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Atlanta, Georgia M a y • 1964 Between the Devil and the Deep Blue Sea: Monetary Policy from I to 9 6 0 A ls o in t h is is s u e : GROWTH OF DISTRICT FINANCIAL INSTITUTIONS: 1957-62 SIXTH DISTRICT STATISTICS DISTRICT BUSINESS CONDITIONS S ^ fe r a f ffy s e r w B a n / tg f 1 9 6 4 The past four years have been challenging ones for Federal Reserve policy-makers, challenging in a way that monetary policy has not often encountered. The first part of this challenge consisted of the recession that began in April 1960. Even after this threat was overcome, the monetary authorities had to contend with unacceptably high levels of unemployment and unutilized plant capacity that occurred despite a continuation of very rapid economic expansion. And, on another front, U. S. balance of payments deficits were large and continuous through out the period. Now that the United States seems to be making some considerable progress in meeting this twofold challenge, some observers are warning of an attack from another direcffcyi. Their current economic intelligence reports tell them th a tm f^ ie n . ana an unsustainable boom are near and that defensive prould be taken, immediately. V T & ^0 $ . Once the recession began, th^fimmediate r f^ $ e m was to check its course and get the economy moving ubwmcKagain. The Federal Reserve System first recognized the sl^K&pX'g in economic activity early in 1960. On March 1, the O t^ jM a rk e t Committee changed its directive to the Manager of the C^jen Market Account so as to place major emphasis on “fostering sustainable growth in economic activity and employment.” This was a full two months earlier than the date the National Bureau of Economic Research later designated as the turning point in business activity. The economic outlook at the time was cloudy, but it was becoming evident that the economy was at least no longer expanding. The following two months furnished more solid evidence of a downturn, and on May 24 the directive to the Account Manager was modified to emphasize the need to provide “reserves needed for moderate bank credit expansion.” On August 16, further emphasis was put on “encouraging monetary expansion.” In response to this progressively easier monetary policy, member bank reserves, which had hardly changed at all in 1959, rose markedly in 1960. Banks quickly put these funds to work by increasing their loans and investments. At first, most of their new money went into investments. So far, the Federal Reserve System was doing what one would expect a central bank to do in combating a decline in economic activity. It was just at this point, however, that the System found itself between the devil of recession and the deep blue balance of payments deficit. With the demand for loans falling off in 1960 because of the recession and the supply of short-term funds being deliberately increased by Fed- eral Reserve open market operations, short-term interest rates plunged sharply downward. If the System allowed short-term rates to fall as low as they had in the previous recession in 1958 (when the three-month Treasury bill rate went almost down to one-half of one percent), there was a good chance that the flow of short-term funds out of this country in search of higher returns abroad would increase and, thus, worsen our already serious balance of payments deficit. The Open Market Committee, therefore, in its directive of October 25 warned the Account Man ager to take “into consideration current international de velopments,” although priority was still given to expand ing the reserve base so as to promote economic recovery. The Federal Reserve Banks, after lowering their dis count rates in two stages from 4 percent to 3 percent, maintained them at the 3-percent level until July of last year (when they were raised to 3 percent). The Open Market Committee early in 1961 began to buy some inter mediate and longer-term securities in the hope of being able to provide additional reserves without driving down short-term interest rates in the process. This had the added result of putting some downward pressure on long term rates. Lower long-term rates would be expected to encourage domestic investment more than a comparable decrease in short-term rates. The Treasury cooperated in this endeavor by concentrating its new cash borrowing in the short-term area, thus applying upward pressure on short-term rates. The results of this tightwire act were reasonably satis factory. The three-month Treasury bill rate went down to 2*4 percent in the middle of 1960 and stayed roughly at that level until nearly the end of 1961. Thereafter, with increasing domestic credit demands, short-term rates rose and thereby contributed to reducing short-term capital outflows. Meanwhile, the Open Market Committee con tinued to supply member banks with additional reserves and the Board of Governors reduced required reserve ratios and allowed member banks to count all of the cash held in their vaults as part of their reserves. M e m b e r b a n k r e s e r v e s h a v e c o n t in u e d t o e x p a n d a lm o s t c o n s t a n t ly s in c e A p r i l 1 9 6 0 , a t o t a l o f 4 8 m o n t h s . T h is is t h e lo n g e s t p e r io d o f r e s e r v e e x p a n s io n s in c e W o r ld W a r I I a n d h a s m a d e p o s s ib le a s h a r p r is e in b a n k d e p o s it s . T h is g r o w t h in d e p o s it s a n d r e s e r v e s h a s c o n t r ib u t e d t o g ro w th o f th e r e a l o u tp u t o f th e e co n o m y a s re p re s e n te d b y t h e g r o s s n a t io n a l p r o d u c t . T h e c u r r e n t e x p a n s io n in b u s in e s s is n o w in it s t h ir t y - n in t h m o n th a n d is t h e s e c o n d lo n g e s t p e a c e t im e e x p a n s io n o n r e c o r d . Source: Board of Governors of the Federal Reserve System. Source: U. S. Department of Commerce. These policy actions have had their effects on economic activity. For example, industrial production is now about 2 4 percent higher than in February 1961 when the current business expansion began. The gross national product, expressed in 1954 dollars of constant purchas ing power, has increased each quarter since then at an average annual rate of 5.3 percent. Total nonagricultural employment has increased steadily since the beginning of the expansion, and outlays for business fixed investment, which are mainly expenditures for new facilities and equipment, have advanced steadily. Moreover, according to the latest McGraw-Hill survey, business firms plan to increase their capital outlays this year 12 percent above their 1963 levels. Construction has boomed. Residential building has been stimulated by ample credit and by the public’s pref erence for income earning assets over demand deposits as a repository for their savings. Commercial banks have seen their time deposits grow much faster than their demand deposits, and other financial institutions, such as insurance companies and savings banks, have also had large inflows of funds. Competition among those who wish to put these funds to work has resulted in a considerable fall in mortgage rates and, therefore, in the monthly pay ments of home buyers. The backlog of building permits and construction contracts already awarded suggests that residential construction will probably remain a source of strength for some time. Disposable personal income has increased steadily since 1961. Part of it goes for expenditures on goods and ser vices and the remainder is saved. Both consumer expendi tures and saving have increased since 1961. Saving, how ever, has increased faster, indicating that consumers have not spent as large a proportion of their income as they have in some other periods. Economic expansion, rapid as it has been, has not been fast enough to remove enough slack from the economy to allow us to concentrate on our balance of payments prob lem. Despite increased employment, the number of jobs has done little more than keep up with the expansion of the labor force. As a result, the unemployment rate has remained fairly constant since early 1962. The unem ployment rate for teen-agers and for the unskilled and semi-skilled has been especially high. Manufacturing ca pacity, too, has been less than fully utilized. While the percentage of utilized capacity has increased from its reces sion low, in the first quarter of 1964 it was still well below the level reached in 1955 and 1956. Federal Reserve policy-makers have recognized this underutilization of resources; and the continuation of re serve expansion longer than in any previous postwar period is a reflection of their concern over the problem. Unemployment, however, cannot be eliminated solely by expanding credit and the supply of money. It can be traced to many things— changing technology, legislation, a deficient educational system, and structural causes. Thus, even if there had been no other problems bedeviling monetary management, monetary policy might not have been able to bring about full utilization of resources. But there were other problems. •2 • In s p i t e o f r a p id e c o n o m ic e x p a n s i o n , r e s o u r c e s h a v e n o t b e e n f u l l y u t i l i z e d . U n e m p lo y m e n t h a s r e m a in e d a b o v e 5 p e r c e n t , a s t h e c i v i l i a n la b o r f o r c e g r e w a s r a p i d l y a f t e r 1 9 6 1 a s d id t o t a l c i v i l i a n e m p lo y m e n t . M a n u f a c t u r in g c a p a c it y u t i l i z a t i o n , a lt h o u g h i t h a s r i s e n , h a s r e m a in e d b e lo w e a r l i e r l e v e l s . Source: U. S. Department of Commerce. Source: Board of Governors of the Federal Reserve System. The Deep Blue Sea This country has experienced massive deficits in its trans actions with the rest of the world in each of the last six years. Several times, as in early 1961 and early 1962, it seemed that we were making progress in reducing the deficit— only to have it worsen again. Numerous non monetary measures have been adopted to solve the prob lem including an export promotion drive, reduction of military expenditures abroad, and increased tying of for eign aid to purchases in this country. The most dramatic improvement so far, however, came in the last half of 1963 after a proposal was advanced for an interest equal ization tax to discourage American purchases of foreign securities. The deficit in the fourth quarter of 1963 was the smallest since 1957, and preliminary figures indicate that the balance improved even further in the first quarter of this year. The reason the Administration proposed the interest A f t e r f i v e a n d a h a l f y e a r s o f v e r y l a r g e d e f ic it s , t h e U . S . b a la n c e o f p a y m e n t s s h o w e d m a r k e d im p r o v e m e n t in t h e l a s t h a l f o f 1 9 6 3 . T o a c o n s id e r a b le e x t e n t , t h is r e s u lt e d f r o m a s h a r p r e d u c t io n in t h e o u t f lo w o f U . 5 . c a p i t a l a f t e r t h e A d m in is t r a t i o n p r o p o s e d t h e i n t e r e s t e q u a l i z a t i o n t a x a n d t h e F e d e r a l R e s e r v e B a n k s r a is e d t h e i r d is c o u n t r a t e s . U. S. BALANCE OF PAYMENTS Transactions S ource: U. S. Department of Commerce. Source: U. S. Department of Commerce. equalization tax is found in the behavior of capital out flows from the U. S. The outflow of long-term capital has been one of the major negative elements in our balance of payments since 1956, but a large part of it had been in the form of direct investments, that is, the purchase or construction of physical assets, such as manufacturing plants, abroad. The accumulated assets acquired by these direct investments have, in the past few years, returned an annual income that was usually greater than the out flow of new money in any one year. This was not true, however, of the other component of long-term foreign investment, portfolio capital. Portfolio capital is another term for foreign securities— stocks or bonds— purchased by Americans. The return from portfolio capital was usu ally smaller than the outflow of new money and, thus, a balance of payments drain occurred. The amount of port folio investment began to rise in late 1962 and reached a record level in the second quarter of 1963. After the interest equalization tax, which would apply only to port folio investment, was proposed in July, this part of the capital outflow shrank dramatically. Short-term capital outflows have also been a problem in the last three years. It was partly in response to the very large outflow in the second quarter of 1963 that the Federal Reserve System raised discount rates and also increased the maximum interest rates that member banks could pay on time deposits. Short-term interest rates in the United States rose after last July’s action by the Fed eral Reserve, and the gap between rates at home and abroad narrowed. This helped to reduce the attractiveness, to U. S. banks and corporations, of moving funds abroad, and the outflow of short-term capital diminished sharply. All major parts of the balance of payments showed im provement in the last half of 1963 and the first quarter of 1964. Exports increased, while imports remained almost unchanged. Private capital outflows decreased sharply, and government loans and grants declined. Even so, we cannot assume that the problem has been solved; we have been disappointed too often before. But it is just possible that all the effort of the past four years may be bearing fruit— that we can look forward to the time when a larger export surplus will be nearly sufficient to offset a deficit on pri vate and government loans and grants. A New Threat? One of the reasons for the good performance of our in ternational trade account is the absence of general infla tion. The wholesale price index is almost identically the same as it was in February 1961. This situation contrasts strongly with the recovery beginning in August 1954. Then, a similar rise in industrial production, gross national product, and employment was accompanied by a sharp upswing in wholesale prices. More recently, however, there have been announcements of price increases for such commodities as aluminum, zinc, brass, copper, chem icals, glass, and lumber. This suggests that, despite the relative stability of the recent past, price stability may become more difficult to maintain in the future. The behavior of consumer prices has been less satis fying than that of wholesale prices. A major source of the upward pressure on consumer prices for all items has been • 3 • the sharply rising trend of prices for services. The service component is made up of costs for rent, transportation, medical care, household operations, and other service charges. Because services make up more than one-third of the average family’s budget, the impact of the continued postwar rise in service prices has been considerable. Ad vances in service prices have been responsible for more than one-half of the total consumer price rise since the Korean War. Stability in service prices, however, is dif ficult to achieve because of the substantial wage element in the final price and because improvements in productiv ity in services in the past have not kept pace with the growing demand. S o f a r in t h e la t e s t e x p a n s io n p e r io d , m a n u f a c t u r in g l a b o r c o s t p e r u n it o f o u t p u t h a s n o t r is e n in s p it e o f c o n t in u e d a d v a n c e s in a v e r a g e h o u r ly e a r n i n g s o f p r o d u c t io n w o r k e r s . T h is w a s m a d e p o s s ib le b y r a p id in c r e a s e s in p r o d u c t iv it y p e r w o r k e r . T h e r e h a s t h u s b e e n n o u p w a r d p r e s s u r e f r o m c o s ts o n t h e w h o le s a le p r ic e i n d e x , w h ic h h a s r e m a in e d a lm o s t u n c h a n g e d . C o n s u m e r p r i c e s , h o w e v e r , h a v e r is e n m o d e r a t e ly . Source: U. S. Department of Commerce. Source: U. S. Department of Commerce. In contrast with services, productivity in manufacturing has increased sufficiently to absorb the rising hourly aver age earnings of manufacturing production workers. From early 1961 to early 1964, average hourly earnings have increased from $2.28 to $2.51. Despite this increase in hourly pay, manufacturers have held down the labor cost per unit of output so that it has remained relatively un changed since late 1961. The current expansion period is unique in the sense that an upward push in unit labor costs, such as occurred in 1955-57, has been absent. To have maintained this stability in cost per unit of output for such an extended period during the current expansion is extraordinary. Some persons are currendy pointing out, however, that the absence of inflationary pressures during the past four years is no assurance of their continued absence in the future. Inflationary forces, they say, can take many forms other than higher wholesale and consumer prices. They see symptoms of inflation in the trends of land values and stock prices, for example. Furthermore, they think inflationary dangers may intensify as the economy expands further. These persons who scent inflationary dangers be lieve that monetary policy-makers should build up their defenses now against future ambush from that hidden enemy, potential inflation. Other persons appraise the situation quite differently. Unused capacity and unemployment suggest that output can expand without inflationary pressures developing. Moreover, investment in new plants and equipment will expand capacity, while worldwide competition is counted on to hold prices in line. At any rate, they conclude that it would be a grave mistake to tighten credit prematurely in anticipation of what might turn out to be an imaginary enemy. The expression “between the devil and the deep blue sea” first began to be used over 300 years ago, we are told by a popular reference work. It has survived all these years because it compresses into a few words the predicament so many of us think we face in having a choice only between disasters. And so it seemed, at times, to some analysts during the past four years when they thought about the alternative monetary policies that could be followed. Some persons believed that any steps taken toward monetary ease for the purpose of facilitating recovery and growth would lead to disaster in the nation’s international payments position. Others felt that any steps taken to help redress the im balance in international payments would lead to a disaster at home in the form of a recession. Actually, neither disaster occurred, even though mone tary policy was directed at both stimulating the domestic economy and helping to correct the nation’s unfavorable balance of payments position. This suggests that, although homely expressions like “between the devil and the deep blue sea” may compress a good deal of the world’s ac cumulated wisdom in a few words, they sometimes over simplify the world as it actually exists. Perhaps the chief value is in pointing out the danger of basing policy deci sions solely on one sector of the economy instead of judiciously weighing all relative factors. In monetary pol icy, as in other things, there is seldom a clear-cut choice. L a w r e n c e F. M a n s f ie l d Bank Announcements The Brevard National Bank, Titusville, Florida, a newly organized member bank, opened for business on April 1 and began to remit at par for checks drawn on it when received from the Federal Reserve Bank. Offi cers are J. J. Parrish, Jr., Chairman of the Board; Thomas L. Henderson, President; George E. Sullins, Executive Vice President and Cashier; and Fred Bell and N. E. Jones, Vice Presidents. Capital is $400,000, and surplus and other capital funds,.$200,000, as re ported by the Comptroller of Currency at the time the charter was granted. On April 1, the Imperial Bank of Lakeland, Lake land, Florida, a newly organized nonmember bank, opened for business and began to remit at par. Officers include Eugene F. Griffin, President and Chairman of the Board; J. E. Stell, Executive Vice President; and H. R. Hjort, Cashier. Capital is $500,000, and surplus and undivided profits, $125,000. The Bank of Sharon, Sharon, Georgia, changed its (Continued on Page 6) • 4 • Growth of District Financial Institutions: 1957-62 Financial institutions facilitate the process of capital for mation by accumulating the savings of individuals and making them available for investment in productive enter prise. In Sixth District states, financial institutions have been extremely active in serving this intermediary func tion throughout the postwar period. This article updates the statistics on financial intermediation in the District for the entire period 1947-62. The data for 1947 and 1957 were presented in the August 1959 issue of this Review. The assets of District financial institutions increased over $12 billion between 1957 and 1962, the last year for which data are available. This development signifies that the business of bringing together borrowers and lend ers is an important part of Sixth District economic activity. Over the 1957-62 period, personal income in District states grew much more rapidly than in the United States as a whole. Since the volume of savings expands as in come increases, it is not surprising to find that the assets of District financial institutions also showed greater gains than in the nation. In addition, the number of financial institutions increased more in the District than in the United States. Within the District, the assets of financial institutions rose appreciably in each state. Florida led the way with an increase of 66 percent. Moreover, except for Louisiana, each of the state gains exceeded that recorded for all U. S. financial institutions. In terms of total assets, commercial banks compose the largest category of Sixth District financial institutions. However, they have not grown as rapidly in the past five years as have nonbank financial institutions. Consequently, the share of assets held by District commercial banks dropped from 69 percent in 1957 to 62 percent in 1962. Credit unions have led the growth parade in District states by expanding their assets 108 percent. They have also grown in number; in 1962, there were 417 more credit unions in the District than in 1957. These are the only financial institutions included in the survey that are more numerous than commercial banks. Insured savings and loan associations are the closest rivals of commercial banks with respect to gains in dollar volume of assets. These associations produced well over a third of the total increase in assets of District financial institutions during the 1957-62 period. Nevertheless, their total assets still amount to less than one-half of the assets of commercial banks. The percentage growth of assets of legal reserve life insurance companies looks relatively small compared with that of some District institutions. However, their 59-per cent increase in assets represents a gain of over one and one-half billion dollars in outstanding credit. It also repre sents almost twice the percentage increase of all such companies in the United States, as well as a greater rate of growth than that of total financial assets in the District. S a m u e l L. S kogstad Note: Figures for 1947 and for 1957-62 are available upon request to the Research Department, Federal Reserve Bank of Atlanta, Atlanta, Georgia 30303. Assets of Financial Institutions in Sixth District States F o r th e Y e a r s ( M illio n s Insured Commercial Banks Year 1957 1958 1959 1960 1961 1962 16,316 17,695 18,707 19,365 20,684 22,090 195 7 -62 o f D o l la r s ) Insured Savings and Loan Associations 4,331 5,039 5,933 6,732 7,706 8,829 Credit Unions Life Insurance Companies 305 360 431 491 558 635 2,738 3,033 3,339 3,671 4,015 4,360 23,690 26,127 28,410 30,259 32,963 35,914 Total By State, 1957 and 1962 ( M illio n s o f D o lla r s ) 1957 Alabama Florida Georgia Louisiana Mississippi Tennessee 1,949.2 4,393.7 2,751.1 3,002.1 1,165.2 3,054.4 281.0 1,977.7 752.4 639.3 188.5 492.1 49.6 80.9 48.8 49.0 10.9 65.6 433.6 297.7 312.0 305.5 109.0 1,280.1 2,713.4 6,750.0 3,864.3 3,995.9 1,473.6 4,892.2 2,658.7 6,143.1 3,717.2 3,624.3 1,693.9 4,252.9 630.7 4,292.2 1,403.9 1,181.2 369.1 952.2 107.9 179.1 97.3 92.3 26.9 131.7 747.6 562.3 503.0 432.0 194.0 1,920.4 4,144.9 11,176.7 5,721.4 5,329.8 2,283.9 7,257.2 1962 Alabama Florida Georgia Louisiana Mississippi Tennessee Percent Change, 1962 from 1957 Alabama Florida Georgia Louisiana Mississippi Tennessee Total, Six States United States + 36 +40 + 35 + 21 +45 +39 +35 +34 + 124 + 117 + 87 + 85 + 96 + 94 + 104 + 101 + 118 + 121 + 99 + 88 + 147 + 101 + 1 08 + 89 +72 + 89 +61 +41 +78 +50 +59 +32 +53 +66 + 48 +33 +55 +48 +52 +42 Number of Sixth District Financial Institutions, By State, 1957 and 1962 1957 Insured Commercial Banks Insured Savings and Loan Associations Alabama Florida Georgia Louisiana Mississippi Tennessee Total 239 265 353 181 192 291 1,521 35 94 83 81 34 46 373 239 340 364 195 190 289 1,617 47 122 96 91 36 60 452 Life Insurance Companies Total 223 487 293 360 93 310 1,766 39 26 33 112 24 22 256 536 872 762 734 343 669 3,916 304 569 354 413 143 400 2,183 37 26 27 111 25 28 254 627 1,057 841 810 394 777 4,506 Credit Unions 1962 Alabama Florida Georgia Louisiana Mississippi Tennessee Total NOTE: These tables bring up to date figures published in this Bank's Monthly Review for August 1959. Data for 1963 are not yet available. BANK ANNOUNCEMENTS Debits to Demand Deposit Accounts (Continued from Page 4) In s u r e d name and location to The Citizens State Bank of Augusta, Augusta, Georgia, and on April 1 began to remit at par. Officers are Travis F. Starr, President and Cashier; and P. G. Blitch, Vice President. On April 1, the Vidalia Banking Company, Vidalia, Georgia, became a member of the Federal Reserve Sys tem and began to remit at par for checks drawn on it when received from the Federal Reserve Bank. Officers include C. M. Jordan, President; H. S. Vandiver and P. W. Tippett, Vice Presidents; and W. A. Humphrey, Cashier. On April 4, the First National Bank of Cape Canav eral, Cape Canaveral, Florida, a newly organized mem ber bank, opened for business and began to remit at par. Officers include Charles O. Andrews, Jr., Chair man of the Board; Ray Dahl, President; William L. Risley, Jr., Vice President; and Morris A. Rowe, Cashier. Capital is $400,000, and surplus and other capital funds, $200,000, as reported by the Comptroller of Currency at the time the charter was granted. The First Bank of Gulfport, Gulfport, Florida, a newly organized nonmember bank, opened for business on April 4 and began to remit at par. Officers are R. Vernon Eckert, Chairman of the Board; Noble C. Doss, President; James T. Christian, Executive Vice Presi dent; and Cary H. Day, Cashier. Capital is $225,000, and surplus and undivided profits, $225,000. On April 6, the Comptroller of the Currency issued to the former Metropolitan Bank of Miami, Miami, Florida, a state member bank, a certificate of authority to commence business as the Capital National Bank of Miami. The conversion was effective at the close of business April 3. Officers include S. Mort Zimmerman, Chairman of the Board; Theodore A. Davis, Jr., Presi dent; Clarence B. Beutel, Vice President and Cashier; Joseph M. Barnes, Jose M. Garcia, and Homer C. Smith, Vice Presidents; and Neal B. Brown, Comp troller. Capital is $1,819,125, and surplus and un divided profits, $726,088, as reported by the Comp troller of Currency at the time of the conversion. The First State Bank, Waynesboro, Mississippi, a nonmember bank, began to remit at par on April 14. Officers are W. D. Mangum, President; and John G. Giles, Jr., Vice President and Cashier. On April 15, the American National Bank of Bir mingham, Birmingham, Alabama, a newly organized member bank, opened for business and began to remit at par. Officers include Oscar Hyde, President and Chairman of the Board; Joseph F. Costa, Jr., Executive Vice President; Leroy S. Gaillard, Jr., Vice Presi dent; and Richard C. Hutcheson, Cashier. Capital is $300,000, and surplus and other capital funds, $300,000, as reported by the Comptroller of Currency at the time the charter was granted. The Lincoln National Bank of Miami, Miami, Flor ida, a newly organized member bank, opened for busi ness on April 20 and began to remit at par. Officers are Frank M. Buchanan, President; Davis L. Statton, Sr., Executive Vice President; Louis J. Diek, Jr., Vice Presi dent and Cashier; and Leonard E. Treister and Dr. John O. Brown, Sr., Vice Presidents. Capital is $240,000, and surplus and other capital funds, $360,000, as reported by the Comptroller of Currency at the time the charter was granted. C o m m e r c ia l B a n k s in t h e S i x t h D is t r ic t (In Thousands of Dollars) Mar. 1964 Feb. 1964 STANDARD METROPOLITAN STATISTICAL AREAS Birmingham . . . 1.096.127 Gadsden . . . . 55,131 142,754 Huntsville . . . Mobile . . . . 398,679 Montgomery . . . 242,865 Tuscaloosa . . . 69,063 984,016 50,289 126,701 337,835r 214,256 65,025 Percent Change Year-to-date 3 Months Mar. 1964 from i %4 Feb. Mar. from Mar. 1964 1963 1963 1963 959,742 47,215 104,685 340,837 229,648 63,033 + 11 +10 + 13 +18 +13 +6 +14 + 17 +36 +17 +6 + 10 + 11 + 11 +31 +9r +8 +7 Ft. LauderdaieHollywood . . Jacksonville . . . Miami . . . . Orlando . . . . Pensacola . . . Tampa-St. Petersburg W. Palm Beach . . 451,397 1,145,260 1,775,069 496,292 152,220 1,060,190 356,063 403,625 1,050,117 1,585,213 447,131 136,181 964,154 343,789 392,088 962,238 1,565,363 410,047 139,074 933,851 311,142 + 12 +9 + 12 + 11 +12 + 10 +4 + 15 +19 + 13 + 21 +9 +14 + 14 +18 + 16 +9 + 14 +10 + 11 +10 Albany ......................... Atlanta . . . . Augusta* . . . . Columbus . . . . Macon......................... Savannah . . . . 68,079 3,201,398 150,607 164,049 178,422 203,978 62,505 2,803,871 137,024 150,010 161,834 186,255 58,190 2,906,707 141,147 134,041 161,883 186,492 +9 + 14 +10 +9 + 10 + 10 +17 + 10 +7 + 22 + 10 +9 +13 +6 +6 + 19 +9 +9 Baton Rouge Lafayette Lake Charles New Orleans . . . . 363,100 80,239 89,821 1,836,217 315,785 79,454 83,031 1,613,687 310,231 74,718 87,371 1,619,733 + 15 + 1 +8 + 14 + 17 +7 +3 + 13 +9 + 14 +5 + 13 406,622 401,349 369,964 + 14 461,515 355,787 1,059,289 379,307 321,545 1,016,625 387,524 314,505 855,429 + 1 + 22 + 11 +4 + 10 Chattanooga . . . Knoxville . . . . Nashville . . . . +19 + 13 +24 +10 +8 + 19 OTHER CENTERS Anniston . . . . Dothan . . . . S e lm a ......................... 49,143 43,524 30,376 45,319 41,304 30,938 43,886 41,459 28,960 +8 + 5 —2 + 10 +6 + 13 27,524 51,151 167,647 71,615 26,056 44,982 147,565 62,975 23,265 46,643 119,019 65,973 +6 + 14 + 14 + 14 + 12 +5 +6 + 18 + 10 +41 +9 . 61,109 63,951 20,851 106,878 45,446 17,606 261,727 88,473 90,013 545,464 55,577 61,051 58,647 21,182 87,881 43,170 n.a. 228,537 82,043 81,731 506,617 54,677 55,420 51,517 18,959 94,820 44,523 16,362 232,756 82,518 70,197 483,588 46,813 + 11 + 18 + 13 +7 +0 n.a. +9 +6 +13 + 11 + 15 Athens . . . . Brunswick . . . Dalton......................... Elberton . . . . Gainesville . . . G riffin ......................... LaGrange . . . . Newnan . . . . R o m e ......................... Valdosta . . . . 50,792 35,755 69,326 9,515 56,868 24,689 19,867 22,206 59,707 40,090 45,269 32,580 66,593 10,947 53.922 22^012 17,328 20,076 53,168 33,664 42,911 33,939 57,631 10,080 53,280 21,184 16,264 20,853 49,675 35,328 + 22 +5 n.a. + 15 + 8 +10 +8 +2 + 12 + 10 +4 — 13 +5 + 12 + 15 +11 +12 +19 + 11 +24 + 10 + 13 +2 +8 + 12 +7 + 28 + 13 +19 +18 +5 + 20 —6 +7 + 17 + 22 +6 + 20 + 13 + 11 + 12 +22 +6 +7 +7 + 12 +7 + 17 + 6 Abbeville Alexandria Bunkie . Hammond New Iberia Plaquemine Thibodaux 8,121 92,947 4,328 24,939 30,591 7,528 18,456 7,947 86,817 4,091 25,220 26,850 6,739 16,740 7,752 81,621 4,470 23,900 26,398 6,308 17,662 +2 +7 +6 —1 + 14 +12 + 10 + 5 +14 —3 +4 + 16 + 19 +4 +8 + 14 —1 +6 + 19 + 18 + 10 Biloxi-Gulfport . . Hattiesburg . . . Laurel ......................... Meridian . . . . Natchez . . . . PascagoulaMoss Point . . Vicksburg . . . Yazoo City . . . 72,500 38,217 31,033 54,552 28,369 68,360 40,164 28,812 51,055 30,063 66,817 38,320 27,480 46,506 26,354 +6 —5 +8 +7 —6 +9 —0 + 13 + 17 +8 + 10 +5 + 13 +0 + 13 38,623 27,852 16,855 34,702 26,727 17,341 37,855 24,189 16,576 + 11 +4 —3 +2 + 15 +2 + 2 + 14 + 12 Bristol . . . . Johnson City . . . Kingsport . . . 55,065 57,013 121,913 48,363 51,454 89,616 50,974 50,175 108,576 + 14 + 11 +36 +8 + 14 + 12 +0 + 12 + 11 20,382,695 19,929,111 2,663,244r 2,585,821 6,724,120 6,474,686 4,715,617 4,848,257 2,777,713 2,769,436 945,360 882,235 2,556,641 2,368,676 342,900,000 294,900 000r 306,800.000 + 11 +12 + 10 + 13 +13 +2 + 11 + 16 +14 +15 + 14 +10 + 13 + 10 + 20 + 11 +12 + 11 +7 + 12 + 12 + 14 +12 +10 Jackson . . . . . . . . . . . . Bartow . . . . Bradenton . . . Brevard County . . Daytona Beach . . Ft. IViyersN. Ft. Myers . . Gainesville . . . Key West . . . . Lakeland . . . . O c a la ......................... S t. Augustine . . St. Petersburg . . Sarasota . . . . Tallahassee . . . Winter Haven . . . . . . . . . . . . . . . . . . . . . . SIXTH DISTRICT, Total 22,624,620 Alabamaf . . . 2,986,562 7,369,636 Floridaf . . . . Georgiaf . . . . 5,338,078 Louisiana^** . . 3,130,483 Mississippi^** . . 967,103 Tennesseef** . . 2,832,758 U.S., 344 Cities . . *Richmond County only. tPartially estimated. + 1 +9 —2 +16 +*♦ +37 + 11 **Includes only banks in the Sixth District portion of the state. r Revised. n.a. Not available. •6 • S ix t h D is t r ic t S t a t is t ic s S easonally Adjusted (All data are indexes, 1957-59 = Latest Month (1964) One Month Ago Two Months Ago 100, unless indicated otherwise.) One Year Ago Latest Month (1964) One Month Ago Two Months Ago One Year Ago S IX T H D IS T R IC T G E O R G IA INCOME AND SPENDING INCOME AND SPENDING Personal Income, (M il. $, Annual Rate) . . Feb. Manufacturing P a y ro lls * * * ............................... Mar. Farm Cash R e c e i p t s ........................................... Feb. Department Store S a l e s * * ...............................Mar. 8,131 146 126 134 8,092r 144 119 132 7,871r 143 PRODUCTION AND EMPLOYMENT Nonfarm E m p lo y m e n t* * * ...............................Mar. M anufacturing***........................................... Mar. Nonmanufacturing***..................................... Mar. Construction***........................................... Mar. Farm Employment................................................. Mar. Insured Unemployment, (Percentof Cov. Emp.) Mar. Avg. Weekly Hrs. in Mfg., (H rs.)*** . . . Mar. 117 113 119 117 71 2.6 41.0 116 115 118 114 71 40.7 117 106 71 3.1 40.8 3.0 40.0 173 150 156 170 143 149 170 140 143 150 134 149 Personal Income, (M il. $, Annual Rate) . . Manufacturing P a y r o lls * * * ............................... Farm Cash R e c e ip t s ........................................... C r o p s .................................................................... Livestock .............................................................. Department Store S a l e s * / * * ......................... Instalment Credit at Banks, *(M il. $) New Loans.............................................................. R epaym en ts........................................................ PRODUCTION AND EMPLOYMENT Nonfarm E m p lo y m e n t* * * ............................... M anufacturing ***........................................... A p p a r e l* * * .................................................. C hem icals***................................................. Fabricated M e ta ls * * * ............................... Food*** ......................... Lbr., Wood Prod., Furn. & F ix .* * * . . P a p e r * * * ........................................................ Primary M e ta ls * * * ..................................... T e x t i l e s * * * ................................................. Transportation Equipment*** . . . Nonmanufacturing***..................................... Co nstruction***........................................... Farm Em ploym ent................................................. Insured Unemployment, (Percentof Cov. Emp.) Avg. Weekly Hrs. in Mfg., (H rs.)*** . . . Construction C o n tracts*..................................... Residential ....................................................... All O th e r.............................................................. Industrial Use of Electric Power . . . . Cotton C o n su m p tio n **..................................... Petrol. Prod, in Coastal La. and M iss.** FINANCE AND BANKING Member Bank Loans* All B a n k s ............................................................. Member Bank Deposits* All B a n k s .............................................................. Bank D e b i t s * / * * ................................................. Feb. 43,098 43,237r 144 142 Mar. 137 Feb. 132 Feb. 146 149 Feb. 117 122 Apr. 134p 139 Mar. Mar. 188 166 180 158 42,553r 141 152 177 109 137 184 175 39,668 132 114 112 115 118 178 154 Mar. Mar. Mar. Mar. Mar. Mar. Mar. Mar. Mar. Mar. Mar. Mar. Mar. Mar. Mar. Mar. Mar. Mar. Mar. Feb. Mar. Mar. 115 114 135 110 119 104 93 110 102 96 126 115 105 81 3.3 41.2 162 176 150 124 105 161 114 113 135 110 117 106 94 109 100 95 122 115 103 84 3.5 41.1 165 156 172 121 101 168r 114 113 135 110 118 105 95 109 103 94 124 114 99 82 3.9 40.8 201 165 232 121 95 165r 111 110 132 106 110 103 92 108 100 95 118 112 99 87 4.1 40.7 125 127 123 113 100 156 Mar. Apr. 170 160 168 158 166 156 149 141 Mar. Apr. Mar. 142 131 148 139 133 145 137 129 142 130 124 137 FINANCE AND BANKING Member Bank L o a n s ........................................... Mar. Member Bank D e p o s it s ..................................... IVIar. Bank D e b it s * * ....................................................... Mar. 2.8 129 112 7,535 129 114 136 113 109 115 120 86 L O U IS IA N A INCOME AND SPENDING Personal Income, (M il. $, Annual Rate) . . Manufacturing P a y ro lls * * * ............................... Farm Cash R e c e ip t s ........................................... Department Store S a l e s * / * * ......................... Feb. Mar. Feb. Mar. 6,402 128 158 121 6,456r 127 155 117 6,262r 128 170 119 6,027 121 115 115 PRODUCTION AND EMPLOYMENT Nonfarm E m p lo y m e n t* * * ............................... M anufacturing***........................................... Nonmanufacturing***..................................... Construction***........................................... Farm Employment................................................. Insured Unemployment, (Percentof Cov. Emp.) Avg. Weekly Hrs. in Mfg., (Hrs.) . . . . Mar. Mar. Mar. Mar. Mar. Mar. Mar. 104 101 105 88 78 3.9 42.3 104 101 105 87 84 3.7 42.1 104 101 104 84 81 4.0 42.2 102 98 103 85 86 4.7 42.6 FINANCE AND BANKING Member Bank L o a n s * ........................................... Member Bank D e p o sits*..................................... Bank D e b i t s * / * * ................................................. Mar. Mar. Mar. 153 125 131 157 125 132 154 125 129 140 119 121 Feb. Mar. Feb. Mar. 3,299 152 140 106 3,244r 151 122 111 3,123r 148 203 105 Mar. Mar. Mar. Mar. Mar. Mar. Mar. 118 121 117 113 77 4.3 40.7 117 121 116 112 81 4.4 40.8 117 120 116 111 75 5.2 40.4 115 117 114 113 82 4.8 40.2 Mar. Mar. Mar. 187 152 152 189 150 156 189 147 150 165 141 147 Feb. Mar. Feb. Mar. 7,020 142 109 117 7,261r 141 177 116 6,595r 142 97 117 6,431 131 117 123 115 118 114 141 90 4.2 40.9 115 117 114 140 91 4.4 40.7 115 118 113 132 91 4.9 41.0 110 113 109 123 93 5.3 40.6 171 143 155 172 139 150 167 136 141 152 134 137 M ISS IS S IP P I ALABAM A INCOME AND SPENDING Personal Income, (M il. $, Annual Rate) . , Manufacturing P a y ro lls * * * ............................... Farm Cash R e c e ip t s ........................................... Department Store S a l e s * * .............................. Feb. Mar. Feb. Mar. 5,932 130 136 114 5,927 130 128 116 5,842r 126 145 115 5,519 125 129 119 PRODUCTION AND EMPLOYMENT Nonfarm E m p lo y m e n t* * * ............................... M anu factu rin g ***........................................... Nonmanufacturing***..................................... Co nstruction***........................................... Farm Em ploym ent................................................. Insured Unemployment, (Percent of Cov. Emp.: Avg. Weekly Hrs. in Mfg., (Hrs.) . . . , Mar. Mar. Mar. Mar. Mar. Mar. Mar. 109 104 111 103 78 3.5 40.8 108 103 110 101 86 3.8 41.3 108 103 110 100 84 4.4 40.2 107 103 108 94 82 4.2 40.1 FINANCE AND BANKING Member Bank L o a n s .......................................... Member Bank D e p o s it s .................................... Bank D e b i t s * * ................................................. ..... Mar. Mar. Mar. 171 142 148 164 140 142 165 141 139 150 129 135 INCOME AND SPENDING Personal Income, (M il. $, Annual Rate) Manufacturing Payrolls*** . . . . Farm Cash R e c e ip t s ............................... Department Store Sales*/** . . . PRODUCTION AND EMPLOYMENT Nonfarm Employment*** . . . . M anufacturing***............................... Nonmanufacturing***......................... Insured Unemployment, (Percent of Cov. Emp.) Avg. Weekly Hrs. in Mfg., (Hrs.) . . . . FINANCE AND BANKING Member Bank L o a n s * ........................................... Member Bank D e p o sits*..................................... INCOME AND SPENDING Personal Income, (M il. $, Annual Rate) Manufacturing Payrolls*** . . . . Farm Cash R e c e ip t s ............................... Department Store Sales*/** . . . INCOME AND SPENDING Personal Income, (Mil. $, Annual Rate) . . Feb. Manufacturing P a y ro lls * * * ...............................Mar. Farm Cash R e c e ip t s ........................................... Feb. Department Store S a l e s * * ...............................Mar. 12,314 172 134 175 12,257r 169 134 171 12,860r 166 168 167 11,119 158 103 158 PRODUCTION AND EMPLOYMENT Nonfarm E m p lo y m e n t* * * ...............................Mar. M anufacturing ***........................................... Mar. Nonmanufacturing***..................................... Mar. Construction***........................................... Mar. Farm Employment................................................. Mar. Insured Unemployment, (Percent of Cov. Emp.) Mar. Avg. Weekly Hrs. in Mfg., (Hrs.) . . . . Mar. 123 126 122 97 95 2.6 42.0 122 126 122 118 94 93 2.7 41.4 122 127 121 93 97 3.0 40.5 117 92 98 3.6 41.5 Insured Unemployment, (Percent of Cov. Emp.) Avg. Weekly Hrs. in Mfg., (Hrs.) . . . . Mar. Mar. Mar. Mar. Mar. Mar. Mar. 172 143 148 169 142 146 167 140 147 148 130 136 FINANCE AND BANKING Member Bank L o a n s * ........................................... Member Bank D e p o sits*..................................... Bank D e b i t s * / * * ................................................. Mar. Mar. Mar. FINANCE AND BANKING Member Bank L o a n s ........................................... Mar. Member Bank D e p o s it s ..................................... Mar. Bank D e b it s * * ....................................................... Mar. 3,037 139 141 110 TEN N ESSEE F LO R ID A 121 *For Sixth District area only. Other totals for entire six states. **Daily average basis. ing have been revised in accordance with the 1963 state employment agency benchmarks. Sources: Personal income estimated by this Bank; nonfarm, mfg. and nonmfg. emp., mfg. consumption, U. S. Bureau of Census; construction contracts, F. W. Dodge Corp.; petrol, receipts and farm emp., U.S.D.A. Other indexes based on data collected by this Bank. All 112 120 PRODUCTION AND EMPLOYMENT Nonfarm Employment*** . . . . M anufacturing***............................... ***Figures for manufacturing payrolls, employment, and average weekly hours in manufactur p Preliminary. r Revised. payrolls and hours, and unemp., U. S. Dept, of Labor and cooperating state agencies; cotton prod., U. S. Bureau of Mines; industrial use of elec. power, Fed. Power Comm.; farm cash indexes calculated by this Bank. •7 • D IS T R IC T Billions Of Doll —AnnualRate Seas Adj B U S IN E S S C O N D IT IO N S B usiness activity continues to advance with gains distributed w idely. The job picture improved further as the number of nonfarm jobs rose, w hile insured unemployment slipped to low er levels. Strong demand characterized the consumer sector, and farm ers pocketed large cash receipts from farm m arketings. In the financial sector, banks continued to expand asset holdings, and sales of District state and municipal bonds w ere brisk. j/ j/ District nonfarm em ploym ent continued to expand in March, and the rate of insured unemployment dropped to the lowest level since 1953. All states except Louisiana experienced employment gains in manufacturing and other forms of nonfarm activity. Gains in construction employment in all states, especially in Florida and Georgia, boosted the District level to a record high. Most manufacturing employment categories were also up. Strong in creases in primary and fabricated metals and in transportation equipment more than offset a decline in food processing. A rise in average weekly hours helped to enlarge manufacturing payrolls. \S Strong demand characterized the consumer sector in ea rly spring. In March, department store sales advanced for the fifth consecutive month; however, preliminary data reveal that a decline occurred in April. Bank debits also rose, and sales at furniture stores remained at the high level reached in the previous month. Sales tax collections and retail sales, available with a greater time lag, showed increases in the first two months of the year. New automobile sales remained buoyant. Consumers m aintained their borrowing at a fast pace. Consumer instalment credit outstanding at commercial banks expanded further during March. The net addition to outstanding debt was about as large as it was in the previous month. Gains in the volume of personal and auto loans accounted for three-quarters of the increase in debt, while loans for other consumer goods and repair and modernization purposes were up slightly. Despite a setback from excessive April rains and a sharp freeze in late March, overall expansion m arks the farm economy. Farm market ings have climbed upward, as farmers sold increasingly large volumes of live stock and poultry products, especially eggs and milk, and as they accelerated the tempo of vegetable and citrus harvests. jX District banks continued to expand their asset holdings as deposits and cash assets advanced briskly in March. Reports from member banks in leading cities show no gains in deposits through the first four weeks in April. However, total cash assets and bank loans continued to increase. Loans comprised the major component of the expanded asset holdings of these weekly reporting banks. No change was recorded in U. S. Government secur ity holdings, and purchases of municipals were on a reduced scale. Time deposit growth in this four-week period almost matched the unusually high rate achieved in the corresponding period in 1962. ^ .PERCENTOFREQUIREDRESERVES Excess Reserves ♦ Se a s. adj. figure; not an index. Sixth District states accounted for slightly more than one-fifth of the state and municipal bonds sold in the United States in March. Florida accounted for almost three-fourths of the total sales by the six District states and for nearly half of the District’s volume for the first quarter of the year. Mississippi led all other District states in first-quarter sales of state and local government securities for industrial development purposes. N o t e : D a t a o n w h ic h s e a s o n a l in flu e n ce s. sta te m e n ts a re b a se d h a v e b e e n a d ju ste d w h e n e v e r p o s s ib le to e lim in a t e
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