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Atlanta, Georgia
May • 1960

Also in this issue:
ELECTRONIC CHECK
PRO CESSIN G
DISTRICT BUSINESS
H IGHLIGHTS
SIXTH DISTRICT
STATISTICS
SIXTH DISTRICT
INDEXES

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What Are Open Market Operations?
Federal Reserve Banks serve their member banks in many ways:
supplying coin and currency, collecting checks, issuing Government
securities (as the agent for the United States Treasury), to name but
a few. What’s more, under certain conditions, banks can obtain money
or, to use the technical term, reserves, from the Federal Reserve System.
To meet a sudden withdrawal of deposits or other demands for short
periods they can borrow from the Reserve Bank in their District.
Lowering reserve requirements, that is, reducing the amounts that
member banks must legally keep against their deposits, is one means by
which the System makes money available. But when the System wishes
to reduce credit availability, it may raise reserve requirements.

How They Affect Reserves
Of all the instrumen.; with which the System can supply or withdraw
reserves, the one most frequently used is its “open market operations.”
This instrument is less spectacular than changes in reserve requirements
or changes in the rate at which Reserve Banks lend to member banks
(the “discount rate” ). Open market operations, therefore, make fewer
headlines and are not as well understood by the public.
Essentially, open market operations are nothing more than the buying
or selling of securities, chiefly U. S. Government issues. The term “open
market” does not refer to a location, but to a market in which prices
are determined by competition between many buyers and sellers.
Suppose the System wants to add to bank reserves through open
market operations. It would buy Government obligations from a firm
that trades in these securities, namely a Government securities dealer.
When the dealer receives the check in payment for the securities he has
sold the System, he deposits the check in his own bank. That bank, in
turn, sends the check to the Reserve Bank for credit to its account.
The bank getting the additional reserves is not likely to leave them
at the Reserve Bank, where money earns no return. Indeed, unless it
has to repay debt, it will most likely lend them, except that percentage
that must be kept as legally required reserves, to another bank or busi­
ness or use them to buy securities, and the money is likely to turn
up at another bank as deposits. That would certainly be so if the bank
receiving the money as a result of the System’s open market purchase
were to lend it to another bank ( “sell” Federal funds). But even if it
were to lend the money to a business instead of a bank, a part, if not
the entire amount, is likely to be withdrawn by the borrower and
deposited in another bank. If the borrower were a garment manufacturer
and used the money to buy textile supplies in this District, for example,
suppliers here would be paid by check for the merchandise. They, in
turn, would deposit the checks with their local bank.
The net result is that even though System open market operations
directly affect only that handful of New York and Chicago banks with
which dealers keep deposits, money quickly flows through financial and

trade channels to banks in other parts of the country.
Moreover, the deposits created by the original purchase of
securities by the System will normally become the basis
for a multiple increase in checking account dollars (de­
posits).
The opposite occurs when the System sells securities.
The dealer buying securities from the System pays for
them by check. The System in collecting payment re­
duces the reserve account of the bank with which the
dealer keeps a deposit. Unless that bank has more money
than necessary to cover legal reserve requirements (excess
reserves), it must then replenish its reserve account by
borrowing, selling securities, or other means. As a result
of such adjustments, other parts of the banking system
will also feel some effects.

Chart I
Federal Reserve Holdings of Governm ent Securities
And Member Bank Reserve Balances, 1959

Reasons for Open M arket Operations
Why should the System want to expand reserves by buy­
ing securities or diminish reserves by selling securities?
Part of the answer lies in the System’s basic purpose of
keeping in circulation the amount of money and credit
necessary to encourage a rising standard of living, adequate
job opportunities, and a stable dollar. The amount of
money and credit necessary to achieve these ends depends
upon the amount of reserves that banks must keep against
their deposits.
When the economy is going full blast and prices are
going up, giving borrowers all the credit they want would
force prices up further, but would not necessarily increase
either jobs or things the public can buy. That is why in
an economic boom the System tries to keep bank credit
from increasing too fast. Reducing reserves by selling
Government obligations is one way of doing this.
What if the economy is plagued with heavy unemploy­
ment and low output? To promote recovery the System
purchases securities as a means of increasing bank re­
serves. These additional reserves encourage banks to ex­
pand credit: Businessmen and others whose loan requests
previously were turned down thus get the credit they need
to buy supplies and perhaps add workers. In this way the
economy is stimulated.

evidently larger than the System felt desirable last year,
since it took offsetting action by open market purchases.
Not every factor affecting member bank reserves op­
erates in as systematic a fashion as currency in circulation,
which, incidentally, varies a lot too, notably over holidays.
One that fluctuates considerably is “float,” the term used
to describe the credit the System gives banks on some
checks before the physical collection has been completed.
Bad weather, among other things, can delay collections
and thereby cause an increase in “float.”
Other important factors causing large changes in mem­
ber bank reserves are changes in the U. S. Treasury’s
deposit account at the Federal Reserve Banks, in the
gold stock, and in required reserves. Chart II gives some
idea how much swing in reserves these factors produce.
On individual days, the changes are even greater than
the weekly averages plotted on the chart.
By borrowing from Reserve Banks or by other means,
banks usually have very little trouble adjusting their daily
reserve position. Occasionally, however, changes in the
Chart II
M ajor Factors Affecting Reserves, 1959*

An Aid to M onetary Management
As a rule the System buys securities in recessions and
either refrains from buying or actually sells securities in
booms. This statement, however, oversimplifies how
open market operations are actually carried out. In 1959,
as shown in Chart I, the System bought securities on
several occasions, although the policy at the time was
aimed against excessive bank credit expansion.
Were these open market purchases inconsistent with
this objective? Not if we consider that things other than
System operations can change reserves. Indeed, on some
days of the week and at certain times of the year, other
elements absorb a tremendous amount of reserves. The
public, for instance, normally wants to hold about $1
billion of extra currency from late autumn to midDecember. This absorbs $1 billion of reserves, for when
the Reserve Bank ships currency to the member banks, it
charges their reserve account. Such a loss of reserves was



* Cumulative changes in daily averages for Wednesday statement periods, Dec. 31, 1958,
through Dec. 30, 1959; sign indicates effect on reserves.

•2 •

daily reserve picture are so great that without some off­
setting open market action, there would be too much
strain (or ease) placed on the banking system or some­
times on the Government securities market. A sudden,
sharp decline in reserves might force banks to sell an
unduly large amount of securities and might make credit
tighter than the business situation demanded. If these sales
had to be made when prices on Government securities
were already falling and when the Treasury was about to
borrow money, it would have to offer higher interest rates
in order to attract buyers for the new securities. The in­
terest cost on the public debt would go up also.

Federal Open M arket Committee
Who in the System decides whether to buy or sell securi­
ties? The ultimate decision rests with the Federal Open
Market Committee established by Congress. It consists
of the seven members of the Board of Governors of the
Federal Reserve System and the Presidents of five Federal
Reserve Banks. The President of the Federal Reserve
Bank of New York is a permanent member. The other
four rotate in designated order. The Presidents not cur­
rently on the committee customarily attend open market
meetings and present views on the economic situation.
This representation on the committee emphasizes the
regional character of the Federal Reserve System. A broad
participation in policy formation of this sort makes for
consensus of opinion rather than domination by a single
individual. A meeting in Washington every three weeks
means a frequent reviewing of policy.
What the open market committee decides at each meet­
ing and why is reported to the Congress each year. Any­
one interested can read about it in the Annual Report of
the Board of Governors of the Federal Reserve System.
A perusal of the reports shows that decisions are made
only after a thorough review of the underlying economic
and financial situation. Before each meeting the partici­
pants receive exhaustive information and counsel from
professional economists on the staffs of the Board of
Governors and each Federal Reserve Bank.
At the conclusion of each meeting, the manager of the
so-called “open market account” gets his instructions.
From these and the tenor of the discussion, he will know
whether pressure on reserves should be tightened, eased,
or left unchanged until the next meeting.

W ork of the Trading Desk
The actual buying and selling of Government securities
is done at the Trading Desk of the Federal Reserve Bank
of New York, which acts as the agent for the committee.
The manager responsible for the System’s $25 billion
Government securities portfolio is an officer of that Bank.
In its operations, the Desk does business with 17 Govern­
ment securities dealers. Some of them deal only in U. S.
Government securities. Others, besides dealing in U. S.
Governments, do substantial business in state and local
government, corporate, and other bonds. Unlike the stock
brokers you may be familiar with, these dealers buy and
sell securities for their own account. Working on narrow
margins, they make their profit from the differences be­



tween what they pay and what they get for the securities.
Of course, they may also gain from a rise in price of the
securities they hold. Orders are handled by telephone,
usually in units of millions of dollars, with total value
of trading by the relatively few firms in the market far
exceeding that done at the New York stock exchange. Of
the total business done by dealers, the System accounts
for only about 5 to 10 percent. Accounting for the re­
mainder are banks, insurance companies, pension funds,
large corporations, and other investors.
In determining how much pressure banks are subject to,
those at the Trading Desk look at a variety of things:
Are banks able to borrow funds easily from another
bank? At what rate? Is the reserve picture different in
New York than in other parts of the country? Do dealers
find it difficult to finance their needs? How is the Govern­
ment securities market behaving?
To help answer questions of this type, the Desk collects
a great deal of information. Some of it comes from
written reports and conversations with dealers; some
from price quotations of Government securities; some
from reports from Federal Reserve Banks and member
banks. In addition, the Desk learns about conditions in
the Government securities market firsthand through its
purchases and sales for foreign central banks and govern­
ments, which entrust their investing to the Trading Desk.

How Orders Are Executed
Some general approach for the day is usually worked out
before the 11 o’clock telephone call made with one of the
Presidents serving on the Open Market Committee and a
representative from the Board of Governors. Suppose the
manager has decided to buy. Under his guidance, the
traders around the U-shaped trading desk, equipped with
direct lines to the dealers, ask them for quotations for
Government securities, usually Treasury bills, in which
the System is interested. He will finally buy those offered
at the lowest price and those that fit best into the System’s
securities portfolio.
In addition to buying securities outright, the Desk from
time to time enters into repurchase agreements with
dealers. Under such an arrangement, a dealer sells securi­
ties with the understanding that he will buy them back
within a stated period, a few days later. This method of
supplying funds to dealers is particularly useful when
monetary strains are expected to be temporary.
The foregoing may give some idea of the importance of
open market operations in the workings of the Federal
Reserve System. As public understanding of this instru­
ment of policy grows, the goals set by the Reserve System
will come closer to realization.
H arry B randt

Additional copies of this article are available without
charge to instructors and students in economics and
finance and to others. Address requests to the Research
Department, Federal Reserve Bank of Atlanta, Atlanta 3,
Georgia.
• 3 •

C

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No, the Federal Reserve Bank of Atlanta is not proudly
proclaiming an archeological treasure found in dusty
dunes along the Nile. The queer symbols at the top of
this page are not Ptolemy II’s hieroglyphics. They do not
refer to a dim past; rather they herald a bright future.
These symbols, rare now, in years to come are destined to
be as common as mustard-coated hot dogs. Look closely:
You can make out the numbers 0612-1488; they are the
routing and transit numbers of the Pine Cone National
Bank of Short Story, Georgia. Besides identifying the
drawee bank, these numbers tell us that this bank is located
in the Sixth Federal Reserve District in territory served
by the head office and that checks drawn on this bank
are receivable for deferred credit. Furthermore, these odd­
shaped characters are the check language of progress.
What banker has not groaned on eyeing the swelling
stream of checks written by Americans everywhere? Only
a modest Hollywoodian adjective like supercolossal can
adequately describe the growth in check usage in recent
years. Checks processed by the five offices of the Federal
Reserve Bank of Atlanta, for example, jumped 140 per­
cent in a dozen years, hitting 277,948,000 last year, or
well over a million each business day. Compared with the
national volume, this is but a trickle. Americans wrote
3,500,000,000 checks in 1939. The volume this year will
be four times as large, 14,000,000,000. And that’s not
all! The number, experts guess, will increase another 50
percent in the next ten years. Topping all this, each check
must be handled several times before being returned to
Number of Checks Processed by
Federal Reserve Bank of A tlanta and Branches
1947-59
Millions

Millions

*B«sldM country items, checks drawn on banks outside reserve cities, and city Items,
checks drawn on banks in reserve cities, also includes Treasury checks and post office
money orders.




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its maker. To the burgeoning pile of adjectives descriptive
of the present decade, check processors woefully add the
“swamping sixties.”
Present equipment and procedures cannot cope satis­
factorily with tomorrow’s deluge of checks. To avoid
burial under a paper avalanche, the American Bankers
Association, the Federal Reserve System, office equipment
manufacturers, check printers, and others since the early
1950’s have labored for a solution. Their answer: Auto­
mation. Substitute high-speed electronic equipment for
slow-moving human eyes and hands.

How the Electronic System W orks
The system of check processing of tomorrow is known
as MICR, Magnetic Ink Character Recognition. Its
two basic components are machines that can “read” and
process checks and checks that can be read mechanically.
The first task was to invent a language that would be
universally acceptable; then manufacturers could proceed
to develop “reading” machines. The strange-looking type
used in the title of this report illustrates the common
machine language agreed upon after much research.
Numbers and characters in that style are printed on checks
in iron oxide, or magnetic ink. In reading, the eye picks
out dark spots (words) on this page. These sensory im­
pulses are swiftly signaled to the brain where they are
instantly matched with patterns that we have stored in
our memory. The reading done by electronic equipment
is based on the same general principle.
Without standardization, automation is impossible. This
is as true of check handling as it is of ice cream cone
manufacturing. Uniformity in the physical size and general
design of checks is essential. Too, machines cannot operate
successfully unless the magic magnetic characters are
placed in a strictly controlled location; this area extends
across the bottom of the check within a horizontal band
five-eighths of an inch high. A one-fourth inch wide mag­
netic ink strip is located in this area. The commercial
bank’s transit number and routing symbol, the customer
account number, and the amount of the check are recorded
on this strip. Details on check specifications are contained
in the American Bankers Association Bank Management
Publication 147, entitled The Common Machine Language
for Mechanized Check Handling.
In brief the new check mechanization system involves
three steps: (1) The transit number-routing symbol and
customer account number are placed on each check in
the magnetic ink strip at the time of printing (technically
called preprinting). (2) The first bank receiving the
check for deposit, if it has the necessary equipment, is
to encode on the magnetic ink strip the dollar amount of
the check as made out by the drawer. (3) Once the
amount is encoded, machines can perform all the usual
transit operations of proving, sorting, and listing checks.
Equipment already developed can handle in one minute
about as many checks as a highly skilled operator, using
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the best conventional equipment, can process in one hour.
These versatile machines then go on to post checks to
the deposit accounts of bank customers and prepare bank
records and customer statements.
The machine language system was designed for use by
all banks. It accommodates nonpar banks just as easily as
it does par-remitting banks. As far as the format of checks
is concerned, the chief difference in a nonpar bank check,
a minor one at that, crops up in the treatment of the
transit numbers appearing on the magnetic ink strip:
Since nonpar banks have no routing symbol, they will
show only their transit number; also, the figure 90 pre­
cedes the transit number on nonpar bank checks. For
example, 64-1754 would be set out in magnetic ink as
9064-1754. On the check pictured are numbers for a par
bank.

Wanted: Help from Commercial Banks
This is not a romantic dream. Nor is the paper avalanche
a scary nightmare. Both are as real as life. Great progress
has been made in check mechanization, and pilot opera­
tions will get under way in the next few months at five
Federal Reserve Banks— Boston, New York, Philadelphia,
Chicago, and San Francisco. These installations will test
equipment for performance capability and economic feasi­
bility under varied check-handling conditions. For success­
ful testing, a large volume of checks preprinted with
magnetic ink will be needed. The success of these pilot
operations and the speed with which check automation
occurs depend now mainly on commercial banks them­
selves. Without checks with encoded characters imprinted
in magnetic ink, this high-speed, large-volume electronic
system of processing checks is about as useful as an
electric stove is in the uncivilized tropics.
The American Bankers Association and the Federal
Reserve System are urging all banks, par and nonpar, to
cooperate in this long-awaited venture that is opening a
new era in banking and service to the community. The



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immediate task is simple enough: Mr. Banker, as your
present check inventory runs out, ask your printer to rede­
sign your checks with electronic processing in mind and
to preprint on the checks in magnetic ink your bank’s
transit number and routing symbol. This is the first step,
and many banks in the Sixth Federal Reserve District
have already taken it. You can also further the cause by
urging customers who have their own checks printed to do
the same. Check printers are familiar with the common
machine language program and can be of great help in the
switch-over.

What's in it for Bankers?
Why should a bank redesign its checks and preprint data
in magnetic ink? There will be an initial increase in print­
ing costs, although printers say that this increase will be
slight and may disappear completely as experience and
volume increase. Furthermore, smaller banks with com­
paratively low check volumes probably could not afford,
nor would they have much need for, expensive check
processing equipment. Unquestionably, these are legitimate
points. Arrayed against them, however, are the benefits,
direct or indirect, to be gained by the banking system as
a whole.
The check avalanche represents a huge amount of
money continually in process of collection. With a fast
and efficient check collection system, balances will be
transferred more rapidly. High volume banks will benefit
directly through lower processing costs, increased produc­
tivity, and, very likely, greater accuracy. Some of the gains
accruing to the larger city and country banks in time
undoubtedly will filter on to smaller correspondents. Final­
ly, each bank is a part of a greater whole, the American
banking system. That system can progress and better
serve the nation only with the active cooperation and
support of each of its members.
As business leaders, bankers have a great responsibility
to serve their communities to the best of their ability.
• 5 •

This means keeping up with the growing needs for progress
in all areas, including check handling. Now is the time,
to paraphrase the typewriter repairman’s crutch, for all
bankers to come to the aid of their check-writing countrym en ‘

B asil A . W a pe n sk y

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

March
1960

Feb.
1960

Percent Change
Year-to-date
..
. __1 t
3 Months
March 1960 from
March
Feb. March
from
1960
1959
1959
1959

ALABAMA
Anniston . . . .
39,682
39,746
38,056
Birmingham . . .
851,324
789,185
799,236
Dothan . . . .
35,649
31,038
31,625
Gadsden . . . .
37,823
35,728
36,110
Huntsville* . . .
60,679
57,156
59,219
Mobile
. . . .
286,250
271,185
267,026
Montgomery
. .
163,992
167,592
160,970
Selma* . . . .
24,081
22,338
21,572
Tuscaloosa* . . .
53,787
50,623
49,255
Total Reporting Cities
1,553,267
1,457,969
1,469,691
715,549
672,990r
Other Citiesf . . .
681,387r
FLORIDA
Daytona Beach*
61,641
58,800
62,028
Fort Lauderdale* .
240,774
217,111
224,985
Gainesville* . . .
48,725
37,992
39,486
Jacksonville . . .
890,762
863,841
831,893
Key West* . . .
17,442
17,065
17,609
Lakeland*
. . .
87,411
84,830
77,606
Miami
. . . .
965,340
942,730
940,809
Greater Miami*
1,445,774
1,407,120
1,427,814
Orlando . . . .
282,376
270,675
251,411
Pensacola
. . .
90,698
88,139
86,822
St. Petersburg . .
256,500
232,810
239,683
Tampa
. . . .
458,784
429,757
440,021
West Palm Beach*
153,642
148,367
152,846
Total Reporting Cities
4,034,529
3,865,875
3,842,836
Other Citiesf . . .
1,854,603
l,737,430r l,643,537r
GEORGIA
Albany
. . . .
53,241
50,302
46,056
Athens* . . . .
38,051
38,263
37,392
Atlanta . . . .
2,068,713
1,982,771
1,983,532
Augusta . . . .
110,901
105,406
104,838
Brunswick . . .
23,672
22,643
26,806
Columbus
. . .
105,606
99,791
101,727
Elberton . . . .
8,832
8,831
8,853
Gainesville*
. .
44,819
40,993
47,752
Griffin* . . . .
18,398
18,269
18,164
LaGrange* . . .
21,146
19,180
20,587
Macon
. . . .
121,532
120,406
123,348
Marietta*
. . .
30,634
29,440
28,780
Newnan . . . .
21,205
19,253
17,553
Rome*
. . . .
49,290
44,319
44,074
Savannah
. . .
206,385
184,009
207,190
Valdosta . . . .
33,732
31,563
32,735
Total Reporting Cities
2,956,157
2,815,439
2,849,387
Other Citiesf . . .
969,768
916,176r
886,668r
LOUISIANA
Alexandria*
. .
71,732
66,089
69,096
Baton Rouge
. .
258,487
278,290
264,914
60,445
Lafayette* . . .
60,714
62,657
Lake Charles
. .
83,249
79,077
88,149
New Orleans
. .
1,346,552
1,470,397
1,315,620
Total Reporting Cities
1,964,382
1,779,718
1,831,368
Other Citiesf . . .
626,059
605,296r
599,146r
MISSISSIPPI
51,066
48,669
46,092
Biloxi-Gulfport . .
36,663
36,208
Hattiesburg . . .
34,609
291,876
273,421
Jackson . . . .
292,291
31,804
28,023
25,489
Laurel* . . . .
44,235
Meridian . . . .
41,425
46,223
23,248
22,660
21,663
Natchez*
20,719
18,313
18,037
Vicksburg
. . .
500,026
487,174
465,534
Total Reporting Cities
280,410r
263,896r
294,851
Other Citiesf . . .
TENNESSEE
42,128
43,563
42,059
Bristol* . . . .
345,892
314,957
335,408
Chattanooga
. .
40,568
39,149
39,823
Johnson City* . .
78,122
92,647
88,125
Kingsport* . . .
236,068
229,478
Knoxville . . . .
228,865
692,633r
743,486
711,906
Nashville . . . .
l,396,467r 1,446,186
1,502,224
Total Reporting Cities
596,526
593,087r
550,808r
Other Citiesf . . .
17,567,941 16,608,031r 16,546,204r
SIXTH DISTRICT
.
Reporting Cities
12,510,585 ll,802,642r 11,905,002
4,805,389r 4,625,442r
5,057,356
Other Citiesf . .
10,664,289 10,058,853r 10,131,006
Total, 32 Cities . .
UNITED STATES
344 Cities . . . 245,695,000 221,965,000 223,374,000

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—6
+4
+3
+1

+11
+6
+7
+25
—4
+7
+ 15
+7
+ 12

+8
+9
+8
+ 13
+2
+4
+3
+7
+ 15

+4
+ 19
+3
+7
+8
+1
+6
+6
+5
+6

+4
+3
+2
+5
+3
+4
+4
+8
+6
+5
+9
+5

+6
+7
+4
+9
+4
—3
+2
+ 10
+6

+ 11

+10

+9

+6
—1
+4
+5
+5
+6

+0
+9

+ 10
+1
+4

+ 10
+ 11
+12
+7
+5
+6
+9
+8

+0
+5
+ 12

+ 10
+3
+5
+1

+0

+ 13
+7
+3
+ 13
+3
+5
+3

+ 10

+12
+4
+7
+4
+1
+5

+0
+8
+8
+4
+3

+5
+10
+6

* Not included in total for 32 cities that are part of the National Bank Debit Series,
t Estimated.
r Revised.




Bank Announcements
The Federal Reserve Bank of Atlanta is pleased to
welcome four banks to membership in the Federal
Reserve System. Three are newly organized national
banks and one is a former state, par-remitting bank.
The Peoples Bank & Trust Co., Montgomery, Ala­
bama, joined the System on April 1. Officers are Milton
L. Campbell, President; Henry G. Studstill, Jr., Execu­
tive Vice President; A . D. Smith, Vice President; and
J. Gaston Edmonson, Cashier. Capital totals $450,000
and surplus and other capital resources $738,000.
The First National Bank at Pine Hills, Orlando,
Florida, opened for business on April 1. Officers of
this bank are William H. Dial, Chairman of the Board;
Robert R. Lowe, President; H. R. Cloud, Vice Presi­
dent; Calvin Steele, Cashier; and Donald L. Estes,
Comptroller. Capital stock totals $250,000 and surplus
and other capital resources $350,000.
The Florida National Bank at Opa-Locka, OpaLocka, Florida, opened on April 14. Its officers are
Ernest J. C. Doll, President; Dean S. Campbell and
W. C. James, Vice Presidents; and S. W. Mitchell,
Cashier. Capital stock amounts to $300,000 and sur­
plus and other capital resources $200,000.
The National Bank of St. Petersburg, St. Petersburg,
Florida, began operations on April 25. Starley M.
White is Chairman of the Board; Fred H. Green is
President; J. Wesley Little is Vice President; and Harry
H. Finlay is Cashier. The bank has capital stock of
$500,000 and surplus and other capital funds of
$250,000.
Department Store Sales and Inventories*
Percent Change
______________ Sales________________
_______Inventories
Mar. 1960 from
3 Months
Mar. 31, I960 from
Feb.
Mar.
1960 from
Feb. 29
Mar. 31
Place_________________________________1960
1959__________1959
1960
1959
ALABAM A................................... + 2 0
Birmingham
......................... + 1 6
M o b ile ................................... + 2 8
M ontgom ery......................... + 1 5
F L O R I D A ................................... + 1 4
Daytona Beach......................... + 8
J a c k s o n v ille ......................... + 2 7
Miami Area
..........................+ 1 0
Miami
.............................. + 9
O rlando................................... + 1 8
St. Petersburg-Tampa Area
. +13
G E O R G IA ................................... + 1 4
A t la n t a * * .............................. + 1 3
A ugusta................................... + 1 5
C o lu m b u s .............................. + 1 6
M a c o n ................................... + 2 0
R o m e **................................... + 1 7
S a v a n n a h .............................. + 1 6
L O U IS IA N A .............................. + 16
Baton R o u g e ......................... + 3 7
New Orleans
......................... + 1 2
M IS S IS S IP P I.............................. + 25
Ja ck so n ................................... + 27
Meridian**.............................. + 28
T E N N E S S E E .............................. + 21
Bristol-KingsportJohnson City**
. . . .
+ 15
Bristol (Tenn. & Va.)**
.
+18
C hattano oga ......................... + 2 0
K n o x v ille .............................. + 1 7
D IS T R IC T ................................... + 1 6

—7

—4 + 3
—6+ 2
—4

—8
—6

—6

— 11
—1
—7

+8
+1
—1
+3

—8

+3

+3

— 12
— 11
— 11
— 10
— 16
— 18
— 16
—11
—7
— 11
— 12
— 13
— 14
— 17
— 28
— 31
— 16
— 16
—7

+3+3
—2
+14+ 8
+3
+2
—3
+ 10
— 3—
— 1—
—3
—6+ 9
—8+ 4
—5
—9
—6+ 7
—6+£
— 5+ 9
— 9+ 7
— 10+ 6

—8

— 10+ 7
— 18
— 23

+9
+ 11

+2
—9
— 10

—6 +8

— 2+ 3

♦Reporting stores account for over 90 percent of total District department store sales.
**In order to permit publication of figures for this city, a special sample has been
constructed that is not confined exclusively to department stores. Figures for non­
department stores, however, are not used in computing the District percent changes.

•6 •

Sixth District Indexes
S easonally Adjusted (1947-49 = 100)
1960

1959
SIXTH DISTRICT

FEB.

MAR.

APR.

MAY

JUNE

JULY

AUG.

SEPT.

OCT.

NOV.

DEC. |

JAN.

FEB.

MAR.

Nonfarm Em ploym ent.............................. 137
Manufacturing Em ploym ent.................... 120
A p p a re l.................................................. 174
C h e m ic a ls............................................. 132
Fabricated M e t a l s .............................. 178
F o o d .......................................................114
Lbr., Wood Prod., Fur. & Fix.*** . . 79r
Paper & Allied P r o d u c t s .................... 161
Primary M e t a l s ...................................
92
T e x tile s ..................................................
87
Transportation Equipment.................... 212
Manufacturing Payrolls.............................. 206
Cotton Consumption**..............................
92
Electric Power Production**.................... 346
Petrol. Prod, in Coastal
Louisiana & M ississippi**.................... 193
Construction C o n t r a c t s * ......................... 445
Residential............................................. 382
All O t h e r ............................................. 496
Farm Cash Receipts................................... 131
Crops
..................................................115
L iv e s t o c k ............................................. 164
Dept. Store S a le s * / * * .............................. 168
A t la n t a ..................................................161
Baton R o u g e ........................................ 181
Birmingham
........................................ 127
Chattanooga........................................151
Ja ck so n ..................................................116
Jacksonville
........................................141
K n o x v ille ............................................. 154
M a c o n .................................................. 155
M i a m i .................................................. 248
New O r le a n s ........................................ 139
Tampa-St. Petersburg......................... 204
Dept. Store Stocks*................................... 198
Furniture Store S a l e s * / * * .................... 153
Member Bank D e p o s it s * ......................... 178
Member Bank L o a n s * .............................. 303
Bank D e b its* ............................................. 271
Turnover of Demand Deposits* . . . .
153
In Leading C it ie s ................................... 162
Outside Leading C i t i e s ......................... 121
ALABAMA
Nonfarm Em ploym ent......................... 120
Manufacturing Employment
. . . .
106
Manufacturing Payrolls......................... 185
Furniture Store S a l e s ......................... 153
Member Bank D eposits......................... 154
Member Bank L o a n s .............................. 254
Farm Cash R eceip ts.............................. 125
Bank D e b i t s ........................................ 231r
FLORIDA
Nonfarm Em ploym ent......................... 189
Manufacturing Employment . . . .
190
Manufacturing Payrolls......................... 326
Furniture Store S a l e s ......................... 184
Member Bank Deposits......................... 238
Member Bank L o a n s .............................. 492
Farm Cash Receip ts.............................. 236
Bank Debits
........................................ 379r
GEORGIA
Nonfarm Em ploym ent......................... 131
Manufacturing Employment . . . .
116
Manufacturing Payrolls......................... 197
Furniture Store S a l e s ......................... 144
Member Bank Deposits......................... 157
Member Bank L o a n s.............................. 237
Farm Cash Receipts.............................. 141
Bank D e b i t s ........................................ 238
LOUISIANA
Nonfarm Em ploym ent......................... 129
Manufacturing Employment
. . . .
95
Manufacturing Payrolls......................... 173
Furniture Store S a le s * ......................... 174
Member Bank D e p o s it s * .................... 160
Member Bank L o a n s * ......................... 287
Farm Cash Receipts.............................. 106
Bank D e b it s * ........................................217r
MISSISSIPPI
Nonfarm Em ploym ent......................... 131
Manufacturing Employment . . . .
131
Manufacturing Payrolls......................... 246
Furniture Store S a le s * ......................... 106
Member Bank Deposits*
.................... 190
Member Bank L o a n s * ......................... 367
Farm Cash R e ce ip ts.............................. 103
Bank D e b it s * ........................................212r
TENNESSEE
Nonfarm Em ploym ent......................... 121
Manufacturing Employment
. . . .
118
Manufacturing Payrolls......................... 204
Furniture Store S a le s * .........................113
Member Bank Deposits*
.................... 160
Member Bank L o a n s * ......................... 267
Farm Cash R eceip ts.............................. 106
Bank D e b it s * ........................................ 244r

138
121
174
133
179
115
80r
161
95
88
208
209
93
341

138
121
176
135
180
115
80r
161
98
87
214
214
94
340

139
122
179
135
181
113
80
163
100
88
212
215
92
346

139
123
182
135
182
114
80r
163
103
88
202
219
89
357

139
123
186
135
181
112
81r
165
102
89
207
224
110
359

139
120
185
136
175
112
80r
163
73
88
206
216
94
359

139
120
185
131
177
113
80r
165
74
88
203
213
93
351

139
120
186
130
173
115
80r
164
74
87
209
210
93
350

140
121
186
131
174
116
80r
161
94
86
183
212
91
346

139
121
187
133
177
114
80r
160
100
86
187
217
91
345

140
122
188
133
183
117
79r
166
99
87
197
219
95
358r

140
122
186r
133
184
117
79r
165
97
86
194
215r
95
375

140
122
187
132
181
115
79
164
93
87
193
211
94
n.a.

189
463
394
520
129
109
183
165r
156r
171
124r
145r
104
138r
147
143
252r
130
221
195
140r
179
305
272r
149
160
118

198
453
398
499
135
116
188
175
169
190
135
148
111
130
151
170
263
142
230
201
157
178
311
273r
145
164
112

206
397
429
370
136
119
183
182
161
187
135
164
121
135
153
166
269
144
251
200
153
182
316
261r
158
174
126

200
411
433
393
137
114
186
186
174
192
127
161
114
139
148
168
277
151
245
202
148
183
321
279r
152
174
117

195
416
425
410
142
123
186
190
177
179
136
168
124
138
164
167
301
155
244
212
158
181
329
284r
162
179
124

203
440
444
436
123
96
179
196
188
190
145
164
131
221
165
177
312
156
263
217
161
183
330
259r
154
174
115

207
380
440
331
151
134
194
180
170
168
131
155
111
166
165
158
277
151
241
222
149
183
331
282r
150
164
118

215
350
441
276
141
124
181
178
169
185
124
160
113
151
159
158
274
149
241
225
158
182
331
271 r
147
153
109

214
302
373
245
143
123
176
187
178
209
129
168
130
182
168
162
269
154
260
223
163
184
333
271r
150
160
109

231
302
367
249
132
106
154
188
176
202
135
160
123
172
172
164
282
153
251
227
151
181
335
288r
154
166
121

227r
328
351
309
132
104
166
178
173
187
131
158
118
176
170
164
257
141
232
227
166
182
337
276r
154
166
119

226r
345
366
327
131
107
173
167
169
169
120
136
104
161
146
142
256
141
219
225r
143
180
340
296
156
168
120

230
n.a.
n.a.
n.a.
n.a.
n a.
n.a.
161
154
179p
121p
131
97p
160
133
146
261
123
204
220p
128
180
342
289
153
167
119

121
107
189
124r
154
250
130
230r

120
107
193
145
156
254
126
234r

121
107
190
135
157
259
122
226r

121
106
195
134
160
266
125
247r

122
109
198
139
160
275
129
248r

117
100
173
143
160
269
125
220r

117
99
167
139
160
270
141
242r

117
97
168
138
159
272
114
235r

121
105
184
134
159
273
136
223r

121
106
190
128
158
272
142
246r

121
105
194
148
159
279
124
234r

120
105
188
133
158
283
124
244

120
104
186
111
159
284
n.a.
243

191
193
319
163
235
500
179
386r

193
195
343
183
233
511
243
382r

195
195
351
176
241
526
231
391r

197
198
351
175
243
534
241
426r

199
202
364
178
238
544
240
430r

199
202
371
212
246
548
203
396r

200
202
370
177
247
550
210
439r

200
202
371
180
245
547
194
425r

200
201
366
203
245
547
177
417r

198
199
370
195
241
549
206
427r

198
201
362
189
242
546
229
394r

199
202
360r
174
237
549
205
427r

198
199
347
157
234
545
n.a.
414

131
117
204
133r
157
235
147
243

132
118
206
151
157
244
140
248

132
119
211
148
160
246
137
236r

132
119
215
139
159
250
127
253

134
120
219
159
157
256
172
261

133
119
216
163
162
260
133
239r

134
120
207
144
160
260
142
259r

134
120
210
159
160
261
136
249

134
117
203
157
163
266
164
244

134
118
204
150
158
266
121
264

135
119
211
149
161
269
137
255

134
119
205
127
160
271
147
265

133
119
201
121
158
267
n.a.
254

128
96
175
191r
165
293
109
229r

128
96
178
177
160
293
111
231r

128
96
179
191
165
295
141
220r

128
96
175
177
165
295
109
244r

127
96
176
193
160
302
105
237r

126
95
176
178
160
299
97
227r

127
95
178
193
160
304
127
252r

126
96
170
171
157
307
136
229r

127
95
171
195
160
309
104
216r

127
95
171
184
158
311
111
239r

128
95
176
188
162
313
98
208r

128
96
176r
192
159
316
101
224r

127
97
178
172
161
335
n.a.
244

131
131
251
97
198
378
110
229r

130
132
250
114
195
383
110
230r

132
134
247
120
191
391
106
214r

131
133
247
132
195
398
111
246r

131
134
252
115
197
403
112
240r

131
134
253
129
194
400
106
231r

133
135
253
95
195
411
140
244r

133
135
241
83
202
392
127
236r

134
136
244
117
204
392
136
240r

133
136
245
133
208
403
130
256r

136
136
255r
106
200
414
111
229r

135
135
249
99
201
424
115
247r

134
134
255
94
206
418
n.a.
249

122
119
205
115r
159
268
104
232r

123
119
208
114
162
272
106
233r

122
119
206
116
166
276
97
230r

123
120
206
116
164
283
103
241r

122
121
211
105
165
287
81
245r

122
119
214
122
165
287
108
227r

122
120
211
109
166
288
135
234r

122
119
206
108
167
293
117
230r

122
120
206
102
167
291
122
239r

121
119
209
109
164
296
109
235r

122
120
213
104
166
296
95
237r

122
120
214r
95
161
301
92
254r

121
120
205
98
161
303
n.a.
244

*For Sixth District area only. Other totals for entire six states.
**Daily average basis.
***Revisions reflect new seasonal factors.

n.a. Not Available.

p Preliminary.

r Revised.

Sources: Nonfarm and mfg. emp. and payrolls, state depts. of labor; cotton consumption, U. S. Bureau Census; construction contracts, F. W. Dodge Corp.; petrol, prod., U. S. Bureau
of Mines; elec. power prod., Fed. Power Comm. Other indexes based on data collected by this Bank. All indexes calculated by this Bank.




• 7 •

SIXTH DISTRICT BUSINESS HIGHLIGHTS




h a n g e s a m o n g im portant econom ic indicators in M arch were
slight, but declines predom inated. The decline in num bers em ployed
in the nonfarm sector was negligible even though sm all losses were
w idespread am ong states and types of a ctivity. R eta il sales suffered
in M arch, as bad weather plagued much of the D istrict. L oans and
deposits of m em ber banks changed little and borrow ing from the
Federal R eserve Bank of A tlan ta continued to decline. M ore re­
cently, econom ic tem po on farm s increased because dry weather
favored field w ork, and m ore w orkers were em ployed.

(C

122

_

Nonfarm em ploym ent, seasonally adjusted, declined slightly in March,
although not enough to change the index plotted on the chart. Small declines
occurred in all District states except Alabama. M anufacturing em ploy­
ment changed little as employment in the textile, apparel, and lumber in­
dustries held steady and dampened effects of declines in other major types
of manufacturing employment. M anufacturing p ayro lls, however, dropped
as the average workweek decreased. The rate of insured unemployment
failed to show the decline it usually does at this time of year.
Construction em ploym ent kept moving downward, after seasonal adjust­
ment, but the three-month ave ra g e of a w a rd s for future construction,
based partly on March data, picked up. Cotton textile activity, showing
only a small drop, as measured by cotton consumption in March, continued
its recent pattern of small changes around a relatively high level. Crude oil
production in Coastal Louisiana and Mississippi rose slightly to a new
high, but steel mill operations declined further in March and early April.
Department store sales, seasonally adjusted, continued downward in
March, but, according to preliminary estimates, rebounded sharply in April.
In March, sales dropped in every major District metropolitan area except
Baton Rouge, Birmingham, Macon, and Miami. Departm ent store stocks,
seasonally adjusted, also declined in March, as did furniture and appliance
store sales.
Consumer instalm ent credit outstanding declined more than seasonally

at retail outlets in March, reflecting sales declines. Among nonbank financial
institutions, outstandings at credit unions, seasonally adjusted, increased, but
consumer finance companies showed a decrease. At com m ercial banks,
outstandings mounted seasonally. Consumer saving changed no more than
usual in March. O rd in ary life insurance sales increased more than season­
ally; savings and loan shares outstanding rose seasonally; and time
deposits at commercial banks increased less than seasonally.
Dry weather recently has enabled farmers to rapidly complete field work
which had lagged because of rains and floods. Planting has progressed well in
most places, although dry soils in Louisiana slowed rice plantings. Some
vegetable crops in South Florida, however, especially tomatoes and beans,
were damaged by excessive rains. All told, farm production held at monthearlier levels, with larger output of cattle and hogs offset by declines in crop
marketings. The average of prices received by farm ers increased slightly
as prices for livestock rose. Employment on farms increased more than
seasonally and w ag e rates were up from a month ago and a year ago.
Member bank loans, seasonally adjusted, rose only slightly in March:
Increases at banks located in Alabama, Louisiana, and Tennessee were almost
offset by declines at banks in Florida, Georgia, and Mississippi. Reflecting
primarily a drop at banks in leading cities, m em ber bank deposits, seasonally
adjusted, declined further. Investments continued to decrease as banks in all
six states liquidated securities. In April, loans at banks in leading cities
rose slightly less than usual. Of the major loan categories, only loans to sales
finance com panies showed any real strength. Member bank borrowing
from the Federal Reserve Bank continued to decline.