Full text of Economic Review (Federal Reserve Bank of Atlanta) : May 31, 1948, Volume 33, Number 5

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R eview

Monthly
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A tlan ta, G eorgia, M ay 31, 1 9 4 8

V o lu m e X X X III

T h e

R e v i v a l

S i x t h

D is tr ic t

o f

a n

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o o l

h i s t o r y o f in d u strial d ev elo p m en t sh ow s that m an ­
ufactu rin g in a region p asses th rou gh several broad
stages. In each stage the typ e o f m an u factu rin g that p re­
dom inates resu lts from efforts to com b in e m ost p ro fita b ly
the reg io n ’s factors o f p rod u ction . T h e m ost p ro fita b le co m ­
bin ation s, o f course, vary from tim e to tim e.
In the ea rly stages, the p ro cesses u sed are lik e ly to be
th ose req u irin g com p aratively la rg e q u an tities o f raw m ate­
r ia ls and u n sk illed lab or, w h ich are abundant in rela tio n to
c a p ital and to lab or and m a n a g eria l sk ill. P ro cesses that are
sim p le and th ose that in v o lv e o n ly the first step s o f tran s­
fo rm in g raw m aterials in to fin ish ed products, th erefore, are
g en era lly the ru le. In the later stages b oth la b o r and m an ­
agem ent p o ssess sk ills too valuable' fo r u se in m erely the
sim p le typ es o f m an u factu rin g. A s d ev elo p m en t advances,
the p rocesses in w h ich th ese sk ills are im p ortan t to su ccess
b ecom e m ore profitab le than th ose in w h ich m erely an ab u n ­
d ance o f u n sk illed lab or or raw m aterials is im p ortan t. M anu­
fa ctu rin g, therefore, becom es m ore co m p lex and carries a lo n g
furth er the process o f tran sform in g the raw m aterials into
fin ished products. T he clo ser d evelop m en t ap p roach es m atur­
ity, the m ore in fluence tech n o lo g ica l advances, ca p ita l eq u ip ­
m ent, and the sk ill o f m anagem ent and lab or h ave in g overn ­
in g the typ e o f m anufactu rin g that is don e in the region .
A lth o u g h the South has b y no m eans reached in d u strial
m aturity, postw ar develop m en ts in m an y m an u factu rin g
field s are sim ila r to those fou n d in the later stages o f m an ­
u factu rin g. One exam p le is m ade up o f the recent entrance
o f Southern tex tile firm s into a m ore c o m p lex ty p e o f m an ­
ufacture, that o f w o o len w o rsted s; the b u ild in g o f new
p la n ts in the S outh fo r that p u rp o se; and rum ored p la n s fo r
th e erection o f ad d ition al m ills. “ S outhern k id n a p p ers” h ave
been blam ed fo r th is develop m en t, but a m ore lik e ly cause
p r o b a b ly lie s in the changed pattern o f eco n o m ic fo rces. R e­
cent develop m en ts in w o o l m an u factu rin g in that part o f the
South covered b y the Sixth F ed eral R eserve D istrict illu s ­
trate the w ay econ om ic factors w h ich influence in d u stria l lo ­
ca tion at one tim e m ay lo se their im p ortan ce at another.
S om e w o o l m an u factu rin g has been carried on in th e area
covered b y the D istrict fo r m ore than a century. F or m uch
o f that tim e, h ow ever, it w as p ra ctic a lly dorm ant and in
som e o f the states co m p letely dead. A s la te as 1 9 4 7 it w as
carried on in o n ly three o f them , G eorgia, T en n essee, and
A lab am a, w ith the G eorgia and T en n essee m ills as the p r in ­
c ip a l producers. T he m ills u sin g w o o l a lo n e p ro b a b ly em ­
p lo y ed no m ore than 5 ,5 0 0 , and the m ills u sin g w o o l to ­

T

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he




O ld
M

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N um ber 5

I n d u s t r y ,

a n u f a c t u r i n g

gether w ith other fibers no m ore than 4 ,0 0 0 , ou t o f a total
o f ab ou t 2 0 0 ,0 0 0 te x tile w orkers in the fo u r le a d in g textilep ro d u cin g states o f the D istrict, w h ich are A lab am a, G eor­
g ia , M ississip p i, and T en n essee. In 193 9 , the latest year fo r
w h ich p rod u ction statistics are a v a ila b le, the g o o d s prod uced
b y w o o le n and w orsted m anufacturers in G eorgia and T en ­
n essee w ere v a lu ed at o n ly 2 .4 p ercen t o f th e v a lu e o f U n ited
States w o o len and w orsted p rod u ction . F or th e sam e year the
cotton -textile m ills ’ prod u ct in the D istrict states w as valu ed
at 2 5 .4 percen t o f the to ta l U n ited S tates p rod u ction o f
b road-w oven cotton clo th . B oth the num ber o f em p lo y ees
and th e v a lu e o f the p roduct prod u ced , h ow ever, rank the
w o o l in d u stry as b ein g o f im p ortan ce to th e D istrict’s in ­
com e but, com pared w ith other in d u stries, n ot y e t o f great
im p ortan ce.
In the ea rly years o f th is cou n try’s h isto ry b oth the sm a ll
farm ers and th e la rg e p la n ta tio n ow ners in th e Sou th , as
w e ll as in the N orth, m anufactured m ost o f th e w o o len cloth
th ey used from th eir ow n raw m aterials. P erh a p s in that re­
sp ect G eorge W ash in gton , w ho recorded that 6 ,5 5 7 yards o f
w o o len clo th w ere w oven betw een 1 7 6 7 and 1 7 7 0 at h is
M ount V ern on h om e, w as a ty p ic a l Southern p la n ta tion ow n­
er. But even in the ea rliest h isto ry o f th is country, part o f
the p rocess o f w o o l-clo th m an u factu rin g w as b ein g taken out
o f the h om e. In 1 643, 2 0 fa m ilie s that w ere sk ille d in card­
in g and com b in g cam e from Y ork sh ire, E n glan d , to R oxbury, M assachusetts, and set up a fa cto ry fo r th e prod uction
o f w o o l tex tile s. M ost o f the e a rly estab lish m en ts, m any o f
w hich did no m ore than card the w o o l, w ere sm a ll. T hey
w ere run as sid elin es to g rist m ills and w ere w orked on a
custom b asis. S om e o f them exch an ged fin ish ed clo th fo r the
farm ers’ w o o l. T h e industry, h ow ever, so o n b egan to take in
m ore and m ore o f the p rocesses in v o lv ed in tran sform in g
raw w o o l in to cloth .
In at lea st that part o f the Sou th now in clu d ed in the D is ­
trict, the d evelop m en t o f co m p lete w o o l m an u factu re cam e
about slo w ly . O f the 1 ,8 0 0 co m p lete sets o f w o o l m ach inery
reported fo r the U n ited States in 1845 o n ly fo u r, tw o in
G eorgia and tw o in T en n essee, w ere in th e area. U n d ou b ted ­
ly there w ere a lso m an y sm a ll card in g m ills. T h e p ractice o f
sp in n in g and w ea v in g at hom e w as d eclin in g th rou gh ou t th e
South a lso , how ever, and betw een 1845 and th e b eg in n in g o f
the W ar B etw een the States there w as a r e la tiv e ly rap id d e­
velo p m en t o f fa cto ries in the section . A lth o u g h the total
num ber o f w o o len m ills in the U n ited S tates d eclin ed b e­
tw een 1 8 5 0 and 186 0 , the num ber in th e S ix States in ­

46

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o f th e F ederal R eserve B a n k o f A tla n ta fo r M ay 1948

creased. O ne or m ore w ere reported in each o f them ex cep t
F lo rid a , n u m bering 2 3 a ll togeth er. T h ey p rod u ced go o d s
v a lu ed at alm ost $ 9 0 0 ,0 0 0 , w h ich w as ab ou t 2 percen t o f the
total fo r th e n ation , and th ey em p lo y e d a lm o st 9 0 0 p e o p le .
A t that stage o f econ o m ic d ev elo p m en t th e reg io n had
reached b y 1 8 6 0 , th e indu stry w as an im p ortan t on e.
In ad d ition th ere w ere scattered th rou gh ou t th e reg io n
m any sm a ll card in g m ills th at p ro cessed w o o l b ro u g h t to
them b y th e lo c a l farm ers, w h ose fa m ilie s th en sp u n the
yarn and w ove the clo th . M ost o f them e m p lo y ed o n ly on e
or tw o w orkers. T h e clo th in g that eq u ip p ed m an y C on fed er­
ate so ld iers w as m ade on h o u seh o ld lo o m s and in v illa g e
w ork sh op s. A t th e b eg in n in g o f th e w ar th e C itizens C om ­
m ittee o f F ran k lin C ounty, T en n essee, w rote that “ From our
w o o l w e can m ake b lank ets, c lo th in g , an d sock s and clo th e
every m an w e h ave in the field (a b o u t 9 0 0 ) i f n ecessa ry .”
A ll parts o f the C onfed eracy, h ow ever, w ere n o t so fo rtu n a te;
n ot o n ly w as there a dearth o f p ro cessin g fa c ilitie s , but
there w as a scarcity o f raw m ateria ls.
D ifficu lt as th e R econ stru ction years w ere, m an y o f the
sm all m ills survived. In 1 8 7 0 the C ensus o f M an ufacturers
listed estab lish m en ts fo r a ll th e S ix S tates ex cep t F lo rid a .
T here w ere tw o m ills in A lab am a, 11 in G eorgia, on e in
L ou isian a, 5 in M ississip p i, and 15 in T en n essee. T h e v a lu e
o f their produ cts, h ow ever, w as at th at tim e less than it had
been b efo re the w ar, th ou g h the v a lu e o f U n ited S tates’ p ro ­
d uction had m ore than trip led .
N ot o n ly in the South but elsew h ere th e w o o le n in d u stry
w as u n d ergoin g som ew h at p ro fo u n d ch an ges. F or m an y years
it had used raw m aterials sheared from sh eep o f th e farm ers
in th ose areas su rrou n d in g th e m ills. A m erican w o o le n m ills
in 1874, it is estim ated, used m ore than n in e p o u n d s o f d o ­
m estic w o o l fo r every p ou n d o f fo r e ig n w o o l. T h e dem ands
o f th e grow in g n ation ca lle d fo r ev en m ore clo th , how ever,
and its in creased w ealth dem anded better ty p es o f fa b rics
than th ose that w ere b ein g m an u factu red in th e rather p rim ­
itive sm a ll-sca le estab lish m en ts scattered th rou gh ou t the
country. M ore and m ore o f th e raw m aterial, th erefore, had
to com e either from abroad or fro m th e Far W est. Im ­
p roved tech n iq u es introd u ced fro m abroad, p a rticu la rly
from F rance, m ade it p o ssib le fo r th e A m erican s w ith larger
estab lish m en ts to prod u ce th e k in d s o f w o o le n s and w orsted s
that the coun try dem anded, but th e ca p ita l req u ired w as
greater than m an y o f the sm a ller firm s co u ld afford.
A s a resu lt o f th ese ch an ges a p erio d o f ra p id con cen tra­
tion fo r the in d u stry ensued, d u rin g w h ich m an y o f the
sm a ll lo c a l estab lish m en ts f e ll b y the w a y sid e. B etw een 1 8 7 0
and 189 0 th e num ber o f w o o l-m a n u fa ctu rin g esta b lish m en ts
in the U n ited States d eclin ed fro m 3 ,2 9 0 to 1 ,6 9 3 , alth o u g h
the v a lu e o f th eir prod u cts rose from 177 m illio n d o lla r s to
2 6 8 m illio n . A s the in d u stry becam e in cre a sin g ly dep en d en t
o n raw m aterials from th e W est and abroad, its lo ca tio n
near the d om estic sou rce o f raw m a teria ls becam e le ss im ­
portant. T h e con cen tration w as ta k in g p la c e m a in ly in N ew
E ngland, N ew Y ork, P en n sy lv a n ia , and N ew Jersey. S p e c ia l­
ists in the a ssem b lin g o f the raw m aterial concentrated th eir
a ctivities at the B oston w o o l m arket.
T hese ch an ges d id n ot im m ed ia tely elim in a te, how ever, a ll
w o o l m an u factu rin g in th e S ix States. T h o u g h th e 3 4 estab ­
lishm en ts listed b y th e C ensus fo r 1 8 9 0 in clu d ed m an y sm a ll
carding m ills, th ey em p lo y ed 2 ,2 7 5 w orkers and th e v a lu e o f
their output had m ore th an d ou b led sin ce 1 8 7 0 . M ississip p i
w as the lea d in g prod ucer o f w o o len clo th in the South, w ith



its m ills e m p lo y in g m ore th an 1 ,0 0 0 w ork ers. T h e v a lu e o f
to ta l w o o l m an u factu re in M ississip p i th at y ea r w as alm ost
a m illio n d o lla r s, n o t m u ch le ss th an th e v a lu e o f w o o l
g o o d s m an u factu red in T en n essee, w h ich w as th e lea d in g
p rod u cer. E ven th en , h ow ever, sig n s o f a co m in g d eclin e
w ere ap p aren t. D u r in g th e 2 0 -y ea r p e r io d th e p ro d u ction o f
w o o l clo th in L o u isia n a h ad ceased and th e v a lu e o f w o o len
p rod u cts prod u ced in A la b a m a h ad d e c lin e d tw o thirds.
B y 1 9 0 0 th e M ississip p i m ills e m p lo y ed o n ly a third as
m an y w orkers and th e v a lu e o f th eir p ro d u cts h ad d eclin ed
to a fou rth . T en years later, a cco rd in g to p ro d u ctio n reports,
the o n ly states in th e D istric t th at w ere p r o d u cin g w o o len
g o o d s w ere G eorgia and T en n essee. B y 1 9 1 4 th e g o o d s m an ­
u factu red in th ese tw o states b y th e 1 ,6 0 0 w a g e earners
am ounted to o n ly th ree fifth s o f o n e p ercen t o f th e U n ited
S tates to ta l. W o o l m a n u fa ctu rin g h ad d ec lin ed in alm ost ev­
ery sectio n o f th e cou n try e x cep t th e N o rth ea st. S in ce 189 9
the num ber o f fa cto ries and m ills h ad fa lle n fro m 1 ,4 0 0 to
9 7 9 . T here w ere o n ly 4 0 esta b lish m en ts w est o f M ississip p i
and o n ly 6 0 sou th o f th e P o to m a c. O f th e latter, 2 8 w ere in
G eorgia and T en n essee. A lth o u g h th e n u m ber d eclin ed fu r ­
ther in th e years th at fo llo w e d , th e rem a in in g esta b lish m en ts
grew so la rg e that b y 1 9 3 9 th ey e m p lo y e d 4 ,5 0 0 w orkers in
th ese tw o states.
S in ce th ese m ills co u ld su rviv e an d grow , th e d isa p p ea r­
an ce o f the in d u stry in so m e o f th e D istr ic t states and its
static c o n d itio n in oth ers w a s p r o b a b ly n o t cau sed b y an in ­
a b ility to p ro cess w o o le n s at a p rofit. B etw een R econ stru c­
tio n and 1 9 3 0 th ere w ere o p p o rtu n ities to e m p lo y the re­
g io n ’s c a p ita l and lab o r in oth er ty p es o f en terp rises that
w ou ld y ie ld greater returns. M an y in v esto rs and m anagers
preferred , fo r o n e th in g , to d evote th eir efforts to th e grow ­
in g co tto n -tex tile in d u stry. T h e r e g io n ’s fa cto rs o f p ro d u c­
tio n co u ld b e com b in ed m ore p ro fita b ly in co tton -textile
m a n u factu rin g than th ey co u ld in w o o l p ro cessin g . T h e tech ­
n ic a l co m p lex ity o f w o o len m a n u fa ctu rin g h e lp s to ex p la in
both w h y the fa cto rs o f p ro d u ctio n c o u ld b e u sed m ore p r o f­
ita b ly in th e m an u factu re o f cotton a t th at tim e and w hy
som e p e o p le b e lie v e that th ey m ig h t b e m ore p ro fita b ly em ­
p lo y e d in w o o l m an u fa ctu rin g u n der p resen t c o n d ition s.

Woolens and Worsteds
A lth o u g h w o o l clo th is m an u factu red fr o m m an y typ es o f
fleece, it is, o f cou rse, p r im a r ily p rod u ced fro m sh eep w o o l.
T h e w o o l u sed b y A m erica n m an u factu rers is cu stom arily
c la ssified in to a p p a rel and carp et w o o l, w ith m an y m inor
su b d iv isio n s. T h o u g h n o carp et w o o l is p rod u ced in this
cou n try, so m e a p p a rel w o o l is p ro d u ced in ea ch o f the
states. A ll th e ten la rg est p r o d u cin g states e x cep t O hio lie
w est o f th e M ississip p i R iver. T o g eth er th ey a ccou n t fo r 7 0
percen t o f d o m estic p ro d u ctio n . E ach o f th e D istrict states
p rod u ced w o o l in 1 9 4 7 , b ut th e 2 .4 m illio n p o u n d s clip p ed
and p u lle d in them con stitu ted le ss th an o n e p ercen t o f the
to ta l U n ited S tates p ro d u ctio n . T en n essee led , w ith 55 per­
cen t o f th e to ta l S ix -S ta te p r o d u ctio n , fo llo w e d b y L ou isian a
and then M ississip p i. T h e w o o l p rod u ced in th ese three states
m ade up ab ou t 9 0 p ercen t o f to ta l D istrict p rod u ction .
E ven i f a ll th e w o o l p rod u ced in th e S ix S tates during
1 9 4 7 had been su ita b le fo r u se b y the G eorgia an d T ennessee
m ills, it w o u ld h a v e su p p lie d no m ore th an 35 p ercent o f
th eir n eed s even d u rin g 1 9 3 9 , w h ich w as, o f cou rse, b efo re
th e p resen t p er io d o f in crea sed dem an d s b egan . N eith er is
th e A m erican d o m estic a p p a rel-w o o l p ro d u ctio n sufficient at

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p resent to su p p ly the need s o f the w o o l-m an u factu rin g e s­
ta b lish m en ts throu gh ou t th e n ation . A lth o u g h b efo re W orld
W ar II, d urin g w h ich there w ere unpreced en ted dem ands fo r
w o o l clo th and sto ck p ilin g activ ities, a ll b ut a p p ro x im a tely
30 percen t o f the ap p arel w o o l u sed in the U n ited S tates w as
o f d om estic o rig in , last year d om estic w o o ls accou n ted fo r
o n ly abou t 2 0 p ercent o f the to ta l. U n d er th ese co n d ition s
n earness to p rim ary raw -m aterial sou rces is, o f course, u n ­
im portant.
G eorgians in Cobb C ounty te ll the story o f a C onfederate
so ld ier from there w ho, w h ile o ff w ith th e A rm y, sen t a
m essage h om e b y a frien d , ask in g fo r a n ew p air o f trou ­
sers. M em bers o f h is fa m ily w ent rig h t to w ork. T h ey sheared
their sh eep , carded the w o o l, sp u n it, w o v e it in to cloth , and
m ade the trousers, a ll in less than a w eek. T h at th is fea t w as
con sid ered rem arkable p ro b a b ly accou n ts fo r th e su rvival o f
the story. E ven the h ou seh o ld m an u factu re o f h om esp u n w as
con sid ered co m p lex in th ose d ays. In order to p rod u ce the
finer m aterials dem anded now , h ow ever, m an y m ore c o m p li­
cation s have had to b e added.
A s it com es from the sh eep , w o o l con tain s m an y fo re ig n
sub stan ces. It is dirty. It is ta n g led w ith burrs and seed s. I t
con tain s grease and, som etim es, su ch other su b stan ces as tar
'and p ain t. T h ey a ll m ust b e rem oved b y “ sco u rin g .” T h is
p rocess in v o lv es w ash in g and carb on izin g in a series o f co m ­
p le x m echanized steps.
A fter the w o o l is scoured, a d ecisio n m ust b e reached co n ­
cernin g the k ind o f fa b ric it is to go in to. I f it is to b e m ade
in to w o o len s, it w ill be p ut th rou gh a d istin ct p ro cess. I f it
is to be m ade into w orsteds, an en tir e ly d ifferent p ro cess w ill
b e used. W hen yarn is m ade fo r w o o le n clo th the fibers are
crisscrossed so that the ends w ill p ro ject outw ard and the
yarn w ill b e so ft and fluffy. F rom th ese y arn s are m ade such
fab rics as w o o len b lan k ets and th e so fter ty p es o f cloth fo r
w om en’s suits and m en’s overcoats. W o o len s are sp u n and
w oven from shorter fibers than w orsted s are. B oth v irg in
and reused w o o l m ay be m ade in to w o o len s, but w orsteds
are m ade from v irg in w o o l o n ly . W orsted yarn is spun from
lo n g fibers com bed p a r a lle l. It is w oven in to such fa b rics
as gabardine, serge, p o p lin , and va rio u s ty p es o f m en ’s su it­
in gs. B oth the w o o len and w orsted m an u factu rers o ften com ­
b in e w o o l w ith other fibers, such as cotton and rayon and
n y lo n .
N o p rocess o f w o o l m an u factu rin g is sim p le , but the m an ­
u factu re o f w o o len s is g en era lly con sid ered less co m p lex than
the m anufacture o f w orsteds. A fter th e w o o l is scoured, a
w o o len m ill’s first op eration is to com b in e, or m ix, the v a ­
riou s typ es o f raw m aterials. T h ey m ay be a ll w o o l or a
com b in ation o f w o o l and other te x tile fib ers; and som e o f
them m ay be rew orked w o o l and “n o ils ,” the short fibers
that have been rem oved in p ro cessin g the w o o l fo r w orsteds.
A t th is p oin t, if the fab ric is n ot to be
d yed in one p iece, the raw m aterial m ay
be dyed. It is then treated w ith an o il
e m u lsio n and put throu gh a p rocess o f
card in g, w h ich m ay in v o lv e p assage
through several m achin es that op en up
the fibrous m at, rem ove an y rem ain in g
burrs, com b out th e w o o l, and d istri­
bute the fiber in a film y w eb. A s it
leaves the m achine the w eb, w h ich is
c a lled a “ ro v in g ,” is w ound on sp o o ls
to m ake it ready fo r sp in n in g .



47

W o o len yarn s are spun eith er b y rin g sp in n in g or b y m u le
sp in n in g , but three o p eration s are p erform ed b y a ll typ es o f
sp in n in g m ach in es. F irst the r o v in g is draw n ou t to the d e­
sired size, then it is tw isted, and fin a lly the sp u n yarn is
w ound in to a p ack age.
T h e sp in n in g and w ea v in g o f w o o len s w as th e ty p e o f
w o o l m an u factu re that first d ev elo p ed in th e U n ited States
and the ty p e that survived in the South. A ll th e o ld er m ills
in the D istrict, w h ich had been started b y th e end o f 1910,
m an u factu re w o o len s. T h e H ardw ick W o o len M ills o f C leve­
land, T en n essee, fo r ex a m p le, w h ich w ere esta b lish ed in 1880,
m ake w o o len cashm eres, su itin gs, and overcoatin gs. T h e J e f­
ferso n W o o len M ills, in corp orated in 1 9 0 4 , m anufacture
sim ila r m aterials at N a sh v ille . A t R o ssv ille , G eorgia, the a p ­
p ro x im a tely 1 ,5 0 0 em p lo y ees o f the P eerless W o o len M ills
com p an y, w h ich w as esta b lish ed in 190 7 , m ake w o o len s fo r
m en’s and w om en ’s w ear as w e ll as auto clo th s and b lank ets.
T he L ebanon W o o len M ills, in corp orated in 1 9 1 0 at L eb­
anon, T en n essee, m an u factu re b lankets. U n til recen tly there
w ere no w orsted m ills in the D istrict states, th ou gh there
w ere a few in other parts o f the S outh. In 1 9 4 3 th e num ber
o f w orsted sp in d le s in p la ce th rou gh ou t th e S ou th equaledj
r o u g h ly, a third the num ber o f w o o len sp in d les in p la ce in the
area, w hereas fo r the U n ited States as a w h o le there w ere a l­
m ost fo u r fifth s as m an y w orsted sp in d les as w o o len sp in d les.
W o o l that is to be used fo r w orsted yarn is a lso carded,
but less stren u o u sly in order that the lo n g fibers w ill n ot be
broken. It em erges fro m the card in g m ach in e in a rou gh
strand, or a “ sliv e r .” T h e sliv er w as u n til recen tly treated
o n ly under eith er th e B rad ford system or th e F rench sy s­
tem . B oth th ese m ethods in v o lv e “ g illin g ,” a p rocess in
w h ich the strands are com bed in to th inner sliv e r s in su ch a
w ay that th e n o ils are elim in a ted and th e rem a in in g fibers
la id p a r a lle l. T h e p rocess in clu d es sev era l step s that vary
from system to system and fro m p la n t to p la n t. F rom it, the
m aterial em erges in the fo rm o f “ w o o l to p s,” a clea n fin ely
p rocessed w o o l o f r e la tiv e ly lo n g fibers in th ick , lig h tly
tw isted strands.
T h e p rocess o f sp in n in g th e w o o l to p s in to yarn differs
g rea tly fro m th e sp in n in g o f cotton, e sse n tia lly b ecau se o f
the len g th differen ces o f the tw o fibers. C otton is a rela tiv ely
sh ort-stap le product, and th e sta p le is co m p a ra tively u n i­
form . W ith it, th erefore, the len g th betw een th e r o lls o f the
sp in n in g fram e can b e ad justed and k ep t u n ifo rm . M oreover,
h igh -sp eed m ach in ery can be used . W o o l fo r w orsteds not
o n ly has a lo n g er sta p le, b ut its fiber len g th s are n ot u n i­
form . T h ey va ry fro m less than an in ch to five in ch es. S p e ­
c ia l sp in n in g p rocesses take care o f these ch aracteristics.
T h e B rad ford system , w h ich w as d evelop ed in E ngland,
has g e n e r a lly been fo llo w e d fo r sp in n in g the harder typ es o f
w orsted. T h e F rench system , o f o b v io u s o rig in , is g en era lly
associated w ith th e so fter ty p es. E ach
o f th ese m ethods is slow er than the cotton -sp in n in g op eration , p a rtly because
it in v o lv es m ore step s in the draw ingout p rocess. T he w o o l m ay b e p u t
th rou gh several m ore g illin g processes
than the cotton is and m ay be d ou b led
several tim es b efo re the to p s are re­
duced to a sp in n in g size. In th e w orsted
m ills o f the U n ited States at present,
about 8 0 percent o f the w orsted yarn
is spun on the B radford system .

48

M o n t h ly

R e v ie w

o f th e F ederal R eserve B a n k o f A tla n ta fo r M ay 1948

T h e variety o f m aterials in w h ich m en ’s su its are o rd in a ri­
ly a v a ila b le g iv e som e in d ica tio n o f the m an y ty p es o f w or­
sted m aterial w oven b y th e m ills. L oom s p la ced sid e b y sid e
m ay be p ro d u cin g q u ite differen t m a teria ls at the sam e tim e.
A lo t p roduced fo r on e custom er m a y co n sist o f o n ly a few
thousand yards in a p articu la r pattern. E a rly in th e p rocess
ca refu l attention to p ro d u cin g yarn in th e rig h t size, th e cor­
rect shade, and th e exact q u an tities req u ired m ust b e begu n ,
som etim es even b efo re th e w o o l reach es th e to p s stage. T he
b ackground fo r a m en’s ch alk -strip ed su it, fo r ex a m p le, often
c o n sists o f w h ite or g ray fiber m ix ed w ith th e b a sic c o lo r.
T h is m ix in g m ust b e p la n n ed b e fo r e th e w o o l to p s reach the
sp in n in g stage. A fter it h a s b een w oven , th e clo th m ust be
c a r e fu lly in sp ected , m en d ed , w ashed, n a p p ed , p ressed ,
steam ed, and p u t th rou gh other fin ish in g p ro cesses.
T h e in fin ite num ber o f d eta ils req u irin g atten tion a ll the
w ay th rou gh m a y accou n t fo r th e rather co m p lete in teg ra ­
tio n in the m an u factu re o f w orsted clo th . A b o u t th ree quar­
ters o f a ll the w orsted w ea v in g yarn is u sed b y th e sp in n ers
in their ow n clo th m anufactu re.
T h ere is on e part o f th e m an u factu re, h ow ever, that is
o ften p erform ed b y other ty p es o f con cern s fo r th e sp in n ers.
A great num ber o f th e m ills b u y a lrea d y m an u factu red to p s
from to p s m akers, m id d lem en w ho co m m issio n w o o l m an u ­
facturers to p rod u ce certain ty p es o f to p s th at th ey se ll to
the sp in n ers. M ost to p s m akers h ave no m a n u factu rin g f a c ili­
ties o f th eir ow n.
O n ly a slig h t fa m ilia r ity w ith th e cotto n -tex tile in d u stry
in th is region m akes clear the m an y w a y s in w h ich it d iffers
from the w o o l-tex tile in d u stry, and p a r tic u la r ly fro m the
w orsted branch. B etw een 75 and 8 0 percen t o f the w o o l m an ­
u factured goes in to ap p a rel, and o n ly ab ou t 30 p ercen t o f
the cotton. A ll the care and sk ill that g o in to p ro d u cin g
sty le item s, th erefore, h ave b een im p ortan t to a greater se g ­
m ent o f the w o o l industry.
In cotton -textile m an u factu re it h a s a lw a y s been fe a sib le
to su b d ivid e the p rod u ctio n p rocesses, so that som e m ills
co u ld rea d ily sp ecia lize in th e p rod u ction o f yarn , som e in
th e w ea v in g o f g ray goo d s, som e in b lea ch in g and d y ein g ,
and others in fin ish in g the cloth . D u rin g th e in d u stry ’s ea rly
d evelop m en t in th e Sou th th ose p e o p le w ho w en t in to tex ­
tile m anufacture sp ecia lized in the sim p ler ty p es. F or m any
years the p rod u ction o f the h eavier te x tile fa b rics p red o m i­
nated in the South, w ith the m ak in g o f th e finer m aterials
and th e fin ish in g p rocesses le ft a lm o st e n tirely to m ills in
o ther section s. I f som e yea rs ago a ca p ita list in an y o f the
D istrict states had fa ced an altern a tiv e o f m ak in g an in ­
vestm ent in a cotton -textile m ill or m ak in g o n e in a w o o lte x tile m ill and h e p referred the o n e that w o u ld a llo w h im
to concentrate on a lim ited ty p e o f p rod u ction , to u tiliz e r e l­
a tiv ely u n sk illed lab or, to h a v e h is m ill n ear h is sou rce o f
raw m aterial, and to u se th e raw m aterial th at required less
p rocessin g, h e w o u ld n a tu r a lly h ave ch osen th e cotton m ill.
S in ce it first b egan its ex p a n sio n in the S ou th th e cottonte x tile in d u stry h as u n d erg o n e a num ber o f ch an ges. In­
stead o f co n tin u in g to d evote th eir op era tio n s to sp in n in g
and the p rod u ction o f hea v ier tex tile s and to lea v e th e fin ­
ish in g to m anu facturers o f other reg io n s, th e m ills b egan
to sp in and w eave finer m a teria ls and to d ye and fin ish them .
C om plete in tegration o f th e v a rio u s p ro cesses u n der on e
m anagem ent, i f n ot in on e estab lish m en t, h a s accelerated
sin ce th e b eg in n in g o f W o rld W ar II.
South ern m ills h ave b ecom e d om in an t in th e cou n try’s



te x tile in d u stry. T h e a b ility to co m p ete su c c e ssfu lly h as d e­
p en d ed m ore and m ore in recen t y ea rs o n m an agem ent’s
tech n ica l co m p eten ce and its a b ility to m eet ra p id ly ch an g­
in g co n d itio n s. A n y a d v an tage th e S ou th ern te x tile m ills had
b ecau se o f ch eap la b o r h as b een la r g e ly rem oved b y upw ard
a d ju stm en ts in S ou th ern te x tile w a g es. T h e ex p erien ce o b ­
tain ed in th e o p era tio n o f a h ig h ly te ch n ica l and com p etitive
in d u stry h a s created a great p o o l o f m a n a g eria l com petence
that is o n e o f th e re g io n ’s m ost v a lu a b le fa cto rs o f p rod u c­
tio n .

The American System
O ne o f th e S ou th ern te x tile firm s w h o se m an agem ent accum ­
u la ted su ch a p o o l o f a b ility and k n o w led g e is th e N ew nan
C otton M ills o f N ew n a n , G eorgia. T h is com p an y, w h ich b e­
gan o p era tio n s in 1 8 8 8 , sp e c ia liz e d fo r m an y y ea rs in the
p ro d u ctio n o f fin e yarn s, m a n y o f th em m ad e fro m m ix ed fi­
bers. L ike m an y other co tto n -tex tile m en, th e m an agers o f
th e firm m ust h ave sp ecu la ted on th e p o ss ib ility o f p ro cess­
in g w o o l as w e ll a s cotton and sy n th etic fibers b y u sin g the
m ach in ery th ey a lrea d y h ad . A ll te x tile m en h ad b een aw are
o f the slo w er p ro cess in v o lv ed in sp in n in g w orsted s and the
r esu ltin g in crea se in ex p en se. E ven after th e in tro d u ction o f
the C asab lan ca system o f lo n g -d ra ft sp in n in g , w h ich w as
g e n e r a lly ad op ted in th e co tto n -tex tile in d u stry in th e early
3 0 ’s, m ost te x tile m en p ro b a b ly a greed w ith a statem ent
m ade in G eorgia in 1941 th at th ey co u ld n ot sp in w o o l on
cotton m ach in ery u n less th e y m ix ed at lea st an eq u al am ount
o f cotton w ith it.
W y lly s T a y lo r, a S ou th ern er w ho w as to b eco m e p resi­
dent o f th e N ew n a n co m p a n y in 1 9 3 8 , h ad b eg u n as e a rly as
1 9 3 4 , h ow ever, to e x p lo r e th e p o ss ib ility o f sp in n in g w o o l on
cotton m ach in ery. A t th e S la ter M a n u fa ctu rin g C om pany in
S ou th C arolin a, h e ran so m e w o o l w orsted o n co n ven tion al
cotton eq u ip m en t b y u sin g an e sp e c ia lly selected sh ort top .
T h e yarn w as n o t as ev en as reg u la r w orsted , b ut it w as su it­
a b le as a fillin g in cotton w arp fo r b a b y b lan k ets.
A t ab ou t th e sam e tim e K a rl N ix o n , n ow g en era l m anager
o f th e N ew n an m ills, w as a lso ex p erim en tin g . A fter m aking
repeated attem pts and m a k in g a series o f m o d ification s in
h is eq u ip m en t, h e fo u n d th at it w a s p o ss ib le to sp in fibers
as lo n g as five in ch es. T h e y a rn s w ere k n itted c o m m ercia lly
in to jersey s and w oven ex p e r im e n ta lly . T h e recessio n o f
1 9 3 7 , h ow ever, slo w ed d ow n th e e x p erim en ta l w ork.
M r. T a y lo r an d M r. N ix o n jo in ed fo r c e s in 1 9 3 8 . A fter
th ey h ad con q u ered th e sp in n in g d ifficu lties, th e y b egan to
d ev elo p th e p r e sp in n in g p ro c essin g o f th e w o o l. T hou gh
so m e o f th e cotton m a ch in es h ad to b e rep la ced w ith new
eq u ip m en t, th ey w ere a b le to m ak e a d a p ta tio n s to others.
P art o f th e n ew m ach in ery, o f cou rse, w a s m an u factured fo r
th em b y th e tex tile -m a ch in ery co m p a n ies, b u t th e m ill’s ow n
m en m ad e m a n y ad a p ta tio n s to it and con structed som e o f
th e m ach in es th em selv es.
C onstant ex p erim en ta tio n , r ed esig n in g , and p ra ctice led to
a p ro cess th at h a s e n a b led th e c o m p a n y to m ake fine w or­
sted yarn s. A fte r a d d in g w ea v in g eq u ip m en t and a new fin­
ish in g p la n t, it co u ld p erfo rm a ll th e oth er p ro cesses e x ­
cep t sco u rin g . Its w o o le n w orsted s are a ccep ted b y lea d in g
clo th in g m an u factu rers in th e n a tio n as b e in g eq u a l in q u a l­
ity to th e w orsted s p ro d u ced un d er eith er th e B radford or
the F ren ch system .
T h e sp eed o f th e N ew n a n system , w h ich is n ow know n as
th e A m erican system , is greater than th at o f the co n ven tion al

M o n t h ly

R e v ie w

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49

w oolen -w orsted processes but less than that o f regu lar cotton
sp in n in g . S a v in g s under the system , the m ill ex ecu tiv es say,
are n ot as great as th ey m igh t seem at first. T h e ch ie f a d ­
v an tage the N ew n an p eo p le cla im fo r th eir system is that it
p rod u ces an e x cellen t product. S everal th in g s about th is d e ­
v elo p m en t are g ra tify in g . It p resents, o f course, ad d itio n a l
ev id en ce o f tech n o lo g ica l in itia tiv e and sk ill in th e South.
S in ce M r. T a y lo r received h is tra in in g at C lem son C o lleg e
and M r. N ix o n h is train in g at G eorgia T ech, th e h isto ry o f
th is d evelop m en t sh ou ld confirm th e stress that m an y p e o ­
p le p la ce on the v a lu e that h ig h er tech n ica l ed u cation in the
S ou th has to the section ’s eco n o m ic p rogress. M oreover, the
su ccess o f the N ew nan m ill in d ev e lo p in g th is system co n ­
tributes further evid en ce o f the im p ortan ce o f in d u strial re­
search. It arose from the research p o lic y o f an alert co m ­
p an y. T o th e q uestion “W here is you r research d ep art­
m e n t? ” an execu tive o f the m ill once answ ered, “T he entire
p la n t is a research lab ora to ry .”

v ille , G eorgia, w here it w ill a lso in sta ll m odern equ ipm en t
fo r th e m an u factu re o f w orsteds. T h ese d evelop m en ts in the
D istrict states p a r a lle l ea rlier d evelop m en ts in other S ou th ­
ern states, p a rticu la rly in N orth C arolina, S ou th C arolina,
and T exas.
A lth o u g h the recent d evelo p m en ts in the w ool-m anufacturin g in d u stry h ave b een ch iefly in th e w orsted branch there
are a num ber o f m ills in th e D istrict states, o f course, that
m ake w o o le n and m ixed yarns. T h e estab lish m en ts set up in
T en n essee after 19 10 in clu d e the A m erican T e x tile W oolen
C om pany’s m ills at A th en s and its Sw eetw ater W o o len M ills,
the C um berland Gap W o o le n M ills at H arrim an, and the
S p rin g field W o o len M ills. T h eir p rin cip a l p rod u cts are b la n ­
kets, overcoatin gs, and w o o len s. In G eorgia the later m ills
in clu d e the A tlan ta W o o len M ills, the A thens M an ufactu ring
C om pany, and th e A rm co M ills at N ew n an . In A lab am a the
W est P o in t M an u factu rin g C om pany h as a m ill that p ro ­
duces w o o len yarn .

M achines fo r u se in th e A m erican system h ave been d e­
v elo p ed b y textile-m ach in ery com p an ies. O ne com p an y
cla im s that the A m erican system , b esid es o fferin g a su p erior
fiber con trol, resu lts in a lab or sa v in g s that has b een e sti­
m ated as h ig h as $ 1 0 a n n u a lly per sp in d le w ith tw o sh ifts
w orking. T o others the system seem s to h ave d isad van tages.
T h ey b eliev e that it can o n ly u se h ig h ly u n ifo rm to p s o f a
n arrow ly defined range. T o som e com p an ies the new system
seem s su itab le fo r the sp in n in g o f yarn that is to be w oven
into fa b rics o f u n iform c o lo r but, becau se there are few er
d o u b lin g s in the new p rocess, n ot as su ita b le as others fo r
sp in n in g that in v o lv es m ixed co lo red fibers.

T h e d evelop m en t o f th e A m erican system com es at a tim e
w hen the w o o l in d u stry n eed s to do som eth in g about the o b ­
so lescen ce o f a great part o f its m ach in ery. W ritin g in the
Daily News Record , M urray E. W ych e states that few m ills
have re-eq u ip p ed to take advantage o f the m any im p ro v e­
m ents w h ich w ere d ev elo p ed even b efo re W o rld W ar II, in ­
clu d in g new h igh -p rod u ction cards, w o o len -sp in n in g fram es,
new m ach in es fo r h igh -sp eed sp o o lin g and w arp in g, and new
fin ish in g and d y ein g equ ip m en t. A survey revealed in 19 4 2
that o n ly 38 p ercen t o f the lo o m s in u se w ere less than 20
years o ld . T he m any w ar dem ands fo r w o o l clo th kept the
m ills o p era tin g at cap a city and thus in creased further their
need fo r m ach in ery rep lacem en ts, but th e tig h t situ ation in
the m ach in e in d u stry h as m ade such rep lacem en ts difficult.
W hether the A m erican system or another is ad op ted , m any
o f th e w orsted m ills th rou gh ou t th e cou n try m ust rep la ce
th eir eq u ip m en t if th ey are to keep p a ce w ith their com p eti­
tors. T h e re-equipm ent o f o b so lescen t m ills, o f course, m ight
ju st as w e ll take p la c e w here th e w oolen -w orsted indu stry is
a lrea d y centered u n less there is a greater ad van tage in lo ca t­
in g the m odernized op eration s elsew h ere. In th e sam e w ay,
becau se fu n d a m en ta lly the lo ca tio n a l factors that govern the
tran sfer o f fa cto ries to other region s a lso govern the estab ­
lish m en t o f new u n dertakings, new en terp rises m igh t ju st as
w e ll b e d ev elo p ed elsew h ere if there are no greater lo ca tio n ­
a l ad van tages in th e S outh.

Recent Developments
T h e r e la tiv ely new exp a n sio n o f w orsted m an u factu re in the
D istrict has com e in tw o w ays. Southern te x tile firm s h ave
b egu n the prod u ction o f w orsteds, and firm s in other areas
h ave estab lish ed new p la n ts in th e region .
In G eorgia the B achm an U x b rid g e W orsted C orporation
h as p u t its M acon T ex tiles, In corp orated , p la n t on the A m er­
ican system in the past few m onths. T h is com p an y, o r ig in a t­
in g in N ew E n glan d , a lso ow n s a p la n t at C edartown,
G eorgia, w h ich even b efo re the w ar w as m an u fa ctu rin g cotton-w arp w o o len s and h as now ad op ted a system som ew hat
sim ila r to the A m erican . A nother te x tile firm w h ich h as e n ­
tered the field is the C alla w a y M ills, now sp in n in g w orsted
under th e A m erican system in o n e o f its m ills at LaG range,
G eorgia. O ne new com p an y is th e H ig h la n d C ity M ills, o r ig ­
in a lly incorp orated in 1 9 4 7 as the C oosa V a lle y M ills, T a l­
la d ega, A lab am a. Its m ill is a m od ern ized form er cotton
m ill that is m an u factu rin g w orsted yarn s en tirely under the
A m erican system . It is financed b y lo c a l ca p ita l. A nother
p roject, recen tly com p leted fo r th e B rooks M an u factu rin g
C om pany, is the new w orsted-yarn m ill at G reensboro, G eor­
g ia .
A m ore recent develop m en t in G eorgia is th e o p en in g b y
the M . T . S teph ens C orporation, o r ig in a lly o f P ea ce D a le ,
R hode Islan d , o f a co m p lete ly au tom atic p la n t at D u b lin .
T he m ill w ill em p lo y betw een five and six hundred w orkers.
M odern m ach in ery and m ethods, it is estim ated, w ill effect
sa v in g s eq u a lin g as m uch as tw o thirds o f th e la b o r costs
under o ld er m ethods. T h e sam e com p an y, it is reported, has
su cceeded in lea sin g the N a v a l O rdnance P la n t at M illed g e


New Economic Opportunities
A ll th ese recent ch an ges o b v io u sly in d icate that no lon ger
are op p o rtu n ities fo r u sin g the reg io n ’s factors o f production
m ore p ro fita b ly confined to the sim p ler ty p es o f m an u fac­
turing. T h ey a lso sh ow that m uch o f the recent grow th in the
r eg io n ’s w o o l m an u factu rin g is the resu lt o f efforts to use
m ore p rofitab ly the m an a g eria l sk ill and the tech n ical k n o w l­
ed ge that h ave becom e m ore abundant. M oreover, th e grow th
o f th e D istrict’s w orsted in d u stry show s that in selectin g the
lo ca tio n fo r a ty p e o f m an u factu rin g w h ose su ccess depends
up on th is sk ill and k n o w led g e both nearness to m arkets and
p ro x im ity to raw m aterials o ften have o n ly a secon dary in ­
fluence.
D esp ite th e greater p ro x im ity o f th e D istrict states to the
sh eep -raisin g W est, fo r exa m p le, m ost o f th e m arketing
tran saction s take p la c e at the B oston w o o l m arket and m ost
o f the w o o l is a ctu a lly sh ip p ed there. T here th e so rtin g and

50

M o n t h ly

R e v ie w

o f th e F ederal R eserve B a n k o f A tla n ta fo r M a y 1948

grad in g, w h ich are so essen tia l to p ro d u ctio n under the
A m erican system , are done. It is there a lso th at m ost o f the
w o o l is scoured , a p rocess that can b e carried on p ro fita b ly
o n ly on a la rg e scale. N ear B oston are m ad e m ost o f the
w o o l to p s w ith w h ich a m a jo rity o f th e D istrict m an u factu r­
ers at presen t b egin th eir m an u factu re o f w orsted s.
A s th e industry d ev elo p s in the reg io n it m a y b ecom e
la rge en ou gh to m ake the esta b lish m en t o f la rg e scou rin g
p la n ts in the South fe a sib le . W o o l sco u rin g is a lrea d y b ein g
d o n e to som e extent in T ex a s. It is a lso p o ssib le that m ore
and m ore p lan ts w ill m ake th eir ow n to p s or that sp ecia lized
to p s-m an u factu rin g p lan ts w ill b e esta b lish ed . U n til th ese
even ts take p la ce, nearn ess to p ro d u ctio n m a teria ls even in
a sem ip rocessed state can n ot stim u la te th e lo ca tio n o f the
w o o l ind ustry in the Sou th .
T he garm ent in d u stry in th e S ou th , o f cou rse, is grow in g.
In la te 1 9 4 7 the D istrict states w ere p rod u cin g, fo r ex a m p le,
as m uch as 1 4 p ercent o f a ll th e m en ’s w o o le n w ork and
dress trousers m ade in th is cou n try. T h e m an u factu re o f
m en’s su its and coats, how ever, is still concentrated in the
N ew Y ork, R ochester, B oston , and P h ila d e lp h ia areas, w hich
together accoun t fo r 5 5 p ercen t o f th e cou n try’s su it m an u ­
factu re and 65 p ercent o f its o vercoat p ro d u ctio n . S om e te x ­
tile m en p o in t out that tran sp ortation to th is m arket, o f
course, costs the Sou thern m an u factu rers m ore than it costs
the N ew E n glan d m ills. O thers b eliev e that th is a sp ect is
over-em ph asized . T h ey p o in t to th e garm ent in d u stry in the
M id d le and F ar W est, to w h ich th e D istrict m ills are as
c lo se as the N ew E n glan d m ills are. S till others b e lie v e that
the lo c a l a v a ila b ility o f m ore w orsted clo th w ill lea d to fu r ­
ther grow th in th e S outhern garm ent in d u stry and p ro v id e a
m arket clo ser by.
O f m uch greater im p ortan ce th an p ro x im ity to the m ar­
ket h ave been the a v a ila b ility o f la b o r and th e ex isten ce o f
a fa v o ra b le com p etitive p o sitio n . B ecau se the in d u stry has
in the p ast been on e that w as slo w to ch an ge, som e p eo p le
charge that both m an agem en t and la b o r h a v e b ecom e u n d u ly
conservative. N ew m an u fa ctu rin g esta b lish m en ts in th e D is ­
trict states do not, o f cou rse, h a v e la b o r that is alrea d y e x ­
p erienced in the m anufactu re o f w orsted s a v a ila b le , but to
som e w orsted m an ufactu rers th is is an advantage.
O ne South ern te x tile ex ecu tiv e recen tly ob served the r ela ­
tive efficiency o f three ty p es o f w orkers in th e n ew m ethods.
O ne grou p con sisted o f w orkers ex p erien ced in th e m an u ­
factu re o f w orsteds. A secon d group com p rised w orkers w ith
exp erien ce in cotton -textile m an u factu re. T h e th ird consisted
o f p e o p le w h o h ad never been in sid e a te x tile p la n t b efore.
T h is w as th e grou p that p roved to be th e m ost sa tisfactory.
T h e con servatism o f the exp erien ced w orsted w orkers m ade
it difficult fo r th em to ad ap t th em selv es r e a d ily to th e new
m ethods. It w as hard to im p ress th e form er cotton -textile
w orkers w ith the greater care and sk ill needed in m ak in g
m aterials that w ere w orth S3 a yard in stead o f the 40-centa-yard m aterial w ith w h ich th ey had b een w ork in g. T h ose
w ho had had no p revio u s exp erien c e but received ca refu l
train in g w ere m ost w illin g to u se the care required. T here is
a su p p ly o f th is ty p e o f la b o r in m an y S ou th ern com m u n ities.
M ost au th orities exp ect n either a sudden w h o le sa le m ig ra ­
tion o f w o o l m an u factu rin g fro m its p resen t lo ca tio n n or an
overn igh t m od ernization o f the ex istin g p la n ts. U n til o n e or
the other o f th ose events takes p la ce, p rices o f fin ish ed w o o l



p rod u cts w ill co n tin u e to b e go v ern ed p rim a r ily b y th e co m ­
p a ra tiv ely h ig h costs o f th e N orth ern m ills . M an y Southern
m ills, b ecau se th ey w ill b e n ew ly eq u ip p ed , w ill reap th e
co m p etitiv e ad van tages o f m od ern lo w -co st m ach in ery and
m ethods.
In recen t y ea rs w o o le n and w o rsted m an u factu rers h ave
been e n jo y in g co m p a ra tiv e p ro sp erity . T h e lo n g er that con ­
d itio n con tin u es, th e m ore ad v a n ta g eo u s it w ill b e fo r new
S ou th ern m ills . B ecau se m ost o f th e m en in th e arm ed
fo rces w ore w o o l clo th es, th eir n eed s d u rin g W o rld W ar II
raised w o o l m an u fa ctu rin g to record h eig h ts. T h e dem ands
o f retu rn in g veteran s fo r c iv ilia n c lo th in g in crea sed activity
s t ill fu rth er in th e p o stw a r y ea rs, and h ig h con sum er in ­
com es h e lp e d m a in ta in p ro d u ctio n th ro u g h 1 9 4 7 . E ven if
h ig h p erso n a l in co m es con tin u e, w o o l-m a n u fa ctu rin g activity
w ill no d ou b t b e co n sid era b ly in flu en ced in th e fu tu re b y
con su m er p referen ces n o t o n ly fo r c lo th in g rather than oth ­
er consum er g o o d s b u t fo r clo th in g m ad e o f w o o l rathe*
than that m ad e o f oth er fibers.
S in ce th e b e g in n in g o f W o rld W ar II w o o l h a s a n n u a lly
con stitu ted fro m 9 to 11 p ercen t o f a ll th e te x tile fibers used
in the U n ited S tates. In th e five p rew ar y ea rs en d ed in 1940
the p ro p o rtio n a veraged o n ly 9 p ercen t. A p p a re n tly th e w o o l
p ro p o rtio n o f th e to ta l te x tile fibers u sed is greater in years
o f a h ig h rate o f b u sin ess a ctiv ity an d le s s d u rin g p erio d s o f
a lo w rate o f b u sin ess a ctiv ity . In o th er w ord s, th e indu stry
ap p ears to b e m ore sen sitiv e to eco n o m ic flu ctu ations than
som e other in d u stries are. A n in d ex o f th e p rices o f w oolm a n u fa ctu rin g -com p a n y stock s, w h ich reflects th e earn in gs
o f th e co m p a n ies, d eclin ed m ore sh a rp ly d u rin g th e d ep res­
sio n o f th e 1 9 3 0 ’s th an th e in d ex o f stock p rices o f cottonm a n u fa ctu rin g co m p a n ies and, in fa ct, th e in d ex o f in d u s­
tria l stocks g e n e ra lly . D u r in g th e p ostw ar p erio d th e in d ex
o f w oo l-co m p a n y -sto ck p rices ro se m o re r a p id ly than did
the in d ex es o f eith er cotton co m p a n ies or a ll in d u stry.
S om e p e o p le b eliev e, h ow ever, that, a lth o u g h it w o u ld not
b e fa v o ra b le to th e in d u stry ’s d ev elo p m en t, in th e D istrict,
a d ec lin e in th e dem and fo r w o o l te x tile s w o u ld n ot n eces­
sa r ily stop th e ex p a n sio n en tire ly . T h e S ou th ern w orsted
m ills w o u ld at lea st h a v e r e la tiv e ly n ew eq u ip m en t. O thers
th in k that a d e c lin e in th e d em an d w o u ld fo r c e th e m ills to
m od ern ize in an effort to red u ce th eir co sts and that m uch
o f the m od ern ization w o u ld b e m ad e at n ew lo c a tio n s in the
S ou th .

Prospects
A fa ir ly p o p u la r p red ictio n is th at th e S ou th ern exp a n sio n
in th e m an u factu re o f w orsted s m arks o n ly th e b eg in n in g o f
an ex p a n sio n lik e th e o n e w h ich h a s a lrea d y taken p la c e in
co tto n -tex tile p ro d u ctio n . T h ere are m a n y p o in ts o f d iffer­
en ce in the tw o field s, h ow ever, n o t o n ly in m ech a n ical p ro c­
esses b u t in eco n o m ic fa cto rs as w e ll. C on seq u en tly the
d raw in g o f too c lo se a p a r a lle l m a y b e m islea d in g . A r e a l­
iza tio n o f th e p red ictio n s m a d e fo r w o o l m an u fa ctu rin g in
th is d istrict seem s to d ep en d m a in ly o n w h eth er th e in d u s­
try affords a m ore p ro fita b le m ean s o f u tiliz in g th e region ’s
eco n o m ic resou rces th an so m e other in d u stries d o. In the
D istrict’s p resen t sta g e o f eco n o m ic d ev elo p m en t, p rosp ects
fo r ex p a n sio n in th is ty p e o f m a n u fa ctu rin g are greater than
th ey h a v e b een fo r m an y years.
C h a rles T . T

a ylo r

M o n t h ly

R e v ie w

o f th e F ederal R eserve B a n k o f A tla n ta fo r M ay 1948

D is tr ic t
Meat Prices and Beef-Cattle Prospects
a l t h o u g h there w ere few er b e ef cattle on D istrict farm s
x V at the b eg in n in g o f th is year than there w ere in January
1 9 47, m ost o f the w artim e grow th o f th e area’s b eef-ca ttle
in d u stry h as been retained. In th e S ix S tates th e num bers in ­
creased fro m 3 .0 m illio n in 1 9 4 0 to 4 .4 m illio n b y 1 9 4 7 . D e ­
sp ite a decrease la st year o f ab ou t a quarter o f a m illio n ,
m o stly in L ou isian a and M ississip p i, farm ers in the D istrict
states n ot o n ly had 38 p ercen t m ore b ee f cattle on January 1
o f th is year than th ey had in 1 9 4 0 but th ey a lso had a slig h t­
ly larger p rop ortion o f the to ta l num ber fo r th e n ation .
T h is sm a ll relative in crease m ay b e m ore sig n ifica n t than
the la rg e a b solu te increase, sin ce b eef-ca ttle num bers over
the n a tio n a lso increased ra p id ly betw een 1 9 3 8 and 1 9 4 5 .
M ost o f the la rg e increase in D istrict b eef-ca ttle num bers o c ­
curred sim p ly because farm ers in the area w ere p a rticip a t­
in g in the upw ard p hase o f the cattle-num bers c y cle . S in ce
som e D istrict farm ers, p a rticu la rly th ose in F lo rid a , L o u isi­
ana, and M ississip p i, added to th eir herds m ore ra p id ly than
the n a tio n ’s farm ers did, how ever, th eir w artim e in crease in
b eef-cattle num bers m ay n ot h a v e been attrib u tab le en tirely
to th e c y c lic ch an ge in num bers.
P art o f the D istrict’s r ela tiv e gain , o f cou rse, m ay h ave
been caused b y a greater sen sitiv ity to livestock -p rice
ch anges. A recent study o f h o g p rod u cers’ resp o n se to hogp rice ch an ges show ed, fo r ex a m p le, that the m argin al p ro ­
ducers, th ose w h ose profit m argin s u su a lly are the sm allest,
tended to m ake greater ch an ges in th eir p rod u ction p la n s
w hen p rices changed than the m ore efficient prod u cers did.
C om pared to the lo n g-esta b lish ed b eef-p ro d u cin g areas, the
D istrict has a greater p ro p o rtio n o f farm ers ra isin g b ee f cat­
tle w ho m ay b e m argin a l p rod u cers. In resp o n se to th e fa ­
v o ra b le p rices in th e past few years, such prod u cers p ro b ­
a b ly in creased their prod u ction m o re than th e grow ers w h ose
m argin o f p rofit is u su a lly greater.
D esp ite an y rela tiv e g a in s th e D istrict h a s had in beefca ttle prod u ction , its farm ers’ c h ie f in terest is in o b ta in in g
further g a in s. In th is con n ection recent ch an ges in m eat
p rices, p a rticu la rly th ose that narrow the spread b etw een the
h igh er-p riced and the cheaper grad es o f b eef, afford som e
in terestin g p o ssib ilitie s. G en erally th e h ig h ly concentrated
carbohydrates needed to p rod u ce th e better grade o f b e e f
carcass are n ot lo c a lly a v a ila b le . A s a co n seq u en ce m ost o f
the b e e f cattle are either slau gh tered , to p rod u ce a rela tiv e ly
low -grad e b eef carcass, or so ld as stackers and feed ers. A
p rice ch an ge that resu lts in r e la tiv e ly fa v o r a b le p rices fo r
low -grad e and u n finish ed b e ef cattle, th erefore, ten d s to b en ­
efit the D istrict cattle p rod u cers.
F rom 16.5 cents a pound in th e first w eek o f F eb ru ary the
spread betw een th e choice- and the u tility -g ra d e-b eef car­
casses so ld at w h o lesa le in C hicago decreased ste a d ily to 5 .7 5
cents a p ou n d in the la st w eek o f A p r il. In th e latter w eek
u tility -b eef carcasses w ere se llin g fo r 8 9 percen t as m uch as
the ch o ice carcasses and in the co rresp o n d in g w eek la st year
fo r 73 percent as m uch.
In January th is year the p rice o f com m on slau gh ter steers
at C hicago w as 59 percent o f th e average p rice o f ch o ice and
prim e steers. B y M arch the spread had decreased u n til the
form er w as 75 percent o f th e latter average. A year earlier




51

B u s in e s s
p rices fo r com m on steers w ere o n ly 6 6 percen t o f th ose for
ch o ice and p rim e steers.
S om e o f th e n arrow in g o f th e sp read betw een steer p rices
that h as occurred in recent w eeks is attrib u tab le to the usual
season al fluctuations. O rd in arily, in la te sp rin g the p rices fo r
com m on steers reach th eir sea so n a l p eak and th e p rices fo r
w ell-fin ish ed steers are se a so n a lly lo w . W ith adjustm ents
m ade fo r sea so n a l v ariation , how ever, com m on-steer p rices
even in M arch o f th is year w ere h ig h com p ared w ith choiceand prim e-steer p rices. T h ey w ere a lso h ig h er in rela tio n to
choice- and prim e-steer p rices than th ey w ere d u rin g 1937-41.
S in ce p rice co n tro ls ended, th e am ount o f m o n ey that p e o ­
p le h ave to sp en d has been th e m ost im p ortan t in fluence on
m eat p rices. B oth the retail v a lu e o f m eat consum ed per p er­
son and the d isp o sa b le in com e per p erson set new records in
1947, and consum ers sp en t a la rg er p ro p o rtio n o f their in ­
com es fo r m eat than th ey h ad in an y year sin ce 1 9 34. T here
w as little ch an ge in the p u rch asin g p ow er o f con su m ers’ d is­
p o sa b le in com e d uring th e first quarter o f th is year. M eat
p rod u ction w as at lea st 10 percen t less than it w as in the
first quarter la st year, and p rices h ave rem ained com p ara­
tiv e ly h ig h . T h e rela tiv e ly h ig h p rices fo r th e low er grades
o f b e e f su g g est that m an y consum ers m ay be tu rn in g to less
ex p en siv e cuts in stead o f in crea sin g the p ro p o rtio n o f th eir
total in com e sp en t fo r m eat. A com p arison o f th e changes in
retail b eef p rices w ith the ch an ges that occurred in the spread
betw een p rices fo r th e higher- and low er-grad e b eef steers,
how ever, d oes n ot c le a r ly in d ica te an y m onth-to-m onth
changes in b u y in g h ab its o w in g to ch an ges in m eat prices.
A lth o u g h there seem s to b e su ch a rela tio n sh ip , a p p aren tly
a lso th ere is a la g in tim e betw een p rice ch anges and
ch an ges in con su m ers’ b u y in g h ab its.
In the short run, o f course, a n arrow in g o f the spread be­
tw een p rices fo r the better grades o f b e ef and th o se fo r the
p oorer grades is o f little benefit to D istrict p rod u cers. S in ce
sm a ller su p p lie s are in p rosp ect fo r the n ext few years, h ow ­
ever, b eef-ca ttle p rices are lik e ly to rem ain com p aratively
h ig h . In th e ea r ly stages o f a dow nturn in the beef-cattlen um bers c y c le there is u su a lly a la rg e in crease in b eef p ro­
d u ction . In other w ords, as herds are reduced in size or liq ­
uidated, la rg e q u an tities o f b e e f are m arketed. T hus, the n a­
tio n a l d eclin e that b egan in 194 5 h a s b een resp o n sib le for
the p resent situ ation . L ast year b e e f su p p lie s per p erson w ere
ex trem ely large, but as b eef-ca ttle num bers con tin ue to d e­
clin e th ey too w ill lessen . W hen b e e f producers b egin to en ­
la rg e th eir h erds so as to take ad van tage o f fa v o ra b le p rices,
the su p p ly o f b eef m arketed d eclin es still further. T o b u ild
up th eir herds cattle grow ers m ust, o f course, h o ld y o u n g a n i­
m a ls fo r b reed in g stock, in stead o f se llin g a ll th eir current
p rod u ction .
I f farm ers rea lize their exp ectation s fo r feed -grain crops,
the su p p lie s w ill be a m p le fo r liv esto ck d u rin g 1948-49.
W ith a m p le feed su p p lies, the dem and fo r stocker and fe e d ­
er steers sh o u ld rem ain strong.
T o som e exten t b e e f p rices m ay a lso be affected b y the
su p p lie s o f other m eats, p a rticu la rly pork. P ork p rodu ction ,
o f course, can b e exp an d ed or contracted m ore q u ick ly than
b eef p rod u ction . I f th e u su a l rela tio n sh ip betw een th e hogcorn ratio and th e size o f the p ig crop h o ld s, a m oderate to

52

M o n t h ly

S ix th

o f th e F ederal R eserve B a n k o f A tla n ta fo r M a y 1948

R e v ie w

D is t r ic t S ta tis tic s

RETAIL JEWELRY STORE OPERATIONS
Item
Total s a le s ................. .......................................
Gash s a le s ... ................... .............................. .
Credit s a le s ....................................................
Accounts receivable, end of m onth...........
Collections during m onth............................

INSTALMENT CASH LOANS
Volume
O utstandings
No. of Percent Change Percent Change
Lenders April 1948 from April 1948 from
Report­
April
April
March
ing
March
1947
1948
1947
1948

Lenders

Federal credit u n io n s...............
State credit u n io n s...................
Industrial banking com panies.
Industrial loan com panies___
Small loan co m p an ies..____ t..
Commercial b an k s.....................

Item

N um ber
Percent Change
of
April 1948 from
Stores
Reporting March 1948 April 1947
— 2
— 6
35
— 15
34
4- 4
+ 1
— 4
34
34
4- 30
+ 16
— 3
34
4- 19

46
25
11
20
43
34

4- 5
— 8
4- 1
— 13
— 8

44+
—
—
i+

66
23
19
1
4
40

44"
+
+
—
4-

4
3
1
1
1
3

4- 62
+, 54
4- 13
+ I
+
+ I5

WHOLESALE SALES AND INVENTORIES*
INVENTORIES
SALES
Percent Change
Percent C hange
No. of April 1948 from No. of Apr. 30, 1948, from
Report­ Mar.
Apr. Report­ Mar. 31 Apr. 30
ing
1947
1948
1947
ing
1948

Automotive supplies.
Electrical g ro u p ........
W iring su p p lie s ...
A ppliances..........
G eneral h a rd w a re ...
Industrial hardw are.
Je w e lry .. .....................
Plumbing and heat­
ing su p p lies...........
Confectionery...........
Drugs and sundries.
Dry g o o d s...................
G roceries....................
Full lin e s..........,----Specialty lin e s___
Tobacco p ro d u cts__
M iscellaneous...........
Total........... .................

3

— 20

— 1

3
3
8
3
5

—
+
+
4-

15
13
1
4
9

+
—
44_

4
5
11
21

+
—
—
—

16
10
2
11

34
6
8
17
131

4- 1
1
— 2
— 3
— 2

—

28
12
13
7

+ 26

3

4-

4

— 7

+

4

4

+ ‘i

— 18

4- 32
+ 0
— 6

3

+

2

+ 88

6
14

44-

1
2

4- 6
4- 12

2
6

19
3

— 4
— 7

19
5

17
73

— 2

2

4+
+

4+

io

—

4

"a

+
+

ii

16

4- 35
4- 16

* Based on U. S. D epartm ent of Commerce figures
DEPARTMENT STORE SALES AND INVENTORIES

Place

No. of
Stores
Report­
ing

ALABAMA
Birm ingham . . . .

INVENTORIES
SALES
Percent Change
Percent Change
No. of
April 1948 from
Stores Apr. 30, 1948, from
Report­ Mar. 31 Apr. 30
Apr.
Mar.
ing
1948
1947
1947
1948

+ 5
— 15
4
5
— 14
4- 11
M ontgom ery...
3
— 8
+ 4
FLORIDA
Jacksonville___
—
9
4
— 5
M iam i................
4
— 20
— 8
O rla n d o ../..........
— 13
3
4- 16
Tam pa___ ____
5
— 8
4- 0
GEORGIA
A tlanta_______
— 11
6
+ 8
A u g u sta...........
— 15
— 13
4
C olum bus..........
— 11
3
4* 12
M acon...............
— 11
— 17
4
Rom e.............
3
— 4
4- 2
Savannah, .i___
4
— 10
+ 0
LOUISIANA
Baton R o u g e ...
— 13
4- 2
4
New O rleans. ...
— 1
+ 14
5
MISSISSIPPI
Jackson.............
— 0
4- 11
4
M eridian...........
— 4
3
+ 1
TENNESSEE
2
— 9
3
Bristol...............
C h attan o o g a...
— 9
4
— 2
K noxville.......
4
4- 20
+ 33
N ashville..........
6
— 16
— 3
OTHER CITIES*...
19
— 9
4- 0
DISTRICT.............
— 9
104
4- 5
*W hen few er than three stores report in a given
are grouped together under “ other cities."




3

4- 28

3

i+

3

4- ’7

4- '9

3
3

— 0
— 4

4- 28
4- 12

3

— 3

4- 39

5
3

— 2
+ 22

4- 22
4- 34

4

4- *7

— io

4
4

4* 5
4- 2

,4- 25
4- 12

4

4-

1

4- 16

3

— 0

— i

3

4-

4

5
4~ 5
22
4- 3
72
4- 2
city, th e sales or

+

4

4- 26
f 17
4- 19
stocks

sharp red u ction in th is year’s f a ll p ig crop w ill occur. L ittle
or n o in crease in p ork p ro d u ctio n is lik e ly , th erefore, u n til
at lea st th e f a ll o f 1 9 4 9 .
In v iew o f th e su p p ly-an d -d em an d p ro sp ects fo r th e ty p e
o f b e e f g e n e r a lly p rod u ced b y D istr ict farm ers, th e o u tlook
fo r b eef-cattle ra isin g seem s u n u su a lly fa v o ra b le . F or th ose
o f the D istrict farm ers w h o are attem p tin g to e sta b lish a
perm an en t en terp rise o f th is ty p e, th e ch a n g es n ow occurring
m a y be p a rticu la rly h e lp fu l. T h e e x p erie n c e o f cattle g lo w ­
ers over the years h as sh ow n rather c o n c lu siv e ly , how ever,
that attem pts to get in and ou t o f th e b u sin ess in a n ticip a ­
tio n o f fu tu re p rice trends u su a lly en d in fa ilu r e . B ut, if the
b eef-ca ttle en terp rises are w e ll in teg ra ted in to th e farm b u si­
ness and ad ju sted to e c o n o m ic a lly p rod u ced fe e d su p p lies,
su ch as h ig h -y ie ld in g p a stu res, ev en ts o f th e n ex t few years
m ay p rov id e an u n u su a lly g o o d o p p o rtu n ity fo r th e d ev el­
op m en t o f a la rg er and a m ore efficient b eef-ca ttle in dustry.
B .R .B.

Industry
F o llo w in g th e term in a tio n o f th e co a l strike on A p ril 12
th ere w as, o f cou rse, a p ro m p t in crea se in th e p rod u ction
o f co a l and a lso a ra p id r ise in th e rate o f ste e l-m ill activity.
F o r th e fo u r w eeks th at th e m in ers w ere id le , th e statem ents
o f th e U n ited S tates B ureau o f M in es in d ica te, a w eek ly aver­
a g e o f o n ly 7 4 ,5 0 0 ton s o f c o a l w as p rod u ced in A lab am a
an d T en n essee. O utput in crea sed in th e su cceed in g w eeks,
a m o u n tin g to 5 6 3 ,0 0 0 ton s in th e la st w eek o f A p r il. T h is w as
som ew h at greater than th e a v era g e fo r th e 11 w eeks p reced in g
the strike and a lso greater th an o u tp u t in th e co rresp on d in g
w eek la st year. F or M arch and A p r il togeth er, h ow ever, the
ou tp u t w a s su b sta n tia lly le ss than it w as a year earlier.
S teel m ills in th e B irm in gh am -G ad sd en area, after op erat­
in g v ir tu a lly at ca p a city sin ce th e m id d le o f 1 9 4 6 and even
som ew h at a b ove th e rated ca p a city in th e first tw o and a
h a lf m on th s th is year, h ad red u ced th eir o p era tio n s becau se
o f the co a l strik e to 4 1 p ercen t o f c a p a city b y A p r il 13.. B y
th e w eek o f M a y 11 th ey w ere o p era tin g , it w as reported,
at 9 8 p ercen t o f ca p a city .
In th e first fo u r m o n th s o f th is y ea r co tto n -tex tile m ills
in G eorgia, A la b a m a , T en n essee, an d M ississip p i used 7.1
p ercen t le ss cotton than th ey d id in th e first fo u r m onths
la st year. T o ta l co n su m p tio n in M arch ex ceed ed th e February
figure, b u t th e d a ily a verage rate d e c lin e d 3 .3 p ercent and
in A p r il d ro p p ed 3 percen t. L ast y ea r te x tile -m ill a ctiv ity in
the D istrict d eclin e d 8 .7 p ercen t fro m J a n u ary 1 through
A p r il, and 3 2 p ercen t fr o m J an u ary th ro u g h J u ly . T h e Janu a ry -A p ril decrease th is year w as 7 .7 p ercen t.
C ontinued g a in s in th e v a lu e o f con tracts aw arded in the
D istrict in d ica te in creased a ctiv ity in th e co n stru ction line.
A cco rd in g to figu res co m p ile d b y th e F . W . D o d g e C orpora­
tio n , th e M arch to ta l o f a lm o st 7 6 m illio n d o lla r s is larger
than the to ta l fo r eith er F eb ru ary or Jan u ary and 4 7 percent
greater than th e M arch 1 9 4 7 figu re. R esid en tia l contracts
aw arded in M arch, w h ich a m ou n ted to 3 2 .5 m illio n d o lla rs,
w ere up 4 4 p ercen t fro m th o se o f M arch la st year, and other
aw ards w ere ab ou t 5 0 p ercen t greater th an th ey w ere a year
a go. In the first quarter to ta l aw ards w ere 3 7 p ercen t greater
than th ey w ere in th e first th ree m on th s o f 1 9 4 7 , w ith resi­
d en tial contracts 3 8 p ercen t greater and other aw ards 36
p ercen t greater. B oth th is year an d la st, resid en tia l contracts
in the first quarter accou n ted fo r 4 4 p ercen t o f th e total.
S in ce th ese c o m p a riso n s are based u p o n th e d o lla r v a lu e o f

M o n t h ly

R e v ie w

o f the F ederal R eserve B a n k o f A tla n ta fo r M ay 1948

con struction contracts, part o f the in crease is, o f course,
attributable to the continued rise in con stru ction costs. T h e
in d ex o f b u ild in g costs co m p iled b y the A m erican A p p ra isa l
C om pany fo r 30 o f the larger cities th rou gh ou t the country
rose 2 2 percent betw een F ebruary 1 9 4 7 and F eb ru ary 194 8 .
F or A tlanta, the o n ly S ixth D istrict city fo r w h ich the in d ex
is a v a ila b le, the rise w as 21 p ercent. In F ebruary, h ow ever,
the A tlan ta in d ex, w as 7 percent h ig h er than the in d ex fo r
the grou p . T he 12-m onth rise in the w h o lesa le-p rice in d ex o f
b u ild in g m aterials co m p iled b y the B ureau o f L abor S tatistics
w as 10 percent, w ith the in d ex o f lum ber p rices sh o w in g a
rise o f 15 percent.
Im p roved w eather con d ition s in A p r il and M ay en ab led
m any lum ber m ills to resum e fu ll op era tio n s fo r the first
tim e in m any w eeks, and output h a s rep o rted ly increased .
T here are reports o f occa sio n a l u n certain ty about the m arket
fo r som e S outhern-p ine item s, but there seem s to b e no e v i­
d en ce o f any w eakening in the dem and fo r h ard w ood lum ber.
B uyers are still tak in g a ll the h ard w ood lu m b er a v a ila b le .
F urniture fa cto ries are a ctiv ely b u y in g the sp ecies th ey use,
flo orin g fa cto ries are takin g a ll the flo o r in g oak a v a ila b le,
and the b o x and crate facto ries are co n sta n tly o rd erin g low grade stock.
C rude-oil p rod u ction in coastal L o u isia n a and M ississip p i
has been grow in g in recent years. In 1 9 4 6 it in creased a lm ost
9 p ercent over that in 1945, and in 1 9 4 7 there w as an in ­
crease o f 16 percent. In each o f the first three m onths o f
1948, prod u ction has been at a rate a p p ro x im a tely 16 p ercen t
h igh er than the rate in the first quarter o f 1 9 4 7 . W hat is
th ough t to be the first com m ercial p ro d u ctio n o f o il fro m
an at-sea lo ca tio n w as begu n e a r ly in M ay at a w e ll in the
contested tid ela n d tracts o f the G u lf o f M ex ico . T h is w ell
is b eliev ed to be the o n ly com m ercial p rod u cer co m p letely
out o f sigh t o f land .
P rod u ction o f p ow er b y S ix th D istrict e lec tric u tilitie s,
w h ich has been in creasin g each m on th sin ce la st J u ly , w as
greater in M arch than it had ever been. T h is record total
w as 11 percent greater than the to ta l fo r M arch la st year.
P rod u ction from the use o f w ater p ow er w as o n ly 2 p ercen t
greater than it w as a year ea rlier, and the F ebruary and
January figures w ere a ctu a lly low er than th ey w ere a year
ago, th ou gh outp ut from the u se o f fu e ls in th ose tw o m onths
w as greater than it w as in the co rresp o n d in g m onths last
year. M arch p roduction b y use o f fu e ls w as 2 4 percen t greater
th is year. T he first-quarter to ta ls fo r the six states o f the D is ­
trict sh ow total p rod u ction up 8 percent, w ith p rod u ction
b y u se o f w ater p ow er 10 percent less than it w as and p r o ­
d u ction b y use o f fu e ls 3 4 percen t greater.
In th e last tw o w eeks o f A p r il th ose ra ilro a d s co m p o sin g
the A sso cia tio n o f A m erican R a ilro a d s’ Sou th ern district
lo a d ed m ore cars o f revenue freig h t than th ey d id in th e
co rresp on d in g w eeks last year, but the w eek ly average fo r
the m onth w as slig h tly less than it w as a year a g o . T h e in ­
crease in the latter part o f the m onth w as b rou gh t about by
the rap id resum ption o f coal sh ip m en ts fo llo w in g the term i­
n a tion o f the coa l strike. A verages o f the w eek ly figu res, b y
the num ber o f cars, fo r A p ril th is year com pared w ith th ose
fo r la st A p r il reveal that a 10-percent decrease o f m erchan­
d ise sh ip m en ts in less-than-carload lo ts and ca rlo a d d e­
creases o f 23 p ercent in grain, 14 p ercen t in livestock , and 5
p ercent in co a l w ere offset in la rg e part b y in creases o f 12
percent in fo rest products, 2 6 percent in coke, and a lm o st 3
percent in m iscella n eo u s freig h t. T h e to ta l num ber o f cars



S ix th

Place
DISTRICT.............
A tlan ta...............
Baton R ouge. . .
Birmingham.___
C h attan o o g a...
Jackson..........
Jacksonville___
Knoxville..........
M acon..........i...
M ontgom ery...
N ashville.. . . . .
New O rle a n s...

Place
DISTRICT.............
A tlanta...............
Birmingham___
M ontgom ery...
N ashville..........
New O rle a n s...

Place
SIX S T A T E S ......
A la b a m a .........
Florida...............
G eo rg ia.........
Louisiana.........
M ississippi. .1...
T ennessee.......

D is tr ic t I n d e x e s

DEPARTMENT STORE SALES*
Adjusted**
Unadjusted
Apr.
Mar.
Apr.
Apr.
Mar.
1948
1948
1947
1948
1948
390
368r
387
366
353
455
398
428
410
394
407
417
390
391
433
374
376r
387r
343
341
350
355
357
338
348
374
352
346
358
333
437
432r
436
411
455
450
327
416
333
330
284
328
276
320
314
352
374
362
359
434
375
362
374
352
346
396
454
455
395
400
368
352
366
318
363
507
478
499
469
485

Apr.
1947
350
366
383
322
344
324
434
312
310
369
332
406
319
482

DEPARTMENT STORE STOCKS
Unadjusted
Adjusted**
Apr.
Apr.
Mar.
Apr.
Mar.
1947
1948
1948
1948
1948
320
376
370
379
370
371
490
451
481
480
237
311
316
305
303
356
322
352
336
380
559
538
423
589
531
299
357
335
330
349

Apr.
1947
317
395
24.6
347
469
319

GASOLINE TAX COLLECTION***
Unadjusted
Adjusted**
Apr.
Apr.
Mar.
Mar.
Apr.
1948
1948
1948
1948
1947
182
165
187
153
163
195
177
172
192
163
182
175
209
191
195
155
176
150
171
164
127
164
167
138
154
157
175
126
171
140
161
178
193
142
191

Apr.
1947
170
175
187
159
152
160
180

COTTON CONSUMPTION*
Apr.
Apr. Mar.
Place
1948
1947
1948
TOTAL...........
158
168
154
A labam a..... 165
162
181
G e o r g i a . . 152
167
160
Mississippi. 104
119
110
T e n n e sse e .. 132
141
133

Place

Feb.
1948

Mar
1947

145
160
125
135
138
148
156

146
160r
126
136
138
154r
156r

144
154
127
133
134
157
154

Apr.
1948

Mar.
1948

Mar.
1948
DISTRICT.... 374
R esidential. 491
318
A labam a... 282
F lorida....... 365
G e o rg ia ...
410
L ouisiana.. 488
Mississippi. 193
Tennessee.
497
Place

M(ar.
1948

CONSUMER'S PRICE INDEX
Item

ELECTRIC POWER PRODUCTION*
Mar.
Feb.
Mar.
1948
1947
1948
SIX STATES.. 341
307
338
Hydro­
325
generated . 332
291
Fuel­
284
generated . 353
400
CONSTRUCTION CONTRACTS

MANUFACTURING
EMPLOYMENT***

SIX STATES..
A labam a. ..
F lorida.......
G eorgia---L ouisiana..
M ississippi.
T ennessee.

53

Apr.
1947

ALL ITEMS... 173
162
172
F ood ........... 214
200
210
C lo th in g ...
181
201
200
Fuel, elec.,
122
and ic e ..
133
133
Home fur­
nishings .
196
189
176
Misc...........
147
148
144
Purchasing
pow er of
d o lla r.....
.58
.58
.62
*Daily average basis
**Adjusted for seasonal variation
***1939 monthly average=100;
other indexes, 1935-39=100

Feb.
1948
349
501
276
271
501
285
425
169
270

Mar.
1947
254
340
212
184
384
210
231
156
198

ANNUAL RATE OF TURNOVER OF
DEMAND DEPOSITS
Mar.
Apr.
Apr.
1948
1948
1947
U n ad ju sted .. 19.2
19.1
18.4
A djusted**... 19.5
19.6
18.7
79.2
79.3
72.3
CRUDE PETROLEUM PRODUCTION
IN COASTAL LOUISIANA
AND MISSISSIPPI*
Apr.
Mar.
Apr.
1948
1948
1947
U n ad ju sted .., 283
282
248
Adjusted**... 278
282
243
r Revised

M o n th ly R eview o f th e F ederal R eserve B a n k o f A tla n ta fo r M a y 1948

54

S ix th

D is tr ic t S ta tis tic s

CONDITION OF 28 MEMBER BANKS IN LEADING CITIES
(In T housands ol Dollars)
Percent C hange
May 12 April 14 May 14 May 12, 1[948 irom
Item
April 14 May 14
1947
1948
1948
1947
1948
Loans and investm ents—
T o t a l ...,.............................. 2,293,140 2,296,500 2,328,944
Loans—to tal...........................
832,211
834,076 705,619
Commercial, industrial,
and agricultural loans. 513,150
519,664 407,996
Loans to brokers and
7,132
dealers in se c u ritie s...
6,464
6,566
O ther loans for p ur­
chasing an d carrying
83,462
58,167
58,082
secu rities............. ...........
55,667
76,016
75,157
Real estate lo an s.............
3,817
4,845
6,239
Loans to b an k s.................
172,175
169,762 147,545
O ther lo an s.......................
1,460,929 1,462,424 1,623,325
Investm ents—to tal..........
379,003 435,326
U. S. direct o b lig atio n s.. 380,087
Obligations g u aranteed
by U, S ............................ 894,659
899,844 1,000,536
O ther securities...............
183,577 187,463
186,183
Reserve w ith F. R. Bank..,. 453,348
451,168 433,121
Cash in v a u lt.........................
41,148
43,376
43,283
Balances w ith dom estic
b an k s.................................... 194,035
207,214 214,849
Demand deposits adjusted. 1,749,613 1,743,764 1,722,498
Time dep o sits..,............. .
545,065 546,798
544,760
68,663
41,389
U. S. G ov't d ep o sits...........
46,111
490,790 515,415
Deposits ol dom estic banks. 466,815
1,500
3,000
Borrow ings.............................

— 0
— 0

— 2
+ 18

— 1
— 2

— 9

+ 0
+ 1
.+29
+ 1
— 0
t+ o

—
+
+
+
—
—

— 1
+ 1
+ 0
+ 0

— 11
— 1
+ 5
+ 5

—
+
—
+
—

—
+
—
—
—

6
80
11
5

+i 26

30
37
63
17
10
13

10
I0
33
9

DEBITS TO INDIVIDUAL BANK ACCOUNTS
(In T housands oi Dollars)
ria c e
ALABAMA
A nniston...........
B irm ingham ...
D othan.............
G ad sd en ..........
M obile.............
M ontgom ery...

No. oi
Banks
Report­
ing
3
6
2
3
5
3

Apr.
1948

Mar.
1948

Apr.
1947

Percent C hange
Apr. 1948 irom
Apr.
Mar.
1947
1948

19,904
303,512
11,090
17,785
139,550
67,639

22,282
339,851
12,030
18,045
150,120
75,622

19,383
274,089
9,201
15,746
111,130
63,144

—
—
—
—
—
—

11
11
8
1
7
11

+
+
+
+
+
+

3
11
21
13
26
7

FLORIDA
Jacksonville...
Miami...............
G reater Miami*
O rlando ...........
P ensacola____
St. Petersburg.
Tam pa.............

3
7
12
3
3
3
3

253,407
252,454
356,246
54,833
30,745
57,992
108,397

283,428
291,680r
413,231r
54,274
37,453
60,256
120,039

233,998 — 11
212,923 — 13
306,039 — 14
42,893 + 1
30,609 — 18
52,628 — 4
102,357 — 10

GEORGIA
A lbany.............
A tlanta..........
A u g u sta...........
B runsw ick.......
C olum bus........
E lb e rto n .. . .....
G ainesville*. . .
Griffin*.............
M acon...............
N ew n an .. . . . . .
Rome*...............
Savannah .........
V aldosta..........

2
4
3
2
4
2
3
2
3
2
3
4
2

17,086
786,828
57,534
8,647
54,972
3,872
14,002
10,800
62,440
8,205
21,222
86,418
9,902

17,208
807,176
57,688
8,784
57,625
3,875
13,741
10,823
60,213
7,903
21,490
94,610
10,671

13,564 — 1
696,947 — 3
53,542 — 0
8,379 — 2
54,244 — 5
3,415 — 0
11,267 ■+ 2
10,072 — 0
51,503 + 4
6,362 + f
18,422 —
1
76,503 — 9
11,401 — 7

+ 13
+ 24
+
+ «?
21
+ 29
+ 15
+ 13
— 13

LOUISIANA
Baton Rouge.
Lake C h a rles..
New O rle a n s..

3
3
7

88,517
32,701
615,676

88,368
31,780
641,450

67,507
24,420
566,40£

+ o
+ 3
— 4

+ 31
+ 34
+ 9

MISSISSIPPI
H attiesb u rg ...
Jackson.............
M eridian.........
V icksburg........

2
4
3
2

14,776
118,714
29,974
23,593

16,137
149,611
28,947
25,483

15,038
97,471
24,771
20,571

—
—
+
—

—
+
+
+

2
22
21
15

TENNESSEE
C h attan o o g a...
Knoxville..........
N ashville__

4
4
6

135,725
107,981
280,979

142,212
107,444
280,415

118,689
100,150
261,432

— 5
+ o
+ o

+
+
+

17

SIXTH DISTRICT
32 C ities..........

11Q

3,861,848 4,102,680r

3,440,412

— 6

+ 12

— 5

+ 17

UNITED STATES.
102,354,000 107,621,000 87,771,000
333 C ities........
* Not included in Sixth District total
r Revised




8
21
47

+
+
+
+
+
+
+

8
19
16
28
o
10
6

+ 26
' i 1?

t

?

lo a d ed averaged le ss than o n e p ercen t b e lo w th e average
fo r A p r il 1 9 4 7 .
A t th e m id d le o f M arch in m o st areas, in fo rm a tio n from
th e va rio u s sou rces rep o rtin g o n em p lo y m en t in d icate, there
w ere sm a ll in creases in th e estim ated nu m b er o f n o n a g ricu l­
tu ral w orkers over th e estim ate fo r th e m id d le o f January.
O ver-all estim ates in d ica te su ch in crea ses in G eorgia, L ou­
isia n a , and T en n essee but a d ecrease o f le ss th an on e h a lf
o f o n e percen t in M ississip p i an d a s lig h t d e c lin e fo r F lorid a,
w h ich is attributed in d ir ec tly to a se a so n a l d e c lin e in the
citru s in d u stry and id le n e ss in lu m b er m a n u fa ctu rin g becau se
o f con tin u ed r a in y w eather.
In creases w ere rep orted in M arch at p ap er-m an u factu rin g
p la n ts in S avan n ah , M acon , an d M o b ile . S h o rta g es o f steel
caused so m e d ec lin es at m e ta l-fa b rica tin g p la n ts at variou s
p o in ts, but te x tile m ills in m o st areas h a d m ore w orkers
than th ey h ad tw o m on th s ea rlier. A t M o b ile and at T am pa
reduced o p era tio n s at th e sh ip y a rd s h a v e resu lted in rather
su b sta n tia l d eclin es in th e num b er o f p e o p le em p lo y ed in
that in d u stry. A t T am p a, h ow ever, stea d y g a in s in e m p lo y ­
m ent in other in d u stries h a v e o ffset th e drop o f 2 ,6 5 0 sh ip ­
yard w orkers sin c e A p r il a y ea r a g o . S in c e th e m id d le o f
M arch im p roved w eath er co n d itio n s h a v e fa v o red increased
em p lo y m en t in b oth lu m b er m a n u fa ctu rin g an d con stru ction
w ork, A p r il rep orts in d ica te fu rth er slig h t g a in s in em p lo y ­
m ent in the A tla n ta , C olu m b u s, an d M acon areas, a d eclin e
in the R om e area, an d a b a la n c in g o f in crea ses an d d e­
creases in th e S a v a n n a h area. In creased em p lo y m en t in con ­
stru ction w as rep orted in ea ch in sta n ce, b ut th ere h as been
a sea so n a l red u ction in th e n u m ber o f w orkers e m p lo y ed in
fertilizer-m a n u fa ctu rin g p la n ts.
D. £• M.

Prospects for Sixth District Deposits
T h is A p r il, fo r th e first tim e in m an y years, in d iv id u a ls and
b u sin esses had le ss d ep o sits at the S ix th D istrict w eek ly re­
p o rtin g banks in le a d in g citie s than th ey had in the corre­
sp o n d in g p erio d o f th e p r eced in g y ea r. N o t o n ly h ad th is
co n d itio n been u n p reced en ted in th e D istr ic t sin c e 19 3 8 , but
it w as contrary to c o n d itio n s p r e v a ilin g th ro u gh ou t the
U n ited S tates as a w h o le. T h e a v erag e w ee k ly d ecrease o f
fo u r m illio n d o lla r s in d em an d d ep o sits a d ju sted durin g
A p r il am ou n ts to a less-th an -on e-p ercen t d e c lin e . It m ay b e
tem p orary and o f n o great sig n ific a n c e . It d oes, how ever,
contrast w ith the n a tio n a l in crea se o f 1 .6 p ercen t. M oreover
it o n ce m ore d irects a tten tion to p a st sp e c u la tio n s o n the p o s­
sib ility o f a p ostw ar run-off o f D istr ict d ep o sits.
D ep o sits in th e b a n k in g sy stem are p r in c ip a lly created,
o f cou rse, b y an ex p a n sio n in lo a n s and in vestm en ts o f com ­
m ercia l banks. B etw een 1 9 4 1 an d 1 9 4 6 th e n a tio n ’s banks
in creased th eir lo a n s and in v estm en ts to 1 4 0 b illio n d ollars.
O f the a p p ro x im a te ly 7 9 -b illio n d o lla r in crease, a ll but 4
p ercen t resu lted fro m th e b an k ’s in v e stin g in G overnm ent
secu rities. T h eir to ta l d e p o sits ro se a p p ro x im a tely 7 4 b illio n
d o lla r s d u rin g th e p erio d .
S ix th D istrict b anks p a rticip a ted in th e ex p a n sio n w ith an
in crease in to ta l lo a n s an d in v estm en ts o f 4 .1 b illio n d o lla rs,
or 2 2 3 percen t. T h is rate o f in crea se w as a lm o st d ou b le that
fo r th e n a tio n ’s ban k s. T o ta l d ep o sits ex p a n d ed at an even
greater rate w h ich w a s m ore th an tw ice th e n a tio n a l rate.
T h at the p ercen ta g e in crea se w as greater in th e D istrict than
it w as fo r th e U n ited S tates is b est e x p la in e d b y the w artim e
co n d itio n s, un d er w h ich th e T rea su ry w as sp en d in g m ore

Mo n t h l y R eview o f th e F ederal R eserve B a n k o f A tla n ta fo r M ay 1948
fu n d s in the D istrict than it w as r a isin g th ere b y eith er ta x ­
a tio n or b orrow ing.
S u rveys o f the ow n ership o f b u sin ess and p erso n a l dem and
d ep osits, w h ich have been con d u cted b y th is bank w ith the
co op eration o f m em ber banks at ab ou t six-m on th in tervals
sin ce J u ly 1943, have m ade it p o ssib le to estim ate c lo s e ly
the extent to w h ich variou s ty p es o f b u sin esses and p erson s
shared in the gen eral d ep o sit in crease. B etw een th e date o f
the first su rvey and January 1 9 4 6 estim ated b u sin ess and p er­
so n a l dem and d ep osits at a ll banks in th e D istrict in creased
1.7 b illio n d o lla rs. T h e in crease in p erso n a l d ep o sits a c­
counted fo r alm ost three fifth s o f the to ta l in crease, w ith m ost
o f the rem ain in g in crease b ein g shared b y v a rio u s ty p es o f
n on fin an cial b usin esses. P erso n a l d ep o sits, w h ich had co n ­
stituted but 38 percent o f total b u sin ess and p erso n a l dem and
d ep osits at the b eg in n in g o f th e p erio d , am ounted to m ore
than 4 6 p ercent o f the tota l in January 1 9 4 6 .
T h e sp en d in g o f th ese d ep o sits in th e D istrict w o u ld h ave
in v o lv ed m erely a transfer o f fu n d s fro m on e ow ner to a n ­
other, w ith no change in th e to ta l. B efo re th e w ar ended
there w ere p o ssib ilitie s that th e sp en d in g o f accu m u lated
w artim e d ep osits m ight m ean a tran sfer o f fu n d s to other
areas. P u rch ases o f au tom o b iles and other consum er d u rab le
g o od s that are b ou gh t ou tsid e the D istrict had been d elayed .
F arm ers had had to p ostp o n e th e b u y in g o f farm eq u ip ­
m ent, w h ich to a large exten t a lso is m an u factu red ou tsid e
the D istrict. S in ce about a fifth o f th e to ta l p erso n a l d ep osits
co nsisted o f farm er’s dep osits, a d eclin e in a g ricu ltu ra l p rices
m igh t lead to further w ith d raw als o f D istrict fu n d s. A p p a r­
en tly, m any b u sin esses a lso w o u ld direct th eir p u rch ases o f
m aterials required fo r ex p a n sio n or m od ern ization to areas
o u tsid e the D istrict. E vents that som e p eo p le b eliev ed m igh t
offset these trends w ere the greater in d u stria l d ev elo p m en t o f
the w h o le South, the conseq u en t in vestm en t fro m other areas,
and the d iversification o f the D istrict’s p rod u ction .
A lth o u g h 1946 m arked an end to the D istrict’s greater-thann a tio n a l rate o f d ep osit ex p a n sio n , at the c lo se o f that year
D istrict b anks h eld about the p ro p o rtio n o f total d ep o sits
that th ey had h eld at the end o f 1 9 4 5 . T o ta l m em ber-bank
d ep o sits in the D istrict d eclin ed 8 .3 p ercent, and th ose
fo r the U n ited States decreased 8 .9 percen t. D em an d d ep o sits
ad ju sted , w h ich are a m ore sig n ifica n t in d icator sin ce th ey
ex clu d e F ederal d eposits, in creased 9 .6 percen t at th e D is ­
trict’s m em ber banks and 9 .4 percent at a ll m em ber banks.
T h e retention o f d ep osits in th e D istrict can be p a rtly e x ­
p la in ed b y large purchases o f the m an y n on d u rab le go o d s
that are m anufactured lo c a lly and b y th e re la tiv e ly h ig h
farm prices.
T h e year 1 9 4 7 p rovid ed th e first test o f th e effects that
greater p urchases o f consum er d u rab le g o o d s w o u ld h a v e
o n the flow o f fu n d s out o f the D istrict. It w as a year du rin g
w h ich the m an u factu rin g b oom w as greatest ou tsid e th e D is­
trict and a lso on e d u ring w h ich a g ricu ltu ra l-p rice in creases
had occurred ch iefly in the p rod u cts o f other areas. T h ese
fa cto rs m ay h ave contributed to the fa ilu r e o f the rate o f in ­
crease, 4 percent, in dem and d ep o sits at D istrict m em ber
b anks to eq u al the rates in other d istricts p a rtic u la r ly those
o f th e M id d le W est and the N orth east, and the n a tio n a l
rate, w h ich w as 4 .7 percent.
Further in sig h t in to differen ces betw een th e trends o f d e­
p o sits at the D istrict banks and th ose at other banks is p ro ­
vid ed by the survey m ade o f ow n ersh ip o f p erso n a l and busi


55

D e m c m d D e p o s it s o f I n d iv id u a ls , P a r tn e r s h ip s ,
a n d C o r p o r a t io n s
a t A ll S ix th D istric t B a n k s — 1 9 4 3 - 4 8
I. Business an d P erso n al D em and D eposits at all Sixth Dis­
trict banks increased 2 percent between February 28, 1947, and
February 1948. The national rate of increase, which was lower
than the District rate during the war, was 6 percent.

FROM JULY *43“
FEB.*44

FEB .‘4 4*
JULY * 4

JU LY '44*
JAN. *45

JAN.*45JULY‘4 5

JULY *45JAN. *46

JAN. *46JU LY ‘4 6

JU LY '46*
FE8.*47

FEB . ‘47JAN. *48

2. P erso n a l D ep osits at the end of January this year were one
percent less than they were at the end of February 1947, chiefly
because of a 4-percent decline in farmers' deposits. Business
D ep o sits, however, increased 5 percent.

1943

1944

1945

1946

1947

1948

3. N onfinancial Bu sin esses of all types increased their deposits
between the two latest survey dates, but the trade firms and the
manufacturing and mining concerns had the greatest increases.

Mo n t h l y R eview o f th e F ederal R eserve B a n k o f A tla n ta fo r M ay 1948

56

n ess dem and d ep osits in January 1 9 4 8 . F or th e first tim e in
the h isto ry o f the su rvey p erso n a l d ep o sits w ere lo w er than
they w ere on the p reced in g su rvey date. T h e estim ated onep ercent d ecrease sin ce F ebruary 1 9 4 7 w as a lm o st w h o lly e x ­
p la in ed b y a 4-percent d eclin e in fa rm ers’ d ep o sits. O ver the
country, how ever, farm d ep o sits in creased 5 percen t. A ga in
at the S ix th D istrict banks w as rep orted in every other d e­
p o sit category, but in a ll ex cep t o n e th e rates o f in crease
w ere low er than the n a tio n a l rates. P erso n a l and b u sin ess
dem and d ep osits increased 2 p ercen t; fo r the n a tio n th e in ­
crease w as 5 percent.
ESTIMATED DEMAND DEPOSITS OWNED BY INDIVIDUALS,
PARTNERSHIPS, AND CORPORATIONS IN ALL COMMERCIAL
BANKS OF THE SIXTH FEDERAL RESERVE DISTRICT
(In Millions oi Dollars)
Type oi O w nership
Manufacturing and m in in g ....
Public utilities, transporta­
tion, an d com m unications..
Retail and w holesale tra d e ..
All o ther nonfinancial*...........
T o ta l nonfinancial . ............
Insurance com panies..,..........
Trust funds of b a n k s..........
All other financial**...............
T o ta l fin a n cia l. .................
TOTAL BUSINESS...............
P erso n al......................................
F a rm e rs.................................
F o reig n ................................ .......
Total I ndividuals, P art­
nerships, AND CORPORA-

January
1948
494
235
884
259
1,872

79
65
239
383
2,255
122
386
1,645
2

Percent
Dollar
Change
Change
Feb. 1947- Feb. 1947Jan. 1948
Jan. 1948
+ 29
+ 4
9
29
4
62
7
14
17
38
99
7

+ 4
+ 3
+ 2
+ 3
+ 10
+ 28
+ 8
4- U
+ 5
+ 6

— 14
3

— 4
— 0

+
+
+
+
+
+
+
+
+
+

Percent
Distribu­
tion
Jan. 1948
11.2
5.3
20.0
5.9
42.4

1.8
1.5
5.4
8.7

51.1
2,8
8.8
37.3
.0

100.0
+ 89
+ 2
4,410
*Including construction-contracting establishm ents, theaters and hotels,
and laundries, garages, repair shops, and other service establishm ents.
**Including investm ent, loan, and insurance agencies; real-estate b u si­
nesses, etc.

T h e gen eral trend o f bank d ep o sits th rou gh ou t the n ation
th is year w ill p ro b a b ly b e influ en ced m ore b y th e su ccess
o f the current p rogram to h a lt bank-credit ex p a n sio n than
b y an yth in g else. It ap p ears lik e ly that w ith a con tin u ed h ig h
le v e l o f b u sin ess a ctiv ity d u rin g the rem ain d er o f the year
d ep osits at the D istrict banks w ill n ot decrease su b sta n tia lly ,
and th ey m ay in crease som ew hat. S in ce som e o f th e elem en ts
that influenced the ch an ges in d ep o sits d u rin g 1 9 4 7 are s till
present, how ever, further sh ifts are lik e ly .
T h e p rosp ects fo r long-term ga in s, m an y p erso n s b eliev e,
are m ore en cou ragin g. N o t o n ly are the D istrict’s fin a n cia l
resources m uch greater n ow than th ey w ere b efo re th e w ar
but m ost o f the w artim e g ain s, con trary to th e ex p erien c e
after W orld W ar I, have been retained. F rom year to year,
as the D istrict’s eco n o m ic structure b ecom es m ore d iversified
the further rem oved b ecom es the p o ss ib ility th at th e fin a n cia l
resources o f the reg io n w ill be su b ject to th e sharp con trac­
tion s that w ere ch aracteristic o f the p erio d b etw een the tw o
w orld w ars.
c. T. T.

Trade
T he influen ces that m ad e sa le s in the S ix th D istrict d ep art­
m ent stores 9 p ercen t greater in v a lu e the first quarter o f
th is year than th ey w ere th e first three m on th s o f 1 9 4 7 co n ­
tinued to operate d u rin g A p r il and M ay. D e sp ite th is y ea r’s
e a rlier date o f E aster, A p r il sa le s ex ceed ed th o se o f la st
year 5 percent, and sa les d u rin g the first tw o w eeks o f
M ay su rp assed th ose o f th e co rresp o n d in g p erio d la st year
11 percent. T h e D istrict rate o f in crease in departm ent-store



sa le s d u rin g th e first quarter w a s th e sam e a s th e n a tio n a l
rate.
A lm o st a ll the m ajor dep artm en ts shared in th e firstquarter sa le s in creases. T h o se in w om en ’s ready-to-w ear, p ar­
tic u la r ly the lo w er-p riced lin e s so ld in th e b asem en t stores,
w ere o f th e greatest im p o rta n ce in k e e p in g u p th e volu m e.
M arch sa le s o f w o m en ’s a n d m isses’ ready-to-w ear in the
basem ent stores w ere 31 p ercen t greater th an th e y w ere in
1 9 4 7 . W om en ’s and m isse s’ a c cesso ries an d a p p a rel in the
m ain stores w ere, r e sp e c tiv e ly 12 an d 1 4 p ercen t greater.
S a le s o f m en ’s and b o y s’ w ear in th e b asem en t stores w ere
up 3 4 percen t fro m sa le s o f M arch la st year, an d th o se in
the m ain stores up 6 p ercen t. B asem en t sa le s o f h om efurn ish in g s w ere up 2 2 p ercen t, w ith m ain -store sa le s risin g 9
p ercen t. T hat ab ou t th e sam e rela tio n b etw een b asem ent and
m ain -store sa le s h a s r ecen tly p rev a iled a lso in oth er F ed eral
R eserve d istricts in d ica tes con su m ers are seek in g ou t the
low er-p riced m erch an d ise.
In contrast to th e ex p erie n c e so fa r th is year, total sa les
o f departm ent stores w ere k ep t h ig h la st year p r in c ip a lly
b ecau se o f in creased sa le s o f h o u sefu r n ish in g s and m en’s
and b o y s’ clo th in g , w h ich w ere g rea t en o u g h to au gm en t the
m ore m oderate in crea ses in so m e so ft-g o o d s lin e s and offset
d eclin e s in others. T h e recen t ch a n g es in th e sa les o f so ft
g o o d s are w elco m ed n o t o n ly b y th e sto res b ut b y b u sin esses
w h o se in co m es are affected , eith er d ire c tly or in d irectly , b y
th e tren d s in th e p ro d u ctio n o f n o n d u ra b le g o o d s, in w h ich
m uch o f the D istric t’s b u sin ess a c tiv ity is centered.
C.T.T.

B a n k

A n n o u n c e m e n ts

The Farmers and Merchants Bank, Forest, Missis­
sippi, became a member of the Federal Reserve
System on April 3 0 . Organized in 1 9 0 5 , this bank
now has capital of $ 6 0 ,0 0 0 and surplus and un­
divided profits of $ 1 2 5 ,0 0 0 . Its deposits total $2,6 8 8 ,0 0 0 . The officers are W. A. Davenport, presi­
dent; R. L. Goodwin, executive vice president; J.
R. Mitchell and II. E. Bishop, vice presidents; R.
L. Thompson, Jr., cashier; J . H. W'icker and H . N.
Mitchell, assistant cashiers; and O. S. Redden, ag­
ricultural agent.
Another addition to the member banks in this
District is the Beach Bank, Jacksonville Beach,
Florida, which was admitted to membership on
May 17. It was organized in 1 9 3 8 with capital
funds of $ 3 1 ,2 5 0 . These have since been increased
to $ 1 3 0 ,8 0 0 , of which $ 5 0 ,0 0 0 is in capital and
$ 8 0 ,8 0 0 in surplus and undivided profits . The bank’s
deposits have grown from $ 4 5 ,0 0 0 on the opening
date to $ 2 ,6 0 6 ,0 0 0 . Fred C. Allen is president, and
W . M. Mason and W . A. Stanly are vice presidents.
O. F . Rogers is vice president and cashier, and Miss
Treva A. Moore is the assistant cashier.