Full text of Economic Review (Federal Reserve Bank of Atlanta) : June 30, 1948, Volume 33, Number 6

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M onthly
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R eview
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A tlan ta, G eorgia, June 30, 194 8

V o lu m e X X X III

S ix th

D is tr ic t

L iv e s to c k

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N um ber 6

I n d u s t r y :

An Appraisal of Efficiency
the d evelop m en t o f p astu res and new co m b in a ­
tio n s o f grazin g crops m an y D istrict farm ers are in ­
creasin g their in com e fro m liv esto ck . O n ly in recen t years
h ave eith er research in stitu tion s or in d iv id u a l farm ers ca p ­
ita lized on the fu ll feed -p rod u cin g p o te n tia litie s o f th e D is­
trict states. T h e lo n g m ild w inters and the abundant r a in fa ll
can be assets in the p rodu ction o f feed and g razin g cro p s. In
fa c t the records o f experim en t station s and som e farm ers in ­
d icate that a greater w eig h t o f g razin g m aterial can b e
grow n d u ring the six fa ll and w inter m onths than can be
grow n d u rin g the six sp rin g and sum m er m onths.
T h e ad vantage in the p rod u ction o f liv esto ck feed that
D istrict farm ers m ay h ave over farm ers in m ore n orth erly
latitu d es d oes n ot lie in h igh er y ie ld s o f a sin g le crop but
in the alm ost con tin u ou s p rod u ction p o ssib le w ith an effi­
cien t com b in ation o f grazin g crop s and p astures. S in ce the
com b in ation s o f feed crop s are a lm o st lim itless, m an y fa rm ­
ers are exp erim en tin g to find th e m ost efficient system fo r
their ow n particu lar op eration s. E xp erim en t station s in D is ­
trict states a lso are con d u ctin g a w id e variety o f tests on feed
crop s, and m ost o f the resu lts offer encou ragem en t to D is ­
trict p rod ucers.
Just recen tly the B ell M ina S u b station o f th e A la b a m a E x ­
p erim en t Station released in fo rm a tio n on an ex p erim en t it
h ad conducted w ith the fe e d in g o f b e ef cattle on a co m b i­
n a tion o f tw o so il-b u ild in g legu m es, reseed in g crim son c lo v ­
er and L espedeza serecia. T h is com b in ation , th e resu lts
sh ow ed, m ay p rovid e year-round g razin g o f h ig h fe ed in g
v a lu e from th e sam e lan d year a fter year— lesp ed eza in the
sp rin g and sum m er and crim son clo v er in th e la te f a ll and
w inter. T h is fora g e system p ro m ises th e p rod u ction o f highq u a lity fe e d w ithout the annual w ork o f p rep aration an d re­
seed in g. A s stated in the first p rogress report, co v erin g the
five m onths M ay-Septem ber 1 947, th is co m b in a tio n p rod u ced
4 1 7 p ou n d s o f b e e f to the acre. In term s o f the num ber o f
fe ed u n its required to prod u ce that am ount o f b eef, th e com ­
b in ation w as the eq u ivalen t o f a lm o st 8 0 b u sh els o f corn.
A t th e W est T ennessee E xp erim en t S tation at Jackson, an ­
other exp erim en t w as conducted to determ ine the resu lts o f
fe e d in g p rod u cin g Jersey cow s on an a ll-ro u g h a g e ration
and the effect that w ou ld b e p roduced b y ad d in g fu ll-g ra in
fe ed in g to su ch a ration. T h e herd, m o stly purebred, w as d i­
vid ed in to tw o grou p s. O ne w as g iven pasture, h a y , and s i l­
age, and th e other th e sam e ration w ith grain added at a
rate o f on e p ou nd to each three pou n d s o f m ilk prod u ced

T

h ro u g h




d a ily . M id w ay in th e fou r-year test th e ration w a s reversed
fo r th ese grou p s, the g rain b ein g d iscon tin u ed fo r o n e grou p
but added to the other. P r elim in a ry resu lts sh ow that the
cow s w hen fe d grain averaged 1 0 ,5 7 9 p o u n d s o f m ilk p er
cow per year and th o se receiv in g no g rain averaged 8 ,0 4 3
pou n d s. R ou gh age fe ed in g a lo n e thus p rod u ced 7 6 p ercen t
as m uch m ilk as com b in ed rou gh age and fu ll-g r a in feed in g
did.
In b oth o f th ese ex p erim en ts, the o n e w ith b e e f cattle and
the on e w ith d a iry cattle, ex c ellen t liv esto ck w ere grazed on
p rod u ctive p astu res and crop s under su p erior m anagem ent.
It is, th erefore, im p ro b a b le th at state or D istrict average
rates o f p rod u ction co u ld in the near fu tu re ap p roach the
rates ob tain ed in th ese ex p erim en ts. N ev erth eless, h ig h and
efficient m ilk and b ee f p rod u ction can b e ob tain ed from rec­
om m ended g razin g and rou gh age p rogram s.
A s a resu lt o f the in creased p rod u ctivity o f pastures and
la n d devoted to grazin g crop s, D istrict farm ers h a v e show n
an in crea sin g in terest in ex p a n d in g liv esto ck p rod u ction on
their farm s. T he trends are show n m ore c le a r ly w hen the
v a rio u s cla sses o f liv esto ck are converted to a n im al units.
O ne a n im al u n it is taken as the eq u iv a len t o f a m ature cow
or h orse in the con su m p tion o f feed . T h e num ber o f such
a n im al u n its on the farm s o f D istrict states in 1 9 4 7 w as 23
p ercent larger than th e average num ber on farm s during
1 9 3 0-39. In 19 3 0 -3 9 , 62 p ercen t o f the a n im al u n its in D is ­
trict states w as com p osed o f cattle and calv es, but in 1947
th is percen tage had risen to 7 0 . T h ese figu res in d icate that
liv esto ck d evelop m en t in th e S outheastern states is taking a
defin ite trend tow ard cattle and ca lv es or, in other w ords,
a n im a ls w h ich can u tiliz e g razin g crop s m ost efficiently. The
num ber o f h o g s had in creased 15 percent, or le ss than h a lf
the rate o f in crease fo r cattle. T h e num ber o f ch icken s on
farm s in creased ab ou t 7 percent, and that o f turkeys d eclin ed
33 percent. Sh eep num bers, lo n g on the w ane, w ere dow n
2 2 percent.
N o t o n ly h as there been a sig n ifica n t in crease in the total
num ber o f an im al u n its on D istrict farm s, but apparently
there h as a lso been an in crease in the p rod u ction rates o f
m ost c la sses o f liv esto ck . U n fo rtu n a tely no production-rate
data on m eat a n im a ls are a v a ila b le becau se o f the m an y d if­
feren t w eig h ts and ages at w hich th ese a n im a ls are sold .
D ata are a v a ila b le, h ow ever, fo r d airy cow s and ch ickens,
alth o u g h ch ick en s are n e g lig ib le w ith resp ect to th eir co n ­
su m p tion o f feed fro m p astu res and grazin g crop s. O f a ll

58

M o n th ly R eview o f th e F ederal R eserve B a n k o f A tla n ta fo r J u n e 1948

the m easures o f the efficiency w ith w h ich fe e d cro p s are b e ­
in g converted in to incom e, m ilk p ro d u ctio n is th erefo re p ro b ­
a b ly th e b est th at is a v a ila b le .
T h e average m ilk p rod u ction p er cow in D istrict states
d u rin g 19 4 7 w as 11 percen t ab ove th e 1 9 3 0 -3 9 rate, but the
total p rod u ction w as 18 p ercent greater than th e 1 9 3 0-39
average. F lo rid a show ed th e greatest g a in in p rod u ction p er
cow , 2 5 percent, and L ou isia n a th e sm a llest, 3 .5 percent.
TOTAL ANIMAL UNITS ON FARMS IN DISTRICT STATES
Livestock

1930-39

1947

Cattle and calv es............. ......................
Hogs and p ig s ..........................................
C hickens.....................................................
Sheep and lam b s....................................
Turkeys.......................................................
Mules and co lts.......................................
Horses and co lts......................................
Total.........................................................
Percent of
cattle in to ta l....................................

6,001,000

1,137,200
408,320
102,240
3,210
1,557,000
471,000
9,679,970

8,337,000
1,311,000
436,730
79,560
2,140
1,245,000
528,000
11,939,430

62

70

Percent
Change
38.92
15.29
6.95
-22.19
-33.34
-20.04

12.10

23.34

—

In part th ese ga in s in num bers o f liv esto ck and in p ro ­
duction per an im al com e from the increased p rod u ction o f
feed . In 194 7 th e p rod u ction o f feed u n its w as 55 percent
greater than the 1930 -3 9 average. T h is estim ate, how ever,
is n ecessa rily rou gh b ecau se there is no accurate w ay o f
m easuring how m uch cam e from pastures.

Low Livestock Production Rates
T he increased am ount o f feed a v a ila b le d u rin g recent years
together w ith h ig h p rices fo r m ilk and m ilk p rod u cts d u rin g
and sin ce the w ar has resulted in D istrict dairym en d o in g
two th in g s: first, fe ed in g their cow s m ore h ea v ily , as is in d i­
cated b y an increase o f 11 p ercent in 1947 over the 1930-39
average in the am ount o f m ilk p roduced per co w ; and, sec­
ond, ad d in g m ore cow s to their h erds. T h e latter is evident
from the fa ct that total p rod u ction o f m ilk in D istrict states
in 1947 had increased b y 18 p ercent over the 1 930-39 aver­
age, or at a faster rate than the in crease in p rod u ction p er
cow . T he gain s m ade in D istrict states, how ever, w ere e x ­
ceeded b y the ga in s m ade b y dairym en th rou gh out the n a ­
tion, sh o w in g that D istrict farm ers h ave m erely shared in the
increased dem and fo r d airy p roducts rather than that th ey
have m ade inroad s on that part o f the m ilk m arket u su a lly
su p p lied b y d airy farm ers ou tside the area. In 19 4 7 the aver­
age p rod u ction o f 3 ,2 8 4 p ou n d s o f m ilk p er cow in S ixth
D istrict states w as o n ly tw o thirds o f the n a tio n a l average.
MILK PRODUCTION PER COW IN DISTRICT STATES
FOR SELECTED YEARS
Yearly Production
(Pounds)

State
G eo rg ia.............
F lorida...............
T en n essee..........
A labam a.............
M ississippi......
Louisiana...........
Six States
A verage..........
United States
A verage........

Percent
Increase
1947/1930-39

1930-39

1941

1943

1945

1947

3,137
3,034
3,352
3,103
2,673
2,309

3,240
3,300
3,510
3,260
2,600
2,250

3,200
3,750
3,570
3,200
2,580
2,340

3,200
3,900
3,640
3,350
2,730
2,324

3,340
3,800
3,820
3,430
2,840
2,390

6.47
25.24
13.96
10.53
6.24
3.50

2,953

3,038

3,076

3,160

3,284

11.21

4,355

4,741

4,604

4,797

5,000

14.81

O ne reason o ften giv en fo r the lo w rates o f p rod u ction o f
liv estock and liv esto ck p rod u cts in D istrict states is that
m ost farm ers keep o n ly en o u g h liv esto ck fo r th eir fa m ilie s’
use. W here a farm er h as no m ore than on e or tw o cow s o n
h is farm and se lls no dairy p rod u cts h e h as little in cen tiv e



to feed h is cow s fo r h ig h p ro d u ctio n or to breed them fo r
that p u rp o se. A lth o u g h th e reason is a p la u s ib le on e, it is
o n ly p a rtly correct. In A la b a m a , fo r e x a m p le , m o re than a
third o f a ll the co w s in 1 9 3 9 w ere fa m ily m ilk cow s and p ro ­
duced at a rate 15 p ercen t a b o v e th e state a verage fo r a ll
cow s. C om pared w ith th e five-to-n in e-cow g ro u p , th e one-cow
grou p a lo n e p rod u ced at a rate 6 0 p ercen t h ig h er in F lorid a,
5 4 p ercen t h ig h er in A la b a m a , 5 2 p ercen t h ig h er in G eorgia,
3 0 p ercen t h ig h er in L o u isia n a , 21 p ercen t h ig h er in T en ­
n essee, and 2 0 p ercen t h ig h e r in M ississip p i.
FARMS WITH MILK COWS IN SIX DISTRICT STATES
AND TOTAL IN UNITED STATES, 1939
Area

Number ol Farm s
w ith Cows

G eorgia.................
F lorida...................
T e n n e sse e ..........
A labam a.................
M ississippi...........
L ouisiana...............
Six S tates.............
United S tates. . . .

158,226
26,924
195,157
181,579
191,907
103,600
857,393
4,663,431

Farm s w ith F ew er Than Three Cows
Num ber
Percent
86.64
137,092
21,921
81.41
145,125
74.36
161,597
88.99
76.59
146,988
78.89
81,740
80.99
694,463
50.57
2,358,606

D a iry m en w h o h av e la r g e h erd s an d w h o s e ll m ilk fo r
Grade “A ” u se h ave p ro d u ctio n rates co n sid e r a b ly h igh er
than th e state avera g es. T h e fa rm ers m o st in n eed o f in ­
crea sin g th eir rate o f p ro d u ctio n , th erefo re, a re a p p a ren tly
th ose w ho s e ll m ilk to p ro c e ssin g p la n ts th at m ake cheese,
butter, evap orated m ilk , and other p ro d u cts. F o r th e m ost
part th ese five-to-nine-cow h erd s b e lo n g to th e op erators o f
fa m ily -size d fa rm s w h o are seek in g to su p p lem en t th eir crop
in co m e w ith in co m e fro m liv esto ck , and it is th ese farm ers
w ho co u ld u tilize im p ro v ed p astu res an d g ra zin g crop s to
th e b est ad van tage. T h eir u n its are to o sm a ll to afford the
h ig h in vestm en t in eq u ip m en t n ecessa ry fo r th e p rod u ction
o f G rade “ A ” m ilk . M oreover, in a d d itio n to h a v in g p ro b ­
lem s o f p ro d u cin g feed , th ey fa c e p ro b lem s in b reed in g fo r
h ig h er-ca p a city p ro d u ctio n b eca u se th e y d o n o t h a v e en ou gh
co w s or sufficient in co m e to ju s tify th eir k eep in g a b u ll that
w o u ld im p ro v e th e q u a lity o f h erd rep la ce m en ts. T h is p ro b ­
lem h a s b een red u ced som ew h at in recen t y ea rs, how ever,
w ith th e esta b lish m en t in so m e o f th e D istr ic t states o f arti­
ficia l-b reed in g a sso cia tio n s th at o ffer fa rm ers w ith sm a ll
h erd s an o p p o rtu n ity to im p ro v e th eir c a ttle strain s at a
rea so n a b le cost.
MILK PRODUCTION PER COW IN DISTRICT STATES IN 1939
BY SIZE OF HERD
(Pounds)
Size of H erd

State
G e o rg ia ....
F lorida___
T ennessee.
A lab am a...
M ississippi
L o u isian a..

O ne Cow

Two Cow s

5 to 9 Cows

50 to 74 C ow s

3,731
3,039
3,793
3,823
3,114
2,715

2,928

2,461
1,896
3,138
2,478
2,588
2,084

5,083
4,691
4,978
4,458
4,072
3,997

2,221

3,260
3,005
2,672
2,342

All Cows
in State
3,323
3,494
3,463
3,337
2,834
2,571

L ow p ro d u ctio n rates seem to co n stitu te o n e o f th e m ost
serio u s h a n d ica p s to d airym en in D istric t states. In part the
in crease in to ta l m ilk p ro d u ctio n h a s cotne fro m m ore low c a p a city cow s o n rather p o o r ly d ev elo p ed p astu res.
T here is a d efin ite r e la tio n b etw een th e rate o f p rod u ction
and the efficien cy o f p r o d u ctio n . O f a ll th e v a rio u s factors
affectin g m ilk costs, th e rate o f p ro d u ctio n p er co w is p er­
h a p s th e m ost im p ortan t. O ne reason is th at a s m ilk p rod u c­
tio n in creases, th e p ercen ta g e o f fe e d req u ired b y the cow
fo r her b o d y m ain ten an ce d ec lin e s and, as a con sequence,

M o n t h ly

R e v ie w

o f th e F ederal R eserve B a n k o f A tla n ta fo r J u n e 1948

m ore o f her feed is converted into m ilk . A n ation -w id e
study o f m ilk -p rod u ction cost records revealed that the re­
turns over feed cost becam e stea d ily greater as th e y ie ld o f
m ilk increased. B y in crea sin g th eir m ilk co w s’ presen t aver­
age p rod u ction , 3 ,2 8 4 p ounds, to 4 ,0 0 0 p o u n d s D istrict
farm ers w ou ld reduce their fee d cost per u n it 1 4 percent. I f
D istrict dairy farm ers brought their p rod u ction up o n ly to
the n ation al average o f 5 ,0 0 0 p ou n d s, th ey co u ld reduce
th eir feed cost per 100 pou n d s o f m ilk 21 percent. I f th ey
co u ld in crease it to 7 ,5 0 0 pou n d s, their red u ction in feed
cost w ou ld total 38 percent.

Feed Production Up
S in ce m ost feed crops are harvested in b u sh els, p ou n d s, or
tons, th ey can be converted r ea d ily in to feed u n its. F or esti­
m atin g D istrict p rodu ction a b u sh el o f corn w as ch osen as a
standard feed unit b ecau se the acreage devoted to corn in
the S ix S tates is by far the la rg est o f a n y other fe e d crop.
A ll h ay and concentrate feed s p rod u ced b y farm ers in the
S ix States can then be reduced to th eir fe ed in g v a lu e in
term s o f b u sh els o f corn, or feed un its. W here such a crop
as a lfa lfa or lesp ed eza is grazed, the acreage can be a s­
sum ed to produ ce the sam e num ber o f feed u n its it w o u ld
y ie ld if it w ere harvested fo r h ay.
A n assu m p tion used b y the A lab am a exp erim en t station,
n a m ely that an acre o f pasture sh o u ld prod u ce as m any
feed units as an acre o f tam e h a y w o u ld , fa c ilita te s an esti­
m ate o f the num ber o f feed u n its prod u ced on pasture a cre­
age. T he acre o f tam e h ay used w as a w eigh ted com p osite
o f a ll the tam e h ays grow n, w h ich resu lted in an estim ated
feed v alu e per acre o f pasture slig h tly m ore than that o f a
ton o f tam e hay, or about the feed eq u iv a len t o f 15 b u sh els
o f corn. A n acre o f im proved perm anent p asture sh o u ld p ro ­
duce m ore than the feed eq u iv a len t o f 15 b u sh els o f corn,
but, on the other hand, there are la rg e u n im p roved pasture
acreages in the S ix States that w ill n ot p rod u ce a feed in g
eq u ivalen t o f 15 b u sh els o f corn.
1,000

800

600

200

M ost o f the 55-percent d ifference betw een the 194 7 p ro­
du ction o f feed units and the 1 930-39 average cam e from
the increase in pasture. Feed un its su p p lied b y p asture a lo n e
w ere m ore than d ou b le the 19 3 0 -3 9 av era g e; fe e d units su p ­
p lied b y h ay and roughage in creased 3 8 percent, and th ose
by concentrates, that is corn, sm a ll grains, and peanuts, in ­
creased 7 percent. W hen it is a p p lie d to the total acreage o f
op en p asture in D istrict states the assu m p tion that on e acre



59

is eq u al to an acre o f tam e h a y m ay exaggerate the feed in g
v a lu e o f pasture. But even i f the assum ed v a lu e w ere cut in
h a lf the p rod u ction o f to ta l fe ed u n its w o u ld show a gain o f
3 9 p ercent over the 1 9 3 0 -3 9 average.
DISTRICT STATES FEED UNITS BY SOURCE, FOR SELECTED YEARS
Concentrates
Year
1930-39 Average.
1941.......................
1943.......................
1945.......................
1947.......................

Roughages

Pasture

Num ber
(Ths'nds)

Per­
cent

Num ber
(Ths'nds)

Per­
cent

Number
(Ths'nds)

Per­
cent

250,896
351,692
291,040
301,578
268,811

140
116

100

55,662
82,573
77,592
89,932
77,113

100

182,445
307,678
286,650
469,442
411,993

100

120
107

148
139
162
138

169
157
257
226

Feed Units Increase Faster than Animal Units
W ith the 23-p ercen t in crease in the num ber o f liv estock on
D istrict-state farm s b y January 1, 1947, and the 55-percent
in crease in 1 947 feed p rod u ction , there w as ab ou t 25 p er­
cent m ore farm -produced feed per a n im al than there w as
du rin g the 1 9 3 0 ’s. M easured in term s o f feed un its relative
to the num ber o f an im al u nits, the 1 9 4 7 p rod u ction o f con ­
centrates w as dow n 13 p ercen t fro m the am ount a v a ila b le
du rin g the b ase p eriod , h a y and rou gh age com bined w as up
12 percent, and pasture w as up 8 4 percent. T he in crease in
feed u n its per an im al d oes n ot m ean that D istrict livestock
a re now b ein g g iven as m uch feed as th ey can u tilize effi­
cien tly . Indeed, the con tin u ed lo w rates o f liv esto ck prod u c­
tio n in d icate that a greater qu an tity and a better q u a lity o f
feed w o u ld be p ro fita b le fo r m ost D istrict p roducers.
FEED UNITS AND ANIMAL UNITS IN DISTRICT STATES
FOR SELECTED YEARS
Feed Units p er
Animal Unit
Num ber Percent Num ber Percent Number Percent
(Ths'nds)
(Ths'nds)
(Ths'nds)
1930-39 A verage .. . 489,003
100
9,680
100
50.5
100
1941...........................
741,943
152
10,455
108
71.0
140
1943............................ 655,282
134
11,623
120
56.4
112
1945............................
860,952
176
12,309
127
138
69.9
1947...........................
757,917
155
11,939
123
126
63.5
*Each acre of pasture is counted as an acre of tame hay. ________________
F eed U nits1

Animal Units

Year

A n eva lu a tion o f p rogress in total feed p rod u ction and in
the am ount produced per an im al u n it m ust in clu d e the con ­
sid eration that the S ix th D istrict states do n ot m ake up a
natural liv esto ck area in the sen se that th ey h ave abundant
n ative grasses, that grain s can be p rod u ced at lo w cost, or
that lan d is lo w p riced in rela tio n to its p rod u ctivity. N e i­
ther is the area “n a tu ra lly ” adapted as fa r as the back­
ground o f its farm p e o p le is con cern ed ; fo r o n ly a fraction
o f D istrict farm ers h ave had exp erien ce in p rod u cin g liv e ­
stock and liv esto ck p roducts fo r m arket. M oreover, u n til re­
c en tly there w ere com p a ra tiv ely few m arkets o f that typ e.
T he tw o b asic feed s in liv esto ck p rod u ction are grass and
g rain . A lth o u g h grasses grow w e ll in m ost o f th e D istrict
states, there are o n ly a few areas o f p rairie w here nutritive
grasses do not h ave to be p lan ted and cared fo r. T he B lack
B elt o f A lab am a and M ississip p i is one o f the m ain ex cep ­
tio n s. T h ou gh there are, o f course, native grasses w hich w ill
take over abandoned field s, few o f them are n u tritiou s; and
in pastu res that are n ot seeded or given other care broom
sage is lik e ly to p red om in ate. In com p arison w ith y ie ld s in
other section s o f the U n ited States, D istrict grain y ie ld s are
low , w ith corn avera g in g o n ly about 60 percent o f the n a ­
tio n ’s average p rod u ction rate. T he 1930-39 average y ield o f
corn in G eorgia, fo r ex a m p le, w as less than 1 0 b u sh els an

60

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o f th e F ederal R eserve B a n k o f A tla n ta fo r J u n e 1948

acre, and the 1 9 4 7 y ie ld w as o n ly 15 b u sh els, w h ereas the
U n ited S tates figures w ere 2 3 .5 and 2 8 .6 b u sh els p er acre.
L ow grain y ie ld s have d iscou raged m an y farm ers fro m in ­
creasin g th eir liv esto ck num bers. A lth o u g h som e grain is
n eeded in feed in g m ost cla sses o f liv esto ck , it h as been fo u n d
that a m uch larger p ortio n o f the to ta l feed requirem ents o f
b e e f and dairy cattle than w as p re v io u sly th ou gh t p o ssib le
can b e obtained from grazin g crop s. T h e g o a l o f liv esto ck
researchers is a system that w ill fu rn ish year-round grazin g
from a m inim um num ber o f crop s, p refera b ly p eren n ia l or
reseed in g crops.
A d eq u ate feed is o f p aram ou n t im p ortan ce, but th e p r o ­
d u ction o f livestock and liv esto ck p rod u cts to ob tain m a x i­
m um net in com e in v o lv es a com b in ation o f m an y factors, in ­
clu d in g b reed in g and m anagem ent. M oreover, the efficiency
o f an y one o f these facto rs is p a rtly d ep en d en t on th e effi­
cien cy o f the com b in ation in w h ich th ey are a ll used. B y em ­
p h asizin g on e part o f h is liv esto ck p rogram w ith o u t g iv in g
adequate attention to its effect on the w h o le, a farm er m ay
reduce the efficiency o f the en tire o p era tio n b y th ro w in g it
out o f balan ce. T h e u n b a la n ce m ay m in im ize th e v a lu e o f
feed crops and thus en gen d er a p essim istic attitude tow ard
them w hen, in rea lity , it m ay be other fa cto rs that are re­
sp o n sib le fo r h is less-than -exp ected returns.
T h erefore it m ay be tim e ly fo r farm ers to check on their
p asture y ie ld s and on the num ber and q u a lity o f th e liv e ­
stock b ein g u sed to con vert fo r a g e in to cash receip ts. A n i­
m als la ck in g the cap acity to m ake efficient u se o f grass an d
legu m es m ay be u n econ o m ica l, e sp e c ia lly on h ig h ly d e v e l­
op ed pasturage.
T here are, o f cou rse, m an y reason s w h y attem pts to in ­
crease liv esto ck prod u ction in D istrict states h a v e n ot m et
w ith greater success. A lack o f ex p erien ce, th e sm a ll size o f
the farm s, a h ig h p ercen tage o f ten an cy, h ig h er acre in com e
from cotton and tob acco, and an ap ath y tow ard th e con fin ­
in g req u isites o f liv esto ck p rod u ction are som e o f them .
E ach o f these lim itin g factors h a s been a serio u s h an d icap
to m any farm ers. P erh a p s the m ost b a sic and c o n tin u in g
p rob lem has been that o f p ro v id in g v a rio u s c la sses o f liv e ­
stock w ith feed and p asture, but fo r th ose farm ers w ho can
adopt new system s o f fo ra g e crop s the p ro b lem is b eco m in g
m uch less acute.

Excessive Feed Costs
W ith the p rod u ction o f fe ed u n its a p p a ren tly in crea sin g at
a faster rate than an im a l u n its are, it w o u ld seem that th e
relative cost o f th e feed p u rch ased w o u ld d eclin e, but that
has not h ap p en ed . Farm ers in D istrict states sp en t 3 0 percent
o f th eir receip ts from liv esto ck and liv esto ck p rod u cts fo r
purchased feed in 1929, 2 7 p ercen t in 1 9 3 9 , and 3 9 p ercen t
in 1944. It m ay be that feed p rices h ave in creased fa ster
than the p rices o f liv esto ck and liv esto ck p rod u cts or that
there has been a q u alitativ e in crease in the ty p e o f fee d p u r­
chased, but it is su rp risin g to find an in crease in feed u n its
b ein g accom p an ied b y an in cr e a sin g ly larger p ercen tage o f
livestock receip ts sp en t fo r feed . D u rin g 1 9 4 4 farm ers in
fou r o f the D istrict states sp en t m ore than tw o out o f each
five d o lla rs they received fro m liv esto ck fo r feed . T here are
instances in w h ich it is m ore p ro fita b le to b u y feed than
raise it, and m any D istrict farm ers w ill p ro b a b ly a lw a y s
p urchase feed from one another and from farm ers in other
areas. It is u n lik ely , how ever, that the reg io n w ill p erm a­



n en tly ex p a n d its liv esto ck n u m b ers u n til th is up w ard trend
o f h ig h cash costs o f feed is reversed.
In the D istrict states, com p ared w ith esta b lish ed livestock p ro d u cin g states, the am ou n t o f m o n ey sp en t fo r purchased
feed per d o lla r o f liv esto ck receip ts is r e la tiv e ly higher,. For
e x a m p le, in 192 9 w hen D istric t states sp en t ab ou t 30 percent
o f th eir liv esto ck receip ts fo r feed , C olorad o sp en t 12, W y­
om in g 11, W isco n sin 9, and M in n esota 6 percen t. T en years
later the D istrict states w ere sp en d in g 2 7 percen t o f their
liv esto ck receip ts fo r feed w h ile C olorad o w as sp en d in g 12,
W y o m in g 9, W isco n sin 11, and M in n esota 8 . E ven in tw o
o f the N ew E n g la n d states, w here m ost o f the feed stu ff m ust
b e im p orted fro m the M id w est, the am ou n t o f m on ey spent
fo r feed d u rin g 1 9 3 9 w as o n ly 4 2 p ercen t o f liv esto ck re­
ceip ts, in M assachusetts, and 3 7 p ercen t, in C onnecticut.
PERCENT OF LIVESTOCK RECEIPTS SPENT FOR FEED
IN DISTRICT STATES, 1929, 1939, 1944
State

1929

1939

1944

G eo rg ia.......................................................
F lorida.........................................................

28
44
16
31
48
48
30

26
43
16
27
29
40
27

44
44
30
39
40
54
39

M ississippi.................................................
L ouisiana.....................................................
Six States A verage................................

T h e la rg e p ercen tage o f th eir cash receip ts that D istrict
farm ers sp en t fo r feed m ay in d ica te the liv esto ck industry
is in a p recariou s p o sitio n . O rd in a rily it is o n ly in the sp e­
c ia l areas w here m arket co n d itio n s perm it, as th ey do in the
fluid-m ilk reg io n s o f th e N orth east, that farm ers can depend
p ro fita b ly on p u rch ased h a y and con cen trates. It is d ou b tfu l
if the S ou th east is a sp e c ia l area in th e sam e sen se that New
E n g la n d is.
P erh a p s the efficien cy o f the sm a ll num ber o f com m ercial
liv esto ck p rod u cers in th e S ou th east ten d s to be lo st in the
D istrict a verage figu res, and even in the state averages. D ou b t­
le ss m any o f the D istrict farm ers riv a l the M idw estern or
M ountain-State stock m en in efficiency, but as a group they
h ave not d isp la y e d the efficien cies in p rod u ction w h ich w o u ld
en a b le them in tim es o f severe re g io n a l co m p etition to h o ld
on to th eir p resen t ga in s.

Efficiency in Dollar Terms
On a m a jo rity o f th e D istric t fa rm s, la n d is the m ost lim ited
reso u rce; and th erefo re a p aram ou n t n eed o f m ost D istrict
farm ers is to in crease th eir in co m e p er acre o f farm land.
W here sm a ll- and m ed iu m -sized fa rm s h a v e b een sh ifted to
liv esto ck o p eration s, h ig h p ro d u ctio n is n ecessa ry to m ain­
tain in co m es as h ig h as th o se afford ed b y cotton and tob ac­
co gro w in g . E ven w h ere n o su ch sh ift h a s been m ade, the
p o ssib ilitie s o f o b ta in in g h ig h er farm in co m e are greater
w hen pastures and liv esto ck b oth p ro d u ce a t h ig h rates.
A s w ith p h y sic a l ga in s, an ex a ct m easu re o f th e m oney
returns fro m pastu res is im p o ssib le . T h e sub traction o f
know n costs fro m in com e, h ow ever, g iv e s som e rou gh m eas­
ure o f the cash co n trib u tio n th ey m ake.
In 1 9 4 4 farm ers in D istrict states received 3 5 9 m illio n d o l­
la rs from the sa le o f liv e sto c k and liv esto ck p roducts but
sp en t 141 m illio n d o lla r s fo r fe e d . E ven i f a ll o f the 218m illio n -d o lla r d ifferen ce c o u ld h a v e b een im p u ted to p a s­
ture, it w o u ld h ave m eant a cash in co m e o f o n ly $ 1 0 an
acre. O b v io u sly , th is cash -in com e figu re d oes n o t represent
the fu ll v a lu e o f liv esto ck and liv esto ck p ro d u cts p roduced
on pastures and feed cro p s sin ce ab ou t h a lf o f th e m ilk and
pork and ab ou t a third o f the e g g s p rod u ced b y D istrict

M o n t h ly

R e v ie w

o f th e F ederal R eserve B a n k o f A tla n ta fo r J u n e 1948

farm ers are consum ed on the farm s w here th ey are prod u ced .
But these figures do in d ica te that D istrict pastu res are re­
tu rnin g a low average rate o f cash in co m e and, thus, further
illu stra te the need to in crease the q u a lity o f pastu res.
T h e cost o f esta b lish in g an acre o f perm an en t pasture
ranges from $35 to $45 , and an n u al m ain ten an ce costs
ran ge from $6 to $8. I f the p asture d id n o t n eed to be re­
estab lish ed fo r five years, the y e a r ly co st o f an acre o f im ­
p roved pasture w ou ld be about $ 1 5 . R eturns fro m the sale
o f liv esto ck and livestock p roducts ob tain ed w ith the u se o f
im proved pasture and grazin g crop s sh o u ld at p resen t p rices
ran ge from about $30 an acre fo r b eef to $ 7 5 fo r Grade
“A ” m ilk . Som e farm ers find the in itia l cost o f esta b lish in g
pastures a real barrier, but over a p eriod o f tim e the in ­
vestm ent o f th ose w ho can surm ount it sh o u ld be a p rofita­
b le one.
In 1947 the low m ilk p rod u ction o f 3 ,2 8 4 p ou n d s per
cow m ay h ave been attributable to the lo w cap acity o f the
cow s as m uch as to the p oor q u a lity o f p astu res and feed
crop s in D istrict states. W ith that y ie ld the sa le o f m ilk fo r
G rade “B ” uses, at $ 3 .3 0 a hundred p ounds, w ou ld total
o n ly $10 8 per cow per year and that fo r Grade “A ” pu r­
p oses, at $ 5 .5 0 a hundred p ou n d s, w ou ld to ta l $ 1 8 0 . T he
h ig h rate o f 8 ,0 4 3 p ound s o f m ilk per cow ob tain ed at the
W est T en n essee station from rou gh age fee d in g a lo n e w ou ld ,
at these p rices, have returned $ 2 6 5 if it had been so ld fo r
Grade “ B ” u se or $ 4 4 0 if so ld fo r G rade “ A ” p u rp oses.

Need for Increased Capacity of Pastures
T here w ere a v a ila b le to each an im al u n it in 1 9 4 5 o n ly 1.75
acres o f open pasture. T h is h ig h ratio o f liv esto ck to total
pasture m ay be one o f the factors that are lim itin g the p ro ­
d uction rates o f D istrict liv esto ck . O n ly pastures that have
been greatly im proved can efficien tly carry so h eavy a rate
o f grazin g. P asture, thou gh , is a very gen eral term that
m eans little u n less it refers to a sp ecific pasture. S om e o f
them , p a rticu la rly abandoned field s w h ich m ay h ave been
fenced, w ill fu rn ish very little grazin g, but som e im proved
pastures to w h ich m in erals and th e fu ll rate o f recom m end­
ed seed have been a p p lied w ill prod u ce at a h ig h rate—
h ig h en ou gh at tim es to su p p ort m ore than on e an im al to the
acre.
H ig h ly prod uctive pastures u su a lly p rod u ce feed m ost e f­
ficien tly . It costs no m ore to fen ce a go o d pasture than it
d oes to fen ce a p oor one, and other overhead costs per unit
o f feed decrease w ith greater p rod u ction per acre. M oreover,
an im proved pasture w ill p ro v id e needed m in erals and p ro ­
tein s that unim p roved pastures w ill fu rn ish o n ly to a lim ited
exten t or n ot at a ll. D ou b tless there are m an y acres o f u n ­
im p roved pasture on land on w h ich it w o u ld be u n eco n o m i­
ca l or u n w ise in other respects to attem pt th e b u ild in g o f
h igh -cap acity pastures. Som e o f the ligh ter, san d y so ils in
the D istrict fa ll in this category, but the cap acity on fe r tile
so ils that w ill respond to m in erals and seed in g co u ld be
raised by fertilization , seed in g, and go o d m anagem ent.
It m ay be that D istrict farm ers have not ob tain ed the m a x ­
im um grazing from their pastures. T he id ea l pasture m an age­
m ent w ou ld be that w hich w ou ld m ake y o u n g g ro w in g grass­
es and legum es a v a ila b le to livestock . O vergrazing cuts dow n
o n th e am ount o f feed an acre w ill p roduce, and u n d ergraz­
in g resu lts in m ore fibrous p la n ts o f low er feed in g v alu e.
M oreover, there sh ould be a b a la n ce betw een feed fro m p a s­
ture and feed in the form o f concentrates, such as corn.



61

G ood pastu rage and grazin g crop s g en era lly su p p ly the
m ost eco n o m ica l feed up to a certain cap acity, and the effi­
cien t liv esto ck m anager uses concentrates to supplem ent
grazin g rather than the other w ay around.
G rains are n ecessary in the ration becau se the m axim um
am ount o f rou gh age an an im al can h o ld p rovid es less feed
units than a h igh -p rod u ction an im al can u tiliz e efficiently.
M oreover, certain cla sses o f an im a ls, such as p ou ltry and
h ogs, require m ost o f their feed in concentrate form . But
even w ith these two grou p s the feed un its su p p lied from
pasture are im p ortan t in red u cin g costs. Farm ers som etim es
fa il to con sid er that yo u n g , g ro w in g p asture grasses and
legu m es have a h ig h p rotein content and that su p p lem en tin g
them w ith a concentrate or grain m ixture h ig h in protein
m ay n ot resu lt in h igh er y ie ld s, and th erefore m ay be u n ­
eco n o m ica l. T h e A lab am a and T en n essee exp erim ents clea r­
ly show that pastures and grazin g crop s can prod uce suffi­
cien t feed fo r h igh rates o f p rod u ction o f som e classes o f
livestock , even w ith ou t the a d d ition o f concentrates.

Summary
D istrict farm ers are in creasin g their num bers o f livestock
and the acreage p lan ted to pasture and grazin g crops, but
few o f them h ave ach ieved m axim um efficiency in the p ro ­
duction o f liv esto ck and livestock products. It has been
w id ely dem onstrated that farm ers in the S ou th east can
ach ieve efficiency in the prod u ction o f feed stu ffs. In recent
years a system o f fo ra g e p rod u ction that w ill y ie ld abundant
g razin g th rou gh ou t the year has been v irtu a lly attained, w ith
som e grazin g p rogram s y ie ld in g a total p rod u ction o f feed
units that far su rp asses that w h ich can be ob tain ed from
annual h a y and grain crop s. B ut ap p a ren tly th e p revalent
p ractice has been to add m ore p o or-q u ality an im a ls to p a s­
tures that are p rod u cin g at o n ly a fra ctio n o f th eir capacity.
U n less farm ers in the D istrict states im p rove their efficiency
by in creasin g the p rod u ction rates o f liv esto ck and b y in ­
creasin g the carrying ca p acity o f p astures and grazin g crops,
recent gain s in liv esto ck d evelop m en t m ay be jeopard ized.
T he eco n o m ic secu rity o f D istrict stock farm ers lie s in the
efficiency o f th eir op eration s rather than in an in crease in
the num ber o f an im a ls a lo n e.
J o h n L. L iles

B a n k

A n n o u n c e m e n ts

On June 1 the Farmers and Merchants Bank, Pied mont, Alabama, began remitting at par . This bank ,
which was organized in 1915, has at present capital
stock amounting to $ 3 0 ,0 0 0 , surplus and undivided
profits to $ 4 0 ,4 8 4 , and deposits of $ 1 ,0 2 6 ,6 7 0 . C. W.
Thompson is president, J. S . Tole vice president, and
Miss Myrtle Fain cashier.

6 2

G r o w th

M o n t h l y

a n d

R e v ie w

P r o s p e c ts

o f th e F ederal R eserve B a n k o f A tla n ta fo r J u n e 1948

o f

a lth o u g h
difficu lties in fin an cin g, rather than shortZ tL ages o f m aterials, m an y ob servers b eliev e, set the lim it
to fu tu re resid en tial constru ction in the S ix th D istrict, the
reports o f S ixth D istrict m em ber banks as a group g iv e no
in d ica tio n that th eir exp a n sio n in real-estate len d in g has
stop p ed . B y the first o f the year their aid in fin an cin g the
recent resid en tia l-b u ild in g b oom had raised their total realestate lo a n s 155 p ercent sin ce the end o f 1 945, w hen h ea v y
postw ar construction got under w ay. R eal-estate lo a n s at the
m em ber banks had grow n so m uch that, even th ou gh the
banks’ total loan s had increased 4 3 percent, th eir real-estate
lo an s w ere alm ost tw ice as im p ortan t in rela tio n to their
total lo a n s as th ey had been tw o years earlier. M oreover, the
w eek ly reports o f m em ber banks in lea d in g D istrict cities
show no sig n that the trend has reached its peak. D u rin g the
first five m onths o f 1948 real-estate lo a n s at th ose banks in ­
creased 11 percent, w hereas total lo a n s d eclin ed 3 percent.
A t the nonm em ber banks, reports o f the insured banks in
the S ixth D istrict states in d icate, the rate o f ex p a n sio n in
real-estate len d in g w as not q u ite as great. T h eir real-estate
lo a n s increased 117 percen t betw een the end o f 1945 and
19 48. Such lo a n s o f a ll insu red banks rose 1 66 percen t in
A labam a, 128 p ercent in F lo rid a , 125 p ercent in G eorgia,
150 percent in L ou isian a, 1 07 percen t in M ississip p i, and
136 percent in T ennessee.
T he banks c la s sify th eir real-estate lo a n s into three g en ­
eral ty p es: lo a n s on farm lan d , lo a n s on resid en tial real e s­
tate, and th ose on other n on farm real estate. R esid en tia l
real-estate lo a n s exceed the com b in ed to ta ls o f the other tw o
types, and their grow th du rin g the tw o-year p erio d accounted
fo r three fifths o f the 1 2 9 -m illio n -d o lla r in crease in S ixth
D istrict m em ber-bank real-estate lo a n s. On a p ercen tage
basis the increase in resid en tia l real-estate lo a n s at the D is­
trict’s m em ber banks, 187 percent, w as greater than that o f
the m em ber banks in any o f the other F ed eral R eserve d is­
tricts.
T h e u np recedented resid en tia l con stru ction e x p la in s the
la rg e dem and fo r such lo a n s. A cco rd in g to F . W . D o d g e
C orporation figures, contracts aw arded fo r that ty p e o f co n ­
struction in the S ixth D istrict rose fro m 6 2 m illio n d o lla r s
in 1945, to 331 m illio n in 1 9 46 , and to 3 7 4 m illio n in 19 4 7 .
In 1938 they had am ounted to o n ly 81 m illio n d o lla rs. T he
D istrict’s 1947 contracts exceed ed its 1945 contracts 5 0 4 p er­
cent, w hereas the in crease fo r the Eastern states covered by
the F. W . D o d g e figures w as 4 5 9 percent.

H ow m uch o f th e dem and fo r h om e fin an cin g in the D is­
trict w as m et b y total m ortgage cred it or w hat part o f th is
total w as m ade up o f m em ber-bank credit cannot be ex a ctly
determ ined. T ra d itio n a lly , h ow ever, banks h ave n ot b een the
c h ie f sou rce o f resid en tial-con stru ction fin an cin g. N a tio n a l
data co m p iled b y the F ed eral H om e L oan B ank A d m in is­
tration show that in th e tw o years o f 1 9 4 6 and 1 9 4 7 hom e
lo a n s on on e-to-fou r-fam ily resid en ces m ade b y a ll ty p es o f
len d in g in stitu tion s in creased m ore than 10 b illio n d o lla rs.
C om m ercial banks accou n ted fo r a p p ro x im a tely 2 .8 b illio n
d o lla rs o f that am ount. T h eir m ortgage lo a n s in creased at
greater rates than th ose o f the other len d in g in stitu tio n s
did, but am ounted to o n ly 1 7.5 percen t o f a ll th e m ortgage



B a n k

R e a l

E s ta te

L e n d i n g

lo a n s ou tstan d in g at the en d o f 1 9 4 7 , com p ared w ith 12.9
percent at the end o f 1 9 4 5 . E ven i f n o n e o f th e increase re­
su lted from lo a n s m ade fo r the p u rch ase o f o ld hou ses,
real-estate lo a n s at the D istr ic t’s m em ber banks co u ld have
financed no m ore than 18 p ercen t o f th e to ta l resid en tial
co n stru ction in th e D istrict d u rin g th at p erio d and the loan s
o f both m em bers and n on m em b ers no m ore than 2 0 percent.
O f m uch m ore im p ortan ce in the n ation , and p ro b a b ly in
the D istrict, are the lo a n s m ad e b y sa v in g s-a n d -loan a sso ­
cia tio n s. In the U n ited S tates th o se o u tsta n d in g at the end
o f 1 9 4 7 on o n e-to -fo u r-fa m ily resid en ces m ade up about 30
percent o f the total m ortgages o f that ty p e. In su rance com ­
p a n ies and m utual sa v in g s banks h e ld around 1 0 percent
each, and in d iv id u a l and other len d ers ab ou t 30 percent.
T h is d istrict’s m em ber banks h ave b een co n sisten tly less
a ctive in real-estate le n d in g than banks in other section s o f
the cou n try h ave. In 1 9 2 8 , the first year fo r w h ich statistics
w ere co llected , m em ber b anks in the D istrict had real-estate
lo a n s am o u n tin g to o n ly 9 .7 p ercen t o f th eir total loan s,
w hereas the m em ber banks th rou gh ou t the cou n try had a
p ro p o rtio n o f 1 2 .4 percen t. T en years later the real-estate
lo a n s o f a ll U n ited S tates m em ber banks m ade up 2 0 .5 p er­
cent o f th eir to ta l lo a n s, but th ose o f the S ix th D istrict
m em ber banks a ccou n ted fo r o n ly 1 3 .4 percen t o f their total.
At the b eg in n in g o f the p resen t lo a n ex p a n sio n the D istrict
ratio w as o n ly 8 .3 p ercen t; the U n ited S tates ratio w as 15.2.
D esp ite the strik in g ex p a n sio n in D istrict m em ber-bank loan s
sin ce 1 945, the 1 9 4 7 ratio o f real-estate lo a n s to to tal lo a n s
is sig n ifica n tly low er than the ratio o f 2 1 .9 fo r a ll m em ber
banks. It is sm a ller than that in a ll but tw o o f the other
F ed eral R eserve d istricts.
B anks are lim ited in th eir real-estate len d in g b y the stat­
utes o f the govern m en tal u n it u n der w h ich th ey are char­
tered. T h e am ount a N a tio n a l bank can len d on real estate,
fo r ex a m p le, is lim ited to its tota l u n im p a ired ca p ita l or 60
p ercen t o f its tim e d ep o sits, w h ich ev er is greater. In m ost
cases the latter is the larger. S im ila r lim ita tio n s are im p osed
on State banks. B ut in a d d itio n to lim itin g the to ta l, at m any
banks the am ou n t o f tim e d ep o sits o th erw ise in flu en ces realestate len d in g . T h ese d ep osits, co m p o sed to a co n sid erab le d e­
gree o f sa v in g s d ep o sits, are g e n e r a lly regard ed as p rovid in g
better o p p o rtu n ities fo r bankers to m ake lon ger-term loan s,
such as real-estate lo a n s, than dem and d ep o sits provide,.
A lth o u g h at the la rg er m em ber b anks o f th e D istrict tim e
d ep o sits con stitu te in gen eral a greater p ro p o rtio n o f total
d ep o sits than th ey do at the sm a ll banks, real-estate loan s
m ake up a sm a ller p ro p o rtio n o f to ta l lo a n s. T h ey com p ose
3 9 p ercent o f to ta l lo a n s at b anks w ith d ep o sits o f less than
a m illio n d o lla r s and o n ly 7 p ercen t at b anks w ith d ep osits
o f m ore than 100 m illio n . O ne reason fo r the apparent
an o m a ly is that the sm a ller banks o ften req u ire real-estate
m ortgages as secu rity even fo r com m ercia l and in d u strial
lo a n s. T here is, h ow ever, a g en era l ten d en cy fo r banks? o f
the sam e size to h a v e a greater p ro p o rtio n o f real-estate
lo a n s w hen their tim e d ep o sits are h ig h than th ey do w hen
their tim e d ep o sits fo rm a sm a ll p ro p o rtio n o f their total
d ep osits.
B ankers do not m ake d e c isio n s about the lo a n s th ey grant,
o f course, sim p ly b y c o n su ltin g ratios or other m ech an ical

M o n t h l y

R e v ie w

o f th e F ederal R eserve B a n k o f A tla n ta fo r J u n e 1948

Below
Below
Below
Below

1

90
80
S

/

/•^ ^ R EA L-E
LOA

Fla.

Ga.

La.

Miss.

Tenn.

District

99
96
81
41

89
72
43
27

94
71
52
26

100
95
63
26

84
65
47
33

90
74
54
29

Size oi Bank
(Total Deposits in Millions)

1-10

10-100

89
68
46
22

94
90
74
44

More than 100
100
100
93
73

*Based on maximum allow ed National banks. State banking law s regulating
State m em ber banks differ som ewhat from state to state.

A p p aren tly th erefore it is n ot le g a l san ction s that have
k ept the real-estate len d in g in m any banks dow n to m odest
p rop ortion s. T h e p rop o rtio n o f real-estate lo a n s to total
lo a n s at in d iv id u a l m em ber banks ran ged fro m zero to
m ore than 60 percent, but at h a lf the banks real-estate lo a n s
am ounted to less than 25 p ercent o f to ta l lo a n s. O n ly 8
p ercen t o f the banks had a real-estate-loan p ro p o rtio n o f
m ore than 5 0 percent.
O p p ortu nities to m ake other ty p es o f lo a n s, o f course,
e x p la in the rela tiv ely lo w rate o f real-estate-len d in g a ctivity
o f m an y bankers, but other bankers h ave d ev elo p ed a co n ­
servative attitude p artly b ecau se th ey d istru st th e p erm a­
n ence o f present h ig h real-estate va lu es, p a rticu la rly th o se o f
residences. So lo n g as th ey h ave op p o rtu n ities to em p lo y
fu n d s p rofitab ly in other typ es o f len d in g , th erefore, som e
b ankers p refer not to m ake real-estate lo a n s. W hen th ey do
m ake them , accord ing to reports, th ey are in sistin g that a p ­
p ra isa ls b e con sid erab ly b elo w the current se llin g p rice and
that the p oten tial buyer h ave a su b stan tial cash eq u ity in
the h om e h e is p u rchasin g. S uch attitudes as th ese seem
m ore lik e ly to set a lim it to fu tu re real-estate len d in g b y
m ost o f the D istrict’s banks than does an y exh au stion o f
len d in g pow er.



-

'

C h a rles

T.

T a ylo r.

1938 1939

1940 1941

1942 1943 1944 1945 1946

1947

P ER C EN T INCREASE 1945-47

RESERV E D ISTRICT.

10

1948

PERCENT OF TOTAL

DALLAS
SAN FRANCISCO

m m m m

KANSAS CITY
MINNEAPOLIS
ST. LOUIS

■ ■ ■ ■ ■ ■ ■

CLEVELAND

■ ■ ■ ■ ■ ■ ■

CHICAGO

■ ■ ■ ■ ■ ■ ■ I
■ ■ ■ ■ ■

PHILADELPHIA
NEW YORK
BOSTOM

m m m

■ ■ ■ ■ ■ ■ ■

■ ■ ■ ■ ■ ■ ■

UNITED STATES
L IM

M l

1 1 1 I M

M

30

20

8 2 3 8 8 3 L0ANS1947

RICHMOND

50
40

-

3. Although the rate of increase in member bank realestate loans since 1945 has exceeded that in any other
district, such loans constitute a smaller proportion of
total loans than they do in all but two other districts.
ATLANTA

70
60

2. O ther types of loans as a group also expanded rap­
idly, but the proportion of real-estate loans increased.

85
65
45
18

Below 1
70
60
20
10

100

REPORTIN G MEMB ER BANKS
IN LEADING GITIE IS , W EEKLY

'38 '39 *40 '41 '42 '43 ’4 4 '45 '46 '47

Ala.

100.....................
75.......................
50.......................
25.......................

110
M ILLION S OF D O LLA R S

J I L L 11 1 L I U , J J l i J . i l . l i l l .

A rea

Ratio oi Real
E state Loans to
Legal Maximum*
(Percent)

f. Real-estate-lending growth since the war's close has
been caused chiefly by urban real-estate borrowing.

1

Ratio of Real
Estate Loans to
Legal Maximum*
(Percent)
Below 100...........
Below 75.............
Below 50.............
Below 25.............

SIXTH DISTRICT M EM BER B A N K S

Ui

SIXTH DISTRICT MEMBER BANKS WITH
REAL ESTATE LOANS BELOW THE LEGAL MAXIMUM
DECEMBER 31, 1947, BY AREA AND SIZE OF BANK
(Percentages)

REAL ESTATE L O A N E X P A N S IO N

___________________________________________________________________________________________________________________________________________y j z _____________

gu id es. T h ey b ase their d ecisio n s on the best a ltern ative use
o f fu n d s from the stand p oin t o f p ro fita b ility and risk and
a num ber o f other in ta n g ib le factors. T h e p o ssib le fu tu re
ex p a n sio n in their real-estate len d in g can n ot, th erefore, be
p red icted m erely from a d eterm in ation o f th eir le g a l lim it.
T he le g a l p ro v isio n s o f the b an k in g acts do, h ow ever, in ad ­
d itio n to settin g a lim it u p on len d in g , in flu en ce th e attitude
that bankers m ay take.
A t on e out o f every 10 m em ber b anks in the D istrict
there w as no p o ssib ility o f real-estate-loan ex p a n sio n at the
b eg in n in g o f the year. In other w ords, it w as “ lo a n ed u p .”
T h e u se o f the lim itatio n s im p o sed b y th e N a tio n a l B ank­
in g A ct as the o n ly criteria sh ow s th at ab ou t a fo u rth o f the
banks had either exhausted their rea l-estate-len d in g ca p acity
or u sed a ll but 2 5 percent o f it. On the other h and, m ore
than h a lf had used up le ss than 5 0 p ercen t o f their le g a l
m axim u m . In gen eral, the sm a ller the bank w as, the greater
the p rop ortion o f its len d in g ca p a city that had been u tilized .
M oreover, con d ition s varied from state to state, even am ong
banks o f sim ila r size.

63

..J - L J ... f I J ....f

0

64

M o n t h ly

R e v ie w

o f th e F ederal R eserve B a n k o f A tla n ta fo r J u n e 1948

D is tr ic t

B u s in e s s

Agriculture

under the A ct o f J u ly 1, 1 9 4 1 , w ill h a v e a m in im u m su pport
o f 6 0 percen t o f p a rity and a m axim u m eq u a l to the 1948
su p p ort lev els.
Farm p rices a fter Jan u ary 1, 1 9 5 0 , w ill b e supp orted
w ith in th ese re v isio n s: ( 1 ) b a sic co m m o d ities— excep t to ­
b acco— at 60 -9 0 p ercen t o f p a rity , d ep en d in g on su p p ly —
tob acco to be h e ld at 9 0 p ercen t o f p a r ity ; (2 ) n on b asic
co m m o d ities at le v e ls fro m 0 -9 0 p ercen t o f p a rity, at the
d iscretion o f th e S ecreta ry ; ( 3 ) w o o l p ric es at 6 0 -9 0 percent
o f p a rity u n til p ro d u ctio n reach es 3 6 0 m illio n p o u n d s; (4 )
potatoes su p p orted at 6 0 -9 0 p ercen t o f p a r ity ; (5 ) corn ou t­
sid e th e com m ercial areas at 7 5 p ercen t o f th e su p p ort lev el
in th e com m ercial areas.
B eg in n in g Jan u ary 1, 1 9 5 0 , th e m ethod o f co m p u tin g parity
p rices w ill a lso b e revised . U n d er th e o ld m eth od the p arity
p rices o f cotton, p ean u ts, and rice, fo r e x a m p le, w ere de­
term ined b y m u ltip ly in g th eir 1 9 1 0 -1 4 a verage p rice b y the
current in d ex o f p rices p a id fo r item s en terin g in to fa m ily
liv in g ex p en ses and fa rm -p ro d u ctio n co sts. T h e n ew fo rm u la
su b stitu tes an ad ju sted b ase p rice fo r the 1 9 1 0 -1 4 average
p rice. T h is ad ju sted p rice o f th e co m m o d ity is th e average
p rice fo r the la st 1 0 y ea rs d iv id ed b y th e a v erage in d ex o f
p rices received (1 9 1 0 -1 4 = 1 0 0 ) b y farm ers fo r a ll crops
and liv esto ck d u rin g th e sam e 1 0 yea rs.
T w o o f th e D istrict’s im p ortan t cash crop s, tob acco and
peanuts, are n ow at su p p o rt le v e ls, and th erefo re farm ers are
p a rticu la rly interested in th o se p r o v isio n s o f the n ew b ill that
w ill affect -the p rice le v e ls at w h ich th ese crop s w ill b e su p ­
p orted. A fter January 1, 1 9 5 0 , th e p rices o f tob acco w ill
con tin u e to b e su p p orted at 9 0 p ercen t o f p a rity , but the
su p p o rt lev e l on p ean u ts w ill drop to 7 5 p ercen t o f parity
i f the su p p ly is n o rm a l. M oreover, th e ch a n g e in th e m ethod
o f c a lc u la tin g p a rity w ill lo w er su p p o rt p rices on m ost o f
the m ajor cash cro p s grow n b y D istrict farm ers. T h e d eclin es
in p rice-floor le v e ls cau sed b y th e n ew m eth o d o f com p u ta­
tio n , how ever, w ill be cu sh io n ed b y th e p r o v isio n that the
d ecrease in p a rity p rices sh a ll n o t ex ceed 5 p ercen t in any
on e year.
In gen era l, the effect o f lo w e r in g su p p o rt p rices on peanuts
and cotton m ore th an th o se on corn and h o g s w ill b e to fa v o r
M idw estern farm ers over S ou th ern farm ers, a s sh ow n in the
tab le. O ne effect o f th e n ew m eth od , h ow ever, m ay b e to
a ccelerate th e sh ift that m an y D istr ict fa rm ers are m aking
fro m the p ro d u ctio n o f cotton and to b a cco to th e p rodu ction
o f liv esto ck and liv e sto ck p rod u cts.

F arm ers th roughout the D istrict h ave fo llo w e d w ith av id in ­
terest the efforts o f C ongress to p a ss n ew farm le g isla tio n
to rep la ce the ex istin g statutes th at ex p ire at th e end o f
the year. T here have been few ch an ges in farm le g isla tio n
sin ce th e b eg in n in g o f the w ar. F or the p ast seven yea rs the
p rices o f m ost D istrict crop s h a v e been su p p orted at 9 0 p er­
cent o f parity. C otton p rices h ave been su p p orted at 921/&
percent.
S in ce the n ation is no lo n g er at w ar, h ow ever, the n eed
fo r farm le g isla tio n in clu d in g p rice su p p orts h a s ch anged.
Im p rovin g p rod u ction tech n iq u es and m arket o p p o rtu n ities
p ro b a b ly c a ll fo r a revalu a tio n o f farm le g isla tio n and a
red efinition o f parity from tim e to tim e. In the u p p er H ou se,
Sen ator A ik en , o f V erm on t, sp on sored a b ill to alter pricesu p port features o f F ed eral fa rm p rogram s and to reorgan ize
action agen cies in the D ep artm en t o f A g ricu ltu re. In the
low er H ouse, R epresen tative H op e, o f K ansas, in trod u ced a
b ill c a llin g fo r reorgan ization o f certain ag en cies o f the
D epartm ent o f A gricu ltu re, but a lo n g q u ite differen t lin es.
A lth ou gh p rice su p p orts w ere n ot in clu d ed in the H o p e b ill,
it did n ot p reclu d e them .
O f the m an y d ifferen ces betw een th ese tw o lon g-ran ge b ills
the greatest had referen ce to the le v e l at w h ich p o lic y m ak in g
and adm inistration w ou ld take p la ce. T he A ik en B ill, am o n g
other th in gs, p rovid ed fo r in itia tiv e and ad m in istration b y
lo c a l com m ittees o f farm ers and p r o fessio n a l a g ricu ltu ra l
w orkers, w ith the farm ers ou tn u m b erin g other rep resen tatives
b y at least one. On the other h an d , the H o p e B ill p rovid ed
fo r the p la c in g o f in itia tiv e and a d m in istrative resp o n sib ility
on the Secretary o f A gricu ltu re. N eith er o f th ese b ills p assed .
A new b ill c a llin g fo r a con tin u ation o f p resen t farm le g is la ­
tio n and p rice su p p orts to June 30, 1 9 5 0 , ex cep t that the p rice
su p port lev el fo r cotton w o u ld b e reduced to 9 0 p ercen t o f
p arity, w as reported b y th e H ou se A g ricu ltu ra l C om m ittee
in p la ce o f M r. H o p e’s p ro p o sa l.
T h e agricu ltu ral b ill that w as p assed in the c lo sin g h ou rs
o f the E igh tieth C ongress w as a com p rom ise betw een the
H ou se and Senate p ro p o sa ls. T h e new b ill con tin u es p rice
su p ports u n til January 1, 195 0 , w ith the fo llo w in g p ro v isio n s
to take effect January 1, 1 9 4 9 : ( 1 ) B asic com m od ities, in ­
c lu d in g 1 9 4 9 cotton, are to be su p p orted at 9 0 percent o f
p a r ity ; (2 ) H ogs, ch ickens, eg g s, m ilk and its prod u cts, and
1948 crop p otatoes are to be su p p orted at 9 0 p ercen t o f
p arity. Other S teg a ll and n o n b a sic com m od ities su p p orted
P A R IT Y

A N D

SU PPO R T

P R IC E S

F O R

U N D E R

SELEC TED

P R O D U C T S

P R O V IS IO N S

T O

A S

T A K E

T H E Y

EFFECT

A R E

A T

PRESEN T

JA N U A R Y

C o m m o d ity

U n it

R ec e iv e d
M ay

C o t t o n .................

lb.

C o r n --- *............

bu.

P e a n u t s ...............

lb.

H o g s ....................

cw t.

T H E Y

W O U L D

BE

Pric e

by

Farm ers

15# 1 9 4 8

Under

Present

F orm u la

Under

N e w

F orm u la

Under

Present

F orm u la
at 9 0 %

of P arity

Under

N e w

Form u la
at 7 5 % o l P a r i t y 1

Actual

Percent

Change

Change

—

31

—

19

—

34

—

15

3 5 .2 7 #

3 2 .4 5 # 2

2 7 .0 0 # *

2 9 .2 0 # *

2 0 .2 5 # *

—

$ 2 .1 6

$ 1 .6 0

$ 1 .5 5

$ 1 .4 4

$ 1 .1 6

— $ 0 .2 8

1 0 .4 0 #
$ 1 9 .6 0

JOn a basis of 98-102 p ercent of normal supply.
2On a basis of 15/16 inch m iddling cotton.




A S

P ric e F lo o r

P a r ity P r ic e
Average

A N D

1950

12.0 0 #
$ 1 8 .2 0

9 .4 6 #
$ 1 8 .5 0

1 0 .8 0 #
$ 1 6 .3 8

7 .1 0 #
$ 1 3 .8 8

—

8 .9 5 #
3 .7 0 #

— $ 2 .5 0

M o n t h ly

R e v ie w

65

o f th e F ederal R e se rv e B a n k o f A tla n ta fo r J u n e 1948

A g ricu ltu ra l p rice le g isla tio n h a s benefited m ost D istrict
farm ers in m an y w ays. O ne o f th e m ost im p ortan t o f th ese
b enefits h as been to reduce th e u n certain ty o f in co m e b ecau se
o f v io le n t flu ctuations in th e p r ic e o f th e com m od ities th ey
p rod u ce. P a rtic u la rly d urin g the w ar years, p r ic e floors gave
farm ers a great in cen tive to in crease th eir p rod u ction o f fo o d
crop s. In return fo r gu aran teein g th at p rices w o u ld n ot de­
c lin e b elow a reason ab le le v e l th e n a tio n w as rew arded by
the greatest prod u ction o f fo o d , feed , and fiber o n record,
at a tim e w hen th ey w ere m ost n eeded. A lo w erin g o f su p p ort
le v els, b eg in n in g in 1950 , w ill m erely return to the farm ers
a part o f th e p rice risk w h ich th e G overnm ent sh ou ld ered
d u rin g the w ar and h as con tin u ed to bear.
E ven th ou gh the new farm b ill con tin u es p rice sup p orts
farm ers sh ou ld n ot overlo o k th e fa ct that th eir in com e w ill
be la r g e ly determ ined b y th eir ow n in d u stry and efficiency.

S ix t h

Place
DISTRICT
Baton R o u g e ..
Birm ingham ..
C h attan o o g a...
Jackson.............
Jacksonville...
Knoxville..........
Miami...............
M ontgom ery...
N ashville------New O rlean s..

D is t r ic t

DEPARTMENT STORE SALES*
Unadjusted
Adjusted**
May
May
Apr.
Apr.
May
1948

1947

May

1948

1948

1948

1947

394
437
428
420
363
347
457
422
319
382
384
502
355
467

390
455
407
374
350
374
437
450
284
352
375
396
3§6
478

367
405
390
364
375
328
425
370
329
350
367
470
323
428

375
415
424
399
363
326
434
401
310
336
361
492
334
467

366
394
391
341
338
358
411
416
276
359
346
395
363
485

348
385
386
346
375
308
404
351
319
308
345
461
303
428

DEPARTMENT STORE STOCKS
Adjusted**
Unadjusted
Apr.
May
May
May

j . L . L.
Place
DISTRICT.............
A tlanta.........
Birmingham—
M ontgom ery...
N ashville.........
New O rle a n s...

1948

1948

1947

1948

1$48

368
449
278
404
537
340

379
451
305
352
531
335

280
393
225
334
445
294

357
457
285
410
545
350

376
480
316
380
589
357

SIX STATES.......
A labam a___
F lorida.............
G eorgia.............
L ouisiana.........
M ississippi.......
T ennessee........

May
1948

Industry
F avorab le w eather co n d itio n s and a la r g e v o lu m e o f contract
aw ards h ave com b ined in recent m on th s to accelera te b u ild in g
and construction and to g iv e p ro m ise o f co n tin u ed activ ity.
D u rin g the first quarter o f th e y ea r th e to ta l v a lu e o f co n ­
struction contracts aw arded in th is d istrict, a cco rd in g to the
F. W . D o d g e C orporation figu res, w a s 3 7 p ercen t greater than
it w as in the corresp on d in g p erio d a y ea r a g o . A n u n u su a lly
la rg e v olu m e fo r A p ril brou gh t th e to ta l fo r th e first fo u r
m onths up to 3 3 4 m illio n d o lla rs, w h ich represents an in ­
crease o f 52 percent over the to ta l fo r that p art o f 1 9 4 7 . T h e
A p ril total th is year w as 9 5 p ercen t greater than that la st
year. T here h ave n ot been m an y m onths, even d u rin g the w ar
years, w hen so la rg e a v o lu m e o f contracts w as let. R esid en ­
tia l contracts in A p ril w ere u p 5 2 percen t fro m resid en tia l
contracts in M arch and 5 6 percen t fro m th o se in A p r il 1 9 4 7 .
O ther aw ards w ere 7 7 percen t greater than th o se in M arch



SIX STATES.
Alabama.
F lorida___
G e o rg ia ...
L ouisiana..
Mississippi
T ennessee.

211

304
415
276

1948

1947

1948

1948

1947

182
192
195
WJ
167
171
191

166
171
169
162
152
164
186

189
199
190
181
176
188
204

187
195
209
176
164
175
193

168
174
171
162
149
160
186

195
188
181
179
192
204

145
152
146
97

120

&
154
165
152
104
132

ELECTRIC POWER PRODUCTION*
May

Apr.
1948

|144
155

122
133
140
149
155

Mar.

Apr.

1947

161
191
152

101
121

Apr.

1948

1947

146r
160
125
135
138
153r
156

143
154

120

134
136
154
154

CONSUMERS' PRICE INDEX
Item

283
360

188

MANUFACTURING
EMPLOYMENT***
Place

1947

1948

COTTON CONSUMPTION*

TOTAL ,, ,
A labam a..
G eorgia.
Mississippi
Tennessee.

May

GASOLINE TAX COLLECTIONS***
Adjusted**
U nadjusted
Apr.
May
May
May
Apr.
May

Place

Place

In d e x e s

May

Apr.

May

1948

1948

1947

ALL ITEMS..
162
174
173
Food..........
215
197
214
C lo th in g ...
201
201
181
Fuel., elec.;
an d ic e ...
122
134
133
Home fur­
nishings. . 192
196
174
M isc...........
148
148
144
Purchasing
pow er of
dollar___
.58
.62
.57
*Daily average basis
• ‘Adjusted for seasonal variation
***1939 monthly average «= 100;
other indexes, 1935-39 — 100

1948

SIX STATES..
Hydro­
generated
Fuelgenerated

Mar.

1948

Apr.
1947

344

341

303

324

3$2

296

371

353

312

CONSTRUCTION CONTRACTS
Apr.
Apr.
Mar.
Place
1947
1948
1948
DISTRICT....
Residential
O ther.........
A labam a...
F lorida___
G e o rg ia ...
L ouisiana..
Mississippi
T ennessee.

598

731
534
854
780
654
330
191
432

360r
482r
301r
282
365
410
488
193
497

307
469
228
466
427
309
76
172
256

ANNUAL RATE OF TURNOVER OF
DEMAND DEPOSITS
May
Apr.
May
1948

1948

1947

U n ad ju sted .. 18.7
19.2
17.3
A djusted**.. 20.1
19.5
18.6
Index**......... 81.5
79.2
71.9
CRUDE PETROLEUM PRODUCTION
IN COASTAL LOUISIANA
AND MISSISSIPPI*
May
Apr.
May
Unadjusted.
A djusted**.,
r Revised

1948

1948

1947

285
289

283
278

253
257

66

M o n th ly R eview o f th e F ederal R e se rv e B a n k o f A tla n ta fo r J u n e 1948
S ix th

D is tr ic t S ta tis tic s

CONDITION OF 28 MEMBER BANES IN SELECTED CITIES
(In Thousands ol Dollars)
Percent Change
June 16 May 19 June 18 June 16, 1948, Irom
Item
May 19 June 18
1948
1948
1947
1947
1948
Loans and investm ents—
Total.................................... 2,296,863 2,300,577 2,312,129
Loans—to tal..........................
811,650 829,636 705,854
Commercial, industrial,
and agricultural lo an s.
497,002 512,660 404,506
Loans to brokers an d
7,718
d ealers in se c u ritie s ...
6,216
6,439
O ther loans for p u r­
chasing and carrying
secu rities.........................
58,145
81,798
58,970
Heal estate lo a n s ...............
75,427
55,342
73,204
Loans to b an k s...................
5,964
4,425
5,639
Other lo an s......................... 170,619 171,001
152,065
Investm ents—to tal............... 1,485,213 1,470,941 1,606,275
U. S. direct o b lig atio n s..
433,756 379,147 413,002
O bligations gu aran teed
by U. S............................
864,751 905,089 1,005,828
Other secu rities................. 186,706
186,705 187,445
Reserve with F. R. B a n k .... 434,602 421,937 425,898
Cash in v au lt.........................
39,880
41,529
40,514
Balances with dom estic
b an k s..................................
214,639 203,890 194,721
Demand deposits a d ju ste d . 1,784,063 1,761,367 1,759,055
Time d ep o sits.......................
541,140 544,567 546,141
15,606
42,525
33,147
U. S. G ov't d ep o sits...........
451,467 445,224 479,061
Deposits of dom estic banks
7,000
Borrow ings............................

— 0

+ 15

+ 23
— 19
— 28
+ 32
+ 27

± i

— 5

— 0
■f

i *8
■f 5

1

+ 14

— 4

+

0

± i
10
+ 1
0
+ 112
— 6
f

± 0
— 22
+ 1

DEBITS TO INDIVIDUAL BANK ACCOUNTS
(In Thousands ol Dollars)
No. ol
Banks
Report­
in g

Percent C hange
May 1948 Irom
May
1947
f fill

May
1948

1948

Way
1947

20,394
307,473
11,321
17,530
137,158
71,366

19,904
303,512
11,090
17,785
139,550
67,639

19,824
278,657
9,769
17,557
126,476
65,010

>+
1+
,+
,—
—
+

2
1
2
1
2
6

253,305
233,333
322,606
52,184
31,422
53,389
100,994

253,407
252,454
356,246
54,833
30,745
57,992
108,397

232,211
198,508
281,993
43,459
31,585
48,840
98,746

—■
—.
i—
—
+
—
—

0
8

17,086
786,828
57,534
8,647
54,972
3,872
14,002
10,800
62,440
8,205

2

96,115
11,510

86,418
9,902

13,637
729,671
49,268
8/529
57,302
3,821
12,662
10,393
56,396
6,658
18,438
80,454
10,178

— 5
+ 2

2

16,270
803,176
51,233
9,437
53,285
3,984
14,209
11,258
57,305
8,038

3
3
7

90,706
33,294
614,634

88,517
32,701
615,676

74,528
24,045
535,873

+
+

2
4
3

15,085
123,419
26,289
22,766

14,776
118,714
29,974
23,593

15,730
101,224
23,770
20,727

+
+

TENNESSEE
C hattanooga...
Knoxville.........
N ashville.........

4
4

6

135,555
109,241
277,729

135,725
107,981
280,979

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

110

3,848,940

3,861,848

Place
ALABAMA
A nniston...........
Birm ingham ---D othan.............
G ad sd en ...........
M obile...............
M ontgom ery...
FLORIDA
Jacksonville....
Miami...............
G reater Miami*
O rlando...........
Pensacola.........
St. Petersburg.
Tam pa...............
GEORGIA
A lbany.............
A tlanta.............
A u g u sta...........
Brunsw ick........
C olum bus........
E lberton...........
G ainesville*. . .
Griffin*.............
M acon...............
N ew nan...........
Rome*...............
S avannah.........
V aldosta...........
LOUISIANA
Baton R o u g e..
Lake C h a rles..
New O rle a n s ..
MISSISSIPPI
H attiesb u rg___
Jackson.............
M eridian...........
V icksburg........

UNITED STATES
333 C ities........

3

6
2
3
5
3

3
7

12

3
3
3
3

2
4
3

2
2

4

3

2
3

3
4

2

21,020

21,222

9
5

2
8

7

11

+
—
»+
+
+
'—
—
—
+
+

9
3
3

1

4

8
2
1
11

16

+
+
+
—
+
+

3
}2
16
0
8
10

+
+
,-h
+
—
+
+

,2
18
14
20
1
9
2

+
rf
,+
+
—
+
t
t4*
-jrf
+
+

\10
l

4
u7
4

ll

82
21
14
19
13

2
2
0

+ 22
+ 38
■f 15

2

— 4

—
+
.+
+

121,819
101,042
249,017

— 0
.+ 1
— 1

+ 11
+ 8
f 12

3,454,331

— 0

f

97,593,000 102,354,000 87,840,000

— 5

+ 11

Not included in Sixth District total




4

12

4
22
11
10

11

and tw o and a third tim es as la r g e as th o se in A p r il la st year.
F or the first fo u r m onths th is year resid en tia l aw ards w ere 43
p ercent greater than th ey w ere in that p erio d la st year and
other contracts 5 9 p ercen t greater.
C ontract aw ards in A p r il w ere la rg er than th ey w ere in
A p r il last year in a ll six states o f the D istrict, but the gain s
over the M arch figu res and th e m a jo r part o f th ose over the
A p ril 1 947 figu res w ere in A la b a m a , F lo rid a , and G eorgia.
A n aw ard o f 13 m illio n d o lla r s fo r a m an u fa ctu rin g p lan t
h elp ed raise the A p r il aw ards in A la b a m a to 2 4 .5 m illio n
d o lla rs. In F lo r id a the to ta l fo r A p r il o f 4 9 m illio n d o lla rs
w as m ore than d o u b le that fo r M arch. T h e G eorgia total in
A p ril, 2 4 m illio n d o lla r s, rep resen ts a su b sta n tia l increase
over that fo r an y other recent m onth.
Im proved lo g g in g co n d itio n s h a v e resu lted in increased
p rod u ction and, th erefore, greater co n su m p tio n o f lum ber.
T here seem s to be n o la ck o f d em an d fo r th e better grades
o f lu m b er; rep orts are that d ea lers are m ore ca u tiou s and
selectiv e in th eir b u y in g .
T e x tile activ ity , as it is m easured b y th e d a ily average rate
o f con su m p tion o f cotton , d eclin ed in th e D istrict d u rin g M'ay.
C otton m ills in the fo u r S ix th D istrict states fo r w h ich figures
are a v a ila b le used 6 percen t le ss cotton thaii th ey did in A p ril
and 10 p ercen t less than th ey d id in M ay o f la st y e a r ; th e co n ­
su m p tion rate fo r the cou n try w as 3 percen t b elo w that in M ay
1947. From January to M ay th is year the co n su m p tion o f
cotton in the D istrict d eclin ed 13 p ercen t and d u ring that
p eriod la st year 9 p ercent.
D u rin g recent m on th s em p lo y m en t in the con stru ction in ­
dustry h as been in crea sin g in a ll areas o f th e D istrict and
w ill, it is exp ected , co n tin u e to do so b ecau se o f the la rg e
vo lu m e o f w ork a lrea d y in p ro g ress and th at under contract.
In other lin e s there h a v e been rep orts o f v a ry in g trends. E m ­
p lo y m en t in creased in the D istr ic t’s m an u fa ctu rin g industries
betw een J u ly last year and F eb ru ary but d eclin ed slig h tly in
F ebruary, M arch, and A p r il. A lth o u g h fa cto ry em p loym en t
in creased s lig h tly in L o u isia n a d u rin g A p r il, decreases o c ­
curred, it w as reported, in the other five states.
T h e D istrict in d ex fo r A p r il th is y ea r is o n ly slig h tly
h igh er than that fo r A p r il 1 9 4 7 ; th e in d ex e s fo r A lab am a,
F lo rid a , L ou isian a, and T en n essee sh ow ed slig h t increases,
and the in d ex es fo r G eorgia and M ississip p i d ecreases. In
G eorgia there w as a d e clin e in m a n u fa ctu rin g em p loym en t
du rin g A p r il o f 1.9 percen t b elo w th e M arch figure, w ith the
p r in c ip a l d ecreases reported in th e fo o d and food -p rod u cts
group and the fin ish ed -textile-p rod u cts gro u p . T h e increases
o f 1 1 .6 p ercen t in p rin tin g and p u b lish in g , 14.1 percent in
pap er and p ap er prod u cts, and 7 .4 p ercen t in w ea rin g apparel
over A p r il 1 9 4 7 em p lo y m en t in th o se field s p a rtly offset d e­
creases in som e other gro u p s. In L o u isia n a em p lo y m en t in ­
creases in n o n d u ra b le-g o o d s in d u stries m ore th an offset d e­
creases in the d u rab le-good s in d u stries. T h e p r in c ip a l gain s
occurred in the corrugated-carton, fib er-con tain er, and paperan d -p u lp d iv isio n s o f the p a p er in d u stry an d in th e sugar and
ca n n in g d iv isio n s o f the fo o d in d u stry. T h e m ajor d eclin es
w ere in the tran sp ortation -eq u ip m en t in d u stry, fo r the m ost
part in the sh ip b u ild in g d iv isio n , and the lu m b er and tim berprod u cts in d u stry. In F lo rid a , A p r il em p lo y m en t in lum ber
and lum ber p rod u cts sh ow ed an in crea se o f 2 .9 p ercent over
M arch em p lo y m en t and w as 1 3 .4 p ercen t greater than a year
ago. T here w as an in crea se o f 3 .9 p ercen t over the M arch
total in the p ap er and p ap er-p rod u cts in d u stry, but there
w as a d eclin e o f 2 3 .9 percen t in the c a n n in g lin e, and a con-

M

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 rve

B a n k

o f

siderable reduction in shipyard employment. Shipyard lay­
offs, owing to the expiration of contracts, were also reported
in the Mobile area.
Weekly production figures in the statements issued by the
United States Bureau of Mines show that coal output in Ala­
bama and Tennessee averaged a little more in May than
it did in either February or January. It was greater, by less
than one percent, however, in May this year than it was in
corresponding weeks a year earlier; a gain in Tennessee
more than offset a slight decrease in Alabama.
Steel-mill operations in the Birmingham-Gadsden area have
in recent weeks been reported at the level that prevailed dur­
ing the first two and a half months of the year. At the time
of the coal strike the rate of activity declined from 102 per­
cent of capacity for the week of March 16 to 41 percent for
the week of April 13, but with the ending of the strike
steel-mill operations began the climb back to 102 percent,
which they reached the week of May 18 and have maintained
since that time.
May was the first month this year in which more cars of
revenue freight were loaded by the Association of American
Railroads9 Southern district lines than were loaded in the cor­
responding period last year. The weekly statements of the
association indicate that lines in the South loaded an aver­
age of 3 percent more cars in May this year. The average
for the month was up 8 percent from that for April.
d

. E. M.

R e c o n n a is s a n c e
S ixth D istrict S ta tistic s lo r M ay 1948 c o m p a re d w ith M ay 1947
PERCENT DECREASE ^

PERCENT INCREASE

Department j | i i | Sales
Department I H

A t la n t a

fo r

Ju n e

T o ta l s a l e s ........................................................
C a s h s a l e s ................................. ......................
In s ta lm e n t a n d o t h 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 to r ie s , e n d o f m o n t h ..........

il

N o. of
L e n d e rs
R ep o rt­
in g

L e n d e rs

F e d e ra l c re d it u n io n s .. . .
S ta te c r e d i t u n i o n s ................
In 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
S m a ll lo a n c o m p a n ie s ___
C o m m e rc ia l b a n k s ................

4- 5

V olum e

O u ts ta n d in g s

P e rc e n t C h a n g e
M ay 1948 from

P e rc e n t C h a n g e
M ay 1948 from

A pril
1948

M ay
1947

A pril
1948

M ay
1947

46
24

5
4- 16

,4- 43
,4- 2 6

4- 4
4- 5

4 - 60
+ 51

11
20
44
34

—

7
3

4- 10
— 6
4- 10
4- 3 5

4—
44-

4- 13
— 1

4*
+•
44*

0
1
1
1

12
5
9
49

WHOLESALE SALES AND INVENTORIES*
SALES
INVENTORIES
N o. of
Firm s
R ep o rt­
in g

Item

A u to m o tiv e s u p p l i e s .
E le c tric a l g r o u p . . . . .
W ir in g s u p p l i e s . . .
A p p lia n c e s ..................
G e n e ra l h a r d w a r e ...
I n d u s tr ia l h a r d w a r e .
J e w e lr y .................................
P lu m b in g a n d h e a t ­
in g s u p p l i e s ...............
C o n f e c tio n e r y ................
D ru g s a n d s u n d rie s .
D ry g o o d s .......................
G r o c e r ie s ............................
F u ll l i n e s .....................
S p e c i a lt y l i n e s . . . .
T o b acco p r o d u c t s ...
M is c e lla n e o u s ................

ALABAMA
B irm in g h a m ----M o b ile .............
M o n tg o m e r y .. .
F LO R ID A
J a c k s o n v ille ----M ia m i.......................
O r l a n d o ................

0

10

20

30

4 (H

RETAIL JEWELRY STORE OPERATIONS




+ 4
— 2

P e rc e n t C h a n g e
M ay 1948 from
A pr.
1948

M ay
1947

4

—

—

5
6

— 13
+
1
— 6
H- 3
— 3

8
3

4

1

5
9

18

—
—
—
—

43

± 1
4- 3
4- 1

3

12
1 35

5
5
5

—
—
4-

6
2
1

,+ 16
r f 25
4- 2 0

4

— 'o

— '5

3

4-

1

4- 73

6
11

—
4-

o
1

4- 5
4- 12

—

+

1
2

4.4”

15

—

82

—

8
2

+ 4i
4- 18

24

+ A
— 2
4- 4
4- 20
4- 4

0
7
0
— 2

7
7

6

— 14
— 11
4- 7
+
5
— 6

— 10
— 0
— 4
— 1

4

N o. of P e rc e n t C h a n g e
F irm s M ay 31, 1948, from
R eport­
A p r. 30, M ay 31,
in g
1948
1947

4

8
8

N um ber
of
S to res

INVENTORIES

SALES

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

T o ta l s a l e s . .....................................................
C a s h s a l e s ........................................................
C r e d it 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 .....................

— 5
— 25
4* 0
4* 3 6
4- 2
4 - 15

+ 4

4- 9

DEPARTMENT STORE SALES AND INVENTORIES

M em bejim H c Investments

Item

M ay 1947

+ 6

* 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 rc e f ig u r e s

Demand Deposits Adjusted
10

A pril 1948

88
80
80
87
87
63

I I i i i

Member B | j | | | | | | | | | |

20

P e rc e n t C h a n g e
M ay 1948 from

INSTALMENT CASH LOANS

P lace

30

N um ber
of
S to re s
R ep o rtin g

Item

Gasoline T a f l i l i i o n s

40

6 7

RETAIL FURNITURE STORE OPERATIONS

F u m i i e Sales

Bank M

1948

P e rc e n t C h a n g e
M a y 1948 from

R e p o r tin g

A pril 1948

32
32
32
31
31

4- 2 3
-f 26
4- 2 2
4- 1
4- 1

M ay 1947
—
—
—
44-

10
20
2
28
11

G E O R G IA
A tla n ta ..................
A u g u s t a ................
C o lu m b u s ...........
M a c o n .....................
S a v a n n a h .............
L O U ISIA N A
B a to n R o u g e ..
N e w O rle a n s ..
M IS S IS S IP P I
J a c k s o n ..................
M e r id i a n ...............
TE N N ESSEE
B r is to l.....................
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 I T I E S * ..
D IST R IC T

N o. of
S to re s
R ep o rt­
in g
4
5
3

4

P e rc e n t C h an g e
M ay 1948 from
M ay
A pr.
1947
1948

4

+

1

— 13
1

+

3

— *4

4- 3 7

+

4

5
3

— 5
— 21

+ 2i
48

4

—

5

—

8

+ *2
—
6
— 3
4- 2 4

+
—

§
8

44-

6
6

4

—

4

—

7
2

4* 2 5
-j- 15

—
—

9
0

+
—

16

4

—

4

4- 2 0

3
3

—
—

4
5

4* 4
4- 12

5
22
72

—

7
2
5

4- 2 9
4- 17
4- 19

+
+
4-

li

5

4

4
6
19
104

4-

—

3
4

3

4- 2 8

l 5l

3
3

4- 5
4- 14
+
8

4

*8

44*

4- 2 5
4- 5

6
7

3

3

4- 2 6

+

4-

6

4

— 10

3

+

*—

4

3

1

+ ll
4- 6
4- 4

4
3
5

4

P e rc e n t C h an g e
N o. of
S to res May 31, 1948, from
R ep o rt­ A pr. 30, M ay 31,
in g
1947
1948

—
—

4
4

2

4- 4
4- 8
— 4
4- 2 4
— 6
4- 3

—

2

— 9
— 7
4 - 10
4- 3
— 2
4- 4

—

—

4-

^

8

9

* W h e n f e w e r th a n th r e e s to r e s r e p o r t in a g iv e n c ity , t h e s a le s o r s to c k s
a r e g r o u p e d t o g e t h e r u n d e r “ o th e r c i t i e s ."

6 8

M

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 rve

B a n k

o f

A t la n t a

fo r

Ju n e

1948

N ational Business Conditions
output and department-store sales increased in age of 284 for the first quarter. Sales in the first half of
May and were maintained at advanced levels in the early June continued near this advanced level.
part of June. The general level of wholesale commodity prices Loadings of railroad revenue freight in May and the first
rose further in June, reflecting chiefly sharp increases in live­ half of June were in substantially larger volume than in the
stock. Substantial advances were announced in prices of auto­ preceding two months, mainly because of a sharp rise in coal
mobiles and some other industrial products.
shipments. Grain shipments showed a marked further gain
during this period, reflecting chiefly an unusually early move­
Industrial Production
The Board’s seasonally adjusted index of industrial produc­ ment of the new wheat crop. Total freight carloadings in May
tion advanced four points in May to a level of 192 percent and early June were at about die same level as during this
of the 1935-39 average, which was close to the record peace­ period a year ago.
Commodity Prices
time rate prevailing in the first quarter before output was
curtailed by work stoppages at coal mines.
The general level of wholesale commodity prices advanced
Production of durable goods in May was above the April further in June to about the peak reached in January. The
rate but below first quarter levels. Production of iron and rise reflected chiefly sharp increases in livestock prices fol­
steel increased sharply as coal supplies were restored. Output lowing settlement of the meat packing strike. Prices of most
of nonferrous metals and of stone, clay, and glass products other farm products and foods showed little change.
was maintained at the high rate of recent months. Production
Prices of industrial materials continued to show mixed
of most other durable goods, however, declined further in changes in June with further declines reported for cotton
May. Activity in the automobile industry was substantially goods and some other items and marked increases in sec­
curtailed as a result of steel shortages and a labor dispute
at plants of a major producer, and the number of cars and ondary aluminum, tin, and wool. Prices of automobiles and
trucks finished in May was about one fifth below the first various other manufactured products were raised.
The consumers’ price index increased .7 percent in May,
quarter average.
Output in most nondurable goods industries in May was reflecting mainly further advances in retail prices of meat.
maintained at the April level or advanced somewhat. Petro- Retail prices of most other groups of items showed little
leum-refinery operations increased further; output of gaso­ change or increased slightly.
line and fuel oil was 16 percent larger than in May of last
Bank Credit
year. Coke production recovered from the curtailment in
Substantial Treasury cash payments in excess of receipts dur­
April resulting from reduced coal supplies. Meat production
showed a slight gain in May, reflecting settlement of a labor ing late May and the first half of June reduced Treasury bal­
dispute at major packing establishments on May 21. Activity ances at Reserve Banks by about 600 million dollars and in­
at cotton-textile and paperboard mills and at printing estab­ creased the reserves of commercial banks. A large gold inflow
also supplied banks with reserve funds, offset in part by a
lishments was maintained at the April rate.
Minerals output rose to a new high level in May, owing currency outflow over the Memorial Day holiday.
Effective June 11, the Board of Governors increased reserve
mainly to a sharp increase in bituminous coal output and to
requirements
against net demand deposits at central reserve
a further rise in crude-petroleum production to a new record
level. Production of iron ore was maintained in exceptionally city banks from 22 to 24 percent. These banks sold Govern­
ment securities to the Reserve Banks as needed to meet the
large volume.
resulting increase of about 500 million dollars in their re­
Construcfion
quired reserves. An increase in Treasury deposits resulting
Value of construction contracts awarded in May, as reported from tax payments after the middle of June exercised a drain
by the F. W. Dodge Corporation, increased further to a new on bank reserves and caused additional sales of Government
postwar peak more than 10 percent above April and slightly securities to the Federal Reserve.
above the previous high in May 1946. The increase reflected
Real-estate and consumer loans continued to increase at
mainly large gains in awards for public works and for edu­ banks in leading cities during May and the first two weeks
cational and hospital buildings. Value of awards for com­ of June. Commercial loans were maintained at about the
mercial structures increased further in May to the highest volume outstanding in the last half of April.
level in more than two years. Private residential awards also
Security Markets
continued to increase. The number of new dwelling units
started, according to the Bureau of Labor Statistics, was Common stock prices advanced somewhat further from the
97,000 as compared with 90,000 in April and 73,000 in middle of May to the third week of June, and trading re­
May 1947.
mained relatively active.
Distribution
The Treasury announced on June 10 increases in purchase
Value of department-store sales rose to a new high in May, limits for F and G bonds bought by savings institutions dur­
after allowance for seasonal changes. The Board’s adjusted ing the period July 1-15. Prices of marketable Government
index for the month is estimated to be 308 percent of the bonds, which had risen during May, declined in June.
1935-39 average as compared with 304 in April and an aver­
T h e B oard o f G o vern o rs
n d u s t r ia l

I