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N HL T V F E D E R A V o lu m e X X X L R E S E R Review V E B A N K O F A T L A tlanta, G eorgia, M arch 3 1 , 1945 A N T A N um ber 3 Cottonseed in the Southern Economy m id st o f a liv e ly n a tio n a l concern w ith the fate o f cotton a s a te x tile fiber, little atten tion has been giv en the eco n om ic im p ortan ce o f cotton seed in th e S ou th ern econ om y. H ow ever exp erts m ay differ on m an y asp ects o f a w ork ab le cotton program , th ey are a ll agreed on one, n a m ely , the d e sir a b ility o f red u cin g the cost o f gro w in g cotton in an effort to strengthen its com p etitiv e p o sitio n . B ecause cottonseed is a by-product o f cotton cu ltu re and h as no sep arab le cost o f p rod u ction o f its ow n, the v a lu e that cottonseed returns to the farm er in one w a y or another is a credit again st the gross cost o f p ro d u cin g cotton lin t. The effect o f th is credit, therefore, is to reduce the net cost o f p rod u cin g the lin t. D u rin g the crop year 1942-43, fo r ex a m p le, w hen the u p lan d varieties o f cotton y ie ld ed an average o f 2 8 4 pounds o f lin t per acre fo r the n ation as a w h ole, the gross cost o f p rod u ction — cost o f prep aration and p la n tin g , cu ltiv a tin g and h o ein g , h arvestin g, fertilizer and m anure, seed, gin n in g , and m iscella n eo u s exp en se and lan d rent — am ounted to $ 4 5 .8 2 per acre, or 16.1 cents per p ound o f lin t. In that year, how ever, the credit fo r cotton seed w as $ 1 1 .4 2 per acre, the net cost o f p rod u cin g lin t b ein g reduced b y that am ount to $ 3 4 .4 0 per acre, or 12.1 cents per pound. O b v io u sly at any g iv en le v e l o f gross cost, th erefore, the h ig h er the credit for cotton seed, thes low er w ill be the net cost o f th e lin t and the stronger w ill be th e com p etitive p o sitio n o f cotton fiber. C on v ersely , the less the credit fo r cottonseed, th e h ig h er w ill be th e n et cost o f the lin t and the w eaker w ill be cotton ’s com p e titiv e p osition . S om e in d ication o f the im p ortan ce o f th is credit is given b y the v a lu e o f cottonseed p rod u ction . T he 10-year average fa rm v a lu e o f cottonseed fo r th e p eriod 1 9 3 0 -3 9 am ounted to 1 2 1 .9 m illio n d ollars. T h is am ount w as a lm ost 10 per cent o f the figure fo r the country’s corn crop, 42 per cent o f that for the oats crop, 2 4 per cent o f that fo r the w heat crop, and 1 2 8 p er cent o f that fo r the b a rley crop, and it w as m ore than fo u r tim es the v alu e o f the soyb ean crop. B y 1942, w artim e in fluences had alm ost d oub led the v a lu e o f cotton seed prod u c tio n , ra isin g the figure to 2 3 7 m illio n d o lla rs. O f th is total v a lu e 3 8 .8 per cent, 9 2 .5 m illio n d o lla rs, accrued to cotton farm ers in S ixth D istrict states w here 38 .3 per cent o f the seed , ap p ro x im a tely tw o m illio n ton s, w as p rod u ced in 1942. I N th e T he m agn itu d e o f these figures w o u ld ju stify som e con sid era tio n o f cotton seed as a m ajor Southern crop irresp ective o f its effect u p on the p o sitio n o f cotton. C ottonseed ap p ears first as a m erch an tab le com m od ity at the cotton g in , w here it is separated from th e fiber. T en thousand active cotton g in s, o f a total o f about 1 2 ,0 00 in the country, p erform ed th is fu n ctio n in 1943 and, in ad dition, served as in itia l p o in ts o f co lle c tio n fo r the seed. A p p r o x i m ately 13 per cent o f th e seed separated at g in s is returned to farm s fo r use as seed and, to a sm a ll extent, as feed and fertilizer. T he rem ainder o f the seed , 8 7 per cent o f it, finds its w a y d irectly or th rou gh v ariou s in term ed iate m arketing ch an n els to the o il m ills, w here it is broken dow n in to its constituent parts. A cco rd in g to the latest census figures 3 9 4 m ills in the U n ited States crushed cotton seed du rin g th e crop year ended J u ly 1, 1944. O f these, 28 w ere in A lab am a, 4 3 in G eorgia, 41 in M ississip p i, 18 in L ou isian a, and 13 in T en n essee. In a d d ition to the m ills that a c tu a lly crushed cottonseed in the crop year 1 9 4 3-44, 52 m ills p ossessed the n ecessary eq u ip m ent but did n ot crush any seed. T he total num ber o f a v a il a b le m ills w as th erefore 4 4 6 . F rom year to year fo r a lm ost a quarter o f a century the num ber o f m ills cru sh in g cottonseed has d eclin ed . Com pared w ith the 3 9 4 active m ills on J u ly 1, 1 9 4 4 , 4 1 0 w ere active on the co rresp o n d in g date in 1 943, 4 2 6 in 1 9 4 2 , 4 4 6 in 1941, 4 4 6 in 1 9 4 0 , 4 6 2 in 1939, 4 6 6 in 1 9 3 8 , 5 5 7 in 1 928, and 763 in 1917. F our ch aracteristic products o f cotton seed em erge from the o il m ill — lin ters, h u lls, o ilca k e or m ea l, and o il. Each o f these, after g o in g th rou gh further p ro cessin g stages, m ay reap p ear in a very w id e variety o f end products. L inters, th e short cotton fibers ad h erin g to th e seed after g in n in g , are rem oved in the first m ajor op eration at the o il m ill. L inters enter in to the m an ufacture o f such th in gs as cotton b attin g, w ad d in g, stuffing m aterial, fe lt, absorbent cot ton, low -grad e yarns, and ce llu lo se . M odern ch em istry con verts c e llu lo se in turn in to a m yriad o f other th in gs, som e o f w hich are w ritin g paper, gu n cotton , sm ok eless pow der, p la s tics, varn ish es, a rtificial leather, ce llu lo id , a rtificial silk , and p h o to g ra p h ic film . H u lls that are strip p ed fro m th e k ern els or m eats o f the 2 2 M o n t h l y R e v ie w o f th e F e d e ra l R e s e rve seed are used as cattle feed , fertilizer, and p a ck in g m aterial. T he fiber can be converted into a stuffing; a b ase fo r e x p lo siv es, such as d y n a m ite; pressed -p ap er p rod u cts; and b lo ttin g paper. D u rin g the p resent w ar, cotton seed h u lls are an im portan t source o f fu rfu ra l, w h ich is used in the m an u factu re o f syn th etic rubber. A fter h u llin g , the seed m eats are p assed through h eavy ro llers, and the resu ltin g flakes are fe d in to a cooker. F rom the cook er they p ass to a m ach in e ca lle d a “ fo rm er,” in w hich th ey are spread over a m o ld , w rap p ed in press clo th s, and pressed lig h tly in to cakes. T h ese cakes are then ready fo r the press, w here th ey are su b jected to pressu re that is in creased g ra d u a lly to about 4 ,2 0 0 p o u n d s per square inch. P ressure is m ain tain ed fo r 2 0 to 30 m in u tes. T h is p ro cess re su lts on the one hand in so lid sla b s o f cotton seed cake that m ay su b seq u en tly b e reduced to cu b es or p e lle ts or be ground into m eal, and, on the other hand, in the crude cotton seed o il that is pressed from the m eats. C ottonseed cake or m eal has som e im p ortan ce as a fertilizer and in the m anufactu re o f d y estu ffs, but it is ch iefly im portant a s feed fo r ca ttle, p o u ltry , sw in e, sh eep , and horses and m u les. T o a sm a ll but g ro w in g exten t flour m ade from cottonseed m eal, h ig h in p rotein and v itam in B content and lo w in starch, is b ein g used in bread, cake, and crackers. C rude cottonseed o il ap p ears, after refin in g and fu rther p rocessin g, in a great v a riety o f other products, such as c o s m etics, b ak in g and co o k in g o il, sa la d o il and m ayon n aise, vegetab le sh orten in g and m argarin e, and m ed icin a l o il. It a lso enters in to the m an u factu re o f so a p , roofin g tar, lin o leum , w aterp roofin g m aterial, a b ase fo r cheap p ain t, a rti ficial leath er, and p h on ograp h records. T h e fo u r b asic prod u cts o f th e cotton seed -oil m ill are, o f course, n ot a ll o f eq u al im p ortan ce. F or th e p eriod 1 9 30-39, crude cottonseed o il accou n ted fo r an average o f 5 3 .9 per cent o f the total v a lu e o f cotton seed p roducts. N in ety per cent o f th is o il u ltim a tely ap p eared in the fo rm o f fo o d products. C ottonseed cake and m eal in the sam e p eriod accou n ted for 3 0 .8 per cent o f the to tal v a lu e, lin ters 10 .2 per cent, and h u lls 5.1 p er cent. F ood fo r hum an con su m p tion and fe e d fo r livestock are c le a r ly the tw o m ost im p ortan t u ses o f co tto n seed products. A li other uses, a lth o u g h fa r fro m n e g lig ib le in th e aggregate, are in d iv id u a lly o f q uite m in o r im p ortan ce. Competitive M arkets E ach o f the fou r b asic cotton seed p rod u cts enter, b y w ay o f th eir v ariou s uses, h ig h ly co m p etitiv e m arkets. L in ters com pete w ith cotton lin t its e lf and w ith w ood p u lp as a source o f c e llu lo se . H u lls com p ete w ith h ay and sila g e as cattle feed . O ilcak e an d m eal com p ete w ith m an y other p rotein co n cen trates in th e fe ed in g o f liv esto ck and w ith other fertilizers in that p articu lar u se. V a rio u s d om estic and fo r eig n fa ts and o ils, such as lin seed , peanut, soyb ean , and cocon u t o ils and lard can e a sily rep lace or be rep laced b y cotton seed o il in m any uses. W hen d ifferent com m od ities can be re a d ily su b stitu ted fo r on e another, as is th e case w ith cotton seed p roducts, their prices in a com p etitive m arket tend to b e tied c lo s e ly together. A sm a ll u n fa v o ra b le d ifferen tial in th e p rice o f one o f the com p etin g products w ill lo se fo r that com m od ity a d is p rop ortion ate share o f the to tal sa les. C on versely, a sm all fa v o ra b le p rice d ifferen tial w ill w in fo r it a d isp rop ortion ate share o f th e total sales. F or ex a m p le, in the case o f co tto n B a n k o f A tla n ta fo r M a rc h 1945 seed o il, the m ost im p o rta n t p ro d u ct o f th e o il m ill, the average w h o le sa le p rice fo r th e p erio d 1 9 3 1 -4 0 w as 6.1 cents per p ou n d w h ile th at fo r pean u t o il w a s 6 .5 cen ts p er pound, and that fo r so y b ea n w as 5 .8 cents. In ev ery year fro m 1 931 th rou gh 1 9 4 3 th e p rice o f cotton seed o il w as b elo w th at o f p ean u t o il, b u t in n o case b y as m uch as o n e cent. D u rin g th at p erio d th e fa c to ry prod uction o f p ean u t o il never am ou n ted to m ore than 5 p er cen t o f the to tal o f cotton seed , so y b ea n , lin see d , and p ean u t o ils. In th o se 13 years th e avera g e w h o le sa le p rice o f soybean o il did n ot vary b y m ore than 1.1 cen ts p er p ou n d from that o f cotton seed o il. T h e p rice o f cotton seed o il in th is case, h ow ever, w as so m etim es b e lo w th at o f th e co m p etin g o il but m ore o ften ab ove it. In th e yea rs 1 9 3 1 -3 4 th e p rice o f cotton seed o il w as le ss than that o f so y b ea n o il, and in th ose sam e years th e fa cto ry p ro d u ctio n o f th e latter never rose ab ove 2.1 per cent o f th e to tal p ro d u ctio n o f cotton seed , soyb ean , lin seed , and pean u t o ils. T h e p rice o f co tto n seed o il in 19 3 5 , how ever, w as 1.1 cen ts h ig h er than that o f th e c om p etin g o il, and in that year the p ro p o rtio n o f so y b ea n o il m anufactured m ore than d ou b led , risin g to 5 .7 per cen t o f th e fo u r-o il total. W hen, in 1 9 3 6 , the p rice o f co tto n seed o il w a s a g a in ab ove that o f so y b ea n o il, the fa c to r y p ro d u ctio n o f th e latter on ce m ore alm o st d o u b led , r isin g to 11.3 per cent. T h e year 1937, how ever, saw th e p rice o f co tto n seed o il f a ll 0 .1 cent b elow that o f soyb ean o il. T h is drop w as acco m p a n ied b y a d eclin e in the fa cto ry p rod u ction o f so y b ea n o il to 7 .7 p er cent o f the fo u r-o il to ta l. In ev ery su b seq u en t y ea r the p rice o f cotton seed o il w as h ig h er than th at o f so y b ea n o il, and the p rod u ction o f so y b ea n o il rose to 1 2 .8 p er cen t o f th e fouro il total in 1 9 3 8 and then, w ith som e flu ctu ations, to 34.2 per cent in 1943. Factors in Pricing T he m ovem ents ju st d escrib ed w ere u n d o u b ted ly the resu lt o f m an y fa cto rs, a m o n g w h ich w ere th e restriction o f cotton p rod u ction and the w artim e official en cou ragem ent o f the g ro w in g o f so y b ea n s. T h ey n ev erth eless illu str a te th e tend en cy fo r the p rices o f su b stitu ta b le co m p etin g p rod u cts to clin g to gether and fo r th e sh are o f th e m arket o b ta in ed b y each to vary in v e r se ly w ith its p rice. T h e p rices o f cotton seed p rod u cts a s m ad e in such com p etitiv e m arkets go fa r to determ in e h ow m u ch an o il m ill can afford to p a y fo r cotton seed w ith o u t in cu rrin g lo ss. T w o other fa cto rs en terin g in to th e p rice that th e o il m ill can p ay are the m a n u factu rin g costs and th e y ie ld s o f v ariou s con stitu en t p rod u cts per to n o f seed . C ottonseed is a h ig h ly v a r ia b le raw m a teria l. Its y ie ld o f o il, cake, and lin ters per ton v a ries w id e ly from season to season , fro m reg io n to reg io n , an d fro m on e lo t o f seed to another. W ith in a sin g le state in a sin g le season the o il con tent o f seed h as been fo u n d to v ary fro m a s little as 145 p ou n d s to as m uch as 3 9 5 p ou n d s per ton. O ilcak e has som e tim es v aried fro m 6 9 3 p ou n d s p er ton o f seed to 1,036 pounds. M oistu re content m a y v a ry fro m 5 per cent to as m uch as 3 0 per cent in a sin g le sea so n , a ll m oistu re in excess o f 7 per cent b ein g v a lu ele ss. S eed is th erefo re b ou gh t b y an o il m ill on the b a sis o f grad es esta b lish ed b y the U n ited States D ep artm en t o f A g ricu ltu re in co-o p era tio n w ith the o il m ills. B id s fo r cotton seed are b ased u p o n an average grade, w ith prem iu m s and d iscou n ts fo r seed that grades h igh or lo w in co m p a riso n w ith th e a v erage official grade. M o n t h l y R e v ie w o f th e F e d e ra l R e s e rve B a n k o f A t la n t a T h e gross p rice, or valu e, that an o il m ill can afford to p ay fo r a ton o f cotton seed is th erefo re m ad e up o f th e sum o f th e y ie ld s o f th e variou s products m u ltip lie d b y th eir p rev a il in g m arket p rices. T he net p rice that the m ill can p a y is the difference betw een the gross v a lu e and th e cost o f p ro cessin g the seed. S in ce cottonseed is produced as an in ev ita b le b y-p rod u ct o f the prod u ction o f cotton lin t, at the rate o f a p p ro x im a tely 2 p ou n d s o f seed to each p ound o f lin t, and sin ce the seed uiust find a m arket at the o il m ill or rem ain r e la tiv e ly v a lu eless, the p rice that th e o il m ill must p a y fo r seed is n ot lik e ly to v a ry a great deal fro m w hat it can p a y . T h erefore the p rice o f cottonseed is la r g e ly a dem and-determ ined p rice. T h e size o f the credit that receipts from cotton seed p ro v id e as an off set again st the cost o f gro w in g cotton thus dep en d s, in the first in stan ce, on w hat h ap p en s in th e co m p etitiv e m arkets fo r cottonseed products and, in the secon d , o n th e am ount o f cotton that is grow n and g in n ed , fo r th is am ount determ ines the quantity o f seed. It w ou ld b e hazardous to pred ict w ith a n y great certainty w hat the postw ar situ a tio n m ay be w ith respect to th ese tw o factors. Postwar Supply and Demand O n the dem and sid e, cotton seed p roducts w ill m ost lik e ly be under con sid erab le com p etitive pressure. T he end o f the w ar w ill find the country in a su rp lu s p o sitio n w ith resp ect to fats and o ils, a con d ition that w ill be further accentuated w hen fo r eig n o ils again com e on th e m arket. E ven w ith ou t th is fo r eig n com p etition , how ever, cotton seed w o u ld be hard p ressed b y the w ar-expanded p rod u ction o f so y b ea n s and, to a lesser extent, o f peanuts. Other cotton seed p rod u cts w ill be under sim ila r but less defin ab le com p etitive pressure. T he su p p ly o f cotton seed that w ill be a v a ila b le fo r cru sh in g is a ls o a m atter o f con jectu re. T o a la rg e exten t, it w ill d epend upon the general p o lic y that w ill b e fo llo w e d b y the F ederal G overnm ent w ith respect to cotton. C learly, an y p o lic y that in v o lv es any d irect restriction on the p rod u c tio n o f cotton w ou ld have the effect o f d ep riv in g o il m ills o f raw m aterial. Such a p o lic y w o u ld m ake it difficult fo r cottonseed products to w in as large a share o f the m arket as th ey otherw ise co u ld at low co m p etitiv e p rices. M oreover, alth ou gh farm ers m igh t g ain som e ad van tage from an a rti fic ia lly supported p rice fo r lin t, th is ad van tage w o u ld be d im in ish ed to som e extent b y reduced receip ts fro m the sa le o f cotton seed if less seed w ere a v a ila b le b ecau se o f crop restrictions. A cotton p rogram w ill n ecessa rily be concerned p rim a rily w ith cotton lin t rather than w ith the by-product, cottonseed , but su ch a program sh ou ld certa in ly not o v erlo o k its p o ssib le effects on th e p o sitio n o f cottonseed in the total cotton eco n om y. N o r sh o u ld a cotton program be o b liv io u s to the r o le that cottonseed m igh t p la y in the d evelop m en t o f a betterb a lan ced agricu ltu re in the cotton b elt, as w ell as in the in d u strial d evelop m en t o f the South. C otton has lo n g been d ecried as a so il-d e p letin g crop , and the restoration o f so il fe r tility b y crop rotation and the b a la n cin g o f cotton w ith liv esto ck en terp rises have been im portan t p h ases o f every p rogram fo r the reh a b ilita tio n o f Sou thern agricultu re. In carryin g out an y su ch so il-b u ild in g program , cottonseed co u ld be an im p ortan t factor. M ost o f th e p lan t-food elem en ts lo st by the so il in th e p rod u ction o f cotton are fixed in the seed and not in th e lin t. T h ese elem en ts fo r M a rc h 1945 2 3 co u ld b e restored to th e so il b y th e d irect or in d irect use of cotton seed p rod u cts as fe r tiliz in g agents. D u rin g 1 9 42 m ore than 9 ,0 0 0 to n s o f cotton seed m eal w ere a p p lie d as fertilizer on cotton farm s in S ix th D istrict states. W hat is g en era lly con sid ered a b etter p ractice, how ever, is to fe e d cotton seed m eal to cattle and other liv esto ck as a high-protein su p p lem en t to other feed s and then to recover the anim al m anure fo r u se on the so il. In th is w ay fro m 65 to 85 per cen t o f the p la n t-fo o d elem en ts w o u ld be returned to the so il and, in ad d ition , the d iet o f the region co u ld b e im p roved by an in creased con su m p tion o f d a iry and liv esto ck products. In th e o p in io n o f som e exp erts, th e dietary lev e l o f the p o p u la tio n w o u ld b e im p roved i f a m uch la rg er p roportion o f the fluid-m ilk su p p ly w ere consum ed as w h o le m ilk instead o f as butter, w ith th e skim m ilk b ein g fed to h o g s and other livestock . T h e butter that w o u ld b e lo st th ereby co u ld ea sily b e rep laced b y m argarin e w h ich , w hen enriched w ith vitam in A , is said to b e the eq u iv a len t o f butter in fo o d v a lu e and is a lm o st in d istin g u ish a b le fro m butter in taste. C ottonseed o il is th e m ost im p ortan t fa t u sed in th e m an ufacture o f m ar garin e, a lth o u g h d u rin g th e w ar soyb ean o il h as reached a p la ce o f a lm ost eq u al im portance. E ven th o u g h it is n ot the m ost p rod u ctive v eg eta b le-o il crop per acre, cotton seed never th eless su rp asses the d airy cow as a producer o f fa t on a per acre b a sis. A d a iry cow , a ccord in g to a D epartm ent o f A g ri cultu re study, w ill convert the feed crop s on an acre o f land in to an a verage o f 4 6 p o u n d s o f butterfat, w hereas th e cotton seed from o n e acre o f lan d w ill y ie ld , on th e average, 65 p ou n d s o f fat. M illio n s o f p erson s h a v e b ecom e fa m ilia r w ith m argarine du rin g the w ar w hen butter h as been in short su p p ly for c iv ilia n use. W hen th e w ar is over, m argarin e w ill u n d ou b ted ly con tin u e to b e fo u n d on m an y ta b les w here it w as p rev io u sly unknow n. T h e p o ssib ility o f e x p a n d in g the m ar garin e m arket fo r cotton seed o il, how ever, is ham pered by state and F ed eral law s that im p o se d iscrim in atory taxes and burdensom e c o lo r in g p rov isio n s on th is product that is de rived to such a la rg e extent from Southern cotton farm s. Q uestions con cern in g the m ost d esirab le com b in ation o f farm enterp rises, th e best w ays in w h ich to reb u ild the so il, and the best m eans o f im p ro v in g the n a tio n a l and region al diet are tech n ical and co m p lex to a h ig h degree. T h e answ ers m ust be giv en b y the agron om ist, the n u trition ist, and the farm -m anagem ent exp ert. H ere it is o n ly m eant to suggest that cotton seed p roducts, b ecau se th ey are in v o lv ed to som e exten t in th e so lu tio n o f m ost o f th ese p rob lem s, can b e an im portant factor in d ev elo p in g a better-balanced agriculture in th e South. In a d d ition to p la y in g an im p ortan t ro le in the reh ab ilita tion o f agricu ltu re in the S ou th , cottonseed m a y w e ll con tribute su b sta n tia lly to th e r e g io n ’s in d u strial structure. T he m an y end products in to w h ich cotton seed can be u ltim ately converted co u ld ap p a ren tly offer o p p ortu n ities fo r a con sid era b le in crease in the num ber o f p la n ts en gaged in the u tiliza tio n o f cottonseed, or its products, a s raw m aterials. C ertain ly the 21 refineries, the 3 m argarin e p la n ts, the 16 sh orten in g p lan ts, and th e 4 2 m ixed -feed p lan ts in the Sixth D istrict w o u ld n ot seem to exhaust the p o ssib ilitie s in this direction . B u sin essm en and bankers m igh t th erefore serve not o n ly th em selves but th eir com m u n ities and the w h o le region as w e ll b y b ein g on the alert fo r such in d u strial op p ortun ities. E a r l e L. R a u b e r. 2 4 M o n t h l y R e v ie w o f th e F e d e ra l R e s e rv e B a n k o f A t la n t a fo r M a rc h 1945 New Member and Par List Banks h e F ed eral R eserve System in M arch g ain ed tw o new m em ber banks in the S ix th D istrict, in one in stan ce b y the con version o f a nonm em ber state bank to a N a tio n a l bank and in the other b y th e ad m ission o f a state bank to m em bership. O ne bank w as a lso added to the P a r L ist in M arch, and tw o others w ill be added on A p r il 1. T Admission of New Members E ffective M arch 10, 1 9 4 5 , the C itizens B ank and T rust C om p any, H oum a, L ou isia n a , a n on m em b er state bank, w as c o n verted to a N a tio n a l b a n k in g in stitu tio n , b y au th ority o f the C om p troller o f the C urrency, and b ecam e the C itizens N a tio n a l B ank and T rust C om pany. T h is in stitu tio n w as o r ig in a lly or gan ized in 1 919 as the B ou rg State B ank, o f B ourg, L ou isian a, w h ich is located abou t n in e m ile s fro m H oum a. It w as m oved to H oum a in 1 9 2 4 w h ere it co n tin u ed op era tio n s u n til 1928, w hen it w as su cceeded b y the C itizens Bank and T rust C om pany. F iv e years later it w as reorgan ized under the title of the C itizens Bank and T rust C om pany. T he new m em ber b an k ’s ca p ita l is $ 1 5 0 ,0 0 0 , its su rp lu s is $ 1 0 0 ,0 0 0 and its d ep o sits exceed $ 3 ,0 0 0 ,0 0 0 . M. L. F u n d er burk is p resid en t o f the bank and is a c tiv ely assisted b y L ou is E. R outier, first v ic e p resid en t an d cash ier, and L eo J. C ab al lero, assistan t cashier. T w o other active officers, R o lan d J. C ham pagne and W arren H . B o u rg eo is, both assistan t cash iers, are at present on leave w ith th e arm ed fo rces. L eo p o ld B lum , secon d v ice presid ent, and H arry B ourg, third v ice president, are in active. In ad d itio n to M essrs. Funderburk, R outier, B lum , and B ourg, the board o f directors in clu d es A lp h o n se J. C enac, A lb ert C ham pagne, R . W . C o llin s, H . D ep on t, L ee P . L ottinger, D . C. M cln tire, J. J. M unson, W illia m P rice, H . P . St. M artin, and Sam Scurto. H oum a is a com m u n ity o f a p p ro x im a tely 1 3 ,0 0 0 p o p u la tio n and is in the center o f T erreb on n e P a rish . It is the trad in g center fo r the en tire p arish and som e parts o f the su r roundin g p arish es. T he in d u stries o f T erreb on n e P a rish are w ell d iversified , co n sistin g p rim a rily o f the p rod u ction o f o i l ; the g row in g and p rocessin g o f sugar ca n e; the ca tch in g and p rocessin g o f sea fo o d s, in c lu d in g sh rim p , oysters, and fish ; and th e trap p in g o f m uskrats. T h e p arish a lso raises an a p p recia b le am ount o f v eg eta b les fo r sh ip p in g , in clu d in g p otatoes and sh a llo ts. T h e secon d bank to be adm itted to m em b ersh ip d u rin g the m onth o f M arch w as the S ecu rity S a v in g s Bank, B irm ingham , A lab am a. It w as adm itted on M arch 13, 1 9 4 5 . T h is bank’s cap ital is $ 2 0 0 ,0 0 0 , and its su rp lu s and u n d ivid ed profits are in excess o f $ 2 0 0 ,0 0 0 . Its d ep o sits ap p ro x im a te $ 1 ,3 0 0 ,0 0 0 . A . M . S h ook is presid en t o f the bank, A lto n P . Barr is v ice p resident, and Josep h S tein er is cash ier and secretary. In ad d ition to M essrs. S h ook and Barr, the b oard o f d irectors in clu d es L eo E. B a sh in sk y ; C. C. B la c k w e ll; J. E. C h a p p e ll; N eedham A . G raham , J r.; C. E. Irela n d ; and J. A . N orm an. T h e city o f B irm ingh am , w ith a p o p u la tio n estim ated to be in excess o f 3 0 0 ,0 0 0 , is a le a d in g in d u strial city in the S o u th east and is the largest iro n and steel center in th e South. W ith the ad m ission o f the S ecu rity S a v in g s Bank, the city of B irm ingham now has three F ed eral R eserve m em ber banks, the other tw o b ein g the B irm in gh am T rust and S a v in g s C om p an y and the F irst N a tio n a l B ank o f B irm in gh am , w hich has six b ran ch es lo ca ted in an d arou n d B irm in gh am . Additions to Par List T he L in co ln C ounty B ank, F a y e tte v ille , T en n essee, w as added to the F ederal R eserve P a r L ist o n M arch 2 1 ,1 9 4 5 . B egin n in g on that date the bank w ill rem it at par fo r checks that are draw n u p o n it and routed fo r c o lle c tio n th rou gh th e N a sh v ille B ranch o f the F ed eral R eserve B ank o f A tlan ta. T he L in co ln C ounty B ank w as org a n ized in January 1934. Its ca p ita l is $ 5 0 ,0 0 0 ; it h as su rp lu s and p rofits o f $ 5 0 ,0 0 0 ; and its d ep o sits am ount to m ore than $ 1 ,5 0 0 ,0 0 0 . T . D . S u gg is p resid en t, F red R a w ls is ca sh ier, and C. E. G eorge is a s sistan t cash ier. In a d d itio n to M essrs. S u g g and R aw ls, the b oard o f d irectors in c lu d e s 0 . H . H ig g in s, H . M . S h errell, and P . A . T w itty. F a y e tte v ille is a tow n o f a p p r o x im a te ly 4 ,7 0 0 p eo p le, ac c o rd in g to the 1 9 4 0 cen su s. It is lo ca ted in th e south central part o f the state n ot fa r fro m th e A la b a m a lin e. T h e South S id e A tla n ta Bank, lo ca ted in L ak ew ood H eights, A tlan ta, G eorgia, w ill be added to th e F ed eral R eserve Par L ist on A p r il 1, 1 9 4 5 . B e g in n in g o n th at date ch ecks draw n on th is bank and routed th rou gh th e F ed eral R eserve Bank o f A tla n ta w ill be rem itted fo r at par. T h is in stitu tio n o r ig in a lly o p en ed fo r b u sin ess in 1912 at R ex, G eorgia, as the B ank o f R ex, w ith a c a p ita l o f $ 1 5 ,0 0 0 . It m oved to its p resen t lo ca tio n in 1 9 2 9 and b ecam e the South S id e A tlan ta Bank. W ith a ca p ita l o f $ 2 5 ,0 0 0 and a su rp lu s o f $ 3 5 ,0 0 0 , the bank h as u n d iv id ed p rofits am o u n tin g to a p p ro x im a tely $ 2 8 ,0 0 0 . Its d ep o sits to tal m ore than $ 2 ,5 0 0 ,0 0 0 . W alter E stes is p resid en t o f th e b a n k ; E. J. S trip lin is execu tive v ice p resid en t; T. M . L o n g in o is v ic e p resid en t; E. C owan is ca sh ier; and W . L. W illia m so n is assistan t cashier. In ad d itio n to M essrs. E stes, S tr ip lin , L o n g in o , and C owan, the board o f d irectors in c lu d e s G eorge B raungart, Jr.; B. M. C la y ; D r. Z. S. C ow an ; D r. D . R. L o n g in o ; S. C. M cW il lia m s; S. L. N e lm s; an d J. P . Starr. E ffective a lso on A p r il 1, 1 9 4 5 , the F lo rid a B ank and Trust C om pany, W inter P ark, F lo rid a , w ill be added to the F ederal R eserve P ar L ist. C hecks draw n on th is bank and routed for c o lle c tio n th rou gh th e J a ck so n v ille B ranch o f th e F ederal R eserve B ank o f A tla n ta w ill be rem itted fo r at par. T h e F lo r id a B ank and T ru st C om p an y w as o r ig in a lly or gan ized in 1 9 1 7 u nder th e n a m e o f U n io n State Bank. In M ay 1 9 3 0 the nam e w as ch an ged to F lo r id a B ank at W inter Park. U p o n q u a lify in g fo r trust p o w ers in F eb ru ary 1 945, the bank ch an ged its title to F lo r id a B ank and T rust C om pany. Officers o f th e bank are W . R. R o se n felt, p resid en t; H . W . B arnum , v ic e p resid en t; P . E. D a v is, v ice president and c a sh ie r ; and E. M . B a ld w in , a ssista n t cash ier, w ho is at p resent on le a v e w ith the arm ed fo rces. In a d d ition to M essrs. R o sen felt, B arnum , and D a v is, th e b oard o f d irectors in clu d es Josh u a C. C hase, B . R. C olem an , H om er G ard, R ock w ell C. O sborne, and W . E. W in d erw eed le. D ep o sits o f th e bank am ou n t to $ 4 ,8 0 0 ,0 0 0 . Its capital is $ 1 0 0 ,0 0 0 , and it h as su rp lu s and u n d iv id ed profits o f $ 1 2 7 ,0 0 0 . W inter P ark is lo ca ted near O rlan d o and is the site o f R o llin s C o lleg e. T h e c ity ’s 1 9 4 0 p o p u la tio n w as 4 ,7 1 5 . M o n t h l y R e v ie w o f th e F e d e ra l R e s e rve B a n k o f A t la n t a fo r M a rc h 1945 2 5 Member Bank Operations for the Year 1944 security financing continued to be the domi nant factor in Sixth District banking during 1944. Earn ings, in large measure from holdings of Government se curities, were the highest in recent years. For the first time, in fact, the eamings of the banks from interest and dividends on securities exceeded the earnings on loans. Average hold ings of securities for the year moved up to almost one half of total assets and to almost one half of total deposits. Such holdings at the end of the year, in contrast to the average, were actually more than one half of total deposits — 2.6 bil lion dollars in Government securities for 309 banks against 4.9 billion dollars of deposits. In spite of record-breaking profits, the banks have tended to follow conservative policies, keeping dividend payments at normal levels and writing down or disposing of real estate assets. Tabulations, which were compiled by this bank, set forth these developments in detail on pages 26-28. They were pre pared as a part of the Research Department’s annual study of operating ratios of member banks, a study first made for the year 1937 and continued ever since. The ratios, it should be explained, are simple arithmetic averages of ratios as computed from the financial reports of individual member banks. The financial reports used were the condition reports as of December 31, 1943, June 30, 1944, and December 30, 1944, and the earnings and dividends reports for the year of 1944. Asset, liability, and capital items used in calculating the ratios were averages for the three condition-report dates. Though there were 316 member banks at the close of the year, the ratios were calculated only for the 309 member banks that were members of the Federal Reserve System throughout the year. In order to recognize differences arising from size, the banks for purposes of comparison were divided into seven groups — the smallest group consisting of those banks having deposits of less than $500,000 and the largest group of those having deposits in excess of 75 million dollars. Perhaps the most striking feature of Sixth District memberbank operations during 1944 was the degree to which higher profits on invested capital were attained. The average ratio of net profits after taxes to total capital accounts was 11.2. This ratio was the highest reached in any of the past eight years. The previous high was for the year 1943, with an average ratio of 8.8, and the previous low was for the year 1942, with an average ratio of 6.0. Almost all banks, regardless of size, experienced an in crease in profits. The average ratio of net profits after taxes to total capital accounts was 11.8 for banks with deposits in excess of 75 million dollars. It was 12.3 for banks with de posits between 15 million and 75 million dollars, 11.2 for banks with deposits between five million and 15 million dol lars, and 11.5 for banks with deposits between two million and five million dollars. For the 82 banks with deposits be tween $500,000 and two million dollars, the ratio was 10.3. With an average ratio of 7.3, only the six banks with de posits of less than $500,000 fell below the 10 per cent capitalreturn ratio. This group of small banks, however, for the year 1944 had an increase of 35.8 per cent over the profits realized for 1943. This percentage increase in profits com pares with 27.4 per cent for banks in the seven groups as a G overnm ent whole and was exceeded only by the gain of the Group C banks, those having deposits between one million and two million dollars. Another striking feature of member-bank operations dur ing 1944 was the fact that, for the first time, interest and dividends on securities surpassed earnings on loans. For the year 1944, the average ratio of security earnings to total earnings was 43.3, compared with 36.4 for earnings on loans. These two ratios were almost exactly the reverse of what they were in 1943, when security earnings provided an average of 35.9 of total eamings and loan eamings provided an average of 42.8. In 1941 the average ratio between security earnings and total earnings was 20.5 and between loan earnings and total eamings 62.7. In general the larger the bank, the greater was the per centage of security earnings to total earnings. For the group of largest banks, those with deposits of more than 75 million dollars, these two ratios were 52.1 and 25.8, respectively. In contrast, the two ratios for the 24 banks with deposits be tween $500,000 and one million dollars were 32.6 and 49.6. The proportion of total earnings represented by service charges declined for the year 1944, compared with that for 1943. The ratio of such earnings to total earnings for the year, however, was higher than that for any year during the period 1938-42. It remains true, however, that most of the banks, regardless of size, are now drawing their principal eamings from the same source, namely, Government securities. The switch in the principal source of eamings was, of course, the direct result of a change in the character of the principal earning assets of the banks. As recently as 1941, the average ratio of securities to total assets was 22.0. This ratio for 1944 was 49.5. Loans to total assets, on the other hand, declined from a ratio of 35.5 in 1941 to 15.4 in 1944. On their holdings of securities, the banks earned an average net return of 1.8. On their loans, in contrast, the average ratio was 5.2. The lower rate on loans largely reflects the decline in interest rates that has been taking place since 1940. While the return on securities is low in comparison with that on loans, the potential loss in earnings has been more than off set by a much greater volume of security investments. More over, during the past three years, the banks have tended to be come more and more fully invested. The average ratio of cash assets to total assets, for example, for 1944 was 34.0. This is the lowest ratio experienced in any year since 1939, and the average for that year was 33.9. As should be expected with a wider margin between earn ings and expenses, the ratio of the various expense items to total earnings showed a decline for the year 1944. The average ratio of salaries and wages to total eamings was 30.5 for 1944 against 32.2 for the previous year. The average ratio of interest on time and savings deposits to total earnings has shown the greatest decline of any of the expense items. For the year 1944 this ratio was 8.2; for the previous year it was 8.9; and for 1937, the highest point during the last eight years, it was 15.3. This decline is largely a reflection of the reduction in interest rates that has taken place during the past several years. The average ratio of interest on time and savings deposits to total time deposits for the year 1944 was M 2 6 A V E R A G E o n t h l y o f th e F e d e ra l R e s e rve R e v ie w O P E R A T IN G R A T IO S B a n k O F o f A tla n ta fo r M a rc h M E M B E R 1945 B A N K S GROUPED ACCORDING GROUPS WITH AVERAGE DEPOSITS OF........... U p to $5004)00 NUM BER OF BANKS IN EACH GROUP.............. 6 $14)004)00 to $24)00,000 $500,000 to $1.0004)00 24 Average oi Group Range w ithin w h ich fell middle 50% of the banks % Average ol Group % % 58 Range w ith in w h ich fell m iddle 50% of the banks Average of Group % % Range w ithin w h ich fell middle 50% of the banks % 3.2 4.0— 5.0— 4.0— 3.1— 9.3 8.5 8.0 4.0 2.9 C O o Net current earnings................................. Profits before income taxes................. .. Net profits after taxes............................... Cash dividends declared.......................... to r P E R C E N T A G E O F T O T A L C A P IT A L ACCOUN TS : 8.3 8.3 7.3 10.0 11.9 10.3 3.6 7.2— 11.6 7.2— 15.0 6.3— 11.7 2.8— 3.9 11.3 11.6 10.3 4.0 7.4— 14.0 9.0— 13.8 7.8— 12.5 2.5— 4.0 PERCEN TA G E O F TO TAL A SSETS : Total earnings........................................... Net current earnings............................. Net profits after taxes............................ 2.2 .9— 1.0 .7— .9 .9 .8 .8 .8 2.0— 2.3 .6— .9 .5— 1.0 2.2 .8 .7 1.9— 2.4 .5— 1.0 .5— .8 P E R C E N T A G E O F T O T A L E A R N IN G S : Interest and dividends on securities....... 29.6 18.9— 32.4 32.6 15.2— 44.5 35.6 26.2— 44.9 E a r n in g s o n lo a n s .................................... 53.7 44.3— 50.0 49.6 44.7 35.5— 53.4 S e r v ic e c h a rg e s o n d e p o sit a c c o u n t s ---- 37.6— 66.3 9.8 T ru st d e p a rtm e n t e a r n in g s ...................... 1.0 A ll o th e r e a r n in g s .................................... T o ta l e a r n in g s ........................................ Salaries and wages................................. Interest on time and savings deposits — All other expenses.................................. Total expenses...................................... N et cu rre n t e a rn in g 's ............................... N et lo s s e s or r e c o v e r ie s .......................... T a x e s on n et in c o m e ............................... N et p rofits after t a x e s ............................... 4.4— 3.2— 5.9 100.0 4.1— 9.5 5.2 X X X X 6.3— 12.0 12.5 X X X X 1004) 100.0 9.2 24.4— 37.9 1.4— 1.8 1.8 5.6 28.6 23.7— 31.8 37.4 31.1 + 63.8 36.2 + 6.8 X X X X 31.9 . . . — 1.8 68.9 5.2 25.4 5.8— 15.8 26.7— 43.7 45 11.2 25.3 9.5 4.3 2.0 30.5— 34.2 .6— 7.5 21.4— 29.6 56.0— 68.7 31.3_ 44.0 — .5—+8.4 1.6— 8.2 33.2 3.5— 27.5— 35.8 5.9— 10.8 20.6— 27.8 57.9— 71.1 28.6— 41.9 — 2.3—+5.4 3.5— 6.8 26.6— 29.8 7.9— 9.7 20.7— 28.5 59.7— 69.3 28.8— 39.3 — 4.3—+ .6 32.4 7JZ 8.3 9.5 32.4 8.4 24.4 65.2 34.8 + 1.4 P E R C E N T A G E O F T O T A L S E C U R IT IE S : In te re st a n d d iv id e n d s o n s e c u r it ie s ....... N et lo s s e s o r r e c o v e r ie s .......................... 2.3 + .2 2.1— — 1.7 2.2 .1— ... . . . —+ 1.4— 2.0 . . . —+ .1 .1 P ER C EN T A G E O F TO TA L LO A N S : E a r n in g s o n lo a n s .................................... 8.2 7.4— 8.3 N et lo s s e s or r e c o v e r ie s .......................... 6.7 + .8 5.1— 7.4 . . . —+ .3 6.0 5.0— 6.5 . . .—+ .1 21.7— 42.2 1.4— 4.6 10.4— 25.2 31.6— 46.7 .4— 1.0 36.4 31.2— 43.7 1.6— 6.9 11.0— 22.3 30.4— 43.4 .4— 1.1 PERCEN TA G E O F TO TAL ASSETS : Government securities............................. Other securities....................................... Loans......................................................... Cash assets.............................................. Real estate assets.................................... A ll other assets....................................... 30.2 T o ta l a s s e t s .......................................................... 100.0 C A P IT A L A N D D E P O S IT R A T IO S ( In P e r c e n ta g e ) 5.8 19.7 43.1 1.2 27.6— 32.5 .8 - 5.0 15.2— 16.6 37.2— 48.0 .4— 1.1 34.6 5.0 19.3 40.3 .7 1004) 18.8 38.0 .8 .2 .1 X X X X 5.8 X X X X 100.0 X X X X : Cap. accts. to total assets........................ Cap. accts. to total assets less gov'ts and cash assets.................................... Cap. accts. to total deposits...................... Time to total deposits............................. Interest to time deposits.......................... 13.1 9.6— 11.4 8.5 6.5— 9.6 7.1 3.3— 8.3 50.1 40.0 .7 28.5— 48.9 7.0— 10.6 4.1— 20.3 .1— 1.1 31.9 1.4 39.9— 58.7 10.7— 12.9 18.0— 23.9 .9— 1.6 .9 22.1— 38.4 5.7— 9.1 11.6— 26.6 .9— 1.0 34.5 30.5— 36.7 37.7 23.5— 46.3 39.2 33.3— 46.8 15.5 25.8 9.5 13.5 7.7 19.2 R A T IO T O T O T A L D E P O S IT S : Government securities............................. M o n t h l y IN o f th e F e d e ra l R e s e rve B a n k R e v ie w T H E S IX T H F E D E R A L o f A t la n t a f o r M a rc h R E S E R V E 1945 2 7 D IS T R IC T IN 1 9 4 4 TO SIZE OF DEPOSITS $2400.000 to $5,000,000 $5,000,000 to $ 15400X 00 $ 1 54 0 0 4 0 0 to $75400400 O ver $ 7 54 0 0 4 0 0 A l l D istric t M em ber Banks 94 72 38 17 309 Range within Average which iell m iddle ol 50% of the Group banks % Range within Average which fell middle of 50% of the Group banks % % Range within Average which fell m iddle of 50% of the Group banks % Range within Average which fell middle of 50% of the Group banks % % % Average of Group % % 13.2 10.0— 15.5 12.4 9.4— 15.1 14.6 11.3— 17.2 14.7 13.1— 16.3 12.6 13.6 10.0— 15.8 14.2 10.8— 15.9 16.4 11.6— 17.1 15.8 12.4— 18.6 134 8.9— 13.7 8.5— 13.8 11.8 8.9— 13.0 11.2 11.2 8.4— 12.7 12.3 3.7 2.6— 4.4 3.2 2.4— 3.9 2.4 1.7— 3.1 3.4 2.6— 3.9 3.4 2.0 1.7— 2.2 1.9 1.6— 2.0 1.8 1.7— 2.0 1.7 1.5— 1.8 2.0 .7 .5— .9 .6 .5— .7 .7 .6— .8 .7 .6— .8 .7 .6 .5 - .7 .6 .4— .7 .6 .4— .6 .6 .4— .6 .6 42.1 30.2— 52.9 49.8 41.9— 58.8 50.3 43.4— 55.4 52.1 43.5— 58.6 43.3 38.7 27.6— 52.8 29.5 20.9— 37.4 25.0 18.2— 29.5 254 21.5— 30.3 36.4 9.0 5.3— 11.7 7.9 5.6— 9.6 4.7 3.1— 6.5 1.8 2j 8 .1— 4.0 3.6 1.8— 4.7 1.0 7.1— 12.1 144 8.2— 17.3 13.8 9.8— 16.5 11.5 11.5 7.4 3.3— 8.4 11.1 100.0 .9— 1.1 .7 6.7— 14.6 X X X X 10.6 X X X X 100.0 26.3— 34.4 30.2 27.1— 33.8 28.9 9.1 5.0— 10.0 94 5.7— 11.8 6.2 24.7 20.1— 27.2 27.1 21.9— 30.6 64.4 58.4— 70.0 66.3 35.6 + X X X X 1004 30.6 29.8— 41.5 33.7 2.1 — 1.2— + 5 .6 + 5.1 5.6 32.1 1.7 7.6 2.0— 1.4— .1 ...— + + 5.6 .1 ...— + 43.0 5.8 2.4— 1.9 .1 6.5 .2 35.8— 50.7 1.7— 8.2 .1 .1 49.4 6.8 24.7— 30.8 63.6 36.4 3 .8 -+ 1 0 .6 + 5.2 100.0 30.5 7.7 8.1 29.6 28.0— 32.6 26.0 58.9— 69.7 60.0 54.1— 65.5 64.7 30.1— 40.3 — 2.4— + 5 .1 404 35.5— 45.9 35.3 34 — 3.2— + 4 .8 + 3.4 + 4.8— 10.9 9.7 4.6— 13.7 10.0 7.2— 12.4 6.5 324 22.8— 34.4 32.8 22.0— 40.5 32L2 1.6 1 . 5 - 1.7 . . . — + .1 1.3— + .2 — + .3 — .1— + .1 42.0— 56.6 2.6— 9.3 1.4— 1.7 1.8 + ...— + .1 3.7 3.8— 5.3 4.6 + 28.5 3.6— 1.6 + 6.1 X X X X 22.6— 27.2 22.0— 40.1 31.3 + 7.8 28.8— 39.5 + 4.1— 24.3 69.4— 72.0 7.5 25.8— 37.9 100.0 24.8— 31.9 7.8 + .1 49.6 5.9 3.1— — .1— + 1.9 .2 4.1 .1 43.5— 53.6 3.0— + 7.8 .1 34 2.4— 3.5 .1 . . . — ■ .1 + 50.2 — 44.7— 55.2 5.2 2.3— 1.7 + 6.2 .1 5.2 + .1 43.5 64 15.0 8.1— 20.1 12.9 7.5— 17.1 13.1 9.4— 16.3 15.4 10.8— 19.5 15.4 35.4 29.6— 39.0 29.7 24.6— 33.5 30.0 25.1— 33.1 27.8 25.0— 29.6 344 .7 .1 100.0 5.8 32.8 6.2 20.2 .9 45.6 1.1 .9 .5— 1.1 1.2 .5— 1.5 1.0 .8— 1.2 4 .1 .4— .3 .2— .3 .2 ...— .3 .4 .2— .6 2 X X X X 100.0 6.8 5.4 21.0— 36.8 32.7 4.4— 7.3 5.7 11.9— 25.3 20.4 4.7— 1.0 4 38.7— 54.3 52.3 .8— X X X X 4.1— 100.0 6.1 4.8 21.4— 36.1 264 6.0 5.1 14.5— 25.7 154 4.3— .9 .8 43.8— 60.3 52.2 .8— X X X X 3.8— 100.0 5.6 4.7 17.8— 31.5 24.8 4.0— 6.0 5.0 11.2— 17.7 12.1 .7— .9 .9 47.4— 56.4 52.9 X X X X 4.1— 100.0 4.7 6.1 15.5— 28.9 32.2 4.2— 5.0 6.6 9.6— 14.0 18.5 .9 4 48.4— 58.0 46.3 .8— , 2 8 M o n t h l y R e v ie w o f th e . F e d e r a l R e s e r v e B a n k o f , A t la n t a fo r M a rc h 1945 0 .9 . T h is average ratio w as reached b y su ccessiv e d ec lin e s in every year fo llo w in g 1 9 3 9 . In th at y ea r th e average ratio w as 1 .8 ; in 1 9 4 0 it, w as 1 .7 ; and in 1 9 4 3 it w as 1.0. In sp ite o f th eir h ig h er ea rn in g s th e banks h ave ten d ed to fo llo w con servative d iv id en d p o lic ie s. T h e average ratio o f cash d ivid en d s declared to to ta l ca p ita l accou n ts fo r each o f th e p ast sev en y ears h a s b een betw een 3 .1 and 3 .5 . T h is ratio fo r th e year 1 9 4 4 w as 3 .4 . A n oth er sig n o f con serv a tiv e b a n k in g p ractices is the very co n sid era b le red u ction th at h a s taken p la c e in th e average ratio o f real estate assets to to ta l assets. F o r th e y ea r 1 9 3 9 th is a verage ratio w as 3 .6 . S u ccessiv e d eclin e s w ere recorded in th is ratio, year b y year, u n til fo r 1 9 4 4 th e avera g e w as 0 .9 . S o lo n g as th e G overnm ent co n tin u es its p o lic y o f r a isin g a large part o f its w ar fu n d s b y b orrow in g, th ere seem s little reason to a n ticip ate an y sharp reversal in th e b ank op eratin g trends that h ave ch aracterized th e w ar p erio d . D e p o sits w ill con tin u e to rise, b ank h o ld in g s o f G overnm ent secu rities w ill con tin u e to in crease, and p rofit m a rg in s w ill ten d to b ecom e w ider. T h e con tin u ed grow th in bank p rofits p resen ts p ro b lem s o f its ow n. S in ce th ese profits w ill b e d erived in la r g e part from interest on th e p u b lic debt, th e p u b lic it s e lf w ill h a rd ly c o n T h ou gh it is tru e th at in co m e an d excess-p rofits ta x es w ill op erate to restrain a n y u n d u e p ro fit a ccu m u lation s, such d ra in in g o ff o f p rofits sh o u ld n o t b e p erm itted to w eaken u n d u ly th e co m p e titiv e p o sitio n o f th e com m ercial banks w ith other fin a n cia l a g en cies. A n im p ortan t m ean s o f stren g th en in g th is p o sitio n is th ro u g h th e c u ltiv a tio n o f greater p u b lic g o o d w ill. T h e p erfo rm a n ce o f a d d itio n a l free p u b lic services, th e en cou ragem en t o f tim e d ep o sits o f the sm a lle r savers, an d a red u ction in se r v ic e and exch an ge ch arges w ill a ll serv e to a c h iev e th is en d . A n y red u ction in ta x receip ts th u s o cca sio n ed w o u ld b e w elco m ed rather than cen su red b y th e p u b lic. SUM ARY TABLE M Operating Ratios of All M ber Banks in the Sixth Federal Reserve District em 1 3 -1944 97 13 1 3 1 3 1 4 14 1 4 14 14 9 7 98 9 9 9 0 91 9 2 93 94 0 1 1 1 1 1 1 2 Num o banks.............. 3 0 3 8 3 3 3 4 3 5 3 5 3 2 3 9 ber f RATIOS : TO TOTAL EARNINGS Interest and dividends 3 7 5 on securities.............. 2 5 24.7 23.6 21.6 20.5 2 .U 35.9 4 .3 5 ,4 9 Earnings on loans.......... 5 ** 5 .1 60.3 62.3 62.7 55.0 42.8 36.4 4.8 4.9 5.1 5.4 6.6 8.1 7.8 Service charges............ * * 1.0 1.0 .9 1.0 Trust departm earnings * ent .2 1 1 7 .2 .0 .4 3 All other earnings.......... 1 1 1 .4 11 11 11 1 .4 13 1 .5 0.0 0 .0 0 0 0 0 0 0 Total earnings........... 10 .0 10 .0 10 .0 10 .0 10 .0 10 1 0 10 .0 Salaries and wages........ 28.6 29 29.6 30.1 30.4 32.5 32.2 30.5 .1 Interest on tim and e 5 .7 .4 3 2 5 savings deposits........ 1 3 1 .2 14 14 1 .6 1 .8 8.9 8.2 8 All other expenses.----- 25.8 25.7 25.9 27.1 2 .1 28.7 27.9 26.0 .1 Total expenses........... 69 V 70.0 70.2 71.6 72 74.0 69.0 64.7 N current earnings... 30.3 30.0 29.8 28.4 27.9 26.0 31.0 35.3 et +3.4 N recoveries.............. — — — * — — * — et 3.6 4.6 2.9 3.7 3.2 2.1 * * * 3.6 3.7 6.5 Taxes on net income. 8 N profits................ 26.7 25.4 26.9 24.7 24.7 20.3 2 .1 32.2 et TO TOTAL CAPITAL ACCOUNTS 2 N current earnings..... 9.4 9.0 9.0 8.7 8.9 8.0 9.9 1 .6 et Profits-before income * 10 1 .6 * * * * * .0 3 taxes......................... 1 N profits................. 80 7.6 8.0 7.4 8.0 6.0 8.8 1 .2 et * 3.3 3.4 3.4 3.5 3 ..1 3.3 3.4 Cash dividends declared. TO TOTAL ASSETS Total earnings............... 4.1 4.1 3.9 3.8 3.6 2.8 2.2 2.0 N current earnings_ et _ 1.2 1 .3 1.2 1 .1 1.0 .7 .7 .7 * .1 1.0 N profits.................. 1 et .9 .9 .6 .6 .6 * 25.0 23.0 22.0 27.4 42.6 49.5 * Securities..................... * • 37.2 36.5 35.5 27.2 17.4 1 .4 Loans.......................... * 3.6 3.2 2.7 2.1 1.3 5 * .9 Real estate assets........... • 33.9 37.0 39.5 4 .1 38.4 34.0 * Cash assets.................. 3 * * .3 .3 .3 .2 .3 .2 All other assets........... * 1 0 10 .0 1 0 10 .0 10 .0 10 .0 * 0 0 Total assets............... 0 .0 0 0 .0 0 TO TOTAL DEPOSITS * 1 .1 1 .1 1 .7 1 .5 8.4 6.6 * 1 Total capital accounts..... 7 6 4 * 35.2 34.6 32.6 26.0 1 .8 1 .5 9 8 Tim deposits............... e TO TIME DEPOSITS Interest on tim and e ♦ * 1.8 1.7 1 .5 1 .0 .9 savings deposits.......... .6 1 TO SECURITIES Interest and dividends on securities.............. 3.7 3.6 3.5 3.3 3.2 2.4 1 .7 1.7 N losses (or rec. and et pr.) on securities........ .5 .6 .9 .7 .8 .0 .1 .1 N return on securities. 4.2 4.2 4.4 4.0 4.0 2.4 1.8 1.8 et TO LOANS Earnings on loans........... 6.5 6.5 6.5 6.6 6.5 6.0 5.7 5.2 N losses (or rec.) on et loans......................... — .4 — .4 — .4 — .4 — .2 — .1 + .o N return on loans....... 6.1 6.1 6.1 6.2 6.3 5.9 5.7 5.3 et * N com ot puted ** Included in "all other earnings' SIXTH DISTRICT M BEH BANK CHANGES IN DEPOSITS. EARNING EM ASSETS. AND PROFITS FOR THE YEAR 1 4 “ 94 (In thousands of dollars) Num ber Year Ending Year Ending Change Group* in Group Dec. 1 4 94 Dec. 1 4 93 Am ount Per Cent Depos i t s A 6 2,584.6 2,047.2 + 537.4 +26.3 B 2 4 21,658.7 16.457,2 + 5,201.5 +31.6 C 5 8 102,765.5 77,017.7 + 25,747.8 +33.4 D 9 4 344,146.2 258,352.7 + 85,793.5 +33.2 E 7 2 641,777.7 508,114.0 + 133,663.7 +26.3 F 3 8 1,311,440.2 1,031,881.5 +27.1 +279,578.7 1 7 G 2,447,369.2 2,060,160.0 +387,209.2 + 18 .8 Total 39 0 4,871,742.1 3,954.010.3 +23.2 +917,731.8 Gover nment S e c u r i t i e s A 6 1,025.2 676.5 + 348.7 +51.5 B 2 4 8,368.2 5,757.7 + 2,610.5 +45.3 C 5 8 42,428.2 27,832.6 + 14,595.6 +52.4 D 9 4 165,427.3 110,569.6 + 54,857.7 +49.6 E 7 2 349,831.6 250,822.4 +39.5 + 99,009.2 F 3 8 712,336.7 +31.9 539,997.6 + 17 9.1 2,33 G 1 7 1,336,141.2 1,003,833.4 +332,307.8 +33.1 Total 39 0 2,615,558.4 +34.9 1,939,489.8 +676,068.6 loans A 6 447.4 445.0 + 2.4 + -5 B 2 4 3,910.4 3,613.5 + 296.9 + 8.2 C 5 8 18,809.0 16,836.7 + 11.7 + 1,972.3 D 9 4 49,356.8 44,412.0 + 1 .1 1 + 4,944.8 E 7 2 82,039.4 + 7.2 76,513.9 + 5,525.5 F 3 8 161,201.4 + 15 .9 139,117.5 + 22,083.9 1 7 G 381,735.3 381,085.2 + 650.1 + .2 Total 39 0 697,499.7 662,023.8 + 35,475.9 + 5.4 Pr of i t s A 6 22.0 16.2 + 5.8 +35.8 B 2 4 13 6 .6 12 3.2 + 40.4 +32.8 C 5 8 47 3.1 + 190.4 +40.2 663.5 D 2,007.9 + 496.7 +32.9 9 4 1,511.2 E 7 2 + 762.7 +27.6 3,527.4 2,764.7 F 3 8 + 7,525.7 +26.6 7,259.0 5,733.3 +26.4 1 7 + 2,661.4 G 12,759.6 10,098.2 Total +27.4 39 0 26,403.0 20,719.9 + 5,683.1 •Average Deposits Group A— Up to $ 500,000 Group B—$ 500,000— 1,000,000 Group C— 1,000,M — 2,000,000 O Group D— 2,000,000— 5,000,000 Group E— 5,000,000— 15,000,000 Group F— 15,000,000— 75,000,000 Group G— Over 75,000,000 **The banks in each group are identical for both years, the classification of each bank being determined by its average deposits for 1 4 . 94 tin u e to d isc la im con cern i f th ey are u sed fo r p u rp oses other than that o f stren g th en in g th e b a n k in g sy stem . N o o b jection can b e m ad e i f th e b an k s c o n tin u e to fo llo w con servative d iv id en d p o lic ie s and th u s im p r o v e th eir c a p ita l p o sitio n s. N o r can o b jectio n b e le g itim a te ly m a d e i f an in crea sin g p o r tio n o f b an k ea rn in g s is u sed to ra ise sa la r ies o f the low erp a id em p lo y ee s w h ere su ch a ctio n is co n sisten t w ith w agesta b iliza tio n p roced u res. T h e b a n k s h a v e a repu tation, w hether ju stified o r n o t, o f p a y in g lo w sa la r ie s, an d n o harm w o u ld b e o cca sio n ed i f sa la r y e q u a lity w ith oth er related em p lo y m en t w ere attained. M o n t h l y o f th e F e d e ra l R e s e rve B a n k R e v ie w S e v e n th W a r L o a n o f A t la n t a 2 9 DEPARTM ENT STORE SALES* Adjusted** Unadjusted Jan. Feb. Feb. Jan. Feb. Feb. 14 94 14 94 14 95 14 95 14 95 14 95 go al 1945 S ix th D is t r ic t I n d e x e s D r iv e o f 14 b illio n d olla rs has b een set fo r th e Seventh W ar . L oan D rive. T h is quota is d iv id ed eq u a lly betw een se cu rities to be so ld to in d iv id u a ls and secu rities to be so ld to other nonb ank investors. T h e d rive to se ll Seven th W ar L oan secu rities to in d iv id u a ls w ill b eg in M ay 14 and end Ju n e 30. O f the 7 -b illio n -d o lla r quota fo r in d iv id u a ls, it is h o p ed that 4 b illio n d o lla rs w ill be raised b y the sa le o f S eries E war sa v in g s bonds. T h is is the h ig h est quota ever esta b lish ed fo r that secu rity, and 7 b illio n d o lla rs is th e la rg est g o a l ever set fo r in d iv id u a ls. Great stress w ill b e p la ced on p ay r o ll sa v in g s p la n s to raise the 4 b illio n d o lla rs in S eries E b on d s. B eg in n in g A p ril 9 the m illio n s o f p erson s n ow b u y in g S eries E b o n d s through p ay r o ll d ed u ction s w ill b e asked to in crea se th eir ded u ction s fo r th e S ev en th W ar L oan D riv e. In ta b u la tin g sa le s o f S eries E, F , and G sa v in g s bond s and o f S eries C sa v in g s n o tes in the Seven th D riv e a ll such sa les p rocessed th rou gh the F ederal R eserve B anks betw een A p ril 9 and J u ly 7 w ill be credited to th e drive. O nce again , the variou s state W ar F in a n ce C om m ittees w ill b e in ch arge o f th e d rive, and a m arket b ask et o f secu rities w ill b e offered, in clu d in g, in a d d ition to S eries E , F, and G sa v in g s bon d s and S eries C sa v in g s notes, 2y2 per cent bonds, 2 1 per cent b ond s, i y 2 p er cent b on d s, and % p er cen t cer A tificates o f ind ebtedness. A n n ouncem ent o f issu e and m aturity dates o f th e m arketable secu rities to be so ld d u rin g th e d rive w as d elayed in order to d isco u ra g e sp ecu la tio n . S u b scrip tion s from nonbank in vestors, oth er than in d iv id u a ls, w ill be received o n ly in th e fin al p h a se o f th e drive from June 18 through June 30. T h ese in vestors w ill be a llo w ed to su b scrib e fo r th e 2 1 per cent and 2y2 per cent /4 m arketable bonds and fo r th e % per cent certificates o f in debtedness, but the 11/2 per cent b o n d s w ill n o t b e offered to corp orations. B anks accep tin g dem and d ep o sits w ill betw een June 18 and J u n e 3 0 b e given the op p o rtu n ity to su b scrib e fo r S eries F and S eries G sa v in g s bon ds, as w e ll as fo r 1 y 2 per cent bonds and % p er cent certificates. But su b scrip tio n s fro m com m ercial banks w ill b e lim ited to $ 5 0 0 ,0 0 0 or 10 per cent o f th eir tim e dep osits, under the sam e fo rm u la used in the S ixth W ar L oan D rive. S ecu rities so purchased b y com m ercial banks w ill not, how ever, be cou n ted tow ard an y quota or in clu d ed in th e d rive totals. T h e 2 y 2 per cen t and 21/4 per cent m ark etab le b on d s to be offered in the d rive can n ot be ow ned b y com m ercial banks u n til w ith in 10 years o f th eir resp ective m atu rity dates. Great stress w ill b e p la ced on th e o b jectiv e o f s e llin g as m a n y T reasu ry secu rities as p o ssib le ou tsid e the b an k in g sy s tem in order to a llev ia te in flation ary p ressu res. A s h e did in th e S ixth W ar L oan D rive, th e S ecretary o f th e T reasury is ag a in req u estin g banks to m ake no sp ecu la tiv e lo a n s fo r the pu rch ase o f G overnm ent secu rities and, in ad d itio n , to re fu se to accep t su b scrip tion s fro m custom ers w h o seem to be su b scrib in g fo r sp ecu la tiv e p u rp oses o n ly . Furtherm ore, the T reasu ry w ill regard as an im p rop er p ractice th e acq u isitio n b y banks o f ou tstan d in g secu rities o n th e u n d erstan d in g that a su b sta n tia lly lik e am ount o f th e S even th W ar L oan se cu rities w ill b e su bscrib ed fo r th rou gh such banks and thus en a b le them to exp an d th eir w ar-loan d ep o sit b alan ces. A fo r M a rc h D istrict..................... A tlanta................. Baton R o u g e . . . Birm ingham . . . . C h a tta n o o g a ... Jackso n............... Jackso nville____ K n o x v ille ............ M acon................. M iam i................... M on tgom ery... N ash v ille............ New O re a n s. . . . Tam pa ................ 274 302 325 265 -ai 2 294 368 327 267 201 274 291 246 314 268r 300 258r 285 265 286r 387 363r 236 20 lr 285 317r 248 309 225 227 219 215 235 240 298 250 236 188 205 240 214 270 235 265 252 221 218 229 303 283 204 256 218 248 203 282 194 199 170 179 183 187 246 217 180 240 163 205 177 242 215r 220 171r 201 210 198 279 269r 163 226r 212 227r 190 255 DEPARTM ENT STORE STOCKS Adjusted** Unadjusted Jan. Jan. Feb. Feb. Feb. Feb. 14 95 14 95 14 95 14 94 14 95 14 94 D IS T R IC T .............. A tlanta................ Birm ingham ____ M ontgom ery... N ash v ille............ N ew O r le a n s ... 178 265 138 189 282 111 165 263 140 191 316 130 182 249 143 186 244 130 COTTON CONSUM PTION* Jan. Feb. Feb. 14 94 14 95 14 95 T O T A L ..................... A labam a ............ G e o rg ia ............... T e n n e s s e e .. . . . 165 174 162 144 166 176 164 139 158 168 156 134 174 252 133 185 276 111 COAL PRODUCTION* Jan. Fe b . Feb. 14 94 14 95 14 95 162 163 117 177 179 182 i58 i58 17,1 CONSTRUCTION CONTRACTS February January 14 95 14 95 D IS T R IC T .................................................... R esid en tial.............................................. O th e rs...................................................... A labam a.................................................. F lo rid a ...................................................... G e o rg ia .................................................... Lo u isia n a ................................................. M ississip p i.............................................. Ten nessee............................................... 70 42 83 74 99 52 81 86 102 M ANUFACTURING EM PLOYM ENT Jan. Jan. Dec. 14 94 14 94 14 95 S IX S T A T E S .......... A labam a............ F lo rid a ................. G e o rg ia .............. Lo u isia n a .......... M ississip p i........ T e n n e sse e .......... 154 187 160 144 166 142 132 COST OF LIVING Jan. Dec. 14 95 14 94 A L L IT E M S .. Fo o d ........... C lo t h in g ... Ren t............ F u e l, e le c tricity and ic e .. Home fur n ishings . M iscel laneous. . 155r 183r •162r 146r 168r 144 133 Jan. 14 94 132 145 141 114 132 145 140 114 129 144 134 114 109 109 109 142 141 125 127 127 122 CRUDE PETROLEUM PRODUCTION IN COASTAL LOUISIANA AN D MISSISSIPPI* Feb. Jan. Feb. 94 14 95 14 95 14 U n a d ju ste d .. A d ju s te d * *... 206 203 202 198 198 195 162 191 187 151 164 150 140 178 236 138 182 239 130 155 231 121 169 258 113 February 14 94 119 62 147 58 185 104 57 76 116 140 86 167 354 94 69 51 94 164 GASOLINE TAX COLLECTIONS*** Jan. Feb. Feb. 14 94 14 95 14 95 101 111 102 98 107 76 107 105 111 101 91 116 114 108 101 101 91 90 96 93 135 ELECTRIC POWER PRODUCTION* Jan. Dec. Jan. 94 94 14 14 95 14 S IX S T A T E S . Hydrogenerated. F u e l generated. 292 276 254 277 242 201 311 321r 322 ANNUAL RATE OF TURNOVER OF DEM AND DEPOSITS Feb. Jan. Feb. 94 95 14 14 95 14 U n a d ju ste d .. A d ju s te d * *... In d e x **.......... 15.9 15.8 61.1 17.8 16.0 61.9 19.5 19.3 74.6 ’ D aily average b asis ‘ ‘ Adjusted for seasonal variation ***1939 m onthly a v e r a g e = 100; other indexes, 1935-39 = 100 r = Revised 3 0 M o n t h l y o f th e F e d e ra l R e s e rv e R e v ie w S ix th D is t r ic t S ta t is t ic s S ix th SA LES No. oi Stores Report in g N Place A LABAM A Birm ingham ............ M ob ile......................... M ontgom ery............ F L O R ID A Ja ckso n ville .............. M iam i......................... T am pa......................... G E O R G IA A tlanta........................ A u g u sta ..................... M acon......................... LO U ISIA N A Baton R o ug e............ New O rle a n s ............ M ISSISSIP PI Jackso n....................... T EN N ESSEE Chattanooga............ K n o x v ille ................... N ash v ille ................... O TH ER C IT IE S * .......... D IS T R IC T ....................... IN V E N T O R IE S Per C ent C hange Fe b . 1945 irom No. oi Stores Report ing Per C ent C hang e Fe b . 1945 from Jan. 1945 Fe b . 1944 5 5 4 19 4 + 10 — 3 + 35 — 5 + 28 3 + 9 + 2 4 3 5 + + + 6 3 3 + 11 — 2 + 15 + 27 + 19 + 9 5 + 9 + 7 3 + 29 — 11 3 4 — + 36 1 + 19 + 10 3 — — 19 + o 4 2 4 3 3 6 24 85 + 12 + — — 4 3 + -t- 8 4 ‘ Fe b . 1944 18 + Jan. 1945 2 17 + 15 + 25 + 17 + 13 + 16 4 24 46 + 7 + 20 + 10 + + + 16 4 1 ‘ W hen less than 3 stores report in a given city, the sales are grouped together under "other cities." D E B IT S TO IN D IV ID U A L BAN K A C C O U N T S (In Thousands oi Dollars) P lace ALABAM A A n n isto n............ Birm ingham . . . . D othan................ G a d s d e n ............ M o b ile................. M ontgom ery... No. oi Banks Report ing Per Cent C hang e F e b . 1945 irom Feb. 1945 Jan. 1945 Fe b . 1944 3 3 2 3 4 3 16,704 185,165 7,320 10,730 108,285 35,892 20,004 217,428 9,143 11,556 122,658 41,599 17,474 173,961 9,304 10,114 108,859 39,256 — — — — — — Jan. 1945 16 15 20 7 12 14 Fe b . 1944 — 4 + 6 — 21 + 6 — 1 — 9 FL O R ID A Jackso nville. . . . M iam i................... Greater M iam i*............ O rlan d o .............. P e n sa co la .......... St.P etersb urg . . Tam pa................. 3 6 170,664 129,662 192,973 145,152 183,514 140,165 — 12 + 12 — — 10 2 3 3 3 176,340 29,453 24,893 28,185 79,659 201,068 37,232 28,176 32,177 94,531 184,936 27,153 22,907 24,996 77,632 — + — — — 12 26 12 12 16 — 5 + 8 + 9 + 13 + 3 G E O R G IA A lb a n y ................. A tlanta................. A u g u sta .............. B ru n sw ic k .......... C o lu m b u s.......... E lb erto n ............ M acon................. N ew n an .............. Sa van n ah .......... V a ld o sta ............. 2 4 3 2 4 2 3 2 4 2 8,729 448,263 29,461 13,931 37,495 1,802 36,764 3,666 74,221 5,918 11,861 514,760 36,127 16,312 39,728 2,010 42,056 5,495 83,670 6,858 9,318 457,091 31,885 13,978 32,892 1,722 42,104 5,195 74,876 6,118 — — — — — — — — — — 26 13 18 15 6 10 13 33 11 14 — 6 — 2 — 8 — 0 + 14 + 5 — 13 — 29 — 1 — 3 LO U ISIA N A Baton R o u g e. . . Lake C h a rle s . .. N ew O rle a n s . . . 3 3 7 46,649 15,274 397,138 48,266 19,567 476,205 41,485 22,759 427,149 — 3 — 22 — 17 + 12 — 33 — 7 M ISSIS SIP PI H a ttie sb u rg .. . . Jackso n .............. M eridian............ V ic k s b u rg .......... 2 4 3 2 11,991 56,792 15,598 16,966 14,132 71,435 17,566 20,445 12,992 66,705 18,328 26,702 — — — — 15 20 11 17 — 8 — 15 — 15 — 36 TEN N ESSEE C hattano oga. . . K n o x v ille .......... N a sh v ille ............ 4 4 6 78 ,,168 121,854 162,128 105,408 133,443 185,247 83,059 94,677 175,510 — 26 — 9 — 12 — 16 + 29 — 8 114 2,426,386 2,803,220 2,479,880 — 13 — 2 70,250,000 82,743,000 70,688,000 — 15 — 1 SIX TH D IS T R IC T 32 C it ie s ............ U N ITED ST A TES 334 C it ie s .......... *Not included in Sixth Di strict Total 7 7 o f A t la n t a fo r M a rc h 1945 D is tr ic t B u s in e s s m a r c h , S ix th D istrict b u sin ess in g en era l reached new h ig h lev e ls. In the first h a lf o f th e m on th departm ent store sa les as rep orted b y so m e 3 0 stores lo ca ted in the p rin cip a l cities o f th e D istrict w ere 2 4 p er cen t h ig h e r than th ey w ere in M arch 1944. In d ica tio n s are th at su ch sa le s in the D istrict d u rin g M arch w ere 16 per cen t h ig h er th an th ey w ere in F eb ruary o f th is year. C ircu la tio n o f F ed era l R eserve notes issu ed b y th is B ank co n tin u es to rise, and o n M arch 21 it totaled 1 ,3 0 5 m illio n d o lla r s, 3 1 3 m illio n d o lla r s h ig h er than on th e co rresp o n d in g d ate la st year. D esp ite the fa ct that F eb ru ary 1 9 4 4 h ad one m ore b u sin ess d ay than F eb ru ary 1 9 4 5 , sa le s o f 8 5 departm ent stores in the D istrict w ere 16 per cent greater th is F eb ru ary than th ey w ere fo r the sam e m onth la st year. M o n tg o m ery ag a in recorded the 'largest in crease, 2 8 per cent. T w o other cities in the D istrict recorded in crea ses in ex cess o f 2 0 per cent— sa les w ere up 2 7 p er cent in A tlan ta and 2 5 per cent in K n o x v ille . S tores in A u gu sta, B aton R ou ge, and B irm in g h a m reported g ain s o f 19 p er cent. S a le s in J a c k so n v ille in creased 18 per cent, and in Jackson and N a sh v ille th ey w ere up 17 per cent. Som ew hat sm a ller ga in s w ere record ed in C hattanooga, T am pa, N ew O rlean s, and M acon, w here p ercen tage in crea ses w ere 15, 12, 10, and 9 per cent, resp ectiv ely . S m a ll g a in s o f 3 and 1 per cent w ere resp ectiv ely reported b y stores in M o b ile and M iam i. D esp ite an unp reced en ted sa le s v o lu m e fo r the p ast 12 m onths, departm ent store in v en to ries at th e end o f F ebruary w ere 1 per cent la rg er than th ey w ere at the end o f F eb ruary 1 9 4 4 , and th e in crease fro m th e end o f Jan uary to the end o f F eb ru ary th is year am ounted to 10 per cent. F or both regu lar accou n ts and in sta lm en t a ccou n ts at departm ent stores, the c o llec tio n ratio w as som ew h at sm a ller in February than it w as in January. In sharp d istin ctio n to the retail sa le s ex p erien ce, w h o le sa le firm s in the S ix th D istrict rep orted that th eir sa les in F ebruary w ere 16 per cent sm a lle r than th ey w ere in January and w ere 6 per cent under the sa le s o f F eb ru ary 1944. E x cep tion s to the g en eral trend w ere a u tom otive su p p lies, drugs, fresh fru its and v eg eta b les, and in d u stria l hardw are— these lin es show ed in creases th is F eb ru ary as com p ared w ith last. W h ile resid en ts o f the S ix th F ed eral R eserve D istrict are sp en d in g m ore m o n ey than ever b efo re, th e y are b u y in g m ore life in su ran ce than at an y tim e sin ce 1 9 3 0 . In F ebru ary 1945 life in su ran ce sa le s in the states o f A la b a m a , F lo rid a , G eor gia, L ou isian a , M ississip p i, and T en n essee w ere 19 per cent greater than th ey w ere in F eb ru ary 1 9 4 4 . T h e L ife Insurance S a les R esearch B ureau rep orted that 4 8 m illio n d o lla r s’ worth o f life in su ran ce w as so ld in th ese six states in F ebruary, an am ount not eq u a led in a n y F eb ru ary sin ce 1 9 3 0 . Increases in life in su ran ce sa les in th is area are ru n n in g fa r ahead o f those in the cou n try as a w h o le, fo r w h ich sa le s th is F ebruary w ere o n ly 6 per cent greater than th o se in F eb ru ary 1944. B y states, in creases in sa les o f lif e in su ran ce fro m F ebruary 1 9 4 4 to F eb ru ary 1 9 4 5 ranged fro m 2 3 per cent in T en n essee to 3 p er cent in A lab am a. T h e current h ig h le v e ls o f b u sin ess a ctiv ity and incom e paym ents in the D istrict co n tin u e to b e reflected in in creasin g F ed eral R eserve n ote circ u la tio n . O u tstan d in g n otes issu ed b y th e F ed eral R eserve B ank o f A tla n ta in creased 2 4 m il lio n d o lla rs d u rin g F eb ru ary, and c ircu la tio n h as con tinued I D EPAR TM EN T S T O R E S A L E S AND S T O C K S B a n k M o n t h l y R e v ie w o f th e F e d e ra l R e s e rv e B a n k o f A t la n t a to increase d uring M arch. O ver the 12 m on th s from M arch 1, 1 9 44, to M arch 1, 1945, c irc u la tio n o f F ed eral R eserve n otes in den om in ation s o f $ 5 0 and h ig h er in creased 53 per cent, w h ile the circu lation o f the sm a ller n o tes in creased b y about 2 5 p er cent. T otal circula tio n at th e end o f February 1945 w as m ore than five tim es as great as it w as at the b eg in n in g o f th e w ar in D ecem ber 1941. In th e 12 m onths en d in g F eb ru ary 2 8 , 1 9 4 5 , th e num ber o f $ 1 0 ,0 0 0 notes issu ed b y th is bank and in circu la tion in creased 8 4 per cen t; the circu la tio n o f $ 1 0 0 n otes increased b y 55 per cent, $ 5 0 0 notes by 5 4 per cent, $ 5 ,0 0 0 notes b y 53 per cent, $ 5 0 notes b y 52 per cent, and that o f $ 1 ,0 0 0 notes b y 4 9 per cent. In contrast, $5 n otes in circu la tio n increased b y o n ly 11 per cent, $ 1 0 n otes b y 13 per cent, and $ 2 0 notes b y 3 9 per cent. S teel p rodu ction in the B irm ingham -G adsden area o f A la bam a in creased som ew hat in M arch and w as 99 per cent of ca p acity d u rin g the first tw o w eeks o f the m onth. T h is rate com p ares w ith the F ebruary average o f 9 7 .5 per cent. A la b am a m in es prod uced 1 ,4 4 5 ,0 0 0 net ton s o f coal in F eb ruary, and T en n essee m in es 5 9 8 ,0 0 0 net tons. C onsum ption o f cotton b y te x tile m ills in A lab am a, G eor g ia , and T en n essee d eclin ed s lig h tly in February after an in crease o f 11 per cent from D ecem b er to January. N everth e less, cotton consum p tion in D istrict m ills is co n tin u in g above the lev els o f a year ago. In F eb ru ary 1 9 4 5 , A lab am a m ills consum ed 9 7 ,0 7 4 b a les, G eorgia m ills 1 6 3 ,9 0 4 , and T enn essee m ills 18,458. T he Southern lum ber in d u stry con tin u es to be character ized b y dem ands that, fo r m ost o f its products, co n sid era b ly exceed a v a ila b le su p p lies. B ad w eather du rin g th e late w inter and, m ore recen tly, floods in th e low er M ississip p i v a lle y have han d icap p ed the w ood s end o f the in d u stry to a co n sid erab le extent. A s S ixth D istrict farm ers b eg in a new crop year, th ey can lo ok back on 194 4 as the m ost su ccessfu l year from the standpoint o f total cash in com e that th ey have exp erienced fo r the last 2 0 years. F igu res recen tly released b y the U n ited States D epartm ent o f A gricu ltu re reveal that the total cash in com e o f farm ers o f A lab am a, F lo rid a , G eorgia, L ou isian a, M ississip p i, and T ennessee, d erived from m arketings o f crops, livestock , and livestock products, reached 1 ,8 4 6 m illio n d o l lars in 1944. T he trem endous w artim e ch an ges in th e D is trict’s farm -in com e picture are p o in ted up b y the fa ct that the 1 9 4 4 cash in com e o f farm ers in the area w as a lm o st tw ice as large as such cash in com e w as in the last prew ar year o f 1 941. P rice con trols and shortages o f m an p ow er and eq u ip m en t resu lted in a 194 4 cash in com e fo r farm ers in the D istrict o n ly slig h tly larger than that attained in 1 9 4 3 . Indeed, in A lab am a and M ississip p i there w as a slig h t d eclin e fo r 1 9 44. Cash in com e o f G eorgia farm ers, how ever, in creased 10 per cent, and that o f T en n essee farm ers 9 per cent, com p ared w ith that th ey received in 1 943. In creases in F lo rid a and L ou isian a fo r 1 9 4 4 over 1943 w ere sm a ller, 5 and 2 per cent, resp ectively. T he increase in cash receip ts fro m liv esto ck and livestock p rod u cts fo r 1 9 4 4 over 194 3 w as o n ly n o m in a l, but receip ts fro m th e s a le o f crop s w as up 6 p er cent. O f th e to tal cash farm in com e o f 1 ,8 4 6 m illio n d o lla r s, crop s y ield ed 1,323 m illio n d o lla rs and livesto ck and liv esto ck products 523 m illio n d ollars. fo r M a rc h 1945 3 1 S ix th D is t r ic t S ta t is t ic s IN STA LM EN T C A S H LO A N S Number oi Len ders Len der Reporting Federal credit u n ions....................... State credit u n ions............................ Industrial banking com panies........ Personal iinance com panies........... Commercial b an k s............................ Industrial loan com panies............... Per C ent C hange Jan. 1945 to Fe b . 1945 Volum e 43 24 + — 9 — — — — Outstandings 9 0 14 7 2 7 58 34 20 — 0 — 3 + 1 — 1 — 4 — 2 R E T A IL FU R N IT U R E S T O R E O P ER A T IO N S Number oi Stores Reporting Item Instalment and other credit s a le s .. Accounts receivable, end of month Collections during m onth................ Inventories, end ol m onth................ Per C ent C hang e Fe b ru a ry 1945 irom Jan. 1945 109 98 98 106 106 84 + — + — — + F e b . 1944 2 7 4 0 8 8 + + + + + — 17 27 17 10 12 7 S E L E C T E D ITEM S FR O M STA TEM EN T O F F IN A N C IA L C O N D IT IO N , F E D E R A L R E S E R V E BAN K O F A TLAN TA (In Thousands oi Dollars) Item Mar. 14 1945 Fe b . 21 1945 Mar. 15 1944 Bills d iscounted....................... 700 700 550 Industrial a d v an ce s............... 19 106 U. S. securities, direct and guaranteed........................... 953,544 947,825 508,158 Total bills and securities. 954,244 948,544 508,814 F. R. note circulation ............ 1,311,476 1,292,897 995,427 Member-bank reserve dep osits................................. 654,591 624,577 535,153 U. S. G o v't d ep osits............... 12,360 12,591 834 Foreign-bank dep osits........ 40,894 43,600 46,200 Other d ep osits......................... 3,500 3,662 3,737 Total d ep osits....................... 711,345 684,430 585,924 Total re se rv e s........................... 1,054,528 1,018,451 1,045,530 Per Cent C h a n g e M ar. 14, 945. from Fe b . 21 1945 Mar. 15 1944 + 0 + 27 + + + 1 1 1 + 88 + 88 + 32 + — — — + + 5 2 6 4 4 4 + + — — + + 22 48 11 6 21 1 CO N D IT IO N O F 20 M EM BER BAN KS IN S E L E C T E D C IT IE S (In Thousands oi Dollars) Item Loans and investments— total......................................... Loans— total............................. Com m ercial, industrial, and agricultural lo a n s. . Loans to brokers and dealers in secu rities. . . . Other loans for pur chasing and carrying se cu rities........................... Real estate lo a n s................ Loans to b a n k s..................... O ther lo a n s........................... Investm ents— total................. U. S. direct o b lig a tio n s... O bligations guaranteed by U . S ............................... O ther se cu ritie s................... Reserve w ith F . R. B a n k s ... C a sh in v a u lt........................... Balances w ith domestic b a n k s....................................... Demand deposits— adjusted Time dep osits........................... U. S. G ov't dep osits.............. Deposits of domestic b a n k s. B orrow in gs............................... Mar 14 1945 Fe b 14 1945 Mar 15 1944 1,823,688 1,802,573 1,559,932 328,805 344,570 328,402 Per Cent Change Mar. 14, 1945, irom Feb . 14 1945 + — 1 5 — Mar. 15 1944 + 17 + 0 189,548 203,821 193,720 7 — 2 6,623 5,814 6,913 + 14 — 4 40,728 41,840 33,295 23,843 24,484 27,212 1,234 2,608 1,478 66,829 66,003 65,784 1,494,883 1,458,003 1,231,530 1,358,812 1,324,137 1,082,777 — 3 — 3 — 53 + 1 + 3 + 3 + — — + + + 22 12 17 2 21 25 39,629 109,130 288,008 24,572 — 13 + 2 + 0 + 4 — + + + 84 19 21 27 163,601 149,962 158,597 1,212,847 1,313,013 1,004,080 343,498 339,268 257,588 186,441 221,248 229,046 519,629 506,147 445,553 3,000 + 9 — 8 + 1 — 16 + 3 + + + — + 3 21 33 19 17 6,302 129,769 347,437 31,314 7,259 126,607 345,950 29,966 3 2 M o n t h l y R e v ie w o f th e F e d e ra l R e s e rve B a n k o f A tla n ta fo r M a rc h 1945 The National Business Situation I NDUSTRIAL activity con tin u ed to in crea se s lig h tly in F eb ruary and the e a rly part o f M arch. V a lu e o f departm ent store sa les w as on e-fifth greater than in the sam e p eriod last year. W h o lesa le com m od ity p rices g en er a lly sh ow ed little change. Industrial Production T h e B oard ’s se a so n a lly ad ju sted in d ex o f in d u strial p rod u c tion w as 2 3 5 per cent o f the 1 9 3 5 -3 9 average in F ebruary, com pared w ith 2 3 4 in January and 2 3 2 in th e la st quarter o f 1944. S teel p rod u ction , w h ich d eclin ed fu rth er in the first part o f F ebruary as a result o f con tin u ed severe w eather con d itio n s, sh ow ed a su b stan tial in crea se at the end o f th e m onth and in the first three w eeks o f M arch. A v era g e output o f op en hearth steel during F ebru ary w as 2 per cent ab ove the January rate, and electric steel prod u ction in creased 7 per cent. O utput o f non ferrou s m etals con tin u ed to rise s lig h tly in February, la rg ely reflecting in creased m ilita r y dem ands. A ctiv ity in the m achinery and transportation eq u ip m en t in d u stries w as m a in tained at the le v e l o f th e p reced in g m o n th ; a d eclin e in sh ip b u ild in g offset a slig h t in crease in ou tp u t o f m ost other m u n ition s indu stries. P ro d u ctio n o f lu m b er and ston e, cla y , and g la ss products in F eb ru ary w as at about the January lev el. P rod u ction o f m ost n on d u ra b le g o o d s sh ow ed little ch an ge in F ebruary. O utput o f cotton g o o d s and sh oes, how ever, rose 5 per cent fro m the preced in g m onth to a lev e l s lig h tly above that o f a year ago. O utput o f e x p lo siv e s and sm all-arm s am m u n ition sh ow ed further la rg e g ain s. A ctiv ity at m eat-pack in g estab lish m en ts con tin u ed to d eclin e, as pork and lard p ro duction drop p ed further and w as 50 per cent b elo w the peak lev el reached a year ago. In M arch it w as announced that su p p lies o f m eat a v a ila b le fo r c iv ilia n s in th e secon d q uar ter o f 1 945 w o u ld be 12 per cent le ss than in th e first quar ter. A ctiv ity in rubber-products in d u stries in January and F ebruary w as 6 per cent ab ove last autum n, reflecting chiefly a sharp in crease in prod u ction o f m ilita ry truck tires. M in erals output rose s lig h tly in F ebruary, reflecting in creased output o f anthracite and a further ga in in crude p etroleu m p rod u ction . A n th racite p rod u ction recovered in F eb ru ary and the first tw o w eeks o f M arch fro m a la rg e d e c lin e d u rin g January. B itu m in ou s co a l p rod u ction show ed little ch an ge in F ebru ary fro m the January lev e l and d e c lin ed slig h tly in the e a rly part o f M arch. Distribution D epartm ent store sa les in February, w h ich u su a lly sh ow little change from January, in creased co n sid era b ly th is year. V a lu e o f sa les in F ebruary and the first h a lf o f M arch w as 22 per cent larger than in the co rresp o n d in g p eriod a year ag o , re flecting the ea rlier date o f E aster th is year and con tin u ation o f th e freer sp en d in g in ev id en ce sin ce the m id d le o f 1 9 4 4 . F reigh t ca rload in gs, w h ich had d eclin ed at th e end o f Jan uary and the e a r ly part o f F eb ru ary o w in g to severe w eather con d ition s, have in creased sin ce that tim e. S h ip m en ts o f m iscella n eo u s freig h t w ere in la rg er v o lu m e in th e five-w eek p eriod en d in g M arch 17 than in the co rresp o n d in g p erio d o f 1 944, w hereas lo a d in g s o f m ost other cla sses w ere less. T h e cost o f liv in g in d ex d eclin ed s lig h tly in F ebruary from the January figure and in the latter m on th w as at 126.8 per cent o f the prew ar average. B oth c lo th in g an d fo o d , how ever, rem ain w e ll ab ove th e total c o st-o f-liv in g average. In F eb ruary, p rices o f th e fo o d co m p o n en ts o f the in d ex w ere 36.5 h ig h er than prew ar, w h ile c lo th in g p rices in the in d ex were 4 3 .3 per cent h ig h er than th e prew ar average. W h o lesa le p rices w ere, on the w h o le, u n ch an ged fro m m id-F ebruary to m id-M arch. Bank Credit T reasu ry exp en d itu res d u rin g F eb ru ary and the first h a lf o f M arch con tin u ed to in crease th e total v o lu m e o f d ep osits and cu rren cy h eld b y the p u b lic. A d ju sted dem and d ep osits at w eek ly rep ortin g banks in 101 c itie s in creased 1.4 b illio n d o lla rs, and tim e d ep o sits ro se ab ou t 2 0 0 m illio n d ollars d u rin g the fou r-w eek p erio d en d ed M arch 14. C urrency in c irc u la tio n in creased 3 5 0 m illio n d o lla rs over the sam e period but d eclin ed som ew h at in th e w eek fo llo w in g . T o m eet th e re su ltin g in crease in required reserves as w e ll as the currency d rain, F ed eral R eserve B ank h o ld in g s o f U n ited S tates G ov ernm ent secu rities in creased 3 9 5 m illio n d o lla r s in the fou r w eeks ended M arch 1 4 w h ile red u ctio n s in n onm em ber and in T reasury d ep o sits at th e R eserve B anks su p p lie d 4 5 0 m il lio n s o f R eserve fu n d s to m em ber banks. E xcess reserves have rem ained at an average le v e l o f ab ou t a b illio n d o lla rs. T h e in crea se in F ed eral R eserve h o ld in g s o f G overnm ent secu rities ro u g h ly p a r a lle le d th e d ec lin e in com m ercial-b an k h o ld in g s. R ep o rtin g b anks red u ced th eir p o r tfo lio s b y 2 6 0 m illio n d o lla rs in the fo u r w eeks. H o ld in g s o f T reasury notes d eclin ed b y 1.7 b illio n d o lla r s w h ile certificate h o ld in g s in creased b y 1.4 b illio n d o lla r s, reflectin g th e M arch 1 T reasury ex ch a n g e offer. B ill h o ld in g s w ere red u ced b y 2 1 0 m illio n d o lla rs. B ond h o ld in g s, h ow ever, co n tin u ed to in crease. T otal lo a n s fo r p u rch asin g and ca rry in g G overnm ent securities declined b y 2 3 0 million dollars, and commercial loans by 185 m illio n . WHOLESALE SALES AND INVENTORIES* SIXTH DISTRICT — FEBRUARY 1945 Item Automotive s u p p lie s . D ru gs and sun dries. . D ry g o o d s..................... Fre sh fruits and v e g e tab le s............... C on fectio nery ............ G ro ce rie s— full line w h o le sa le rs............. G ro ce rie s— specialty line w h o le sa le rs. .. B e e r................................. Hardware!— general. H ardw are— industrial M achinery, eq u ip ment and s u p p lie s . Paper and its p ro d u cts..................... Tobacco and its products..................... M iscellan eou s............. T O T A L ................... SALES No. of Per Cent Change Firms Feb. 1945 from Report ing Jan. Feb. 1944 1945 INVENTORIES No. of Per Cent Change Firms Feb. 1945 from ReportFeb. ing Jan. 1944 1945 + 1 2 4 — 28 + 1 + 6 — — 19 — 6 — 20 — 22 — 3 — 15 —2 1 + + — 37 3 5 2 1 25 — 20 —1 1 4 + 4 + — — — 35 — — 18 4 + 1 136 3 —1 1 — 14 — 16 15 30 + 2 + 1 1 — — 16 — + — — 6 *Based on U. S. Department of Com m erce figures (This page was written by the staff of the Board of Governors of the Federal Reserve System) 19 57 — 6 — 2 7 " 4
@FedFRASER