Full text of Economic Review (Federal Reserve Bank of Atlanta) : June 30, 1945, Volume 30, Number 6

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N LY
TH
F E D E R A L

Review

R E S E R V E

Volume XXX

B A N K

O F

Atlanta, Georgia, June 30, 1945

R a m ie :

A

N e w

E c o n o m ic

A T L A
Number 6

O p p o rtu n ity

reports concerning actual ramie plantings in Florida

Another quality of ramie that makes it unique among fibers

what may well prove to be a revolutionary development in
the textile world. Currently more than 1,600 acres have been
•planted with ramie and upwards of 10,000 additional acres
have been set aside for the same purpose. Among the larger
planters of ramie are the Florida Ramie Products Corpora­
tion, which has recently purchased 5,000 acres of Everglades
land from the state; Newport Industries, Incorporated, of
Pensacola, which together with the United States Sugar Cor­
poration owns a large acreage near Clewiston; the Sea Island
Cotton Mills of New York; the state itself, which has be­
tween 400 and 500 acres in ramie at the state-prison farm at
Belle Glade; Dr. Brown Landone, who has approximately 200
acres planted in ramie at Zellwood. Besides these, a scatter­
ing of other producers are also cultivating the ramie plant.
Although the present activity in ramie is to a large extent
a result of the war, it is quite unlikely to die down with the
end of the emergency. On the contrary, the war is probably
merely hastening the birth of an industry that will take its
place as a permanent part of the South’s economy. This in­
dustry promises, when fully developed, to have profound
effects upon the region’s agriculture and industry, par­
ticularly as they relate to textiles.
Ramie is a fiber-producing plant, and the impact that the
ramie industry is almost sure to make on the textile field will
arise from the unusual properties of ramie fiber. Most promi­
nent of the characteristics of this fiber is its unusual strength.
Of all known vegetable fibers it is one of the strongest, if not
the strongest. The tensile strength of ramie is four times that
of flax, more than eight times that of cotton, about three times
that of hemp, and almost eight times that of silk. In elasticity,
ramie is equal to cotton, is better than flax by 50 per cent,
and is better than hemp by a third. It is, however, much less
elastic than silk. The torsion strength of ramie is somewhat
greater than that of either flax or hemp but is much less than
that of cotton or silk.
Ramie fiber’s great strength is said to arise from the con­
tinuity of the cellulose crystals that make up from 97 to 99
per cent of its substance and that lie parallel to the fiber
axis instead of being inclined thereto as is the case with cot­
ton. Its unusual strength and toughness make it the most
durable fiber of any in use, and fabrics made of it wear in­
definitely. One piece of ramie fabric was laundered 150
times, was creased and recreased in the same place, and yet
when it was examined under the microscope no breaking of
the fibers could be discerned.

cent of its dry weight, whereas cotton holds water.to the ex­
tent of only 26 per cent. Moreover, instead of losing strength
when wet as do many fibers, particularly synthetics, ramie is
30 to 60 per eent stronger when wet than when dry. On the
other hand, ramie dries more rapidly than does flax or
cotton. It has the additional advantages of being nonshrinkable and of being highly resistant to mildew as well as to
the attack of micro-organisms that cause rot.
When thoroughly cleaned of gums and'pectins, the fiber is
pure white in color, without bleaching, and has an almost
silk-like luster and texture. It dyes beautifully and retains
the dyes as well as cotton does. Ramie fiber can be spun,
woven, and knit on standard textile machinery and can be
made into fabrics resembling gossamer-like silks, fine cotton
cloth, woolen goods, linen, and .others on up to the coarsest
kinds of cloth.
Its qualities suggest a very wide field of usefulness. During
the war ramie has found an insatiable demand by the Navy
and the Merchant Marine for certain maritime uses. One of
the earliest of these uses was as a .packing for the stern tubes
of vessels to prevent sea water from backing up along the
drive shafts. In this use, ramie is far superior to flax, which
had formerly been used, for ramie is unaffected by sea water;
it holds lubricants better; it is free from abrasives that tend
to score the drive shafts; and, being of light weight, it pro­
vides from 30 to 50 per cent more lineal feet of material for
a given weight. This means that from 30 to 50 per cent more
stuffing boxes can be packed with a given weight of ramie
than with an equal weight of flax.
Ramie’s freedom from shrinkage and the greater strength
of this fiber when wet than when dry make it a superior
material for the manufacture of halyards and other naval
cordage, which are subject to alternate periods of wetness or
dryness. In this use ramie can replace long-staple cotton and
flax to great advantage.
Great Britain has also found ramie to be a most useful
fiber in wartime. In the fighting of fires that broke out in the
wake of the London bombings, all-ramie fire hose, it is said,
proved its utility. Untreated with rubber, such hose was
capable of carrying water under normal pressure without
leakage. When water mains were broken by explosion, the
water supply could be maintained by the use of flexible
sections that had been woven of ramie and that were as large
as 14 inches in diameter. These uses of ramie were possible
because of the high absorbency of the fiber, which makes it

RESS

and
prospective expansion have been
is its behavior
contact with
ab­
P from their state during recent months. They are emanating ofsorbent than iswhen inholding waterwater. Ramie is more per
that
harbingers
cotton,
to the extent of 28.5




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virtually self-sealing. In the air forces of Great Britain and average carotene content of 02.77 milligrams a pound,
Canada narrow webbing of ramie has been used in the mak­ whereas ramie meal has 68.4 milligrams a pound. Carotene
ing of parachute harness. The great strength of the fiber is is an important source of vitamin A, which promotes growth
the quality that makes ramie extremely desirable in this par­ and performs a protective function. The protein content of
alfalfa meal is 21.1 per cent, whereas that of ramie meal is
ticular wartime use.
Postwar Uses
25.5 per cent. Ramie meal has almost double the fat content
Important as have been the wartime uses of ramie, its of alfalfa meal and a smaller percentage of crude fiber.
peacetime possibilities are still more impressive. Some, of Though cattle may not find it as palatable as alfalfa meal,
these, of course, will be but wider applications to fields al­ this handicap can be overcome by sweetening the ramie
ready penetrated during the war. The use of ramie for shaft meal. With the expansion of ramie growing, therefore,
packing in the Navy and Merchant Marine will undoubtedly Florida may be able to supply her thriving cattle industry
continue, as will its use for twine, cordage, rope, canvases, with a feed superior to the more expensive imported alfalfa.
awnings, sails, and fish nets. Even before the war certain
Geography and Botany
amounts of ramie were consumed in the manufacture of in­ In view of ramie’s extraordinary qualities and its extreme
candescent gas mantles and filter cloths for air-conditioning versatility, this plant would seem to lay a foundation for a
plants, and such uses may be expected to expand in peacetime. wide range of economic opportunities. Those opportunities
Other industrial uses where strength and durability are lie not only in the manufacture of final products but also in
prime factors suggest themselves as possible fields for ramie. the growing of the plant by farmers so situated that they
In the tire-cord field, now being contested by cotton and may engage in its cultivation profitably.
rayon, ramie may enter as a third contender. The chief dis­
Despite the widespread lack of information concerning
advantage of ramie as compared with cotton for use in tire ramie, this plant is really not a newcomer. Ramie fiber, in­
cord is its low torsion strength. In the opinion of some tire deed, is one of the oldest fibers known. Egyptian mummy
manufacturers, however, this obstacle is not considered in­ wrappings that were formerly thought to be made of linen
superable but may quite likely be overcome by further re­ are now believed to have been made of ramie cloth. For more
search. Upholstery fabrics, especially those, such as auto­ than 3,000 years ramie has been known and utilized in China,
mobile upholsteries, that are subjected to heavy wear, consti­ which is its home. It now grows throughout the tropical and
tute another possible field for ramie. It can also be used ad­ semitropical areas of eastern Asia from Japan to Sumatra
vantageously for carpet backing. When used for the nap of and westward to India. Ramie has been grown experimentally
imitation Oriental rugs it can impart qualities of durability in southern Europe, particularly in southern France and in
and luster surpassing those of the originals. Ramie can also Italy, as well as in the Tanganyika Territory and Libya in
be employed in the manufacture of durable, crisp, opaque Africa. In 1929 Soviet Russia had more than 11,000 acres
papers that are so tough they can be torn only with great planted in ramie on 150 collective farms, but by 1939 almost
difficulty. Paper of this sort would be valuable for legal two thirds of this acreage had been abandoned for undis­
documents, carbon paper, and bank notes. Since ramie gives closed reasons. Ramie was first introduced into the United
off -virtually no lint, it would be superior to other materials States about the middle of the last century and shortly after­
for surgical pads, dressings, bandages, and operating gowns. ward found its way into a number of Central and South
Wearing apparel, however, offers some of the most in­ American countries. It has been grown extensively in Haiti,
triguing possibilities for the future use of ramie. Fabrics under irrigation, and in Cuba. In the early years of the pres­
more delicate than any ever worn by women and more com­ ent decade approximately 20,000 acres of ramie were planted
fortable than any worn by men are possible with this fiber. in Brazil, the Sao Paulo region being the most productive.
Clothing that is light and warm in the winter
Within the United States, experiments in grow­
and cool in the summer, that absorbs perspira­
ing ramie have been conducted by individuals,
tion readily and dries rapidly, that never shrinks,
state agricultural experiment stations, and the
and that holds its shape and withstands the
Department of Agriculture along the South At­
ravages of modern laundering indefinitely —
lantic and Gulf of Mexico coasts and in Cali­
such clothing as this is possible with ramie.
fornia. Although good stands of ramie have been
In the household, too, ramie fabrics that
grown in many different places in the United
possess both durability and beauty will be wel­
States, the Everglades region in Florida is
comed for bed sheets, pillowcases, table linen,
generally conceded to be the best location.
portiers, and drapes. Indeed, the number of
Botanically, ramie belongs to the hemp family
final products into which ramie can enter is
and more than 16 varieties of the plant are
almost endless.
known. Of these, Boehmeria nivea is the only
A fiber possessing a unique combination of
one considered to be a satisfactory source of
desirable qualities, however, is not the only
fiber. The ramie plant can be propagated either
valuable contribution that the ramie plant can
from seed or from root sections. The latter
make to the Southern economy. The leaves of
method is usually considered preferable be­
the plant when dehydrated produce an ex­
cause of the lack of uniformity that may result
ceptionally good cattle and poultry feed. In
in growing from seed. When growing ramie
many respects, ramie meal surpasses alfalfa
from rootstock, root sections about six inches
meal. According to the Bureau of Animal In­
in length are planted in rows from three to six
dustry of the United States Department of Agri­
feet apart and are spaced in the rows at inter­
A B u n d l*
o f R a m i* S ta lk s
culture the best grade of alfalfa meal has an
vals of 18 to 24 inches. With suitable conditions



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of moisture and temperature, the roots send up shoots in
about two weeks’ time.
The ramie plant grows as a tall straight stalk approxi­
mately a half inch in diameter. Under favorable conditions
it may reach a height of eight feet, although between six and
seven feet is more common. Under less favorable conditions,
of course, the height of the plant may be much less. From
the stalk grow a few large heart-shaped leaves, serrated along
their edges, dark green on top and white on the underside.
A cluster of these leaves tops the plant.
Although heavy muck land is apparently the best soil in
which to grow it for fiber, the plant may also do well in a
rich sandy loam. Experiments conducted by Dr. Brown Landone of Winter Park, Florida, seem to have demonstrated
that larger and hardier roots may be grown in sandy loam
soil than in muck, although the stalk may be shorter and the
yield of fiber correspondingly less. The general conditions
for a good growth of ramie seem to be fertile soil; abundant
and well-distributed rainfall during the growing season; good
drainage, so that the roots will not be flooded; and an
absence of frost that might penetrate the soil deep enough
to kill the roots.
A cross section of a ramie stalk shows a pithy center sur­
rounded by a woody layer. This layer in turn is surrounded
by the inner bark, which consists of the fibers embedded in
gums and pectins. Although some of these fibers may be as
short as two inches, others may be as long as 20 inches. On
the average their length is somewhere between six and eight
inches. Sheathing the plant stalk on the outside is a thin
green bark that becomes brown as the plant matures. This
outer liark is rich in tannic acid, which is said to be the
reason for the plant’s remarkable freedom from insect pests.
Yields
Since the ramie plant is a perennial, it requires almost no
cultivation after the first year. Once the acreage has been
established, plants will continue to come up year after year.
The length of life of the ramie plant is a matter of dispute,
but few authorities on the subject say that any replanting is
necessary in less than seven years, and some optimistically
report that none may be necessary for 20 or 30 years. The
longevity of a ramie planting must be considered as an im­
portant offset against what may seem to be the high initial
cost of preparing and planting the land and carrying it
through the first year.
Under favorable conditions of moisture and temperature
planted roots will sprout within two weeks and in. approxi­
mately two months the stalks will be about 30 inches high.
After the first year, growth is much more rapid. Ordinarily
the first crop is cut and left on the land as fertilizer, for the
stalks of this cutting do not contain much merchantable fiber.
Using the first cutting in this way, the grower is more certain
of obtaining sturdier and more numerous stalks in subsequent
cuttings. The later cuttings will tend to be of the maximum
height possible under the growing conditions.
If the soil has been well chosen and if the ramie has been
properly planted and ,given normal attention, a minimum of
three cuttings a year Can be obtained on Florida muck land.
Under favorable conditions the number of cuttings may be
increased to five or six, but three may be considered normal.
A cutting of ramie grown under reasonably good con­
ditions may be expected to yield from 400 to 500 pounds of
fiber an acre, or from 1,200 to 1,500 pounds an acre for the




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year. Since an acre of land in ramie yields approximately 45
tons of green material a year, the recovery of fiber is in the
neighborhood of 1.5 per cent.
Any plant that produces as much green material an acre
in the course of the growing season as does ramie is obviously
a voracious consumer of the plant food in the soil. In a cut­
ting of 14.25 tons, 369.7 pounds of nitiogen will have been
withdrawn from the soil, 155.7 pounds of phosphorus, and
251.98 pounds of potash. If this crop is to be grown perma*
nently on the same land, it will be necessary to return the
lost plant food to the soil.
Two ways of making up this soil depletion are possible.
One is to return to the field the residue of green material left
after the extraction of the fiber. When this is done, seven
eighths of the lost plant food is restored. The second method
of restoring soil fertility, of course, is by the use of com­
mercial fertilizers. Which of these two methods would
prove the more economical would depend upon a variety of
circumstances.
If the extraction of the fiber, a process known as decortica­
tion, were done in the field it might be feasible to follow the
first method. On the other hand, if the green stalks were to
be trucked to some central decorticating plant, the expense of
hauling the green material to and from the plant might be
heavy. Under such conditions it would perhaps not be much
more expensive to buy commercial fertilizer. Certainly, if the
leafy tops and the leaves growing out of the stalks were to
be dehydrated into ramie meal for cattle and poultry feed,
their value in this form would greatly exceed the cost of any
commercial fertilizer that might be necessary to maintain soil
fertility. Alfalfa meal, a somewhat poorer feed, sells in
Florida for approximately $70 a ton. Since leaves constitute
30 per cent of the ramie plant, an annual yield of 45 tons of
green material an acre would produce 13.5 tons of leaves,
which would dehydrate to perhaps three tons of meal that
should sell at a price comparable to that of alfalfa.
Problems
In considering the great antiquity of ramie, its incom­
parable combination of desirable characteristics, its extreme
versatility, and the economic opportunities that it seems to
offer growers and manufacturers, the question that naturally
arises is: Why is it not now in widespread use? The answer
to this question lies in the difficulties intervening between the
growing of the plant and the delivery of the fiber to the
manufacturer. The three steps in preparing the fiber for
manufacture are harvesting, decortication, and degumming.
Ramie is ready for harvesting when the outer bark has
turned brown up to about six inches from the ground. This is
a sign that the plant has reached its maximum growth. The
harvesting itself may be done either by hand or by machine.
In the latter case a mower equipped with a short heavy sickle
bar is the appropriate equipment to use. When harvesting by
hand, a machette such as that employed in cutting sugar
cane may be used. Until such a time as a more suitable me­
chanical harvester has been perfected some authorities are
inclined to recommend hand harvesting.
There is another reason, too, for harvesting ramie by hand.
Like other field crops, ramie stalks do not all reach their
maximum growth at exactly the same time. To harvest the
whole field at one stroke, as would be necessary if a me­
chanical harvester were used, would mean the cutting and
hauling of a great many stalks that would prove to be un­

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usable or immature. Experience with the harvesting of ramie
in the Philippines has shown that a very much greater yield
of fiber can be obtained over the year if individual stalks,
only, are cut by hand as they reach maturity.
The second step in the production of ramie is decortication.
This step involves the separation from the rest of the stalk of
the inner bark in which the fibers are held together by the
gums and pectins. It is at this point that the greatest diffi­
culty has been found. Indeed, the lack of a method for ac­
complishing this task without injuring the fiber has been the
most important factor in retarding the birth of the ramie in­
dustry. In the Orient decortication has been done entirely by
hand, beating the stalks into ribbons and scraping them with
bone and bamboo. Fiber produced under such conditions is
enormously costly in terms of labor time and is feasible only
where labor is very cheap. Because of this situation, only
small amounts of ramie fiber under the name of “China
grass” were imported annually into the United States from
the Orient before the war. Almost none was produced here.
It would have been utterly impossible for a ramie industry to
grow up in the United States under prevailing wage scales if
decortication had to be performed by hand.
Decortication
The lack of satisfactory decorticating machinery lias not
been the result of a lack of interest on the part of inventors.
The dazzling economic possibilities of ramie have long in­
trigued the minds of inventors in many countries. In 1869,
years after ramie had been discovered growing wild in India,
the British government offered a prize of $25,000 to any man
who invented a satisfactory decorticating machine. The ma­
chine was not forthcoming, and the prize was later with­
drawn. The French government also held out inducements
for the invention of such a machine. More than a thousand
patents covering ramie decorticating machines are said to
be recorded in Washington, but none of them have proved
satisfactory in commercial operations.
What decorticating machines were in use before the war
were foreign inventions and were really machines designed to
operate on other fibers. Perhaps the most successful of these
foreign machines was the Corona machine, a product of the
Krupp Works at Essen, Germany. This machine was built for
the decortication of the leathery leaves of the sisal plant, but
in 1943 the discovery was made that the machine would also
successfully decorticate ramie in a stream of running water.
At the Dauphin Plantation of the Haitian-American Develop­
ment Company on the north coast of Haiti, 31,300 pounds of
long, straight, well-decorticated fiber were produced by a
Corona machine during the month of April 1944. This fiber
was far superior to the best imported China grass and was
produced at the rate of 250 pounds of dry fiber
an hour. Several Corona machines are said to
have been subsequently brought to the Dauphin
Plantation from Cuba.
At present a number of machines working ac­
cording to different principles are to be found
in the United States. Some of them are un­
doubtedly based upon foreign designs,- but
others embody new principles. Details of these
American decorticators are not available, and
if they were, any comparisons among the
various machines would be unfair. All of them
are still largely in an experimental stage and are




subject to a continuing process of improvement. Each ma­
chine, of course, has its own supporters who uphold its merits.
Six or seven of these machines, probably, do a satisfactory
job of decorticating ramie, although none of them are com­
mercially available at present.
Most of the American decorticating processes involve the
use of large stationary machines for establishment in central
plants. Charles R. Short of Clermont, Florida, however, has
invented a portable decorticator that can be used in the field.
One model of this machine was used to decorticate 45 acres
of ramie on the state-prison farm at Belle Glade last year.
As it was then constructed, the Short machine required six
men for its operation and its output was low. A new model
has just been completed requiring only two thirds the labor
but having an output capacity two and a half times that of
the earlier model.
Although there has been some dispute over the relative
merits of decorticating ramie dry or in the green state and
though some existing decorticators probably perform this
operation on dried stalks, the weight of opinion seems to
favor green decortication. This means, of course, that the
harvested ramie stalks must be moved from the field to the
decorticating plant immediately after cutting or else must
be decorticated in the field.
Degumming
Degumming, the next step, has also presented certain prob­
lems. Some of the gums are usually removed in the process
of decortication, but not all. If the residue of gum is allowed
to remain on the ramie fibers, it rapidly hardens and the
fiber becomes coarse and brittle. The long white silky fibers
that are characteristic of ramie at its best are fibers that have
been not only well decorticated but also well degummed. The
problem in this connection has been the development of a
degumming process in which the fibers would not be injured
by the chemicals used in the process. Neutral oxidizing so­
lutions, acids such as hydrochloric and nitric acids, and
strong bases made the fiber brittle.
Weak bases, on the other hand, such as ammonium
hydroxide, although not injurious to the fiber, nevertheless
do not remove all the gum. Caustic soda was tried but it
produced an inferior fiber from the start. Later, however, it
was found that air-dried ramie ribbons could be degummed
in a dilute solution of sodium hydroxide if they were di­
gested for three hours under a steam pressure of 100 pounds
to the square inch. Charles R. Short has degummed freshly
decorticated green ramie ribbons in one hour by cooking
them in a mild soap solution at a temperature of 180 degrees.
Whether or not decorticated ramie should be degummed
while it is still green or after it has been dried has been a
matter of controversy. The arguments in favor
of green degumming seem unanswerable. Not
only does green degumming require less time,
less chemicals, and generally milder and less in­
jurious solutions than would be the case with
dried ramie ribbons, but green degumming, im­
mediately following green decortication, results
in a considerable saving in shipping weight and
freight costs since degumming reduces the
weight of decorticated fiber by 10 per cent. In
experiments conducted by Herman W. Hawker
at Leone Plantation, Incorporated, Teague,
Texas, it was found that degumming ramie im­

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mediately after green decortication saves as much as four
fifths of the chemicals and all but a small fraction of the
time required to degum China grass or ramie decorticated
by other dry processes. Indeed, Mr. Hawker believes that
through green decortication and green degumming it will be
possible to realize the slogan of his company — “From Field
to Fiber in Fifteen Minutes.”
In spite of the economy of degumming ramie immediately
after green decortication, some manufacturers are said to
prefer to buy their ramie undegummed and to perform that
operation themselves. The reason given for this preference is
that the manufacturer cannot be sure of the quality of the
product he is buying if the degumming has been done per­
haps by various producers using different chemicals and
different processes. To be certain of a uniform product he
must do the degumming in his own plant. It is possible, how­
ever, that the price spread between the undegummed and
the degummed fiber may have something to do with a manu­
facturer’s decision to do his own degumming.
In view of the developments that have occurred within the
last few years it is probable that the chief technical problems
involved in the growing and processing of ramie either have
been solved or are well on the way to a solution. The size
and business reputation of the larger concerns entering the
ramie field are evidence that this is so.
Economic Factors
A new product, such as ramie, however, seldom makes a
place for itself in the economic world merely because so­
lutions have been found for its technical problems. In ad­
dition to that factor, cost and price relationships in both the
raw-materials and the processing stages must be favorable
enough to assure profitable production and to attract the
capital and managerial abilities necessary for the establish­
ment of the industry.
Unfortunately no wholly satisfactory figures for the cost of
growing and processing ramie are available. Various esti­
mates have been made, but they are all based upon experi­
mental conditions and hence are subject to a certain margin
of error. Just because these estimates are based upon experi­
mental conditions instead of on full-scale commercial opera­
tions, however, they are likely to be too high rather than too
low in the long run, although changing prices and wages in
the postwar period may upset any current calculations. With
all due allowance for errors of fact or of forecasting, how­
ever, both the growing and processing of ramie appear to be
profitable ventures.
One estimate of the cost of growing and processing ramie
has been made by the Office of Production Research and
Development of the War Production Board. This estimate is
made. on the assumption that the planting is favorably
located, that root segments are planted at the rate of 5,500
to an acre, that the first two crops are mowed and rolled
down to insure a better stand, that no replanting of roots is
necessary, and that by decorticating the stalks green in the
field most of the cost of fertilization after the first year would
be avoided. On the ba^s of such assumptions, the total labor
and material costs are estimated at $90.50 an acre for the
first year. This amount includes the costs of plowing and
harrowing; 5,500 root segments at $10 a thousand; planting
and covering the roots; an application of potash fertilizer;
two cultivations; rolling down two crops; and harvesting
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For the second and subsequent years the agricultural cost
for labor and materials, it is estimated, would fall to $36 an
acre. This amount would represent the costs of cultivating or
plowing between rows; harvesting three cuttings and strip­
ping the leaves and tops from the stalks; and hauling the
decorticated fiber. Assuming a yield of 1,200 pounds of fiber
to the acre, the cost of growing ramie would thus amount
to 3.0 cents for each pound of fiber.
On the assumption that one acre of ramie could be de­
corticated in one day with the labor of four men and with
about five gallons of gasoline, the cost of decorticating one
cutting would be $14.25, or $42.75 for the year. Decortication
would thus cost 3.6 cents a pound.
Degumming is estimated to cost no more than $50 a ton of
finished fiber, or 2.5 cents a pound. Thus, the total cost of
growing, decorticating, and degumming a pound of grade A
fiber ready for the manufacturer would be 9.1 cents a pound.
It should be pointed out that the foregoing estimate makes
no allowance for the amortization of the investment made in
the preparation and planting of the land during the first
year, nor does it include depreciation for the decorticating
machine and other equipment. Depreciation would in any case
be difficult to approximate because no one can tell what such
a machine will eventually sell for. It has been estimated that
the Short portable decorticator could perhaps be manu­
factured and sold for approximately $1,200.
Another Cost Estimate
Another estimate similar to the one just given has been
made by A. C. Whitford, a research chemist of Alfred, New
York. Mr. Whitford has long been interested in ramie, and
he is considered an authority in the field. According to his
estimate the total cost of labor and materials during the first
year would amount to $81 an acre, assuming planting at the
rate of 4,000 roots to an acre. For the second and subsequent
years the cost would fall to $49.50 an acre. On his assumption
of an annual yield of 1,500 pounds of fiber an acre, the agri­
cultural cost .would amount to 3.3 cents a pound. On the
further assumption that decortication and degumming are
both done in a central plant by the use of the Manawul
process, in which Mr. Whitford seems to be especially inter­
ested, the cost of decortication would not be more than 1.7
cents a pound and the cost of degumming would be approxi­
mately 5.5 cents a pound. The total cost of producing a
pound of fiber ready for the manufacturer would thus be
10.1 cents, according to this estimate.
Despite the difference between these two estimates of the
cost involved in the various steps required for the production
of ramie fiber, the final cost on a poundage basis is sub­
stantially the same. Moreover, the cost of ramie calculated
on any reasonable basis would seem to be low enough to
permit it to compete on a better-than-equal footing with other
fibers that do not possess all the advantageous qualities of
ramie.
The profitableness of any operation depends not only on
cost but also on the price of the product. In the case of ramie
there is no established market price for the fiber. Decorticated
but undegummed fiber has sold for 25 cents a pound or some­
times for a little more than that. Well-decorticated and welldegummed fiber on the other hand sold for 40 cents a pound
before the war. Under the pressure of war demands, however,
it is said that mills have been willing to pay 60 cents a

6 2

M

o n t h l y

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o f th e F e d e ra l R e s e rv e B a n k o f A t la n ta f o r J u n e 1945

pound, or even much more provided they could get the fiber tain parts of other states. What the ultimate shape of this
in large quantities.
industry may be cannot now be clearly discerned. Several
Ramie requires little labor after the first year and is possibilities, however, are apparent.
harvested during the summer when farm labor might other­
Regardless of the industrial and marketing mechanisms by
wise be idle. For these reasons and because of the substantial which it reaches the manufacturer and, ultimately, the con­
spread between cost and price, it would seem that ramie suming public, however, ramie is almost certain to have pro­
could well prove to be a very profitable crop for many farm­ found effects upon the competitive relationships among
ers in the Sixth Federal Reserve District. The greatest profits various other fibers. No fiber can be sure that its market will
would naturally be reaped by farmers growing ramie under not be invaded successfully by this versatile newcomer that
the most favorable conditions of yields and costs. For farm­ possesses so many points of superiority.
ers operating in areas of lower yields and higher costs, profits
Competitive Effects
would be less, but these profits might still be greater than
those realized from current field crops. A few acres planted The effects of ramie will, of course, not be apparent at
to ramie could in this way easily add a considerable amount once. It may well take 20 or 25 years before its full influence
to the net income of farmers who, by experiment, have is felt. In the immediate future probably all the ramie that
demonstrated their ability to grow it. Before a farmer under­ can be produced will be absorbed in naval and industrial
takes the raising of ramie, however, he should possess a uses. Somewhat later it may appear in the manufacture of
decorticating machine of his own or make sure that he is automobile upholstery and in the making of specialty papers.
within reasonable distance of a decorticating plant to which Only later will ramie invade the general textile and apparel
markets. Even then it will not at first appear in the form
his green ramie could be hauled.
of all-ramie fabrics but rather in a material in which it has
Root Culture
Although the lack of satisfactory decorticating devices has been blended with cotton, wool, rayon, linen, or other tra­
for centuries been the main factor inhibiting the growth of ditional fibers.
In its first impact on the textile market ramie may actually
the ramie industry, the time seems to be rapidly approach­
benefit rather than harm its competitors, for through blend­
ing when a shortage of material for decortication may prove
to be a serious bottleneck. Textile mills and other manu-' ing it will overcome some of the deficiencies of the older
facturers will not interest themselves in ramie to any great fabrics. Ramie would add lightness and minimize shrinkage
extent unless they can be assured of a large and dependable when mixed with wool, it would add strength and luster to
supply of grade A fiber. The manufacture of decorticating cotton, and it would offset the low wet strength of rayon.
machinery after the war would make such a supply possible The practice of blending fibers may continue for many years,
if only an acreage sufficient to keep the machines busy were because the supply of ramie will probably be short, relative
planted in ramie. A great expansion in acreage, however, to the total potential demand for it, for a fairly long time.
would need a very large number of roots for planting. At this Blending, however, may also be thought necessary for
stage of its development, therefore, the ramie industry seems another reason. One man commercially interested in ramie
to require the growing of ramie plants more for rootstock ^put it this way: “The trouble with ramie is that it’s too good.
than for fiber. Farmers who possess soils that are not well We will have to mix it with cotton so that at least every other
adapted to the production of heavy yields, of fiber but that thread will wear out anyway!”
At the beginning ramie will undoubtedly continue to
are adapted to the growth of hardy roots may find this a
command a high price because of its superior qualities and
profitable enterprise.
A root segment that sells for a cent will, in the course of the high price will tend to limit the market to those uses in
three years, produce a root from which a number of seg­ which price is not an important factor in the determination
ments can be cut for further planting. At Winter Park, of demand. Eventually, however, if the supply of ramie can
Florida, Dr. Brown Landtjne has grown in sandy loam soil be sufficiently increased, the low cost of producing this fiber
three-year-old roots from which between 200 and 250 seg­ may be expected to make its influence felt and prices will
ments could be cut. Such roots, of course, are very unusual. probably decline. When that time comes ramie will be able
Even where much smaller roots are produced, provided they to outcompete its rivals on both a quality basis and a price
are hardy and of a good strain, the possibilities of profit are basis.
worth investigation.
Ramie thus holds revolutionary possibilities for the South.
How long this stage in which growers produce ramie roots It can prove to be the source of a considerable increase in
for others who want to produce more roots may last is agricultural income for favorably situated farmers; it can
problematic. It has been suggested that it may take five years dot ramie-producing areas with decorticating and degumming
or longer before a sufficiently broad acreage basis can be plants; it can lay the raw-materials foundation for a great
created for a substantial ramie in­
many industries producing final pro­
dustry. The plantings at the Florida
ducts. In doing these things ramie will
prison farm at Belle Glade and the
be opening up many economic oppor­
Leone Plantation at Teague, Texas, are
tunities of various kinds to Southern
important sources, among others, of the
businessmen who, if alert, will seek to
rootstock now being planted in Florida,
ride with the tide of technological
In spite of all past and present ob­
change rather than to perpetuate for­
stacles, a ramie industry of con*
ever their commitments to an older
siderable proportions seems bound to
technology.
come into being in Florida and in cer­
E a r l e L. R a u b e r .



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o n t h l y

R e v ie w

o f the F e d e ra l R e s e rv e B a n k o f A tla n ta f o r J u n e 1945

A d d itio n s
f f e

c t i v

July 1
e

to

nonmember banks located in Albany,

t w o

checks drawn against them and routed for collection through
the Federal Reserve Bank of Atlanta.
One of the banks, the Citizens and Southern Bank of Al­
bany, was originally organized in 1890 as the Albany Ex­
change National Bank. It surrendered its National charter
and became a nonmember state bank on June 1, 1943. Its
capital is $150,000, it has a surplus of $125,000, and its
deposits are more than $7,000,000.
H. E. Davis is president of the bank, Lansing B. Mays is
vice president, Olin F. Fulmer, Jr., is vice president and
cashier, and Emory Lewis is assistant cashier. Included on
the board of directors, in addition to Messrs. Davis, Mays,
and Fulmer, are W. H. Burt, Leonard Farkas, L. J. Hofmayer,
E. H. Kalmon, J. C. Keaton, P. A. Keenan, M. W. Tift, and
John E. Wallace.
The other Albany bank to go on the Par List on July 1 is
the First State Bank of Albany. This bank was organized in
1928 as the City National Bank of Albany, and it also sur­
rendered its National-bank charter and became a nonmember
state bank on June 1, 1943. Its capital is $150,000, it has a
surplus amounting to $150,000, and its deposits are approxi­
mately $8,300,000. Its official staff includes W. Banks Haley,
chairman of the board; J. T. Haley, president; J. R. Pinkston,
executive vice president; William C. Holman, Harold B.
Wetherbee, and George H.Joiner, vice presidents; T. H. Wil­
liams, cashier; and Kathleen C. Bishop and H. A. Crittenden,
assistant cashiers. In addition to Messrs. Haley and Messrs.
Pinkston, Holman, and Wetherbee, on the board of directors
are Hollis Lanier, Lee R. Ferrell, Irvin B. Callaway, Joel T.
Haley, Jr., and John Ed. LeGreve, H. B. Stovall, Allen
Churchwell, and James E. Reynolds.
Albany in 1940 had a population of 19,055. It is the seat
of the government of Dougherty County, which is located in
the southwestern part of Georgia. The city is surrounded by
rich agricultural lands devoted to well-diversified agri­
cultural crops and particularly to extensive development in
the raising of pecans, peanuts, and livestock. Within the city
and adjacent to it are located a number of packing and shell­
ing plants for the handling of pecans and peanuts and meat­
packing facilities for the processing of livestock products.
Effective July 1, too, the Bank of Everglades, Everglades,
Florida, will go on the Par List. It will then remit at par for
checks drawn against it and routed for collection through the
Jacksonville Branch of the Federal Reserve Bank of Atlanta.
C. H. Collier is president of the bank, and J. L. Howell is
executive vice president and cashier. The other officers of the
bank are D. W. McLeod, vice president, and Wayne Howell,
assistant cashier. The board of directors is made up of C. H.
Collier, D. W. McLeod, Ed Scott, J. J. Gormican, and J. L.
Howell.
The Bank of Everglades was first organized in 1923. At
the close of 1944 the bank had capital of $25,000, surplus
and profits of $42,000, and total deposits of $818,000.
The town of Everglades in 1940 had a population of 518.
It is located in Collier County on the wefet coast of Florida,
almost directly across the state from Miami. It is the
southern terminus of the Atlantic Coast Line Railway.



S ix t h D is t r ic t S t a t is t ic s

P a r L is t

Georgia,
List in
Ethe Sixth will be added to the Federal Reserve Parat par for
District. These banks will then remit

6 3

C O N D IT IO N O F 2 0 M EM BER B A NK S IN SELE C TED C IT IE S
( I n T h o u s a n d s of D o lla r s )

Ju n e 20
1945

I te m

L o a n s a n d in v e s tm e n ts —
T o ta l.................................................
L o a n s — t o t a l ....................................
C o m m e rc ia l, in d u s tr i a l,
a n d a g r i c u lt u r a l l o a n s . .
L o a n s to b r o k e r s a n d
d e a le r s in s e c u r i tie s . . .
O th e r lo a n s lo r p u r ­
c h a s i n g a n d c a rr y i n g
s e c u r i t i e s .................................
R e a l e s ta te l o a n s .................. ..
L o a n s to b a n k s .......................
O th e r l o a n s .................................
I n v e s tm e n ts — t o t a l .....................
U. S . d ir e c t o b l i g a t i o n s . .
O b lig a tio n s g u a r a n t e e d
b y U. S ......................................
O th e r s e c u r i t i e s .....................
R e s e r v e w ith F . R. B a n k ___
C a s h in v a u l t .................................
B a la n c e s w ith d o m e s tic
b a n k s ..............................................
D e m a n d d e p o s it s a d j u s t e d .
T im e d e p o s i t s ...............................
U . S . G o v 't d e p o s i t s ...............
D e p o s its o f d o m e s tic b a n k s
B o r r o w i n g s ..................................

M ay 23
1945

1 ,9 4 1 ,8 7 5
3 5 2 ,3 1 1

1 ,8 4 0 ,6 0 0 1 ,5 3 5 ,7 9 0
3 1 9 ,4 0 9
2 8 3 ,6 5 1

J u n e 21
1944

P er C ent C hange
J u n e 2 0 , 1 9 4 5 , fro m
M ay 23
1945

J u n e 21
1944

6
10

+ 26
+ 24

+
+

1 8 0 ,4 0 4

1 8 2 ,6 6 5

1 6 4 ,1 8 8

—

1

8 ,6 6 9

7 ,6 3 9

4 ,8 2 9

+

13

+ 80

+ 68
1
+
+ 2b
+ 14
4
+
b
+

+ 1 0
—6 7

_ 86

_

+
+
—

1
b

+
+
+

8

_

5 9 ,1 3 5
2 4 ,6 5 9
2 ,2 4 4
7 7 ,2 0 0
1 ,5 8 9 ,5 6 4
1 ,4 5 0 ,4 3 4
845
1 3 8 ,2 7 5
3 5 4 ,2 0 7
2 8 ,6 5 2
1 3 8 ,6 5 0
1 ,1 9 8 ,4 1 4
3 7 2 ,2 1 6
2 7 4 ,6 7 0
5 0 3 ,7 3 4

3 5 ,1 5 5
2 2 ,7 4 1
2 4 ,4 3 5
2 6 ,5 3 6
1 ,8 0 1
429
67,7.16
6 4 ,5 7 6
1 ,5 2 1 ,1 9 1 1 ,2 5 2 ,1 3 9
1 ,3 7 9 ,6 2 2 1 ,1 1 8 ,7 9 2
6 ,1 9 2
1 3 5 ,3 7 7
3 4 9 ,0 3 1
3 0 ,1 1 6

2 3 ,8 4 2
1 0 9 ,5 0 5
3 0 2 ,4 8 0
2 7 ,0 3 7

1 2 8 ,8 2 8
1 6 3 ,8 4 7
1 ,2 7 5 ,0 5 4 1 ,0 9 5 ,1 2 8
3 6 5 ,4 2 7
2 7 9 ,8 7 7
1 1 0 ,9 9 5
1 2 4 ,8 6 9
4 8 9 ,0 0 3
4 3 1 ,2 4 4
3 ,5 0 0

10
0

+

10

+ 423
+ 20
+ 27
+ 30
96
26
17
6

15
9
+
+ 33
+ ,1 2 0
+ 17

+
—6
2
!47
3
+

+

D EB ITS T O IN D IV ID U A L BANK A C C O U N T S
( I n T h o u s a n d s o f D o lla r s )
NOa Of
B anks
R e p o r t­
in g

M ay
1945

A p ril
1945

M ay
1944

3
3
2
3
4
3

1 9 ,4 2 9
1 9 5 ,9 1 9
7 ,4 3 9
1 0 ,1 0 7
1 2 0 ,5 6 6
4 0 ,4 9 5

1 6 ,0 3 7
1 9 0 ,8 4 4
6 ,5 8 3 r
9 ,7 8 1
1 0 3 ,1 7 3
3 6 ,0 1 5

3
6
10
2
3
3
3

1 9 1 ,7 9 8
1 4 2 ,6 3 0
2 0 3 ,3 1 3
3 3 ,4 0 2
2 8 ,0 9 0
3 1 ,7 4 5
8 2 ,9 5 8

N e w n a n .............
S a v a n n a h ...........
V a ld o s ta .............

2
4
3
2
4
2
3
2
4
2

L O U ISIA N A
B a to n R o u g e . .
L ake C h a rle s.
N e w O r le a n s .

P la c e

P er C ent C hange
M a y 1 9 45 from
A p ril
1945

M ay
1944

1 7 ,1 5 6
1 7 7 ,2 2 5
6 ,2 8 3
9 ,5 1 5
1 1 1 ,1 1 2
3 7 ,1 1 5

+ 21
+
3
+ 13
+
3
+ 17
+ 12

+
+
+
+
+
+

1 7 0 ,0 2 9
1 3 8 ,1 3 7
1 9 7 ,2 2 9
3 5 ,5 0 7
2 3 ,1 1 3
3 0 ,5 2 3
8 5 ,2 2 2

1 8 2 ,3 8 1
1 1 9 ,7 7 8
1 6 2 ,4 0 5
2 9 ,6 0 2
2 0 ,3 5 9
2 4 ,9 1 0
8 0 .0 3 3

+ 13
+
3
+
3
— 6
+ 22
+
4
— 3

+
5
+ 19
+ 25
+ 13
+ 38
+ 27
+
4

9 ,1 5 0
4 9 3 ,7 7 8
3 4 ,4 2 7
1 2 ,5 8 2
3 6 ,1 3 9
1 ,8 6 4
5 0 ,5 5 8
5 ,7 3 2
8 1 ,5 2 2
7 ,4 9 7

8 ,8 4 5
4 5 7 ,5 9 9
3 4 ,0 4 2
1 1 ,9 5 5
3 3 ,7 1 8
1 ,7 4 4
3 7 ,4 0 1
4 ,8 5 4
8 7 ,5 1 8
6 ,6 3 7

8 ,6 0 0 .
4 5 4 ,0 4 8
3 2 ,7 6 2
1 4 ,5 9 4
3 2 ,2 0 1
1 ,7 3 6
3 8 ,4 5 1
4 ,2 7 1
7 9 ,3 8 3
6 ,6 0 9

+
3
+
8
+
1
+
5
+
7
+
7
+ 35
+ 18
— 7
+ 13

+
+
+
—
+
+
+
+
+
+

3
3
7

4 2 ,2 0 8
1 6 ,7 1 6
4 2 0 ,3 8 8

4 3 ,0 2 6
1 5 ,3 9 1
4 0 6 ,5 3 7

3 8 ,3 0 6
2 0 ,9 6 1
4 0 4 ,5 1 5

—
+
+

2
9
3

+ 10
— 20
+
4

M IS S IS S IP P I
H a ttie s b u r g ...
J a c k s o n ................
M e r id i a n .............
V ic k s b u r g ___

2
4
3
2

1 2 ,6 2 8
5 8 ,1 6 9
1 7 ,9 8 1
2 0 ,0 5 1

1 1 ,4 9 7
5 8 ,2 2 8
1 6 ,4 0 5
1 5 ,1 4 2

1 2 ,1 8 3
4 5 ,3 3 9
1 6 ,1 4 2
1 6 ,3 2 9

+ 10
— 0
+ 10
+ 32

+
4
+ 28
+ 11
+ 23

TE N N E S S E E
C h a tta n o o g a ..
K n o x v ille ..........
N a s h v ill e ..........

4
4
6

9 0 ,2 2 8
1 2 6 ,2 3 7
1 8 7 ,4 0 9

8 3 ,1 1 2
1 2 0 ,6 9 7
1 7 2 ,9 7 3

7 9 ,3 9 9
1 0 3 ,4 0 5
1 7 9 ,3 7 3

+ ' 9
+
5
+
8

+
+
+

14
22
4

SIX T H D ISTRICT
3 2 C i t i e s .............

114

2 ,6 2 9 ,8 4 2

2 ,4 0 4 ,0 7 6

+

6

+

9

6 7 ,2 5 9 ,0 0 0

+

10

ALABAM A
A n n is to n .............
B ir m in g h a m .. .
D o th a n ................
G a d s d e n .............
M o b ile ..................
M o n tg o m e r y ..
F L O R ID A
J a c k s o n v i l l e .. .
M ia m i....................
* G r e a te r M iam i
O r l a n d o .............
P e n s a c o l a ..........
S t. P e te r s b u r g
G E O R G IA
A lb a n y ................
A tla n ta ................
A u g u s t a .............
B r u n s w ic k ___
C o lu m b u s ___
E l b e r to n .............

U NITED STA TES
334 C it ie s ...

8 1 ,7 2 3 ,0 0 0

*N ot in c lu d e d in S ix th D is tric t to ta l
r = R e v is e d

2 ,4 7 2 ,2 8 5 r
7 4 ,1 3 1 ,0 0 0

13
11
18
6
8
9

6
9
5
14
12
7
31
34
3
13

+ 22

6 4

M

T h e

o n t h l y

R e v ie w

D is tr ic t

o f th e F e d e ra l R e s e rv e B a n k o f A t la n ta f o r J u n e 1945

B u s in e s s

S itu a tio n

activity in the Sixth Federal Reserve District that month. The daily rate was, however, slightly under that
shows no general signs as yet of a down turn. Little of January, which was the shorter month by one working day.
reason seems to exist, in fact, to indicate that the peak of ac­ Construction contracts awarded in May declined sharply
tivity during the current war has yet been reached. Whatever from the April volume. The April total, however, included a
dampening effect has been brought by war contract cutbacks similarly large increase because of awards amounting to
has. been promptly offset by increased new activity in serving about 120 million dollars that were made during the month
civilian needs and in making adjustments to the anticipated for large manufacturing plants.
postwar situation.
Textile mills in Alabama, Georgia, and Tennessee con­
sumed 290,096 bales of cotton in May. This exceeds the April
Industrial Developments
War contract cutbacks have still not attained any considerable total by 16,274 bales. May had two working days more than
volume in the District. Cutback announcements that occurred April had, and actually the daily average of consumption de­
in June were even more modest in volume than those that clined 2 per cent. The rate in May was 8 per cent below that
occurred in May. The three-million-dollar Mohawk rubber of January and 20 per cent under the record high recorded
project that was under way at Chattanooga was canceled in in September 1942. It was, however, 2 per cent above the
the early part of June. Mid-June announcements of employee rate in May of last year.
Lumber products over most the Sixth District have mainly
layoffs were those of the Redstone Arsenal at Huntsville, Ala­
bama, which reduced its force by approximately 200 workers, had favorable weather conditions in recent weeks. Labor
and of the Alabama Dry Dock and Shipbuilding Corporation is as scarce as ever in most localities, however, and the
at Mobile, which gave dismissal notices to 2,290 second-shift prolonged use of trucks and mill and woods equipment
workers. The Marietta aircraft-assembly plant near Atlanta without replacements is now beginning to tell with greater
also began a leveling-off process in June, putting its nearly frequency. In recent months many trucks used in the woods
and at the mills have been forced out of operation by the
30,000 employees on a straight five-day week.
inability to obtain badly needed tire replacements. Little
If current and postwar industrial programs that have been
change has occurred in the lumber-market situation. Govern­
announced are carried through, the displaced war workers
will be absorbed without too much difficulty. The United ment agencies continue to take the larger part of production,
obtain some
States Sugar Corporation expects to complete its large new and though railroads and shipyards are able to occasionally
lumber, retail yards for many months have only
starch plant at Clewiston, Florida, some time early in July. been able to obtain even small amounts. There is already a
When this plant reaches full operation it will employ some heavy movement of lumber through Southern ports for the
2,500 pedple. The new development covers some 18,000 acres
Pacific
and the indications
and is designed to produce starch from sweet potatoes. At grow astheater of war, the war increases. are that this will
the tempo of
Atlanta both the Ford Motor Company and General Motors
Shipping and Transportation
Corporation have formally announced plans for the establish*
ment of new assembly plants that will employ a large num­ The movement of the chief theater of war operations from
ber of workers. At Birmingham the Tennessee Coal, Iron, and Europe to the Pacific has permitted some measure of return
Railroad Company has announced a major modernization to more normal shipping activity. At Savannah the Seaboard
and improvement program for its Fairfield tin-plate mill. railroad has freed two of its three terminal slips from their
This program involves an expenditure of at least one million wartime collection of silt, and a number of vessels have
dollars and is expected to provide jobs for 500 additional already loaded and discharged at the terminals since the
slips were opened. The port of Tampa is at present chiefly
workers.
Steel-mill activity in the Alabama area shifted abruptly handling petroleum and tropical fruit and is expecting a
from a ‘gradual decline during most of May to a sharp re­ sharply increased volume of tonnage over prewar years. More
duction in the early part of June because of a two-week than 200 tank cars are reported moving daily from the docks,
strike by blast-furnace workers. From a rate of 99 per cent representing a movement that far exceeds prewar petroleum
of capacity reported by the Iron Age for the first two weeks shipment. Currently, too, ships of at least a dozen lines are
in May, production fell to 95 per cent in the week ended May bringing in fruit products from various Caribbean ports.
22, to 89 per cent the following week, and to 18 per cent in
Mobile is also busily preparing for postwar shipping ex*
the week ended June 5, where it remained for another week. pansion. The port is already able to handle well over five
During the strike six blast furnaces were banked; nine open- million tons of cargo and to tend more than 2,000 ships. Al­
hearth steel furnaces were closed; and rail, blooming, and though it is primarily a cargo port, Mobile anticipates sub­
steel-billet mills were shut down. A wire mill that received stantial expansion in passenger movement to the West Indies,
its materials from the steel-billet mill also was closed. A Central and South America, and Europe. The port of New
recovery to 54 per cent of capacity was reported for the Orleans is also making extensive plans for postwar shipping
week ended June 19, several days after termination of the expansion and is currently handling a vastly increased vol­
strike.
ume of military shipments. Only the most vigorous measures
Output of coal increased substantially in May over April, have prevented freight-car tie-ups at the port.
when a strike at steel-company mines cut production almost
Air lines that serve the District are continuing with their
in half. The May output was the largest, in actual tonnage, expansion programs. On June 1 Eastern Air Lines started
since May of last year and only slightly below production for service between Atlanta and Memphis by way of Binningu s in e s s

B




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o n t h l y

o f th e F e d e ra l R e s e rv e B a n k o f A t la n ta f o r J u n e 1945

R e v ie w

S ix t h D is t r ic t S t a t is t ic s
IN STALM ENT C A S H LO A N S
L ender

N um ber
of
L e n d e rs
R e p o r tin g

V o lu m e

F e d e r a l c r e d i t u n i o n s ...............................
S ta t e c r e d i t u n i o n s ......................................
I n d u s tr ia l b a n k i n g c o m p a n ie s ..........
I n d u s tr ia l lo a n c o m p a n ie s ....................
P e r s o n a l f in a n c e c o m p a n ie s ...............
C o m m e r c ia l b a n k s ......................................

42
26
ill
26
57
34

+ 34
+ 55
+ 12
+ 52
+ 17
+
0

Per C ent C hange
A p ril 1 9 4 5 to M ay. 1 9 45
O u ts ta n d i n g s
+
+
+
+
+
+

2
7
2
7
2
2

R ET A IL FU R N ITU R E S T O R E O PE R A T IO N S
N um ber
of
S to r e s
R e p o r tin g

Ite m
T o ta l s a l e s ........................................................
C a s h s a l e s ....................................... .............
I n s ta lm e n t a n d o th e r c r e d i t s a l e s . .
A c c o u n ts r e c e iv a b l e , e n d o f m o n th
C o lle c tio n s d u r i n g m o n t h .....................
I n v e n t o r ie s , e n d o f m o n t h ..................

P er C ent C hange
M a y 1 9 4 5 fro m
A p ril 1 9 45

1 05
94
94
.102
102
80

+
—
+
+
+
+

M a y 1 944

4
0
3
o
4
2

4- 16
+
2
+
7
+ 11
4- 2 3

W H O L E S A L E SA LES AND IN V E N T O R IE S* — M AY 1 9 4 5
IN V E N T O R IE S

SA LES
N o. of
F in n s
R epent­
in g

Item

Per C ent C hange
M a y 1 9 4 5 fro m
A p ril
1945

M av
1944

+

+

N o . of P e r C e n t C h a n g e
M a y 1 9 4 5 fro m
F irm s
R e p o rt­
A p ril
M av
in g
1944
1945

15

9

+, 1

+. 37

+ 15
— 1
+ 10
+ 16

+
1
— 3
— 13
+ 24

'5
5

+ 2
+ .0

— 34
+ 30

4“ 8
+ 17

+ 10
— 22

32

+

17

—

4

15

10
12
5

A u to m o tiv e s u p p l i e s .
C lo th in g a n d
f u r n i s n i n g s ..................
D ru g s a n d s u n d r ie s ..
D r y g o o d s ..........................
E le c tric a l g o o d s ...........
F r e s h f r u its a n d
v e g e t a b l e s ....................
C o n f e c tio n e r y ................
G r o c e r ie s — fu ll lin e
w h o l e s a l e r s ................
G r o c e r ie s — s p e c i a lt y
li n e w h o l e s a l e r s . . .
H ard w are!—g e n e r a l . .
H a rd w a re s—in d u s tr i a l
P a p e r a n d its
p r o d u c t s ..................
T o b a c c o a n d it s
p r o d u c t s ...................
M is c e l la n e o u s ------T O T A L .................

+ 29
— 0
— 8

+

18

—

5

+

10

8
4

+ 6
—2

+

—

5
3
18
67

—
+
—

3
3

— 19

11
3
8
10
7
6
6

4
9
23
146

4

4* 2

4

— 14
— 7
— 1

+ 19
— 3
+
7

— 30

+ 5

1

—1
2
—1
1

• B a s e d o n U . S . D e p a r tm e n t o f C o m m e r c e f ig u r e s

D EPA RTM EN T S T O R E S A L E S A N D S T O C K S
SA LES
P la c e

ALA BAM A
B ir m in g h a m .. .
M o b ile ...................
M o n tg o m e r y ..
F L O R ID A
J a c k s o n v i l l e ..:

M i..........
iam

T a m p a ..................
G E O R G IA
A tla n ta ................
A u g u s t a . ...........
M a c o n ..................
L O U IS IA N A
B a to n R o u g e . .
N ew O r le a n s ..
M IS S IS S IP P I
J a c k s o n . . . . ----TENNESSEE
C h a t t a n o o g a ..
K n o x v ille ...........
N a s h v ill e ...........
O TH ER C IT IE S * .
D IS T R IC T ................

N o . of
S to r e s
R e p o r t­
in g

IN V E N T O R IE S

P er C ent C hange
M a y 1-945 fro m

N o . of
S to r e s
R e p o r t­
in g

P er C ent C hange
M a v 1 9 4 5 fro m

A p ril
1945

M av
1944

5
4
3

+ 21
+ lb
+ 11

+
— 13

1

4

+

9

+

15

+

8

3

+

7

+

5

4
3
5

+ 22
2
+
9
+

+
+
+

4
17
3

6
3
3

+

A p ril
1945

M ay
1944

15
20
22

+ 11
8
+
— 4

5

+

7

+

3

+

0

—

1

3
4

+
+

19
11

+
+

9
3

3
3

+
+

4
13

+

17
19

4

+

9

+

2

3

+

11

+

11

+
+
+•
+
+

21
9
14
11
13

+
+
+
+
+

7
1
4
3
b

5
31
60

+
+
+

4
8
8

+
+
+

12
10
10

3
4
6
24
84

l

27

• W h e n l e s s th a n 3 s to r e s r e p o r t in a g iv e n c ity , th e s a le s a r e g r o u p e d
to g e t h e r u n d e r "o th fe r cities.**________________________________________________




6 5

ham. The new flight connects at Memphis with Chicago and
Southern for Houston, Texas, and with American Air Lines
for service to Dallas and the west coast. Delta, too, has just
added another direct flight between Atlanta and Fort Worth,
making a total of six daily flights by Delta between the two
cities. Moreover, examiners of the Civil Aeronautics Board
have just recommended that National Air Lines be permitted
to establish a new air route between New Orleans and Miami
by way of Tampa and that Southern Airways of Birmingham
be permitted to operate a local air service between Jackson­
ville and Miami.
Agricultural Prospects
In spite of weather conditions that, on the whole, have been
none too favorable, the crop outlook for the District is well
above the average. The weather was mostly favorable in Ala­
bama, Louisiana, and Mississippi. There was, however, too
much rain in Tennessee. The drought in central and southern
Florida continued, and hot dry weather in central and
southern Georgia since mid-May has caused considerable
deterioration in crop prospects.
As might be expected, crop prospects in individual states
of the District vary with weather conditions. Alabama an­
ticipates crops of winter wheat, oats, peaches, and pears that
are well above those of last year. Indications point to a
winter wheat crop of 240,000 bushels in the state against
218,000 last year and a 10-year average of 87,000. The oats
crop of 4,878,000 bushels in prospect for 1945 will be some­
what larger than that of last year and almost double the 10year-average crop of 2,729,000 bushels. Peach production is
estimated at 2,440,000 bushels against 1,380,000 bushels in
1944. Prospects seem good for a pear crop of 432,000
bushels, compared with 312,000 bushels last year. In the
early part of May wet weather hindered farm work in the
north central and northern areas of the state.
Though generous showers fell in northern and north*
western Florida, the weather continued hot and dry during
May in the south central and southern areas. The critical
drought over the citrus belt and peninsular cattle lands;
furthermore, still continues. A few heavy local showers fell
in early June, but at the middle of the month there had been
no general relief.
The condition of the new citrus crop reflects the continued
dry weather. On June 1 growers reported oranges, grapefruit,
and tangerines to be in the lowest condition since 1917.
Oranges were said to be at 52 per cent of normal, grapefruit
at 51 per cent, and tangerines at 48 per cent. Considerably
more rain has fallen in the staple-crop areas of North
Florida, but even there reports indicate irregular crops of
corn, peanuts, and tobacco.
Hot dry weather in much of Georgia, from the middle of
May to the middle of June, caused rapid deterioration of
corn, tobacco, truck crops, and pastures. Production of early
varieties of peaches in the southern commercial area has
been lowered through considerable reduction in the size of
fruit. Cotton and peanuts also suffered in some localities but
are standing the drought better than other crops. The south­
eastern and south central parts of the state were especially
hard hit. Crops in those areas were at a critical stage of de­
velopment, with above-normal temperatures adding to the
harmful effects of the dry weather. Some relief was brought
by scattered showers over a wide section of the state around

6 6

M

o n t h l y

R e v ie w

S ix t h D is t r ic t I n d e x e s
D EPA RTM EN T S T O R E SA L ES*
U n a d ju s te d

. .A d ju s te d * *
M ay
1 9 45

M ay
1944

M av
1945

A p ril
1 9 45

M av
1944

243
257
243
235
250
222
295
267
213
260
226
242
213
293

D IS T R IC T ..................
A tla n ta .....................
B a to n R o u g e . . .
B ir m in g h a m ___
C h a tta n o o g a .. .
J a c k s o n ..................
J a c k s o n v ille ___
K n o x v ille .............
M a c o n .....................
M ia m i.......................
M o n t g o m e r y .. .
N a s h v ill e .............
N ew O r le a n s ...
T a m p a .....................

A p ril
1945
234r
256
240
233
243
222
286r
295
184r
222
224
254
1 95
263

233
232
224
229
232
218
285
266
222
222
208
234
207
286

239
261
262
23.1
257
2 31
305
279
222
213
233
260
208
283

227r
245
238
206
230
229
269r
277
197r
226
226
246
203
280

228
236
241
225
239
227
295
278
231
1 82
214
2 51
203
276

DEPA RTM EN T S T O R E S T O C K S
U n a d ju s te d

A d ju s te d * *
M ay
1 9 45

A p ril
1945

M ay
1944

M ay
1945

A p ril
1 9 45

M ay
1944

205
309
1 60
214
304
115

186r
275
145
187
267
99

186
243
138
203
272
1 43

199
314
164
217
308
119

18 4r
293
151
202
296
105

180
247
142
206
276
147

D IS T R IC T ..................
A tla n ta .................. .
B ir m in g h a m ___
M o n tg o m e r y .. .
N a s h v ille .............
N ew O rle a n s ..

C O T T O N C O N S U M P T IO N *

C O A L P R O D U C T IO N *

M ay
1 9 45

A p ril
1945

M ay
1944

M ay
1945

A p ril
1 9 45

M av
1944

152
158
150
1 37

155
161
155
1 30

149
152
149
1 26

168
1 79

95
95

169
177

1 39

95

is 2

T O T A L ........................
A la b a m a ................
G e o r g i a ................
T e n n e s s e e ..........

C O N S T R U C T IO N C O N T R A C T S
M av
1945

L o u i s i a n a ..............................................
M is s is s ip p i.........................................
T e n n e s s e e ............................................

M ay
1944

101
114
95
1 36
128
115
28
43
107

D IS T R IC T ...................................................
R e s id e n tia l .........................................

A p ril
1 9 45
738r
181 r
l ,0 0 8 r
284
219
180
48
97
2 ,7 7 0

101
1 48
78
114
82
71
161
30
38

M A N U FA C TU R IN G
EM PLO YM EN T***
A p ril
1 9 45

M a rc h
1 9 45

T43
173
137
133
149.
132
13ff

1 4 8r
177r
146
138
156r
137
131

S IX S T A T E S ..........
A la b a m a .............
F lo r id a ..................
G e o r g i a ................
L o u i s i a n a .............
M is s is s ip p i----T e n n e s s e e ..........

C O S T O F L IV IN G
M a rc h
1945

M ay
1 9 45

A p ril
1 945

M ay
1944

157
185
1 76
146
167
1 45
136

105
109
96
98
104
93
131

104
1 15
108
107
94
94
104

95
96
89
95
94
97
113

A p ril
1944

132
1 44
141
114

131
143
141
114

128
140
136
114

109

109

109

141

141

129

129

A p ril
1945
S IX S T A T E S .. .
H y d ro ­
g e n e ra te d .
F u e l­
g e n e ra te d .

124

M ay
1945

A p ril
1945

M ay
1944

210
213

207
203

197
200




M a rc h
1945

A p ril
1944

275

284

262

258

303

310

297

260

199

ANN U AL RA TE O F T U R N O V ER O F
D EM A N D D E P O S IT S

134

C R U D E PETR O LE U M P R O U C T IO N
IN C O A S T A L L O U IS IA N A A N D
M IS S IS S IP P I*

U n a d ju s te d ___
A d ju s te d * * ___

A p ril
1944

EL E C T R IC P O W E R P R O D U C T IO N *

A p ril
1945
A LL IT E M S .. . .
F o o d ..................
C lo th in g .
R e n t . ................
F u e l, e l e c ­
tr ic ity ,
an d ic e .. . .
H om e fu r­
n i s h in g s . . .
M is c e l­
la n e o u s —

G A S O L IN E TAX
C O L L E C T IO N S

M ay
1945
U n a d ju s te d .. . .
A d ju s te d * * ___
I n d e x * * ................

A p ril
1945

M av
1944

1 3 .7
1 4 .7
5 6 .9

1 4 .5
1 4 .7
5 6 .8

1 5 .5
1 6 .7
6 4 .5

• D a ily a v e r a g e b a s i s
* 'A d j u s t e d fo r s e a s o n a l v a r ia tio n
* * * 1 9 3 9 m o n th ly a v e r a g e = 100; o th e r
in d e x e s , 1 9 3 5 - 3 9 = 100
r = R e v is e d

o f the F e d e ra l R e s e rv e B a n k o f A t la n ta f o r J u n e 1945

the middle of June, and these were followed by more general
rains the next week.
The winter wheat crop in Georgia, estimated at 3,081,000
bushels, is the largest in 45 years. Realization of the current
estimate for oats, 14,915,000 bushels, will set a new record
for the state. In addition, Georgia’s peach crop is estimated
at 7,998,000 bushels against 4,590,000 bushels last year.
Relatively dry weather during May permitted farmers in
central and northern Louisiana to finish planting their cotton
and corn. Much of the land submerged during the recent
floods is now in crops that can still produce well if favorable
growing weather prevails during the remainder of the season.
In general, crops are unusually well advanced over the
southern part of the state. Prospects for sugar cane are very
promising in almost all areas, and good weather has enabled
growers to plant rice earlier than usual. Though the corn
crop in the southern part of the state is in generally good con­
dition, it needs rain. Oats are not yielding as well as they
have been in recent years, because of excessive rainfall dur*
ing the late winter and early spring. Although the current
estimate of oats in Louisiana is 5,324,000 bushels, compared
with 4,880,000 bushels last year, the increased production
will be merely a result of a larger acreage that will more than
offset the lower average yield an acre. Louisiana’s peach crop
is forecast at 360,000 bushels, against 390,000 bushels in
1944, and the production of pears, indicated to be 221,000
bushels, is also slightly below the 1944 crop.
Mississippi has had mostly favorable weather conditions,
although some areas in the state needed rain during early
June. Farm work has progressed rapidly. Cotton and corn
are about all planted, except in a few sections where labor is
scarce. Chopping of cotton has made rapid progress, and
some fields show the formation of squares. Truck crops are
reported in excellent condition. Current estimates indicate
more tomatoes, green peppers, and watermelons than last
year, but they also point to a reduction in snap beans.
In Tennessee at the beginning of June the crop outlook was
far from satisfactory. Because frequent rains that interfered
with planting operations all spring have continued, it appears
that the acreage of corn and some other crops will be less
than was planned. Much of the cotton acreage required re­
planting several times, and the persistently cool wet weather
has been bad for that crop. On the other hand the abundant
moisture has improved pastures in the state. Plentiful green
feed together with liberal grain allowances has resulted in a
near-record milk production. Moreover, prospects are ex­
cellent for all fruit crops except apples, and present indica­
tions are that the commercial apple crop, though only
moderate in size, will be above average. Just recently weather
conditions have been more favorable for other crops.
Except in Florida, District sales of fertilizer in May, as
they were reflected in tax-tag sales, declined seasonally from
April but were 18 per cent greater than in May of last year.
In Florida and in Georgia sales in May were smaller than
they were a year ago. In the five-month period January
through May the total for the District’s six states amounted
to almost two and a half million tons, 4.6 per cent more than
in that part of 1944. Only in Louisiana was there a decrease.
The other five states had increases that ranged from 1 per
cent in Florida to 10 per cent in Alabama.
Farmers in the six states located wholly or partly in the
Sixth District received more than 128 million dollars for the

M

o n t h l y

R e v ie w

o f the F e d e ra l R e s e rv e B a n k o f A tla n ta f o r J u n e 1945

crops, livestock, and livestock products they marketed in
March. According to figures compiled by the United States
Department of Agriculture, this is about 1 per cent less than
the amount received in February but 16 per cent greater than
the total for March 1944. It is, in fact, a new record total
for March.
The Six-State total of receipts from marketings of livestock
and livestock products was up 19 per cent above February.
Moreover, it was 2 per cent greater than the total for March
of last year. Although five of the states had increases in
March farm income, this revenue in Tennessee was down 19
per cent from a year ago, principally because of a rather
sharp drop in receipts from livestock and livestock products
but also because of a decrease of 3 per cent in receipts from
crops.
March receipts from crops marketed in the Six States
totaled almost 84 million dollars. This amount is down 9 per
cent below the February total but up 24 per cent above the
total for March of last year. In Florida, however, because of
increases from oranges and truck crops, cash income in
March rose 20 per cent over that of the preceding month.
Retail Trade Activity
Department store sales figures continue to support the con*
elusion that retail-trade activity in the District has not yet
reached its peak. For the four weeks ended June 16 this year
combined sales of 33 stores in large District cities were 15
per cent above those for the corresponding period of last
year. Moreover, the increased volume of sales this year is
about the same as the increase of last year over the previous
year, for the corresponding periods.
Some weeks ago it appeared that retail trade as measured
by department store sales might be leveling off. Sales for
April this year, for example, were only 1 per cent higher
than for April of last year. Apparently, however, this modest
increase was the result of earlier-than-usual Easter buying
and the month’s unfavorable weather. At all events, May
sales as reported by 84 department stores were 5 per cent
greater in dollar volume than last year’s sales for the same
month.
Increases in department store sales of May this year over
May of last year were experienced at 13 out of the 15 re­
porting centers. Only Mobile and Macon had decreases. Both
of these cities have experienced spectacular wartime booms.
Mobile’s expansion was based primarily upon wartime ship­
building activities, and with the decrease in new construction
that has taken place in these plants, some contraction in re­
tail trade is to be expected. Macon’s wartime expansion has
been largely based upon employment in Government es­
tablishments (Camp Wheeler. Robins Field, and WarnerRobins depot) and Reynolds Ordnance plant. Any decrease
in activity at these establishments will, of course, be directly
reflected in retail-sales volume in the city.
Miami in May led all other reporting centers in the Dis­
trict in gain in sales volume over last year. Atlanta was next,
and Baton Rouge, Augusta, and Montgomery followed in
that order. Miami’s tourist trade continues to be large in
volume, and it is heavily buttressed by the servicing of mili­
tary and naval personnel. The largest single employer in the
Atlanta area is the Marietta aircraft-assembly plant, which
employs almost 30,000 workers. The operation of this plant
has been an important factor in Atlanta’s trade gains.
The collection ratio for department store open-book sales



6 7

was 4 per cent higher in May than in April. Collections were
greater in May than in April in all cities of the District ex­
cept Birmingham, where the ratio declined slightly. Collec­
tion ratio for instalment sales in the District as a whole, how­
ever, was exactly the same for May as for April.
Customers of department stores apparently are still well
supplied with cash. For the reporting department stores as a
whole in May, cash sales made up 62 per cent of the total
against open-book sales of 35 per cent and instalment sales
of 3 per cent.
The trend in retail furniture store sales still seems to be
upward. The movement was irregular, however, at selected
reporting centers. May sales for this year, as compared with
those of last year, were up 3 per cent at Birmingham, 1 per
cent at Chattanooga, and 2 per cent at Tampa but were down
10 per cent at Columbus, 9 per cent at Nashville, 11 per cent
at New Orleans, and 10 per cent at Savannah.
Labor Developments
Labor disputes during June interrupted production to some
extent here and there in the District. A dispute involving
approximately 3,300 workers stopped production at the
Goodyear Tire and Rubber Company of Alabama at Gadsden
early in the month. Production at two steel plants of the
Tennessee Coal, Iron, and Railroad Company was interrupted
over a 13-day period when some 1,100 blast-furnace workers
walked out during a wage dispute leading to a temporary
layoff of some 10,000 workers. At New Orleans, too, some
9,000 workers at Higgins Industries, Incorporated, were out
for more than a week in the early part of June. A minor
stoppage of work took place also at the Mobile Pulley and
Machine Works plant when the company’s foundry helpers
and molders went out on strike.
The end of the war in Europe has brought a major change
in labor-shortage areas as defined by the War Manpower
Commission. Columbus, Macon, Mobile, and Knoxville, how­
ever, are still classified as being in Group I, and Rome, Sa­
vannah, Tuscaloosa, and Pensacola are in Group II. Cities in
these two classifications are regarded as having labor short­
ages that might endanger essential production if manpower
controls were relaxed.
R e c o n n a is s a n c e
S ix th D is tr ic t S ta tis tic s fo r J u n e 1 9 4 5 c o m p a r e d w ith J u n e 1 9 44
PER C E N T D E C R E A S E

^

P E R CEN T IN C R E A SE

Department lUiiire Sales
Department iiH ifctocka
Furniture S a le s
Construction Contracts
Gasoline T a f |lf |* t io n s
Cotton Cojy^umption
Bank M U
Member BBIliioans
Member Bank I n v e n t s Demand D e p ^ M * d
+
40

30

20

10

0

10

20

30

40

68

M

T h e

o n t h l y

R e v ie w

o f th e F e d e ra l R e s e rv e B a n k o f A t la n ta f o r J u n e 1945

N a tio n a l B u s in e s s

activity and factory employment continued to
decline slightly in May. Value of department store sales
increased in May and the early part of June, following the
sharp decline in April. Prospects for major crops have de­
teriorated somewhat in the past month but still compare
favorably with the past three years of general abundant har­
vests. Wholesale prices of consumer goods continued to ad­
vance from the middle of May to the middle of June.
n d u s tria l

I

Industrial Production
As a result of further decreases in activity at munitions
plants, the Board’s seasonally adjusted index of industrial
production declined in May to 227 per cent of the 1935-39
average, as compared with 231 in April.
A further reduction in operations at shipyards accounted
for most of the decrease in activity at munitions plants, al­
though there were small decreases in activity in the machinery
and aircraft and other transportation-equipment industries.
The decline in aircraft was in accordance with reductions in
schedules made prior to V-E Day. At the end of May the
Army Air Forces announced a cutback in procurement that
will reduce total military-aircraft production in the last quar­
ter of the year to a level 30 per cent below that of March.
Steel production was maintained at a high level in May but
declined somewhat during the first three weeks of June. Pro­
duction of nonferrous-metal products showed a sharp drop
in May, following a large rise earlier this year. In June brass
mill products and aluminum were made available for general
civilian use, and after July 1 some steel also will be released.
Production of textile, leather, paper, chemical, and pe­
troleum products showed little change in May. Total out­
put of nondurable goods was 3 per cent above that of last
year.
Coal production declined 8 per cent in May as anthracite
output dropped sharply because of interruptions in mine
operations in the first three weeks of the month. In the early
part of June, production of both anthracite and bituminous
coal increased to about the level that prevailed earlier in the
year but was still somewhat below the rate of output in June
1944. Output of crude petroleum was maintained in record
volume in May and the early part of June.

S itu a tio n

Bank Credit
During the four weeks ending June 13, covering the period
of intensified sales of securities to individuals in the Seventh
War Loan, loans and investments at reporting banks in lead­
ing cities increased by close to 1.7 billion dollars. JLoans for
purchasing and carrying Government securities rose by 620
million dollars, as investors adjusted their portfolios in an­
ticipation of security purchases. Advances to brokers and
dealers accounted for 360 million dollars of the increase,
and loans to others for 260 million. Government security
holdings of reporting banks rose by 825 million dollars, re­
flecting continued purchases of bonds.
Deposits of individuals and businesses at weekly reporting
banks increased by about 1.3 billion dollars during the first
four weeks of the drive. U. S. Government deposits at these
banks declined by 300 million dollars. The time deposit ex­
pansion slackened, presumably as a result of the war loan
drive. Owing to these developments the weekly average level
of required reserves at all member banks increased by around
200 million dollars during the first four weeks of the drive.
Reserve funds to meet the increase in required reserves and
a reduced currency drain of 160 million dollars were sup­
plied through an increase of 435 million in the Government
security portfolios of Reserve Banks and by substantial
member-bank borrowing from the Reserve Banks shortly
prior to and early in the drive. Borrowing from the Reserve
Banks rose in early June to over 900 million dollars out­
standing, the largest amount since the spring of 1933. The
total increase in Reserve Bank credit more than offset re­
serve needs, and the average level of excess reserves rose by
about 350 million dollars to close to 1.4 billions outstanding
in mid-June.
In the week ending June 20, when large payments were
made by corporations and others for securities purchased in
the drive, there was a shift of deposits from private accounts
to reserve free war loan accounts and a consequent reduction
of 440 million dollars in required reserves of member banks.
Member-bank borrowings declined in the week by nearly
550 million dollars.
Reserve Bank holdings of Government securities, however,
increased further.

( This page was written by the staff of the Board of Governors of the Federal R eserve S ystem )

IN D U STR IA L PRODUCTION

DEPARTM
ENT STORE SALES A D STO S
N
CK

W
HOLESALE PRICES

Federal Reserve index. Monthly figures,
latest shown is for May.

Federal Reserve indexes. Monthly figures,
latest shown are for May

Bureau of Labor Statistics' indexes.
Weekly figures, latest shown are for week
ending June 16.