seasonal adjustment, declined slightly Construction C o ntro cts C otton C onsum ption B o n k D e bits Dept. Store Sto cks M Dept. Store S o le s Mem ber Bonk Loons M em ber Bonk De po sits RATIO TO REQUIRED R ES E R V E S Borrowings from F. R. B o n k j* in April reflecting largely a further decrease in the nonmanufacturing sector. Manufacturing em ploym ent was practically unchanged, after declining sub stantially in other recent months. Factory payrolls declined in April, following a slight rise in the preceding month. With total nonfarm jobs down, the rate of insured unemployment rose further in April, contrary to the usual seasonal movement. Activity in the cotton textiles industry, as measured by seasonally adjusted cotton consumption, declined further in April from already depressed levels. Construction em ploym ent was slightly below a year ago, but seasonally adjusted construction contract aw ard s have increased since mid-winter. Steel operations improved in May, even though mills were still operating well below capacity. Cash receipts from farm m arketings, seasonally adjusted, increased in April, but still remained slightly below a year ago; the increase reflects in part higher prices received by farmers. M arketings of vegetables, potatoes, beef, eggs, and milk totaled less than last year. Broiler marketings, however, ex ceeded last year’s, and hog marketings have reached last year’s level. Favor able w eather during recent weeks has facilitated planting and permitted rapid crop growth. Spending, as measured by seasonally adjusted bank debits, increased sharply in April after declining for three months. Departm ent store sales were down in April but, according to preliminary data, rose in May to the highest point this year. Inventories at department stores declined to the lowest point in over two years. Furniture and household appliance sales showed gains in April, but remained substantially below last year’s volume. Consumer credit outstanding at commercial banks rose about seasonally in April. Savings in the form of time deposits and ordinary life insurance sales were up more than seasonally. Moderate gains in member bank deposits, seasonally adjusted, occurred in April in all states except Louisiana. Total bank credit also expanded sharply as banks increased their loans and their holdings of Governments and other securities. The increase in loans was greater than seasonal and again centered at banks in smaller cities. All states shared in the loan expansion. In May, the decline in loans outstanding at banks in leading cities was greater than a year ago. Borrowings from the Federal Reserve Bank in May rose somewhat after having declined for five straight months.
@FedFRASER