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Atlanta, Georgia
May

A ls o

•

1965

in

t h is

is s u e :

PROFITS JUMP AT
DISTRICT BANKS

SIXTH DISTRICT
STATISTICS

DISTRICT BUSINESS
CONDITIONS

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f f e e

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Indebted Cotton Farmers
Our Poor Relations:
Fact or Fantasy?
Our ideas about economic and credit conditions frequently fall short
of reality, usually because we are not intimately acquainted with the
specifics involved. If you were to ask the average person to give his
impressions of the debt status of cotton farmers, he might begin his
answer somewhat like this: Well, cotton is grown in the South, so
cotton farmers must be southerners. They probably are rather un­
happily tied to landlord financing and to merchant and dealer credit,
which they use to purchase the necessities of life— seed, fertilizer, and
food. Usually, if they are tenant farmers, they find themselves in debt
at the end of each year. In fact, it seems to me that the landlord’s
situation is only slightly less oppressive than that of his tenants. Because
he ordinarily stakes everything on a single cash crop that is plagued by
wildly fluctuating prices, he also probably sinks into debt quite fre­
quently.
This answer would have been most accurate some thirty years ago.
However, cotton farming and the economic status of cotton farmers
are quite different today. New facts have been made available recently
that enable us to compare commonly accepted views about the debt of
cotton farmers with their actual status. This information was obtained
from a survey of farm debt in 1960 that was conducted by the Census
Bureau in cooperation with the Federal Reserve System, the United States
Department of Agriculture, and the Farm Credit Administration.1 In­
formation from this survey enables us to answer such questions as: How
heavily indebted are cotton farmers? Do they borrow as much as other
types of farmers? Are most of the indebted cotton farmers in the
South? What sources of credit do they use? What are the characteristics
of the typical borrower?
D e b t N o t U n iv e r s a l
Contrary to our average observer’s general impression, not every cotton
farmer is continually burdened with debt. When the survey was made
in November and December 1960, only about 54 percent of the nation’s
219,000 cotton farm operators were indebted. Although this percentage
reflected the traditional lull in farm borrowings that occurs “between
crops,” it was, nevertheless, rather low relative to that for other types
of farmers who pay on debts in the fall and winter. Thus, proportionately
fewer cotton farmers were indebted than were cash grain farmers, live­
stock operators, and other farmers with field crops, fruits and nuts, and
vegetables. Furthermore, their debts were generally smaller: On the
average, cotton farmers owed about $7,300, compared with about
1The 1960 Sample Survey of Agriculture provided the first comprehensive survey of total
farm debts. The first article on the survey was published in the Federal Reserve Bulletin for
December 1962. Definitions of debt and other pertinent information about the survey are
contained in that article and in a statistical handbook, Farm Debt, Data from the 1960
Sample Survey of Agriculture, Federal Reserve Board of Governors, 1965.

$10,300 for cash grain farmers and others with seasonal
credit needs (Chart 1). The smaller average debt owed by
cotton farmers, of course, strongly reflects the relatively
small scale of their operations. Although farm consolida-

Chart II: Cotton Farms with Debt: Average Debt, by
Region, 1960

Chart I: Average Total Debt of Indebted Commercial
Farm Operators, 1960

farmed by indebted cotton farmers and received more than
half of the cash receipts earned by this group. The cash
receipts of all cotton farmers accounted for 7 percent of
the national total in 1960.

tion has led to an increase in cotton acreage over the
years, the average cotton farmer in debt operated 265
acres in 1960, while those without debt operated 151 acres
on the average.
Moreover, when we cast cotton farmers’ aggregate in­
debtedness against that of other farm operators in 1960,
we see that they owed only 5 percent of the $16.8-billion
total farm debt outstanding with farm operators in 1960.
A small increase in this ratio occurs when we include
the $256 million owed by landlords of cotton farms in
the total. Cotton farmers owed about the same proportions
of real estate and non-real estate debts as most other
major types of farmers. In the fall of 1960, about 60 cents
out of each dollar of indebtedness was for real estate,
while 40 cents was for non-real estate.
S o u th V e rsu s W e s t
In the past three decades, cotton farming, long the spe­
cial province of southern growers, has moved West. Greatly
enhanced by an expansion in the supply of water made
available for irrigation, the West has become an im­
portant cotton-producing region and a powerful com­
petitor of the South. By 1960, the West (defined for
purposes of the survey to include Oklahoma and Texas,
states traditionally classed as southern cotton-producing
states) was producing 55 percent of the nation’s cotton
crop.
Indebted cotton growers were more numerous in the
South than in the West in 1960, but their debts were
smaller. When the survey was made, there were 52,000
cotton farmers in the West, and 32,000 of them were
indebted. Although they accounted for only about onefourth of the nation’s 119,000 indebted cotton farmers,
western operators owed 57 percent of the total farm debt
of cotton farmers, while southern growers owed 43
percent. The proportions were similar for major real
estate indebtedness and non-real estate and related debt.
Moreover, the average total debt of a western grower
was almost four times larger than the average for a
southern grower— about $15,500, compared with about
$4,300 (Chart 2). Western growers in debt, of course,
had larger farms and earned sizable incomes. In fact,
when the survey was made, they operated half of the land



Cotton Farm Operators with Debt,
by Region, 1960*
United
West** States

South
Number of Indebted Farm Operators (000)

Percent of Total

87
73

32
27

119
100

16
50
184

16
50
500

32
100
261

154
54
4 ,792

285
100
2,396

66
45
2,057

146
100
1,233

371
43
4,283

498
57
15,450

868
100
7,313

211
43

282
57

492
100

2,436

8,737

4,145

160
43

216
57

376
100

1,847

6,713

3,167

Size of Farms

Number of Acres Operated
(Millions of Acres)
Percent of Total
Average Acres Operated
Farm Income

Net Cash Farm Income of Operators
(Millions of Dollars)
130
46
Percent of Total
Average Dollar Income per Farm
1,504
Off-Farm Income of Farm Operators
and Family (Millions of Dollars)
80
Percent of Total
55
Average Dollar Income per Farm
926
Farm D ebt of Indebted Operators

Total Debt of Operators
(Millions of Dollars)
Percent of Total
Average Total Debt per Farm
Major Real Estate Debt of Operators
(Millions of Dollars)
Percent of Total
Average Major Real Estate
Debt per Farm
Non-Real Estate and Related Debt
(Millions of Dollars)
Percent of Total
Average Non-Real Estate and
Related Debt per Farm

*TotaIs may not add because of rounding.
♦♦For purposes of this study, the West was defined to include Oklahoma and
Texas, which usually are considered southern cotton-producing states.

G r o w e r s B o r r o w fr o m T r a d itio n a l
C r e d it S o u r c e s
After noting that cotton farmers were enlarging their
farms and otherwise responding to advanced cotton tech­
nology, a casual observer may have reasoned that they
were drawing borrowed funds from new or different out­
lets. He also probably speculated that farm specialization
would logically cause them to seek across-the-board
financing from one source. Contrary to this conception,
however, the survey reveals that cotton growers in 1960
•2 •

were utilizing many credit sources. Furthermore, most
of them have traditionally served cotton growers.
Long-term Credit Cotton growers’ major real estate in­
debtedness indicates their reliance on creditors of long
standing— the Federal land banks since 1916, commercial
banks for an even longer time, and, of course, individuals,
such as farmers, who sold them farms. Overall, most
cotton growers with major real estate debt in 1960 were
financed by Federal land banks, commercial banks, and
individuals. Almost a third of the operators with major
real estate debt that year had borrowed funds from Federal
land banks. Individuals selling their farms and obtaining a
mortgage were creditors of about one-fourth of the
borrowers, while commercial banks were third in numbers
of borrowers with major real estate debt. In the South
especially, the Farmers Home Administration and in­

ratio of major real estate debt to the value of land and
buildings owned is also the smallest for cotton growers.
Variations occurred among the specific credit sources,
however. Measured by the lending ratios, individuals and
insurance companies were the most liberal creditors for
cotton farmers with major real estate debt, while Federal
land banks were the least liberal. This pattern prevailed
in both the South and West.
Short-term Credit With respect to production credit,
many cotton farmers have relied for years on merchants
and dealers to supply “furnish,” i.e., food, seed, guano or
fertilizer, plows, and other personal and production items,
when the crop season opens in the spring. Such debts would
not be paid until after harvest in the fall. This may seem
a bit out of date to many of us. Yet, surprisingly enough,
the survey data indicate that merchants and dealers still

Cotton Farm Operators with
Major Real Estate Debt, by
Source of Debt, 1960

Source of M ajor
Real Estate D ebt

N um ber of
Farm
Operators
(000)

Federal Land Banks
Farmers Home Administration
Insurance Companies
Commercial and Savings Banks
Other Institutions
Individual Sellers by Mortgage
Individual Sellers by Land Contract
Other Individuals

14
5
5
8
3
11
2
1

Farm Operators with
D ebt to Specified Source
Non-Real
Estate and
Total D eb t *
Related D ebt

A m ount of
M ajor
Real Estate
D ebt Owed to
Each Source

(Millions of Dollars)

(Millions of Dollars)

178
35
262
72
47
205
90
9

36
7
80
18
13
67
21
1

142
29
181
54
34
138
68
7

Proportion of
D ebt in
South
West
(Percent)

31
79
52
37
26
26
13
43

69
21
48
63
74
74
87
57

♦Totals may not add because of rounding.

surance companies also had served numerous borrowers.
Cotton farmers indebted solely to insurance companies
for major real estate debt in 1960 owed the largest aggre­
gate amount— about $136 million. Federal land bank
debtors owed the banks $108 million; debtors to individ­
uals from whom the farm was purchased under a mortgage
owed about $92 million; and those who purchased under
land contract owed about $44 million. Cotton farmers in­
debted to commercial banks owed about $47 million for
major real estate debt.
These debt aggregates, of course, obscure significant
differences in cotton farmers’ average indebtedness to their
credit suppliers. Insurance company debtors in 1960
owed the companies about $26,000, on the average, com­
pared with about $7,500 owed to individuals on mortgages.
Again, western growers had larger average debts than
southern growers, reflecting, of course, variations in farm
sizes, farm valuations, and farm incomes. Judging from
their average incomes, however, western growers with
major real estate debt in 1960 had the greatest potential
for repaying their debts.
Creditors have been relatively conservative in their
long-term lending to cotton growers, judging from the
survey data. The ratio of total debt to income for cotton
farmers with major real estate debt is the smallest among
the ratios for the major types of farmers. Furthermore, the



were providing substantial short-term financing to cotton
growers in 1960. Although the size, value, and tech­
niques of cotton farming operations have changed con­
siderably during the transition from the mule-power age
to the mechanical age, merchants and dealers evidently
stand ready to supply cotton farmers with funds to finance
the purchase of machinery, fuel, fertilizer, spray materials,
and the other production requirements of a modern farm.
Merchants and dealers were top-ranking suppliers
of funds for non-real estate and related financial purposes
in 1960. While almost 60 percent of the nation’s indebted
cotton farmers owed funds to merchants and dealers,
the South contained about three such debtors to each one
in the West. In the aggregate, cotton farmers owed mer­
chants and dealers about $243 million, a total significantly
higher than the $174 million they owed commercial banks
and the $89 million they owed the credit co-operatives
known as production credit associations. The average
amount owed to merchants and dealers, however, was
relatively small, compared with the averages for debts
owed to other primary sources of short-term credit, be­
cause many of the farmers indebted to them were southern
operators with small farms. Cotton farmers’ debts to
merchants and dealers were $2,000, on the average, in the
fall of 1960. In comparison, their debts for production
requirements to commercial banks and production credit
•3 •

Cotton Farm Operators with
Non-Real Estate and Related Debt, by
Source of Debt, 1960

Production Credit Association
Farmers Home Administration
Insurance Companies
Commercial and Savings Banks
Other Institutions
Merchants and Dealers
Other Individuals
Miscellaneous

N umber of
Farm
Operators

Am ount of
Non-Real Estate
and R elated
D ebt Owed
Each Source

(000)

Source of
Non-Real Estate
and Related D ebt

Farm Operators with
D ebt to Specified Source
M ajor Real
Total D ebt*
Estate D ebt
(Millions of Dollars)

(Millions of Dollars)

11
5
1
24
7
58
22
14

153
35
26
304
97
506
118
166

65
10
8
130
42
263
54
83

89
25
17
174
56
243
64
83

Proportion of
D ebt in
South
West
(Percent)

44
27
6
36
25
48
39
32

56
73
94
64
75
52
61
68

*TotaIs may not add because of rounding.

associations were about $4,500 and $6,000 per farm,
respectively.
Cotton farmers indebted to major short-term creditors
differed little, if at all, as to age and time on their present
farm, but their farms varied considerably with respect
to the value of land and buildings. Debtors to merchants
and dealers in 1960 were operating farms valued at about
$65,000 on the average, a value influenced considerably
by large growers in the West. Those who owed individuals
were operating farms with relatively small valuations of
about $30,000 per farm, while growers indebted to pro­
duction credit associations and commercial banks had
units valued at approximately $91,000 each. These
average values indicate that many farmers utilizing mer­
chant and dealer credit in 1960 had sufficient financial
resources to obtain production financing from commer­
cial banks and production credit associations if they had
wished. Possibly, cotton farmers were receiving certain
services from merchants and dealers that are not ordi­
narily provided by other credit sources.
Landlord Debt Landlords are still important in the
financing of cotton production. In 1960, 171,000 of the
219,000 commercial cotton farmers were using rented
land. Altogether, they rented 25 million acres, with an
average acreage of 148 acres. However, only 51,000
farmers had an indebted landlord. On 39,000 farms, one
or more of the landlords had major real estate debt, and
there was at least one landlord with non-real estate and
related debt on 29,000 farms. When the survey was made
in 1960, the indebted landlords owed about 29 percent
of all farm debt outstanding on cotton farms.
As in earlier years, relatively few cotton farmers rent­
ing land in 1960 had paid their rent in cash. Typically,
the renter had given the landlord a share of his crop sales.
This share covered about 85 percent of the total rent, while
the other 15 percent was paid in cash.
Landlord indebtedness was largely for major real estate
purposes, such as buying and improving land and build­
ings. They obtained financing primarily from insurance
companies, Federal land banks, and commercial or savings
banks. Non-real estate financing was obtained mainly
from commercial and savings banks and from merchants
and dealers. Landlords’ indebtedness was relatively well



margined in 1960, judging from survey data indicating
that their rental receipts exceeded their total indebtedness

Commercial Cotton Farm Operators, 1960
South

West

Number of All Cotton Farm
Operators (0 0 0 )
167
Percent of Total
76
Net Cash Farm Income of All Cotton
Farm Operators (Millions of D ollars) 243
Percent of Total
47
Value of Land and Buildings Operated
by All Cotton Farm Operators
3,633
(Millions of Dollars)
39
Percent of Total
Value of Land and Buildings Owned
by All Cotton Farm Operators
(Millions of Dollars)
1,711
37
Percent of Total

United
States

24

219
100

272
53

515
100

5 ,722
61

9,355
100

2,942
63

4,653
100

52

Note: For purposes of this comparison, the West is defined to include Okla­
homa and Texas, which usually are considered southern states.

Cotton Farms with Rented Land, 1960
Selected Characteristics
Num ber of Farms (In Thousands)

Total
No Landlord Debt
With Landlord Debt:
Any Debt
Major Real Estate Debt
Non-Real Estate and Related Debt
Total Acres Rented (Millions of Acres)
Average Acres Rented (Number of Acres)
Land and Buildings Rented, Average Value (In Dollars)

171

120
51
39
29
25
148
27,548

Rent:

Total (Millions of Dollars)
Landlords’ Share of Farm Sales (Millions of Dollars)
Cash Rent (Millions of D ollars)
Total Rent (Average in D ollars)

417
354
63
2 ,440

Landlord Debt:

Total (Millions of Dollars)
256
Major Real Estate Debt (Millions of Dollars)
212
Non-Real Estate and Related Debt (Millions of Dollars)
44
Landlord D ebt: (Per Farm with Such Debt)
Total (In Dollars)
5,058
Major Real Estate Debt (In D ollars)
5,445
Non-Real Estate and Related Debt (In Dollars)
1,532
Debt Per Indebted Landlord Per Farm (In Dollars)
4,310
.

4

.

by about 60 percent. Broadly viewed, the landlord in­
debtedness on cotton farms in 1960 suggests that land­
lord financing for modern farming relates more to obtain­
ing larger farm units and needed volumes of production
supplies than to simply satisfying the minimal needs of
their tenants as in earlier years.
F a r m a n d F a r m e r C h a r a c t e r i s ti c s a n d D e b t
Not too many years ago, most persons thought of the
typical cotton farmer as eking out a living from a cotton
patch on his small farm. Furthermore, he was thought
to command relatively few borrowed financial resources.
Facts from the 1960 survey, however, require us to alter
that image. Although many indebted cotton farmers still
were operating small units and owed small debts, many
others had large farms and owed substantial sums.
Furthermore, relationships among farm value, income,
and debt were exerting a strong influence on cotton farm­
ers’ debt position in 1960, according to the survey data.
The higher the valuation of an indebted cotton farm,
the larger the operator’s income and the larger his debt.
However, only when farms were valued at more than
$200,000 did debts increase significantly (Chart 3).
The close association between cotton farmers’ income
and debt may also be illustrated by classifying indebted
farmers according to gross farm sales. Indebted cotton
farmers in the top economic class— $20,000 or more in
value of farm products sold— operated farms valued at
about $211,000 and had total debts outstanding of about
$28,000 per farm. In the lowest economic class— $50
to $4,999 in gross sales annually—farms were valued at
about $11,000 each and carried total debts that averaged
about $1,400 per farm.
Although small cotton farmers owed some debt, farm­
ers in the upper economic strata who operated farms
valued at $40,000 or more owed about 85 percent of the
total debt outstanding in 1960. However, only about onethird of the indebted operators were in that group. Those
operators also owned most of the wealth that supported

Chart III: Cotton Farms with Debt: Average Major
Real Estate Debt and Average Non-Real Estate
and Related Debt, by Value of Land and
Buildings Operated, 1960

these debts since the value of their farm land and build­
ings accounted for 85 percent of the total valuation.
Large Farms and Large Debts in the South Contrary
to the general impression that all cotton farms in the
South are small and have low values and small debts,
many farms in that region are in the upper economic
groups and earn incomes and carry debts on a par with
their western counterparts. True, there were about 61,000
indebted cotton farms in the South in 1960 in the lowest
economic group— those who earned $50 to $4,999 in
annual gross sales. Moreover, the number in that economic
class was about seven times the number in the West. Yet,
also in the South, there were about 6,000 indebted cotton
farms in the top economic group. There were about 15,000
farms in that group in the West.
Farms in the highest economic class had large valu­
ations in both South and West. For the South the average
valuation per farm was about $179,000, compared with
about $225,000 in the West. Debt per farm for this income
group was about the same size in both the South and
West— approximately $30,000 and $27,000, respectively.
Although cotton growers in the lowest economic group

Cotton Farm Operators, by
Economic Class of Farm, 1960*

Number
of Farms
Without
With
D ebt
D ebt

Average Total N et
Cash Income
Without
With
D ebt
D ebt

Average Value Per
Acre Operated
Without
With
D ebt
D ebt

(000)

Region and
Economic Class
of Farm

(Dollars)

(Dollars)

Gross Sales of:
$ 20 ,0 00 and over
$5,00 0 to $19,999
$50 to $4,999
All Classes

Average
Total
Ratio of
D ebt of
Real Estate
Farms D ebt to Value
with
of Land and
D ebt Buildings Owned
(Dollars)

(Percent)

3
12
66
81

6
19
61
87

10,231
5,147
1,428
2,272

9,430
3,887
1,243
2,430

163
134
135
142

190
161
110
156

2 9,847
5,650
1,176
4,283

22
16
15
19

7
8
5
20

15
9
8
32

16,193
4,609
2,312
7 ,899

10,948
4,525
1,843
6,849

320
182
76
246

259
231
174
250

27,032
7,268
3,212
15,450

14
17
13
14

West

Gross Sales of:
$20,000 and over
$5,000 to $19,999
$50 to $4,999
All Classes

♦Totals may not add because of rounding.




• 5 •

in both regions had small debts, the smallest debt average
was in the South where most of the small farms were
located.
Operators’ Tenure Whether individual cotton farmers
were indebted and how much they were in debt depended
to an important degree upon their ownership status or
tenure. While less than half of the tenants and full
owners were indebted when the 1960 survey was made,
almost three-fourths of the part owners had debts. More­
over, both indebted tenants and indebted full owners owed
proportionately less of the total debt outstanding than did
part owners, reflecting differences in numbers of debtors,
as well as the average size of debts for the three groups.
In aggregate terms, indebted tenant operators on cotton
farms were about as numerous as part owners in 1960,
and they were more numerous than full owners. Tenant
operators with debt numbered about 54,000, compared
with 42,000 part owners and 22,000 full owners. The
tenants owed much smaller total debts than the full owners
or part owners, a relationship that may stem partly from
the typical tenant’s inability to keep pace with modern
farm technology and expand his income. Tenants with
small incomes and small debts were largely in the South,
and about half of them were Negroes. While tenant
operators of cotton farms with debt generally had earned
little and owed little in 1960, some indebted tenants were
in the highest economic class with $20,000 or more in
annual gross sales and owed relatively large debts.
Although the average debts of tenants were generally
small, their aggregate debt bulked relatively large in the
total owed by all cotton farmers. Tenants owed about
$103 million in 1960, almost as much as the full owners
but much less than the approximately $500 million
owed by part owners.
It would be natural for most persons to assume that
indebted cotton growers who were full owners earned the
largest incomes, owned the most valuable farms, and
owed the largest debts in 1960. The survey data reveal,
however, that the indebted part-owner group owed rela­
tively larger debts and possessed a substantially higher
debt-repaying capacity. Farmers who were part owners
typically had larger annual gross sales than either full
owners or tenants, and their farms were more highly
valued. Their average debts also were larger, principally
because they owed more non-real estate and related debt.
They also were younger men who had been on their
farms for fewer years than the farmers in the other two
groups, which may partly explain their larger average
debts.
The average indebtedness of part-owner operators was
also closely related to the operator’s economic class
and generally was about as large as the debt owed by full
owners in the same economic group. Part owners in the
top economic class had average major real estate debt
outstanding of about $17,800; it was about $3,800 for
the middle class, and about $1,600 for the lowest class.
The averages for non-real estate and related debt out­
standing were about $11,100, $2,700, and $1,300, respect­
ively. The average debt for full owners was larger only
for the major real estate debt of those in the two upper
economic groupings. Although tenant debt averages were
approximately the same as those for part owners in the



two upper economic groups, they were only half as large
in the lowest economic group because tenants had no
major real estate debt.
The income received by indebted cotton farmers who
were part owners justified in some degree their relatively
large debts. For part owners with debts, the total
value of farm products sold was about $20,000, on
the average, compared with $11,000 for indebted full
owners and $6,700 for indebted tenants. Off-farm income
added about $1,900 to this total for part owners with
debt, which was about the same amount that was earned
by full owners but well above the $500 average earned
by tenants.
Part owners’ relatively strong potential for liquidating
debts was also indicated by the valuations of their land
and buildings. The average valuation of their farms was
about $82,000 in 1960, compared with $44,000 for full
owners and only about $24,000 for tenants. In the West,
the farm valuation for indebted part owners was about
$129,000, compared with only about $53,000 in the
South (Chart 4). Relatively liberal lending by creditors

Chart IV: Cotton Farms: Average Value of Land and
Buildings Operated by Indebted Operators, by
Tenure and Region, 1960
A
verageV eo L dan B
alu f an d uildingsO
perated
(T
housands o D
f ollars)
40 60 80 IO 120
O

|
10
4

to indebted cotton farmers who were part owners was
reflected in the ratios of total debt to net cash farm in­
come and value of land and buildings owned. These ratios
were higher than those for full owners and tenants.
Survey data on the debts and incomes of indebted
cotton farmers who were part owners reflect in some de­
gree the economic pressures that have prevailed in the
cotton-production economy in recent years. An urge to
enlarge farm operations and to borrow more to do so
has often been felt more strongly by younger men who
own some land than by older, more settled farmers or by
tenants with limited potential. Younger men have invested
borrowed capital heavily to expand their farms and other­
wise make them more productive. Full owners probably
had borrowed less and had smaller debts outstanding in
1960 because they were older, operated smaller farms,
and perhaps reacted more conservatively to borrowing for
the purpose of expanding their units.
Operators’ Farm Income and Debt Indebted growers
with the highest average incomes had large farms and
were rather heavily indebted. However, only 8 percent of
the indebted cotton growers were at the top of the
income scale, that is, with $7,500 or more in net cash
farm income. Significantly for farm creditors, these opera­
• 6 •

tors owed almost two-fifths of the total debt and received
about two-fifths of the gross farm income obtained by in­
debted cotton growers. Their relatively high potential
for debt repayment was indicated by their low ratios of
debt to value and debt to income, which were even lower
than those of indebted cotton farmers with only modest
net incomes.
As logic would suggest, much of the debt on cotton
farms in 1960 was owed by farmers with relatively large
incomes. The indebted cotton growers earning an average
of $3,000 or more in net cash income owed about 55
percent of the total debt outstanding. Another fourth was
owed by growers who received from $0 to $3,000 in net
income, a group that included about seven-tenths of the
indebted cotton farmers in 1960.
Growers with large farms, however, were not auto­
matically assured of large incomes. Net losses were in­
curred in 1960 by about one-tenth of the indebted cotton
farmers, primarily part owners and tenants. In these
cases, both the farms and the debts were relatively large
(Chart 5). The operators with losses in 1960 owed about

Chart V: Cotton Farms with Debt: Average Major Real Estate
Debt and Average Non-Real Estate Debt, by
Net Cash Farm Income of Operator, 1960

N Lss O $999 $ to $3000to $5000to $7600to $ dO0
et o to
1000
5
$2999 $4999 $7499 $ 4 9 an ,0v
1 ,9 9 1 0er
N C FrmIno e
at ash a c m
one-fifth of the total debt outstanding on cotton farms:
one-sixth of the major real estate debt and one-fourth of
the non-real estate and related debt.
Operators’ Off-farm Income and Debt That cotton
farmers might make ends meet by earning off-farm in­
come seems sensible to the average person who reflects
on the cotton farmer’s income plight, especially in the
South. This option, however, may either have a minimum
potential for many growers or be ignored by them. Accord-

Cotton Farm Operators and Non-commercial Farm Operators
with Off-Farm Income, 1960
Off-Farm Income
of Operator
and His Family

Cotton Farm
Operators
With
Without
D ebt
D ebt
(Percent)

No Off-Farm Income
$1 to $499
$ 50 0 to $999
$ 1,00 0 to $1,999
$ 2,00 0 to $4,999
$ 5,00 0 and Over
All
Total Number (0 0 0 )



35
33
12
4
10
6
100
101

37
22
13
12
9
7
100
119

Non-commercial
Farm Operators
Without
With
D ebt
D ebt
(Percent)
4
1

5
17
24
32
18
100
529

2
8
17
41
31
100
457

ing to the survey data, commercial cotton growers without
any off-farm income in 1960 owed about one-third of
the debt outstanding on cotton farms. Although many in­
debted cotton farmers and their families earned some offfarm income that year, the amounts earned by farmers
who were low on the economic scale were relatively small
and, therefore, were only of modest economic benefit to
the operators. On the other hand, indebted cotton growers
who received $2,000 or more in off-farm income were
principally those with large farms who also had earned
large net cash farm incomes. Moreover, operators in this
group owed almost two-fifths of the total debt outstand­
ing on cotton farms. These comparisons suggest that the
indebted commercial cotton farmers who obtained the
largest off-farm incomes were sufficiently skillful to also
operate farm-related or nonfarm enterprises or to make
nonfarm investments that produced additional income.

Debt Ratios When the survey was made, most cotton
farmers with major real estate debt had low debt-to-value
ratios: About half had ratios below 20 percent and fourfifths had ratios below 50 percent. The operators in the
two lowest ratio groups were older, on the average, and, as
might be expected, had been on their farms longer, had
repaid most of their major real estate debt, and had larger
net worths than operators in the group with the higher
ratios.
Creditors were relatively liberal lenders to farmers who
operated large units but owned only a small portion of
the land they operated. In 1960, the debt-value ratios
were higher for such men than for those who owned most
of the large units they operated. Similarly, farmers with
large cotton farms and large gross farm incomes carried
more debt per dollar of farm receipts than did farmers
operating on a small scale.
In P e r s p e c t i v e
Do the survey data support our average observer’s
notions about cotton farmers’ debts? To a certain extent
they do. In 1960, many tenants did have debts outstand­
ing during November and December, a period when
cash crop debts normally reach a seasonal low. At the
same time, most indebted tenants received only small
incomes and had small debts. Furthermore, merchant
and dealer credit was being extensively used in the cottonproduction economy by both tenants and owners. Surpris­
ingly enough, farm owners apparently were outpacing
tenants in the use of such credit. Although the basic pur­
poses of this credit probably were virtually the same as
those for “furnish” in earlier times, the large amounts
owed to merchants and dealers in 1960 and the number
of farm borrowers may not have been fully anticipated
prior to the survey. Landlords also had a significant role
in providing capital to the cotton-production economy
and proved to be more important debtors than the average
person might have expected.
Intuitively, we might have assumed that the farmers
with the largest incomes and the largest and most highly
valued farms owed the largest debts and the largest pro­
portion of the total debt (Chart 6). A significant im­
pression gained from the survey data is that most of the
debt of cotton farmers was owed by farmers in the top
income classification. Furthermore, these large operators
•7 •

Chart VI: Cotton Farms: Total Debt and Number
of Operators with Debt, by Value of Land and
Buildings Operated, 1960

Ud $ 5 0 to $25,000to $
n er 1 ,0 0
40,000to $ 0,000to $ 0 ,0 0to $ 0
6
1 0 0 2 0,000
$ 5 0 $24 9 $39,999 $
1 ,0 0
,9 9
59,999 $
99,999 $ 9 ,9 9 a dOe
1 9 9 n vr
Vlu o Ln an Bild g Oerated
a e f a d d u in s p

who produce most of the cotton had obtained large-scale
financing and were using it effectively; in the aggregate,
they were earning considerably more income with the
aid of their borrowed capital.

On the other hand, some preconceptions may have
to be modified. Although the South contained more in­
debted cotton growers, some of them with large debts,
the western cotton region took the lead with larger farms,
larger average debt, and larger total debt in 1960.
While farm credit institutions belonging to farmers had
received their support, competing lenders had success­
fully retained much of the cotton farmer’s credit business.
Contrary to general belief, however, commercial banks
were not financing a major portion of cotton growers.
Evidently, nonbank financial sources, drawing funds from
places often far from the cotton regions, are the paramount
credit sources of the cotton economy.
That cotton farmers had obtained their financing from
a variety of sources may be significant in the cotton econ­
omy’s overall credit structure. With several sources avail­
able, growers not only may be able to tap distant pools
of funds, but desirable competition may be fostered among
local creditors serving cotton growers.
A rthur H. K antner

Profits Jump at District Banks
The past year was an unusually profitable one for Dis­
trict member banks. Net income after taxes jumped 16
percent to $133 million, after gaining only about 5
percent in 1962 and 1963. Bank returns on both capital
and total assets were slightly higher than in 1963. How­
ever, the average of individual bank ratios of profits to
total assets declined fractionally.
What accounts for the rise in net income in 1964?
In a word— revenue. Banks boosted total revenue so
sharply that it more than offset the continued rapid ad­
vance in costs. The sources of last year’s increases in
revenue and costs may be easily determined by viewing
a table of income and expenses, such as Table I. Addi­
tional information is provided by the average operating
ratios of individual member banks, shown in Table II.
A s s e t a n d P o r tfo lio S h ifts R a is e R e v e n u e
How did banks increase their total revenue last year?
They accomplished this feat mainly by shifting their asset
structure and by changing the composition of their port­
folios.
The largest single source of the increase in revenue
was interest and discount on loans. A sharp upsurge in
the demand for funds allowed banks to place a greater
proportion of their resources in loans. Increasing sub­
stantially as a percentage of total assets, loans rose sharply
to account for 54.1 percent of total deposits. At the
same time, bank investment in securities and in non­
earning cash assets declined, relative to total assets, al­
though the dollar amount increased somewhat. The
average rate of return on loans is generally about twice
that on securities; thus, last year’s increase in revenue
from loans can be explained mainly by the shift in asset
structure, although a small rise in the average return on
loans was a contributing factor.
Interest and dividends on securities provided a smaller



portion of the rise in revenue. The increase in this
measure resulted largely from changes in portfolio com­
position. Banks expanded their holdings of U. S. Govern­
ment securities slightly last year, although such issues
declined relative to total assets. At the same time, bank
holdings of other issues advanced substantially. The ex­
panded portfolios were weighted more heavily than earlier

Table I
Income and Expenses, Sixth District Member Banks1
(In T h o u sa n d s of D o llars)

1964

1963

Operating revenue:
Interest and dividends on securities 150,493
Interest and other charges on loans 3 95 ,7 16
Service charges on deposit accounts 43,543
Trust department revenue
21,01 7
All other operating revenue
18,987
6 29 ,7 56
Total
Operating expenses:
Salaries
Officer and employee benefits
Interest on time and savings
deposits
Net occupancy expense of
bank premises
All other operating expenses
Total
Net current operating earnings
Recoveries, transfers from reserves,
and profits
Losses, charge-offs, and transfers
from reserves
Net income before related taxes
Taxes on net income
Net income
Cash dividends declared
Number of Banks

D ollar
Change

165,323
457,088
4 8,23 7
2 4,183
2 1,84 0
716,671

+ 14,830
+ 61,372
+ 4,694
+ 3,166
+ 2,853
+ 86,915

163,101
19,748

179,301 + 16,200
22,83 2 + 3 ,084

135,569

160,236 + 24,667

27,751
107,546
4 53 ,7 15

3-1,087 + 3,336
125,085 + 17,539
518,541 + 64,826

176,041

198,130 + 22,089

15,961
37,635
154,367
5 6,98 2
97,385
39,575

17,280 +
43,698
171,712
5 9,038
112,674
4 3,09 9

467

• 8 •

+ 6,063
+ 17,345
+ 2,056
+ 15,289
+ 3,524

502 +

1Based on a tabulation of annual income and dividend statements.

1,319

35

with higher-yielding, longer-term issues. These changes,
along with the rising trend of interest rates on some issues,
led to higher average yields on bank-owned securities and
thus contributed to the increase in total revenue.
There was a further shift in portfolio composition
that affected income. As profits rose and banks moved
into higher income tax brackets, they bought more
tax-exempt state and municipal issues; consequently, in­
terest from these securities contributed more heavily

than earlier to the advance in profits.
Income from service charges, trust department opera­
tions, and rentals also contributed to the increase in
total revenue. The cost of this higher revenue was a de­
cline in bank liquidity in 1964. This decline was not as
great as might be first suspected, however. Both the
growth in time and savings deposits, which are generally
more stable than demand deposits, and the growing
monthly cash flows from amortization of expanded totals

Table II
Average Operating Ratios of Individual Member*
Banks in the Sixth Federal Reserve District
1960

SUMMARY RATIOS:
Percent of total capital accounts:
Net current earnings
Net income before taxes
Net income
Cash dividends declared
Percent of total assets:
Total operating revenue
Net current earnings
Net income
SOURCE AND DISPOSITION OF INCOME:
Percent of total operating revenue:
Interest on U. S. Government securities
Interest and dividends on other securities
Interest and discount on loans
Service charges on deposit accounts
Trust department revenue1

All other operating revenue
Total operating revenue
Salaries and wages
Pension, hospitalization, and other benefits
Interest on time and savings deposits 2

Net occupancy expense of bank premises
All other operating expenses
Total operating expenses
Net current earnings
Net losses (or recoveries and profits + ) 3
Net increase (or decrease + ) in valuation reserves
Taxes on net income
Net income
RATES OF RETURN ON SECURITIES AND LOANS:
Return on securities:
Interest on U. S. Government securities
Interest and dividends on other securities
Net losses (or recoveries and profits + ) on total securities3
Return on loans:
Revenue from loans
Net losses (or recoveries + ) 3
DISTRIBUTION OF ASSETS:
Percent of total assets:
U. S. Government securities
Other securities
Loans
Cash assets
Real estate assets
All other assets
Total assets
OTHER RATIOS:
Total capital accounts to:
Total assets
Total assets less U. S. Government securities and cash assets
Total deposits
Time deposits4 to total deposits
Interest on time deposits4 to time deposits
Number of banks

1961

1962

1963

1964

16.9
14.8
10.6
3.1

14.3
12.6
8.2
2.9

14.5
12.6
8.6
3.0

14.4
12.1
8.5
3.0

14.9
12.0
8.6
2.9

4.55
1.36
.86

21.7
6.9
59.2
7.3
2.6
4.9
100.0
28.3
n.a.
18.0
n.a.
41.6
69.9
30.1
.9
2.5
7.5
19.2

4 .52
1.21
.70

20.5
7.0
60.5
8.0
2.9
4.0
100.0
29.2
2.6
19.2
5.1
36.2
73.1
26.9
1.0
1.8
8.5
15.6

4.70
1.21
.72

20.7
7.1
60.3
8.0
2.8
3.9
100.0
27.9
2.6
22.5
4.5
39.0
74.0
26.0
.6
2.5
7.2
15.7

4.85
1.19
.71

20.5
7.2
60.5
7.7
3.0
4.1
100.0
27.0
2.7
24.1
4.4
41.1
75.2
24.8
1.5
2.1
6.3
14.9

5.06
1.26
.73

19.8
7.1
61.4
7.8
2.9
3.9
100.0
26.5
2.7
23.9
4.7
41.0
74.9
25.1
2.7
1.9
5.7
14.8

3.39
3.09
+ .21

3.22
3.03
+ .21

3.33
3.23
+ .17

3.44
3.29
+ .10

3.72
3.37
+ .03

6.91
.22

6.83
.27

7.07
.20

7.10
.21

7.18
.28

28.0
10.3
39.2
20.5
1.7
.3
100.0

27.9
10.6
40.3
19.0
1.9
.3
100.0

28.0
10.6
40.2
19.0
1.9
.3
100.0

27.5
10.9
41.6
17.8
1.9
.3
100.0

25.7
11.1
43.8
16.9
2.2
.3
100.0

8.4
16.8
9.3
33.0
2.63

9.0
17.5
10.1
35.0
2.68

8.6
16.8
9.6
36.3
3.12

8.8
16.7
9.8
37.9
3.29

9.1
16.4
10.3
38.8
3.37

402

418

416

426

454

♦These figures are averages of individual bank ratios taken from member bank reports of condition for December 20, 1963, April 18, 1964, and June 30, 1964.
Ratios for banks that joined the System after December 20, 1963, and for a few other new member banks were not included in the averages.
1 Banks with none were excluded in computing this average. Ratio included in “All other operating revenue.”
2 Banks with none were excluded in computing this average. Ratio included in “All other operating expenses.”
•*Includes recoveries or losses applied to either earnings or valuation reserves.
'
4 Banks with none were excluded in computing this average.




. 9 .

of mortgage and consumer loans and of business term
loans stemmed the downturn.

Debits to Demand Deposit Accounts
In su re d C o m m e rcia l B a n k s in th e S ix th D istrict
(In Thousands of Dollars)

R is e in C o s ts A c c o m p a n i e s K e e n C o m p e t i t i o n
Why did expenses move upward in 1964? In recent
years, higher interest costs on time and savings deposits
have been the primary component of rising expenses.
Banks have competed aggressively for time and savings
funds, both among themselves and with other financial
institutions, through special twists, such as the develop­
ment of a market for CD’s, and by simply raising interest
rates. In 1964, interest cost was again the largest single
contributor to rising expenses. Competition for funds
continued to be keen, as the negotiable savings bond
or certificate, an older instrument revitalized by higher
interest rates, attracted large amounts of time deposits
at some banks. Despite the dollar increase in interest
expense in 1964, this expense declined for the first time
since 1960 as a percentage of total revenue, according
to the average operating ratios. Undoubtedly, the decline
reflects the large increase in revenue in 1964. However, it
also mirrors a slowing of the rate of advance of interest
costs since the very large upsurge in 1962.
Higher salary and wage costs also contributed heavily
to the increase in expenses. This probably reflects an
increase in rates of pay, as well as increased employ­
ment at District banks. Salaries and wages declined as
a proportion of total revenue, however.
In addition to these factors, increased expenditures
for advertising, employee benefits, maintenance of bank
buildings and offices, property tax, and general business
needs, such as office supplies, utilities, postage, and travel,
accounted for smaller proportions of the increase in
expenses last year than in 1963.
Net income is affected not only by operating revenue
and expenses but also by nonoperating factors, such as
transfers to reserve funds, recoveries and charge-offs on
loans and securities, and taxes on income. In 1964, banks
paid more taxes than in other recent years, despite a
reduction in Federal tax rates. This reflects the higher
level of net income before taxes last year. Taken alto­
gether, the rise in net nonoperating costs plus income
taxes was less in 1964 than in the preceding year.
T h e O u tlo o k
Revenue from loans will probably increase further in
1965 if present trends continue. Thus far this year, loans
have expanded rapidly in response to heavy demand.
At the same time, security portfolios have continued to
shift toward higher-yielding taxable issues and tax-ex­
empts. Increased revenue from loans and securities will
have to offset increased expenses once more if net income
is to register a gain. Already, interest costs on time and
savings deposits have advanced further this year, reflecting
both higher interest rates and expanded deposit levels.
Banks are presently facing much the same situation
they confronted last year. Loan demand is strong and
revenue can be increased by shifting more funds into
loans while minimizing nonearning assets. To do this,
however, banks must compete for time and savings de­
posits at fairly high rates.
R obert R. Wyand II



Mar.
1965

Percent Change
Year-to-date
3 Months
Mar. 1965 from
1965
Feb.
Mar.
^om
1965
1964
1964

Feb.
1965

Mar.
1964

1,084,861
52,214
146,653
377,479
234,023
73,920

1,0%,127
53,286
152,025
388,888
240,008
69,063

+ 13
+ 12
+ 17
+8
+23
+3

+12
+10
+ 13
+5
+ 19
+ 10

+9
+9
+9
+8
+8
+6

472,683
1,308,607
1,714,178
413,196
164,955
973,184
396,362
75,895
3,231,930
143,036
169,021
201,199
190,587
386,658
86,395
96,576
1,775,632
449,198
411,389
336,923
1,040,825

490,630
1,305,143
1,775,069
439,218
166,119
1,013,184
368,168
68,079
3,250,164
161,701
167,954
179,982
208,186
359,973
80,239
99,744
1,803,353
414,731
464,658
351,192
1,057,252

+ 21
+ 19
+ 16
+ 10
+ 21
+ 19
+4
+12
+ 17
+ 22
+12
+4
+ 28
+22
+13
+ 11
+ 19
+ 12
+ 24
+ 17
+2

+ 16
+ 19
+ 12
+4
+20
+14
+12
+24
+ 16
+8
+ 13
+16
+ 17
+ 31
+ 21
+7
+18
+ 22
+ 10
+12
+1

+5
+ 11
+7
+ 14
+6
+10
+19
+13
+4
+ 11
+ 15
+6
+ 22
+ 12
+1
+ 12
+ 10
+9
+6
+1

53,937
49,464
32,456
33,424
52,736
186,273
77,595

48,096
44,247
31,183
31,938
47,281
166,371
67,916

49,143
43,524
30,376
27,524
51,151
169,582
71,615

+ 12
+ 12
+4
+5
+ 12
+12
+14

+ 10
+14
+7
+ 21
+3
+10
+8

+7
+9
+3
+ 20
+2
+ 10
+ 1

70,900
72,076
32,403
116,293
54,976
17,684
283,063
95,475
98,379
649,837
58,862
60,445
40,998
83,047
11,924
60,019
27,872
19,632
23,209
63,699
46,235
9,067
99,886
4,564
29,118
31,966
8,866
18,483

60,934
66,471
30,184
101,250
47,289
14,228
243,938
88,462
94,116
537,521
57,599
51,757
34,346
79,976
10,618
56,475
24,171
17,640
17,493
56,370
40,250
9,993
96,994
4,563
26,894
28,811
7,396
15,420

61,609
63,951
25,799
106,878
45,446
17,606
261,727
88,453
90,013
545,464
55,577
50,792
35,755
69,326
9,515
56,868
24,689
19,867
22,206
59,707
40,090
8,121
92,947
4,328
24,939
30,591
7,528
18,456

+16
+8
+7
+ 15
+ 16
+24
+ 16
+8
+5
+ 21
+2
+ 17
+ 19
+4
+ 12
+6
+ 15
+ 11
+ 33
+ 13
+ 15
—9
+3
+0
+8
+ 11
+ 20
+ 20

+ 15
+ 13
+ 26
+9
+ 21
+ 10
+8
+8
+9
+ 19
+6
+ 19
+ 15
+ 20
+ 25
+6
+ 13
—1
+5
+7
+15
+12
+7
+5
+ 17
+4
+ 18
+0

.
.

79,285
44,067
30,509
57,890
29,172

72,987
40,240
27,497
55,074
28,146

72,500
38,217
31,033
54,552
28,369

+ 10
+ 11
+5
+4

+9
+15
—2
+6
+3

+5
+ 11
+ 19
+7
+7
—0
+6
+1
+8
+ 11
+4
+ 13
+7
+22
+16
+5
+ 11
+3
—2
+3
+14
+8
+8
+14
+10
+3
+7
+2
+5
+7
—5
+3
+0

.
.
.

42,072
33,130
19,763

38,863
29,914
19,207

38,623
27,852
16,855

Bristol
. . . .
Johnson City
. .
Kingsport
. . .

61,409
64,359
147,934

50,053
52,924
100,761

55,065
57,013
121,913

+8
+ 11
+3
+ 23
+ 22
+ 47

+9
+ 19
+17
+ 12
+ 13
+ 21

+ 11
+ 13
+14
+6
+8
+ 12

SIXTH DISTRICT, Total 25,307,217

22,133,587

22,427,373

+ 14

+13

+9

2,845,259
7,226,318
5,342,187
2,969.509
987,232
2,763,082

2,924,958
7,359,314
5,259,570
2,949,199
943,174
2,991,158

+ 12
+ 15
+ 14
+17
+9
+14

+9
+13
+16
+18
+15
+5

+6
+7
+13
+ 12
+7
+3

STANDARD METROPOLITAN
STATISTICAL AREASt*
Birmingham . . .
1,225,180
Gadsden . . . .
58,441
Huntsville
. . .
171,882
Mobile
. . . .
408,018
Montgomery
. .
286,691
Tuscaloosa . . .
76,026
Ft. LauderdaleHollywood
. .
570,444
Jacksonville
. .
1,552,328
Miami
. . . .
1,986,540
Orlando . . . .
455,234
Pensacola
. . .
199,552
Tampa-St. Petersburg 1,154,711
W. Palm Beach
410,824
Albany
. . . .
84,675
Atlanta . . . .
3,781,746
Augusta . . . .
173,987
Columbus
. . .
189,608
Macon
. . . .
208,704
Savannah . . . .
244,130
Baton Rouge
. .
470,567
Lafayette
. . .
97,476
Lake Charles
. .
106,896
New Orleans
. .
2,119,762
Jackson . . . .
504,807
Chattanooga . . .
509,279
Knoxville . . . .
394,815
Nashville . . . .
1,064,121
OTHER CENTERS
Anniston . . . .
Dothan . . . .
Selma
. . . .
Bartow . . . .
Bradenton . .
Brevard County
Daytona Beach .
Ft. MyersN. Ft. Myers
Gainesville . .
Monroe County .
Lakeland . . . .

.
.
.
.

St. Augustine . .
St. Petersburg . .
Sarasota . . . .
Tallahassee . . .
Tampa
. . . .
Winter Haven . .
Athens
. . . .
Brunswick . . .
Dalton
. . . .
Elberton . . . .
Gainesville . . .
Griffin
. . . .
LaGrange
. . .
Newnan . . . .
R o m e ....................
Valdosta . . . .
Abbeville . . . .
Alexandria . . .
Bunkie
. . . .
Hammond
. . .
New Iberia . . .
Plaquemine . . .
Thibodaux . . .
Biloxi-Gulfport .
Hattiesburg . .
Laurel
. . . .
Meridian . . . .
Natchez . . . .
PascagoulaMoss Point .
Vicksburg
. .
Yazoo City . .

Alabamaf
. .
Floridat . . . .
Georgiaf . . . .
Louisianaf** .
Mississippi^** .
Tennesseef** .

.
.
.
.

3,190,632
8,297,809
6,107,249
3,475,916
1,080,938
3,154,673

*Year-ago data have revised for all states and for all SMSA's except Birmingham,
Tuscaloosa, Miami, Albany, Lafayette, and Lake Charles.
‘ ♦Includes only banks in the Sixth District portion of the state. fPartially estimated.

• 10 •

Sixth D istrict Statistics
Seasonally Adjusted
(All data are indexes, 1957-59 =

Latest Month
(1965)

One
Month
Ago

Two
Months
Ago

One
Year
Ago

SIXTH DISTRICT
INCOME AND SPENDING
Personal Income, (Mil. $, Annual Rate) . .
Manufacturing P a y ro lls * ** .........................
Farm Cash R e c e ip t s ...................................
Crops .......................................................
Livestock ..................................................
Department Store S a l e s * / * * ....................
Instalment Credit at Banks, *(Mil. $)
New Loans ..................................................
Repayments.............................................

Latest Month
(1965)

One
Month
Ago

Two

Months
Ago

One
Year
Ago

GEORGIA
Feb. 46,261 45,956r 46,019r
Mar.
156
155
155
Feb.
137
140
113
Feb.
162
163
116
Feb.
119
121
119
Apr.
138p
142
142
Mar.
Mar.

192
178

PRODUCTION AND EMPLOYMENT
Nonfarm Employment***
......................... Mar.
Manufacturing***................................... Mar.
A p p a r e l* * * ........................................ Mar.
Chemicals***
................................... Mar.
Fabricated M e ta ls * ** ......................... Mar.
Food***
............................................. Mar.
Lbr., Wood Prod., Furn. & Fix.***
Mar.
P a p e r * * * ............................................. Mar.
Primary M e ta ls* ** .............................. Mar.
T e x t ile s * * * ........................................ Mar.
Transportation Equipment*** . . . Mar.
Nonmanufacturing***.............................. Mar.
Construction***................................... Mar.
Farm Employment........................................ Mar.
Insured Unemployment, (Percent of Cov. Emp.) Mar.
Avg. Weekly Hrs. in Mfg., (Hrs.)*** . . . Mar.
Construction Contracts*.............................. Mar.
R e sid e n tia l............................................. Mar.
All O t h e r .................................................. Mar.
Industrial Use of Electric Power . . . .
Feb.
Cotton Consum ption**.............................. Mar.
Petrol. Prod, in Coastal La. and Miss.**
Mar.

121
121
146
115
125
108
100
109
113
97
140
121
120
73
2.5
41.5
139
148
131
127
115
173

Apr.
Apr.
Apr.
Apr.
Mar.

FINANCE AND BANKING
Member Bank Loans*
All B a n k s..................................................
Leading C i t i e s ........................................
Member Bank Deposits*
All B a n k s..................................................
Leading C i t i e s ........................................
Bank D e b it s * / * * ........................................

100, unless indicated otherwise.)

215r
183

42,790
144
131
148
119
132

195
173

181
166

121
120
145
115
129
108
98
109
112
98
140
121
118
78
2.6
41.5
137
139
136
128
113
172

120
120
145
114
128
108
98
109
112
97
137
120
118
81
2.7
41.6
190
153
221
126
113
174r

116
115
138
112
121
104
97
106
106
96
125
116
108
81
3.3
41.3
162
176
150
124
105
168

199
181

197
180

193
177

172
160

154
143
159

156
143
156

152
141
161

140
131
147

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.

8,586
160
124
145

8,633r
157
133
138

8,543r
158
99
146

8,049
147
116
135

PRODUCTION AND EMPLOYMENT
Nonfarm Employment***
......................... Mar.
Manufacturing***...................................Mar.
Nonmanufacturing***.............................. Mar.
Construction***................................... Mar.
Farm Employment........................................ Mar.
Insured Unemployment, (Percentof Cov. Emp.) Mar.
Avg. Weekly Hrs. in Mfg., (Hrs.) . . . .
Mar.

121
119
122
126
63
1.9
41.2

120
118
121
127
64
2.0
40.9

120
117
121
127
79
2.1
41.6

117
114
119
117
70
2.6
41.0

205
166
171

206
168
169

200
162
172

176
145
154

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.

6,954
138
122
122

6,900r
139
139
132

6,770r
138
108
131

6,255
130
121
121

PRODUCTION AND EMPLOYMENT
Nonfarm Employment***
. . . . . .
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.

114
109
115
130
72
3.1
42.3

113
109
114
126
75
3.2
42.7r

111
109
112
124
78
3.0
42.4

106
103
107
95
78
3.9
42.7

179
136
145

179
137
134

178
134
143

157
125
123

FINANCE AND BANKING
Member Bank L o a n s ................................... Apr.
Member Bank D e p o s it s .............................. Apr.
Bank D e b it s * * ............................................. Mar.

LOUISIANA

FINANCE AND BANKING
Member Bank L o a n s* ................................... Apr.
Member Bank Deposits*.............................. Apr.
Bank D e b it s * / * * ........................................ Mar.

MISSISSIPPI

ALABAMA
INCOME AND SPENDING
Personal Income, (Mil. $, 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.

6,213
146
129
115

6,127r
144
141
115

6,177r
142
106
124

5,737
129
123
113

PRODUCTION AND EMPLOYMENT
Nonfarm Employment***
.........................
Manufacturing***...................................
Nonmanufacturing***..............................
Construction***...................................
Farm Employment........................................
Insured Unemployment, (Percentof Cov. Emp.)
Avg. Weekly Hrs. in Mfg., (Hrs.) . . . .

Mar.
Mar.
Mar.
Mar.
Mar.
Mar.
Mar.

114
114
115
113
73
2.6
41.7

114
113
114
112
76
2.7
41.8

113
112
114
113
84
2.9
41.7

111
107
113
112
82
3.5
40.9

FINANCE AND BANKING
Member Bank L o a n s ...................................
Member Bank D e p o s it s ..............................
Bank D e b it s * * .............................................

Apr.
Apr.
Mar.

193
154
151

192
155
151

187
154
157

170
141
145

INCOME AND SPENDING
Personal Income, (Mil. $, Annual Rate)

Feb.
Mar.
Feb.
Mar.

3,579
162
185
94

3,532r
160
171
101

3,416r
160
100
102

3,327
149
172
98

Mar.
Mar.
Mar.
Mar.
Mar.
Mar.
Mar.

124
130
122
126
66
3.2
40.6

123
129
121
124
72
3.2
41.lr

123
127
121
128
69
3.2
41.4

119
121
118
110
77
4.3
40.7

Apr.
Apr.
Mar.

213
165
163

214
167
163

213
167
163

195
152
148

Feb.
Mar.
Feb.
Mar.

7,415
150
113
123

7,455r
150
117
123

7,262r
150
126
129

6,908
139
114
116

Mar.
Mar.
Mar.
Mar.
Mar.
Insured Unemployment, (Percentof Cov. Emp.) Mar.
Mar.
Avg. Weekly Hrs. in Mfg., (Hrs.) . . . .

121
125
119
138
77
3.3
41.0

121
125
119
140
87
3.3
41.2

121
125
119
140
84
3.4
41.3r

116
119
114
133
90
4.2
40.8

199
157
165

197
157
162

192
155
165

173
141
164

PRODUCTION AND EMPLOYMENT
Manufacturing*

Insured Unemployment, (Percentof Cov. Emp.:
Avg. Weekly Hrs. in Mfg., (Hrs.) . . . .
FINANCE AND BANKING

Bank Debits*/*

FLORIDA

TENNESSEE

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.

13,514
188
143
176

INCOME AND SPENDING
Personal Income, (Mil. $, Annual Rate)

PRODUCTION AND EMPLOYMENT
Nonfarm Employment***
......................... Mar.
Manufacturing***...................................Mar.
Nonmanufacturing***..............................Mar.
Construction***................................... Mar.
Farm Employment........................................ Mar.
Insured Unemployment, (Percent of Cov. Emp.) Mar.
Avg. Weekly Hrs. in Mfg., (Hrs.) . . . .
Mar.

129
131
129
109
95
1.9
42.5

129
131
129
106
104

129
131
128
106
108

125
127
124

42.3r

41.8

42.2

204
155
159

200
156
156

197
152
162

174
141
147

FINANCE AND BANKING
Member Bank L o a n s ................................... Apr.
Member Bank D e p o s it s .............................. Apr.
Bank D e b it s * * ............................................. Mar.

13,309r
189
138
175

13,851r 12,514
187
177
134
134
181
174

PRODUCTION AND EMPLOYMENT

2.0

2.1

101
94
2.6

Manufacturing*

FINANCE AND BANKING

Bank Debits*/*

*For Sixth District area only. Other totals for entire six states.
**Daily average basis.
***Figures
manufacturing have been revised in accordance with the 1964 state employment agency benchmarks.

for manufacturing payrolls,
r Revised.
p Preliminary.

Apr.
Apr.
Mar.
employment,

and average weekly hours

in

Sources: Personal income estimated by this Bank; nonfarm, mfg. and nonmfg. emp., mfg. payrolls and hours, and unemp., U. S. Dept, of Labor and coooerating state agencies; cotton
consumption, U. S. Bureau of Census; construction contracts, F. W. Dodge Corp.; petrol, prod., U. S. Bureau of Mines; industrial use of elec. power, Fed. Power Comm.; farm cash
receipts and farm emp., U.S.D.A. Other indexes based on data collected by this Bank. All indexes calculated by this Bank.




* 11 •

D IS T R IC T

B U S IN E S S

C O N D IT IO N S

W e ,, into its fifth year of expansion, the region’s economy, according to
current data, is in glowing health. Nonfarm employment has risen further,
and payrolls in manufacturing industries have increased substantially. In
farming areas, crop planting and related tasks have gained momentum
and quickened the economic pulse. Consumers have slackened the pace
of their spending but have not reduced it sharply below the high reached
in early 1965. Total bank credit has continued to expand. The decline in
volume of large construction contracts from that of early 1964 has not
been recouped. Nonresidential building continues strong; however, a
slight improvement in residential building was offset by a decline in non­
building projects.

_A n n u a l Rate

A ve ra ge W e ek ly Hours*

W inM .
orked fg

The current expansion, now in its fifty-first month, has fostered steady
growth in the number of nonfarm jobs at District firms. In the first three
months of this year, employment grew by about 80,000 jobs, or at an annual
rate of almost 6 percent. Although all District states shared in the advance,
Louisiana scored the largest proportional gain. Construction employment in
March rose substantially in both Florida and Louisiana. As a result of additional
nonfarm jobs in March, insured unemployment decreased, and payrolls
showed a healthy gain. The average workweek in manufacturing, however,
remained the same as in February.
v*

Diverse weather conditions have greatly stimulated the pace of agricul­
tural activity. Plantings of rice, cotton, and corn now are nearly half completed,
while the transplanting of the Georgia and Florida tobacco crops is virtually
finished. Welcome rains in Florida relieved drought conditions in the western
and northern areas. While prices paid by farmers in April were up only slightly
from a month earlier, the prices they received recovered from the March dip,
primarily because prices for some livestock and poultry products, potatoes, and
vegetables strengthened.
\S
Consumers maintained their spending at a high level in March but
failed to match the blistering pace of January. Evidence now available con­
firms a letdown in consumer spending in February. Department store sales,
debits to demand deposits, furniture store sales, automobile sales, and total
retail sales all declined in that month despite a small increase in personal
income. As might be expected, therefore, personal savings rose, paced by a
strong rise in life insurance sales. Although available data indicate that some
resurgence in consumer spending occurred in March, instalment debt at com­
mercial banks increased less than usual. Department store sales did not change
from February, but debits to bank accounts rose, and furniture store sales set
a new record for the past five-year period. Preliminary data indicate, however,
that department store sales may have declined slightly in April.
)S

— ERCEN T OF REQUIRED R E S E R V E S
P
B o r r o w i n g s f r o m F. R. B a n k s

1962

rTI . .TTTTI

1963

1964

♦Seas. adj. figure; not an index.




.n . ■.. I
1965

jX

A further expansion in total bank credit occurred in April at member
banks. Loans increased somewhat more than usual, reflecting strength in both
real estate and business loans. Investments were unchanged: A decline in U. S.
Government securities offset a rise in other securities. Meanwhile, total deposits
declined, as demand deposits decreased and time deposits expanded at less
than the usual rate.
N o t e : D a t a o n w hich statem ents are b a sed h ave been adjusted whenever p o ssib le to elim in ate se ason al
influences.