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Monthly Review Atlanta, Georgia March • 1958 1Iso in this issue: CHARTING THE COURSE OF CONSTRUCTION CONTRACT AWARDS NATIONAL SUMMARY OF BUSINESS CONDITIONS DISTRICT BUSINESS HIGHLIGHTS SIXTH DISTRICT STATISTICS SIXTH DISTRICT INDEXES Member Bank Earnings Improve S lX T H DISTRICT member banks have just closed the books on the most profitable year they have ever had. Their total earnings in 1957, at 363 million dollars, were 14 percent higher than in 1956. This rep resented a return of 3.88 percent on total assets, up from 3.66 percent for the previous year. As the bankers began figuring their net profits, however, they found that greater operating costs and higher taxes had whittled away much of the increase in gross earnings. After taking into account smaller losses on loans, security sales, and other transactions, however, they still came up with a net profit of 59 million dollars, 15 percent higher than in 1956. Aggregate earnings data may tell us something about bank profits, but a full understanding of them requires an examination of any changes that may have occurred in sources of income. In order to arrive at the rate of return banks received, we have related earnings from various sources to the average amounts of income-earning assets they have on their books. In this way, we have also found how individual banks and groups of banks fared. To make such an analysis possible, this Bank prepares an annual tabulation of operating ratios for each member bank in the District. The ratios are based on reports of earnings and dividends for the year and on year-end, mid-year, and autumn reports of condition submitted by member banks. Earnings by Source Much of the increase in total earnings of District member banks during 1957 stemmed from the loans they made to individuals and businesses. Recipients of these loans paid 214 million dollars in the form of interest and discounts, 16 percent more than they paid in 1956. The increase represented not only the larger amount of loans outstanding but also the rise in interest rates that accompanied the larger demand for bank loans. The average return on loans rose from 6.35 percent in 1956 to 6.67 percent in 1957. Rising interest rates were responsible also for much of the increase in earnings on Government securities. District bankers were able to add moderately to their Government security holdings and at the same time raise their loan volume. The somewhat larger holdings of securities, together with improved market yields, raised earnings from this source from 63 million dollars in 1956 to 71 million in 1957. Earnings on other securities, which consist principally of obligations of state and local governments, increased from 17 million dollars in 1956 to almost 19 million in 1957, a rise of 10 percent. Earnings from other sources, such as service charges and trust fees, accounted for the balance of 1957 gross income. Operating Expenses Increased Rising operating expenses continued to plague bankers during 1957. Total expenses rose 20 percent to reach 240 million dollars, an even faster rate of growth than the one that took place in earnings. Almost 70 cents out of each earnings dollar in 1957 went to pay operating expense; it took only 66 cents during the preceding year. Mucft of the increase in operating expense relative to earnings reflected the rise in interest paid on time deposits. This expense, which had amounted to only 11.3 percent of total earnings in 1956, rose to 16.4 percent in 1957. Most District bankers increased the rate on time deposits early in 1957 after the maximum permissible rate on this Average Operating Ratios of all Member Banks in the Sixth Federal Reserve District SUMMARY RATIOS: Percentage of total capital accounts: Net current earnings before income t a x e s ........................ Profits before income taxes . . . Net p ro fits ................................. Cash dividends declared . . . . Percentage of total assets: Total earnings............................. Net current earnings betcre income taxes ........................ Net p r o f it s ................................. 1<>52 1953 1954 1955 1956 1957 16.4 14.1 9.0 3.2 16.3 14.2 9.0 3.1 15.5 15.1 9.9 3.1 16.2 13.2 8.5 3.0 16.9 12.8 8.4 3.0 15.7 12.6 8.4 3.0 3.12 3.25 3.26 3.43 3.66 1.14 .64 1.15 .64 1.10 .71 1.18 .63 1.23 .62 3.88 1.16 .63 SOURCE AND DISPOSITION OF EARNINGS: Percentage of total earnings: Interest on U.S. Gov. securities . 22.1 23.0 22.4 21.8 22.2 22.5 Int. and div. on other sec. . . . 5.9 5.7 5.9 5.9 6.0 6.2 Earnings on lo a n s ........................ 58.7 58.6 58.8 59.7 59.6 59.4 Service charges on dep. accts. . 6.6 6.4 6.7 6.6 6.5 6.6 Trust departm ent earn in g s1 2.2 2.2 2.6 2~6 2.6 2* Other current earnings . . . . 6. 7 6. 2 6. 3 6. 0 5. 7 53 Total earnings........................ 100.0 100.0 100.U 100.0 100.0 100.0 Salaries and w a g e s ................... 31.7 32.0 32.3 31.6 31.2 30.2 Interest on tim e deposits2 8.4 9.1 10.4 10.8 11.3 16.4 Other current expenses . . . . 31.7 32.5 33.9 34.2 35.0 39.7 Total expenses........................ 63.4 64.5 66.2 65.8 66.2 69.9 Net current earnings before income tax es........................ 36.6 35.5 33.8 34.2 33.8 30.1 Net losses I or recoveries and profits + ) 3 ............................. 4.5 3.8 + 1.0 3.5 4.9 3.2 Net increase (or net decrease + ) in valuation reserves . . . . .5 1.4 2.3 2.9 2.4 Taxes on net incom e................... 11.4 11.3 11.4 9.9 8.7 7.9 Net p r o f its .................................. 20.7 19.9 22.0 18.5 17.3 16.6 RATES OF RETURN ON SECURITIES AND LOANS: Return on securities: Interest on U.S. Gov. securities . 1.9 2.04 2.06 2.12 2.46 2.64 Int. and div. on other sec. . . . 2.6 2.67 2.60 2.52 £52 2.66 Net losses (or recoveries and profits + ) on total sec.3 . . . .1 .08 + -27 .17 .27 .11 Return on loans: Earnings on lo a n s ........................ 6.3 6.30 6.19 6.35 6.35 6.67 Net losses (or net recoveries -j-) on loans3 .................................. .1 .20 .17 .10 .15 .15 DISTRIBUTION OF ASSETS: Percentage of total assets: U. S. Government securities . . 33.9 33.9 33.4 33.0 31.4 31.4 Other s e c u r it ie s ........................ 7.7 7.9 8.1 8.6 9.0 9.4 Loans ........................................... 29.8 30.8 31.5 32.8 34.8 34.8 Cash assets .................................. 27.5 26.2 25.8 24.3 23.4 22.8 Real-estate assets ........................ .9 1.0 1.0 1.1 1.2 1.4 All other assets ........................ .2 .2 .2 .2 .2 .2 Total a ss e ts ............................. 100.0 100.0 100.0 100.0 100.0 100.0 OTHER RATIOS: Total capital accounts to: Total assets.................................. 7.2 7.5 7.7 7.7 7.8 7.9 Total assets less Government securities and cash assets . . 20.1 20.0 19.6 18.9 18.0 18.1 Total deposits............................. 7.9 8.2 8.4 8.5 8.6 8.8 Time deposits4 to total deposits . . 22.6 23.5 24.8 25.8 26.0 28.2 Interest on time deposits4 to time deposits...................................... 1.1 1.23 1.36 1.42 1.62 2.36 Number of b a n k s ............................. 355 358 362 369 378 387 ’ Banks with none were excluded in computing this average. Ratio included in "Other current earnings." 2Banks with none were excluded in computing this average. Ratio included in "Other current expenses." includes recoveries or losses applied to either earnings or valuation reserves. ‘ Banks with none were excluded in computing this average. type of deposits was raised from 2y2 percent to 3 percent. As a result, the average rate paid increased from 1.62 percent in 1956 to 2.36 percent in 1957. Other operating expenses, which include interest on borrowed money, depreciation of fixed assets, and miscel laneous expenses, increased from 35.0 percent of total earnings in 1956 to 39.7 percent in 1957. Much of this rise probably reflects the increases in member bank bor rowings during the year as well as the higher rediscount rate of this Bank. Salaries and wages, the largest single expense item, declined in relation to total earnings. The drop from 31.2 percent to 30.2 percent continued the downtrend in this expense that began in 1955. N e t Profits Up After they had balanced operating expenses against gross earnings, District banks found that their net earnings be fore income taxes amounted to 122 million dollars, only 3 percent higher than in 1956. Since both total assets and capital increased at a greater rate, this represented a lower return on both than in the previous year—net current earnings declined from 16.9 percent of capital to 15.7 percent and from 1.23 percent of total assets to 1.16 percent. A decrease in losses on security sales and on loans, together with smaller transfers to valuation reserves, tended to raise net profits during the year. In addition, income taxes took a much smaller share of each earnings dollar in 1957 than in 1956. The dollar volume of net profits, therefore, increased during 1957. It represented a smaller share of total earn ings, however, than in 1956— 16.6 percent against 17.3 percent. Net profits as a percent of total capital were un changed from the preceding year; the ratio to total assets increased only slightly. Earnings Vary from Bank to Bank Bank size apparently had little to do with earning rates during 1957. Banks with deposits ranging from 25 mil lion-50 million dollars had the highest ratio of total earn ings to total assets—4.09 percent. Judging by this ratio, banks with deposits over 100 million dollars were the least profitable; their total earnings to total assets ratio was 3.50. The earnings rate of the smallest banks, those with deposits below one million dollars, however, was only slightly higher at 3.67 percent. A bank’s total earnings depend not only on the rate of return it receives on its loans and investments but also on the composition of its e arn in g assets. It is, therefore, not surprising to find that the banks with the highest ratio of earnings to assets also had the highest proportion of its assets in the form of high-yielding loans. Decisions to be Made Bank earnings are, of course, the result of many inter acting forces. Bank management has control over some of these forces but it has no control over others. A banker may decide, for example, to make a loan rather than vest in a Government security yielding a somewhat lower rate. He should remember, however, that he has already increased his loans appreciably relative to securities during • 2 • Earnings by Sourc* Sixth District Member Banks 1946-57 the past two years. Any further decline in his liquidity may lessen his bank’s ability to meet successfully any un expected deposit drain. His decision to invest in loans or securities, moreover, would depend largely on their yields, which are determined by factors over which he has little control. A banker may improve his earnings position by trim ming down cash assets— on which he is earning no income —and investing in loans or securities. In so doing, how ever, he must realize that his cash assets already com prise a much smaller share of total assets than they did a year or two ago. In fact the ratio declined significantly in 1957. A bank’s earning capacity during 1958, therefore, will depend partly on the skill of its management and partly on the general economic condition of the nation and area in which the bank is located. Economic conditions deter mine whether credit-worthy applicants will seek loans and also the level of interest rates on both loans and invest ments. The current economic downturn has already reduced the demand for loans at banks in the District’s lead ing cities. Outside these cities, however, the demand for bank credit has held up well; the total has declined less than it ordinarily does at this time of year. Somewhat easier conditions in the money and credit markets have produced a pronounced drop in rates on most types of securities that banks normally buy. In ad dition, falling money rates, including the Federal Reserve rediscount rate, have prompted large banks throughout the nation to reduce the rates charged on prime business loans. District bankers, therefore, are likely to experience a decline in the rate of return on both loans and invest ments during 1958. In addition, unless the recession proves to be a short one, the weakening demand for loans may spread to all banks. Bankers, therefore, could ex perience difficulty in finding credit-worthy applicants necessary for expanding the ratio of loans to total assets even if liquidity considerations would permit them to do so. The supply of Governments and other securities, on the other hand, is likely to increase; banks should thus have little difficulty in increasing their security holdings. The recent decline in interest rates has a further im plication for District bankers. With the rates of return on loans and investments likely to fall, the current high rate banks are paying on time deposits will be an even heavier drag on total earnings than it was in 1957. Bankers must soon decide whether they will continue to pay the 1957 rate. New developments that will threaten bank earnings during 1958 are taking shape. Bank management will need all the skill it can muster to meet these threats. Although only time can tell whether 1957 profit rates can be matched, we may be sure that banks’ financial statements will change considerably. w „ n Charting The Course of Construction Contract Awards To provide readers of the Monthly Review with a better picture of current developments in District construction, the Federal Reserve Bank of Atlanta is publishing its in dexes of construction contract awards on a seasonally adjusted basis, beginning with this issue. Separate indexes for total awards, residential awards, and nonresidential awards are shown on page 7. Indexes were previously Published without adjustment of any kind. As always, of course, the indexes are computed from data provided by the F. W. Dodge Corporation on the dollar volume of construction contracts awarded each month. We are interested in construction contract awards be cause they give us a preview of construction projects to started in the near future in terms of their value. Care ®ust be exercised in interpreting the figures, however, Slnce they are characterized by wide, irregular fluctuations and sharp changes associated with the different seasons of the year. Irregular fluctuations often reflect contracts for unusually large individual projects. In such cases, the entire value of the construction project is recorded in one month, whereas actual construction may take many months or even years. Fairly regular seasonal changes oc cur because of increased activity in warm weather and slower activity in cold weather. To avoid being misled by these changes and to determine the more basic trend, it is necessary to eliminate the effects of these regular seasonal fluctuations. It is fairly simple to adjust the irregular changes if we are somewhat arbitrary in choosing the averaging period. For our purpose here we used the so-called three-month moving average, that is, the figure for each month was based upon the average of contracts awarded in that •3 • Construction Contract Awards Sixth District States, 1946-57 1947-49=100 month, the preceding month, and the following month. The index for December 1957, for example, is based on the average of contracts awarded in November, December, and January 1958. A three-month moving average is more representative of contracts awarded during a given month because it helps to smooth out the sharp, irregular fluctu ations obscuring the level of activity likely to be sustained for a longer period of time. Having adjusted our series for irregular fluctuations, we are ready to measure the regularly recurring seasonal changes and adjust for them. The measurement is made by determining the average percent by which each month is above or below the trend, based on figures for a num ber of years. To complete the seasonal adjustment, we “correct” each month using these average percentages. In recent years, for example, we have lowered the April figure for residential awards by about 12 percent because April awards have been averaging about that much above the trend. Similarly, we have raised the October figures by about 10 percent, because the value of residential awards is normally that much lower in October. Contract awards for nonresidential construction are adjusted in a similar manner, and are combined with the residential figures to get the series on total awards shown by the solid line in the chart. Fortunately, we were able to have the necessary com putations for both steps made by UNIVAC. In this way, days of manual computations were reduced to seconds of electronic computations. We carefully reviewed the re sults, however, and made some additional minor adjust ments, which we believe improved the series. The two lines on the chart show the results of all the ad justments. The dashed line shows the index based on the dollar value of construction contracts awarded, without adjustment of any kind. The solid line shows the index adjusted for both types of fluctuations. The adjustments smoothed the series substantially, bringing into sharper focus the more basic movements. The general upward trend from mid-1954 through early 1955, the subsequent slight dip, and the resumption of an upward movement through mid-1956, for example, are shown much more clearly by the adjusted index. By contrast, the sharp fluc tuations in the unadjusted series sometimes almost com pletely obscure these sustained movements. The chart also shows some irregular fluctuation still in the adjusted index. This was to be expected; with our method of handling them, treating irregular movements in a regular way, we could only hope to dampen their effects. The dampening is of substantial help in our analysis, how ever, for it reveals just how extreme certain figures are. Thus we have a better basis for judging what sustained effect unusually large projects may have on construction. A striking instance of this type of situation occurred m September 1952, when a contract for over 460 million dollars was awarded in Tennessee for the construction of an atomic energy project. It took our unadjusted index beyond the upper limit of the chart. The adjustment pro cedure moderated this extreme picture considerably, &v' ing us a better idea of the probable effect on construction activity over the long pull. As it turned out, this major project kept large numbers of construction workers em ployed for about three years beyond the time it first af fected the series on contract awards. By adjusting the raw data for these two major types of fluctuation, we have answered some questions. At the same time, we have raised other questions by revealing the more significant movements that require special analytical attention. Take the declines in late 1956 and 1957, fof example. Our adjustment tells us these declines were larger than usual for that time of year, but we are faced with the question, “What is their real meaning?” The de cline in 1956, of course, proved to be temporary and due, in large measure, to a drop in contracts awarded for con structing new factories. Subsequent increases in awar for most other types of construction brought the total up again in the first half of 1957. The decline in late 195 , judging from the available information, appears somew a more general than was the case a year earlier. P h i l i p M. W ebster N a t i o n a l S u m m a r y o f Industrial production and employment continued to de cline in January, and unemployment increased consider ably. Meanwhile construction activity was maintained, new housing starts rose, and total retail sales increased. In January and early February commodity prices changed little. Decreases in bank loans to business were substan tial. Short-term interest rates declined sharply further while long-term rates leveled off. B u s i n e s s C o n d i t i o n s summer and 4 percent above a year earlier. Sales at most retail outlets rose or changed little. Sales at department stores declined, however, and unit sales of new autos were down sharply from both December and a year earlier. Dealers’ stocks of autos increased further. In December, stocks held by wholesale and retail distributors again changed little while manufacturers’ inventories continued to decline. Industrial Production Commodity Prices The Board’s industrial production index declined 3 points in January to 133 percent of the 1947-49 average, a level 8 percent below last summer and 9 percent below a year earlier. The Board’s index of electric and gas utility out put increased further and was 5 percent above January 1957. Broad curtailments in durable goods industries in Jan uary continued to account for most of the decline in total industrial output. Steel mill operations, which had been sharply reduced in December, decreased further in Jan uary and early February. At about 90 percent of the 1947-49 average, steel ingot production was somewhat below the mid-1954 low, while activity in most steel con suming lines was higher than at that time. Declines con tinued during January in the producers’ equipment indus tries and there were further decreases in output of autos and other consumer durable goods. Activity in the air craft industry showed no further reduction in December and January. Production of nondurable goods continued to decline gradually in January, as activity in the textile and petrol eum industries was curtailed and output of chemical and rubber products showed little change from the reduced December level. Minerals output was unchanged. The average of wholesale commodity prices changed little from mid-January to mid-February. While prices of most industrial commodities were stable, nonferrous metal scrap, rubber, and fuel oils declined, and steel scrap and wool advanced. Among farm products, prices of livestock rose further, to the highest level for this time of year since 1952. The consumer price index was unchanged in December at the new high reached a month earlier. Prices of services continued to advance, and prices of meats turned up. At the same time prices of some other foods decreased and new and used autos declined. Construction Private housing starts rose in January following a De cember dip. At a seasonally adjusted annual rate of 1,030,000 units, starts were 8 percent above the reduced levels of early 1957. Seasonally adjusted outlays for new construction were about the same as in other recent months. Expenditures declined for most types of private construction other than public utilities, but increased sub stantially for highway building. Employment Seasonally adjusted employment in nonfarm establish ments declined further in January and, at 51.7 million, was 760,000 less than a year earlier and 1.1 million below the peak of August 1957. The average factory workweek declined more than seasonally in January, to 38.7 hours, and weekly earnings were also reduced. The number of persons unemployed rose 1.1 million to 4.5 million, a ®vel 1.3 million higher than a year earlier and close to e postwar peak of 4.7 million reached in February 1950. Distribution Seasonally adjusted retail sales increased slightly further 111 January and were close to the record levels of last Bank Credit and Reserves Total loans and investments at city banks declined about $3 billion during January reflecting principally reductions in business and security loans and in holdings of U. S. Government securities. In early February total bank credit increased due mainly to Treasury refunding operations. In the five weeks ending February 5, business loans decreased $1.8 billion, almost twice as much as in the comparable period last year. Repayments by sales finance companies, food processors, and trade concerns were unusually large, and loans to all other major categories of business bor rowers except textile manufacturers declined. Excess reserves of member banks exceeded their bor rowings from the Federal Reserve by about $210 million in the four weeks ending February 12. In the previous four-week period, borrowings had about equaled excess reserves. Between the weeks ending January 15 and Feb ruary 12, more reserves were supplied to banks through a currency inflow and a decline in required reserves than were absorbed through reductions in Federal Reserve holdings of U. S. Government securities and in float. Security Markets Short-term interest rates continued to decline rapidly dur ing January and early February. Treasury and private open-market rates, and also Federal Reserve discount rates and the prime rate on short-term bank loans, were reduced. Except for Treasury bond yields, which leveled off, long-term rates continued to decline in January. In early February, however, bond yields generally increased somewhat, reflecting the continued heavy volume of new financing in capital markets and the influence of the Treas ury refunding, which included a long-term bond. Common stock prices showed little net change from mid-January to mid-February. •5 • Bank Announcements The Federal Reserve Bank of Atlanta is pleased to welcome to membership in the Federal Reserve System on February 28, the Springs National Bank of Tampa, Tampa, Florida. Officers of the bank are W. D. Lowry, President; Ebe J. Walter, Harris B. Sanders, and B. J. Willett, Vice Presidents; D. H. Laney, Cashier; Elam S. Sutton, Lawton Carlton, and C. H. Charlton, Assistant Cashiers. It has capital of $350,000 and surplus of $270,000. On February 4, 1958, the First Bank of Linden, Lin den, Alabama, a nonmember bank, began to remit at par for checks drawn on it when received from the Fed eral Reserve Bank. Officers are C. G. Jeffrey, Chairman and President; W. W. Scott, Executive Vice President and Cashier; J. E. Williams, Vice President (inactive); and R. J. Tucker, Assistant Cashier. Capital stock of the bank amounts to $25,000 and surplus and un divided profits to $119,236. On March 8, the Vermilion Bank and Trust Com pany, Kaplan, Louisiana, a newly organized, nonmem ber bank, began to remit at par. Officers are Paul E. Eleazer, President; J. M. Kaplan, Vice President; and Louis A . Roy, Cashier. Its capital totals $200,000 and surplus and undivided profits, $150,000. Percent Change Inventories Jan. 1958 from Place Jan. 31,1958 from Dec. 1957 Jan. 1957 Dec. 31, 1957 Jan. 31, 1957 —3 —3 —2 —4 —0 +1 —1 +4 +7 —9 +2 + 14 —5 — 13 —2 —1 —0 —1 —3 —1 +2 —1 —i +1 — 15 +7 —2 +6 —3 — in —0 ALABAMA ........................................ . — 59 M o b ile ........................................ Montgomery .............................. . . — 61 — 58 . . . . . . . . — 54 — 62 — 49 — 49 — 50 — 50 — 45 — 54 . . . . . . . — 59 — 58 — 62 — 60 — 64 — 67 — 64 L O U IS IA N A ................................... Baton R o u g e .............................. New O r l e a n s .............................. . . . — 55 — 60 — 54 +2 +0 —1 +6 —0 —6 +6 —4 + 16 —4 —4 —5 +2 —7 — 18 —8 —2 +1 —3 M IS S IS S IP P I................................... Jackson ........................................ M eridian**................................... . . . — 58 — 56 — 62 —5 —6 —3 TENNESSEE ................................... Bristol (Tenn. & Va.)** . . . Bristol-Kingsport-Johnson City** Chattanooga .............................. Knoxville ................................... . . . — 63 — 67 — 62 — 60 — 61 —3 +4 —7 +5 —6 —2 —4 —1 —4 +2 — 11 —2 — — 58 —1 +2 F L O R I D A ........................................ Daytona B each.............................. Miami A r e a ................................... Miami ................................... O rla n d o ........................................ St. Ptrsbg-Tampa Area . . . . St. Petersburg......................... Tampa ................................... G E O R G IA ........................................ A t la n t a * * ................................... A u gu sta ........................................ Columbus ................................... Macon ........................................ Rome** ........................................ D IS T R IC T ........................................ . . —b —9 —8 12 —5 •Reporting stores account for over 90 percent of total District department store sales. ••In order to permit publication of figures for this city, a special sample has been constructed that is not confined exclusively to department stores. Figures for non department stores, however, are not used in computing the District percent changes. Debits to Individual Demand Deposit Accounts (In Thousands of Dollars) Percent Change January 1958 from Jan. Jan. Dec. 1957 1957 1957 Jan. 1958 Dec. 1957 36,257 743,387 27,249 32,230 271,553 135,265 23,414 47,802 35,660 723,066 26,335 33,776 291,217 138,908 22,693 44,261 37,227 720,082 26,906 32,704 272,587 136,992 22,318 42,623 +2 +3 +3 —5 —7 —3 +3 +8 —3 +3 +1 —1 —0 —1 +5 +12 52,644 211,689 34,445 722,885 15,991 62,538 780,262 1,193,457 175,316 86,805 176,084 364,012 110,029 53,964 215,158 34,769 662,634 16,145 69,120 794,474 1,262,939 175,513 81,477 193,103 338,194 115,841 + 20 +9 + 12 +8 +3 —1 +3 +7 +6 —3 +7 + 1 + 11 + 17 +7 + 11 + 17 +2 —11 West Palm Beach* . 63,077 230,027 38,560 777,335 16,507 61,810 800,683 1.280,337 186,537 84,571 189,150 367,038 122,369 GEORGIA Albany .................... Athens* . . . . Atlanta . . . . Augusta . . . . Brunswick . . . . Columbus . . . . Elberton . . . . Gainesville* . . . Griffin* . . . . LaGrange* . . . M acon.................... Marietta* . . . . Newnan . . . . Rome* .................... Savannah . . . . Valdosta . . . . 60,510 36,835 1,726,967 88,281 23,819 99,645 8,643 48,057 16,382 23,304 111,519 28,132 19,548 41,886 177,870 25,907 57,670 36,819 1,769,069 93,103 23,837 105,792 7,857 47,245 18,299 22,237 110,643 25,724 15,679 41.242 188)982 29,207 59,924 34,121 1,589,159 97,014 18,564 101,859 8,544 48,973 16.247 22.876 108 559 28,533 l*i.671 41,682 176 631 27,727 +5 +0 —2 —5 —0 —6 +10 +2 —10 +5 +1 +9 + 25 +2 — 11 +1 +8 +9 —9 +28 —2 +1 —2 +1 +2 + ^ —1 + 17 +n +1 —7 LOUISIANA Alexandria* Baton Rouge Lafayette* Lake Charles New Orleans . . . . . 73,560 225,262 61,909 94,779 1,357,998 69,804 211,334 56,699 87,998 1,343,831 72 914 195,615 56.714 90,661 1,347,345 +5 +7 +9 +8 +1 +T + 15 +9 +5 +1 MISSISSIPPI Biloxi-Gulfport* Hattiesburg . . . Jackson . . . . Laurel* . . . . Meridian . . . . Natchez* . . . . Vicksburg . . . . 38,978 33,024 204,982 21,715 36,437 23,192 19,353 40,146 31,117 201,243 22,601 34,857 21,293 18,212 38 861 32,134 208.840 20,759 37,207 22,517 18,112 —3 +6 +2 —4 +5 +9 +6 +0 +3 —2 +5 —2 TENNESSEE Bristol* . . . . Chattanooga . . . Johnson City* . . Kingsport* . . . Knoxville . . . . Nashville . . . . 37,923 323,037 41,169 70,379 219,015 626,313 36,356 276,819 40.361 73,846 252,147 642,607 36,730 335,485 37,932 65,024 228,774 632,771 +4 + 17 +2 —5 —13 —3 —4 +q +£ —4 —1 9,134,164 9,056,330 8,803,489 +1 +^ 212,862,000 220,376,000 204,293,000 —3 +‘ ALABAMA Anniston . . . . Birmingham . . . Dothan.................... Gadsden . . . . M obile.................... Montgomery . . . Selma* . . . . Tuscaloosa* . . . FLORIDA Daytona Beach* . Fort Lauderdale* Gainesville* . . Jacksonville . . Key West* . . Lakeland* . . . . . . . . Greater Miami* . . Orlando . . . . Pensacola . . . . St. Petersburg . . Department Store Sales and Inventories* Sales On March 10, 1958, the Vernon Bank, Leesville, Louisiana, a nonmember bank, began to remit at par. The bank’s officers are H. R. Scobee, President; Miss K. Ferguson, Executive Vice President; W. H. Dishongh, R. S. Fertitta, and O. E. Morris, Vice Presi dents; and N. L. Fisher, Cashier. Its capital totals $100,000 and surplus and undivided profits, $125,000. . . . . . . . . . . SIXTH DISTRICT 32 Cities . . . . UNITED STATES 344 Cities . . . . * Not included in Sixth District totals. •6 • —h +1 +1 +^ +4 —2 +' +6 +3 +7 +3 Sixth District Indexes Seasonally Adjusted (1947-49 = 100) SIXTH DISTRICT 1956 j 1957 | 1958 DEC. JAN. FEB. MAR. APRIL MAY JUNE JULY AUG. SEPT. OCT. NOV. DEC. Nonfarm Employment....................... , . 133 121 Manufacturing tmployment . . . 168 Apparel.............................................. Chem icals........................................ , 164 Fabricated M e t a ls ....................... Fo od .................................................... Lbr., Wood Prod., Fur. & Fix. . . 84 , 164 Paper & Allied Products . . . Primary M e t a ls ............................. , . 110 T extiles.............................................. . , 92 Transportation Equipment . . . 214 Manufacturing Payrolls . . . . Cotton Consumption**....................... , . 94 Electric Power Production** . . . . 289 Petrol. Prod, in Coastal Louisiana & Mississippi** . . . . 200 268 Construction Contracts* . . . . 134 121 172 132 165 117 83 164 108 92 213 193 90 309 134 121 172 132 164 117 83 161 107 91 206 191 86 288 134 119 172 131 166 116 80 161 106 90 206 190 86 298 134 120 168 134 172 117 81 163 107 91 209 191 84 297 134 120 170 136 175 116 81 162 108 91 218 194 88 308 135 121 171 136 179 117 80 163 107 90 231 198 89 310 135 121 164 136 185 118 80 156 108 89 235 201 87 298 135 120 164 133 180 113 80 161 107 89 243 200 89 297 134 119 165 133 177 113 81 159 104 89 230 197 90 299 134 120 166 131 178 113 80 161 105 88 216 194 86 303 134 120 166 131 176 114 78 159 100 88 216 196 85 299 133 118 164 131 172 115 78 159 99 88 225r 194 79 295 133 117 167 129 173 117 77 158 95 87 215 188 83 n.a. 198 297 298 295 116 101 142 158r 151 179r 125 135r 115 128 156r 149 221r 135 181r 160 212r 112r 153 253 218 140 150 107 205 339 315 359 140 140 151 165 157 186 124 140 114 129 150 151 225 151 187 161 200 116 154 255 226 143 153 107 203 319 293 339 121 112 139 164 159 170 139 141 102 124 144 160 241 132 165 142 202 111 156 258 216 139 148 109 195 313 268 350 129 120 149 162r 141 167 118 139 98 118 146 141 229 140 182 148 203 112 160 259 223 138 156 102 195 311 291 327 132 135 146 172 r 163 183 134 141 112 127 154 149 252 142 185 157 198 106 159 260 224 144 159 109 170 320 325 315 142 150 145 176r 158 186 131 146 107 128 148 151 251 148 187 165 198 111 159 261 223 140 160 103 172 330 319 340 148 149 158 175r 159 177 128 149 119 127 151 147 267 148 183 159 204 114 162 263 231 152 168 111 160 330 341 321 109 74 152 179r 167 194 138 151 121 135 158 166 274 148 185 167 203 110 160 268 225 147 166 106 164 315 324 308 83 62 147 172r 154 181 132 147 111 132 156 141 267 151 189 165 201 105 161 268 231 144 158 110 167 283 334 241 93 76 157 159r 149 187 128 141 102 118 139 136 244 145 177 147 208 103 159 265 221 138 145 101 164 261 288 239 102 82 151 166 154 205 123 147 115 130 144 143 231 140 195 180 206 108 159 263 216 136 144 99 179 259 294 229 123 108 173 173r 156 201 126 145 117 133 156 149 255 147 207 201 207r 113r 162 269 235 149 160 113 171 n.a. n.a. n.a. 131e n.a. n.a. 156p 145 181 121 142 109 127 146p 139 234p 131p 192 185 201p 107p 161 270 227 146 157 111 123 110 180 129 135 209r 122 109 177 126 136 210r 122 110 178 118 137 211 122 111 177 108 143 214 123 113 181 117 140 215r 123 114 185 113 140r 219 123 114 187 131 140 219 123 113 193 125 139 223r 122 109 187 100 139 226r 123 112 188 111 136 223 122 112 185 120 136 218r 121 107 173 117 139 222 122 105 170 123 139 224 167 166 257 107r 193 385 169 167 267 123 193 391r 170 169 258 132 196 396 171 172 264 121 201r 401 175 174 273 112 201r 404r 177 177 280 118 201 405 179 177 286 124 206 410 179 180 290 114 207 414r 180 179 293 111 211 415 178 180 291 106 212 416 176 182 290 111 213 417r 174 179 292 126r 213 423 173 174 281 lOOp 210 427 210 131 123 198 115r 138 207 131 122 193 114r 136 208 130 122 192 102 140 213 131 122 192 106 144 214 130 122 194 105 142 214 129 123 196 105 142 216r 130 122 198 106 145 218 130 120 199 107 141 219r 130 118 192 107 141 217r 130 117 187 103 138 212 130 119 198 111 137 208 129 118 191 r 110 142r 212 129 116 184 107 141 210 Nonresidential ............................. Farm Cash Receipts............................. Crops .................................................... L iv e s to c k ........................................ Dept. Store Sales*/** . . . . Atlanta . . ............................. Baton Rouge ................................... B irm ingham ................................... Chattanooga................................... Jackson .............................................. Jacksonville ................................... K n o x v ille ........................................ M a c o n .............................................. M ia m i.............................................. New O rle a n s ................................... Tampa-St. Ptrsbg.............................. T a m p a .............................................. Dept. Store Stocks*............................. Furniture Store Sales*/** . . . Member Bank Deposits* . . . . Member Bank L o a n s * ....................... Bank D eb its*........................................ Turnover of Demand Deposits* . . In Leading C itie s............................. Outside Leading Cities . . . . . 265 . 105 143 170 148 180 131 143 . . . . . 132 158 151 230 182 , . , . , , . . ALABAMA Nonfarm Employment . . . . Manufacturing Employment . . . . Manufacturing Payrolls . . . . ; Furniture Store Sales . . . . Member Bank Deposits . . . . . Member Bank Loans....................... FLORIDA Nonfarm Employment . . . . Manufacturing Employment . . . , . 122 110 126 135 212 167 168 117 195 375 Furniture Store Sales . . . . Member Bank Deposits . . . . Member Bank Loans....................... GEORGIA Nonfarm Employment . . . . Manufacturing Employment . . . Manufacturing Payrolls . . . . Furniture Store Sales . . . . Member Bank Deposits . . . . Member Bank Loans....................... 203 113 155 251 216 136 146 103 . 131 123 202 114 JAN. LOUISIANA Nonfarm Employment . . Manufacturing Employment Manufacturing Payrolls . . Furniture Store Sales* . . Member Bank Deposits* . Member Bank Loans* . . , . . . . . . . . . . . . . . . . . . 129 100 168 137 155 258 130 102 172 141 151 257 131 103 175 122 152r 256 130 102 173 141 155r 259r 131 102 174 132 155r 259r 130 101 174 117 155 262 131 103 173 139 155r 261 130 101 173 139 156r 267r 131 100 174 147 155 272 130 100 173 133 154 271 130 100 172 133 153 268 130 99 171 135r 151r 265 130 97 173r 148r 153 274 129 98 174 132 151 268 MISSISSIPPI Nonfarm Employment . . Manufacturing Employment Manufacturing Payrolls . . Furniture Store Sales* . . Member Bank Deposits* . Member Bank Loans* . . . . . . . . . . . . . . . 125 122 197 113 143 269 126 125 207 90 143 269r 126 126 212 100 144r 269r 125 124 210 89 145r 276 125 125 207 92 152 278 124 122 207 89 155 280 123 124 211 92 155r 283 124 126 219 83 157r 286 123 124 217 75 158 288 125 124 213 85 154r 282 124 123 208 80 147 293 124 122 206 95 149 294 124 121r 212 107 154 296 125 123 210 88 163 302 TENNESSEE Nonfarm Employment . . Manufacturing Employment Manufacturing Payrolls . . Furniture Store Sales* . . Member Bank Deposits* . Member Bank Loans* . . . . . . . . . . . . . . . . . . 121 119 187 89 142r 219r 121 119 189 86r 140r 221r 120 117 188 91 140 218 120 118 188 83 143 223 120 119 189 91 144 226 119 118 188 87 144 229 120 118 187 86 144 233 119 117 189 85 148 236 119 117 190 82 148r 236 120 116 186 82 147r 236 119 115 185 82 146 230 120 115 183 80 147r 233r 118 114 181r 87 148r 236r 117 113 181 85 146 239 . *For Sixth District area only. Other totals for entire six states. ** Daily average basis. n.a. Not Available. p Preliminary. e Estimated. r Revised. Sources: Nonfarm and mfg. emp. and payrolls, state depts. of labor; cotton consumption, U. S. Bureau Census; construction contracts, F. W. Dodge Corp.; petrol, prod., U. S. Bureau of Mines; elec. power prod., Fed. Power Comm. Other indexes based on data collected by this Bank. A ll indexes calculated by this Bank. •7 • SIXTH DISTRICT BUSINESS HIGHLIGHTS I M. . o s t e c o n o m ic indicators have declined fu rth er recently, al though stability or im provem ent has been show n in som e sectors. Factory payrolls were lower in January as both em ploym ent and w eekly earnings declined. Insured u n em p lo ym en t increased, but total nonfarm em ploym ent show ed little change. R eflecting weak ness in consum er incom e and adverse weather, consum er spending decreased. B ank loans declined less than usual in January, and borrowings from the Federal R eserve B a n k o f A tla n ta dropped _ further. Total nonfarm employment showed little change in January, followinf several months of slight declines. Manufacturing employment declined further, but this decrease was offset to some extent by a slight rise in *••• manufacturing. Factory payrolls also continued downward in January, reflecting a decline in weekly earnings as well as decreased employment With activity slackening in a number of lines, the rate of insured unempley ment rose more than usual in January. Activity in cotton mills, as indicated by the amount of cotton consumed, improved somewhat in January from December’s depressed level. Slonl operations, already reduced sharply, were curtailed again in January and February. Seasonally adjusted crude oil production in Coastal Louisiana and Mississippi declined during January, after having increased in December. Contracts awarded for new construction have been declining in rece* months after allowance for usual seasonal changes. Cash receipts from farm marketings, seasonally adjusted, increased, princi pally because of improved returns from livestock and poultry. Prices of cattk, hogs, and broilers were well above a year ago, and marketings of beef carte and broilers were up. Also, an income bulge occurred in D ecem ber and January because inclement weather had delayed the cotton harvest in matjf areas. Finally, receipts in Florida held up better than was anticipated, since much frozen Florida citrus was successfully salvaged. Total spending slackened in January, as indicated by a drop in seaso n al adjusted bonk debits. Consumer spending apparently was off somewW more. Department store sales fell to the lowest point in two years, and pre* liminary data indicate a further dip in February. Sales of durables su c h a* furniture, household appliances, and automobiles continued to lag. Reflect!*! this, instalment credit outstanding at commercial banks declined duii*l January in contrast to increases during the same month in recent year*Consumer prices rose to a new record during the month. Total bank credit was unchanged in January, as banks offset decline* in loans by increasing their holdings of Government securities. Howcvc^ the drop in loans, which was concentrated at banks in major cities, was than is usual for this time of year. This was true in all states except and Louisiana. Loans outstanding at banks in major cities were reduce® more in February than they were a year earlier, because sales finance op®' panies made larger repayments. Member banks in February reduced borrowings from the Federal Reserve Bank of Atlanta to the lowest since the fall of 1954.
@FedFRASER