View original document

The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.

ITHLY
FEDERAL RESERVE

Re v i e w
BANK OF

ATLANTA

A tlan ta, G eorgia, June 30, 1 950

V olu m e X X X V

N um ber 6

The Businessman’s Stake in the Federal Reserve
A n
b y L e s lie

a d d ress b e fo re

th e K iw a n is C lu b

o f E rw in , E rw in 9 T en n essee,

R . D r iv e r , P r e s id e n t , F i r s t N a tio n a l B a n k in B r is t o l9 B r is t o l, T e n n e s s e e , a n d
D ir e c t o r o f th e F e d e r a l R e s e r v e B a n k o f A tla n t a

a n y years ago A rtem us W ard, a fam ou s A m erican h u ­
m orist, said that w ith m ost p e o p le it “ a in ’t ign oran ce
that does the dam age, but k n ow in g so m an y th in g s that a in ’t
so .” T od ay I w ant to talk about an in stitu tion — the F ederal
R eserve System — con cern in g w h ich m ost p eo p le know a
great m any th in gs that “a in ’t so .”
I f you w ere to ask a hundred p e o p le on the street w hat the
F ed eral R eserve S ystem is, m ore than h a lf w o u ld p rob ab ly
not have the ghost o f an id ea. A few w o u ld think that it is
ju st another G overnm ent a gen cy h a v in g som eth in g to do w ith
banks and supported by the taxp ayer. H e w o u ld be the rare
ex cep tio n w ho w ou ld have an y clear id ea o f w hat is u n d ou b t­
e d ly on e o f the m ost im p ortan t eco n o m ic in stitu tio n s in our
coun try tod ay.
T h is is n ot strange, fo r few in d iv id u a ls ever com e into d i­
rect contact w ith the F ed eral R eserve S ystem as such. But
th is d oesn ’t m ean that p eo p le in gen eral sh ou ld not be in ter­
ested in it, esp e c ia lly b u sin essm en ; fo r every m an, w om an,
and ch ild in the n ation is v ita lly affected b y th e F ed eral
R eserve System and its op eration s. T hat’s w hy I w ant to talk
about it tod ay, so that w hen you read som eth in g about the
S ystem in the new spaper, you w ill know that you have a vital
stake in the outcom e, w hatever the im m ediate issu e h ap p en s
to be. Like the air w e breathe, our m on ey and b anking system
is so p ervasive that w e h a rd ly ever giv e it a th ou gh t u n til
som eth in g goes w rong w ith it.
I think you w ill be im p ressed w hen I state to you that the
p rin cip a l p u rp ose o f the F ed eral R eserve is to regu late the
su p p ly , a v a ila b ility , and cost o f m on ey, w ith a view to co n ­
trib u tin g to the m aintenance o f a h ig h le v el o f em p loym en t,
stab le valu es, and a risin g standard o f liv in g . I h o p e that
you w ill keep that statem ent in m ind.
A s in te llig e n t citizens w e sh ou ld acq u ain t o u rselv es w ith
this in stitu tion that so v ita lly affects us and our w ell-b ein g .
T w o very com m on m iscon cep tio n s about the F ederal R eserve
S ystem , how ever, sh ou ld be corrected. T he first o f th ese is
that it is som e sort o f G overnm ent agen cy. T h is is o n ly p ar­
tia lly true. T he System , o f course, w as created b y an act of
C ongress in 1913 and is governed by a board o f seven G ov­
ernors, each ap p oin ted by the P resid en t w ith the ad vice and
con sent o f the Senate. T he term s are so staggered that one
term exp ires every tw o years. T he Board sits in W ash in gton .
T he System itse lf, how ever, con sists o f tw elv e reg io n a l cen ­
tral banks w ith tw enty-four branches. T he on e fo r the S o u th ­
east — the S ixth F ed eral R eserve Bank — is located in A t­



M

lanta. A lth o u g h th ey are under th e gen eral ov ersig h t o f the
Board o f G overnors, th ese tw elve F ed eral R eserve B anks are
p riv a tely ow ned corp oration s, their cap ita l stock b ein g ow ned
b y the so -ca lled “m em ber b an k s.” T h ese are p rivate com ­
m ercial banks. A ll n a tio n a l banks are required to b e m em ­
bers, and state banks w h ich m eet the e lig ib ility requirem ents
are in vited to jo in . T od ay about 5 ,0 0 0 n a tio n a l and 2 ,0 0 0
state banks b elo n g . T h ese banks h o ld about 85 p ercent o f a ll
com m ercial bank deposits.
T w o-thirds o f the directors o f the F ed eral R eserve Banks
are elected b y th ese m em ber banks, and the others are a p ­
p oin ted b y the B oard o f G overnors. H a lf o f the directors
elected b y the stock -h old in g m em ber banks are bankers, rep ­
resen tin g large, m edium -size, and sm a ll banks. T he other h a lf
is m ade up o f prom in en t b u sin ess leaders w ho represent the
interests o f in d u stry, com m erce, and a gricu ltu re. T h e d irec­
tors a p p oin ted b y the B oard o f G overnors represent the p u b ­
lic at large and are u su a lly ou tstan d in g and p u b lic-sp irited
citizen s, educators, and the lik e.
T hus, alth o u g h the System is integrated through a Governm ent-appointed board, it is not r e a lly a G overnm ent agency,
d esp ite the w ord “ F ed era l” in its title. M oreover, alth ou gh
it is p rim a rily a b an k in g in stitu tion , bankers do not dom inate
the directorates o f the F ed eral R eserve Banks. B usinessm en!
and other citizen s are a lso represented. Indeed, nonbankersl
h ave tw o-thirds o f the votes in the B oard o f D irectors of?
every F ed eral R eserve Bank. T h is g iv es every businessm an!
an im portant stake in the F ederal R eserve System .
A second m isco n cep tio n about the F ederal R eserve is th is:
It is freq u en tly th ou gh t that every agen cy o f the G overnm ent

N o t ic e
Please check the address on the enve­
lope in which this issue of the Monthly
R eview was received and notify the Re­
search Department of this Bank of any
change that may be necessary. Your
cooperation will be appreciated.

5 4

M

o n t h l y

R e v ie w

is a contrivance o f the d ev il fo r the w a stin g o f th e ta x p a y er’s
m oney. B ut let m e say th is — the F ed eral R eserve S ystem
does not cost the G overnm ent or th e taxp ayer a p en n y. It is
self-fin a n cin g out o f its ow n earn in gs. T he F ed eral R eserve
Banks p a y their stock -h o ld in g m em ber banks a le g a lly re­
stricted d ividend o f 6 percen t a year, but 9 0 percent o f their
net earn in gs are handed over to th e U n ited States T reasury.
\ In 1948 the F ederal R eserve B ank o f A tlan ta p aid the T reas­
ury over 10 m illio n d o lla rs, w h ile the w h o le system p a id in
over 190 m illio n d o lla rs. T h e System is, thus, not a burden
on the taxp ayer or on the G overnm ent. On the contrary, these
contributions to th e T reasu ry a c tu a lly lig h ten the ta x p a y er’s
burden.

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 1950

% A nother th in g sh o u ld b e n oted about the F ed eral R eserve
Banks — alth ou gh th ey are p rivate corp oration s, th ey are not
operated fo r profit. T h ey do, ind eed , m ake p rofits under cer­
tain fa v o ra b le con d ition s, but, as I just said, the b u lk o f
these profits are returned to the G overnm ent, w h ich rep re­
sents the p u b lic. T h ese Banks w ere n ot set up to m ake
m oney, but rather to m ain tain m on etary and credit co n d itio n s
con d u cive to the p rosp ero u s d ev elo p m en t o f in d u stry, co m ­
m erce, and agricu ltu re. Y ou see, th ey w ere set up p rim a rily
to serve you and you r interests. T hat is another stake that
you h ave in the System — another reason w h y you , as b u si­
nessm en, sh ou ld b e interested in the S ystem ’s w elfare.

A s I h ave ju st said, the custom ers o f m y bank can p a y each
other b y check w ith o u t an y m ovem en t o f fu n d s w hatsoever.
But that isn ’t a ll. T h ey can p a y p e o p le a ll over the country
in the sam e w ay. F or ju st as m y ban k acts as a clea r in g h ou se
fo r the checks o f its cu stom ers, so th e F ed eral R eserve Bank
acts as a clea r in g h o u se fo r ch eck s draw n on a ll the niem ber
banks o f the D istrict. A n d th at s till is n ’t th e end o f the story.
T he tw elv e F ed eral R eserve B an k s carry th eir le g a lly p re­
scrib ed reserves in w hat is k n ow n a s th e In terd istrict S ettle­
m ent Fund. T h is fu n d acts as a cle a r in g h o u se fo r the tw elve
F ed eral R eserve B anks. In 1 9 4 8 th e S ystem h an d led two
b illio n checks to ta lin g in am ou n t over 9 0 0 b illio n d o lla rs.
Checks con stitu te n ine-tenths o f our m o n ey su p p ly in m aking
paym ents. T hus, th rou gh th e in d iv id u a l com m ercial bank,
th rou gh th e F ed eral R eserve B ank in the D istrict, and through
the In terd istrict S ettlem en t F und, it b eco m es p o ss ib le fo r an
en orm ou s v o lu m e o f b u sin ess to be d on e a ll over the cou n ­
try w ith a m in im u m m ovem en t o f cash . T h e ea se w ith w hich
paym en ts b y check can b e m ad e in an y part o f the country
thus d ep en d s u p o n the sm ooth w o rk in g o f the F ederal R e­
serve S ystem . It w orks so sm o o th ly , in d eed , that it is hard
fo r us to im a g in e the c o n fu sio n , the d ela y , the chaos that
w ould resu lt i f b y som e il l ch an ce it sh o u ld su d d en ly break
dow n. W hether yo u are aw are o f it or not, th is is another
stake that you h a v e in the S ystem .

T o arouse and m ain tain you r in terest in the F ed eral R e­
serve System , how ever, w ill req u ire an act o f w ill on you r
part because few o f you , u n fo rtu n a tely , have ever seen a F ed ­
eral R eserve Bank. A fter a ll, th ere are o n ly tw elv e o f them
in the country. Y ou do have a d irect contact w ith the System ,
h ow ever, b y w ay o f you r lo c a l bank, i f it h ap p en s to b e a
m em ber o f the S ystem . Y ou h ave an in d irect contact even if
your bank is n ot a m em ber. F or it is th rou gh the b an k in g
structure o f the coun try that the S ystem tries to do w hat it
is supposed to do — maintain sound monetary and credit con­
ditions in the interest of a generally prosperous economy . I
w ant to te ll you a little about h ow the System attem pts to do
this, but first I w ou ld lik e to m en tion a few o f its m any other
services.

A further service that the lo c a l bank renders to its cu sto­
m ers is the m ak in g o f lo a n s. E veryon e at som e tim e or other
finds it n ecessary or ad v a n ta g eo u s to borrow . T hat is w hat a
com m ercial bank is fo r . T o m ak e lo a n s to its cu stom ers. But
in order to accom m od ate th eir cu stom ers, banks m ust them ­
selv es som etim es b ecom e b orrow ers. W hen a m em ber bank
needs to b orrow in order to exten d fu rth er loan s to its cu s­
tom ers, it can a lw a y s do so fro m its F ed era l R eserve B ank on
an y go o d assets. A s bankers, th erefo re, our a b ility to serve
b u sin essm en and oth er in d iv id u a ls is m ade p o ssib le by the
F ed eral R eserve S ystem — b y our a b ility , th rough it, to
draw u p on the resources o f the w h o le b a n k in g system . T here
thus need n ever be a sh ortage o f fu n d s a v a ila b le to credit­
w orthy borrow ers.

O ne o f th ese is that o f actin g as a bank fo r bankers. A s
p resident o f a bank, I lik e to think that m y in stitu tio n ren ­
ders an im p ortan t service to its custom ers. T h ey d ep o sit their
fu n d s in the bank and can then p a y each other b y m ean s o f
checks so that little m on ey need lea v e the bank. T here is o n ly
a sh ift o f b alan ces from on e accou n t to another. T h is is a
great con ven ien ce to the custom ers and it is go o d fo r the
country as a w h o le fo r it econ om izes in the u se o f currency.
Our custom ers, o f course, can w ithdraw cash if th ey w ish . But
every coin and every p ie c e o f p ap er m on ey in th eir pockets
has com e into circu la tio n th rou gh som e bank, w h ich g o t it
from a F ed eral R eserve Bank. O f a p p ro x im a tely 2 7 b illio n
d ollars o f m on ey in circu la tio n , about 2 3 b illio n are in F ed ­
eral R eserve notes. T h rou gh the op eration s o f the F ed eral
R eserve S ystem , the am ount o f currency in circ u la tio n a u to­
m a tica lly adju sts its e lf to the dem ands o f in d iv id u a ls and
b u siness firm s — ex p a n d in g as dem and in creases and co n ­
tracting as it d im in ish es.

T he F ed eral R eserve B anks a lso p erfo rm certain im portant
fu n ctio n s fo r th e G overnm ent. T h e is su in g and redeem ing
and serv icin g o f G overnm ent b on d s, fo r ex a m p le, w hich a
2 5 7 -b illio n -d o lla r debt en ta ils, is d o n e b y th ese banks. W ith ­
out th e F ed eral R eserve B anks, the fin a n cin g o f the recent war
w o u ld h ave b een ex trem ely d ifficult, fo r th e G overnm ent, like
the rest o f us, m u st som etim es b ecom e a borrow er, e sp ecia lly
in tim e o f w ar. W hen such a situ a tio n arises, th e F ed eral R e­
serv e-B a n k s are on e im p ortan t sou rce fro m w h ich the G ov­
ernm ent can get credit. T h ese B anks a lso act as fiscal agents
and cu stod ian s fo r the C om m od ity C redit C orp oration and
th ey are n ow tak in g over th e receip t o f w ith h o ld in g taxes for
G overnm ent accou n t. M oreover, w h en con su m er credit con ­
trol w as still in fo rce, its a d m in istra tio n w as vested in the
F ed eral R eserve B anks.

Our custom ers, n a tu ra lly , cannot get cash from us u n less
they have a d ep osit in the bank. S im ila rly , w e cannot get cur­
rency from the F ederal R eserve B ank u n less w e carry a d e­
p osit there. Our d ep osit w ith the F ed eral R eserve is ca lle d
our “reserve accou n t.” A ll m em ber banks are req u ired to
carry their reserves w ith the F ed eral R eserve Bank.



W e com e now to the m ain p u rp o se o f the F ed eral R eserve
System — the m ain ten an ce o f sou n d cred it con d ition s — and
h ow it tries to a c c o m p lish th is task. S in ce th e end o f the war,
w e h ave had som e ex p erie n c e w ith in flation . W e have seen
the g en eral p rice le v e l rise to record h eig h ts and the v a lu e o f
m on ey m elt aw a y in con seq u en ce. M ost o f us a lso had som e
ex p erien c e w ith d eflation in th e e a r ly th irties. In th ose days
w e saw p rices f a ll to ru in ou s lev els, and b u sin esses b y the
th ou san ds g o in g bankrupt, w h ile m illio n s w alk ed the streets

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 1950

seeking jobs that were not to be found. These violent changes
in the value of money, up and down, although they may favor
certain groups, nevertheless work immeasurable hardship on
the great majority of people. They certainly make it difficult
for any businessman to plan his business rationally.
What causes these violent changes in the value of money,
remembering that bank credit is our main form of money?
Fundamentally the trouble lies in the relation between the
volume of money and the volume of goods and services to be
bought with money. When the stream of money grows faster
than the stream of goods, we have rising prices — inflation.
When the stream of money does not grow as fast as the stream
of goods we have falling prices — deflation. The Federal Re­
serve tries to minimize these fluctuations by influencing the
size of the money stream in such a way that it w ill more
nearly match the size of the goods stream.
How does it do this? Let us see. The ability of a member
bank to extend credit to its customers, and thus add to the
supply of money, depends upon the size of the reserve which
it carries with the Federal Reserve Bank. For each dollar in
its reserve account, a bank can extend five or six dollars in
deposit credit to its customers. The more dollars it has in its
reserve, therefore, the more credit it can extend. The fewer
dollars, the less credit it can extend. Because the Federal
Reserve has the power, within certain limits prescribed by
law, to vary the reserve requirement for member banks, it
has, consequently, the power to restrict or to increase the
banks5 ability to extend credit to their customers.
The Federal Reserve works to this same end in still an­
other way — through the buying and selling of Government
securities in the open market. When the Federal Reserve
buys securities, it obviously puts money into the hands of the
persons from whom the securities are bought. This money
eventually finds its way into the banks and thence into their
reserve accounts, where it enables them to extend more credit.
On the other hand, when the Federal Reserve sells securities
in the open market, it takes money out of the accounts of the
purchasers and so, ultimately, reduces the reserve accounts
of the banks. In this way the ability of banks to extend credit
is diminished. The Federal Reserve can therefore act upon
reserves either directly, by varying reserve requirements, or,
indirectly, through its buying and selling of securities, pro­
viding banks with reserves by buying operations, or depriv­
ing them of reserves by selling. Still another method is to
influence the volume of borrowing by member banks from the
Federal Reserve Banks by raising or lowering the discount
rate. A higher rate makes it more expensive for member
banks to increase their reserves through borrowing and thus
tends to discourage credit expansion. A decrease in the dis­
count rate makes it less expensive for the member banks to
increase their reserves and, therefore encourages credit ex­
pansion. This is relatively ineffective now when reserves can
be obtained by selling Government securities — held to such
a large extent by the banks.
It is primarily through the use of these instruments that
the Federal Reserve seeks to minimize fluctuations in the
value of money and so to protect business from its tendency
to go through disastrous booms and busts.
Of course the Federal Reserve System has not worked per­
fectly — no human institution ever does. In the first place,
only a part of the banking system has accepted the voluntary
discipline involved in membership in the System. Many
banks remain outside the System. In the second place, too
many other things are involved in the problem of inflation




5 5

and deflation for it to be solved completely or solely by mone­
tary means. Nevertheless, imperfect though it be, the Federal
Reserve is today the only instrument that exists primarily for
the protection of business and the public against these violent
changes in the value of money. It is the only alternative to
direct Government intervention if the nation is to be pro­
tected to any degree at all against violent business fluctua­
tions. Federal Reserve actions, even though adapted to chang­
ing conditions, tend to be unpopular because if effective they
place the System in position of constantly bucking the popu­
lar trend. But it is a job which must be done and when done
successfully results in great benefits for every individual and
every business firm, proving again your stake in this System
and your interest in preserving, extending, and improving it.
In order to formulate its policies so that they may best
serve the interests of the whole economy, the Board of Gov­
ernors must know as much as it can about business condi­
tions as they continuously change. It must have at its dis­
posal an enormous body of facts upon which to base deci­
sions. To collect these facts, the Board maintains a large staff
of economists, statisticians, and other highly trained profes­
sional men. Each Federal Reserve Bank maintains a similar
but smaller staff in its Research Department to collect figures
and to study the economic problems of its particular District.
Neither the Board nor the Federal Reserve Banks keep this
information secret, for they know that it is valuable to busi­
ness as well as to System authorities. It is therefore the
policy of the System to make this information public. The
Board of Governors publishes monthly the Federal Reserve
Bulletin, which may be obtained for a very small charge. This
publication is one of the most complete, authoritative, and
up-to-the-minute compilations of business figures in the
country.
Each Federal Reserve Bank also publishes one or more
monthly periodicals which may be received regularly, with­
out cost, merely by requesting them. In addition to its
Monthly Review , the Federal Reserve Bank of Atlanta, for
example, also publishes a Bankers Farm Bulletin as a special
service to the numerous country banks in this District —
keeping them informed of important agricultural develop­
ments and letting them know what other banks are doing and
how the problems of our rapidly changing southern agricul­
ture are being met. Many mimeographed releases are also
put out dealing with current developments in various kinds
of business. These, too, are available free to those who may
be interested.
In the short time at my disposal, I have been able to give
you only a few of the high-lights of the Federal Reserve Sys­
tem. I wish I could have told you more about it. If you ever
have the opportunity to do so, I wish you would visit one
or another of the Federal Reserve Banks or their Branches.
You will receive a cordial welcome from all of its officers
and employees. You will find all of them eager to tell you
everything they can about their work. They are not operating
secretly and in the dark. You will discover that a Federal
Reserve Bank is not a cold, austere, and impersonal institu­
tion. You will find, on the contrary, a warm and friendly
group of highly competent and devoted men who are working
in the interest of a more prosperous America. You will come
away from such a visit, I am sure, with a wholesome respect
for this the greatest central banking system in the world, the
Federal Reserve System, of which my bank and thousands
like it are proud to be members.

M

5 6

o n t h l y

R e v ie w

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 1950

Deposit Growth at Georgia Member Banks
the 396 commercial banks in Georgia added up the
amounts they had to the credit of their depositors on
December 3 1, 1949, they arrived at a total of 1,624 million
dollars. Just ten years before, the year-end total was only 496
million dollars. This 227-percent increase raised per capita
bank deposits from 159 dollars at the end of 1939 to 508
dollars at the end of 1949.
Data on deposits at all Georgia banks for earlier periods
are more difficult to obtain. Deposit changes at banks that
are members of the Federal Reserve System, however,
fairly well reflect changes at all banks. About 70 percent
of the total bank deposits in Georgia are kept at member
banks, a ratio which has changed little over the years.
In general, bank deposits change because of an increase
or a decrease in the credit granted by the nation’s banks.
Economic conditions governing credit throughout the coun­
try, of course, have been the most important factors govern­
ing the level of deposits at Georgia member banks. But dur­
ing the last thirty years, there have been many times when
Georgia bankers have seen the deposits at their banks change
in a different degree or in a different direction than deposits
in other parts of the country. Most of these differences can
be traced to dissimilarities in the rates of income growth and
decline.
hen

W

Depression After World W ar I
One of those periods was from 19 19 through 19 2 1. The
events of those years have been deeply etched in the mem­
ories of Georgia bankers whose experience dates back thirty
years or more. They saw their bank deposits shrink by a
third in the three years, most of the drop occurring in 19 19 .
Banks all over the country were losing deposits during this
period— the primary postwar depression after World War
I — but their loss amounted to only 10 percent.
Cotton was king in Georgia in those days. Loans and de­
posits had been expanded on the basis of cotton, which sold
in the middle of 1920 for over 40 cents a pound. In August
of that year, the price began to drop and by mid-19 2 1 it had
fallen to around 12 cents. With about 40 percent of the state’s
income coming from agriculture, Georgia’s whole economy
felt the impact of this decline.
Recovery from the low point in 19 2 1 at Georgia banks

roughly paralleled growth throughout the nation. At the end
of 1926, however, deposits were lower than at the end of
1925, contrary to the national trend. Moreover, although
Georgia deposits remained practically unchanged from 1926
through 1928, deposits throughout the country expanded.
The period from 1925 through 1928 demonstrates how the
relative rates of income changes in any area can influence the
flow of deposits into and out of the area. Agriculture was less
important as a source of income than in the early part of the
decade, but was still the direct source of a fifth of the income
received by individuals as well as a very important indirect
source of most of the remaining four-fifths.
Cash farm income in Georgia was 20 percent lower in
1926 than in 19 2 5 ; national farm income declined only 4
percent. Georgia agriculture fared worse during the years
that followed than agriculture throughout the country. And
in 19 32 cash receipts from Georgia farm marketings were
only 3 1 percent of what they had been in 1925. This decline
was accompanied by a loss of over 25 percent in deposits of
the Georgia member banks.

Wartime Growth and Postwar Decline
After the low point in 19 33, recovery at Georgia banks
again paralleled that of the country as a whole. At the begin­
ning of the war period in 1939, deposits at Georgia member
banks were at about the same position relative to deposits
at all member banks as they had been twenty years earlier.
Most persons are fam iliar with the wartime developments
that increased deposits at practically every bank in the coun­
try. But the growth at Georgia banks exceeded the national
rate of growth. By the end of 1945, deposits were 2 3 1 per­
cent greater than at the end of 1939, compared with an in­
crease of 16 3 percent for the country as a whole.
In Georgia, total deposits declined after the war just as they
did elsewhere. The decline in 1946 was accounted for pri­
m arily by the use of the Treasury’s war-loan accounts to
retire bank-held Government securities. Each year since then,
however, deposits at Georgia member banks have been lower
than at the end of the preceding year. By the end of 1949,
Georgia deposits were 4 percent less than they were at the
end of 1946, whereas for the nation, deposits rose 4 percent.

INDEX O F TOTAL MEMBER BANK DEPOSITS
PERCENT




1935"39 * 100

PERCENT

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 1950

The deposit decline since 1946 at Georgia member banks
cannot be blamed on a decline in income. United States De­
partment of Commerce estimates of income payments to
individuals in Georgia show a growth of 6 percent between
1946 and 1947 and one of 5 percent between 1947 and 1948.
Estimates are not yet available for 1949, but it is probable
that income was less than in 1948. A more likely explanation
is that income was not expanding as rapidly in Georgia as
elsewhere. For the same two periods, income payments in the
nation increased 10 and 9 percent, respectively.
Industrial development in Georgia since the war has been
characterized by a substantial growth but not the spectacular
rise that is typical in some parts of the country. Moreover,
because its manufacturing is concentrated in the nondurable
lines, the state’s income was increased less by the postwar
boom in durable goods sales than income elsewhere. At the
same time, many Georgians were using their accumulated
bank balances to buy the durable goods manufactured in
other regions that they could not get during the war. The
result was a drain on Georgia bank deposits. Finally, agri­
cultural income declined in 1949.
TOTAL DEPOSITS AT GEORGIA MEMBER BANKS
____________ Classified by Area
Percent Change, End of Year
A rea*

1939-45

Atlanta Area.................... + 224
Atlanta ........................ + 211
Outside Atlanta............ + 3 10
Augusta .......................... + 1 8 5
Columbus, (Ga.) Area. . + 32 5
Savannah ........................ + 248
South Georgia.................. + 142
Georgia Total................ . +231
Sixth District Total........ + 2 54
United States................... . .+ 1 6 3

1945-46

194G-48

1948-49

— 2
— 2
+ o
— 4
— 2
— 4
+ 12
— 2
+ 1
+ 2

— 4
— 3
— 4
+10
+ 2
— 2
— 4
— 2
+ o
+ 2

+171
+ 152
+296
+188
+360
+183
+117
+182
+2 2 8
+151

*Areas include several counties surrounding each city.

Georgia farmers last year received 16 percent less from
their marketings than they did in 1948. A decline at this rate
thirty years ago would probably have had a much more
noticeable effect on the level of Georgia bank deposits than
it did last year, when total deposits declined only 2 percent.
Agriculture still constitutes a very important source of in­
come for Georgians, but its relative importance has declined
considerably. Instead of accounting for almost 40 percent of
the state’s income as it did in 19 19 , it now accounts for
somewhat less than 15 percent. Manufacturing pay rolls in
19 19 made up only 12 percent of total income. Now the ratio
is close to 20 percent. With a more diversified income base,
therefore, it appears likely that in the future, deposit changes
at Georgia banks will correspond to national changes more
closely than during the 1920’s and 1930’s.
The postwar deposit decline, however, has been minor and
in no way resembled that which occurred after World War I.
Georgia member bank deposits at the end of last year were
182 percent higher than at the end of 1939, a considerably
greater rate of growth than the 1 5 1 -percent increase shown
for the country as a whole. The current level of deposits at
Georgia member banks reflects the growth in manufacturing
income which began during the last half of 1949. At the end
of May, total deposits at all Georgia member banks were
4 percent higher than last May.
C harles T. T a y l o r

This article is the third in a series in which deposit trends
m the individual Sixth District states are being discussed.




S ix t h D is t r ic t S t a t is t ic s
CONDITION OF 27 MEMBER BANKS IN LEADING CITIES
(In Thousands of Dollars)
Percent C hange
May 24
June 22 June 21,1950 frorc
June 21
Item
1949
1950
1950
May 24 June 22
1949
1950
Loans and investm ents—
Total.................
2,444,984 2,446,597 2,261,355 — 0
+ 8
Loans—N et.........
795,741
914,273
903,399
+
1 4 15
Loans—Gross. . , ,
927,876
805,783
916,946
4- 1 4- 15.
Commercial, industrial,
and agricultural loans
518,673
487,342
516,663
4- 0 + 6
Loans to brokers and
dealers in secu rities. .
12,531
-j- 43
12,978
8,764 — 3
Other loans for purchasing and carrying
secu rities___
39,345 — 2 — 12
34,744
35,354
Real estate lo an s...........
82,163
69,284
4- 19
79,925
4" 3
4- 32
6,897
5,228
+ 20
Loans to b an k s,
5,746
Other loans
196,820
272,868
4- 39
266,280
+ 2
Investments—to tal............. 1,530,711 1,543,198 1,465,614 — 1
4- 4
Bills, certificates and
+ 59
n o te s.............
— 4
568,122
591,446
358,353
U. S. bonds. ...
750,523
909,851
740,069
+
1 — 18
197,410
Other S ecurities.............
212,066
211,683
+ 7
+ o
451,417 — 4
— 13
393,737
409,571
Reserve with F. R. B a n k ..
40,869 — 5 — 3
Cash in v a u lt. . . .
39,674
41,782
Balances with domestic
156,736 — 1
160,372
162,199
b an k s...............
4- 2
Demand deposits ad ju ste d . 1,789,203 1,793,377 1,724,605 — 0
4- 4
539,597 — 0
539,184
Time deposits. , . .
539,973
— 0
60,377
61,353
27,225 — 2
4-122
U. S. Gov't d ep o sits.........
425,822 — 2
463,163
Deposits of domestic banks
454,699
4- 7
6,500 — 88
1,000
8,500
— 85
Borrow ings.........
DEBITS TO INDIVIDUAL BANK ACCOUNTS
(In Thousands of Dollars)

1939-49

— 12
— 15
+ o
— 4
+ 9
— 13
— 16
— 11
— 8
+ 9

57

Place

ALABAMA
A nniston..........
Birmingham.. .
D othan.............
G ad sd en .........
M obile.............
M ontgom ery...

May
1950

April
1950

May
1949

Percent Change
May 1950 from Year-todate 5
April
May mos. 1950,
1950
1949 from 1949

21,167
344,104
13,002
21,303
122,493
78,502

20,945
327,863
12,518
19,574
112,166
67,358

17,314
311,612
10,875
16,956
119,793
72,413

+
+
+
+
+
+

1
>
5
4
9
9
17

+ 10
+ 20
+ 26
+ 2
+ 8

+22

+
+
+
+
—
+

305,780
273,917
411,816
64,219
35,171
65,649
140,830

288,828
273,151
410,809
60,753
33,352
66,541
137,590

277,116
233,304
335,476
50,182
32,006
52,258
120,805

+
+
+
+
+
—
+

6
0
O
'
6
5
1
2

+ 10.
+ 17
+ 23
+ 28
+ 10
+ 26
+ 17

+ 10
+ 11
+ 12
+24
+ 5
+ 14
+ 15

Savannah .......
V aldosta.........

24,356
931,727
58,270
9,643
64.095
4,046
14,932
10,769
69,279
9,419
20,411
94,362
11,780

23,065
843,868
57,866
9,142
58,620
3,885
13,939
11,288
56,562
7,894
20,936
83,555
10,477

20,739
783,851
49,764
8,541
47,340
3,445
13,214
9,736
53,312
7,717
17,296
79,669
11,306

+ 6
+ 10
+ 1
+ 5
+ 9
+ 4
+ 7
— 5
+ 22
+ 19
— 3
+ 13
+ 12

+ 17
+ 19
+ 17
+ 13
+ 35
+ 17
+ 13
+ 11
+ 30
+ 22
+ 18
+ 18
+ 4

+ 2
+ 9
+ o
+ 7
+ 19
+ 7
+ 5
+ 5
+ 11
+ 10
+ 11
+ 4
+ 1

LOUISIANA
Alexandria*.. .
Baton R o u g e ..
Lake C h arles..
New O rle a n s..

32,466
101,473
36,979
769,373

32,627
97,515
33,731
633,573

29,434
113,437
34,483
697,541

— 1
+ 4
+ 10
+ 21

—11

+ 10
+ 7
+ 10

+ 11
— 9
+ 1
+ 5

MISSISSIPPI
H attiesburg. ..
Jackson...........
M eridian.........
V icksburg........

17,439
137,402
26,503
24,309

17,339
136,837
25,773
23,176

15,913
124,809
23,861
23,818

+
+
+
+

+
+
+
+

+
+
+
+

TENNESSEE
C h attan o o g a..
Knoxville.........
N ashville.........

148,195
108,460
329,376

139,931
109,498
306,659

127,963
96,624
280,204

+ 6
— 1
+ 7

+ 16
+ 12
+ 18

+ 7
+ 6
+ 13

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

4,462,623

4,099,605

3,918,971

+ 9

+ 14

+ 6

UNITED STATES
333 C ities........ 112,078,000 102,528,000 99,280,000
* Not included in Sixth District total.

+ 9

: +13

+ 6

FLORIDA
Jacksonville...
Miami...............
G reater Miami*
O rlando...........
P ensacola........
St. P etersburg.
GEORGIA
A lbany.............
A tlanta.............
A ugusta...........
Brunsw ick.......
C olum bus.......
E lberton...........
G ainesville*...
Griffin*...........
M acon.............
N ew nan...........

1
o
3
5

10
10:
11;
2

3
5
5
8
8
8

9
6
4
1

M

5 8

o n t h l y

R e v ie w

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 1950

District Business Conditions
Increase in Deposit Activity
deposits are being used more actively than before,
according to data on the turnover of deposits at banks in
leading cities of the Sixth District. In May, demand deposits
at these banks were being used at a seasonally adjusted rate
of 22.2 times a year. The rate was 20.3 times a year ago.
Early reports indicate that the increased activity was main­
tained in June.
The turnover of demand deposits is a measure of the re­
lationship between deposits and bank debits, consisting of
checks and other withdrawals from deposit accounts. Con­
verted to an annual basis, the turnover figure shows how
many times, on an average, deposits are withdrawn and re­
deposited during the year. The turnover rates thus measure
roughly what is sometimes called the velocity of circulation
of that important part of the money supply represented by
bank deposits.

D

em and

TURNOVER O F DEMAND DEPOSITS
SIXTH DISTRICT MEMBER BANKS IN LEA DIN G CITIES

and services needed to offset an increased rate of spending,
there need necessarily be no rise in the general price level
even though the rate of deposit turnover is expanding. A l­
though production was increasing from 1945 to 1948, the in­
crease was insufficient to satisfy the increased demands at the
old prices. The general price level as measured by the Bureau
of Labor Statistics Wholesale Price Index rose 56 percent
between 1945 and 1948.
During 1949, a slight decline in the rate of spending was
indicated by the average rate of turnover at the District
banks, reflecting the business recession and a decline in the
general price level. This year, however, the seasonally ad­
justed rate has increased each month. In May the rate
amounted to 90 percent of the 1935-39 average, an increase
of 17 percent since December 1949. The May rate was high­
est for any month since early in 1942. This growth has been
accompanied by an increase in the general price level.
SPEN DIN G IIP IN EACH STATE. A higher rate of spending this
May than last is shown by all except one of the 36 District
cities reporting bank debits. For the District as a whole,
debits were 14 percent greater. Deposits at the reporting
banks, however, expanded only 5 percent.
The same contrast is shown when the figures are grouped
by states. At the Georgia reporting banks, debits were 20
percent greater this May than they were last year; deposits
were up 4 percent. Debits at the Florida reporting banks
were 18 percent greater, but deposits rose only 7 percent.
At the Mississippi reporting banks, debits rose 9 percent, but
deposits were at just about the same level this May as they
were in May 1949. An identical rate of increase in bank
debits was reported for the Alabama banks; deposits rose 4
percent. At the banks reporting from Tennessee, debits were
up 16 percent, but deposits rose only 8 percent.
c .t .t .

Inventory Growth and Sales Trends

An increase in the rate of deposit turnover generally means
that spending is growing faster than deposits. This May, for
example, the amount of demand deposits at the banks in
leading cities of the District averaged only 2 percent higher
than in May 1949. Debits to those deposit accounts, however,
were 13 percent greater.
W ARTIM E DECLINE. Generally speaking, an increase in the rate
of deposit turnover is characteristic of a period of expanding
business activity. The war period was a notable exception.
Although deposits expanded during the war, limitations on
spending led to a decline in the rate of turnover and by 1945
it was only 55 percent of the 1935-39 average. The lowered
rate meant that the expanded money supply was not exerting
its full potential effect on increasing the price level.
P O STW A R D EVELOPM EN TS. Beginning with 1946, the rate of
turnover rose and the rise continued throughout 1948, when
the turnover averaged 80 percent of the 1935-39 figure. Dur­
ing the same period demand deposits remained relatively
stable. As a result of the increased rate of turnover, how­
ever, the deposits in 1946 were performing the work that
would have required about 80 percent more deposits if they
had been used at the rate prevailing in 1945.
So long as production is sufficient to provide the goods




Even without the stimulus provided by the National Service
Life Insurance refunds during previous months, sales at Sixth
District department stores in May continued at approximately
the same level as in April after allowance is made for seasonal
influences. During the first half of June, sales at the weekly
reporting stores were 8 percent greater than those during that
part of last June. I f the trend continued throughout the
remainder of the month, seasonally adjusted sales for June
will be at about the same level as in May.
The contrast between the trends in inventories this year
and those of last year is more striking than the contrast in
the sales trends. At the end of May this year, total inven­
tories of District department stores were 10 percent greater
than on the corresponding date in 1949. Moreover, inven­
tories have been increasng faster in recent months than sales.

B a n k

A n n o u n c e m e n t

On June 1, 1950, the St. Simons State Bank, St. Simons
Island, Georgia, a. newly organized nonmember bank,
opened for business and began remitting at par. This
bank has a capital of $25,000 and surplus and un­
divided profits of $15,000. The President and Cashier
of the bank is J. H. Lester, Jr., and the Vice President is
J. C. Strother.

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 1950

Merchants were reducing their inventories during the first
half of last year. Sales were below the levels of the corre­
sponding months in 1948, and prices were declining. Inven­
tories, however, were being cut at even greater rates than the
rates at which sales were declining. Department store inven­
tories reached their postwar peak in November 1948 when
the seasonally adjusted index stood at 377 percent of the
1935-39 average. Immediately thereafter reductions began
and by mid-1949 inventories were 14 percent lower on a sea­
sonally adjusted basis than seven months earlier.
During the second half of 1949, although the general level
of sales did not differ markedly from that of the first half, the
stores began to build up their inventories. By the end of the
year, department stores in the District reported that after ad­
justment was made for seasonal variation, inventories were 10
percent higher than at midyear. Although the rate of growth
has slowed down since the beginning of this year, inventories
were considerably higher this May than last. But they are
still below the peak reached in late 1948.
An effort to restore a better balance between inventories
and sales rather than a scramble to build up stocks in antici­
pation of price increases seems to be reflected in the current
figures. The stores have added to their inventories most in
those departments where sales showed the greatest rates of
growth over last year. Preliminary reports from a selected
group of department stores, for example, show May sales of
pianos, radios, television sets, and phonographs up 88 per­
cent from last year. The inventories of these items were up
29 percent, the greatest increase reported for any major de­
partment. On the other hand the women’s coat and suit de­
partment reported sales down 5 percent from last year and
inventories reduced 7 percent in value. These comparisons
show no “ involuntary” inventory accumulation.

5 9

S ix t h D is t r ic t In d e x e s
Place
DISTRICT.............
A tlanta...............
Baton R o u g e ...
Birmingham
C hattanooga. ..
Jackson.............
Jacksonville
Knoxville.........
Miami................
M ontgom ery...
N ashville.........
New O rleans. ..
T am pa...............

Place
DISTRICT.........
A tlanta...........
Birmingham. .
Montgomery.
N ashville.......
New Orleans.

Place
SIX STATES.
Alabama. ..
Florida. .. .
G eorgia. . .
Louisiana. .
Mississippi
Tennessee.

DEPARTMENT STORE SALES
Adjusted**
U nadjusted
May
May
May
Apr.
Apr.
1950
1950
1950
1949
1950
390
397
376r
378
389
426
446
415r
405
428
423
413
441r
419
413
386
372
384r
382
354
371
342r
388
388
371
395r
433
384
398
399
430r
415
442
368
364
378
409
371r
390
413
409
395
330H
384
340
379n
392
420
361
407
390
383
374n
370
364
451
422r
467
446
444
357
372r
367
345
374
511
521
485r
489
516

DEPARTMENT STORE STOCKS
Adjusted*
May
May
May
Apr.
1950
1950
1950
1949
30
7'
336r
366
360
415r
478
460
473;
298
294r
283
28
1
355r
405
396
413
545
4.86r
524
529
307n
347
346
336

Unadjusted
Apr.
1950
378
474
295
408
566
365

GASOLINE TAX COLLECTIONS***
Adjusted*
Unadjusted
May
May
May
April
April
1950
1949
1950
1950
1950
241
238
216
239
232
208
237
231
234
232
21
2
200
223
255
239
249
252
19a
249
244
271
258
227
276
231
236
212
241
208
234
232
235
233
233
232

May
1949
365
394
436
381
342
364
404
382
310
326
356
443
350
456

May
1949
332
410
279
362
482
317

M
ay
218

212
202
192
253
229
233

SIXTH DISTRICT DEPARTMENT STORE SALES AND STOCKS
B y D e p a r tm e n ts *

S elected Departm ents

Percent Change
May 1950 from May 1949

Silverw are and Jewelry
W om en's & M isses'Ready-to-W ear Accessories
W om en's & M isses' Coats and Suits . . .
W om en's & Misses' D r e s s e s .........................
M en's Clothing
.........................................
Furniture and B e d d i n g ...................................
Domestic Floor Coverings ...............................
Major Household Appliances . . . . . .
Pianos, Radios,, Television, Phonographs, etc.
*Preliminary, based upon sales of selected stores

Sales
Stocks
- 8
+ 14
+ 10
+ 4
— 5
- 7
+ o
b 1
— 10
--12
-24
—21
— 9
- 8
— 12
-46
-29
+ 88
in leading cities.

Not only are stocks higher than they were last year, but for­
ward commitments are greater. In January and February,
outstanding orders at a selected group of District department
stores were well below those of the corresponding months last
year. At the end of March, however, they were 6 percent
greater and at the end of April and May, they had expanded
27 and 45 percent, respectively, from 12 months previously.
C.T .T.

COTTON CONSUMPTION*
April
May
May
1949
1950
19-SO
109
TOTAL.........
135
145
118
147
135
A labam a. . .
106
G e o rg ia ... . 139
148
49
M ississippi.
83
8
6
116,
Tennessee.
1 1 105
2

ELECTRIC POWER PRODUCTION*
April March April
1950
1950
1949
409
357
SIX STATES.. 379
Hydro­
375
317
generated 287
Fuel454
generated 500
409

MANUFACTURING
EMPLOYMENT***

CONSTRUCTION CONTRACTS
May
April
May
Place
1950
1950
1949
DISTRICT...
795
531'
508
Residential 1,254
950
724
O th er........
572
328
403
Alabama. .. 777
523
508
Florida. .. . 820
546
646
G eorgia. . . 780
640
463
Louisiana. . 488
625
517
Mississippi 596
204
212
Tennessee. 1,059
605
471

Place

April
1950
SIX STATES.
140
Alabama. .. 141
F lo rid a ....
134
G eorgia. ..
141
Louisiana. . 130
Mississippi
134
T ennessee.
148
Place

Copies of the Retail Credit Survey for 1949, recently
completed by this Bank, are available free of charge.
Requests should be addressed to the Research Depart­
ment. The survey is a detailed analysis of changes in
sales and accounts receivable in nine major lines of
business in the Sixth District, tabulated by states, prin­
cipal cities, and areas.




April
1949
139
144
132
138
135
133
145

CONSUMERS PRICE INDEX
May
April
May
1949
1950
1950
ALL ITEMS. .. 171
171
172
F ood ........... 200
203
18
9
Clothing. . . 191
196
191
Fuel, elec.,
and refrig. 137
135
139
Home fur­
nishings
183
183
189
Misc...........
155
154
154
Purchasing
pow er of
d o llar.........
.58
.58
.58
*Daily average basis
**Adjusted for seasonal variation
***1939 monthly average—100;
other indexes, 1935-39=100
Item

N e w R e ta il C r e d it S u r v e y

Marchi
1950
140
141!
137
140
130
136
148

ANNUAL RATE OF TURNOVER OF
DEMAND DEPOSITS
May
April
May
1950
1950
1949
Unadjusted.
20.8 18.7
20.4
A djusted**., 22.2
2 .1 20.3
1
Index**.......
85.4
82.4
89.9
CRUDE PETROLEUM PRODUCTION
IN COASTAL LOUISIANA
AND MISSISSIPPI*
May
April
May
1950
1950
1949
U n ad ju sted .. 308)
302
301
313
296
306
Adjusted**. .

r Revised

60

M

o n t h l y

R

e v ie w

S ix t h D is t r ic t S ta t is t ic s
INSTALMENT CASH LOANS
V olum e
N o. of
P e rc e n t C h a n g e
L e n d e rs
M ay 1950, from
R eporting A pril
M ay
1950
1949

L ender

Federal credit u n io n s........
State credit u n io n s............
Industrial b an k s.................
Industrial loan com panies
Small loan com panies---Commercial b an k s...........

39
17

1
0

33

+ 40
+ 35
+ 16
— 5

+ 7
+ 17

+1
2

+ 37
+44
+ 7
— 3

+22

+ 41
+ 83
+ 18

16
41

O u tsta n d in g s
P e rc e n t C h an g e
M ay 1950, from
M ay
A pril
1949
1950

+ 36

+ 6

+ 1

RETAIL FURNITURE STORE OPERATIONS
N u m b er
P e rc e n t C h a n g e
of
M av 1950, from
Ite m
S to res
A pril 1950
M av 1949
R ep o rtin g

Total sa le s............................................
Cash sa le s..........................................
Instalment and other credit s a le s. .
Accounts receivable, end of month
Collections during m onth...............
Inventories, end of m onth...............

+6
+6

+ 19

118
104
104
115
115
91

+2
1
+2
1

+ 7
+23

+ 3
+ 3
— 1

+ 2
+ 9

WHOLESALE SALES AND INVENTORIES*
INVENTORIES
SALES
P e rc e n t C h an g e
P e rc e n t C h a n g e
N o. of
No. of
M ay 1950 from
T ype of W h o le sa le r
Firm s M ay 31,1950, from
Firm s
R eport­
A pr.
M ay
R eport­ A pr. 30, M ay 31,
1949
1950
1949
in g
1950
ing'

Automotive su p p lie s.
Electrical group
F ull-line...................
A ppliances.............
General h ard w are. . .
Industrial su p p lies. . .
Jew elry.......................
Lumber and build­
ing su p p lies...........
Plum bing and h eat­
ing su p p lies...........
Confectionery............
Drugs and su n d ries..
Dry g o o d s...................
Grocery g roup
F ull-line...................
Specialty lin e s........
Shoes and other
footw ear.................
Tobacco products
M iscellaneous...........
T otal.............................

+ 5

—1
1

+ 7

— 4

+ 52

+ 52
+ 17

—1
—1
— 5
— 3
— 1

— 7

—4

+1
2

— 5
+ 5
+ 18
4

5
13
18
38

+ 10
—23
+2

+ 6

+ 54

+ 14
+ 5

—
20

+ 5

+ 13

+ 25
+ 3
+ 5
+ 3

6

13

—2

+ 1
+ 10

+1
1

+ 14

26

+ 3
+ 17

—6

—3

+
+
+
+

14
95

+ 5

+ 6
+2

+

7

+ 10

1
2

+ 18

3
9
16
151

— 1

+

7

+ 7

+ 5

+1
1
34
18
16
9

6

6

— 4

+1
1
+2

+ 16

+ 13

+ 7

'‘Based on U. S. Departm ent of Commerce figures.
DEPARTMENT STORE SALES AND INVENTORIES
S a le s—P e rc e n t C h a n g e
Place

M ay 1950
from
M ay
1949

A pr.
1950

Y ear to
D ate
19501949

S to cks
P e rc e n t C h a n g e
M ay 31, 1950,
from
A pr. 30, M av 31,
S to ck s
1950
1949

N u m b e r of
S to res
R ep o rtin g
S a le s

ALABAMA
3
— 4
+ 17
— 3
4
+ 4
Birm ingham ..
+ 13
+ 9
5
+ 1
M obile...........
3
— 0
+ 8
3
+ ‘i
M ontgom ery.. + 10’
FLORIDA
3
— 1
— 9
+ 23
+ 7
4
Jack so n v ille..
3
— 0
— 4
4
+ 15
+ 4.
Miami.............
+ 9
+ 8
3
+ o
O rlando..........
3
— 4
5
+ 2
+ 11
+ 4
Tam pa.............
GEORGIA
5
— 0
+ 7
6
+ 2
+ 5
A tlanta...........
3
— 3
—5
+ 6
+ 1
4
A u g u sta..........
+ 32
+ 13
+ 16
4
C olum bus. . . .
4
+ 16
—'5
+ 22
6
M acon...........
+ 8
— 3
— 1
4
Rom e............. . — 9
4
+ '3
6
+ 8
+ 6
Savannah.......
+ 4
LOUISIANA
— 0
— 7
4
— 5
4
Baton R o u g e.. + 9
— 1
4
— 5
New O rleans.
— 0
+ 3
5
MISSISSIPPI
+ 14
4
— 6
Jackson...........
4
+ 8
+ 4
— 5
M eridian......... + 14
+ 4
3
TENNESSEE
— 2
3
3
Bristol............. — 5
+ 4
+ o
C h a ttan o o g a .. + 13
+ 18
4
3
— 3
+ 11
Knoxville.......
4
+ 6
+ 2
+ 1
6
— 7
N ashville.......
+ 13
5
+ 9
+ 3
22
OTHER CITIES* — 7
22
— 1
+ 9
+ 4
113
76
DISTRICT.........
— 3
+ 8
+ 2
+ 5
‘W hen few er than three stores report in a given city, the sales or
Digitized are FRASER together under “ other cities.
for grouped



+ 1
+ i4
+ 18
+ 22
+ i8
+15
+ 33
+ 2
+ 12
+ 7
+ 9
+ 18

—11

— 2

+ '9
+ 1
+ 10
stocks

o f th e F ederal R eserve B a n k o f A tla n ta fo r J u n e 1950
Industry and Employment
May was another near-record month in the volume of con­
struction contracts awarded in the Sixth District. Steel mills
have been operating at well above rated capacity since the
middle of March. Coal output has declined somewhat, how­
ever, from the level of March and April and is less than it
was a year ago. Textile mill operations were also off some­
what further in May.
THE VALUE O F CO N STRUCTIO N CO N TRA CTS awarded in the Dis­
trict in May was up 50 percent from April, and was 53 per­
cent greater than in last May. The gain in each instance was
shared by five of the District states, Louisiana having the only
decreases. Residential contracts awarded in May were 32
percent larger than in April and 72 percent greater than in
May 1949. Other awards were up 74 percent for the month
and were 37 percent greater than a year ago. Total awards
in the District for the first five months of 1950 amounted to
688 million dollars, 72 percent more than the total for the
same part of 1949. Residential awards amounted to 321 mil­
lion dollars, 86 percent more than a year ago. Other awards
increased 61 percent.
In the value of residential awards Florida continues to lead
the other District states. In percentage gains over last year,
however, residential awards in Florida in the January-May
period this year were up only 66 percent. In Alabama the
increase was 87 percent. In Georgia, residential awards were
double the amount for the first five months of last year, and
in Louisiana, Mississippi, and Tennessee the five-month total
was about two-and-a-half times that of a year ago.
M AN UFACTURIN G EM PLOYM ENT in the District continued in April
at about the March level. For the first time in many months,
the District index was slightly higher than in the correspond­
ing month a year earlier. Slight gains over March in Georgia
and Louisiana were offset in the District total by decreases
in the other four states. Decreases from April 1949 in Ala­
bama and Louisiana were almost large enough to offset in­
creases in the other four states.
In Alabama, employment in shipbuilding and repair was
off more than one-half from April last year, and in Louisiana
also the largest decrease was in shipbuilding and repair. In
the other four states, the April index is above that for April
1949 — by 1.4 percent in Tennessee, 1.6 percent in Florida,
2.5 percent in Georgia, and 5.2 percent in Mississippi.
ELECTRIC p o w e r PRO D UCTIO N
by District public utilities de­
clined 7 percent in April, after a small decrease in March.
It was, however, 6 percent larger than in April last year. The
April decrease was caused by a drop of 23 percent in current
produced by hydro-generated plants, offset only in part by
an increase of 10 percent at plants using fuels. Hydro-generated power accounted for 43 percent of the total in April,
52 percent in March, and 50 percent in April last year. April
output at hydro-generated plants was 9 percent less than in
April 1949, but at plants using fuels it was 22 percent higher.
COTTON TEXTILE mill activity, on the basis of daily average
rate of cotton consumption, was off about 7 percent for May,
but was 24 percent above the rate for May 1949. From April
to May, consumption declined 8 percent in Alabama, 6.6 per­
cent in Georgia, 4.5 percent in Tennessee, and 2.5 percent in
Mississippi. In the ten months of the current cotton year,
August through May, mills in these four states consumed
2,660,767 bales of cotton, a gain of 11.5 percent over the
previous cotton year. The increase for the entire country was
10 percent.
d .e .m .