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Atlanta, Georgia

Bankings Paper Curtain

March • 1961

Also in this issue:
IS THE CONSUMER
MISBEHAVING?

DISTRICT BUSINESS
CONDITIONS

SIXTH DISTRICT
STATISTICS

SIXTH DISTRICT
INDEXES

Sw feraf
l^sem

IBanko f

_ ‘ fa n ta
S



Bankers have been doing a good bit of homework lately. They have
been wrestling with the problem of what methods and machines to use
in day-to-day operations. This is not a new problem, of course. For two
decades operating costs have almost matched the rise in bank earnings.
Bankers, therefore, have had to adopt more efficient procedures and try
out new equipment to relieve the squeeze on profits.
District bankers are studying the feasibility of new and powerful
equipment that could revolutionize traditional bank accounting, and
this is the real reason for the midnight oil. They have been listening
to the growing number of people who think the second half of this
century will be recorded as the “age of the computer.” Advocates of
bank “automation,” a word that has not yet found its way into Webster’s
Unabridged, point to the computer and its blood relatives as the foil
to the rise in costs and the growing volume of paper that bankers
must handle.
The potential of this equipment is so important that this Bank re­
cently conducted a comprehensive survey to determine bankers’ plans
in this area. We asked commercial banks in the District several ques­
tions about equipment and procedures now in use and plans for them
in the future. Over 82 percent of the banks returned our questionnaire.
We obtained information not only from this excellent response but also
from personal visits to many of the larger banks.

Sizing Up the Problem
Bankers tell us that growth in the types of bank services
that involve frequent entries, especially instalment loans,
have contributed significantly to the rise in bank costs.
Almost to a man, however, they feel that the most im­
mediate problem lies in demand deposit accounting. Each
year bank customers write more and more checks and
each year banks gain depositors. Activity in checking
accounts is phenomenal, amounting to $24 8 billion at
District commercial banks in 1960. Depositors wrote 1.3
billion checks in that year. These checks, placed end to
end, would span 1 3 4 ,8 2 8 miles, enough to circle the
Sixth District 45 times. Add to this figure the millions of
checks drawn on other banks and you can see the moun­
tains of paper banks must handle.
Each check in the deluge must be handled several
times. First, checks drawn on other banks must be sepa­
rated and sent to those banks for collection. Frequently
this involves further sorting, listing, and processing. The
remaining checks, representing those written by depositors
at the bank— called “on us” checks— are usually sorted
further before being posted to the depositors’ accounts. It
is this multiple handling of each check combined with an
increasing number of checks that has given bank opera­
tions men grey hair.
After they are sorted, checks must be deducted from
the accounts on which they are written. Similarly, deposits
must be added. Bankers have progressed a long way from
the days of green visors and quills, but the posting opera­
tion is still laborious. Most of the District’s commercial
banks still use conventional bookkeeping machines to
some degree to update depositors’ accounts. These ma­
chines, a blend of typewriter and adding machine, require
an operator to key in the amount of the old balance and
of each check or deposit to update the account. A few of
the smaller banks report that they post to the accounts
manually. Many banks, especially the larger ones, have
thrown fresh troops into the paper tussle— machines
known as “tronics.” Bankers tell us that these machines
post at rates up to twice as fast as conventional machines.
In addition, they are able to verify that the correct account
is being posted, as well as to update the ledger auto­
matically.
Some District bankers seem content with the present
equipment, but many feel that even the newer “tronics”
will be clogged by checks in a short time. Some of them
feel that the paper barrier will not be pierced until auto­
matic machines take over the entire job of sorting, rout­
ing, and posting checks. Spurred by the claims of advo­
cates of these machines, many bankers are doing some
hard thinking, but at the moment are wary of jumping
into the race for new machines.

Accounting b y Electrical Impulse
What is the new equipment, and why do some refer to
its use as bank automation? Two pieces of machinery form
the core of a new and revolutionary means of handling
checks and of processing data. One of these is the elec­
tronic computer, a mass of tubes, transistors, and blinking
lights. Although commonly referred to as an electronic



“brain,” this computer is no great shakes at “thinking.”
About all it can do is add and subtract.
This machine, however, has two claims to fame. First
is its blinding speed— even a smaller one can perform
several hundred thousands of separate subtractions in one
second, for instance. Second is its ability to make certain
decisions on its own hook after it has been given instruc­
tions, that is, after it has been programmed. For example,
it can choose alternative A if one number is smaller than
another and alternative B if it is greater. This elementary
reasoning, together with lightning speed, enables the com­
puter to control the operation of other machines, which
is really what automation is.
The other piece of hardware that has caught bankers’
eyes is somewhat more understandable, but in many ways
is just as radical as the computer in terms of the impact
on traditional methods of banking. This machine is the
electronic sorter, which can deal a package of checks
into as many as eighteen separate piles at the rate of 7 5 0
to over 1 ,5 0 0 a minute. Since it would take over 35 clerks
using conventional proof machines to do the same job, it
is no wonder that this device has attracted attention.
There are tricks behind most feats of magic, and
there’s a trick behind this one too. Before the sorter can
place the checks in the necessary groups, certain informa­
tion must be coded in a special type face at the bottom
of the check. The ink used for this must be a special
kind that can be magnetized as the check passes through
the sorter.
If each check had the routing symbol of the bank on
which it is drawn printed in magnetic ink and if, in addi­
tion, the account number of the drawer and the dollar
amount of the check were so encoded, then we would
have a banker’s dream. It would be possible for the
sorter to separate the “on us” checks from the “foreign”
ones. The sorter could further group the checks drawn
on other banks and even provide a listing of the amount
of each of the checks, thus automatically preparing the
“cash letter.” The checks drawn on the bank itself could
then be passed through the sorter and read directly into
the computer. The computer could post them to the de­
positors’ accounts, which would be kept in the form of
magnetic tape or disc file.

Automation in Every Bank?
Does this sound like something out of science fiction?
Maybe, but computer-sorter combinations are already
being used at several banks around the country. A few
of the medium-sized and large banks in this District have
either a sorter or a computer in operation, but none as
yet have both.
The trend toward computers and magnetic ink sorters
has not approached a stampede in the District, but a
giant step has been taken by several banks. Six banks
already have low-powered computers at work posting to
special and regular checking accounts and handling instal­
ment loans. In addition, three other banks have magnetic
ink sorters in operation sorting checks drawn on them to
facilitate posting.
Even more impressive is the number of banks that have
placed orders for automatic equipment. Six District banks
•2 •

have ordered computers and the same number, electronic
sorters. When this equipment is delivered there will be
eleven banks with both sorters and computers in opera­
tion, five banks with a sorter only, and one bank with a
computer only.
Are computers and sorters destined to become a
familiar sight in banks around the District? According to
our survey, this is not likely in the near future. Ninetyfour percent of the banks, including almost all the small
ones, said such machinery is so expensive that it is out
of the question for them.
Over two-thirds of the small group of banks with de­
posits of $50 million and over thought automatic equip­
ment was practical for banks of their size. But only
eighteen percent of the banks with deposits in the $ 10million to $50-million range thought automation was
practical. Even if all the banks that consider their volume
large enough to justify a computer-sorter combination
decided to proceed, therefore, only about 77 banks would
be involved out of about 1,300. Additional banks, how­
ever, may benefit from this equipment by sharing with
other users.
If, by their own admission, such equipment is feasible
for these 77 banks, why have so few of them placed
orders for equipment? It may be because bankers are
practical-minded persons with an added dash of con­
servatism. Many of them say it is not that they aren’t
going this route. To the contrary, evidence points to this
as a thing of the future, but they have many months,
possibly years, of work ahead just to get ready.

Preliminary Problems
Bankers at the larger banks can tick off many preliminary
problems. First of all, before a magnetic ink sorter and
computer can team up in check handling and account
posting, an efficient system of account numbering is neces­
sary. If done from scratch, or if a major revision is neces­
sary, this in itself is a Herculean task. What system should
be used? Straight numeric, wherein Mr. Aaron might
have the last number, or alpha-numeric, wherein accounts
are retained in alphabetical sequence? Any system has its
drawbacks, as bankers can testify!
Then there is the question of the form in which deposit
ledgers are kept. Top management at some banks insist
that a “hard copy” ledger similar to the standard one is
required. They abhor the thought of having to rely on
magnetized dots on a reel of tape. Others point to the
added speed possible when deposit records are stored on
tape or disc and endorse the idea of accounting by
electrical impulse. Since the form of the final record has
a bearing on equipment, this tug of war must be recon­
ciled before a specific order can be placed.
Finally, there’s the question of preprinting their cus­
tomers’ checks. This is a seemingly simple task, but should
it be done on the premises or through an outside printer?
Can local printers adhere to the close tolerances required
of such printing? Then there is the question of checks the
bank does not supply— company accounts and the like—
which will have to be redesigned.
Some bankers feel that they have other expensive equip­
ment that has not been fully exploited. This is especially



true of the “tronics” bookkeeping machines, which are
modern in every sense. Having to dispose of them be­
fore they are amortized can be a deterrent in the purchase
of new equipment, particularly if another manufacturer’s
equipment is being considered. Besides, reputations were
laid on the line when the “tronics” were purchased, and
the persons involved are understandably anxious to give
them a chance.
Despite the hesitation to place immediate orders, one
cannot fail to be impressed with the headway banks have
made in their decision to put these marvels of science to
work in the mundane affairs of banking. Although only a
small percentage of banks have ordered automatic equip­
ment, they hold one demand deposit account in every ten
in the District and account for 15 percent of total de­
posits.

Impact on District Banking
What do the magnetic ink sorter and electronic computer
portend for the future of banking? Will this equipment
knock down banking costs and thus contribute to bank
profits? Will other banks be forced to join the parade once
their competitors are reaping the benefits of automation?
The proponents of automation have never claimed that
bank costs will go down. Banks that have placed com­
puters in limited operation say that they have not as yet
been able to reduce clerical help. Through the use of this
high-speed equipment, however, they hope they can stop
an unlimited rise in the number of employees and in costs
and thus cut through the paper curtain that threatens to
stifle bank operations. Over a longer period, therefore,
bank costs may well be held down. This will undoubtedly
be a factor in equipment decisions of competing banks.
Automatic equipment also may enable a bank to meet the
growing demand for special services more easily, poten­
tially a strong competitive advantage also.
Will the computer be adaptable to other phases of
bank operations than demand deposit accounting? Al­
though most bankers feel that the initial installation must
be justified on the basis of demand deposit accounting,
they feel that the computer can be applied to such other
operations as payrolls, trust transactions, and time de­
posits. At least one computer is already processing instal­
ment loans. There is even talk of the computer’s ability to
assist loan officers by approving loan applications of ob­
vious merit while calling the not-so-obvious ones to the
officers’ attention!
What will happen to the “underprivileged” 94 percent
of banks that may not be able to justify having automatic
equipment? No one expects these banks to be at a serious
competitive disadvantage. For one thing, they may now
be using equipment best suited to their needs. More­
over, other less costly machines, such as the “tronics,”
are available. There is the possibility, too, of sharing a
computer-sorter installation with other banks, a solution
suggested by 26 percent of the banks that feel they can­
not afford a system themselves.
What does bank “automation” mean as a tool of bank
management? With a computer it may be possible for bank
officers to keep closer tabs on their loan portfolios, in­
cluding the status of each repayment schedule. Demand
Continued on Page 6
• 3 •

Is the Consum
Producers' Durable Equipment

Businessmen rely on consumers to buy about sixty-five
of every one hundred dollars worth of goods and services
produced in the United States each year. It is no wonder,
then, that many of them are asking whether some sudden,
irrational change in consumers’ buying habits may not
explain the current slowdown in economic activity.

Business Construction

Shift A w ay from Goods
Gross National Product, the valu e of goods and services
produced, w as slightly low er in the last half of 1960 than
in the record second q uarter, larg ely because of reduced
inventory investment.

Nondurable Goods
Services

R esidential Construction

Consumption expenditures on durable and nondurable goods
averag ed about the sam e or low er, w hile spending for
services and governm ent purchases continued upward.

Extended
Repaid------! 3.5

Nondurable

Monthly retail sales trended irre g u larly dow nward from
last April through Ja n u ary of this y e a r, p rim arily because
of declines in sales of durable goods. Along with this has
come a decline in the use of consumer instalm ent credit.

Less Pressing Needs

E S & SALES

Inventories
Inventories,

1955

1956

1957

1958

1959

I96 0

1961

1952

1954

Sales of autom obiles and home goods such as furniture,
television sets, radios, refrigerators, and w ashers fell short
of expectations in 1960; inventories rose, and output w as
curtailed.




The consumer’s behavior at the nation’s retail outlets has
certainly been disappointing since April 1960. After
reaching a record at that time, total sales trended irregu­
larly downward through the third quarter 1960; then,
after an encouraging partial recovery in October, dropped
more persistently. By January of this year, they were
about 6 percent below last April’s sales. A downward
movement in sales of durable goods such as automobiles,
furniture, and appliances was largely responsible, but
some decrease in spending for nondurable goods also
occurred.
Seeing a roughly comparable drop in the production of
consumer goods, some observers have apparently rea­
soned that failure to buy all that is produced in some
way represents misbehavior on the part of the consumer.
The automobile market is frequently used as an example,
because sales, though at a high level through most of
1960, were not sufficiently high to absorb production.
The resulting large inventory of unsold cars led to sharp
production cuts after October 1960, but, because sales
also declined, inventories remained very high. Sales of
home goods such as furniture, television sets, radios,
refrigerators, and washers also failed to meet anticipations
in 1960, and sharp production cuts were necessary before
high inventories could be reduced. Spending for new
houses has been at a reduced level for nearly two years,
reflecting the sharp decline that has occurred in new
housing starts since early 1959.
The businessman who knows from his own experience
the truth of the old economic axiom, “Man’s wants are
unlimited,” may well wonder why the American con­
sumer is disappointing him by not buying as many goods
as the economy can produce.

1956

Granted the limitlessness of wants, it is true, however,
that wants for specific items have limits. As a result, we
find consumers changing their patterns of spending as
specific demands are satisfied or disappear, perhaps be­
cause of changes in tastes. This is a type of long-run
development that probably explains, in part, why spend­
ing for some goods has slackened recently. With the need
for these goods less pressing now than before, consumers
may be choosing to spend more for other items.
1958
1960
In the automobile market there is evidence of an easing
demand over the years, because, as the appearance of
new cars in the immediate postwar years quickly improved
the adequacy of transportation, maintaining adequate
• 4 •

iisbehaving?
transportation through replacements became more im­
portant than adding to the total number in use. Similarly,
demand for a number of home goods now has to come,
in large part, from replacement needs, for, according to a
study by the McGraw-Hill Publishing Company, about 98
percent of American households wired for electricity have
refrigerators, 95 percent have electric washers, 94 percent
have radios, and 89 percent have television sets. A longrun easing of demand is also evident in the housing
market, where the number of new houses built has ex­
ceeded the number of new households formed each year
since 1949, the number of couples without their own
households has steadily declined, and the rental vacancy
rate has risen.

PASSENGER CARS

HOUSING MARKET

Under 3 Yrs.
Millions

Additions

R eplacem ents'^

1955

1357

1959

Long-run easing of demand has occurred in the m arket
for passenger cars, w here replacem ents have assumed
increased importance. Other evidence indicates an easing
of demand in the housing m arket.

POSTW AR GROWTH IN CONSUM PTION

CONSUMER PRICES

Shift Toward Services
While spending on goods was declining in 1960, expendi­
tures on consumer services continued their steady upward
movement, reaching a new record in the fourth quarter
of the year. As a result, total consumer expenditures also
reached a record high in the fourth quarter of 1960, the
latest period for which total spending figures are avail­
able. Rather than suddenly curtailing his total spending,
therefore, the consumer has changed his pattern of
spending, allocating more of his income to services and
less to goods. The relative shift toward services occurring
in 1960 continued a trend that has been apparent through­
out the postwar period.
The easing of demands for many goods over a period of
years helps explain why the consumer has chosen to spend
more on services. Undoubtedly, however, another reason
for the tendency to spend more on services is the steady
rise of prices of many of those services necessary to the
maintenance of health and to the maintenance and use of
the huge stock of houses and durable goods consumers
have purchased in the past. Prices of goods have risen
less in the postwar period, particularly in the past decade.

Consumption of services has shown the most rapid and
persistent postw ar growth. Stead ily rising prices for services,
m any of which have become essential, help exp lain the
increased importance of service expenditures.

INCOME AND EXPENDITURES

Wages & Salaries
Billions of Dollarsj

What N ext?
Our review seems to absolve the consumer of the charge
of misbehavior. Rather than behaving irrationally, he
appears to have been freely allocating his income to
derive maximum satisfaction from it. Moreover, since his
combined spending on goods and services reached a
record high in the fourth quarter of 1960, the consumer
has undoubtedly moderated the decline in business activity
that has largely reflected businessmen’s efforts to reduce

Because of continued gains in spending for services, total
consumption expenditures w ere at a record high in fourth
quarter 1960. Personal income, though down recently, should
be m aintained rela tiv ely w ell, if the past is an y guide.

POPULATION

U IT ST T
N ED A ES

POPULATION CHANGE
i Age. la Years
Under 5

1950 to 1960
Projected, 1988 to 1970

Sources for d a ta used in the charts:

Gross National Product, Business Investments, Consumption Expendi­
tures, Government Purchases, Retail Sales, Personal Income and
Population: U.S. Department of Commerce.
Consumer Credit, Home Goods Output and Inventories, New A uto­
mobile Output, Sales and Stocks: Board of Governors, Federal
Reserve System.
Consumer Prices: U.S. Department of Labor.
Passenger Cars: Compiled from R. L. Polk & Company data published
in A u t o m o t i v e N e w s 1 9 6 0 A l m a n a c and Bureau of Public Roads
data.




Projected population growth and change present a challenge
to lift demand by providing income from more jobs and a
challenge to adjust to the shifting patterns of consumption
lik e ly to occur.

• 5 •

inventory investment. If the past is any guide, the down­
swing in inventory buying may well prove to have been
excessive, in view of the way consumer spending was
maintained through last year’s final quarter. Thus, the
consumer may already have helped set the stage for
economic recovery.
By so doing, he has probably done the best he can. To
do still better, his greatest need would be more income.
However, personal income has declined since last October,
when it reached a record high. The consumer also has
been borrowing less to pay later. Moreover, with the
continuing need to repay debts incurred for earlier pur­
chases, he may have reached the point where the urgency
to buy more goods is not great enough to justify going
further into debt. It would seem unrealistic, therefore, to
expect a sudden upsurge in consumer spending in the
absence of greater income-generating expenditures by the
business and government sectors of the economy.
P h ilip M. W e b s t e r

BANKING'S PAPER CURTAIN

Continued from Page 3
deposit accounts can be analyzed daily, if desired, to de­
tect instances in which checks have been written against
uncollected funds. Also, errors in check handling may
be reduced and at the same time unpaid checks returned
faster.
When District bankers have finished their study of
equipment, we will discover that many of them have
decided to go forward to a degree of automation. Others
will undoubtedly wait until they are able to learn of the
experience of other banks. Still others will probably de­
cide that this equipment is not feasible for their banks.
Regardless of the outcome, we may be sure that the
bankers have poured a lot of effort into their investigation,
as befits a subject so important.
W. M. D a v is
D eta iled tables su m m arizin g autom ation plans and practices o f
Sixth D istric t com m ercial banks m ay be o btain ed fro m the R e ­
search D epartm en t, F ederal R eserve Bank o f A tlan ta, A tla n ta 3,
G eorgia.

You save more than m oney
* * * * * * *

with. U.S. S a vin g s Bonds



Bank Announcement
The F ederal R eserve Bank o f A tla n ta is p leased to w elcom e the
N ation al Bank o f T am pa, T am pa, F lorida, to m em bersh ip in
the Federal R eserve S ystem . This bank open ed fo r business on
F ebruary 1. O fficers are W illiam E arl T hom pson , Chairm an
o f the Board; C. E arl H erren, P residen t; E. K . T yson, Vice
P resident and Cashier; L eslie H . B lank an d S tew a rt L . P o m e ­
roy, Vice P residents; and C harles A . W ilkeson, A ssistant
Cashier. C apital stock totals $400,000, and surplus and other
capital fun ds $300,000.

Debits to Individual Demand Deposit Accounts
(In Thousands of Dollars)

Jan.
1961
ALABAMA
Anniston . . . .
Birmingham . . .
Dothan . . . .
Gadsden . . . .
Huntsville* . . .
Mob le
. . . .
Montgomery . . .
Selma* . . . .
Tuscaloosa* . . .
Total Reporting Cities
Other Citiest . . .
FLORIDA
Daytona Beach*
Fort Lauderdale* .
Gainesville* . . .
Jacksonville . . .
Key West* . . .
Lakeland* . . .

Jan.
1960

Dec.
1960

Percent Change
Jan. 1961 from
Dec.
Jan.
1960
1960

40,046
869,790
35,308
35,688
70,674
302,055
172,606
26,027
56,164
1,608,358
808,418

45,384
853,713
38,668
37,322
77,872
326,232
175,772
28,558
55,807
1,639,328
756,169r

42,671
808 609
35,224
37,635
63,931
285,667
161,437
24,552
56,082
1,515,808
752,110r

— 12
+2
—9

—9
+1
—2
+7

—6
+8
+0
—5
+11
+6
+7
+6
+0
+6
+7

64,909
239,492
48,017
913,042
19,350
98,262
1,067,114
1,577,108
288,211
89,687
255,085
481,281
157,400
4,231,844
1,791,954

55,762
218,438
46,694
893,634
17,541
88,894
996,526
1,439,217
259,115
93,805
218,201
458,598
139,027
3,928,926
l,620,745r

63,139
253,830
43,939
808,367
17,259
88,646
967,971
1,467,896
280,717
89,946
266,032
446,670
147,537
3,973,978
l,761,407r

+ 16
+10
+3
+2
+ 10
+ 11
+7
+ 10
+ 11
—4
+ 17
+5
+ 13
+8
+ 11

+3
—6
+9
+ 13
+ 12
+11
+ 10
+7
+3
—0
—4
+8
+7
+6
+2

58,660
43,373
2,184,438
120,743
27,875
115,392
9,623
50,287
22,878
20,935
124,858
37,829
26,913
52,583
194,060
34,968
3,125,415
l,023,085r

51,959
37,441
2,049,992
113,909
24,012
107,782
9,335
47,555
18,942
21,596
125,089
33,663
21,729
46,998
197,761
34,988
2,942,751
994,345r

—7
—3
—1
—3
—5
—2
—5
—3
—9
—3
+1
— 13
— 34
+2
—1
+3
—1
—1

+5
+ 13
+6
+3
+ 10
+5
—2
+2
+ 10
—6
+1
—2
— 18
+ 14
—3
+3
+5
+1

71,591
276,174
68,042
88,149r
1,453,053
l,957,009r
594,807r

79,837
280,876
68,164
95,607r
1,326,661
1,851,145r
638,048r

—1
+3
+0
—1
—3
—2
—3

— 11
+1
+0
—9
+6
+3
— 10

53,451
39,688
329,916
30,628
44,590
24,521
22,051
544,845
310,888r

47,787
38,815
287,288
27,610
42,647
23,664
18,654
486,465
286,068r

—2
—2
—2
—6
+2
—6

+ 10
—0
+ 12
+4
+6
—3
+14
+9
+1

52,432
337,025
47,301
83,171
279,810
746,225
1,545,964
547 278r
17,594,459r
12,741,487r
4,852,972r
10,911,181r

46,672
386,444
44,612
85,497
238,147
706,825
1,508,197
586,666r
17 296,988r
12 278,344r
5 018,644r
10,389,466r

— 10
+ 19
— 11
+2

Greater Miami*
Orlando . . . .
Pensacola
. . .
St. Petersburg . .
Tampa
. . . .
W. Palm-Palm Bch.*
Total Reporting Cities
Other Citiest . . .
GEORGIA
Albany
. . . .
54,307
Athens* . . . .
42,243
2,170,801
Atlanta . . . .
Augusta . . . .
117,649
Brunswick . . .
26,456
Columbus
. . .
113,365
Elberton . . . .
9,154
Gainesville* . . .
48,554
Griffin* . . . .
20,918
LaGrange* . . .
20,360
Macon
. . . .
126,594
Marietta* . . .
33,076
Newnan . . . .
17,852
Rome*
. . . .
53,775
Savannah . . . .
191,881
Valdosta . . . .
35,940
Total Reporting Cities
3,082,925
1,007,816
Other Citiest . . .
LOUISIANA
71,191
Alexandria* . . .
Baton Rouge
. .
283,296
Lafayette* . . .
68,220
Lake Charles
. .
87,044
New Orleans . . .
1,403,891
Total Reporting Cities
1,913,642
575,287
Other Citiest . . .
MISSISSIPPI
Biloxi-Gulfport*
52,466
Hattiesburg . . .
38,776
Jackson . . . .
322,001
Laurel* . . . .
28,702
Meridian . . . .
45,350
Natchez*
. . .
23,067
Vicksburg
. . .
21,213
Total Reporting Cities
531,575
288,912
Other Citiest . . .
TENNESSEE
Bristol* . . . .
46,984
400,303
Chattanooga . . .
Johnson City* . .
42,077
Kingsport* . . .
85,071
Knoxville . . . .
269,989
Nashville . . . .
762,726
Total Reporting Cities
1,607,150
Othe- Citiest . . .
559,978
SIXTH DISTRICT . . 18,007.859
Reporting Cities
12,975 494
5,032 365
Other Citiest • •
Total, 32 C'ties . . 11,048,501
UNITED STATES
344 Cities . . . 247,660,000

256,905,OOOr

230,119,000

— o,

—9
—7

—2

—A

—2
—7

+2
+4
+2
+2
+2
+4
+1

+1
+4
—6
—0
+ 13
+8
+7
—5
+4
+6
+0
+6

—4

+8

—A

•Not included in total for 32 cities that are part of the national debit series maintained
by the Board of Governors.
fEstimated.
r Revised.

•

6

•

Sixth District Indexes
Seasonally Adjusted (1947-49 = 100)

SIXTH DISTRICT

DEC.

Nonfarm Employment.................................. ...142
Manufacturing Employment . . . . 123
A p p a re l................................................... ...191
C h e m ic a ls.................................................132
Fabricated Metals
................................185
F o o d .........................................................113
Lbr., Wood Prod., Fur. & Fix.
. . 80
Paper & Allied Products
. . . . 160
.................................. ...103
Primary Metals
T e x tile s ...................................................
87
Transportation Equipment . . . . 199
Nonmanufacturing Employment . . . 149
Manufacturing Payrolls
................................220
Cotton Consumption**..................................
91
Electric Power Production**..........................346r
Petrol. Prod, in Coastal
Louisiana & M ississippi**..........................231
Construction C o n tra c ts * ................................302
Residential.......................................................367
All O t h e r ................................................... ...249
Farm Cash Receipts...........................................133
Crops............................................................... 99
L iv e s t o c k ................................................... ...184
Department Store S a le s * / * * ..........................185
Department Store Stocks*................................225r
Furniture Store S a l e s * / * * ..........................151
Member Bank Deposits*/***
. . . . 181
Member Bank Loans*/ * * * ....................... .. 337r
Bank D e b its*................................................... ...286
Turnover of Demand Deposits* . . . . 154
In Leading C itie s ...........................................166
Outside Leading C i t i e s ............................... 120
ALABAMA
Nonfarm Em ploym ent...............................125
Manufacturing Employment . . . . 108
Manufacturing Payrolls...............................194
Department Store S a le s * * .........................163
Furniture Store S a l e s ...............................128
Member Bank Deposits***.........................158
Member Bank Loans***...............................276r
Farm Cash R eceip ts.................................. ..112
Bank Debits
................................................247
FLORIDA
Nonfarm Em ploym ent...............................197
Manufacturing Employment . . . . 201
Manufacturing Payrolls...............................374
Department Store S a le s * * .........................257
Furniture Store S a l e s ...............................195
Member Bank Deposits***.........................239r
Member Bank Loans***...............................552r
Farm Cash R eceip ts.................................. ..201
Bank D e b i t s ................................................424
GEORGIA
Nonfarm Em ploym ent...............................136
Manufacturing Employment . . . . 121
Manufacturing Payrolls...............................210
Department Store S a le s * * ....................... ..172
Furniture Store S a l e s ...............................150
Member Bank Deposits***.......................159r
Member Bank Loans***...............................267
Farm Cash R eceip ts.................................. ..153
Bank D e b i t s ................................................261
LOUISIANA
Nonfarm Em ploym ent...............................130
Manufacturing Employment . . . .
93
Manufacturing Payrolls...............................168
Department Store Sales*/** . . . . 155
Furniture Store Sales* : ....................... ..184
Member Bank Deposits*/*** . . . . 159r
Member Bank Loans*/***
. . . . 313r
Farm Cash Receipts.................................. ..112
Bank D e b its * ................................................238
MISSISSIPPI
Nonfarm Em ploym ent..............................135
Manufacturing Employment . . . . 135
Manufacturing P ayrolls..............................244
Department Store Sales*/** . . . . 169
Furniture Store S a le s * ..............................133
Member Bank Deposits*/*** . . . . 206r
Member Bank Loans*/***
. . . . 409r
Farm Cash R eceip ts.................................. .128
Bank D e b its * ...............................................252
TENNESSEE
Nonfarm Em ploym ent..............................124
Manufacturing Employment . . . . 123
Manufacturing Payrolls..............................214
Department Store Sales*/** . . . . 157
Furniture Store S a le s * ..............................109
Member Bank Deposits*/*** . . . . 165r
Member Bank Loans*/***
. . . . 297r
Farm Cash R eceip ts.................................. .116
Bank D e b its * ...............................................232

|

JAN.

FEB.

MAR.

APR.

MAY

JUNE

JULY

AUG.

SEPT.

OCT.

NOV.

DEC. J

JAN.

142
124
192
132
191
117
80
166
101
87
209
150
222
95
358

142
124
190
133
193
117
80
165
100
87
208
150
218
95
375

142
124
191
132
190
115
79
164
95
88
206
149
214
94
387

143
125
194
135
188
116
79
166
98
87
210
151
223
95
363

143
126
195
135
192
117
79
167
99
87
211
151
227
94
366

143
125
195
136
194
116
79
165
99
87
206
150
230
93
375

143
125
197
135
194
116
78
166
97
88
200
151
234
93
382

143
124
192
135
195
117
78
164
95
87
202
151
226
90
385

143
124
189
129
190
120
77
164
87
86
203
151
219
85
373

142
122
183
128
186
119
77
162
93
86
208
151
218
83
372

142
121
184
128
185
117
76
162
88
85
187
150
215
83
369

141
120
184
130
186
116
75
161
89
84
193
149
215r
79
390

141
119
183
130
188
117
74
159
87
83
193
150
211
78
n.a.

227
328
351
309
124
93
169
180
224r
166
181r
339r
274r
154
166
119

226
345
366
327
124
96
176
175
223
143
181
342r
292r
156
168
120

228
333
360
311
121
95
179
162
225
129
181r
345r
285r
153
167
119

224
333
356
315
126
100
188
192
223
149
180r
347
274r
148
167
114

222
351
384
325
132
111
185
176
223
145
180
349r
271r
163
181
126

220
371
387
359
132
98
192
183
227
142
180r
349r
281r
159
183
119

220
370
376
365
127
83
194
194
227
147
183r
351r
265r
162
179
129

221
361
367
357
155
147
189
178
232
143
183r
354r
279r
167
190
124

223
353
362
346
149
134
188
185
230
135
185
353r
283r
158
175
120

232
337
364
316
167
157
186
189
231
141
188
353r
263r
152
159
113

233
322
305
336r
156
131
201
179
235
140
188r
352r
281r
153
162
111

248
286
300
276
132
94
199
187
233r
134
189
359r
279r
151r
163r
125r

240
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
177p
225p
133p
189
351
285
162
173
119

126
108
198
166r
148
159
280r
113
235r

125
107
192
158
133
160r
283
122
245

124
106
190
156
112
161r
289r
125
244

125
108
195
176
127
159r
296
122
239r

126
109
198
162
128
159
298r
131
239r

126
109
201
171
127
159r
293r
123
244r

126
109
202
178
126
160r
291r
124
233r

126
108
194
170
119
162r
293r
123
256r

125
106
184
166
117
164r
292
150
257r

125
104
189
166
120
169
293
182
245r

125
104
185
155
110
165r
294
130
252r

124
103
177r
165
lllr
167r
299r
121
246

125
102
177
157p
109p
169
300
n.a.
251

197
204
366
249r
189
240r
553r
231
389r

197
204
364
240
174
239r
554r
206
419r

197
202
352
245
157
238r
552r
171
404r

199
205
372
274
181
237r
553
217
380r

201
209
389
260
175
235
551r
225
395r

202
211
392
264
167
236r
553r
187
431r

204
213
409
277
167
242r
557r
204
388r

203
214
406
263
203
240r
564r
270
425r

203
213
394
256
172
241r
560r
248
415r

202
210
402
261
156
246r
561r
212
400r

200
207
387
268
168
248r
551
196
415r

198
207
387r
276
164
250r
560r
232
407r

196
205
371
262p
156
247
550
n.a.
409

137
122
216
172
149
160r
269
130
253r

136
122
211
164
127
160r
270r
134
264r

135
122
205
156
120
159r
271r
146
252r

138
122
215
170
142
159r
271
153
251r

137
122
223
169
132
160r
275
144
252r

136
122
221
164
135
160
275r
150
263r

136
121
226
175
134
161r
278
125
252r

135
120
216
159
137
164r
286r
215
258r

135
120
211
168
134
166r
288r
160
274r

135
119
208
172
144
170
286r
204
249r

135
117
203
158
138
169r
291r
120
257r

134
117
202
164
135r
170r
289
148
256r

135
116
197
157
124p
169
285
n.a.
263

131
94
173
154r
188
160r
316r
90
206r

131
95
173
150
192
159
317r
90
220r

130
95
176
147
172
159r
328r
94
238r

131
95
179
156
176
160r
329r
89
227r

131
95
178
152
175
159r
334r
101
225r

130
95
178
161
184
158r
334r
119
242r

130
95
177
159
203
161r
335r
102
215r

130
94
178
152
145
159r
334
91
228r

130
94
174
148
161
164r
332r
113
248r

130
94
170
151
159
163r
329r
115
209r

128
93
170
140
167
164r
323
137
222r

128
92
172r
155
172
166r
331r
113
229r

129
91
173
148p
164
165
319
n.a.
206

138
135
253
161
106
201r
424r
92
226

137
134
247
154
99
204r
429r
91
245r

136
133
254
155
94
202r
425r
115
247r

137
134
249
169
100
198r
427r
101
238r

137
135
244
154
113
199r
429r
105
224r

136
134
256
175
107
197r
431r
97
245r

136
133
253
175
112
198r
433r
104
244r

135
132
247
153
100
194r
425r
98
256r

136
131
235
149
95
196r
431r
121
254r

136
130
239
158
84
204r
431r
141
243r

136
131
236
151
101
199r
433r
162
260r

135
129r
237
164
124
209r
460r
136
256r

138
128
239
150p
93p
204
442
n.a.
240

124
124
219
153r
104
164r
297r
88
234r

124
123
219
145
95
164r
301r
90
250r

123
123
208
137
98
164r
304r
86
239r

126
124
225
159
103
164r
305r
100
231r

125
124
223
146
111
163r
309r
95
241r

125
124
223
155
107
165r
309r
102
238r

126
125
225
167
93
170r
313r
109
229r

125
124
224
151
98
167
314
113
238r

125
124
217
157
96
166171r
311r
106
234r219r

124
122
214
164
101
169r
313r
122
241r

123r
120
210
157
96
170r
328r
86
229r

123
120
212
148p
83
170
315
n.a.
242

*For Sixth District area only. Other totals for entire six states, n.a. Not Available.
**Daily average basis.
*** Revisions reflect new seasonal factors.

p Preliminary.

124
120
211
156
98
314r
143

r Revised.

Sources: Nonfarm and mfg. emp. and payrolls, state depts. of labor; cotton consumption, U. S. Bureau of 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. All indexes calculated by this Bank.




•7 •

D IS T R IC T

I I I I I I I I I 1 I I I I I I 1 I I I I

| 1947- 49 = 100

'

I

M

'

I I I I I I I

l

Seosonally Adjusted
13 5

»i—

■
—

Nonfarm Employment

B U S IN E S S

C O N D IT IO N S

| I I I I I I

l

■ 141
—

Reduced businessdevelopmcontinued to be the generalmild nature rly
activity
rule in e a
1961/ but certain
ents have underscored the
of
the current recession. Virtually no change occurred in seasonally adjusted

nonfarm employment in January. Even though this contrasts favorably with
the slight downtrend in employment occurring over the preceding five-month
period, some important types of activity continued downward. Among District
states, Florida experienced a further drop in total nonfarm employment.
The Florida decline was approximately offset by gains in Mississippi, Alabama,
and Louisiana, while employment in Georgia and Tennessee changed little
during January.
v* IS U
*
Manufacturing activity continued to be a source of w eakness in most
District states in Ja n u a ry , as both employment and the average work week

declined further. Reflecting this, payrolls also decreased again. Within the
manufacturing sector, employment in fabricated metals, chemicals, and food
has improved in the past couple of months, while employment in apparel,
changing little since October, appears to have halted an earlier decline. Em­
ployment declines in textiles, lumbering, and other types of manufacturing
have, however, outweighed improvement in other lines. Still, some observers
may interpret the appearance of such mixed trends as encouraging. The decline
in cotton consumption slowed somewhat in January. Steel mill output, though
slightly above December’s level, was changed little from that for November;
some improvement, however, occurred in mid-February.
^
In nonmanufacturing em ploym ent, increases predom inated in Jan u­
a ry , being sufficiently great to offset the w eakness in manufacturing
em ploym ent. The rate of insured unemployment showed little change, after

allowance for the usual seasonal movement.
Construction again failed to show a n y sign of an upturn. Employ­
ment was off further in January, and the latest three-month average of con­
tracts for construction soon to be started, based partly on January data,
dropped sharply further.
Those expecting the consumer to bring a lift to business activity
must still look to the future, judging from indicators of retail spending.

\ l

V

\ I Dept. Store
y
Soles




Department store sales, after a pickup in December, dropped in January and
showed little further change in February. Since second quarter 1960, these
sales, though irregular, have had a downward drift. Furniture store sales in
January remained unchanged at a reduced level, while household appliance
store sales showed some improvement.
v* o ^
Farm activity in m any places w as reduced som ew hat, p artly because
of too much of a good thing—rain. In Alabama, Georgia, and Mississippi,

farm employment decreased as heavy rains hampered fieldwork and flooded
some pastures. In Florida, however, sunny weather favored work in citrus
groves and on vegetable farms.
^
Bank lending tended to m irror the general letharg y of economic
activity. In January, member bank loans lost somewhat more than was

gained in the preceding month, and, in February, showed only minor re­
covery at banks in leading District cities. On balance, little change has oc­
curred over the past six months. Reserve positions remain easy in early 1961,
with excess reserves higher and borrowings from the Federal Reserve Bank
of Atlanta remaining low.