The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
IN THIS ISSUE: • The New Budget • Growing Metropolitan REVIEW Areas Profile Alabama’s Economy • Board of Birectors • Bistrict Business Conditions F E D E R A L R E S E R V E B A N K O F A T L A N T A MARCH 1968 The N ew Budget On January 29, President Johnson sent his annual budget message to Congress. In it he asked for authority to spend $201.7 billion. The budget document describes the proposed activities of the Federal government in the coming fiscal year. Thus, the budget recently presented covers the period July 1, 1968, to June 30, 1969, and is called the fiscal 1969 budget. This means that the estimates provide for activities as far ahead as 18 months. Since it takes considerable time to co ordinate the requests of all Federal departments and agencies, the original agency estimates must be made in some cases two or two and one-half years before actual spending. It is not surprising, therefore, that spending frequently exceeds or (more rarely) falls short of the estimates. Those for fiscal 1966 and 1967 turned out considerably too low, primarily because the extent of the es calation of defense costs in Vietnam was not foreseen; it may be that defense costs have been underestimated once again. Even if budget estimates were exactly correct, however, the Federal government would not spend $201.7 billion in fiscal 1969. This figure repre sents the “budget authority” requested by the President. Actual outlays (expenditures plus net lending) are estimated at $186.1 billion. The Monthly Review, Vol. LIII, No. 3. Free subscription and additional copies available upon request to the Research Department, Federal Reserve Bank of Atlanta, Atlanta, Georgia 30303. 30 difference arises because a considerable portion of the budget authority covers future outlays— for example, construction programs that will not be completed within the forthcoming fiscal year— while some unspent authorizations enacted earlier will be used to make current outlays. The $186.1-billion to be spent in fiscal 1969 is a $10.4-billion increase above the estimated total in fiscal 1968 (which ends this June 30). This rise, while sizable historically, is considerably smaller than the $17.2-billion estimated increase in 1968 and the $23.8-billion jump in 1967. As in the two prior years, defense costs ac count for a large share of the increase—$3.3 billion out of $10.4 billion. Other major addi tions are $ 1.6 billion for salary advances for Federal employees and $4.2 billion in payments by the social insurance trust funds, mainly for social security and health and hospitalization (M edicare). Receipts are estimated at $178.1 billion, pro vided Congress approves the tax advances pro posed by the President. The most important of these measures is a 10 -percent surcharge on per sonal and corporate income taxes. In addition, the Administration is proposing that corporate tax payments be accelerated in order to put corpora tions more nearly on a “pay-as-you-go” basis, and that existing Federal excise tax rates on auto mobiles and telephone services be extended be yond April 1, 1968, when, under present law, they would be reduced. This tax package is supposed MONTHLY REVIEW 1969 Budget— Relation of Authorizations to Outlays to bring in $12.9 billion in fiscal 1969 and $3.0 billion in fiscal 1968. The House Ways and Means Committee has approved the extension of the excise tax rates and the speedup of corporate tax payments, but no action has occurred so far on the income tax surcharges. If all of the tax bills are approved, the Federal budget deficit should be approximately $8.0 bil lion in 1969. If none of them becomes law, it would be perhaps almost as large as the very heavy deficit estimated for fiscal 1968. T h e N e w B u d g e t F orm at The 1969 budget document is not at all tradi tional in one respect. It was presented in the new format recommended by the President’s Commis sion on Budget Concepts. In past years three separate budgets were used; this year there is only one. The three separate budgets—adminis trative, cash, and national income—were de veloped ad hoc in response to the growing com plexities of Federal government operations and the increasing need to analyze their impact on national output, the balance of payments, fi nancial markets, and the economy in general. Each of these “budgets” evolved to satisfy various information needs, but, in the words of the Commission, “the existence of several budgets . . . led to public confusion . . . This confusion . . . makes it difficult for the ordinary citizen to keep abreast of what his Government is doing.” The old administrative budget was for many years the only one used. It covered only receipts and expenditures of Federal funds, i.e., those owned by the Federal government, and excluded MARCH 1968 funds held in trust by the government, such as the social security trust fund. It was originally developed for the coordination, by the Bureau of the Budget, of spending requests of the various government departments and for unification of the financial plan of the government for consider ation by Congress. When the administrative budget was introduced in 1921, it represented a great advance over the previous uncoordinated system whereby Congress, rather than the President, initiated spending and taxing proposals. At that time, it encompassed nearly all the financial activities of the Federal government. Although it was not designed to facilitate analysis of the government’s impact on important economic variables, this was not a serious drawback because the social accounting framework for this sort of analysis had not yet been created. In any case, the impact of gov ernment on the economy was still quite small. The social legislation of the thirties created several new trust funds and independent govern ment agencies and also increased the size of the Federal government relative to the whole econo my. The receipts and payments of the trust funds were accounted for separately from the admin istrative budget, and the extent to which inde pendent agencies were included on a gross or net basis depended on the technical legal provisions of their funding. The necessity of understanding the govern ment’s growing impact on money and capital markets, through its lending programs, and on product and labor markets, through its pur chases of goods and services, led to the cash and national income budgets. The cash budget at tempted to cover all cash payments to and re ceipts from the public, including those relating to trust funds and the government’s lending ac tivities. It was an adaptation of the administra tive budget, however, and suffered from many of the analytical deficiencies of that document. The national income budget has proven very useful, but, because of its nature, could never be more than supplemental information. Although it will be continued as part of the national income ac counts compiled by the Department of Com merce, it will not be called a “budget.” That word will be reserved for the new unified docu ment that the President presents to Congress. When all the adjustments recommended by the President’s Commission have been made, the ex penditure account (exclusive of lending) in the new budget should be practically the same as the Federal sector of the national income accounts. The total budget (including lending) does not 31 differ greatly in total magnitude from the old cash budget. T h e B u d g e t fo r F is c a l 1 9 6 9 The new budget format is designed to show strict ly governmental activities; the authority requested from the Congress to carry out the proposed pro grams; the receipts, expenditures, new loans and loan repayments that will result from these pro grams in fiscal 1969; and the means of financing the budget deficit. The figure of $178.1 billion for receipts is esti mated on the assumptions that : ( 1 ) gross nation al product will be $846 billion in calendar 1968, B u d g e t C o n c e p ts C o m p a re d Some of the principal differences between the new and old budget concepts can be summarized briefly. 1. Coverage The new budget, in the words of the Commission, “should encompass the full scope of programs and transactions that are within the Federal sector and not subject to the economic disciplines of the market place.” Specifically, the new budget includes payments and receipts of the Federal trust funds (which the administrative budget did not do), but excludes the activities of the Federal Home Loan Banks and the Federal Land Banks, because these institutions are wholly privately owned and are not subject to budgetary review and annual appropriations by Congress. They were included in the cash budget. If and when the secondary market operations of the Feder al National Mortgage Association are transferred to private ownership, as the 1969 Budget message recommends, they will be excluded from the budget. The District of Columbia was included in the cash budget as a Federal agency, and both its receipts and expenditures were shown. It will now be con sidered on the same basis as any other municipal government, and only direct Federal payments to it will be recorded. Finally, the old cash budget included a number of “deposit fund” accounts representing primarily banking-type transac tions or service activities of the Federal government as em ployer. Such, for example, are the funds into which money withheld from Federal employees’ salaries for the purchase of savings bonds are temporarily deposited. Another example is the balance of the Exchange Stabilization Fund with the Treasury. The net change in these deposit fund accounts was carried in the cash budget as an expenditure. The new budget excludes these deposit fund accounts except that, to the extent that the government increases its liability to them, that amount is considered a means of financing the govern ment deficit. 2. Netting of receipts and expenditures The Federal government conducts a number of businesstype activities, such as the Post Office, the Tennessee Valley Authority, and National Service Life Insurance. The cash and administrative budgets were inconsistent in their treatment of these activities. In some cases, gross receipts and ex penditures were shown. In others, only net figures were in cluded. No matter which way it was done, the deficit (or surplus) was not affected. It was unnecessarily confusing, however, because an expansion of an activity that was shown gross would affect total receipts and expenditures, while an equal expansion of an activity shown net would not. The Commission recommended that a consistent rule be followed and that the test be whether a receipt is essentially “govern mental” in character, such as taxes, social insurance pre miums, and patent fees, or is a payment for a business-type service or commodity, such as hunting license fees, interest on loans, and sale of government property. In the former case, money received would be counted as budget receipts (gross); in the latter, as offset against outlays (net). The new budget follows this practice; and the netting of many receipts against expenditures, formerly shown gross, is the principal reason why its totals are lower than the cash budget totals would be. Digitized 3 2 for FRASER 3. Timing of receipts and expenditures The time at which receipts and expenditures were put on the books was not entirely consistent in the old budget formats either. The administrative budget recorded expendi tures on the basis of checks issued, except for interest, which was recorded as it accrued. The cash budget recorded ex penditures at the time government checks were paid. They both recorded receipts on the basis of actual cash collec tions. The national income accounts record expenditures partly as they accrue, partly at the time of delivery, and part ly on a cash basis; and receipts are recorded partly on a cash and partly on an accrual basis. The Commission recom mended that government bookkeeping be placed entirely on an accrual basis, at least for budget purposes. It recognized that it would take time to make the changeover, however; and the fiscal 1969 budget uses cash receipts and checks issued (for expenditures), except for interest, which is ac crued. The shift to accrual accounting should be completed within two years, and with some minor changes the Federal sector of the national income accounts can be made con sistent with the new budget concept. 4. Treatment of government lending The Federal government both lends and borrows. A loan, of course, does not have the same direct impact on the economy that a purchase of, say, a tank does, because the borrower is not providing a product or service immediately in return for the money; and he assumes a liability to repay as well. Nevertheless, they are important because of their impact on money and capital markets and because Congress must have information about them in order to carry out its responsibilities. The cash and administrative budgets had showed lending (net of repayments) as an expenditure; the national income accounts omit government lending alto gether. The Commission’s solution was to include net lending, but to show both total lending and repayments separately. Thus, it is possible to show a deficit (or surplus) on expendi ture account and an overall budget deficit as well. The for mer will correspond eventually to the national income ac counts deficit (once accrual accounting is introduced in the budget and assuming that national income accounting is brought into conformity with the new budget concept); the latter, essentially to what the old cash budget was trying to measure. Some government loans are made on more liberal terms than could be obtained in the capital market, either by the government or the borrower. Some of the loans made to foreign goverments under the foreign aid program are of this nature. Other “loans” are not really loans, but direct expendi tures. Nonrecourse loans made to farmers by the Commodity Credit Corporation fall into this category, since the farmer may freely decide whether to repay the “loan” or to forfeit the commodities pledged as collateral. The entire amount of these “loans” is treated as expenditure in the new budget, and eventually it is planned to treat the subsidy element in loans made on noncommercial terms as expenditures. 5. Treatment of borrowing The government can finance a deficit by borrowing from the public, decreasing its cash assets, increasing its current MONTHLY REVIEW personal income will amount to $675 billion, and corporate profits before tax will be $87 billion; and (2) that Congress will pass the tax increases proposed by the Administration. The two assump tions are interdependent. That is, the projections of GNP, personal income, and corporate profits assume passage of the tax proposals. If the new tax program is not put into effect, these magni tudes will presumably be larger, so that the loss in tax revenues would be less than the full amount of the proposed tax increases. The rate of price rise would be greater, however, and government spending (other things being equal) would be inflated. The deficit, therefore, would liabilities, and using its money creating powers. The first is done by the sale of securities, either direct obligations of the Treasury or obligations of independent government agencies. In recent years some independent agencies, such as the Export-Import Bank and the Federal National Mortgage As sociation ( “Fannie Mae”), have issued “participation certi ficates.” This is a device by which the government lending agencies can tap private funds for financing their loans and thus replenish their own resources for making further loans. The private purchasers of the participation certificates obtain a claim with a smaller risk of loss than the original promises to pay of the people to whom the government agencies made the loan. In this case the agencies are acting as financial intermediaries, as banks do. In the cash and administrative budgets, receipts from the sale of participation certificates were treated as a reduction of loan expenditures, and some members of the Commission wanted to continue this treat ment of them in the new budget. The majority felt, however, that a more accurate picture would be obtained by treating participation certificates as a means of financing government lending programs. The new budget incorporates the majority view and treats the sale of participation certificates as bor rowing from the public. As mentioned earlier, any increase in the government’s liability to deposit funds is considered in the new budget as a means of financing the deficit. So is an increase in checks outstanding, whereas the cash budget had treated it as a re duction in expenditures. This difference arises out of the fact that the cash budget was calculated on the basis of checks paid, while in the new budget the expenditure is assumed to be made when the check is issued. In the future, when Federal accounting is entirely put on an accrual basis, accrued liabili ties (say, to a defense contractor) that have not yet been paid will be a means of financing, just as accounts payable are a source of funds to a private business. The Treasury does not as a general rule create money nowadays, that function being left to the Federal Reserve System. One exception, however, is seigniorage, or the differ ence between the monetary value of an increase in the stock of coins and the cost of acquiring the raw materials to make the coins. In the administrative budget this was treated as a receipt instead of a means of financing. Summary of Major Differences in Budget Concepts New unified budget National income accounts Cash budget Administrative budget Included Excluded Excluded Included Excluded Excluded Included Included Included Excluded Excluded Excluded Accrual1 Personal taxes (pay ment); all other (chiefly accrual). Cash collections Cash collections Accrual2 Purchases (delivery); interest (accrual); all other (chiefly checks issued). Checks paid Interest (accrual); all other (checks issued). Included (but shown in separate loan account)3. Excluded Included Included Participation certificates Excluded Excluded Included as negative expenditures. Included a s negative expenditures. Purchases of foreign currency Included Excluded Included Included Coverage Trust funds District of Columbia Federal land banks, Federal home loan banks. Timing Receipts Expenditures Treatment of financial transactions Net lending activities Recorded on a cash collections basis in fiscal 1969 budget. in te re st recorded on accrual basis in fiscal 1969 budget; all other expenditures recorded on checks issued basis. 3The “expenditure account” of the new unified budget excludes net lending as defined by the Budget Bureau, but includes sev eral types of loans excluded in the national income accounts. Source: U.S. Department of Commerce, Office of Business Economics. MARCH 1968 33 The President’s new budget forecasts a deficit of $8 billion for fiscal 1969. The new budget concept totals are very close to those of the old “ consolidated cash budget.’’ $ Billion Source: The Budget in B rie f, F isc a l Y e ar 1969. almost certainly be greater without the tax in crease, and the harmful effects of inflation on the economy would be magnified. It should be noted that, in the absence of appropriate fiscal policies, the burden of restraining inflation would fall on monetary policy. Personal income taxes still constitute the largest source of Federal revenue. 1969 projections esti mate this source of revenue at $80.9 billion, or 45.4 percent of total receipts. Corporate income taxes should amount to $34.3 billion, or 19.3 percent. Employment taxes (which go primarily into social security trust funds) are now almost as important a revenue source as corporate in come taxes, amounting to $34.2 billion, or 19.2 percent of total receipts. They will rise by $4.4 billion over fiscal 1968 because, under present law, the amount of wages subject to these taxes rose on January 1 of this year from $6,600 to $7,800. The combined tax rate on employees and employers will increase from 8.8 percent to 9.6 percent next January 1. Excise taxes, the fourth largest category of receipts, should amount to $14.7 billion, or 8.2 percent. The remainder (7.9 percent) is made up of unemployment insurance tax receipts, insurance and retirement premiums, estate and gift taxes, customs receipts and mis cellaneous. Of total outlays (including net lending) of $186.1 billion, national defense is expected to take $79.8 billion, or 42.9 percent. Nearly a third of defense outlays are earmarked for special Viet nam expenditures, totaling $26.3 billion, or 14.1 percent of the entire budget outlay. These costs amounted to $20.6 billion in fiscal 1967, or 13.0 34 percent of the total. Of civilian outlays ($106 billion), the largest amount goes to health, labor, and welfare programs. Total spending for these purposes is listed as $51.9 billion, or 27.9 percent of total budget outlays. The largest part of this, however, represents disbursements by the Medi care, retirement, and social security trust funds. These trust fund outlays amount to about $39.5 billion, leaving a little over $ 1 2 billion for health service and research, labor and manpower pro grams, economic opportunity programs, and pub lic assistance and other welfare. Education and housing and community development add another $5.8 billion. One large and growing expenditure item is in terest, amounting to $14.4 billion, or 7.7 percent of total outlays. This is the result of a growing debt and new debt issued recently at rising in terest rates. Space research and technology de clined in both percent of total and total amount, $4.6 billion as compared with $5.4 billion in 1967. Most other functions, although increasing in absolute amounts, are decreasing percentages of the total. Budget Summary (B illio n s of D ollars) Description 1967 1968 1969 A ctual E stim a te Estim a te Budget authority R equiring cu rren t action by Congress P revio u sly enacted Proposed in th is budget 135.4 125.1 3.3 141.5 58.7 69.9 73.1 Deductions fo r interfund and intragovernm ental tra n sa c tions and ap p licab le receipts - 1 1 .5 To tal, budget autho rity 182.6 - 1 1 .8 186.5 - 1 2 .9 201.7 149.6 155.8 178.1 153.2 - 3 .6 169.9 - 1 4 .0 182.8 - 4 .7 17.8 5.2 20.9 15.1 5.8 20.4 17.1 3.3 149.6 158.4 - 8 .8 155.8 175.6 - 1 9 .8 178.1 186.1 -ao 3.6 5.3 20.8 8.0 - 1 .0 8.8 19.8 Becom ing a va ilab le w ithout current action by Congress Receipts, expenditures, and net lending Expenditure account R eceip ts Exp end itu res (exclu d es net lending) Exp end itu re d eficit (—) Loan account Loan disb ursem en ts Loan repaym ents Net lending Total budget R eceip ts Exp end itu res and net lending Budget d eficit (—) Budget financing Borrowing from the public Reduction of cash b a lan ces, etc. To tal, budget fin an cin g 12.6 8.0 Source: The Budget of the U.S. Government, 1969. MONTHLY REVIEW Net lending declines in the 1969 budget mainly because the Federal National Mortgage Associa tion is expected to reduce its purchases of federal ly-insured or guaranteed mortgages ( FHA and V A ). It will be able to do so, it is hoped, because pending legislation would raise or eliminate con tract interest ceilings on these types of mortgages. Legislation to shift the FNMA secondary market operations fund to private ownership has also been recommended. Fiscal Uncertainties As mentioned earlier, some spending due to take place in fiscal year 1969 was estimated as much as two or two and one-half years prior to actual outlay. Estimates made that far in advance must be subject to a margin of error. Furthermore, the estimators had to make certain assumptions about the state of the world in 1969, and these assumptions, while perhaps the most reasonable at the time, may not be borne out. At the moment, for example, the news from Vietnam is far from cheerful, and there is discussion of increasing our armed forces by 50,000 to 100,000 men. If this is done, defense expenditures would be above budget estimates. Recently, the President’s National Advisory Commission on Civil Disorders recommended a large expansion in Federal programs to relieve the most urgent and dangerous problem areas in urban unemployment and housing. The Commis sion did not put a price tag on its recommenda tions, but the most conservative horseback esti mate would put the cost at upward of $ 1 0 billion over the next two to three years. These are simply the largest and most obvious possibilities where by spending might be pushed up. Not everyone is certain that it is appropriate to impose income surtaxes at this time. Some observers are skeptical of the projections of large growth in gross national product and personal income made by the Council of Economic Ad visers and most private forecasters. They point out some indications of softness in the economy and argue that even the Council’s projections of large growth in 1968 imply a slowing in the growth rate in the second half of the year. If the growth in output and incomes is considerably slower than the current “standard” projection of large growth in 1968, some of the expected pres sure on prices might not occur. Thus, in their view, higher Federal taxes might not only be unnecessary; they might deal a blow to a weaken ing economy. Aside from arguments based on purely domestic considerations, however, the re cent run on gold and the generally unsettled state of international financial markets have added a new urgency to the need for fiscal restraint. History may prove which view is correct. In any case, the more likely probability at present is unsustainable growth, which calls for both fiscal and monetary restraint. Each of these policy instruments is more effective when they operate in the same direction and reinforce each other. L a w r e n c e F. M a n s f i e l d Suggestions for further reading on the 1969 budget and the new budget concepts: The B udget o f the U nited States G overnm ent, 1969. Wash ington: U. S. Bureau of the Budget, 1968. The B udget in Brief, Fiscal Y ear 1969. Washington: U. S. Bureau of the Budget, 1968. “Federal Programs for Fiscal 1969,” by Charles A. Waite, Survey of Current Business, February 1968, pp. 11-16. R eview o f R ep o rt of the President’s Com m ission on Budget Concepts, Hearing before the Subcommittee on Economy in Government of the Joint Economic Committee, Congress of the United States, 90th Congress, 1st Session. Washington: U. S. Government Printing Office, 1967. Special Analyses, B udget of the U nited States, Fiscal Year 1969. Washington: U. S. Bureau of the Budget, 1968. Statem ent of the H onorable H enry H . Fowler, Secretary of the Treasury, before the H ouse W ays and M eans C om m ittee on the President’s Fiscal Program, January 22, 1968. Wash ington: U. S. Treasury Department (press release). Treasury Bulletin, February 1968. B a n k A n n o u n c e m e n ts Two nonmember banks— the Bank of Moulton, Moul ton, Alabama, and Farmers and Merchants Bank, Sum merville, Georgia— began to remit at par on February 1 for checks drawn on them when received from the Federal Reserve Bank. The Citizens National Bank of Naples, Naples, Flor ida, a new member bank, opened on February 1 and began to remit at par. E. L. Turner is president, and James P. Barnette, vice president and cashier. Capita! is $250,000; surplus and other capital funds, $250,000. On February 17, the Munroe and Chambliss National MARCH 1968 Bank of East Ocala, Ocala, Florida, opened as a mem ber bank and began to remit at par. Officers are A. G. Skipper, president, and William R. Peebles, cashier. Capital is $250,000; surplus and other capital funds, $250,000. The Peoples State Bank, Grant, Alabama, a new nonmember bank, opened on February 22 and began to remit at par. Officers are Charles Willmon, presi dent, and Terry Canady, cashier. Capital is $100,000; surplus and other capital funds, $100,000. 35 G r o w in g M e tro p o lita n A r e a s P r o f i l e A l a b a m a 's E c o n o m y If you asked Alabama bankers and business lead ers how the state’s economy performed in 1967, their answers would probably differ. Some might say that continued gains in most sectors indicate a reasonably good year. Others might point to slowdowns as underlying weaknesses. Since there is no single and comprehensive gauge of economic performance acceptable to everyone, these differing opinions are not con tradictory. A look at the common indicators shows that economic trends in Alabama last year were more mixed and diverse than usual. We will first look at the state’s overall performance last year and then trace the trends in major areas around the state. R e a s o n s fo r P e s s im is m Those persons who have followed the state’s glowing gains since the current economic expan sion began in 1961 may view last year’s perform ance with questioning pessimism. Some of Ala bama’s basic economic barometers that have ad vanced rapidly since that time were less buoyant last year. Employment gains, a frequently used and as sumed reliable indicator of business activity, were not as large for the state from 1966 to 1967 as in earlier years. Total nonfarm employment grew 36 only about one percent, considerably slower than the 4-percent average annual rate from 1961 to 1966. Much of the reduced pace was attributable to the manufacturing sector which experienced a slight decline in jobs last year. With employ ment down, manufacturing payrolls advanced at a slower pace than the average yearly gain be tween 1961 and 1966. Bank debits, a measure of checking account activity at banks, fluctuated widely during the year. For the entire year this indicator, which reflects underlying economic conditions as they affect checkbook spending, increased about 7 per cent over the 1966 level. Although a respectable gain, it was below par, compared with the aver age of nearly 1 2 percent in the earlier expansion years. Deposit and loan growth at Alabama banks was also slower last year. Thus, it is easy to understand why some per sons might interpret these developments as a setback to Alabama’s long economic expansion. There is another side to the story, however. O p t im is m R e ig n s Some other reliable indicators suggest that the state’s economy performed very well in 1967. Al most everyone would agree that with over $595 million added to the pocketbooks of Alabamians MONTHLY REVIEW Although most sectors expanded last year, gains were sm aller than in previous years of the current expansion. Percent Change -5 0 +5 +10 +15 (according to this Bank’s estimates) it must have been a fairly good year after all. In percentage terms, this 8 .2 -percent annual rate of gain was close to that of previous years of this expansion. And, although employment gains were slower, the number of jobless workers remained low. The slower pace of activity in some sectors was a reduction in the growth rate and not an ac tual decline. Furthermore, by the end of the year it appeared that economic activity was again accelerating in most sectors, leading to optimistic expectations for the months ahead. Another in terpretation of Alabama’s performance in 1967 might be that the slower upward movement in some sectors represented adjustments in prepara tion for increased momentum in coming months. Whether we take the optimistic or pessimistic view, the underlying strengths and weaknesses in the state’s overall economy may show up clearer by tracing developments in a few key areas. G ro w th a n d Im p o r t a n c e o f M e t r o p o li t a n C e n t e r s Most current data are for major metropolitan areas only, and these will be used for this study. This does not mean that nonmetropolitan areas are unimportant. M ajor urban areas are designated by the Bureau of the Census as standard metropolitan statistical areas. To qualify as a SMSA, the area must include a county or group of adjoining counties with similar economic characteristics and a total population of 100,000 or more and at least one city of 50,000 or more. Alabama has six such areas. According to the latest Census reports, Ala bama’s six metropolitan areas are growing more rapidly than nonmetropolitan areas. Between 1960 and 1965, these areas experienced a popula tion increase of 7.7 percent, compared with a 6 .8 percent growth rate for the state. Nearly one-half of Alabama’s residents now live in these six areas. In 1940 the proportion was only about one-third. By far, the fastest growing area was the Hunts ville metropolitan area. From 1960 to 1965 its population grew 45.5 percent, about five times as fast as Tuscaloosa, which was in second place with an 8.3-percent increase. Next was Mobile, with a gain of 7.7 percent, the same as for all the SMSA’s. Birmingham and Montgomery grew more slowly in population than the other metropolitan centers and the state. Gadsden’s population, on the other hand, declined 3.1 percent during this five-year period. Population changes result from natural causes (births compared with deaths) and net migration (persons moving away compared with persons moving in ) . The state lost residents from migra tion between 1960 and 1965, but the natural in crease was large enough to result in an overall net gain in population. Considering all the SMSA’s together, the same trend was discernible. When considered separately, only Huntsville and Tuscaloosa—the fastest growing areas in popula tion—witnessed increases from net migration. Gadsden’s loss of population from migration was larger than the natural increase so that the area’s overall population declined. Since people usually live and work in the same area, it is not surprising that Alabama’s major metropolitan areas are also important in terms of employment. About one-half the state’s nonfarm jobs are concentrated in its six SMSA’s. Therefore, accounting for roughly half the state’s population and jobs, it makes sense to see if statewide developments can be related to specific occurrences in these areas. Alabama’s Population Growth, 1960-65 1960 19 6 5 (T h o u s a n d s ) Sta te 3 ,267 S t a n d a rd M e tro p o lita n B ir m in g h a m G a d sd e n H u n ts v ille M o b ile M o n t g o m e ry T u s c a lo o s a A ll S M S A ’s O u t s id e S M S A ’s 3 ,489 S ta tis tic a l A re a s 644 635 94 97 224 154 3 91 363 207 200 118 1 09 P erce nt Change 1960-65 P e rce n t of State, 1965 6.8 100.0 1.4 -3.1 45.5 7.7 3.5 8.3 18.5 2.7 6.4 11.2 5.9 3.4 1,558 1,678 7.7 48.1 1,709 1,811 6.0 51.9 A l a b a m a ' s S S t a n d a r d t a t i s t i c a l M A e t r o p o l i t a n r e a s G adsden H u n ts v ille _____ Bank Debits Demand Deposits 1966 1967' Percent Change, 1967 from 1966 -1 0 -5 0 +5 +10 1 1 Nonfarm Employment Demand Deposits* I 1 .. 1966 1967 Percent Change, 1967 from 1966 +5 +10 -1 0 -5 1 1 i i Nonfarm Employment 1966 1967 Percent Change, 1967 from 1966 -10 -5 0 +5 +10 Nonfarm Employment Manufacturing Employment ** Bank Debits ~ Manufacturing Employment Manufacturing Employment ■ ■ Bank Debits Bank Debits m i Demand Deposits* -----1.........1 _ i — 1— ..... L .... M o b ile Demand Deposits?* _J ---------1--------- M o n tg o m e ry ------1--------- L_ T u s c a lo o s a Thousands r SMillions ^70 Nonfarm Emolovment Seas. Adj. 1,300 1,200 1,100 1,000 Manufacturing Employment _ - Seas. Adj. a *Nillions / 700 4.000 3,500 1966 1967 Percent Change, 1967 from !366 -1 0 -5 0 +5 +10 i i I I Nonfarm 'W Employment Manufacturing Employment Bank Debits Demand Deposits* ...!, 1 1966 1967 Percent Change, 1967 from 1966 + 5 +10 600 3.000 550 160 500 140 450 120 400 1966 1967 Percent Change, 1967 from 1966 + 5 +10 -1 0 -5 i r Nonfarm Employment Manufacturing Employment Bank Debits Bank Debits ......J--------- 1— Demand Deposits Demand Deposits* 1 1 1 Demand Deposits* I .. I 1 1 *Demand deposits of individuals, partnerships, corporations, and state and political subdivisions. **No percent change recorded. 38 MONTHLY REVIEW V a r y in g P a t t e r n s o f L o c a l A c tiv it y Changes in economic activity at the state level reflect widely differing developments in local areas. To point up these differences, we can use changes in employment for 1967, compared with 1966 for the state and the various SMSA’s. Take, for example, Alabama’s slowdown in nonfarm job gains and the decline in the manufactur ing sector last year. When these aggregate figures are dissected, it becomes clear that developments in Huntsville and Mobile were largely respon sible. Total nonfarm employment declined by 3.2 percent and 4.1 percent in these areas, respec tively, from their 1966 levels. Huntsville’s manufacturing and nonmanu facturing sectors suffered decreases, with the former experiencing the largest setback. Employ ment in the food and kindred products industry was the chief cause. Declines in the nonmanu facturing sector were centered in the service and the miscellaneous employment categories, prob ably reflecting the cutback in aerospace contracts. Mobile also experienced a drop in employ ment in 1967 in the manufacturing and nonmanu facturing sectors. In the nonmanufacturing sector Federal Government employment was the chief cause, reflecting primarily the phase-out of the Brookley Air Force installation. Shipbuilding and repair employment also recorded decreases. Transportation, communication, and utilities and trade gained in employment. Other SMSA’s increased in employment last year. However, the trends among the areas were mixed. Montgomery made a healthy advance in overall employment, with most of the strength coming from the nonmanufacturing sector. Trade and government employment were particularly strong. Birmingham’s nonmanufactuimg sector made a good showing last year, but the manufacturing MARCH 1968 sector fell off. Transportation equipment was the main reason. Birmingham’s important primary metals industry expanded in employment, how ever. Another indicator now available for SMSA’s is bank debits, which reflects all types of spending by check. As such, it is generally considered a reliable indicator of local overall business con ditions. Tuscaloosa showed the largest gains over the year, 10 percent, and Birmingham and Mobile were about even with the state average of 6 per cent. The others, however, were below the state average, with Gadsden dropping by 5 percent. Demand deposits of individuals, partnerships, and corporations at banks followed the same trend as bank debits in the various metropolitan areas. C h a r t i n g A l a b a m a ’s F u t u r e Banking activity, along with other indicators of business conditions, suggests that Alabama’s economy weakened in early 1967, as did the na tional economy. However, with most segments still advancing, the economy turned in a respect able performance last year. And, if the consensus on the nation’s economic prospects proves ac curate, Alabama can look forward to another good year in 1968, but with differences in geographical areas and segments of the economy. J oe W. M cLeary This is one of a series of articles in which economic developments in each of the Sixth District states are discussed. Developments in Florida’s economy were analyzed in the October 1967 REVIEW, and a dis cussion of Georgia’s economy is scheduled for a forth coming issue. • Copies of A REVIEW OF FLOR IDA’S ECONOMY, 1959-67, and A REVIEW OF MISSISSIPPI’S ECONOMY, 1960-67, are now avail able upon request to the Research Department, Fed eral Reserve Bank of Atlanta, Atlanta, Georgia 30303. 39 B D o a r d ATLANTA Class C1 Edwin I. Hatch (Chairman)—1968 President, Georgia Power Company Atlanta, Ga. John A. Hunter—1969 President, Louisiana State University Baton Rouge, La. +John C. Wilson (Deputy Chairman)—1970 President, Horne-Wilson, Inc. Atlanta, Ga. o f i r e c t o r s F e d e ra l R eserv e B ank of A tla n ta a n d B ra n c h e s E ffective J a n u a ry 1, 1 9 6 8 BIRMINGHAM BRANCH Appointed by Board of Governors Eugene C. Gwaltney, Jr.—1968 Vice President and General Superintendent Russell Mills, Inc. Alexander City, Ala. Mays E. Montgomery (Chairman)—1969 General Manager, Dixie Home Feeds Company Athens, Ala. JACKSONVILLE BRANCH Appointed by Board of Governors Castle W. Jordan (Chairman)—1968 President, Associated Oil and Gas Company Coral Gables, Fla. Henry King Stanford—1969 President, University of Miami Coral Gables, Fla. *Henry Cragg—1970 Chairman, Minute Maid Company Orlando, Fla. *C. Caldwell Marks—1970 Chairman, Owen-Richards Company, Inc. Birmingham, Ala. Appointed by Federal Reserve Bank Andrew P. Ireland—1968 Senior Vice President Barnett First National Bank Jacksonville, Fla. Appointed by Federal Reserve Bank Major W. Espy, Sr.—1968 Chairman and President Headland National Bank Headland, Ala. L. V. Chappell—1969 President, First National Bank Clearwater, Fla. Will T. Cothran—1969 President, Birmingham Trust National Bank Birmingham, Ala. + Harry Hood Bassett—1970 Chairman, First National Bank Miami, Fla. +Arthur L. Johnson—1970 President, Camden National Bank Camden, Ala. +J. Y. Humphress—1970 Executive Vice President Capital City First National Bank Tallahassee, Fla. + George A. LeMaistre—1970 President, City National Bank Tuscaloosa, Ala. 1N o n b a n k e r s a p p o in te d b y B o a rd of G o ve rn o rs, se rv e S y ste m . 2N o n b a n k e r s electe d by m e m b e r b a n k s. Digitized 40 for FRASER Fed e ral Re "M e m b e r b a n k re p re se n ta tiv e s electe d by m e m b e r b a n k s. *R e a p p o in t e d fo r three -yea r term . + N ew m em b er. MONTHLY REVIEW C la s s B 2 Harry T. Vaughn—1968 President, United States Sugar Corporation Clewiston, Fla. Philip J. Lee—1969 Vice President, Seaboard Coast Line Railroad Jacksonville, Fla. + Hoskins A. Shadow—1970 President, Tennessee Valley Nursery, Inc. Winchester, Tenn. NASHVILLE BRANCH Appointed by Board of Governors Alexander Heard (Chairman)—1968 Chancellor, Vanderbilt University Nashville, Tenn. James E. Ward—1969 Chairman, Baird-Ward Printing Company, Inc. Nashville, Tenn. *Robert M. Williams—1970 President, ARO, Inc. Tullahoma, Tenn. Appointed by Federal Reserve Bank Moses E. Dorton—1968 Chairman and President First National Bank Crossville, Tenn. Andrew Benedict—1969 President, First American National Bank Nashville, Tenn. +H. A. Crouch, Jr.—1970 President, First National Bank Tullahoma, Tenn. +W. H. Swain—1970 President, First National Bank Oneida, Tenn. N O T E: E x p ira tio n d a te s of te rm s o c c u r on D e c e m b e r 31 of the ye a r b e s id e e a c h nam e. Digitized FRASER MARCHfor1968 C la s s A* John W. Gay—1968 President, First National Bank Scottsboro, Ala. William B. Mills—1969 President, Florida National Bank Jacksonville, Fla. +A. L. Ellis—1970 Chairman, First National Bank Tarpon Springs, Fla. NEW ORLEANS BRANCH Appointed by Board of Governors Frank G. Smith, Jr.—1968 Vice President Mississippi Power and Light Company Jackson, Miss. George Benjamin Blair (Chairman)—1969 General Manager American Rice Growers Cooperative Lake Charles, La. + Robert H. Radcliff, Jr.—1970 President, Southern Industries Corporation Mobile, Ala. Appointed by Federal Reserve Bank Donald L. Delcambre—1968 President, State National Bank New Iberia, La. A. L. Gottsche—1969 President, First National Bank Biloxi, Miss. +Lucien J. Hebert, Jr.—1970 Executive Vice President Lafourche National Bank Thibodaux, La. + Morgan Whitney—1970 Vice President, Whitney National Bank New Orleans, La. MEMBER, FEDERAL ADVISORY COUNCIL George S. Craft—1968 Chairman, Trust Company of Georgia Atlanta, Ga. 41 S i x t h D is t r ic t S t a t is t ic s Seasonally Adjusted (A ll d a ta a re in d e x e s, 1 9 5 7 - 5 9 = Latest Month One Two Month Months Ago Ago One Year Ago SIXTH DISTRICT IN CO M E AND SPEN DIN G Personal Income (Mil. $, Ann. Rate)***Dec. Manufacturing P a y r o lls....................Jan. Farm Cash R e c e ip t s ....................... Dec. C r o p s ....................................... Dec. L iv e sto c k .................................... Dec. Instalment Credit at Banks* (Mil. $) New L o a n s .................................Jan. Repayments ............................. Jan. Retail Sales .................................Jan. 59,53960,240 205 207 134 139 131 140 145 143 1 0 0 , u n le s s in d ic a t e d o th e rw ise .) 59,681 55,916 204 196 130 120 103 108 147 152 Latest Month Manufacturing .......................... Jan. N o n m an u factu rin g....................... Jan. C o n s t r u c t io n .......................... Jan. Farm E m p lo y m e n t.......................... Jan. Unemployment Rate (Percent of Work F o r c e ) ............. Jan. Avg. Weekly Hrs. in Mfg. (Hrs.) . . . Jan. One Two Month Months Ago Ago One Year Ago 158 148 107 77 159 148 106 104 157 149 106 92 154 144 3.0 41.8 3.0 42.2 2.9 42.1 2.7 42.4 279 216 276 214 273 209 250 187 190 Personal Income (Mil. $, Ann. Rate)***Dec. 11,695 Manufacturing P a y r o lls ....................Jan. 193 152 Farm Cash R e c e ip t s ....................... Dec. 11,586 208 134 11,656 200 127 10,992 197 134 110 100 FINANCE AND BAN KING 260 256 170p 300r 263 175 303 263 168 256 253 152 138 137 169 132 154 116 105 118 129 106 178 168 130 66 137 137 167 133 151 116 105 118 132 106 180 137 126 67 137 137 167 133 151 117 105 118 132 106 180 137 125 62 136 137 169 131 152 114 107 115 128 106 177 135 131 71 Member Bank L o a n s ....................... Jan. Member Bank D e p o s it s....................Jan. Bank D e b its ** ................................. Jan. PRODUCTION AND EM PLOYMENT Nonfarm E m p lo y m e n t ....................Jan. Manufacturing .......................... Jan. Apparel .................................... Jan. C h e m i c a l s .................................Jan. Fabricated M e t a l s ....................... Jan. F o o d .......................................... Jan. Lbr., Wood Prod., Furn. & Fix. . . . Jan. P a p e r ....................................... Jan. Primary M e t a l s .......................... Jan. Textiles .................................... Jan. Transportation Equipment . . . . Jan. No nm anufacturing.......................... Jan. C o n s t r u c t io n ............................. Jan. Farm E m p loy m e n t.......................... Jan. Unemployment Rate (Percent of Work F o r c e ) ............. Jan. Insured Unemployment (Percent of Cov. E m p . ) ................ Jan. Avg. Weekly Hrs. in Mfg. (Hrs.) . . . Jan. Construction C o n t r a c t s * ................ Jan. R e s id e n t ia l.................................Jan. All O t h e r .................................... Jan. Electric Power Production** . . . . Dec. Cotton C o n s u m p tio n ** ....................Dec. Petrol. Prod, in Coastal La. and Miss.**Jan. 3.7 3.8 3.9 3.3 2.4 40.1 196 224 173 150 120 264 2.1 41.4 187r 230r 151 149 105 254 2.1 41.1 184r 204r 166 146 114 251 2.2 41.4 161r 162r 160 146 258 230 244 222 203 181 213 200 180 218r 197 174 207r 183 167 196r ALABAMA 7,935 184 100 7,627 182 94 7,571 177 112 PRODUCTION AND EMPLOYMENT Nonfarm Employment . . . . Manufacturing ................ Jan. Jan. Jan. Jan. Jan. 125 123 126 118 65 125 124 126 122 70 125 123 126 122 66 125 124 126 122 73 Jan. Jan. 3.9 41.3 4.3 41.3 4.4 40.9 4.5 41.5 Jan. Jan. Jan. 247 194 205 244 191 204 243 191 191 229 180 200 Personal Income (Mil. $, Ann. Rate)* 'Dec. 16,889 Manufacturing P a y r o lls ................ Jan. 252 Farm Cash R e c e ip t s .................... Dec. 160 17,311 252 162 17,348 250 165 15,755 236 126 149 150 146 Unemployment Rate (Percent of Work Force) . . . . Avg. Weekly Hrs. in Mfg. (Hrs.) . . FLORIDA INCO M E PRODUCTION AND EMPLOYMENT Nonfarm E m p lo y m e n t ................ Digitized 42 for FRASER 136 131 139 130 59 136 131 139 128 53 134 130 136 130 3.2 37.7 3.2 41.3 3.6 40.2 3.0 41.2 276 224 236 273 217 252r 263 212 237r 253 66 Personal Income (Mil. $, Ann. Rate)*** Dec. Manufacturing P a y r o lls .................... Jan. Farm Cash R e c e ip t s ....................... Dec. 202 212r 9,278 186 150 9,287 184 166 9,292 184 149 8,650 173 132 Jan. Jan. Jan. Jan. Jan. 129 122 131 153 55 128 121 129 143 56 128 121 129 140 63 120 120 Jan. Jan. 4.6 42.8 4.7 42.2 4.8 42.3 4.0 42.3 Jan. Jan. Jan. 235 170 173 235 168 175 228 164 173 222 ‘Dec. Jan. Dec. 4,510 225 113 4,506 231 149 4,247 224 118 4,248 Jan. Jan. Jan. Jan. Jan. 141 148 137 147 60 140 147 136 136 56 139 146 136 137 46 139 149 135 149 60 Jan. Jan. 4.6 40.3 4.5 41.6 4.9 41.2 4.3 41.1 Jan. Jan. Jan. 330 241 217 324 237 243 316 230 214 296 PRODUCTION AND EM PLOYM ENT Unemployment Rate (Percent of Work Force) . . Avg. Weekly Hrs. in Mfg. (Hrs.) 129 155 61 FINANCE AND BAN KING Member Bank Loans* . . . . Member Bank Deposits* . . . Bank D e b it s * / * * .................... 158 176 M IS S IS S IP P I INCO M E 212 102 PRODUCTION AND EM PLOYM ENT FINANCE AND BA NKING Member Bank L o a n s .................... Member Bank D e p o s i t s ............. Bank Debits** .......................... Member Bank L o a n s ....................... Jan. Member Bank D e p o s it s....................Jan. Bank D e b its ** .................................Jan. LOUISIANA 262 236 137 132 140 131 64 FINANCE AND BA NKING INCOM E 266 239 7,944 188 113 Nonfarm E m p lo y m e n t ....................Jan. Manufacturing .......................... Jan. No n m an u facturin g....................... Jan. C o n s t r u c t io n .......................... Jan. Farm E m p loy m e n t.......................... Jan. Unemployment Rate (Percent of Work F o r c e ) ............. Jan. Avg. Weekly Hrs. in Mfg. (Hrs.) . . . Jan. 114 INCO M E Personal Income (Mil. $, Ann. Rate)***Dec. Manufacturing P a y r o lls ....................Jan. Farm Cash R e c e ip t s ....................... Dec. PRODUCTION AND EM PLOYM ENT 217 FINANCE AND BANKING Loans* All Member B a n k s .......................Jan. Large B a n k s ............................. Jan. Deposits* All Member B a n k s .......................Jan. Large B a n k s ............................. Jan. Bank D e b its * / * * ............................. Jan. GEORGIA INCOME Jan. 149 Nonfarm Employment . . . . Manufacturing ................ N o n m an u factu rin g............. C o n s t r u c t io n ................ Farm E m ploy m en t................. Unemployment Rate (Percent of Work Force) . . Avg. Weekly Hrs. in Mfg. (Hrs.) FINANCE AND BAN KING Member Bank Loans* . . . . Member Bank Deposits* . . . Bank D e b it s * / * * .................... MONTHLY REVIEW 220 203 Latest Month One Month Ago Two Months Ago One Year Ago One Latest Month TE N N ES SEE Non m an u factu rin g................ C o n s t r u c t io n .................... Farm E m ploym en t.................... Unemployment Rate (Percent of Work Force) . . . . . Jan. Avg. Weekly Hrs. in Mfg. (Hrs.) . . . Jan. INCOM E Personal Income (Mil. $, Ann. Rate) *** Dec. Manufacturing P a y r o lls ................ Farm Cash R e c e ip t s .................... 9,223 199 104 9,615 204 117 9,511 202 109 8,700 193 110 Month Ago Two One Months Year Ago Ago 134 169 69 134 165 70 134 159 67 134 169 75 3.9 39.4 4.1 40.7 4.2 41.0 3.2 40.6 260 186 221 249 185 240 252 184 224 238 173 202 FINANCE AND BANKING PRODUCTION AND EM PLOYM ENT Nonfarm E m p lo y m e n t ................ Manufacturing ....................... 140 147 139 147 139 147 Member Bank L o a n s * ............. Member Bank Deposits* . . . . Bank D e b i t s * / * * .................... 139 147 *For Sixth District area only. Other totals for entire six states. **Daily average basis, ment of Commerce benchmarks. r-Revised. p-Preliminary estimate. ‘ Reflects the revision of current monthly estimates to 1966 U.S. Depart- D e b its to D e m a n d D e p o s it A c c o u n ts Insured Commercial Banks in the Sixth District (In T h o u s a n d s o f D o lla r s ) Jan. 1968 Dec. 1967 Percent Cnange Percent Change Jan. 1968 from Jan. 1968 from Jan. 1967 Jan. 1968 Dec. Jan. 1967 1967 STANDARD METROPOLITAN STATISTICAL A REA St B i r m i n g h a m ................ . Gadsden .................... H u n t s v i ll e .................... Mobile ....................... M o n t g o m e r y ................ Tuscaloosa ................ 1,700,776 66,500 193,946 571,223 320,277 117,622 1,503,088 61,510 185,576 500,314 331,960 101,444 1,621,549 +13 62,565 +8 192,270 +5 520,774r + 14 306,558 -4 99,767 +16 +5 +6 +1 +10 +4 +18 Ft. Lauderdale— H o lly w o o d ................ 930,513 J a c k s o n v ille ................ . 1,690,593 Miami ....................... . 2,996,284 O r l a n d o ....................... 748,594 P e n s a c o l a .................... 221,634 Tallahassee ................ 151,113 Tampa-St. Petersburg . . . 1,752,034 W. Palm Beach . . . . 582,167 719,097 1,507,087 2,607,778 647,180 196,717 142,096 1,508,433 469,213 772,730 1,524,861 2,376,153 623,358 194,287 137,929 1,486,336 482,165 +29 +12 + 15 +16 +13 +6 +16 +24 +20 + 11 +26 +20 +14 +10 + 18 +21 Albany ....................... Atlanta ....................... A u g u s t a ....................... C o l u m b u s .................... Macon ....................... Savannah ................... 110,297 . 5,626,301 304,065 243,019 280,259 305,460 100,457 5,794,148r 288,182 231,651 254,772 282,658 94,859 + 10 4,663,736r - 3 296,137 +6 221,044r + 5 242,995 + 10 278,515 +8 + 16 +21 +3 + 10 + 15 +10 Baton R o u g e ................ Lafayette ................... Lake Charles ............. New O r le a n s ................ 640,229 150,118 179,819 2,627,433 556,372 122,917 156,614 2,448,913 562,505 134,488 166,470 2,591,836 + 15 +22 +15 +7 +14 +12 +8 +1 Jackson ....................... 692,575 820,089 598,261 -1 6 +16 C h a t t a n o o g a ................ Knoxville .................... Nashville ................... 662,433 522,004 . 1,782,033 642,076 498,786 1,811,560 634,985 470,382 1,482,446 +3 +5 -2 +4 + 11 +20 Lakeland ................... , Monroe County . . . . . . St. Augustine .............. St. P e t e r s b u r g ............. Sarasota ................... . Tampa ....................... Winter H a v e n ............. Anniston .................... Dothan ....................... Selma ....................... Bartow ....................... B r a d e n t o n ................... Brevard County ............. Daytona B e a c h ................ Ft. Myers-N. Ft. Myers . . Gainesville ................ .. 67,836 71,196 45,933 68,480 61,816 53,066 64,499 62,688 41,895 -1 + 15 -1 3 +5 +14 + 10 50,260 102,749 270,656 105,782 113,887 98,588 38,583 73,903 253,088 82,009r 98,282 92,331 49,341 87,336 248,616 91,553 92,905 86,766 +30 +39 +7 +29 +16 +7 +2 +18 +9 +16 +23 + 14 ‘Includes only banks in the Sixth District portion of the state. MARCH 1968 138,859 39,969 61,934 24,632 344,549 121,445 766,796 78,810 +22 +20 +13 +21 +22 +31 +16 +33 + 11 +1 +8 -2 +19 +31 +19 +4 92,594 50,141 97,139 14,617 75,285 37,567 22,155 28,114 76,308 62,862 76,290 47,673 95,468 15,476 68,102 37,378r 23,078 23,487 78,245 60,411 80,644 43,010 82,010 14,707 75,004 38,892 23,796 26,885 73,073 57,473 +21 +5 +2 -6 +11 +1 -4 +20 -2 +4 +15 +17 +18 -1 +0 -3 -7 +5 +4 +9 . . . 14,186 148,401 8,610 38,828 37,982 14,867 31,472 11,247 132,540r 7,176 39,496r 38,264 11,437 27,757 12,772 146,901 7,272 37,730 40,630 12,649 29,692 +26 +12 +20 -2 -1 +30 +13 +11 +1 +18 +3 -7 +18 +6 B ilo x i-G u lfp o r t............. H a t t i e s b u r g ................ Laurel ....................... Meridian ................... . . N a t c h e z ....................... Pascagoula-Moss Point V i c k s b u r g ................... , . Yazoo City ................ 112,722 62,267 37,517 72,613 41,063 70,150 44,119 31,326 105,037 55,861 37,027 69,321 40,535 56,162 41,382 27,481 100,503 57,199 34,126 70,915 39,632 58,288 44,302 27,924 +7 +11 +1 +5 +1 +25 +7 +14 +12 +9 + 10 +2 +4 +20 -0 +12 Bristol ....................... Johnson City ............. K i n g s p o r t ................... 85,146 85,911 163,574 80,152 78,413 160,006 77,237r + 6 78,004 +10 144,853 +2 +10 +10 +13 SIXTH tPartially estimated. Dec. Jan. 1967 1967 126,446 33,717 59,251 20,097 338,012 121,572 786,248r 61,580 Abbeville ................... . Alexandria ................ Bunkie ........................ H a m m o n d ................... , New Iberia ................ . P la q u e m in e ................ T h ib o d a u x ................... OTHER CEN T ERS Jan. 1967 154,014 40,517 66,926 24,251 411,638 158,668 911,255 81,796 Athens ......................., B r u n s w ic k ................... . Dalton ......................., Elberton ................... Gainesville ................ , Griffin ....................... LaGrange ................... . N e w n a n ........................ . Valdosta ................... DISTRICT, Total . . . . Dec. 1967 . . . . . . . . . . . . 35,743,669 A l a b a m a ! .................... . 4,504,700 F lo r id a ^ ....................... . 11,710,724 Georgia^ .................... . 8,971,922 Louisiana!* ................ . 4,485,559 M ississippi!* ............. . 1,543,836 Tennessee!* ................ . 4,526,928 33,205,302r 31,375,671r 4,092,348 10,061,834 8,888,347r 4,087,018 l,610,339r 4,462,727 +7 +14 4,198,429r +10 9,844,809 +16 7,677,091r +1 4,342,362 +10 1,375,473 -4 3,952,071r +1 +7 +19 +17 +3 +12 +15 tEstimated. 43 D is tric t B u s in e s s C o n d itio n s Despite caution in some sectors, the District’s economy remains upward bound. Nonfarm jobs ad vanced in January, keeping the unemployment rate at a low level. Though plagued by rising mortgage costs and exceptionally poor building weather, construction continued its recovery. Consumers spent their earnings reluctantly and restricted their borrowings. Overall loan growth was hesitant in February, with most gains occurring at smaller banks. Farmers are preparing for the upcoming crop year. Nonmanufacturing employment sparked the January job advance, but crosscurrents clouded developments within manufacturing. Even though manufacturing jobs increased, the average work week contracted because of a sharply reduced workweek in the textile-apparel industries and inclement weather. Construction was still recovering from the low levels of early 1967, as the new year got under way. The dollar value of total construction con tracts for January rose further to a level sub stantially above that of a year ago. The dollar volume of nonresidential contracts also exceeded its December level, and was sharply higher than in January 1967. Demand factors for housing re mained strong. Foreclosure rates and inventories of new houses for sale declined further during fourth quarter 1967. Although savings inflows at savings and loan associations slowed in January, mortgage acquisitions increased at a rate substan tially above that of January 1967. Investment acquisitions dominated bank credit growth in February. Large District banks were avid buyers of the 15-month 5% percent Treasury notes. Although loans advanced at smaller banks, Digitized 44for FRASER moderate declines in business loans at larger banks were indicative of the generally cautious mood of corporate borrowers. Time-deposit growth was healthy, especially at smaller banks. Outstanding consumer instalment debt at banks declined slightly during January as repayments on existing loans exceeded new loan extensions. All categories of instalment lending dropped; but with the exception of other consumer goods loans, year-ago increases were registered. Total retail spending improved very little in January, as did automobile sales. In the southern parts of the District some farm ers are starting preliminary field work. In other regions snow and unusually cold weather have been rough on livestock. Prices received by Flor ida orange growers have more than tripled be cause production is 32 percent below last year’s. Cotton prices weakened considerably from the last quarter of 1967, but are well above those of a year ago. Seasonal prices for broilers and eggs are expected to improve further. N O T E: D ata on w h ic h s ta t e m e n ts are b a se d h a ve bee n a d ju ste d w h e n e v e r p o s s ib le to e lim in a te s e a s o n a l in flu e n c e s. MONTHLY REVIEW
@FedFRASER