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In T h is Is s u e :
Banking Markets and Future Entry
Business Loans Made by Sixth District Banks:
Is the Qualitative Information Consistent?
Banking Notes: Consumer Loan Delinquencies Rise
District Business Conditions
Banking Markets
and Future Entry
by Charles D. Salley
T h e fo re c lo su re o f p o ssib le futu re c o m p e titiv e d e v e lo p m e n ts has b e c o m e an
im p o rta n t feature o f antitru st c h a lle n g e s to b a n k m e rge rs a n d h o ld in g c o m p a n y
a c q u is itio n s sin ce the 1960's. R e g u la to ry a g e n c ie s h a ve sh o w n a d e sire to
p re v e n t the a c q u is itio n o f m a jo r lo ca l m a rke t o r g a n iz a tio n s b y n o n lo c a l
in stitu tio n s that m ig h t en ter that m arke t in the n e a r fu tu re as c o m p e tito rs.
S u c h entry b y a c q u is itio n m a y b lo c k an in d e p e n d e n t entry, thu s p re v e n tin g a
p re fe rab le increase in the m a rk e t's c o m p e t in g o rg a n iz a tio n s.
In these futu re c o m p e titio n cases, the lik e lih o o d o f in d e p e n d e n t entry
b e c o m e s p a ra m o u n t. In the past, ra p id ly g r o w in g areas w ith certain
ch aracteristics have be en e sp e c ia lly attractive as n e w m a rke ts to e x p a n d in g
b a n k in g o rg a n iz a tio n s. A s a c o n s e q u e n c e o f this a p p a r e n t re la tio n sh ip a m o n g
e c o n o m ic gro w th , structural characteristics, a n d n e w entry, the im p o rta n c e
o f a n tic ip a tin g g ro w th tre n d s in lo ca l b a n k in g m a rke ts has increased.
T h e B o a rd o f G o v e r n o r s o f the Federal R ese rve Sy ste m has d e n ie d b a n k
a c q u is itio n s b y h o ld in g c o m p a n ie s w h ic h c o u ld re a so n a b ly b e e x p e cte d to
en ter a m arke t o n a “ f o o t h o ld " b a sis if d e n ie d en try b y m erger. In 13 o f 18
su c h a c q u is itio n s d e n ie d in the Sixth D istric t fro m 1962 to 1973, the p ro je c te d
alte rnate entry w a s m a d e .1
T h e m a jo rity o f Sixth D istric t m arke t entry cases, h o w e v e r, h a ve c o n c e rn e d
a h o ld in g c o m p a n y 's o p e n in g a de novo affiliate o r a c q u ir in g a first affiliate
in re sp o n se to a m a rk e t's p o p u la tio n a n d p e rso n a l in c o m e g r o w th ; this has
b e en e s p e c ia lly true in F lo rid a .2 U n d e r these n a rro w c irc u m sta n c e s, futu re
c o m p e titio n a rg u m e n ts h a ve d ra w n u p o n p ara lle l e x a m p le s o f p are n t c o m p a n ie s
w h o re s p o n d e d to sim ila r e x p a n sio n o p p o rtu n itie s. For e x am p le , after tw o
o r three h o ld in g c o m p a n ie s h e a d q u a rte re d in J ac k so n ville , Florida, h ad
e sta b lish e d n e w affiliates in ra p id ly g r o w in g O r la n d o , it se e m e d lo g ic a l that
1See "Bank Acquisitions and Future Competition,” C. D. Salley, this Review, May 1974.
2See "Southern Banks Take Cue from Economic Growth," Joseph E. Rossman, this Review, August 1971.
Monthly Review, Vol. LX, No. 3. Free subscription and additional copies available
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MARCH 1975, MONTHLY REVIEW
o t h e r m e t r o p o lita n
c o m p a n ie s
o f th e s a m e
s iz e
TA BLE 1
w o u l d a t t e m p t t o m o v e in t o t h a t m a r k e t a ls o .
Location Q uotient: M easure of Em ploym ent Sp e cia lizatio n
1973 Percen t D istribution
A s t h e b a n k in g s t r u c t u r e s o f F lo r id a , T e n n e s s e e ,
a n d A la b a m a m a t u r e , t h e s e " p r o b a b le e x p a n s io n
p a th s"
m a y n o t b e a n t ic ip a t e d
s o e a s ily , e s p e c ia lly
Em ploym ent
Secto r
in c a s e s w h e r e t w o p a r e n t s y s t e m s s e e k t o m e r g e . 3
A s s e s s in g f o r e c lo s e d fu tu r e c o m p e t it io n
in t h e s e
p r o p o s a ls
e x p a n s io n
m eans
p a th s fo r b o th
p r o b a b le
A griculture, Forestry,
and F ish e rie s
M ining
C on struction
M anufacturing
Transpo rtation and
P u b lic U tilitie s
W holesale Trade
Retail Trade
Fin a n ce , In su ran ce,
and Real E state
S e rv ic e s
U n cla ssifie d
h o l d i n g c o m p a n y s y s t e m s if t h e y
w e r e to r e m a in
beyond
e s t im a t in g
in d e p e n d e n t . T h is g o e s a s te p
a s s e s s in g t h e p r o b a b ilit y o f o n e s y s t e m 's
fu tu re e n try
in t o a s i n g l e
m ark e t.
T o a c c o m p l i s h t h is , s o m e q u a n t i t a t i v e t o o l s m a y
b e u s e f u l in i d e n t i f y i n g t y p i c a l m a r k e t s f o r h o l d i n g
c o m p a n y e x p a n s i o n . In F l o r i d a , m o s t b a n k a c q u i s i
t i o n s d u r i n g t h e B o a r d ' s f ir s t t e n y e a r s o f h o l d i n g
m a jo r m e t r o p o lit a n
and
" p r im a r y "
m a rk e ts,
a n t ic ip a t e d
th a t
le d
to
th e
in v o l v i n g t w o
and
any
e v e n t u a lly w o u ld
T h is
a re a s — J a c k s o n v ille , T a m p a ,
M ia m i.4 T h e s e
it
w e re
e n t e r a ll p r i m a r y
p r e v a ilin g
id e a
o p e r a t in g
in
p r im a r y
e x a m in e d
f o r f o r e c lo s u r e
of
syste m
m a r k e t s a ls o .
th a t
m a rk e ts
m e rg e r ca se s
s y s t e m s a lr e a d y
s h o u ld
t h e ir
be
lik e ly
c lo s e ly
fu tu re
e n t r y in t o e a c h o t h e r ' s h o m e m a r k e t s . O n t h e o t h e r
h a n d , s m a lle r
so
lik e ly
If
to
th e
ru ra l
e n te r
sy ste m s
each
p r im a r y
a re
h e lp
p in p o in t s e c t o r s
re ce n t
g ro w th
a c q u ir in g
f o r a n t it r u s t e v a l u a t i o n , h o w
can
r e c e iv e s s o m e
be
M o re
th e se
m ark e ts
im p o r t a n t ly ,
c a n e m e r g in g p r im a r y m a r k e t s b e id e n t if ie d ?
B r o w a r d C o u n t y , F lo r id a , b e c a u s e
C o u n ty , b eca u se
b e c o n s id e r e d
c o u n t ie s
p o p u la t io n
g ro w th ,
o f its c e n t r a l
or
lo c a t io n ,
to
d e v e lo p
th e
p r e s e n t ly
t h e s e q u e s t io n s
is
t o p r o f i l e a m a r k e t ' s e x is t in g e c o n o m i c a c t iv it y .
Tw o
to o ls
o f r e g io n a l
e c o n o m ic s ,
b ase
The
in
o th e r
th a t
stru c tu ra l
m easu re, can
m ark e ts
th e y
w h o se
m ig h t
be
c h a r a c t e r is t ic s .
m a r k e t s e c t o r p r e s u m a b ly
th a t
exceeds
lo c a l
o f its i n c o m e
n o n lo c a l in c o m e th e n
p ro d u ce s
fro m
m akes
its w a y a s w a g e s
T h e s e c t o r is b a s i c , t h e n , in t h e s e n s e t h a t o t h e r
B eca u se
b ase
se cto rs
d e m a n d s, th ey
p ro d u ce
a re a ls o
fo r
s o m e t im e s
n o n lo c a l
c a lle d
e x p o rt
t ie s e x p o r t s e r v i c e s t o w i n t e r v i s i t o r s .
m a r k e t 's
se cto rs,
e c o n o m ic
w h ic h
have
b ase
c o n s is t s
p r o p o r t io n a t e ly
of
th e se
g re a te r
e m p lo y m e n t o r in c o m e th a n th e n a t io n a l o r sta te
a v e r a g e . F o r e x a m p l e , in 1 9 7 3 a b o u t 1 2
se cto r
p e rce n t
o f T a m p a 's to ta l e m p lo y m e n t w a s e n g a g e d
u s e d to id e n t if y im p o r ta n t s o u r c e s o f in c o m e a n d
w h o le s a le
th e
d iv e r s it y
s im p le
to o ls
o r s p e c ia liz a tio n
p e r m it a n a ly s is
d e s c r ip t io n
of
to
p r im a r y
beyond
m a rk e ts
as
tra d e ,
co m p a re d
w ith
in
a s t a t e w id e
a v e r a g e o f a b o u t 7 p e r c e n t ( s e e T a b l e 1 ) . T h e r a t io
o f e m p lo y m e n t .
m ove
and
o t h e r s o u r c e s .5
a n a l y s i s a n d e m p l o y m e n t s h if t a n a l y s i s , m a y b e
T h ese
fo r
c o n s u m p t io n
a n d p u r c h a s e s i n t o l o c a l t r a d e a n d s e r v i c e a c t iv it y .
A
h a v e b e e n e s p e c ia ll y a tt r a c t iv e f o r b a n k e n tr y ?
in a n s w e r i n g
100.00
b a s e s e c t o r s ; f o r e x a m p le , m a n y F lo r id a c o m m u n i
e c o n o m ic
c h a r a c t e r i s t i c s o f t h e u r b a n m a r k e t s in F l o r i d a t h a t
T h e f ir s t s t e p
100.00
lo c a l i n c o m e s t r e a m s d e p e n d u p o n its p r o d u c t i v i t y .
P o lk
p r i m a r y m a r k e t s ? If n o t , a r e t h e s e
lik e ly
.79
.89
.50
a
b ase
r e m a r k a b le
6.98
20.38
.43
Base Sector Analysis
i . e .,
dem and
its
8.74
22.67
.85
in d ic a t e s
p r im a r y
A
F o r e x a m p le , c a n
1.26*
1.69*
.88
c o m m o n to th e u rb a n m a r k e t s p r e s e n t ly c o n s id e r e d
a
of
9.54
11.55
21.45
p r i m a r y . S h if t a n a l y s i s , a d y n a m i c
m a rk e ts.
d e s ig n a tio n ,
id e n t if ie d ?
7.55
6.83
24.34
m e a s u r e , c a n p r o v i d e a p r o f i l e o f e x is t in g e c o n o m i c
b a n k i n g s y s t e m s , is b e c o m i n g a t h r e s h o l d c r i t e r i o n
q u a n t it a t iv e ly
.89
.03
.82
1.18*
a c t i v i t y a n d t h u s id e n t i f y s t r u c t u r a l c h a r a c t e r i s t i c s
h ig h - p r io r it y m e t r o p o lit a n e n tr y p o in t f o r s t a t e w id e
how
.74
.01
9.40
19.47
n o t c o n s id e re d
o t h e r 's
m ark e t
.83
.30
11.38
16.46
w id e ly
s t a t e w id e
h o ld in g c o m p a n y
Location
Quotient
(2) * (1)
dubbed
becam e
a s p ir in g
(2)
Tam pa
♦Quotient greater than one d esig n ates an econo m ic b a se
sector.
c o m p a n y r u l i n g s ( 1 9 5 9 - 1 9 6 9 ) t o o k p l a c e in f o u r
O r la n d o ,
(1)
Florida
a
th o se
o f T a m p a ' s t o F l o r i d a ' s e m p l o y m e n t in t h i s s e c t o r ,
t h e n , w a s 1 2 : 7 , o r 1 .6 9 . T h i s
m e a n s T a m p a 's
th a t h a v e la rg e r p o p u la t io n s a n d m o r e b a n k o f f ic e s
w h o le s a le
is o v e r o n e
t h a n t h e s t a t e a v e r a g e . B a s e s e c t o r a n a l y s i s , a s t a t ic
o n e - h a l f t i m e s a s g r e a t a s t h e s t a t e a v e r a g e , m a k in g
tra d e
e m p lo y m e n t
th e m a r k e t r e la t iv e ly s p e c ia l iz e d
3For example, First Florida Bankshares— United Bankshares (1972),
Pan American Bancshares— ComBanks, Inc. (1973), and First
Bancgroup of Alabama— Citibanc Group (1974).
4See "A Decade of Holding Company Regulation in Florida,"
C. D. Salley, this Review, July 1970.
FE D ER A L R ESER V E BAN K O F ATLA N TA
and
in t h a t s e c t o r .
’’See "Location Theory and Regional Economic Growth," Douglas
C. North, Journal of Political Economy, Vol. 63 (June 1955),
pp. 243-258, and The Community Economic Base Study, Charles
M. Tiebout, New York: Committee for Economic Development,
1962.
31
TA B LE 2
Eco no m ic B a se A n a ly sis
Em plo ym en t
Se cto r
Ja ckso n
ville
A g riculture, Forestry,
and F ish e rie s
.47
—
M ining
C on struction
.91
M anufacturing
.86
Transportation and
P u b lic U tilities
1.25*
W holesale Trade
1.50*
Retail Trade
.88
Fin a n ce , In su ran ce, and
Real E state
1.10*
Se rv ice s
.91
—
U n cla ssifie d
Tam pa
Orlando
.86
M iami
.89
.03
.82
1.18*
1.24*
.93
.59
.30
.70
1.00*
1.26*
1.69*
.88
.85
1.15*
.79
1.46*
1.14*
.85
.79
.89
.90
1.20*
1.10*
1.09*
—
—
—
—
Note:
Location qu otien ts com puted from em ploym ent
data, M arch 1973, U. S. Departm ent of C om m erce,
County B u sin e s s Pattern s.
*B a se sector.
_______________________________________________________
T h is ra tio o f lo c a l to s t a t e w id e e m p l o y m e n t
is c a lle d a " lo c a t io n q u o t ie n t . " A v a lu e o f o n e
s h o w s th a t a s e c t o r ju s t m a tc h e s th e sta te a v e r a g e ;
a q u o t ie n t g r e a t e r th a n o n e p in p o in t s a s e c t o r
o f g r e a t e r -t h a n -s t a t e -a v e r a g e e c o n o m ic a c t iv it y ,
o r a b a s e s e c to r. T a m p a ' s b a s e s e c to rs a re w h o le s a le
tra d e , t r a n s p o r t a t io n a n d p u b lic u tilitie s , a n d
m a n u f a c t u r in g (see T a b le 1).
P rim a r y M a r k e t B a se S e c to r s
A s m e n t io n e d , F lo rid a ' s f o u r m a jo r m e t r o p o lit a n
m a rk e ts h a v e c o m e t o b e c o n s id e r e d lo g ic a l ta rg e ts
f o r h o ld i n g c o m p a n ie s e x p a n d in g in t o s t a t e w id e
s y s te m s . E c o n o m ic b a s e a n a ly s is s h o w s th a t th e
c o m m o n b a s e s e c t o r in all f o u r m a rk e ts is w h o le s a le
tr a d e (see T a b l e 2). T r a n s p o r t a t io n a n d p u b lic
u tilitie s a re c o m m o n b a s e s e c to rs in t h r e e o f th e
m a r k e t s ; fin a n c e , in s u r a n c e , a n d rea l e sta te a re
b a s e s e c to rs in t w o . H o w e v e r , O r l a n d o , th e m o s t
r e c e n t ly d e v e l o p e d m e t r o p o lit a n a re a , d if fe r s f r o m
th e o l d e r m a rk e ts w it h a d d it io n a l b a s e s e c to rs in
c o n s t r u c t io n a n d s e rv ic e s . O n l y T a m p a h a s a
m a n u f a c t u r in g b a se . It a p p e a r s , t h e n , th a t F lo rid a 's
p r im a r y m a rk e ts t y p ic a lly e x p o r t w h o le s a le tra d e ,
t r a n s p o r t a t io n , a n d p u b lic u t ilit y s e r v ic e a n d
fin a n c ia l s e rv ic e s .
P o s s ib le P rim a r y M a r k e t s
T h is in s ig h t is u s e fu l in a s s e s s in g B r o w a r d a n d
P o lk C o u n t ie s as p o s s ib le p r im a r y m a rk e ts . B r o w a r d
C o u n t y , w it h h ig h e r to ta l e m p l o y m e n t th a n s o m e
p r im a r y m a rk e ts , is s p e c ia liz e d in a g r ic u lt u r e ,
c o n s t r u c t io n , re ta il sa le s, a n d s e r v ic e s (see T a b le
3). T h is r e t a il- o r ie n t e d e m p l o y m e n t p a tte rn is
t y p ic a l o f o t h e r r a p id ly g r o w i n g c o a s ta l a re a s
32
s u c h as P a lm B e a c h C o u n t y a n d V o lu s ia C o u n t y
( D a y t o n a B e a ch ) a n d s t r o n g ly c o n tra s ts th e t y p ic a l
p r im a r y m a r k e t p a tte rn .
P o lk C o u n t y , s a n d w ic h e d b e t w e e n T a m p a a n d
O r l a n d o , d if fe r s n o t o n l y f r o m th e s e p r im a r y
m a rk e ts b u t a ls o f r o m B r o w a r d a n d o t h e r p o p u lo u s
c o a sta l c o u n t ie s . Its lo c a t io n q u o t ie n t s in d ic a t e
b a s e s e c to rs in m in in g a n d m a n u f a c t u r in g ,
r e fle c t in g th e area's ric h p h o s p h a t e d e p o s it s . T h is
c o u n t y ' s e m p l o y m e n t p r o f ile s ta n d s m u c h c lo s e r
to th e n a tio n ' s m a n u f a c t u r in g - o r ie n t e d a v e r a g e
th a n to F lo rid a ' s s e r v ic e - o r ie n t e d a v e r a g e . O n l y
th e c o u n t y ' s w h o le s a le b a s e in d ic a te s a
c h a ra c te ris tic F lo r id a p r im a r y m a rk e t. T h e g r o w t h
t r e n d o f th is a n d o t h e r b a s e s e c to rs m ig h t
f o r e s h a d o w a s t r e n g t h e n e d p r im a r y m a r k e t r o le
f o r th e c o u n t y ; to d e t e r m in e s u c h t r e n d s , th e
e m p l o y m e n t s h ift a n a ly s is is n e c e s s a ry .
E m p l o y m e n t S h if t A n a l y s i s
A s b a s e s e c t o r a n a ly s is id e n t ifie s a m a rk e t's
e m p l o y m e n t s p e c ia liz a t io n , th e s h ift a n a ly s is
id e n t ifie s c h a n g e s in a m a rk e t's e m p l o y m e n t
p r o f ile b y c o n t r a s t in g lo c a l g r o w t h p a tte rn s a g a in s t
a v e r a g e c h a n g e s f o r th e sta te as a w h o l e .
T h e sta te a v e r a g e is r e g a r d e d as a n " e x p e c t e d "
ra te o f g r o w t h . T h e p e r c e n t a g e in c re a s e in sta te
e m p l o y m e n t o v e r a g iv e n p e r io d is a p p lie d to a
p a r t ic u la r m a r k e t t o d e t e r m in e its e x p e c t e d c h a n g e
f o r th e s a m e p e r io d . If a m a rk e t's a c tu a l
e m p l o y m e n t c h a n g e d u r i n g th e p e r io d e x c e e d s
th e e x p e c t e d in c re a s e b y , s a y, 6 ,0 0 0 e m p lo y e e s ,
t h e r e h as b e e n a n e t s h ift o f 6 ,0 00 .
A m a rk e t's e m p l o y m e n t g r o w t h c a n d if f e r f r o m
th e sta te a v e r a g e , i.e ., h a v e a n e t sh ift, in t w o
d is t in c t w a y s . First, i n d iv id u a l lo c a l s e c to rs m a y
g r o w m o r e r a p id ly th a n th a t s e c t o r s t a t e w id e .
T h is is c a lle d e it h e r t h e lo c a l fa c t o r e ffe c t, th e
TA BLE 3
E co no m ic B a se A n a lysis
Em ploym ent
S ecto r
A griculture
Mining
Construction
M anufacturing
Transportation and
P ub lic U tilitie s
W holesale Trade
Retail Trade
Fin an ce, In su ran ce, and
Real Estate
S ervices
P rim ary M arket Broward
P atte rn 1
County
Polk
County
.55
.10
.85
.95
1.02*
.37
1.31*
.71
1.47*
13.50*
.83
1.58*
1.30*
1.50*
.86
.76
.67
1.15*
.53
1.02*
1.10*
.98
1.01*
1.09*
.63
.82
.97
’ Pattern is taken a s typ ical of 1973 location quotients
in Table 2.
* B a se sector.
M A R C H 1975, M O N T H LY R E V IE W
TA BLE 4
195 3-1973 EM PLO YM EN T S H IF T S
(0 0 0 ’s Em ployees)
Tam pa
Jackson ville
Orlando
Miami
Polk
Broward
Expected In cre ase
if M atched Florida
Growth R ate
195
151
69
405
69
Actual In crease
103
114
122
382
182
74
43
-3 1
Net Shift
-
92
-
37
53
-
23
113
Lo cal Grow th Effect
-1 0 1
-
30
52
-
42
107
-2 1
9
-
7
1
19
6
-1 0
Lo cal Mix Effect
lo c a l g r o w t h e f f e c t , o r , s o m e t i m e s , t h e d i f f e r e n t i a l
c o n t r a s t t o t h e o t h e r m a r k e t s s h o w s u p in O r l a n d o
s h if t .6
and
T o ta l
fro m
lo c a l e m p lo y m e n t g r o w t h
m a y a ls o
d if f e r
C o u n t y 's
se cto rs
fa ste r th a n
th e s ta te a v e ra g e b e c a u s e , s ta t e w id e , s o m e
e m p lo y m e n t s e c to rs g ro w
B ro w ard
in d iv id u a l
th e
sta te
s p e c ia liz e d
in
th e se
s lo w e r - g r o w in g
la g t h e s t a t e 's a v e r a g e g r o w t h
T h i s is c a l l e d
t h e lo c a l m ix e f f e c t .
ra te .
o f e m p lo y m e n t
g ro w th
fro m
o v e r r id in g
s p e c if ie d
c o u n t ie s
com m on
th e o th e r tw o
lo c a l
se cto rs
g r o w in g
f a s t e r t h a n a v e r a g e f o r t h e s e s e c t o r s ( lo c a l g r o w t h
p r im a r y
e f f e c t ) o r r e s u lt s f r o m
s h o u ld
a lo c a l
p r e d o m in a n c e
of
F o r in s t a n c e ,
had
Tam pa
a v e ra g e
1953
in c r e a s e d
and 1973
m ay
g ro w th
h e lp
e ffe cts
in
d e t e r m in e
th e
w h e th e r
b a s e s e c t o r c h a r a c t e r is t ic s a n d
m a rk e ts a re
c o m m e r c ia l
b e g iv e n
c e n te rs.
to th e
w h e th e r
lik e ly to e m e r g e a s
S p e c ia l
b ase se cto rs
a t t e n t io n
id e n t if ie d
it s
T h e c h a r a c t e r is t ic b a s e s e c t o r s , t ra n s p o r t a t io n
to ta l
a t F lo r id a 's
rate o f 2 2 9 p e r c e n t , th e re w o u ld
a n d p u b lic u t ilit ie s a n d f in a n c ia l s e r v ic e , s e e m to
b e d e c l i n i n g in t h e p r i m a r y m a r k e t a r e a s ( s e e T a b l e
have
b e e n a n e x p e c t e d in c r e a s e o f 1 5 1 ,0 0 0 jo b s b y 1 9 7 3
5 ). O n
(s e e T a b le
in t h e i m p o r t a n t w h o l e s a l e t r a d e b a s e s e c t o r o f
o n ly
4 ). T h e r e
1 1 4 ,0 0 0
jo b s ,
o f 3 7 ,0 0 0 . S u c h
w as
s h if t
in T a m p a
w o rd s,
to
r e p r e s e n t in g
s lo w ly th a n
3 0 ,0 0 0
a n a ly s is
th e
becau se
jo b s .
a tt r ib u t e d
lo c a l
except
of
P o lk
g ro w th
so m e
The
lo c a l
th e
n e g a t iv e
lo c a l
m o st
e ffe ct.
se cto rs
jo b
of
s h if t
In
of
o n ly
7 ,0 0 0
C o u n ty ,
appear
F u rth e rm o re ,
Tam pa
a p p e a r to b e s t r e n g t h e n in g
and
M ia m i
t h e ir p r im a r y
m ark e t
b ase
m a n u f a c t u r in g a n d s e r v ic e s , r e s p e c t iv e ly . O r la n d o ,
is
c o n s id e r a t io n ,
by
6See Regions, Resources, and Economic Growth, H. S. Perloff
and others, Baltimore: Johns-Hopkins Press, 1960, p. 71.
a ls o
by
r e d u c in g
t h e ir
dependence
upon
in c o n t r a s t t o t h e o t h e r p r i m a r y m a r k e t s , s h o w s
th e
stro n g g ro w th
L o o k in g
a
in t h e
n o n c h a r a c t e r is t ic s e c t o r s o f
c o n s t r u c t io n , m a n u f a c t u r in g , a n d
n ext at th e
B ro w ard
a r e a s f o r h in t s o f p o s s ib le
s e r v ic e s .
and
P o lk
e m e rg e n ce
m ark e t
as n o n
m a n u fa c t u r in g w h o le s a le c e n t e r s , th e e v id e n c e
not
FE D ER A L R ESER V E BAN K O F A TLAN TA
J a c k s o n v ille
lo s t
la r g e p r o p o r t i o n o f s l o w - g r o w t h s e c t o r s . A s t r ik i n g
except
but
jo b s
h a n d ic a p p e d
m a rk e ts
g ro w th
s ta tu s n o t o n ly b y in c r e a s in g t h e ir w h o le s a le
in t h e s l o w e r - g r o w i n g s e c t o r s .
under
p r im a r y
lo c a l
m o re
m ix e f f e c t , t h a t is , t o
m ark e ts
th e
c h a r a c t e r is t ic .
o th e r
g re w
a ll
th e o t h e r h a n d , p o s it iv e
i n d i c a t e s c o n t i n u i n g s p e c i a l i z a t i o n in t h i s s t r u c t u r a l
as
lo s s e s
in t h e s t a t e , T a m p a
lo s s
a r e a 's s p e c i a l i z a t i o n
N one
a
in c r e a s e
to o t h e r m a rk e t a re a s.
a tt r ib u t e d
e ls e w h e r e
to t h e
a ctu a l
a s h if t is s o m e t i m e s v i e w e d
o u t w a r d , a lo s s o f j o b s
The
an
in
t h e s ta t ic a n a ly s is .
s l o w - g r o w t h s e c t o r s ( lo c a l m ix e f f e c t ) .
e m p lo y m e n t b e tw e e n
lo c a l
t h e f o u r e x i s t in g p r i m a r y m a r k e t s w i l l r e t a in t h e i r
th e
is
som e
g re w
a v e ra g e .
L o o k in g c lo s e ly a t t h e s p e c if ic s e c t o r s a c c o u n t in g
s t a t e a v e r a g e . It d e t e r m i n e s w h e t h e r t h is v a r i a n c e
to
e f f e c t s . A ll
m ark e ts
Local Growth Effects
fo r th e
T h e s h i f t a n a l y s i s f o c u s e s , t h e n , o n t h e n e t s h if t ,
a tt r ib u t a b le
g ro w th
tw o
se cto rs
w ill g e n e r a lly
o r v a r ia n c e ,
lo c a l
th e se
le s s r a p i d l y t h a n o t h e r s .
H e n c e , a lo c a l m a r k e t w h ic h h a s a n e m p lo y m e n t
m ix
in
p r o m is in g . A lt h o u g h
show n
p o s it iv e
lo c a l
B ro w ard
g ro w th
in
C o u n ty
w h o le s a le
is
has
tra d e ,
t h is is e c l i p s e d b y s t r o n g e r g r o w t h in c o n s t r u c t i o n ,
33
TA BLE 5
LO CA L GROW TH E F F E C T S
(0 0 0 ’s Em ployees)
Em ploym ent
Secto r
A g riculture, Forestry,
and F ish e rie s
-
Broward
.3
.4
.6*
-
.7
-
.4
.1
.1
-
1.3*
-
3.5
16.1*
-
2.7
14.6
-
7.1
■ 1.4
M ining
C onstruction
-
5.4
M anufacturing
-
28.3
Transportation and
P u b lic U tilitie s
-
6.5*
W holesale T rad e
-
5.6*
Retail Trade
-
Fin a n ce , In su ran ce, and
Real E state
Se rv ice s
9.3*
-
.9*
28.4
-
4.0
2.2*
1.0*
4.1
27.0
-
8.2
-
14.1*
-
1.4
-
12.2
- 1 4 .7
10.4
- 2 0 .3 *
-
1.6
.7
23.2*
Total Lo cal Growth
Effect
-101.1
51.8
-30.6
.2
6.8*
7.3
9.2-
7.0
-
3.7*
- 2 7 .8
30.8*
-
.5
-
.9*
11.6*
-
1.9
- 3 0 .5 *
18.6*
-
4.5
■5
.8
.5
-42.1
107.5
-2 1 .2
______.9
U n cla ssifie d
Polk
Miami
Orlando
Tam pa
Ja ck so n v ille
*1973 base secto r
r e t a il t r a d e , a n d
t y p ic a l
b ase
p a tte rn .
In
s e r v ic e s . M o r e o v e r , t h e s e
se cto rs
o th e r
o f th e
w o rd s,
F lo r id a
C o u n ty ,
in
co n tra st,
its b a s e s e c t o r s o f m i n i n g ,
se cto r
tra d e . T h o u g h
p o rte n d e d
a
f a ile d
to
keep
th e
On
d y n a m ic
lik e ly
c o m p a n ie s
if d e n i e d
to
b ased
in
e n try
th e se
m ark e t
tra d e
b ase
d e v e lo p m e n t
does
not
th e c o n tra ry , th e c o n tin u in g
bear
t h is
m e rg e rs
o f M ia m i- a n d T a m p a - b a s e d c o m p a n ie s b e d e n ie d
to p r e s e r v e
m a n u f a c t u r in g , a n d
a w h o le s a le
p r im a r y
a n a ly s is
r e a s o n a b ly
m a rk e t
t h e b a s is o f t h e e c o n o m i c a n a l y s i s , s h o u l d
up
fu tu re
c o m p e t it io n , a s in d ic a t e d
by
t h e h ig h p r o b a b i l i t y o f t h e i r e n t e r i n g e a c h o t h e r ' s
m ark e ts
in d e p e n d e n tly ?
S u c h stro n g c o n c lu s io n s a re n o t w a r r a n t e d , o f
in t h e s t a t i c a n a l y s i s , t h e s e c t o r ' s r e l a t i v e d e c l i n e
in
is
hom e
c o u n t ie s s h o u ld b e a p p r o v e d ? A n d c o n v e r s e ly , o n
w i t h t h e r e s t o f t h e s t a t e in m o s t s e c t o r s , i n c l u d i n g
w h o le s a le
o t h e r 's
m e rg e rs o f h o ld in g
F lo r id a
p r im a r y m a r k e t s t r u c t u r e .
P o lk
com pany
b y a c q u i s i t i o n . D o e s it f o l l o w , t h e n , t h a t p r o p o s e d
t r a d it io n a l
th e
n e ith e r
s tr o n g ly a w a y
m o v in g
of
s in c e
e n te r th e
fro m
im i t a t i o n
w o u ld n o t r e d u c e th e n u m b e r o f f u tu r e c o m p e t it o r s ,
r e t a il
C o u n t y 's
B ro w ard
e m p lo y m e n t a p p e a r s to b e
any
a re
co a sta l
o u t.
c o u rse ,
t o o ls o f
im p o r t a n c e o f
s o le ly
on
th e
r e g io n a l
b a s is
of
e c o n o m ic s .
th e se
t e c h n ic a l
N o r w o u ld
su ch
n e ig h b o r in g O r la n d o a n d T a m p a a s m a jo r w h o le s a le
c o n c lu s io n s n e c e s s a r ily f o llo w fr o m s im ila r a n a ly s e s
c e n te rs se e m s
o f A la b a m a a n d T e n n e s s e e m a r k e t s a n d t h e t y p ic a l
to b e
p r e c lu d in g
e m e r g e n c e a s a p r im a r y
P o lk
C o u n t y 's
m a rk e t. C h a n g e s
m a r k e t 's im p o r t a n t p h o s p h a t e
m in in g
in
t h is
b e h a v io r o f h o ld in g c o m p a n y e x p a n s io n
s ta te s. T h is
( f e r t iliz e r )
is b e c a u s e
id e n t i f y o n l y
b a s e is t h e l i k e l y k e y t o f u t u r e d e v e l o p m e n t s .
e x is t in g
th e
to o ls
in t h e s e
e x a m in e
and
m a rk e t c h a r a c t e r is tic s ;
t h e ir
p r e d ic t io n s o f e c o n o m ic d e v e lo p m e n t s a re a c c u r a t e
Conclusion
o n ly so
lo n g a s p a s t t r e n d s c o n t in u e .
N o n e t h e le s s , th e
A s a r e s u l t o f t h e f o r e g o i n g b a s e a n d s h if t a n a l y s e s ,
d o e s t a b lis h
it is
in p i n p o i n t i n g
nor
p o s s ib le
P o lk
to
C o u n ty
h y p o th e s iz e
is l i k e l y
to
th a t
n e it h e r
e m erg e
as
a
B ro w ard
t y p ic a l
F l o r i d a p r i m a r y m a r k e t in t h e n e a r f u t u r e . If t h is
is t h e
case,
h o ld in g
c o m p a n ie s
t h e s e c o u n t ie s a re n o t v e r y
o t h e r 's m a r k e t s , b a s e d
p ro p o se d
34
on
m e rg e r b e tw e e n
h e a d q u a rte re d
lik e ly
to e n te r e a c h
a c t iv it y
can
s p e c if ic e c o n o m ic
change
in
f o llo w s
changes
lo o k in g
c lo s e ly
c h a n g e w o u ld
tw o
on
c o m p a n ie s
a re
th e y
th e
fa ce
of
u s e f u l. T h e y
a re
in v a lu a b le
se cto rs w h o se
lo c a l
m a rk e ts.
T h u s , to th e e x te n t th a t h o ld in g c o m p a n y e x p a n s io n
p a s t e x p e r ie n c e . A
su ch
t e c h n iq u e s
p a st tre n d s, a n d
in
at
lo c a l
th e
m ark e t
se cto rs
e c o n o m ie s ,
r e s p o n s ib le
a id a n y a n t it r u s t r u lin g
fu tu r e c o m p e t it iv e
fo r
p r e d ic a t e d
d e v e lo p m e n t s .*
M A R C H 1975, M O N T H L Y R E V IE W
A P P E N D IX
S a m p le C o m p u ta tio n
E m p lo y m e n t S h if t A n a ly s is
d)
N um ber
of
Em plo yees
1953
(2)
N um ber
of
Em plo yees
1973
A g riculture
320
1,331
1,011
732
M ining
412
21
-391
943
Tam pa (H illsborough Co.)
Florida
C o n tract Con stru ction
M anufacturing
(3)
(4)
Expected
Growth
(1 )X
2 2 8 .9 % *
A ctual
Growth
19531973
5,899
16,908
11,009
13,503
18,706
35,018
16,312
42,818
Transpo rtation and
P u b lic U tilitie s
6,147
17,175
11,028
14,070
W holesale Trade
7,644
20,790
13,146
17,497
15,802
38,586
22,784
36,171
F in a n c e
Retail Tra d e
3,008
12,571
9,563
6,885
S e rv ice s
7,595
36,663
29,068
17,385
486
784
298
1,112
66,019
179,847
113,828
151,116
U n c la ssifie d
Total
A g ricu lture
(5)
(6)
(7)
(8)
Net
Shift
(3)-(4)
P ercen t Growth
E ach Florida
Se cto r M inus
2 2 8 .9 % *
Mix
E ffect
(1 ) X (G)
Local
Growth
E ffe ct
(5)-(7)
279
4.0
-
1,334
- 2 2 6 .3
C on tract Con stru ction
-
2,494
M anufacturing
- 2 6 ,5 0 6
-
Transpo rtation and
P ub lic U tilitie s
-
3,042
W holesale T rad e
-
4,351
R etail Trade
- 1 3 ,3 8 7
-
M ining
14
265
-
932
32.9
-
6,160
-2 0 ,3 4 6 .
-
35.3
-
2,172
-
-
85.8
-
6,557
32.3
-
968
16.4
-
402
-
3,462
870
2,206
5,107
-
F in a n ce
2,678
136.5
4,107
-
S e rv ic e s
11,683
132.2
10,042
1,641
814
- 1 8 6 .5
-
906
92
-
6,703
- 3 0 ,5 8 5
U n c la ssifie d
-
Total
- 3 7 ,2 8 8
8,280
1,429
• P e rc e n t in cre a se in total Florida em ploym ent from 1953 to 1973.
FE D ER A L R ES ER V E BANK O F ATLA N TA
35
B u s in e s s
S ix t h
L o a n s
D is t r ic t
M a d e
b y
B a n k s:
Is th e Q ualitative
Inform ation C onsistent?
T h i s s t u d y e x a m i n e s b u s i n e s s l o a n s m a d e b y la r g e S ix t h D i s t r i c t b a n k s b e t w e e n
m id - 1 9 7 3 a n d t h e e n d o f 1 9 7 4 . It c o m p a r e s t h e q u a l i t a t i v e i n f o r m a t i o n t h i s B a n k
g e n e r a t e s o n t h e b a s is o f i n f o r m a l c o n t a c t s w i t h
p e r io d , o n
th e o n e
h a n d , w it h
th e
after
s t a t is t ic a l d a t a w h i c h d o n o t b e c o m e a v a i l a b l e u n t i l
o n th e o th e r h a n d .
F o r t h e f iv e s u c h
f i n d i n g is t h a t t h e t w o
In b o t h
s it u a t io n s
p e r io d s d is c u s s e a
k in d s o f in f o r m a t io n
th e
raw
in f o r m a t io n
q u a lita t iv e
m odel
d e s c r ib in g
th e
s u p p ly
in t h e S ix t h
R e s e a r c h s t a f f u s e s t h is f r a m e w o r k
o f in f o r m a l c o n t a c t s w ith
o f b a n k s to e x t e n d
v a r io u s
m ake
t h is
d is c r im in a t io n
im p a c t s f ir s t o n
th e p e r io d
by
is o v e r ,
in t h is a r t i c l e , t h e
r e c e iv e d — e it h e r c o m m e n t s
of and
D is t r ic t .
th e
D u r in g
in
te rm s
dem and
fro m
o f a s im p le
f o r b u s in e s s
lo a n
a p a r t ic u la r p e r io d , th e
in a n a t t e m p t t o d i s c r i m i n a t e , o n
b a n k e rs, b e tw e e n
b u s in e s s c r e d it , o n
o f b u s in e s s e s to b o r r o w fro m
a p a r t ic u la r
su g g e ste d
a re g e n e r a lly c o n s is t e n t .
b a n k e r s o r t h e s u b s e q u e n t s t a t is t i c a l d a t a — a r e v i e w e d
c r e d it o f la rg e r b a n k s
during
b a n k e rs
s u b s e q u e n t im p lic a t io n s
changes
th e s u p p ly s id e , a n d
in
th e
t h e b a s is
w illin g n e s s
th e e a g e rn e ss
t h e b a n k s , o n t h e d e m a n d s id e .1 ( W e a t t e m p t to
not
fo r
its
own
sake,
but
th e s u p p ly o f b a n k c r e d it , o f w h ic h
b ecau se
m o n e ta ry
b u s in e s s
lo a n s a re
p o lic y
an
im p o r ta n t c o m p o n e n t .)
F o r e a c h o f t h e f iv e p e r i o d s , t h e f if t h
and
s ix t h
c o lu m n s o f T a b le
2 sh o w
o u r j u d g m e n t s , m a d e a t t h e t i m e , a b o u t w h e t h e r b a n k s b e c a m e m o r e ( o r le s s )
w illin g s u p p lie r s o f b a n k c r e d it to b u s in e s s e s d u r in g th e p e r io d
w h e th e r
Fo r
b u s in e s s e s
c o n v e n ie n c e ,
becam e
t h is
sam e
m o re
(o r
le s s )
in f o r m a t i o n
is
eager
to
re p e a te d
b o rro w
as
th e
and about
fro m
f if t h
th e
and
b a n k s.
s ix t h
c o lu m n s o f T a b le 3.
Jln this article, the phrase "more (less) w illing to lend" connotes a rightward (leftward) shift in the
economist's supply schedule for business loans; the phrase "more (less) eager to borrow" connotes a
rightward (leftward) shift in the demand schedule. These informal contacts are separate and distinct
from the "Survey of Bank Lending Practices" conducted by the Federal Reserve System.
Note: W. F. Mackara was responsible for the statistical work and much of the analysis on which
the conclusions of this article are based.
M A R C H 1975, M O N T H LY R E V IE W
TH E
C O N V E N T IO N A L
O F
B U S IN E S S
S U P P LY/ D E M A N D
L O A N
M O D E L
B E H A V IO R
Case 1: When the interest rate decreases, from r1 to r2, and
the loan volume increases, from Lj to L2, the inference is that
the banks have becom e more willing to make business loans,
as suggested by the rightward shift in the supply schedule, from
Sx to S2. We can make no clear inference about changes in
businesses' eagerness to borrow from the banks.
Case 2: When the interest rate increases, from rx to r2, and the
loan volume decreases, from Lx to L2, the inference is that banks
have becom e less willing to make business loans, as suggested
by the leftward shift in the supply schedule, from Sx to S2.
We can make no clear inference about changes in businesses'
eagerness to borrow from the banks.
Case 3: When the interest rate increases, from r, to r2, and
the loan volume also increases, from Lx to L2, the inference is
that businesses have becom e more eager to borrow from the
banks, as suggested by the rightward shift in the demand
schedule, from Dx to D2. We can make no clear inference
ab out the banks' willingness to make loans.
Case 4: When the interest rate decreases, from rx to r2, and
the loan volume also decreases, from Lx to L2, the inference
is that businesses have b eco m e less eager to borrow from the
banks, as suggested by the leftward shift in the demand sched
ule, from Dx to D2. We can make no clear inference about the
banks' willingness to make loans.
Note that in each of these cases only one side of the market (banks or businesses) changed its behavior while
the other side remained unchanged. If both sides changed, then the model might be unable to determine the
effect on the interest rate and loan volume. For instance, if banks became more willing to lend (as in Case 1,
which tends to increase loan volume but reduce the interest rate), and businesses became less willing to borrow
(as in Case 4, which tends to decrease loan volume and interest rates), we cannot predict what would happen to
the volume of loans. Likewise, if banks, b ecam e less willing to lend (as in Case 2, pushing loan volume down and
the interest rate up), but businesses becom e more eager to borrow (as in Case 3, pushing volume and the in
terest rate up), we cannot predict the ultimate effect on loan volume. In other words, there are offsetting or
partially offsetting forces* at work, and we cannot determine before the fact what would happen.
FE D ER A L R ESER V E BAN K O F A TLAN TA
37
T A BLE 1
S T A T IS T IC A L
IN F O R M A T I O N
Volum e of B u sin e s s Lo an s
O utstanding at 23 Large
Sixth D istrict M em ber
B anks1
Volum e of B u sin e s s
Loan E xte n sio n s by 23
Large Sixth D istrict
M em ber B anks"
($ M illions)
($ M illions)
(% )
$3640
$365
9.2
N ovem ber 1973
3714
272
9.9
Feb ru ary 1974
3794
309
9.8
May 1974
4144
380
10.6
August 1974
4119
344
11.7
N ovem ber 1974
4250
316
11.6
Month
August 1973
Average In te re st R ates
Charged on B u sin e ss
Lo an s by 23 Large Sixth
D istrict M em ber B a n k s 2
‘ So urce: “W eekly Condition Report of Large C o m m ercial B a n k s, Sixth Fed eral R eserve D istrict, Su p p le m e n t” (416A). Th e
s p e c ific d ates of 8/8/73 , 11/7/73, 2/6/74, 5/8/74 , 8/7/74 , and 11/6/7 4 w ere se le cte d to corresp ond m ost c lo se ly
to the observation periods reported on th e Q u arterly In terest Rate Survey.
^Source: “ B ank R a te s on Short-Term B u sin e s s L o a n s ” (Q uarterly In terest Rate Survey)
T h e s e c o n d a n d s u b s e q u e n t se t o f i n f o r m a t i o n
is s ta tis tic a l d a ta s u p p lie d o n c e a q u a r t e r b y 23
o f th e S ix th D is tric t' s la r g e r m e m b e r b a n k s o n th e
v o l u m e o f b u s in e s s lo a n s t h e y e x t e n d a n d th e
a v e r a g e in te re s t ra te s t h e y c a r r y d u r i n g a d e s ig n a t e d
t e n - d a y o b s e r v a t i o n p e r io d . B y c o m p a r i n g e a c h
o f th e s e r e p o r t s w i t h its in f o r m a l p r e d e c e s s o r o f
t h r e e m o n t h s e a rlie r, w e c a n j u d g e w h e t h e r in te re s t
ra tes ro s e o r fe ll d u r i n g th e p e r io d a n d w h e t h e r
th e p a c e o f b u s in e s s lo a n e x t e n s io n s in c re a s e d o r
d e c r e a s e d d u r i n g th a t s a m e p e r io d . 2 B y e x a m in i n g
th e a p p r o p r ia t e w e e k l y r e p o r t s o f c o n d it i o n
r e p o r t e d b y th e s a m e 23 b a n k s , w e c a n a ls o te ll
w h e t h e r t h e ir s to c k o f o u t s t a n d in g b u s in e s s lo a n s
in c re a s e d o r d e c r e a s e d b e t w e e n th e p e r io d ' s
b e g in n i n g a n d its e n d . 3 T h e sta tis tic s o n th e v o l u m e
o f b u s in e s s lo a n s o u t s t a n d in g , o n th e v o l u m e o f
b u s in e s s lo a n e x t e n s io n s , a n d o n th e in te re s t ra tes
c h a r g e d a re a ll s h o w n in T a b l e 1. T h e d ir e c t io n s
in w h i c h th e s e ra te s a n d v o l u m e s c h a n g e d d u r i n g
e a c h p e r io d a re s h o w n in th e firs t t w o c o lu m n s
o f T a b le s 2 a n d 3.
T o c o m p le t e th e c o m p a r is o n b e t w e e n o u r
in f e r e n c e s b a s e d o n in f o r m a l c o n ta c ts a n d th e
2This inform ation com es from the so-called Q uarterly Interest
Rate Survey. The observation dates of this survey mark the
beginning and end of each period in this study.
:llt is a matter of unresolved debate in eco nom ics w hether one
should analyze this kind of m arket by looking at the stock of loans
outstanding or at the flow of loans being made. For this reason,
w e have used both s stock m easure and a flow m easure, shown
in Tables 2 and 3, respectively.
3 8 for FRASER
Digitized
s u b s e q u e n t s ta tis tic s o n in te re s t ra te s a n d lo a n
v o l u m e , w e a s s u m e th a t th e m a r k e t f o r lo a n s is
re p re s e n te d b y a c o n v e n tio n a l m o d e l o f s u p p ly
a n d d e m a n d . ( T h is is t h e s a m e m o d e l w e u s e d
e a r lie r to d is c r im in a t e b e t w e e n th e s u p p l y a n d
d e m a n d i m p lic a t io n s o f c o m m e n t s f r o m o u r
in f o r m a l c o n ta c ts .)
T h i s a s s u m p t io n a ll o w s u s t o t ra n s la te th e
s ta tis tic a l i n f o r m a t i o n in t o a ft e r - t h e - f a c t in f e r e n c e s
a b o u t w h a t h a p p e n e d t o t h e b a n k s ' w ill i n g n e s s
to s u p p l y c r e d it t o b u s in e s s e s , o n th e o n e h a n d , o r
t o b u s in e s s e s ' e a g e rn e s s t o b o r r o w f r o m t h e b a n k s ,
o n th e o t h e r . F o r e x a m p l e , if b o t h in t e r e s t ra te s
a n d lo a n v o l u m e in c r e a s e d d u r i n g a p a r t ic u la r
p e r io d , th e m o d e l a ll o w s u s t o i n f e r th a t b u s i
n e s s e s b e c a m e " m o r e e a g e r" t o b o r r o w d u r i n g th a t
p e r io d . It g iv e s u s n o c le a r in d ic a t io n a b o u t
w h e t h e r b a n k s b e c a m e m o r e o r less e a g e r t o le n d .
(S ee C a s e 3 in a c c o m p a n y in g b o x .) '
If, d u r i n g th e p e r io d b e t w e e n t h e t w o s ta tis tic a l
o b s e r v a t io n s , o u r c o n v e r s a t io n s w i t h b a n k in g c o n
ta cts h a d p r e v i o u s l y s u g g e s t e d b u s in e s s e s h a d
b e c o m e " m o r e e a g e r" t o b o r r o w , t h e n w e w o u l d
re g a rd th e t w o s o u r c e s o f i n f o r m a t i o n as c o n s is t e n t .
If, o n th e o t h e r h a n d , o u r c o n v e r s a t io n s h a d
s u g g e s t e d th a t b u s in e s s e s b e c a m e " le s s e a g e r" t o
b o r r o w , w e w o u l d h a v e a n in c o n s is t e n c y .
T a b le s 2 a n d 3 s h o w t h e o v e r a l l re s u lts : T h e
t w o s o u r c e s o f i n f o r m a t i o n w e r e c o n s is t e n t in f o u r
o u t o f f iv e p e r io d s , u s in g e it h e r lo a n s o u t s t a n d in g
o r e x t e n s io n s as th e m e a s u r e o f a c t iv it y . T h i s g e n e r a l
f i n d i n g o f c o n s is t e n c y , in t u r n , le n d s s u p p o r t
M A R C H 1975, M O N T H L Y R E V IE W
C O M P A R IS O N S U T IL IZ IN G C H A N G E S
IN B U S I N E S S L O A N S O U T S T A N D I N G
IN F E R E N C E S FROM ECO N O M IC T H E O R Y
AB O U T S U P P L Y AND DEMAND BEH A VIO R
B u sin e s s e s ’ E ag e rn e ss
To Borrow From the
B anks
B anks' W illin gness
To Supply B u sin e ss
Loan C redit
More eager
(C a se 3)
More w illin g
(C a se 1)
More eager
(C a se 3)
L e s s w illin g
(C a se 2)
More w illin g
(C ase 1)
IN FO RM A TIO N FROM IN FO R M A L C O N TACTS
WITH LA R G E SIX TH D IS T R IC T B A N K S
B u s in e s s e s ’ E ag e rn e ss
To Borrow From the
B an ks
C o n siste n cy of
Inform ation
More eager
C o n siste n t
More w illin g
L e s s eager
C o n siste n t
L e s s w illin g
More eager
L e s s w illin g
More eager
C o n siste n t
e
C o n siste n t
L e s s eager
to t h e
(1)
tw o
th a t
a s s u m p t io n s
our
a n a ly s is
u n d e r ly in g
of
th e
in f o r m a t i o n
stu d y :
a p p a r e n t ly fa c e d
p r o v id e d
s t r u c t io n
h e a v y lo a n
f ir m s a n d
i n f o r m a l l y b y b a n k i n g c o n t a c t s is g e n e r a l l y a c c u r a t e
th e
n a t io n a l b o n d m a r k e t . R e a l e s ta t e in v e s t m e n t tru s ts ,
c o m p a r a b le
s t a t is t ic a l
(2 ) t h a t t h e b u s i n e s s lo a n
in
th e
S ix t h
m a rk e t,
rate s
in
and
D is t r ic t
th e
behaves
sense
lo a n
th a t
v o lu m e s
in fo r m a t io n ,
and
a c t i v i t y o f la r g e b a n k s
lik e
an
e c o n o m ic
m o v e m e n ts
g e n e r a lly
in
behave
in te r e s t
as
lo o k
m o re c lo s e ly
at th e
in c r e a s in g ly
h ig h
rate s
in
th e
a c c o r d in g to o u r c o n t a c t s , w e r e a ls o h e a v y d e m a n d e r s o f b a n k c r e d i t . L a t e r in t h e p e r i o d , t h e n a t i o n a l
c o m m e r c ia l p a p e r r a te d r o p p e d b e lo w t h e p r im e
rate s p o s te d
lo a n
b y D is t r ic t b a n k s , a p p a r e n t ly c a u s in g
dem and
to t a p e r o ff. A lt h o u g h
b y th e e n d o f
th e p e r io d th e D is t r ic t e c o n o m y w a s b e g in n in g to
c o n v e n t io n a l t h e o r y s u g g e s ts t h e y s h o u ld .
Let us n o w
fa ce d
con
a n d t h e r e f o r e u s e f u l b e c a u s e w e g e t it in a d v a n c e
o f th e
la t t e r
d e m a n d s fro m
p u b l ic u t ilit ie s , e s p e c ia lly s in c e
r e s u lt s
get
re p o rts
o f th e
e f f e c t o f t h is
w eakn ess
on
f o r t h e f iv e p e r i o d s d e l i n e a t e d b y t h e s ix r e a d i n g s
b u s in e s s ' d e m a n d
on
im p r e s s io n w a s th a t b u s in e s s e s b e c a m e m o r e e a g e r
lo a n s
in e a c h
fro m
and
case
in t e r e s t
w it h
th e
ra te s , c o m p a r in g
in f o r m a t i o n
we
th e
r e s u lt s
r e c e iv e d
f o r b a n k c r e d it , t h e o v e r a ll
to b o r r o w d u r in g th e p e r io d .
O n t h e s t a t is t i c a l s i d e , f r o m A u g u s t t o N o v e m b e r ,
i n f o r m a l c o n t a c t s a t t h e t im e .
th e
August to November 1973
on
D is t r ic t 's
b u s in e s s
la r g e b a n k s
r a is e d
t h e i r in t e r e s t
lo a n s s ig n if ic a n tly , fro m
9 .2
rate s
t o 9 .9
p e r c e n t . T h e v o l u m e o f l o a n s o u t s t a n d i n g a t la r g e
D u r in g
t h is
p e r io d , o u r
in fo r m a l
c o n ta cts
w it h
banks
in c re a s e d ,
lo a n
in t h e w i l l i n g n e s s
c r e d it .
E a r ly
in t h e
FE D ER
A L FRASER
R ES E R V E BANK O F A TLAN TA
Digitized
for
of banks
p e r io d , th e
to
banks
a p p e a rs to
r e s e m b le
C ase
3
of
e x t e n s io n s
o u t s t a n d in g a s o u r m e a s u r e , t h e r e f o r e , t h e s it u a tio n
n o c le a r c h a n g e
v o lu m e
lo a n
e a g e r lo a n
s u p p ly
u se
b u s in e s s
d ro p p e d .
c u s t o m e r s . T h e s a m e c o n t a c t s in d ic a t e d
If w e
but
th e b a n k s s u g g e s te d th a t b u s in e s s e s b e c a m e m o r e
b u s in e s s
(s e e
lo a n s
b o x ), im p ly in g
th a t b u s in e s s e s b e c a m e m o r e e a g e r to b o r r o w fro m
39
TA B LE 3
C O M P A R I S O N S U T I L I Z I N G C H A N G E S IN T O T A L
E X T E N S IO N S O F B U S IN E S S L O A N S
P R IC E AND
Q U AN TITY C H A N G E S
Period
C hang es in
In terest
R ates
8/7311/73
+
11/732/74
—
2/745 /74
5/748 /74
+
+
8/7411/74
IN F E R E N C E S FROM ECO N O M IC T H E O R Y
A B O U T S U P P L Y AND DEM AND B EH A V IO R
B a n k s ’ W illin g n e ss
To Su pp ly B u sin e s s
Loan C redit
B u s in e s s e s ’ E ag e rn e ss
To Borrow From the
B a n ks
—
L e s s w illin g
(C a se 2)
7
+
More w illin g
(C a se 1)
?
+
?
More eager
(C a se 3)
—
L e s s w illin g
(C a se 2)
7
_
?
L e s s eager
(C a se 4)
C hang es in
Loan
Exten sio n s
IN FORM ATION FROM IN FO R M A L CO N TA CTS
W ITH LA R G E SIX TH D IS T R IC T B A N K S
Period
B a n k s’ W illin gness
To Su p p ly B u sin e ss
Loan C redit
B u s in e s s e s ’ Eag e rn e ss
To Borrow From the
B an k s
C o n siste n cy of
Inform ation
More eager
U n c le a r
8/7311/73
11/732 /7 4
More w illin g
L e s s eager
C o n siste n t
2/745 /7 4
L e s s w illin g
More eager
C o n siste n t
5/748 /7 4
L e s s w illin g
More eager
C o n siste n t
8/7411/74
?
L e s s eager
C o n siste n t
th e b a n k s . T h i s is c o n s is t e n t w i t h th e in f o r m a t i o n
o b t a in e d e a r lie r f r o m o u r in f o r m a l c o n ta c ts .
If w e u s e e x t e n s io n s o f b u s in e s s lo a n s as a
m e a s u r e o f lo a n q u a n t it y , h o w e v e r , th e s itu a tio n
r e s e m b le s C a s e 2 a n d im p lie s th a t th e b a n k s
b e c a m e less w i l l i n g to le n d a n d o ff e r s n o c le a r
im p lic a t io n s a b o u t th e e a g e rn e s s o f b u s in e s s e s to
b o r r o w . T h i s in f e r e n c e is n e it h e r c o n s is t e n t n o r
in c o n s is t e n t w i t h th e in f o r m a t i o n s u p p lie d e a r lie r
b y th e in f o r m a l c o n t a c t s ; w e d r e w a b la n k . T h e
r e d u c e d p a c e o f lo a n e x t e n s io n s is c o n s is t e n t w i t h
th e e c o n o m i c w e a k n e s s o u r c o n ta c ts w e r e r e p o r t in g
at th e e n d o f th e p e r io d , h o w e v e r .
F r o m A u g u s t t o N o v e m b e r 1 9 7 3 , t h e r e f o r e , th e
t w o s o u r c e s o f i n f o r m a t i o n w e r e e it h e r c o n s is t e n t
o r im p o s s ib le to c o m p a r e , d e p e n d i n g o n w h e t h e r
w e u s e d lo a n s o u t s t a n d in g o r lo a n e x t e n s io n s
as m e a s u re s .
4 0 for FRASER
Digitized
N o vem b er 1973
to
F e b ru a ry
1974
D u r i n g th is t im e , i n f o r m a l c o n ta c ts s u g g e s t e d th a t
b a n k s b e c a m e s o m e w h a t m o re w illin g to e x te n d
c r e d it to b u s in e s s e s , b u t th a t t h e b u s in e s s e s t h e m
s e lv e s b e c a m e s o m e w h a t less e a g e r t o b o r r o w
f r o m th e b a n k s . C o m p a r e d t o th e p r e v i o u s p e r io d ,
th e la rg e r D is t r ic t b a n k s w e r e in a r e l a t i v e ly m o r e
c o m f o r t a b le p o s it io n . R e s e r v e r e q u i r e m e n t s a g a in s t
n e g o t ia b le c e rtific a te s o f d e p o s it , a p r im a r y s o u r c e
o f f u n d s to th e s e la rg e b a n k s , w e r e r e d u c e d b y t h e
B o a rd o f G o v e r n o r s o f t h e F e d e ra l R e s e r v e S y s te m
in D e c e m b e r 1 9 7 3 . T h e fin a n c ia l e n v i r o n m e n t w a s
g e n e r a lly m o r e c o n d u c i v e t o lo a n e x p a n s io n . A s
fa r as th e b u s in e s s e s w e r e c o n c e r n e d , th e i n f o r m a l
c o n ta c ts g a v e m ix e d r e p o r t s d u r i n g th e p e r io d :
S e v e ra l b a n k s c o m m e n t e d o n c o n t i n u e d s t r e n g t h
in b u s in e s s d e m a n d f o r b a n k c r e d it ; m o s t , h o w
M A R C H 1975, M O N T H LY R EV IEW
e v e r, re p o rte d
In te r e s t
a red u ced
rate s
fa ll o f 1 9 7 4 , t h e f i n a n c i a l p r e s s , in f a c t , w a s r e p l e t e
dem and.
ch a rg e d
by
th e
la r g e
b a n k s d r o p p e d , b u t o n ly in s ig n if ic a n t ly , fr o m
t o 9 .8 p e r c e n t . T h e v o l u m e o f b o t h
in g a n d n e w
W ith
e x t e n s io n s in c r e a s e d
e i t h e r lo a n
w ith
D is t r ic t
9 .9
lo a n s o u t s t a n d
( s e e T a b l e 1 ).
m e a s u r e , t h e r e f o r e , th e s it u a tio n
becam e
m o re
in d ic a t e s
w illin g n e s s
d e crea se
to
in
b o rro w
our
w illin g
to
s u p p ly
th e
fro m
b an k s.
fro m
in
m o re
of
and
a re
c o n s is t e n t w ith
c e iv e d
in f o r m a l c o n t a c t s .
lo a n
any
to
m e a su re ,
ra te
in f o r m a t io n
b a n k e rs
b u s in e s s
lo a n s
a p p lic a n t s . O n
heavy
lo a n
th e d e m a n d
dem and
in
a c o n t in u a t io n
in g w a s r e p o r t e d
s ta n d in g
and
and
o f th e
b y th e e n d
lo a n
re p o rte d
e a r l y J u ly
s p illo v e r
fro m
o f J u ly .
e x t e n s io n s
lo a n s o u t
d e c lin e d ,
but
o n ly
s li g h t ly . T h i s p a t t e r n s e e m e d t o f it C a s e 2 , i m p l y i n g
th a t b a n k s b e c a m e
in f o r m a t i o n
in te r e s t
s h o u ld
S u p p ly / d e m a n d
th e
re
b y la r g e D i s t r i c t b a n k s r o s e s i g n i f i c a n t l y a g a i n , f r o m
a n d b a n k s b e c a m e m o r e w illin g to le n d , a s s u g
to
B a n k e rs
B e t w e e n M a y a n d A u g u s t , in t e r e s t r a t e s c h a r g e d
g e s t e d b y o u r in f o r m a l c o n t a c t s , t h e n in t e r e s t r a t e s
a c c o r d in g
w as
s id e , c o n t a c t s
la t e J u n e
le s s w i l l i n g
b u s i n e s s c u s t o m e r s , a g a in
d u r in g
r is in g .
1 0 .6 t o 1 1 .7 p e r c e n t . V o l u m e o f b o t h
re
A n o t h e r i n c o n s i s t e n c y a r is e s d u r i n g t h is p e r i o d ,
f a lle n
liq u id it y
a n d th a t d e lin q u e n c y
w e re
h o w e v e r . If b u s i n e s s e s b e c a m e le s s e a g e r t o b o r r o w
have
th a t
n a t io n a l m o n e y m a r k e t c e n t e r s ) , b u t s o m e w e a k e n
o ffse t
in te r e s t
on
( p r o b a b ly
lo a n
b u s in e s s e s
F o r e it h e r
v o lu m e
in
b an k s'
th a n
th e
in f o r m a t io n
fro m
r is e
in c r e a s e
c r e d it
e a g e rn e ss
th e
in f e r e n c e s
le n d . T h e
th a t th e
rate s
by
u n c o m f o r t a b ly lo w
p o r t e d g r o w i n g c a u t i o n in r e v i e w i n g b u s i n e s s lo a n
r e s e m b le d C a s e 1 , s u g g e s tin g th a t th e b a n k s in d e e d
v o lu m e s
s ta te m e n ts
b e c o m in g
th e
p e r io d .
s t a t is t ic s , t h e y
ro se
In
fa ct,
s u g g e ste d
s lig h t ly .
p r o v id e d
rate
to
le n d
to t h e ir
e n t ir e ly c o n s is t e n t w ith
b y in f o r m a l c o n t a c t s . T h e
im p lic a t io n s
w e re
in f o r m a t io n
a ls o
fro m
c o n s is t e n t :
our
r is in g in t e r e s t r a t e s , a n d
co n ta cts
in f a c t t h e y
d id i n c r e a s e .
February to M ay 1974
August to November 1974
In t h is p e r i o d , in f o r m a l c o n t a c t s u n i f o r m l y r e p o r t e d
a s t r o n g i n c r e a s e in t h e e a g e r n e s s o f b u s i n e s s e s
to b o r r o w fr o m t h e b a n k s . B u s in e s s e s w e r e r e p o r t e d
a s b o r r o w in g h e a v ily to f in a n c e in v e n t o r y a c c u m u
t iv e lo a n
la t i o n s p r o d u c e d b y s a g g in g s a l e s a n d t h e s t o c k
th a t m a jo r c o r p o r a t io n s
had
u se d
li n e s o f c r e d i t a t la r g e b a n k s o u t s i d e t h e
th a t
p o stu re . A s b a n k s b e c a m e
le s s w i l l i n g
t o le n d , t h e d e e p e n i n g r e c e s s i o n in la t e 1 9 7 4 m a d e
p i l i n g o f m a t e r i a l s . In A p r i l 1 9 7 4 , w e r e c e i v e d
re p o rts
D u r i n g t h is t i m e , i n f o r m a l s o u r c e s s u g g e s t e d
b a n k s w e r e c o n t in u in g a n d in t e n s if y in g t h e ir r e s t r ic
up
t h e ir
D is t r ic t
b u s i n e s s e s le s s e a g e r to b o r r o w , a c c o r d i n g t o t h e
sa m e co n ta cts.
f e ll
o n ly
s li g h t l y
at th e
i n t o t h e S ix t h D i s t r i c t . T h e s a m e r e p o r t s s u g g e s t e d
D is t r ic t b a n k s , fro m
1 1 .7
to 1 1 .6
p e rce n t. T h e
th at th e
v o l u m e o f lo a n s o u t s t a n d i n g i n c r e a s e d s l i g h t l y ; t h e
a n d t h a t n a t i o n a l lo a n d e m a n d w a s " s p i l l i n g o v e r "
b a n k s t h e m s e lv e s
becam e
so m ew hat
le s s
In te r e s t
rate s
w i l l i n g t o s u p p l y c r e d i t t o b u s i n e s s e s d u r i n g t h is
v o lu m e o f n e w
t im e , a lt h o u g h th e t e n d e n c y w a s w e a k e r . W e d o
s it u a tio n
know
t h a t t h e c o s t o f le n d a b le f u n d s to t h e
banks
in t h e f ir s t p e r i o d ,
o u t s t a n d in g
m easu re,
V o lu m e
o u t s t a n d in g
and
a ls o
in
in c r e a s e d ,
lo a n
in
e x t e n s io n s .
By
1,
and
u s in g
C ase
im p lic a t io n s
th e
4,
u s in g
a re c o n s is t e n t
in t h e c a s e o f lo a n e x t e n s i o n s a n d n e i t h e r c o n s i s t e n t
9 . 8 t o 1 0 .6
b o th
C ase
w i t h t h e i n f o r m a t i o n p r o v i d e d b y in f o r m a l c o n t a c t s
in t e r e s t r a t e s c h a r g e d
b y la r g e b a n k s r o s e s i g n i f i c a n t l y , f r o m
p e rce n t.
e x t e n s i o n s f e ll s lig h t l y . T h e
r e s e m b le s
lo a n s e x t e n d e d . T h e
in c r e a s e d .
As
lo a n s
lo a n
v a g u e ly
la r g e r
nor
lo a n s
e it h e r
m e a s u r e , t h e s it u a t io n s e e m e d to r e s e m b le C a s e 3 ,
in c o n s is t e n t w h e n
m e a su re d
b y v o lu m e
of
lo a n s o u t s t a n d i n g . In t h e la t t e r c a s e , t h e d e c r e a s e d
e a g e r n e s s o f b u s i n e s s e s t o b o r r o w is c o n f i r m e d .
s u g g e s tin g th a t b u s in e s s e s b e c a m e m o r e e a g e r to
b o rro w
fro m
in fe re n c e
b y in f o r m a l
U n lik e
th e
b a n k s.
Fo r
is c o n s i s t e n t w i t h
th e
im p lic a t io n s
b o th
m e asu res,
in f o r m a t i o n
t h is
co n ta cts.
p r e v io u s
of
th e
Conclusions
p r o v id e d
W h e th e r
p e r io d ,
th e
in f o r m a t io n
in t e r e s t
r e c e iv e d
rate
fro m
m e asu red
by
in
f o r m a l c o n t a c t s a re c o n s is t e n t w ith t h e s u b s e q u e n t ly
r e c e i v e d d a t a : I n t e r e s t r a t e s d i d in c r e a s e .
b o rro w
in
f o u r o u t o f f iv e
to
le n d
and
The
a n a ly s is
m o s t p a rt, th e
m a t i o n t h e n a s t h e y h a d in t h e t h ir d p e r i o d : B a n k s
b y t h is s a m p l e o f 2 3
banks
becam e
m o r e e a g e r to b o r r o w . D u r in g th e s u m m e r a n d e a r ly
FE D ER A L R ES ER V E BANK O F ATLAN TA
t im e
p e r io d s .
T h is
b u s in e s s e s ' e a g e r n e s s
behaves
su g g e sts
a ls o
su g g e sts
m a r k e t fo r b u s in e s s
becam e
b u s in e s s e s
by
to
is f o r t h e m o s t p a r t u s e f u l a n d n o t m i s
le a d in g .
O u r i n f o r m a l c o n t a c t s s u g g e s t e d t h e s a m e in f o r
le n d ;
or
is c o n s i s t e n t w i t h i n f o r m a t i o n p r o v i d e d b y in f o r m a l
c o n ta cts
w illin g n e s s
to
e x t e n s io n s
s u g g e s ts th a t o u r in f o r m a l in f o r m a t io n a b o u t b a n k s '
M ay to August 1974
le s s w i l l i n g
new
v o l u m e o u t s t a n d i n g , o u r a n a l y s i s o f b u s i n e s s lo a n s
as
la r g e S ix t h
o rth o d o x
th a t,
lo a n s
fo r
th e
p r o v id e d
D is t r ic t m e m b e r
e c o n o m ic
th e o ry
it s h o u l d . ■
41
B a n k
A n n o u n c e m e n ts
November 18,1974
COMMERCE U N IO N BANK OF
SUMNER C O U N TY
Gallatin, T e n n e sse e
November 1,1974
DAVENPO RT FLAGSHIP BANK
D a ve n p o rt, Florida
Opened for business as a par-remitting nonmem
ber. R. K. Bradbury, president.
Opened for business as a member. Officers: David
S. Bradley, chairman; Howard T. Burwell, president;
Harold Whitaker, vice president and cashier; Patt
Hurst controller; William H. Bowen, banking of
ficer; Vivian McKee, banking officer; Myra Hayes,
banking officer. Capital, $750,000; surplus and
other funds, $1,015,000.
November 14, 1974
CLEARWATER OAKS BANK
C learw ater, Florida
Opened for business as a par-remitting nonmem
ber. Officers: J. David O'Dea, chairman and vice
president; Abram V. Honan, president; George
Matsukas, cashier; Theodore H. Rost, assistant vice
president. Capital, $750,000; surplus and other
funds, $750,000.
November 20,1974
TRI-COUNTY C O M M U N IT Y BANK OF
LEHIGH ACRES
Lehigh A cre s, Florida
Opened for business as a par-remitting nonmem
ber. Officers: William G. Price, chairman; John
J. Jenkins, president; Larry B. Hammond, vice
president and cashier.
November 15, 1974
SOUTHEAST BANKS TRUST CO M PAN Y,
N A T IO N A L ASSO C IATIO N
M iam i, Florida
Opened for business as a member. Officers: Harry
Hood Bassett, chairman; Sydney P. Craig, president;
Robert M. Landry, senior vice president, cashier,
and secretary to the board. Capital, $3,000,000;
surplus and other funds, $1,000,000.
November 25, 1974
SOUTHEAST N A T IO N A L BANK OF
NORTH DADE
M iam i, Florida
Opened for business as a member. Officers: Peter
W. Bellows, chairman; Wayne A. Leeder, president;
C. V. Gwyer, vice president and cashier. Capital,
$500,000; surplus and other funds, $500,000.
November 18,1974
COMMERCE U N IO N BANK OF
LAWRENCE C O U N TY
L a w re n ce b u rg , T e n n e sse e
Opened for business as a member. Officers: Law
rence N. Cotter, president; Tom Hudson, vice
president; George H. Lehnert, vice president;
Francis Amos, cashier; Patt Hurst, controller; Tim
Pettus, banking officer. Capital, $500,000; surplus
and other funds, $1,376,000.
November 26, 1974
CITY N A T IO N A L BANK
Tallahassee, Florida
Opened for business as a member. Officers: G od
frey Smith, chairman and president; Tom C. Proctor,
vice president; Lane Eaton, cashier. Capital,
$750,000; surplus and other funds, $750,000.
November 18, 1974
December 16,1974
COMMERCE U N IO N BANK OF
RUTHERFORD C O U N TY
FIRST TENNESSEE N A T IO N A L BANK
|
M u rfre e sb o ro , T e n n e sse e
W hite's C re e k , T e n n e sse e
j
Opened for business as a member. Officers: Sam
Lasseter, president; Francis L. Hill, vice president
and cashier; H. O. Edmondson, vice president;
Luther K. Myers, vice president; Ardie M. Mullins,
assistant vice president; C. Wallace Sharber, as
sistant vice president; Patt Hurst, controller; J. C.
Flatt, Jr., administrative officer; Joyce Ewell, bank
ing officer. Capital, $1,000,000; surplus and other
funds, $2,290,000.
Conversion of White's Creek Bank and Trust Com pany to a national bank. Officers: W. F. Teasley,
president; F. O. Teasley, vice president; Clay Tid
well, vice president; Buddy Parsons, assistant vice
president; Russell T. Dodd, Jr., cashier; Cindy
Frazier, asst, cashier; Sue Williams, asst, cashier;
Sam Kilgore, loan officer; Rick Baker, loan officer.
Capital, $400,000; surplus and other funds,
$1,034,301.
!
42
j
j
|
I5
{
____________ ,___________________________ _______j
M A R C H 1975, M O N T H L Y R E V IE W
|
j
B a n k
A n n o u n c e m e n ts
( C o n t 'd .)
Fagan, senior chairman; Edward M. Henry, chair
man; James W. McFadden, vice chairman; Farrell
R. Broyles, president; William H. McCloskey, execu
tive vice president; Wayne E. Powers, vice president
and cashier; Bill Miller, loan officer; Wanda Clay,
assistant cashier. Capital, $600,000; surplus and
other funds, $600,000.
December 16,1974
FLAGLER N A T IO N A L BANK OF
THE PALM BEACHES
December 19,1974
W est Palm Bea ch , Florida
THE A C A D IA N A BANK A N D
TRUST C O M P A N Y
Opened for business as a member. Officers: W il
Eu n ice, Louisiana
liam C. Clark, chairman; Thomas E. Rossin, presi
dent; Loren H. Hoeltke, vice president and cashier.
Capital, $1,000,000; surplus and other funds,
$1,000,000.
Began to remit at par.
December 19,1974
SOUTH FIRST BANK
December 17,1974
BANK OF THE ISLANDS, SANIBEL-CAPTIVA
San ibel, Florida
Opened for business as a member. Officers: Robert
C. Haynie, chairman and president; James P.
Hermes, executive vice president; Keith R. Barton,
cashier. Capital, $400,000; surplus and other funds,
$400,000.
December 18,1974
BR O W AR D N A T IO N A L BANK OF
BO YN TO N BEACH
Boynton Beach, Florida
Fort M ye rs, Florida
Opened for business as a member. Officers: Harry
Fagan, senior chairman; Edward M. Henry, chair
man; James W. McFadden, vice chairman; Farrell
R. Broyles, president; George E. Cline, III, executive
vice president; Judith Gibbs, vice president and
cashier; Paul Epperson, assistant vice president.
Capital, $600,000; surplus and other funds,
$600,000.
December 20,1974
CITIZENS C O M M ER C IAL BANK OF
TALLAHASSEE
Tallahassee, Florida
Opened for business as a member. Officers: Robert
B. Lochrie, chairman; Daniel S. Goodrum, presi
dent; George B. McGhee, executive vice president
and cashier; Harold G. Jewell, Jr., vice president;
Robert B. Lochrie, Jr., secretary. Capital, $800,000;
surplus and other funds, $450,000.
Opened for business as a member. Officers: Rich
ard C. Smith, chairman and president; Richard
Michael Sims, vice president and cashier. Capital,
$500,000; surplus and other funds, $500,000.
December 18,1974
ELLIS BANK OF NO RTH TA M P A
M O U N T A IN EMPIRE BANK
Tam pa, Florida
Joh n so n C ity, Te n n e sse e
Opened for business as a member. Officers:
Adolphus D. Wilburn, chairman and president;
R. B. Kleven, executive vice president and cashier;
C. H. Charlton, vice president. Capital, $1,000,000;
surplus and other funds, $500,000.
December 20,1974
Opened for business as a member. Officers: Robert
B. Carter, chairman; Mrs. Ruth Ellis, president;
Sterling Fields, senior vice president and cashier;
Clifford Andes, vice president-credit. Capital,
$1,000,000; surplus and other funds, $1,500,000.
December 28,1974
December 18,1974
BANK OF BANKS C O U N TY
NO RTH FIRST BANK
H o m er, G eorgia
N orth Fort M y e rs, Florida
Opened for business as a member. Officers: Harry
FE D ERfor
A L FRASER
R ES E R V E BANK O F ATLA N TA
Digitized
Opened for
member.
business
as
a par-remitting
non
43
B A N K IN G S T A T IS T IC S
ii
i i i i i i 11 i
1973
11 i i i i i 1 1 i i
i i i i i i 11 i i i
i ii i i i ii ii i
iiii1111 i i i
i i i i i i i i i i i
1974
1975
1973
1974
1975
‘ Figures are for the last W edn esd ay of each month
**D aily average figures
LATEST MONTH PLOTTED: JANUARY
S I X T H
D I S T R I C T
B A N K I N G
N D T E 5
C o n su m e r Loan D elin q u en cies Rise
C O N S U M E R IN S T A L M E N T LO A N
D E L IN Q U E N C Y R A T E S
(A n n u a l A v e ra g e s)
1972
Change
1973
Change
1974*
A l a b a m a .....................................
.
.
.
.
1 .7 8
.5 3
2 .3 1
.2 5
2 .5 6
F l o r id a
.....................................
.
.
.
.
1 .0 6
.3 3
1 .3 9
.6 8
2 .0 7
G e o r g i a .....................................
.
.
.
.
2 .2 0
.1 4
2 .3 4
.2 9
2 .6 3
L o u i s i a n a ...............................
.
.
.
.
1 .5 1
.1 8
1 .6 9
.5 8
2 .2 7
M i s s i s s i p p i ...............................
.
.
.
.
3 .1 5
.0 9
3 .2 4
.5 7
3 .8 1
Ten n essee
...............................
.
.
.
.
2 .5 0
.8 3
3 .3 3
- .2 0
3 .1 3
D i s t r i c t .....................................
.
.
.
.
1 .7 6
.3 6
2 .1 2
.4 1
2 .5 3
.2 4
2 .1 4
.4 4
2 .5 8
U n it e d S t a t e s ........................ .........................1 .9 0
*1 0 -m o n th a v e r a g e
D e l i n q u e n c y ra te s o n c o n s u m e r in s t a lm e n t lo a n s
at c o m m e r c ia l b a n k s h a v e ris e n d u r i n g th e p a s t t w o
y e a rs , in th e S ix th D is t r ic t as w e l l as n a t io n a lly .
A u t o m o b i l e l e n d in g d e lin q u e n c ie s h a v e in c re a s e d
m o s t n o t ic e a b ly , a lt h o u g h b o r r o w i n g t o p u r c h a s e
h o m e a p p lia n c e s a n d o t h e r t y p e s o f c o n s u m e r
g o o d s s h o w e d th e s a m e g e n e r a l t e n d e n c y . T h is
t r e n d is d ir e c t ly re la te d to th e d e c lin e in c o n s u m e r
re a l i n c o m e a n d e m p l o y m e n t . B a n k c a rd lo a n s a re
a n e x c e p t i o n to ris in g d e lin q u e n c ie s , r e fle c t in g i m
p r o v e d p r o g r a m a d m in is t r a t io n .
D a t a p u b li s h e d s ix tim e s a y e a r b y th e A m e r ic a n
B a n k e rs A s s o c ia t io n s h o w th e n u m b e r o f lo a n s
d e li n q u e n t as a p e r c e n t o f th e to ta l n u m b e r o f
lo a n s o u t s t a n d in g b y sta te a n d b y lo a n c a t e g o r y .
T o c o n s t r u c t an i n d ic a t o r o f c o n s u m e r lo a n d e
lin q u e n c ie s , w e w e i g h e d th e s e d a ta b y th e v o l u m e
o f lo a n s o u t s t a n d in g in e a c h c a t e g o r y at all in s u r e d
c o m m e r c ia l b a n k s in th e S ix th D is t r ic t . T h i s p r o v i d e s
a r o u g h m e a s u r e o f D is t r ic t c o n s u m e r lo a n d e l i n
q u e n c y ra tes.
D e l i n q u e n c y ra te s in th e S ix th D is t r ic t p a ra lle l
th o s e in th e U . S. as a w h o l e , a lt h o u g h th e D is t r ic t
ra tes a re s l ig h t ly m o r e v o la t i le th a n th e n a tio n 's .
T h e D is t r ic t s h o w s a s lig h t ly d if f e r e n t s e a s o n a l
p a tte rn a n d m o r e o f t e n th a n n o t h as b e e n s lig h t ly
l o w e r th a n th e c o m p a r a b l e n a t io n a l ra te. H o w e v e r ,
th e D is tric t's o v e r a ll d e l i n q u e n c y ra te in la te 1 9 7 4
w a s h ig h e r th a n th e n a tio n 's . T h e 1 9 7 4 ra te ro s e
to 2.83 p e r c e n t f r o m 2 .1 8 p e r c e n t o n e y e a r e a r lie r
a n d 2 .0 8 p e r c e n t in 1 97 2 , a ris e o f 75 b a s is p o in t s , 1
o r 36 p e r c e n t in t w o y e a rs . N a t i o n a ll y , th e in c re a s e
w a s s lig h t ly s m a lle r d u r i n g th e s a m e p e r io d — 33
p e r c e n t , o r 62 b a s is p o in ts .
In th e S o u th e a s t, d e l i n q u e n c y ra te p a tte rn s w e r e
s im ila r f r o m sta te t o sta te . G e n e r a l l y , ra tes w e r e
r e la t i v e ly l o w in 1 97 2 a n d th e n in c re a s e d r a p i d l y
in 1 973 a n d 1 97 4 . T e n n e s s e e w a s a n e x c e p t i o n to
th is p a t t e r n ; a v e r y s h a rp j u m p in a u t o d e lin q u e n c ie s
m a d e 1 97 3 a p e a k y e a r f o r th a t state's o v e r a ll rate.
P e rh a p s n o t u n e x p e c t e d l y , th e a u t o s e c t o r h as
s h o w n th e s te a d ie s t in c re a s e in d e lin q u e n c ie s at
D is t r ic t b a n k s . T h e ra te b e g a n ris in g in A p r i l 1 97 2 ,
n e a r ly 18 m o n t h s b e f o r e th e s h a rp a u to -s a le s d e
c lin e a s s o c ia te d w i t h th e o il e m b a r g o , s o th a t th e
in c re a s e m u s t b e a t t r ib u t e d t o c a u s e s o t h e r th a n
fu e l s h o rta g e s . D e l i n q u e n c i e s o n lo a n s f o r h o m e
a p p lia n c e s h a v e a ls o in c re a s e d s t e a d ily , e s p e c ia lly
in 1 97 4 . T h i s s u p p o r t s th e id e a th a t d u r a b le g o o d s
sa le s a n d p a y m e n t s q u i c k l y r e fle c t r e c e s s io n a r y
t e n d e n c ie s in th e e c o n o m y . W i t h o u t i m p l y i n g a
c a u s e - a n d - e f f e c t r e la t io n s h ip , it is in t e r e s t in g th a t
th e s h a rp ris e in d e l i n q u e n c y ra tes c o i n c i d e d , b o t h
n a t i o n a l ly a n d in th e D is t r ic t , w i t h a f a ll- o f f in rea l
*A basis point equals one-hundredth of a percentage point.
FE D ER A L R ESERV E BANK O F A TLAN TA
B a n k D e l in q u e n c y R a t e s
on C o n s u m e r I n s t a lm e n t
Lo an s*
U.S.
1972
1973
%
— 3.0
1974
‘ Percent of total loans outstanding
s p e n d a b le w e e k l y e a r n in g s a n d a s u rg e in n e w
lo a n e x t e n s io n s in m id -1 9 7 2 . B o th o f th e s e fa c to rs
w o u l d lo g ic a lly c o n t r ib u t e t o ris in g d e li n q u e n c y
ra te s, b u t n o a t t e m p t h a s b e e n m a d e h e r e to te st
th a t r e la t io n s h ip .
H o m e i m p r o v e m e n t lo a n s c o n s is t e n t ly h a v e th e
l o w e s t d e l i n q u e n c y ra te , p r o b a b l y r e fle c t in g b o t h
th e n a t u r e o f th e lo a n a n d th e q u a li t y o f c o lla te ra l.
T h e ra te in c re a s e d 5 0 b a s is p o in t s f r o m 1 9 7 2 to
1 97 4 .
S u r p r is in g ly , m o b i l e h o m e lo a n d e lin q u e n c ie s
in c re a s e d s h a r p ly . W e w o u l d
i n t u i t iv e l y e x p e c t
p e o p l e t o t r y to m a in t a in p a y m e n t s o n t h e ir re s i
d e n c e s , b u t th e ra te in th is c a t e g o r y ro s e 38 b a sis
p o in t s f r o m 1 9 7 2 to 1 9 7 3 , th e n j u m p e d 139 b a sis
p o in t s b y O c t o b e r 1 97 4 . T h e ra te in c re a s e o f 175
b a sis p o in t s , o r 76 p e r c e n t , in t w o y e a r s s h o u ld
c e r t a in ly b e c a u s e f o r c o n c e r n . A lt h o u g h m o b i l e
h o m e s a re n o t e x c lu s i v e ly l o w - i n c o m e h o u s in g ,
m a n y p u rc h a s e rs o f m o b i l e h o m e s r e c e iv e l o w e r t h a n - a v e r a g e in c o m e . P e rh a p s th is c a te g o ry ' s ris in g
d e l i n q u e n c y ra te is in d ic a t iv e o f th e u n e m p l o y m e n t
p r o b l e m s l o w e r in c o m e o r y o u n g e r w o r k e r s a re
h a v in g .
T h e A m e r ic a n B a n k e rs A s s o c ia t io n h as g a t h e r e d
d a ta o n b a n k - c a r d lo a n a n d r e v o l v i n g c r e d it - a c c o u n t
d e l i n q u e n c y ra te s, b e g in n i n g in 197 3 . In c o n tra s t
to o t h e r lo a n s , th e s e t w o t y p e s d o n o t f o l l o w th e
g e n e ra l p a tte rn . In fa c t, b a n k c r e d it c a rd lo a n
d e li n q u e n c ie s in O c t o b e r 1 9 7 4 s t o o d at 3 .1 4 p e r
c e n t, 35 b a s is p o in t s b e l o w th e y e a r - e a r li e r ra te.
A p la u s ib le e x p la n a t io n f o r th is p a r a d o x ic a l b e h a v i o r
c a n b e f o u n d in in t e n s ifie d b a n k e ff o r t s to p o lic e
c r e d it c a rd a c c o u n t s a n d i m p r o v e f o r m e r p o o r
lo a n e x p e r ie n c e s . S o m e b a n k s m a d e b la n k e t m a il
in g s i n t r o d u c i n g t h e ir c r e d it c a rd s , a n d th e re c e n t
r e d u c t io n in d e l i n q u e n c y ra tes p r o b a b l y re fle c ts
an u p g r a d in g in s c r e e n in g b a n k c a rd c u s t o m e r s .
B R IA N D . D IT T E N H A F E R
45
S ix t h
D is t r ic t
S t a t is t ic s
S e a s o n a lly A d ju s t e d
(A ll d a ta a re in d e x e s , u n le s s in d ic a t e d o t h e r w is e .)
Latest Month
One
Two
Month Months
Ago
Ago
One
Year
Ago
Latest Month
Unemployment Rate
(Percent of Work F o r c e ) ............ Jan.
Avg. Weekly Hrs. in Mfg. (Hrs.) . . . Jan.
SIXTH DISTRICT
INCOME AND SPENDING
Manufacturing P a y r o l ls ............... Jan.
Farm Cash R eceipts..................... Dec.
C r o p s ....................................Dec.
Livestock
..............................Dec.
Instalment Credit at Banks* (Mil.$)
New L o a n s ..............................Jan.
Repayments ........................... Jan.
172.8
203
245
172
502
639
171.3
247
328
128
550r
638r
176.9
218
240
175
176.0
190
217
190
578
637
722
675
One
Two
Month Months
Ago
Ago
One
Year
Ago
7.7
39.6
6.3
38.9
5.4
39.6
4.6
41.4
235
194
275
265
208
281
265
209
276
242
195
231
180.7
158
181.2
222
184.4
242
183.7
160
147.1
120.5
152.2
166.6
94.1
148.5
122.3
153.5
176.0
97.5
150.9
125.9
155.8
183.1
92.6
150.7
128.6
154.9
212.2
94.8
8.5
39.1
8.3
39.2
7.1
39.8
4.7
40.9
290
228
288
311
238
310r
311
243
311
296
237
284
FINANCE AND BANKING
Member Bank L o a n s ..................... Jan.
Member Bank D e p o s it s ............... Jan.
Bank D e b i t s * * ........................... Jan.
FLORIDA
INCOME
EMPLOYMENT AND PRODUCTION
Nonfarm Em ploym ent...............
Manufacturing .....................
Nondurable G o o d s...............
F o o d ..............................
T e x t ile s ........................
Apparel ........................
Paper ...........................
Printing and Publishing . .
C h e m ic a ls .....................
Durable G o o d s ..................
Lbr., Wood Prods., Furn. & Fix.
Stone, Clay, and Glass . . .
Primary M e t a l s ...............
Fabricated M e t a ls ............
M a c h in e ry .....................
Transportation Equipment
Nonmanufacturing..................
Co nstru ction ..................
Transportation ...............
T r a d e ...........................
Fin., ins., and real est. . . .
S e r v ic e s ........................
Federal Government . . . .
State and Local Government
Farm Employment.....................
Unemployment Rate
(Percent of Work Force) . . . .
Insured Unemployment
(Percent of Cov. E m p .)............
Avg. Weekly Hrs. in Mfg. (Hrs.) . .
Construction C o n tra c ts*............
Residential...........................
All o t h e r ..............................
Cotton Consumption**...............
Manufacturing Production . . . .
Nondurable G o o d s..................
Food
...........................
T e x t ile s ........................
A p p a r e l........................
Paper ...........................
Printing and Publishing . .
C h e m ic a ls .....................
Durable G o o d s .....................
Lumber and W o o d ............
Furniture and Fixtures . . Stone, Clay, and Glass . . .
Primary M e t a l s ...............
Fabricated M e t a ls ............
Nonelectrical Machinery . .
Electrical Machinery . . .
Transportation Equipment
. Jan.
. Jan.
. Jan.
. Jan.
. Jan.
. Jan.
. Jan.
. Jan.
. Jan.
. Jan.
. Jan.
. Jan.
. Jan.
. Jan.
. Dec.
131.3
111.4
110.5
104.2
98.8
107.0
110.8
126.7
109.4
112.5
98.4
120.9
108.9
123.7
151.8
99.8
138.3
144.0
125.9
135.9
148.4
156.3
105.7
139.5
86.0
130.6
111.6
110.7
102.8
100.1
109.3
111.0
126.8
110.6
112.6
99.7
122.9
110.8
125.7
156.0
91.8
137.3
142.9
126.5
134.1
149.0
155.9
105.1
139.2
81.3
131.4
114.0
112.2
104.0
103.6
109.8
111.0
125.8
112.5
115.8
102.1
124.1
111.8
126.8
154.6
104.2
137.6
139.3
126.0
136.9
147.5
153.1
106.3
139.3
74.7
133.0
120.3
117.7
106.6
114.5
117.4
114.1
130.8
109.7
123.5
112.6
134.0
114.2
133.1
161.9
109.5
137.5
158.0
126.0
137.0
148.5
151.9
103.1
133.6
87.9
. Jan.
8.2
7.3
6.3
4.5
Jan.
Jan.
. Jan.
Jan.
Jan.
Dec.
Dec.
Dec.
Dec.
Dec.
Dec.
Dec.
Dec.
Dec.
Dec.
Dec.
Dec.
Dec.
Dec.
Dec.
Dec.
Dec.
Dec.
5.5
38.9
175
119
230
50
144.4
145.5
133.4
134.0
122.5
137.4
128.6
162.0
143.2
122.6
129.8
147.8
106.9
117.2
155.3
244.9
130.8
5.0
38.9
376
128
618
64
148.4
149.1
132.8
136.5
130.8
137.6
131.2
170.1
147.3
131.9
135.9
150.7
108.2
118.2
156.8
250.0
137.5
3.9
39.3
148
140
155
69
151.1
151.9
132.8
142.3
133.5
138.0
132.6
175.1
150.0
143.6
142.2
154.8
110.0
119.2
155.6
254.9
137.7
1.9
41.0
210
211
209
79
150.7
149.7
134.5
149.9
142.5
137.0
138.7
157.8
152.4
154.5
157.8
154.4
108.7
137.1
152.4
242.6
136.5
257
263
280
265
281
269
266
254
200
189
289
214
191
297r
216
194
294
206
179
263
177.8
175.0
197
. Jan.
. Jan.
. Jan.
. Jan.
FINANCE AND BANKING
Loans*
Deposits*
Bank Debits*/**
............
ALABAMA
INCOME
Manufacturing Payrolls..................Jan.
Farm Cash R e c e ip ts.....................Dec.
EMPLOYMENT
Nonfarm Em ploym ent.................. Jan.
Manufacturing ........................ Jan.
Nonmanufacturing
..................Jan.
Co nstru ction ........................Jan.
Farm Employment........................Dec.
46
Manufacturing Payrolls ............... Jan.
Farm Cash R e c e ip ts..................... Dec.
EMPLOYMENT
Nonfarm E m ploym en t.................. Jan.
M a n u fa c tu rin g........................ Jan.
Nonmanufacturing..................... Jan.
C o n stru ction ........................ Jan.
Farm Employment........................ Dec.
Unemployment Rate
(Percent of Work F o r c e ) ............ Jan.
Avg. Weekly Hrs. in Mfg. (Hrs.) . . . Jan.
FINANCE AND BANKING
Member Bank L o a n s ..................... Jan.
Member Bank Deposits.................. Jan.
Bank D e b i t s * * ........................... Jan.
GEORGIA
INCOME
Manufacturing Payrolls ............... Jan.
Farm Cash R e c e ip ts..................... Dec.
157.9
280
159.2
355
163.5
281
169.8
246
128.3
102.6
140.0
137.5
110.4
127.5
103.7
138.4
139.1
85.8
127.7
106.0
137.6
131.6
85.4
131.4
113.2
139.8
149.5
91.1
11.1
38.3
8.5
38.6
6.4
39.0
4.6
41.3
265
189
340r
271
194
328
271
181
319
EMPLOYMENT
Nonfarm E m ploym en t.................. Jan.
Manufacturing ........................ Jan.
Nonmanufacturing
.................. Jan.
C o n stru ction ........................ Jan.
Farm Employment ..................... Dec.
Unemployment Rate
(Percent of Work F o r c e )............ Jan.
Avg. Weekly Hrs. in Mfg. (Hrs.) . . . Jan.
FINANCE AND BANKING
Member Bank L o a n s ..................... Jan.
Member Bank D e p o s it s ............... Jan.
Bank D e b i t s * * ........................... Jan.
251
180
342
LOUISIANA
INCOME
Manufacturing Payrolls ............... Jan.
Farm Cash R e c e ip ts..................... Dec.
173.9
176
171.2
261
177.9
259
157.0
185
121.3
108.4
123.9
110.5
69.7
119.0
106.0
121.7
103.8
66.0
117.2
102.5
120.4
89.3
52.9
119.1
109.9
121.0
102.0
81.9
7.1
40.3
6.9
40.6
7.3
40.5
6.2
40.9
231
176
245
256
196
247r
258
196
253
237
184
197
EMPLOYMENT
Nonfarm E m ploym en t.................. Jan.
Manufacturing ........................ Jan.
Nonmanufacturing..................... Jan.
C o n stru ction .....................
Jan.
Farm Employment........................ Dec.
Unemployment Rate
(Percent of Work F o r c e )............ Jan.
Avg. Weekly Hrs. in Mfg. (Hrs.) . . . Jan.
FINANCE AND BANKING
Member Bank L o a n s * .................. Jan.
Member Bank D e p o s its*............... Jan.
Bank D ebits*/**........................... Jan.
M ISSISSIPPI
175.8
244
121.1
111.5
125.4
139.7
72.3
173.9
334
120.6
112.9
124.2
137.5
78.8
212
119.7
114.2
122.2
126.0
59.9
121.5
117.9
123.1
144.6
82.0
INCOME
Manufacturing P a y r o l ls ............... j an.
Farm Cash R e c e ip ts..................... Dec.
196.4
233
177.4
179
198.4
190
197.2
246
EMPLOYMENT
Nonfarm E m ploym en t.................. Jan.
Manufacturing ........................ Jan.
Nonmanufacturing..................... Jan.
C o n stru c tio n ........................ Jan.
Farm Employment........................ Dec.
130.0
124.0
132.7
145.3
65.4
127.9
117.8
132.6
133.0
76.8
129.1
123.7
131.5
124.9
81.5
130.4
133.9
128.8
148.2
79.5
M A R C H 1975, M O N T H L Y R E V IE W
One
Two
Month Months
Ago
Ago
Latest Month
Unemployment Rate
(Percent of Work F o r c e )............Jan.
Avg. Weekly Hrs. in Mfg. (Hrs.) . . . Jan.
One
Year
Ago
Latest Month
EMPLOYMENT
Nonfarm Employment . . . .
Manufacturing ...............
Nonmanufacturing............
C o nstru ction ...............
Farm Employment...............
Unemployment Rate
(Percent of Work Force) . .
Avg. Weekly Hrs. in Mfg. (Hrs.)
6.2
37 7
FINANCE AND BANKING
Member Bank L o a n s * ..................Jan.
Member Bank D e p o s its*...............Jan.
Bank Debits*/**...........................Jan.
261
209
268
263
218
262
268
214
268
265
213
238
. Jan..
. Jan.
One
Two
Month Months
Ago
Ago
One
Year
Ago
. Jan.
Dec.
127.9
110.5
137.6
155.0
91.5
126.3
111.4
134.6
143.3
80.7
128.5
114.8
136.1
146.8
76.7
130.1
122.3
134.4
151.0
90.1
. Jan.
6.2
39.0
6.3
38.8
5.1
39.1
3.5
41.1
. Jan.
. Jan.
. Jan.
245
192
269
281
212
277
274
210
265
250
198
234
TENNESSEE
FINANCE AND BANKING
INCOME
Manufacturing Payrolls..................Jan.
Farm Cash R e c e ip ts.....................Dec.
171.0
176
171.8
195
176.2
161
*For Sixth District area only; other totals for entire six states
179.2
149
•Daily average basis
tPreliminary data
ised
N.A. Not availiable
Note: All in dexes: 1967 = 100.
Sources: Manufacturing production estimated by this Bank; nonfarm,’ mfg. and nonmfg. emp., mfg. payrolls and hours, and unemp., U.S. Dept, of Labor and cooperating
state agencies; cotton consumption, U.S. Bureau of Census; construction contracts, F. W. Dodge Div., McGraw-Hill Information Systems Co.; petrol, prod., U.S. Bureau of
Mines; farm cash receipts and farm emp., U.S.D.A. Other indexes based on data collected by this Bank. All indexes calculated by this Bank.
'Data benchmarked to June 1971 Report of Condition,
D e b it s
to
D e m a n d
D e p o s it
A cco u n ts
I n s u r e d C o m m e r c i a l B a n k s in t h e S i x t h D i s t r i c t
(In T h o u s a n d s o f D o lla rs )
January
1975
December
1974
January
1974
Percent Change
Percent Change
January
1975
From
Jan.
Dec.
1974
1974
January
1975
From
Dec.
Jan.
1974
1974
iTANDARD METROPOLITAN
STATISTICAL AREAS'
Birmingham . . .
5,159,319
Gadsden
. . .
109,386
Huntsville . . .
423,487
Mobile
............ . 1,536,766
Montgomery . . .
749,579
Tuscaloosa
275,077
Dothan
Selma
December
1974
195,790
86,738
199,850
91,896
202,132
112,233
- 2
- 6
- 3
-23
221,643
142,663
193,201
42,633
995,423
2,239,918
221,799
125,855
230,621
57,296
1,133,084
2,163,731
+ 11
- 7
+ 8
- 4
+ 14
+ 5
+ 11
+ 5
-10
-2 8
- 0
+ 9
5,108,328
110,416
447,417
1,395,695
802,317
253,101
4,227,100
101.757
358,900
1,163,737
686,336
263,379
+ 1
- 1
- 5
+ 10
- 7
+ 9
+ 22
+ 7
+ 18
+ 32
+ 9
+ 4
Bradenton . . .
246,381
Monroe County
132,675
208,706
O c a l a ...........
St. Augustine
41,091
St. Petersburg
. 1,131,309
Tampa
. . . .
2,362,848
975,636
496,635
909,201
440,892
897,486
441,165
+ 7
+ 13
+ 9
+ 13
Athens . . .
Brunswick .
Dalton
. . . .
Elberton . . . .
Gainesville . . .
Griffin
...
LaGrange . . .
Newnan . . .
R o m e ...........
Valdosta
. .
177,364
139.204
163,898
24,698
185,909
74,583
40,207
56,676
141,234
119,046
169,010
119,634
170,217
27,659
170,444
75,201
40,188
52,041
150,522
121,697
158,273
110,974
197,913
24,209
165,094
86,727
45,575
60,220
148,757
98,672
+ 5
+ 16
- 4
-11
+ 9
- 1
+ 0
+ 9
- 6
- 2
+ 12
+25
-17
+ 2
+ 13
-1 4
-12
- 6
- 5
+21
Abbeville . . .
Bu n k ie...........
Hammond
New Iberia . . .
Plaquemine . .
Thibodaux . . .
20,586
18,609
109,749
96,299
34,145
72,700
23,680
16,891
106,149
98,642
29,400
66.750
20,464
14.229
91,207
76,894
30,257
48,984
-13
+ 10
+ 3
- 2
+ 16
+ 9
+ 1
+ 31
+20
+ 25
+ 13
+48
Hattiesburg . .
Laurel
...
Meridian
. . .
Natchez . . . .
PascagoulaMoss Point
Vicksburg .
Yazoo City . .
145,378
80,112
139.390
65,403
141,083
79,785
137,611
70,106
133,211
83,351
128,857
55.530
+
+
+
-
3
0
1
7
+ 9
- 4
+ 8
+ 18
163,698
86,853
68,121
156,048
79,348
55,189
149,665
101,011
58,249
+ 5
+ 9
+ 23
+ 9
-14
+ 17
Bristol
.
Johnson City . .
Kingsport . . .
148,638
164,866
314,053
146.893
159,114
309,715
103,862
180,144
293,278
+ 1
+ 4
+ 1
+43
- 8
+ 7
. 96.713,343
96,285,746r 88,531.867
+ 0
+ 9
. . 11,612,659
. . 30,748,653
. 28,051,463
. . 10,777,860
. . 3.905.231
. 11.617,477
11,476,313
9,682,466
30.460,765r 30,182,784
28,166,046r 26,478,507
10,31 l,731r 8,742,969
3,870.559
3,443,762
12.000,332 10,001,379
+
+
+
+
-
+ 20
+ 2
+ 6
+23
+ 13
+ 16
Bartow-LakelandWinter Haven
Daytona Beach
Ft. LauderdaleHollywood . . .
Ft. Myers . . .
Gainesville
. . .
Jacksonville . . .
MelbourneTitusville-Cocoa
Miami
............
O r la n d o ...........
Pensacola . . . .
Sarasota ............
Tallahassee . . .
Tampa-St. Pete . .
W. Falm Beach . .
. 2,126,909
495,626
321,841
. 4,931,473
2,085,361
384,107
281,356
5,238,135
2,298,226
461,351
290,011
4,705,955
+ 2
+ 29
+ 14
- 5
- 7
+ 7
+ 11
+ 5
562,279
8,125,198
1,659,738
546,182
694,840
841,418
. 4,728,593
. 1,462,795
454,616
8,542,448r
1,646,524
575,730
554,141
699,673
4,376,017
l,237.014r
483,539
7,858,077
1,724,707
458,420
642,957
858,159
4,650.102
1.460,100
+ 24
- 5
+ 1
- 5
+ 20
+ 20
+ 8
+ 18
+ 16
+ 3
- -4
+ 19
+ 8
Albany
............
A t l a n t a ............
A u g u s t a ............
Columbus . . . .
Macon
............
Savannah . . . .
229,292
20,619,620
553,999
476,606
818,720
923,681
213,404
217,175
19,698,113 20,135,837
663,499r
623,088
478,037
486,331
925,256
685,477
861,070
601,496
+ 7
+ 5
-17
- 0
-12
+ 7
+ 6
+ 2
-11
- 2
+ 19
+ 54
_ 2
+ 2
+ 0
Alexandria . . .
322,628
Baton Rouge . . . . 2,175,570
Lafayette . . .
433,451
Lake Charles .
312,578
New Orleans . .
5,763,906
318,791
2.038,430r
379,506
301,240
5,583,743
296,143
1,435,627
322,233
286,483
4,972,677
+ 1
+ 7
+ 14
+ 4
+ 3
+ 9
+ 52
+ 34
+ 9
+ 16
Biloxi-Gulfport
Jackson ...........
285,940
2,005,637
291,479
1,998,206
252,040
1,647,863
- 2
+ 0
+ 13
+ 22
Chattanooga . . . . 1,405,563
Knoxville . . . . . 1,756,844
Nashville . . . . . 4,749,320
1,435,724
2,124,632
4,529,023
1,514,080
1,472,202
3,898,405
- 2
-17
+ 5
- 7
+ 19
+ 22
122,706
111,022
+ 5
+ 16
THER CENTERS
Anniston
. . .
. . . .
. . . .
January
1974
January
1975
129,328
'Conforms to SMSA definitions as of December 31, 1972.
-District portion only,
r-revised
Figures for some areas differ slightly from preliminary figures published in “Bank
F E D ERfor
A L FRASER
R ESER V E BAN K O F A TLAN TA
Digitized
STRICT TOTAL
Alabama
. .
Florida
.
Georgia . . . .
Louisiana- . .
Mississippi-' .
Tennessee:
1
1
0
5
1
3
lits and Deposit Turnover” by Board of Governors of the Federal Reserve System.
47
D is t r ic t
B u s in e s s
C o n d it io n s
T h e S o u th e a s t's e c o n o m i c s lid e c o n t in u e s . L a b o r m a r k e t s w e a k e n e d f u r t h e r . C o n s u m e r s ' t o t a l in s t a lm e n t
d e b t t o b a n k s c o n t r a c t e d s h a r p ly . R e s e r v e p o s it io n s a t D is t r ic t b a n k s i m p r o v e d , as d e p o s i t f l o w s s t r e n g t h e n e d
w h i l e lo a n g r o w t h la g g e d . S ig n s o f r e c o v e r y in t h e c o n s t r u c t i o n i n d u s t r y r e m a i n e d e lu s iv e . A g r ic u l t u r a l
p r ic e s c o n t i n u e d t o d e c lin e , r e f le c t in g s h r i n k i n g d e m a n d f o r g r a in c r o p s .
N o n f a r m j o b s w e r e u p s l ig h t ly in J a n u a r y , b u t a
la r g e r i n f lu x i n t o t h e l a b o r f o r c e c a u s e d t h e n u m b e r
o f u n e m p l o y e d t o in c re a s e s h a r p ly . T h e u n e m p l o y
m e n t ra te m a t c h e d th e n a tio n ' s . J o b g a in s w e r e r e
p o r t e d in t ra d e , s e rv ic e s , c o n s t r u c t io n , f o o d p r o c e s s
in g , a n d g o v e r n m e n t ; b u t s m a ll j o b lo s s e s w e r e
w i d e s p r e a d a m o n g m a n u f a c t u r in g in d u s t r ie s . A v e r
a g e f a c t o r y h o u r s r e m a in e d u n c h a n g e d , a n d w a g e
in c re a s e s c a u s e d a s m a ll u p t ic k in to ta l m a n u f a c t u r
in g p a y r o lls .
T h e r e w a s a s ig n if ic a n t d e c r e a s e in o u t s t a n d in g
c o n s u m e r in s t a lm e n t d e b t a t c o m m e r c i a l b a n k s .
M a r k e d ly l o w e r e x t e n s io n s r e d u c e d o u t s t a n d in g
n o n a u t o m o t i v e c o n s u m e r g o o d s c r e d it . R e p a y m e n t s
ra n w e l l a h e a d o f e x t e n s io n s o f a u t o m o b i l e c r e d it .
P e rs o n a l lo a n a n d h o m e r e p a ir a n d m o d e r n i z a t i o n
c r e d it o u t s t a n d in g a ls o d e c lin e d . D e s p it e h e a v y p r o
m o t io n s a t D is t r ic t d e p a r t m e n t s to re s in D e c e m b e r ,
d o ll a r sa le s o n l y m a t c h e d t h o s e o f a y e a r a g o , in
d ic a t in g a d e c r e a s e in p h y s ic a l sa le s v o l u m e . A c
c o r d i n g to e a r ly in d ic a t io n s , J a n u a r y a u t o sa le s w e r e
r e v iv e d b y re b a te p r o g r a m s b u t r e m a in e d b e l o w
1 974's l o w le v e l.
S t r o n g i n f lo w s o f t im e a n d s a v in g s d e p o s it s , o t h e r
t h a n la rg e C D ' s , c o n t i n u e d t o r e d u c e D is t r ic t b a n k s '
u s e o f b o r r o w e d f u n d s t h r o u g h e a r ly F e b r u a r y . I n
v e s t m e n t p o r t f o l io s w e r e e n la r g e d s o m e w h a t , as
b a n k s a d d e d t o t h e ir h o ld i n g s o f b o t h g o v e r n m e n t
a n d " o t h e r " s e c u ritie s . B u s in e s s l e n d i n g at la rg e
b a n k s r e m a in e d w e a k , w i t h s u b s ta n tia l d e c lin e s in
lo a n s t o n o n d u r a b l e g o o d s m a n u f a c t u r e r s a n d re ta il
t r a d e c o n c e r n s . O t h e r lo a n c a t e g o r ie s w e r e a ls o
g e n e r a l l y s o fte r.
A l t h o u g h t h e r e s id e n t ia l s e c t o r b e n e f it e d f r o m
r o b u s t s a v in g s i n f lo w s a t t h r if t in s t it u t io n s a n d l o w e r
m o r t g a g e ra te s , t h e r e w a s n o c o n c r e t e e v i d e n c e o f
r e c o v e r y . T h e v a l u e o f r e s id e n t ia l c o n t r a c t s s a n k
in J a n u a r y f o r th e e ig h t h t im e in n in e m o n t h s . A ll
s ta te s in th e r e g io n a g a in s h a r e d in t h e s lu m p . T h e
v a l u e o f n o n r e s id e n t ia l a w a r d s r e t u r n e d t o f o r m e r
le v e ls .
A g r ic u l t u r a l p r ic e s fe ll f u r t h e r in J a n u a r y t o 6
p e r c e n t b e l o w y e a r - a g o le v e ls . P r e li m i n a r y d a ta in
d ic a t e th e d o w n t u r n c o n t i n u e d t h r o u g h F e b r u a r y .
D e c lin e s a re c e n t e r e d in th e c r o p s e c to r, w h e r e
s h r in k in g e x p o r t d e m a n d a n d c u r t a ile d d o m e s t ic
liv e s t o c k f e e d in g h a v e s h a r p l y r e d u c e d p r ic e s o f
g ra in s a n d fe e d s t u ff s . A l t h o u g h m o s t f e e d - p r i c e
ra tio s h a v e i m p r o v e d r e c e n t ly , b r o i l e r p la c e m e n t s
c o n t i n u e d a t w e l l b e l o w y e a r - a g o le v e ls . T o t a l fa r m
c a sh r e c e ip ts f o r 1 9 7 4 s h o w e d a m o d e r a t e g a in
o v e r 1 97 3 in s p ite o f a s h a r p c o n t r a c t io n in t h e l i v e
s to c k s e c to r. M a j o r a g r ic u lt u r a l le n d i n g a g e n c ie s
h a v e c o n t i n u e d to r e d u c e in te re s t ra te s o n lo a n s
as t h e ir c o s ts o f f u n d s in m o n e y m a r k e t s d e c lin e .
N ote: Data on w h ich statements are based have been adjusted w h en e ve r possible to e lim in ate seasonal influences.
4 8 for FRASER
Digitized
M A R C H 1975, M O N T H L Y R E V IE W
@FedFRASER