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Monthly Review
Atlanta, Georgia
May • 1958

Small Business, Tight Credit,
and District Bankers
M

A ls o i n

t h is is s u e :

WHAT THE BANKERS
TELL US
WHAT THE FIGURES
TELL US
district b u s in e s s

HIGHLIGHTS
SIXTH DISTRICT
STATISTICS

SIXTH DISTRICT
INDEXES

fsm



a k in g lo a n s to small businesses on a short- or intermediate-term
basis is a very important activity at most banks in the Sixth Federal
Reserve District. Late last year, member banks had 105,000 business
loans on their books; 55,000 of these were loans to small business.
There are three obvious reasons for this high proportion of small
business loans: Many District banks are small businesses themselves—
over half of them have deposits of less than 3.5 million dollars. The
majority of their customers are small businesses— about 300,000 of the
500,000 business depositors are unincorporated, with deposits averaging
about 3,000 dollars. Short-term credit is the kind of credit small business
needs; it is also the type of credit banks like to extend because such a
high proportion of their deposits is demand liabilities.
Banks, of course, are only one source of financing for small business.
Equity capital and long-term credit most generally come from suppliers
other than banks. Individuals, insurance and sales finance companies,
factors, institutional investors, and suppliers of equipment and goods for
resale are all sources of credit.
In ordinary times, many small businesses have difficulty securing all
the credit they want at the terms they want. When the economy is ex­
panding, even more of them find the competition for available funds
intense. This was certainly true during the most recent period of credit
expansion, from late 1955 into mid-1957, even though banks had more
funds on hand to lend. Business loans at member banks in this District
grew from 1.4 billion to 1.8 billion dollars between October 1955 and
October 1957. The Federal Reserve System, however, did not allow
credit to expand enough so that all potential borrowers could be
satisfied. Had it done so, prices would have risen to unwarranted heights
and would have put additional strains on the economy.
What did this policy of monetary and credit restraint mean to small
business? Because this is not a simple question, we cannot expect a
simple answer. We can, however, find some help from the Federal
Reserve System’s comprehensive study of small business financing re­
cently released. As part of this System-wide study, the research staff of
this Bank interviewed representative bankers throughout the Sixth Dis­
trict about their policies of granting credit to small businesses. As an­
other part of the study, this Bank conducted a survey of business loans
late last fall so that a comparison could be made with data collected in
1955 soon after the period of monetary restraint began.
In the following pages we show preliminary results of these two
surveys in the Sixth Federal Reserve District. We have divided the
material into two sections, “What the Bankers Told Us” and “What the
Figures Tell Us.” The data are for this District only. Moreover, since
they are only a minor part of the System’s comprehensive small business
financing study, the tentative conclusions reached may need to be modi­
fied as other parts of the study are completed.

W

h a t

t h e

B

a n k e r s

T

e l l

Banks in this District are willing to try to arrange the
financing best suited to the particular needs of small busi­
ness. They must, however, choose among many credit­
worthy applicants because they have to protect the money
entrusted to them by their depositors, and their funds are
limited. Through years of experience, bankers have de­
veloped standards to help determine whether or not a
borrower is a good credit risk.
We can make these statements because during December
1957 our staff talked to the presidents and other top per­
sonnel of 31 banks throughout the Sixth District. We con­
tacted the large banks and the small ones; banks located
in large metropolitan areas and those in small towns; mem­
bers of the Federal Reserve System, as well as nonmem­
bers. We carefully selected the 31 banks so that we would
have a cross section of all commercial banks in the District.
All bankers were asked identical questions. Often the in­
terviews took two hours or longer. We believe that what
we learned from these bankers, therefore, is typical of all.
As we made our round of visits, we became increas­
ingly impressed with the way bankers have developed fi­
nancing arrangements to fit the special needs of small
business. Take the small businessman who has no business
collateral to offer as security for a loan. The banker is
likely to ask him if he has any other collateral such as
stocks, bonds, or life insurance. We found lending against
such nonbusiness collateral to be the most common way
banks finance small businesses.
What about the small businessman who has no col­
lateral of this type but who has an acceptable financial
statement? Most bankers will lend him money for sixty or
ninety days. Most bankers will also give a line of credit
if certain general standards are met. They will have to
know that a sizable amount of the owner’s money is in­
vested in the business. The applicant will have to show that
he is an experienced and capable proprietor or manager
and that he pays his bills promptly. Another determinant of
whether one can get a line of credit may be whether some
rigid condition such as a two-to-one ratio of current as­
sets to current liabilities can be met. Banks also lend on
endorsed notes, and the small merchant will find most
banks willing to buy his customers’ instalment paper.
Suppose you own a grocery store, dry cleaning estab­
lishment, or a similar line of business, and you need some
fixtures or equipment. Most banks will be willing to fi­
nance it. But banks may hesitate if the line is one such as
the restaurant business in which ownership changes often.
Some banks, furthermore, do not finance equipment that
wears out rapidly. Banks will be more reluctant to finance
machinery for, say, the road-building business or some
other specialized equipment than they will machinery
that is used universally. If the borrower were to default
on such a loan, banks would find the specialized ma­
chinery more troublesome to sell than the multi-purpose
equipment. Banks that do financing of this type, there­
fore, insist that larger down payments be made on the



purchases and that the loan be paid out
sooner.
U s
To the small lumber dealer and the furni­
ture store, many District banks will lend
against accounts receivables. Some lines of business often
borrow against these assets because they have no other
acceptable collateral to offer. Banks usually have no set
maximum of a customer’s total receivables they w
ill
finance. Moreover, they will accept any reasonably large
single receivable for pledge. The percentage of the face
value of receivables that a bank will lend depends on
how strong financially the concern is and what kind of
accounts it has.
The small builder completing a few homes has a good
chance of getting a construction loan if he has an account
with the bank and can qualify for a line of credit. Bankers
who make few loans of that type told us they get little
call for them. Others said the building slump has in­
creased the risk of lending to builders.
Most banks are reluctant to make unsecured loans for
several years’ duration or to give a mortgage loan on a
commercial building. This is so because of the greater
degree of risk in making long-term loans. Getting credit
secured by inventory is not easy, especially from smaller
banks. Larger banks are better set up to handle this type
of lending, which requires specialized servicing and per­
sonnel.
#

Lending to New Firms
Suppose the firm applying for credit is new. Not one
banker we talked to said he refused to lend to a small
business merely because it was new. Many of them, how­
ever, did say they make few loans to new firms because
management often lacks experience. Their hesitancy is
understandable, since lack of know-how is the principal
reason small businesses fail.
Firms that are new can expect bankers, especially m
the faster growing areas of the District, to check their
background and experience more carefully than if their
firm were well established. The new firm can also expect to
be asked to put up more collateral or, sometimes, to get a
co-signer. Moreover, unless the bank is located in one of
the more rapidly growing areas, it will ordinarily lend
less money to the new firm than it will to a going concern.
Until the owner becomes more experienced and builds up
an earnings record, he will likely be required to pay back
the loan rather quickly. Almost anywhere in the District,
a new owner taking over a going business can expect to
be treated as if the business were brand-new.

Demands in Periods of Credit Restraint
Banks told us that during the last boom, particularly i®
1956, more firms came to them seeking loans. The number
of small firms wanting to borrow increased by about the
same proportion as that of large concerns. Not all
ing arrangements to small business, however, increase^
equally. Demands for credit secured by stocks, bonds, afl
life insurance policies rose only slightly. Because most busi
nesses built up their inventories in that period, vsss^j
more of them asked banks to finance inventories.
•

2

•

the building boom eased, builders also asked for a lot
more credit, partly because other financial institutions
turned them down or lent them less than they wanted.

Handling More Applicants
Because banks, especially those in the faster growing
areas, could not accommodate the increasing number of
applicants, they had to turn more of them away. However,
we were told that although the number of applications
increased, the proportion of rejections did not increase.
Rather than turn down applicants, banks preferred, when­
ever possible, to trim requests.
If you were among those who were rejected, you can
be fairly certain that the bank decided this only after
carefully considering your application. Unless the amount
you wanted to borrow was small, the loan committee,
rather than a single officer, considered your request.
There were probably several reasons why you did not get
the loan; most likely, you had too little money of your
own invested in the business.
The chances are the banks would have turned you
down for the same reason back in 1954, when fewer
persons wanted to borrow. Banks, however, turned down
requests for one particular reason in 1956 and 1957 for
which they would have rarely turned down requests in
District banks make a variety of lending arrange­
ments to meet the needs of small business.

Secured by coiiaieroi unrelated to b u s m e n
Unsecured tfcort - term
Consumer paper - other than outo
Secured by endorsem ents
Lin« of credit
Equipment financing - direct

1954, that is, that the applicant did not have a deposit with
the bank. Bankers told us that they sent some persons
whose requests they turned down to the Small Business
Administration or other institutions for help. Some said
they helped them arrange to get long-term capital.

Changes in Lending Policies
As more people wanted to borrow than could be ac­
commodated, banks altered their general policies of lend­
ing, including their interest rates. In the large metropoli­
tan areas, banks, notably the larger ones, reported changes
in policy more so than anywhere else, although some
banks in the small towns often changed theirs too. The
small businessman who wanted to borrow from such a
bank was probably asked to keep on account with that
bank a portion of the loan. Larger banks that already
had such a requirement insisted on borrowers’ keeping
higher balances than previously.
Although this change in lending policies was the most
common of all, there were others. One-fourth of the banks
tightened up on loan renewals to small business. Onefifth that had previously sought loans outside their terri­
tory no longer did so in 1956. An even smaller per­
centage said they raised standards of credit-worthiness for
small business. Some banks also required more collateral
than before. Others became more strict with new firms,
as compared with established ones.
Builders probably found banks less willing to lend
in view of the less favorable prospects for the construc­
tion business. Because houses became harder to sell
and profit margins of builders dropped, many banks
started to lend only to applicants who were depositors with
them. Others lowered the proportion of the appraised
value of construction they were willing to finance.

Accounts receivable fin an cin g
Construction loons
Mortgage loons on b u s in e ss property
Equipment finon cing - deoler paper
Secured by inventory
Consumer paper - a u to
Unsecured term loons
Equipment financing - finance compony paper

Insufficient ow nership capital w as th e chief reason
banks gave for rejecting loans.___________________
Considered to be a frequent
— cause for rejection______________ Percent of surveyed banks
Insufficient owner equity
84
Lack of deposit relationship
35
low or past due in payments
35
questionable managerial ability
29
Requested maturity too long
26
p lateral of insufficient quality
23
£°°r earnings record
23
r°or moral risk
19
nadequate accounting system
19
Tew Anns having no earnings record
13
ype of loan not handled
10
— of business not handled
'ne
3



Servicing Small and Large Firms
Small businesses generally have long paid higher interest
rates than large firms have. Banks say the reason for
this is that the cost of servicing is relatively greater on
small business loans.
Banks also told us that often they are more willing
to finance the inventory of larger firms than smaller ones.
Larger concerns more commonly borrow against stock
in regular warehouses, an arrangement which gives banks
greater control than other types. Furthermore, banks are
sometimes less liberal in lending to small builders, who
often have too little equity capital.

Bank Announcement
On May 2, the Deerfield Beach Bank, Deerfield Beach,
Florida, a newly organized nonmember bank, opened
for business and began to remit at par. Officers are
Alvin B. Jones, President and Chairman of the Board;
Henry J. Mellon, Vice Chairman; Percy White, Execu­
tive Vice President; Ed Dietrich, Vice President; and
A . E. Henson, Cashier. Capital stock totals $280,000
and surplus and undivided profits $126,000.
•3 •

W

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F i g u r e s

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What effects have the lending policies we have just dis­
cussed had on the structure of loans the banks actually
made? To answer this question, we have detailed infor­
mation on loans outstanding at District member banks
on October 16, 1957, and October 5, 1955, taken from
surveys of business loans conducted with other Federal
Reserve Banks and the Board of Governors. These data
tell us how much credit demand the bankers met; we do
not know, of course, exactly how much was not met.

cent. The growth in loans to “other manu# # facturing and mining” resulted from c
trends; this group includes the strongly ex­
panding paper industry and the declining
lumber business, as well as several others.
Manufacturers of food, liquor, and tobacco owed banks
less in 1957 than they did in 1955. Sales finance com­
panies registered the only other decrease in loans during
the period, reflecting a reduced need for funds from the
high level of 1955 when automobile sales were at a peak.
Moreover, these firms may have obtained part of the funds
they did need by selling open-market paper.
#

Demands of Small Business
Banks Accommodate All Types of Borrowers
A comparison of the two surveys shows us, for one thing,
that the amount of bank loans to business increased strik­
ingly in the last two years. Moreover, judging from the
growth in the number of business loans, District member
banks accommodated a larger number of borrowers. Also,
businesses were borrowing, on the average, larger amounts
than they were in late 1955. Faced with the heavy credit
demand and having only limited funds, District member
banks raised the rates they charged on loans.
The 1957 survey data reveal that business borrowers
were having to put up increasingly more security as the
year progressed. The proportion of total loans secured
only by a promise to pay dropped from 44 percent of loans
made before mid-1957 to 18 percent of those made later.
At the same time, secured business loans increased from
56 percent to 82 percent of the total.
Despite the tight credit situation prevailing, District
banks were letting out larger amounts of long-term loans
in relation to total loans in 1957 than they were in 1955.

Demands Were Greater in Some Industries
Economic conditions in the District explain fairly well
the different rates of growth in loans to the various types
of business borrowers between 1955 and late 1957. In
the petroleum-chemical industry and in the metals in­
dustry, both capital expansion and employment were
stronger than in many other manufacturing industries.
So, too, was loan expansion; loans to the petroleum indus­
try rose 112 percent and 76 percent to the metals industry.
The boom in capital spending by the transportation,
communications, and other public utilities group that
characterized the period may partly explain the 29 per­
cent increase in their loans. Construction activity resulting
from the area s industrial expansion increased the credit
demands of builders, whose loans rose 27 percent.
Trade loans, both to wholesalers and retailers, also in­
creased sharply— 35 and 55 percent, respectively. Not
only did employment expand, but firms needed more
credit to finance larger stocks at steadily rising prices. The
amount of credit used by service firms grew 19 percent.
Borrowing by firms manufacturing textiles, apparel, and
leather reflected conditions peculiar to this industry. Even
though textile activity declined, mills needed to borrow
more money to carry higher inventories. District member
banks increased their lending to these firms over 30 per­



What happens when we group the data by size of busi­
ness? As a first approximation we classified the borrowers
into two groups—those having assets of less than 250,000
dollars and those whose assets were greater. When w
e
make comparisons between 1955 and 1957 data for these
two groups, we see that banks did not cut down on credit
to either size firm.
In October 1955, the banks had 16,169 loans outstand­
ing on their books to firms with assets of over 250,000
dollars; these loans totaled 948 million dollars. Two years
later, the number was 21,659 and the amount 1.2 billion
dollars, gains of 34 and 32 percent, respectively.
In 1955, the banks had 68,500 loans outstanding to
firms with assets of less than 250,000 dollars amounting to
425 million dollars, and in 1957 they had 78,925 loans
amounting to 516 million dollars. The number of loans
increased 15 percent and the amount 21 percent.
It is obvious that the large business borrowers, by this
definition, got more of the increased credit than the
smaller firms. This classification may be misleading, how­
ever, since it does not take into account the various types
of business; the size of a business, in one way of thinking,
depends partly on the type of business it is.
Although there is no unanimity among students of
small business problems as to where the breaking point
between large and small business is even when classified
by type, we have adopted one of the more widely used
definitions. Sales finance companies and m a n u fa c tu rin g
and mining firms producing metals and petroleum, coal,
chemicals, and rubber with assets of less than 5 million
dollars were considered as small. We considered as small,
manufacturers of food, liquor, tobacco, textiles, apparel,
and leather products with assets of less than one million
dollars. Wholesale trade concerns, commodity dealers, real
estate firms, and other manufacturers with assets of less
than 250,000 dollars, we classified as small. Other types
of business were classed as small if their assets totaled
less than 50,000 dollars.
Using this classification, we see first of all that there
were certain types of small business borrowers whose
loans increased at greater rates than those of larger firm
s
in the same industries: manufacturing and mining
metals products, petroleum, coal, chemicals, and rubber,
manufacturing of miscellaneous products; and in traflS'
portation, communication, and public utilities. All these j
groups were expanding strongly at this time.
. .
A second group of small business borrowers received
more credit in 1957 than in 1955, but not as much more
•

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in terms of percentage gains as the larger firms: trade
concerns, real estate firms, service firms, and the “all
other” group of nonfinancial businesses. These industries
were expanding but not as much as the first group.
For a third group of small businesses, loans declined
from 1955 to 1957: manufacturers of food, liquor, to­
bacco, textiles, apparel, and leather; commodity dealers;
sales finance companies; and construction firms. Loans
to the large firms in these industries increased, however,
but more moderately than in the groups previously listed.
Can we assume then that the slackening in business ac­
tivity in these lines and the decreased credit demands
were concentrated among small businesses? Or, did
bankers in applying their lending policies tend to shift
available credit toward those activities where economic
opportunities were the greatest?
The figures alone do not answer these questions. Bank­
ers told us that because of a decline in residential con­
struction they became more reluctant to lend to small
construction firms who specialize in residential building.
W also know that the sag in the automobile market re­
e
duced the demand for credit by sales finance companies.
Bankers also were more willing to finance the inventories
of larger than of smaller businesses, which may explain
why the larger textile and apparel firms increased their
loans whereas the small firms did not. Factors such as
these all point to the conclusion that economic conditions
in a particular industry were more responsible for changes
in loans than was the size of the business.

Longer Terms and Higher Rates
District bankers were apparently willing to put out more
credit on a long-term basis in 1957 than in 1955 despite
the growing scarcity of funds. In 1955, one dollar in
every five they granted was for a period longer than one
year; in 1957 one out of four was a term loan. The dollar
amount of term loans increased from 277 million to 419
million dollars, or 51 percent.
All borrowers took advantage of the increased avail­
ability of term loans. On balance, however, it appears that
small businesses benefited the most. Term loans to small
borrowers more than doubled between 1955 and 1957,
whereas those to large businesses increased about 35 per­
cent. The small-business share of total term loans, there­
fore, rose from 22 percent in 1955 to over 30 percent in
^957; that of larger firms declined from 78 to 70 percent.
The higher demand for credit in relation to available
funds raised interest rates. Businesses of all sizes found
fhat it cost them more to borrow in 1957. The average
Merest rate rose from 4.60 percent to 5.39 percent, or 17
Percent. This does not take into account higher costs
resulting from higher compensating-balance requirements.
Larger firms apparently felt the impact of the increase
more strongly than the small firms. Firms with assets of
°ver 100 million dollars, for example, paid 4.37 percent
°n loans outstanding in 1957, compared with 3.09 per­
cent two years earlier, a gain of over 40 percent. In con­
trast, the rate on loans to the smallest firms, those with
total assets under 50,000 dollars, rose from 6.07 percent
Jo 6.72 percent, or about 11 percent. The differential
between rates on loans to small and large business nar­
rowed considerably.



A major part o# the rise in total loans at District member banks
from 1955 to 1957 was due to a rise in business loans.
Billion $

Billion «

Most types of business loans rose.

Type o f Borrower

All Businesses . . . .
MFG. & MINING .
Food, Uquor, tobacco .
Textiles, apparel, leather
Metals & metals products
Petroleum, coal,
chemicals, rubber . .
All other mfg. & mining
T R A D E ....................
Wholesale trade . . .
Retail trade
. . . .
O T H E R ....................
Commodity dealers . .
Sales finance cos.
. .
Trans., com., other
public utilities . . .
Construction firms . .
Real estate firms . . .
Service firms . . . .
All other non-financial .

Outstanding
Oct. 16,1957
No.
A m t.

Percent Change
Oct. 1957
from Oct. 1955

Average Size
o f Loan
1955
1957

(000)

($ Mil.)

N o.

Amt.

104.6
13.0
2.2
1.1
3.3

1835.0
440.3
63.4
78.4
122.8

+12
+2
—13
—24
+44

+26
+35
—6
+ 30
+76

18
30
36
44
33

22
41
37
77
45

1.5
4.9
44.5
9.7
34.8
47.1
1.1
1.0

79.4
96.3
548.7
213.8
334.9
846.0
40.8
108.3

+47
—11
+13
+18
+11
+15
+52
+1

+112
+6
+ 46
+35
+55
+13
+31
—11

44
20
11
22
8
22
48
124

63
24
15
27
12
22
44
110

93.8
+31
145.1
+24
195.2
+17
152.3
+12
110.5_____ + 3 _

+29
+ 27
+4
+19
+18

43
16
38
10
16

47
18
35
11
20

3.0
10.3
6.6
17.7
7.4

($000)

In heavily expanding industries loans to small business increased
sharply.
Typo Of Borro»«r
Petroleum, Cool, Chemicals, and Rubber
(Mfg ond Mining)
Tronsportotion, Communication, and
Other Public Utilities
Misc

Manufacturing ond Mining*

1
Where expansion was less strong, small business loans rose less
than large business loans.

In some lines, including several where activity was slowing down,
small business loans declined.
Commodity Dealers
Food, Liquor, and Tobacco

Sales Finance Companies

C n ctio Firm
o stru n
*
Textiles, Apportl, and Leather

(M )
f«

Jj

♦In clud es lum ber & wood prods; paper & a llie d prods; sto n e, clay & g la ss prods; & oth er m isc. m fg.

•5 •

F r o m

T

h e s e

F a c t s

. . .

Clear-cut answers to several questions emerge from the
data we have examined, although we find no single
answer to the complex question of small business financ­
ing. Was the amount of credit made available to small
business reduced? The answer is No. The amount of
loans outstanding to small business at District banks was
greater in 1957 than in 1955. Were fewer small busi­
nesses accommodated? The answer is No. The number
of loans to small business increased. Were small busi­
nesses penalized by higher interest rates more than large
businesses? The answer is No. Interest rates rose less on
small business loans than on large business loans. Were
small businesses penalized by shortening of terms for
which loans were made? The answer again is No. More of
the loans were long-term loans than in 1955, and loans in­
creased more for small businesses than for large ones.
Nevertheless, in a period when credit expanded but
when the expansion was restrained, we found that small
business got a smaller share of the increased credit than big
business, chiefly because loans to certain types of small
business borrowers declined. These small business bor­
rowers whose loans declined during the period were, in
general, in industries where, for one reason or another,
demand for the industry’s products or services had fallen
off. Possibly loans declined because credit demands of
these borrowers declined.
In some cases, however, the industries with declining
demands had built up inventories, and the demand for
credit increased. Bankers interviewed indicated that under
such circumstances loan applications were scrutinized
more carefully; this was true of the larger as well as the
smaller firms. Then why were loans to larger firms not cut
as were those to smaller firms? They probably were to
some extent, but equity capital cushions, management
skills, financial records, and other factors on which credit
appraisals are based may have been adequate at the larger
businesses to offset the unfavorable economic elements.
The larger firms, too, may have had more long-existing
lines of credit.
From this we can conclude that the problems of small
business in securing bank financing during a period of
credit restraint very much resemble those during other
periods. During a period of monetary restraint, small
businesses that are good credit risks—which depends to
some extent on the economic conditions in the industry—
can secure funds on as favorable terms as large businesses.
When economic conditions in the industry of the borrower
are not strong, the characteristics that many small busi­
nesses share—lack of equity capital, great variability in
sales and earnings records, management problems and
many others—may make the securing of funds difficult.
These characteristics are, of course, basic problems of small
business and do not stem solely from institutional ar­


i

rangements for the granting of bank credit. Neither are
they conditions peculiar to periods of credit restraint.
The figures agree, then, with what the bankers told us.
Credit-worthiness, not the size of the borrower’s business,
they told us, determines his access to bank credit. The
figures give no evidence that such is not the case. Out
of a total of 105,000 business loans outstanding at Dis­
trict member banks last October, 55,000 were to sm
all
business, which indicates that bankers have found m
any
credit-worthy applicants among small business firms.
H arry B randt and W. M. Davis
Debits to Individual Demand Deposits
(In Thousands of Dollars)

Percent Change
Mar.
1958

Feb.
1958

Mar.
1957

Feb.
1958

32,955
699,175
25,393
28,101
247,407
134,061
20,164
42,210

30,346
633,735
23,012
26,594
242,204
124,394
17,525
40,304

35,091
702,283
25,802
31,262
296,171
131,428
19,187
40,242

+9
+ 10
+10
+6
+2
+8
+15
+5

FLORIDA
Daytona Beach*
Fort Lauderdale*
Gainesville* .
Jacksonville .
Key West* .
Lakeland*
Miami
. .
Greater Miami*
Orlando . .
Pensacola
St. Petersburg
Tampa . .
West Palm Beach*

53,350
197,919
34,879
664,451
15,676
70,431
794,617
1,185,834
167,378
78,361
165,456
336,490
107,732

50,983
183,371
30,693
636,776
13,785
60,375
733,910
1,119,614
159,099
74,002
155,751
312,892
104,742

50,615
200,671
31,862
638,540
15,756
61,132
712,146
1,126,112
160,752
84,342
169,625
324,600
104,024

+5
+8
+1t
+4
+14

GEORGIA
Albany .
Athens* .
Atlanta .
Augusta .
Brunswick
Columbus
Elberton .
Gainesville*
Griffin* .
LaGrange*
Macon. .
Marietta*
Newnan .
Rome* .
Savannah
Valdosta .

48,112
30,954
1,484,683
82,391
19,937
84,789
6,870
39,783
14,652
17,385
91,093
22,498
13,618
33,539
159,944
20,980

52,689
31,890
1,553,551
83,657
18,530
92,707
7,224
43,215
15,263
20,155
105,939
23,969
14,978
35,728
177,233
27,565

+8
+4
+7
+5
—5
+6
+ 20
+14
+9
+8

.

52,047
32,075
1,586,858
86,687
18,920
89,738
8,230
45,469
15,994
18,834
101,561
24,234
15,363
36,688
168,311
22,470

LOUISIANA
Alexandria* .
Baton Rouge
Lafayette* .
Lake Charles
New Orleans

64,046
201,563
54,720
84,926
1,234,678

62,686
173,942
46,872
78,371
1,152,792

65,388
173,925
51,517
80,857
1,241,701

+2
+ 16
+ 17
+8
+7

M ISSISSIP P I
Biloxi-Gulfport*
Hattiesburg
Jackson .
Laurel* .
Meridian .
Natchez*
Vicksburg

38,330
29,080
190,497
.21,878
34,910
19,961
16,572

37,978
28,654
181,825
21,042
32,654
19,581
17,534

34,990
30,489
193,317
20,656
35,544
20,188
16,489

+1
+1
+5
+4
+7
+2
—5

TENNESSEE
Bristol* . .
Chattanooga
Johnson City*
Kingsport* .
Knoxville
Nashville. .

37,479
273,322
37,958
79,785
200,838
588,647

33,280
241,290
33,247
59,926
187,019
543,974

39,207
269,296
36,850
77,418
200,121
560,765

+ 13
+ 13
+ 14
+ 33
+7
+8

8,379,063

7,803,187

8,248,619

+7

203,834,000 181,696,000 197,024,000

+ 12

Mar. 1958 fro
m
1957
1957

ALABAMA
Anniston . .
Birmingham .
Dothan . .
Gadsden . .
Mobile . .
Montgomery.
Selma* . .
Tuscaloosa* .

.
.
.
.
.
.
.
.
.
.
.
.

SIXTH DISTRICT
32 Cities
. .
UNITED STATES
344 Cities . .

•Not included in Sixth District totals.

-5
-3

+
1
-6
-12
+
1
+
1
+7

+!
+9

+3
+5
+3

+1I
+8
+6
+5
+6
+6
+8
+3

+4

-2
+
0
+
b
+
6
+6
+4

-3

ts
+8
+0

3

-1
+0
+
l
-0
—
1
-11

+8
+13
+9
+5
+7

+0
i5
—
5
—
1
+1
+1
+3
+3
+5

+
<
-0
iS
---0

-4
-l
+1

a
+3
+2
+3

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

1958

1957
FEB.

MAR.

APRIL

MAY

JUNE

JULY

AUG.

SEPT.

OCT.

NOV.

DEC.

FEB.

MAR.

N nfarmEmployment . . . . 134
o
M
anufacturing Employment . . 121
Apparel ............................. . 172
. 132
Fabricated Metals . . . . 164
Food................................. . 117
Lbr, W Prod., Fur. & Fix. . 83
ood
Paper & Allied Products
. 161
. 107
Prim Metals . . . .
ary
Textiles ............................. . 91
Transportation Equipment . . 206
M
anufacturing Payrolls
. . . 191
C tto Consumption** . . . . 86
o n
Electric Power Production** . . 288
Petrol. Prod, in Coastal
205
Louisiana & Mississippi**
Construction Contracts* . . . 339
Residential........................ . 315
All o t h e r ........................ . 359
, 127
FarmCash Receipts . . . .
Crops.................................
120
Livestock........................ , 147
D Store Sales*/** . . . . 161
ept.
Atlanta............................. . 157
Baton R o u g e ................... . 186
Birmingham.................... . 124
Chattanooga.................... . 143
Jackson ............................. . 114
Jacksonville.................... . 129
Knoxville........................ . 150
Macon............................. . 151
M ia m i............................. , 227
N O rle an s.................... . 151
ew
Tamp-St. Ptrsbg.
. . . . 187
Tam pa............................. . 161
Dept-Store Stocks* . . . .
. 203
Furniture Store Sales*/* *
. 119r
M ber Bank Deposits* . . . 154
em
M b Bank Loans* . . . . 255
em er
B Debits*........................
ank
226
Turnover of Demand Deposits* . 143
In Leading Cities . . . .
. 153
Outside Leading Cities . . . 107

134
119
172
131
166
116
80
161
106
90
206
190
86
298

134
120
168
134
172
117
81
163
107
91
209
191
84
297

134
120
170
136
175
116
81
162
108
91
218
194
88
308

135
121
171
136
179
117
80
163
107
90
231
198
89
310

135
121
164
136
185
118
80
156
108
89
235
201
87
298

135
120
164
133
180
113
80
161
107
89
243
200
89
297

134
119
165
133
177
113
81
159
104
89
230
197
90
299

134
120
166
131
178
113
80
161
105
88
216
194
86
303

134
120
166
131
176
114
78
159
100
88
216
1%
85
299

133
118
164
131
172
115
78
159
99
88
225
194
79
295

134
117
167
129
173
117
77
158
95
87
211
187r
83
317

133
116
167
129
169
117
76
156
90
86
197
182
78
325

132
113
165
127
166
114
74
155
90
84
191
184
78
n.a.

203
319
293
339
115
102
139
161
160r
170
139
143r
102
124
144
160
247r
132
166r
143r
204r
107r
156
258
216
139
148
109

195
313
268
350
129
120
149
162
141
167
118
139
98
118
146
141
229
140
182
148
203
112
160
259
223
138
156
102

195
311
291
327
132
135
146
172
163
183
134
141
112
127
154
149
252
142
185
157
198
106
160
260
224
144
159
109

170
320
325
315
142
150
145
176
158
186
131
146
107
128
148
151
251
148
187
165
198
111
159
261
223
140
160
103

172
330
319
340
148
149
158
175
159
177
128
149
119
127
151
147
267
148
183
159
204
114
162
263
231
152
168
111

160
330
341
321
109
74
152
179
167
194
138
151
121
135
158
166
274
148
185
167
203
110
160
268
225
147
166
106

164
315
324
308
83
62
147
172
154
181
132
147
111
132
156
141
267
151
189
165
201
105
161
268
231
144
158
110

167
283
334
241
93
76
157
159
149
187
128
141
102
118
139
136
244
145
177
147
208
103
159
265
221
138
145
101

161
261
288
239
102
82
151
166
154
205
123
147
115
130
144
143
231
140
195
180
206
108
159
263
216
136
144
99

175
259
294
229
123
108
173
173
156
201
126
145
117
133
156
149
255
147
207
201
207
113
162
269
235
149
160
113

169r
264
272
257
124
103
160
157
151
181
121
142
109
127
146
139
234
132
192
185
202
107
161
270
227
146
157
111

173
298
293
303
129p
lllp
160p
147
147
171r
111
128
99
116
128
137
227
135
174r
171
199r
93
161
269
226
144
155
112

168
n.a.
n.a.
n.a.
116e
n.a.
n.a.
158p
157
175
132
141
97
122
139
148
233p
125p
186
180
194p
94p
166
272
220
139
150
110

ALABAMA
tlonfarm Employment .
. 122
Manufacturing Employment . 109
Manufacturing Payrolls . . . 177
Furniture Store Sales . . . 125
M ber Bank Deposits . . . 136
em
M ber Bank Loans . . . . 210
em

122
110
178
118
137
211

122
111
177
108
143
214

123
113
181
117
140
215

123
114
185
113
140
219

123
114
187
131
140
219

123
113
193
125
139
223

122
109
187
100
139
226

123
112
188
111
136
223

122
112
185
120
136
218

107
173
117
139
222

ia

122
105
171
123
139
224

120
103
162r
99
139
221

120
102
165
104
140
223

FLORIDA
Nonfarm Employment . . . 169
Manufacturing Employment . 167
Manufacturing Payrolls . . . 267
Furniture Store Sales . . . 125
M ber Bank Deposits . . . 193
em
M ber Bank Loans . . . . 391
em

170
169
258
HOr
196
396

171
172
264
121
201
401

175
174
273
112
201
404

177
177
280
118
201
405

179
177
286
124
206
410

179
180
290
114
207
414

180
179
293
111
211
415

178
180
291
106
212
416

176
182
290
111
213
417

174
179
292
126
213
423

175r
174
281
100
210
427

174
173
276
99
206
428

173
170
267
95p
213
436

GEORGIA
Nonfarm Employment . . . 131
Manufacturing Employment . 122
Manufacturing Payrolls . . . 193
Furniture Store Sales . . . 115r
M ber Bank Deposits . . . 136
em
M ber Bank Loiuis . . . . 208
em

130
122
192
104r
140
213

131
122
192
106
144
214

130
122
194
105
142
214

129
123
1%
105
142
216

130
122
198
106
145
218

130
120
199
107
141
219

130
118
192
107
141
217

130
117
187
103
138
212

130
119
198
111
137
208

129
118
191

no

142
212

129
116
184
107
141
210

128
115
178
86
141
208

127
114
179
93
147
212

LOUISIANA
Nonfarm Employment .
Manufacturing Employment
Manufacturing Payrolls
Furniture Store Sales* .
M ber Bank Deposits*
em
M ber Bank Loiuis*
em

. 131
. 103
. 175
143r
152
. 256

130
102
173
141
155
259

131
102
174
132
155
259

130
101
174
117
155
262

131
103
173
139
155
261

130
101
173
139
156
267

131
100
174
147
155
272

130
100
173
133
154
271

130
100
172
133
153
268

130
99
171
135
151
265

130
97
173
148
153
274

129
98
172
135
151
268

129
98
170r
116r
154
269

128
%
170
125
156
266

MISSISSIPPI
Nonfarm Employment . . . 126
Manufacturing Employment . 126
manufacturing Payrolls
212
Furniture Store Sales*
104r
M
ember Bank Deposits*
144
M
ember Bank Loans* . . . 269

125
124
210
89
145
276

125
125
207
92
152
278

124
122
207
89
155
280

123
124
211
92
155
283

124
126
219
83
157
286

123
124
217
75
158
288

125
124
213
85
154
282

124
123
208
80
147
293

124
122
206
95
149
294

124
121
212
107
154
2%

125
123
212
88
163
302

124
123
208
77
164
305

124
123
226
79
167
308

TENNESSEE
Nonfarm Employment . .
Manufacturing Employment
Manufacturing Payrolls
furniture Store Sales*
M
ember Bank Deposits*
.
M
ember Bank Loans* . . .

120
118
188
84r
143
223

120
119
189
91
144
226

119
118
188
87
144
229

120
118
187
86
144
233

119
117
189
85
148
236

119
117
190
82
148
236

120
116
186
82
147
236

119
115
185
82
146
230

120
115
183
80
147
233

118
114
181
87
148
236

117
113
175r
85
146
239

115
110
175r
72
148
233

115
110
177
75
155
236

.

. .
.
. .

.
. . .
.

. 120
. 117
. . . 188
. . . 90

140
218

I JAN.

e Estimated.
r Revised.
‘ For Sixth District area only. Other totals for entire six states.
n.a. Not Available.
| Preliminary.
•Daily average basis.
Nonfarm and mfg. emp. and payrolls, state depts. of labor; cotton consumption, II. S. Bureau Census; construction contracts, F. W. Dodge Corp.; petrol, prod., U. S. Bureau
* Mines; elec. power prod., Fed. Power Comm. Other indexes based on data collected by this Bank. All indexes calculated by this Bank.




•7 •

SIXTH DISTRICT BUSINESS HIGHLIGH'
i ...... ■•••••!........**
M T 4** »00

E io c tn c Power

J-/M PL O Y M EN T continued dow nw ard in M arch; in tw o states,
however, nonfarm em ploym ent rose slightly. A t the sam e tim e t
longer w ork w eek raised w eekly earnings som ew hat. Farm income
was lower than in February, but sharply higher prices fo r livestock
products held it at the level prevailing a year ago. Consumer
spending continued to lag. L oans and deposits at m em b er banks rose,
reflecting in part easier credit conditions. B a n ks reserve position
were further eased by another reduction in reserve requirements.

Nonfarm employment declined in March although slight increases occurred
in Tennessee and Mississippi. Unemployment continued sharply above a yew
earlier, primarily because of reduced activity in manufacturing and
tion. The recent slide in manufacturing employment centered in transports*
tion equipment, primary metals, and fabricated metals. Continued
pressed conditions in the textile industry brought a further cut in the indM»
try’s work force. Weekly earnings increased because workers still employed
put in a longer work week.
Cash receipts from farm marketings, seasonally adjusted, declined in M fc
aw
but were slightly above last year. Marketings of citrus, vegetables, potato®,
and beef were reduced from both a month and a year earlier. Neverthek*
total receipts were sustained by favorable prices for livestock and podbf
products. Farm costs rose slightly, because of the pressure of higher prices fef
labor, clothing, and other items for family living, and feeder livestock.

Seasonally adjusted department store sales in March and April averaied
somewhat higher than in February but were below last summer’s peak. N i^ *
ture and appliance store sales also improved in March, but fell short of A*
year-ago volume. Seasonally adjusted bank debits during March dropped
further. Consumer credit outstanding at commercial banks leveled off ell*
declining sharply early in the year. Rising prices of food and services pushed
consumer prices to a new record high Personal income in the first quart* j
of 1958 showed a year-to-year gain because of higher earnings by the
j
force in nonmanufacturing activities. Recent gains in income, however, see j
less than those registered last summer.

MtffiM ' Son*




Member bank loans, seasonally adjusted, increased in March after h*f*l s
declined slightly in February. Loans at banks in leading cities in M a rc h fc* j
short of last year s gains, but in April they showed larger increases than * J*® |
*
ago because of expanded business borrowing, notably by sales fin ® ]
*® *
companies. Additions to time deposits during March lifted membor b°flk
deposits, seasonally adjusted, in all states. The Federal Reserve Bank «
Atlanta lowered the discount rate from 2 14 percent to 1% percent, effccti'*
April 22, and the System released reserves by another cut in reserve requ're
ments. Member banks used the additional funds to expand their investne*^^
at an accelerated rate in March and to reduce their borrowing* to the
level since the fall of 1954.