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Monfhlu Review Atlanta, Georgia November • 1963 Meeting Seasonal Loan Demands A Problem of Managing Bank Funds 4 Iso in this issue: A PROSPEROUS YEAR FOR MANY FARMERS T E X T IL E S -A DECLINING INDUSTRY? GROWTH IN DISTRICT BANKING FACILITIES SIXTH DISTRICT STATISTICS DISTRICT BUSINESS CONDITIONS Frequently, because of seasonal forces, banks in an area may lose de posits when loan demands are high and gain deposits when loan demands are low. Such alternate periods of “tightness” and “ease” create a prob lem for an individual bank in managing its funds, regardless of how well Federal Reserve policy reduces the seasonal pressures on the entire banking system. This difficulty occurs because seasonal patterns in local areas frequently differ from those of the entire banking system. This is so because commercial banks make most of their loans to local bor rowers and because the economic structures underlying the seasonal loan demands of these borrowers differ from area to area. At the nation’s banks, loans reach their seasonal peak in December; in the Sixth District, however, Florida and Louisiana are the only states that have a similar seasonal pattern of loan demand. Seasonal influences cause loans to be highest at the end of July in Alabama, Mississippi, and Tennessee. At Georgia banks, the seasonal peak comes at the end of September. Seasonal lending patterns also differ markedly from area to area within the states. Every banker knows on the basis of past experience that more of his customers will be requesting loans in certain months than in others and that these months are the same year after year. Thus, the seasonal pat terns that are derived from data based on banking reports, used as illustrations in this article, merely formalize what bankers already know. Applying statistical techniques to monthly loan data* for recent years, we have developed measures of seasonal movements, technically called seasonal adjustment factors. These factors tell us the typical increase or decrease from month to month, assuming the levels of outstanding loans were influenced solely by seasonal influences and not by general economic conditions, long-term growth or decline, or irregular forces. The Loan M ix S ftfem f ffyserw ia ttltg f jr^ t/an ta The figure for total loans outstanding is a composite of the loans a bank has made to a wide variety of borrowers with different credit needs. The borrowings of some of these persons have a seasonal pattern; those of others do not. The borrowings that show a seasonal pattern are quite likely to do so because of customers’ needs for more short-term working capital during certain months of the year, rather than from their needs for longer-term funds. In this respect, the seasonal loan demands of farmers and businessmen are similar. A farmer needs funds to buy seed and fertilizer, pay hired labor, and cover living expenses until his crops are harvested and sold. The retail merchant needs working capital to accumulate inventories prior to his heaviest selling months and to carry the accounts receivable of his customers after the goods are sold. The home builder needs construction funds to pay for labor and materials The se a s o n a l p a tte rn s of both th e lo a n s a n d d e p o sits a t a ll m em b er b a n k s in th e U. S. a n d in th e S ix th D istrict a r e g e n e r a lly sim ila r . PercentofTrend LOANS DEPOSITS PercentofTrend Som e s e a s o n a l p a tte rn s d iffe r, h o w e v e r, from sta te a n d from a r e a to a r e a w ith in ea ch sta te . PercentofTrend STATE Loansy^y. j,_ sta te to ALABAMA PercentofTrend MOBILEAREA *-mr‘ A > " Deposits Deposits -1 1 1 1 1 1 1 1 1 1 IM 0.1 1 1 1 1 1 1 1 1 1 1— FLORIDA GEORSIA used during the good building months before the houses are ready for sale. The mortgage banker may need funds while mortgages acquired during the peak home-buying months are being “seasoned”. These and other types of borrowers may differ in their specific seasonal needs, but they all have a greater need for short-term working capital in some months than in others and they receive some of these funds from banks. With so many different kinds of borrowers, the seasonal lending patterns of total loans outstanding naturally differ from bank to bank and from area to area merely because of the “loan mix”. In addition, banks with a high propor tion of borrowers whose primary need is for long-term credit are less likely to have a marked seasonal lending pattern than banks with a high proportion of short-term borrowers. For example, although consumers tend to con centrate their car buying in the first half of the year, which causes new automobile instalment loans by banks to be highest then, changes in loans outstanding show less sea sonal response than new loans. This may be explained by saying that the new credit granted for comparatively long terms is only a small part of the total outstandings and, in some cases, repayments are heavy in the same months in which new loans are highest. The variety of seasonal loan patterns of some specific types of loans, as well as the contrasting patterns that re sult in different areas of the District from different “loan mixes” and different local economic characteristics, is il lustrated by the accompanying chart in the left column of Page 3. In general, there is likely to be a stronger seasonal loan pattern in areas where the economic structure is specialized than where it is more diversified. Almost all banks, nevertheless, have a seasonal lending pattern of some sort. The Banker's Problem LOUISIANA MISSISSIPPI TENNESSEE This tendency for loans to rise and fall during the year in a regular recurring pattern is of more than casual interest to the banker. Unless he plans and prepares for these sea sonal peaks in lending, he may find himself either unable to meet the usual credit demands of his customers or dis cover at the same time year after year that he is in an uncomfortably tight “cash position”. The very same forces that are determining the seasonal pattern of his loans may also be drawing funds out of his bank when he most needs them and vice versa. Bankers tend to regard the amount of their deposits as imposing a limit on their loans or investments, even though they may know that the banking system as a whole “creates” deposits when it extends credit on the basis of available reserves. This is so because a bank is likely to gain reserves during a deposit expansion and lose them during a contraction. How much an individual bank can lend or invest, therefore, depends upon its ability to attract or retain deposits. Since both the inflow and withdrawal of deposits are influenced by seasonal forces, the banker must take them into consideration when he formulates his loan and investment policies. In some farming communities, for example, income is derived principally from the sale of a few specific crops in the late summer and early autumn, and deposits build up . 2 • Lo an s th a t p ro v id e sh o rt-te rm w o rk in g c a p ita l a r e m ost lik e ly to fo llo w a se a s o n a l p a tte rn . LOAIN NSLO TIN STQ AS NIX DIN AIS TT M MT BE EU AD TH0D REIC CR ITB IEASNKS The k in d s o f fa rm e n te rp rise c a r r ie d on in a n a r e a d e te r m in e th e s e a s o n a l lo a n p ra ctice s o f b a n k s se rv in g fa rm e r s , a s th e e x p e r ie n c e of ru ra l b a n k s in th e se a r e a s illu s tra te s. SILT LOAM FarmingArea (LouisianaandMississippi) CottonandLivestock CENTRAL BASIN FarmingArea(Tennesses) Diversified Farming Percent ofTrend Percentof Trend PEANUT FarmingArea (AlabamaandOeorgla)^eanuts. Cotton, Com, Hoga Lo an s m a d e f o r lo n g e r p e rio d s sh e w le ss s e a s o n a l v a r ia tion in o u tsta n d in g s. some confidence when there will be “tight” and “easy” periods each year, they plan their operations accordingly to keep available funds fully employed and earning profits and also to meet seasonal drains on their reserves when they occur. during these months. During this period, the banker has ample funds to lend. The demand for loans, however, is then at a seasonal low because farming activity is at a low ebb. After that, deposit declines begin to drain reserves month by month well into the following year until the crops are harvested and sold. Beginning in the spring, money must be spent for seed, fertilizer, and other pro duction expenses; some of this money travels outside the local banking area, thus adding to the bank deposit drains. This is the time, however, when loan demands are high. The banker in such an area finds that when he needs funds most he has a shortage of loanable funds and when loan able funds are abundant he needs them least. Thus, con flicting seasonal deposit and loan patterns may pose serious problems in the management of a bank’s funds. Not all banks have identical problems, but most of them have seasonal problems of some sort. Since bankers know with Meeting the Problem Bankers meet these seasonal problems by properly man aging their secondary reserves, which are, in the words of the money and banking textbooks, those earning assets that may be quickly converted to cash at all times without appreciable loss. Instead of leaving their funds idle during slack periods, they invest them in earning assets that can readily be converted into cash without loss. Since short term securities of the U. S. Government are subject to fewer price fluctuations than long-term securities, they are the chief components of secondary reserves. Skillful man agement spaces the maturities of these issues so that securi ties will mature as funds are needed. Although higher eamings could be obtained from a portfolio consisting en tirely of long-term securities, there is the risk that, with a rise in yields and a consequent decline in prices, a loss •3 • would be incurred if the securities were sold before ma turity. The management of a bank’s cash position is a special art. First of all, some knowledge of seasonal changes in loans and deposits is needed. It also requires a man with a “sharp pencil” who will watch his bank’s cash position from day to day or even from hour to hour. He checks by phone with his Federal Reserve Bank to determine his reserve position; he checks within his own bank on any expected large deposit changes; and he knows if large blocks of securities are maturing. He must be able to esti mate not only today’s position, but also what it will likely be in the future. Only then can he decide whether he should use any existing excess funds in the Federal funds market, buy short-term securities or commercial paper, or whether the bank could prudently earn higher yields on intermediate- or longer-term Government or municipal se curities. When he discovers that the bank is likely to be deficient in reserves, he must decide how to erase the deficiency. Because of the special skills required and the time involved, a money-position specialist is frequently found only at the larger city banks. For many banks, especially the smaller ones, managing the bank’s money position may be only one of the numer ous tasks performed by a bank officer. Paying such close attention to the bank’s daily cash position, however, may not be compensated by an additional gain in earnings. Some banks, therefore, prefer to keep a cushion of excess re serves and correspondent balances that will meet most emergencies. Sometimes, if not carried to an extreme, such a policy may be the most economical one to follow. The seasonal patterns derived from statistics reported' by the member banks in this District’s six county Dothan trade and banking area in southeast Alabama illustrate the asset and liability changes made in response to seasonal forces. This area was chosen as an illustration because it is more dependent upon farming, particularly cotton and peanut production, than many other areas of the District, and, consequently, the seasonal swings in deposits and loans are large. Typically, deposits decline seasonally during the period in which loan demand is expanding and rise when loan demand falls off. Of course, the operations of any one of the banks in the area may not conform specifically to the pattern derived from the experience of all the banks combined. Nevertheless, the asset adjustments that were made are typical of the action many bankers take when faced by such seasonal changes. The statistics for past years show, for example, that the Dothan area member banks typically reduce their invest ment holdings month by month during the first half of the year— the period when loans are rising and deposits declin ing. When deposits increase in the latter part of the year as the crops are marketed, the banks typically add to their investment holdings. They also use their excess reserves with the Federal Reserve Bank of Atlanta, as well as their demand balances with other banks, in making adjustments to seasonal needs. Atlanta or from other banks for seasonal needs? There are two general reasons: the imprecision inherent in forecast ing and mistakes in bank management. Changes in the demand for bank loans and in the level of bank deposits are caused, of course, by changes in gen eral economic conditions, the long-term growth of a com munity, and by other not completely predictable events, as well as by seasonal forces. At times, these forces may push up loan demands or drain off deposits beyond a banker’s prudent expectations. Moreover, the seasonal pattern of lending may change as the economic character of the com munity the bank serves changes. For any such reason, plans for meeting seasonal problems may prove inade quate. Furthermore, the “sharper” the banker’s “pencil” and the greater his attempts to remain fully invested at all times, the more likely it is that he will find himself faced with special seasonal problems. Thus, large banks are more frequent borrowers than smaller ones. A banker may find, for example, that deposit withdraw als are greater than he can meet by liquidating short-term securities. To raise funds by selling his long-term securities on a falling market might incur losses. Sometimes such emergency seasonal needs can be met by borrowing from other banks through the Federal funds market, as dis- P ro p e r m a n a g e m e n t of b a n k fun d s is e s p e c ia lly im p o rta n t in an a r e a w h e r e cash cro p s a r e a n im p o rta n t so urce of in com e, a s th e y a r e in th e D o th an , A la b a m a , t ra d e a n d b a n k in g a r e a . T h e re , d e p o sits d e clin e s e a s o n a lly an d re d u ce re s e rv e s d u rin g th e m onths w h en lo a n s a r e risin g . D ep osits rise s e a s o n a lly w h e n lo a n s d e clin e . DOTHANTRADEANDBANKIN6AREA M e m b e r b a n k s in th e a r e a m e e t p e a k c re d it d e m a n d s an d a b so rb e x c e s s fun d s ch ie fly b y a d ju stin g t h e ir in v e st m en t p o rtfo lio s. T h e y a ls o m a k e a d ju stm e n ts thro u g h th e ir e x c e ss r e s e rv e s a t th e F e d e ra l R e se rv e B a n k of A tla n ta a n d th e ir d e m a n d d e p o sit b a la n c e s d u e from co rre sp o n d e n t b a n k s. DOTHANTRADEANDBANKINGAREA Borrowing for Seasonal Needs Why, then, if a banker by planning can manage his bank’s funds to provide for seasonal needs, do some banks oc casionally borrow from the Federal Reserve Bank of •4 • Sem e S ix th D istrict b a n k s a d ju st th e ir re s e rv e s thro u g h th e p u rch a se a n d s a le o f F e d e ra l fu n d s. F o r a ll D istrict b a n k s co m b in ed , th is a c t iv it y in rece n t y e a r s fo llo w s so m e w h a t o f a se a s o n a l p a tte rn . S e a so n a l re q u ire m e n ts b ey o n d those th a t can b e re a so n a b ly m et from b a n k s' o w n re s e rv e s m a y b e m et b y sh o rt term b o rro w in g from th e F e d e ra l R e se rv e B a n k of A tla n ta . cussed in the October 1962 Review. At other times, mem ber banks exercise their privilege of borrowing from the Federal Reserve Banks. “Access to the Federal Reserve discount facilities,” we are told in Regulation A of the Board of Governors, “is granted as a privilege of membership . . . . Federal Re serve credit is generally extended on a short-term basis to a member bank in order to enable it to adjust its asset position when necessary because of a sudden withdrawal of deposits or seasonal requirements beyond those that can be reasonably met from the bank’s own resources.” Not all seasonal borrowing by member banks can be traced to the fallibility of forecasting and planning for seasonal needs that are to be expected. For example, there is the banker who is surprised year after year to find a sea sonal pattern at his bank. He ties up all his funds in long term securities to take advantage of their yield or income. When confronted by declining deposits, he may find him self in the position of having to replenish his reserves by selling his securities at a loss if money market interest rates have been rising. Or, there is the banker who tries to achieve the seemingly impossible feat of increasing both his loans and investments while his deposits are declining. Circumstances such as these, even though they can be traced to lack of foresight and should have been avoided, can be met temporarily by borrowing at the Federal Re serve Bank’s discount window, since assisting banks to maintain a liquid position is one of the primary concerns of the Federal Reserve authorities. However, in such cases, the Federal Reserve Bank authorities take steps to help the member bank avoid such borrowing in the future. Most banks are able to meet seasonal pressures on their cash positions by properly managing their funds and use the privilege of borrowing from the Federal Reserve Banks only occasionally, if at all. For example, so far this year only 61 of the 458 member banks in this District have used the borrowing privilege. Even in the so-called “tight money” year of 1959, only 115 resorted to borrowing from the Federal Reserve Bank. Both the American commercial banking system and the Federal Reserve System are unique. In the United States, banking is carried on by over 14,000 unit banks that are privately owned and, for the most part, individually op erated; in many parts of the world, commercial banking is highly concentrated among a few large banks. The burden of serving the needs of the public, there fore, falls upon both the Federal Reserve and the pri vately owned and operated commercial banks. Neither can do the job alone. Thus, the Federal Reserve System helps this nation’s banks meet seasonal needs for money and credit in two ways. By providing the banking system with reserves in accordance with seasonal needs (as discussed in the July issue of this Review), it helps avoid periods of general seasonal credit stringency; by extending the dis count privilege to member banks, it helps the individual bank solve its problem of meeting seasonal credit demands in its own community. On the other hand, the Federal Reserve System must have the help of local bank management in meeting the seasonal credit needs of individual communities. Together, the Federal Reserve System and individual banks operate to provide that seasonal elasticity in the supply of money and credit envisioned by those who wrote the Federal Reserve Act fifty years ago. If one measure of the success of Federal Reserve policy is the avoidance of periods of general seasonal credit stringency, one measure of com mercial bank management is how well it meets the peculiar seasonal needs of its own customers. C harles T. T aylor (This is the second in a series of two articles on the sea sonal demand for credit. The first appeared in the July issue of this Review.) N EW ELECTR IC PO W ER SER IES This month, we are introducing a new electric power series. It is an index of the total of (a) sales of electricity to ultimate industrial users and (b) production of electric energy by indus trial establishments. This series replaces our former one of elec tric power production by utilities. W e believe the new series will better indicate movements in industrial activity. Historical data for the Sixth District a re a v a ila b le upon request to the Research Department, Federal Reserve Bank A tlan ta, G e o rg ia 30303. •5 • of A tlan ta, A Prosperous Year for Many Farmers As 1963 draws to a close, farmers in District states are calculating their annual cash inflow and finding it several notches above the total in 1962. The $4-billion, six-state, total of cash receipts from farm marketings estimated by this Bank was about 5 percent above that in 1962, thus setting a new District high and further extending the up trend prevailing since 1958. The national outcome stands in contrast, for adverse weather and production and price conditions in livestock and poultry enterprises dampened the gain in farm cash receipts. Few farmers can remember a better harvest season than the one this fall: Weather was benign, and fields were laden with produce. This was all the more remarkable because the major crops in this region showed signs of hesitation as the farming season began. Early planting progressed rapidly, but a dry spell in May and subsequent heavy rains hindered the crops considerably. Meanwhile, farmers in Mississippi and Louisiana fretted as a drought developed. Modern farming techniques and improved weather, however, enabled farmers to catch up and outdo themselves in boosting yields. The result has been a sure footed recovery marked by a surge in crop income. On the first day of October, according to the United States Department of Agriculture’s crop estimate, it was apparent that 1963 was becoming a banner year in many producing areas. Cotton, corn, and soybean growers throughout the region made an impressive record with their highly important crops. On cotton farms, acreage had been reduced about 10 percent from the 1962 level, but the total yield was, nevertheless, 13 percent larger. The region’s corn and soybean output was more than a fifth larger than in 1962. Sugarcane plantings, spurred by ad justments in sugar quotas resulting from the demise of Cash Receipts from Farm M arketings and Governm ent Paym ents S ix th D istrict S ta te s Billions of Dollars BHIions of Dollars Cuban supplies, have risen sharply in the major producing areas of south-central Florida and southeastern Louisiana. Yields have also been lifted, and total output, at last report, was to be 35 percent larger than a year earlier. Florida’s citrus and vegetable crops, of course, suffered a blow when freezing temperatures numbed the state in December 1962. But, crops of com, potatoes, cotton, soy beans, and pecans, in addition to the sugarcane crop, have yielded well in the District. In the important Louisiana rice area, lying adjacent to and west of the sugarcane section, harvests have been successful, and producers had gathered most of the crop before Hurricane Cindy swept in from the Gulf of Mexico and brushed the area. These large crop yields could insure a sizable increase in crop receipts if prices do not sink proportionately. In the first nine months of the year, prices for major crops were averaging at higher levels than they were a year ago. Corn prices were substantially higher. Although large marketings in the fall normally put downward pressure on prices, Governmental support prices for some crops may prevent a widespread collapse in major crop prices. Sugar cane producers, meanwhile, could realize higher prices for their crop this fall than previously anticipated. In Florida, average prices for citrus this fall, influenced still by freeze damage, could exceed the averages in 1962. Should these price patterns prevail, numerous farmers in Sixth District states would benefit. Receipts from livestock and poultry are rising somewhat this year because farmers increased shipments of major items and prices for them did not drop dangerously. Yearto-year comparisons covering the first nine months of pro duction and price schedules reveal a notable 15-percent gain in egg output and a 3-percent rise in average prices for eggs; broiler output was exceeding 1962 production by 2 percent, although average prices were 4 percent lower; hog marketings were up 4 percent, while prices averaged 6 percent less; and cattle marketings, milk out put, and their corresponding prices showed little change. Farmers’ increased cash flow this fall and winter con tinues to give added punch to the District’s economy. Spending for family living, consumer durables, and auto mobiles will surely be sustained in many places and prob ably increased in those areas where crops have turned out especially well. This possibility is strong in northern Ala bama, in the Mississippi Delta, and in central Georgia, where cotton yields were remarkably good. N ote: D ata on Government payments not available for 1963. Source: U. S. Department of Agriculture. Will this brighter income picture be reproduced again in 1964? Although there is no firm basis for a full assess ment at present, at least three uncertainties cloud the out look. First, long-range weather conditions still remain un predictable. Second, what will Congress do about legisla tion affecting important District crops? Third, will new pressures from agricultural policies established by the European Economic Community harry farmers in some areas, such as the Rice Belt and the Flue-cured Tobacco Belt? These matters will most likely nettle the District’s farm economy next year. A r t h u r H. K a n t n e r •6 • Textiles-A Declining Industry? It is not unusual to hear that the textile industry is declin ing. How much substance has this statement? The answer appears to be similar to the one given by the man who was asked if the bottle were half full or half empty: “It depends on how you look at it.” A look at textile employment gives a quite different impression of what has been happening in the textile industry than does a look at production. Since textile employment is an important part of manu facturing employment-—in 1962, it accounted for 5.4 per cent of U. S. manufacturing employment and 12.2 percent of District manufacturing employment— a review of U. S. and District textile employment, as well as production, is in order. National Textile Trends The dilemma created by observing different aspects of the same industry is aptly demonstrated by developments in the U. S. textile industry since 1947. The chart below shows that the index of national textile employment has increased productivity. Improvements in techniques and machinery within the textile industry have made it possible for fewer employees to produce more goods. The average textile employee in 1962 was producing approximately twice as much as in 1947. District Textile Trends Do the diverse trends ’that we noted at the national level also apply to the Sixth Federal Reserve District? The answer is that the direction of the change in employment and output is the same; but the rates of change are dif ferent. The chart showing textile employment indices for both the District and the nation reveals that the rate of decrease within the District has been less than that for the U. S. Between 1947 and 1962, the decrease in District textile employment was 16.1 percent. This was much smaller than the decrease of 30.5 percent experienced by the U. S. during the same period. Textile Employment and Output, 1947-62 T extile Em ploym ent/ 1947-62 U n ited S ta te s U n ite d S ta te s a n d S ix th D istrict S ta te * generally moved downward, although reversals did take place in 1948, 1950, 1955, and 1959. However, these upswings were brief and, for the most part, mild and served only to slow down the long-run rate of decrease. Although textile employment was up slightly in 1962, it was 30.5 percent less than it was in 1947. Employment fig ures, therefore, support the contention of a declining indus try. However, there are indicators other than employment that should be observed— textile production, for instance. The Federal Reserve Board’s index of textile mill pro duction, which has been drawn on the same chart as the employment index, presents a quite different view of the textile industry. Looked at in this light, the textile industry has been growing. Some setbacks in textile production oc curred in 1949, 1954, 1958, and 1960, as they did in most other types of production. Nevertheless, the trend has very definitely been upward. An increase in textile mill produc tion of 35.5 percent took place between 1947 and 1962. Al though this increase was substantially less than the increase in all manufacturing production for the same period, textile production' certainly was not declining in absolute terms. Why do we get such divergent views while looking at the same industry? The answer is primarily in terms of Unfortunately, production figures comparable to those presented earlier for the U. S. are not available for the District. However, some indication of the changes that have occurred in District textile production can be derived by comparing the District’s current proportion of value added in the textile manufacturing process with that of an earlier period. Census data show that the District was responsible for about 14 percent of all value added in tex tile manufacturing in 1947. The District’s share was about 17 percent in 1961. This is an increase of over 21 percent and is a good indication that textile production in the Dis trict has grown at an even faster rate than in the U. S. Another indication of increased production is the rise in the percent of total production manhours worked in the District’s textile industry. In 1950, the District states ac counted for 15.9 percent of total production manhours worked. By 1961, the District’s share had grown to 19.1 percent, an increase of 20.1 percent. Textiles are an important part of the economy of four District states. In 1962, textile employment accounted for 15.8 percent of total manufacturing employment in Ala bama, 27.8 percent in Georgia, 4.1 percent in Mississippi, and 9.6 percent in Tennessee. The textile employment trend in each of these states has also been down, although •7 • the rates have varied widely. From 1947 to 1962, textile employment decreased 30.3 percent in Alabama, 8.9 per cent in Georgia, 8.8 percent in Mississippi, and 16.8 per cent in Tennessee. However, figures for value added by manufacture in 1947 and 1961 show that only in Alabama has the percent of value added to textiles by District states failed to increase. After considering both textile employment and produc tion, it seems possible to assert either that the trend in tex tiles has been down (based on employment) or up (based on production). It is also possible to say that from either point of view the District appears to have fared somewhat better than the nation as a whole. The District’s relatively improved position may be attributed to a marked tendency for textile producers to locate in southern states — a tendency that has prevailed throughout most of the post war period. Recent Happenings Since the textile industry plays an important role in the District’s economy, it might be well to inquire what changes have occurred recently. The index of the amount of cotton consumed by District textile mills shows signs of increased activity in 1963. The downward movement that began about the end of 1961 appears to have been reversed early this year, and the index has shown a generally up ward movement since that time. In recent months, there have been reports of a scarcity of some types of cloth for immediate delivery, an increasing number of future orders, and increased profit margins. The seasonally adjusted monthly index of national textile mill production reached a postwar high in July of this year. The monthly index of District textile employment has been declining almost continually since February 1962. However, it has shown a tendency to level off somewhat in recent months. In view of the existing long-run down trend in textile employment, this also may be considered Cotton Consumption, 1960-63 S ix th D istrict S tates Textile Em ployment, by Months, 1960-63 S ix th D istrict S tates an indication of increased textile activity. However, if the industry continues to improve its techniques and machin ery as in recent years, it is doubtful if any increase in employment will be sustained sufficiently long to affect a change in the long-run trend. XT & N. D. O B annon Growth in District Banking Facilities There are now many more banks and bank branches in Sixth District states than there were in 1950. This pro liferation has been a joint product of economic forces and of state and national laws governing entry into banking. In fact, the expansion in banking offices has more than matched gains in population in most of the states. The average banking office, however, increased in size, if we use total deposits as a yardstick. At the end of 1962, 1,683 banks were operating in the Sixth District states. These banks, in turn, operated 838 branches, bringing the total number of banks and branches to 2,521. On an average, each of these banking offices served 8,767 persons. In contrast, only 1,786 banking of fices were in operation at the end of 1950, each serving, on average, 9,755 persons. This 41-percent increase in the number of banking of fices over the 12-year period was brought about in large part by the expansion of the economies of both the nation and of the Sixth District states. The rapidly expanding economy of the Southeast, accompanied by rising incomes and massive shifts in population, created the need for additional banking facilities and services. Some of these needs were satisfied by the formation of new banks. Others were fulfilled by the establishment of branches by existing banks, especially in the major metropolitan areas. In both cases, bank stockholders showed no hesitation in invest ing their funds to take advantage of prospective profits or Net Change in Banks and Branches, 1950-62 S ix th D istrict S tates Member Total 1951 1952 1953 1954 1955 1956 1957 1958 1959 1960 1961 1962 Total, 1950-62 13 22 21 30 36 39 45 38 43 62 44 65 458 Nonmember Banks Branches 2 5 5 11 7 12 6 4 2 14 1 10 79 11 17 16 19 29 27 39 34 41 48 43 55 379 Total 24 5 14 3 38 33 22 17 21 29 39 32 277 Total Banks Branches 17 4 1 —4 22 18 9 7 8 10 10 12 114 7 1 13 7 16 15 13 10 13 19 29 20 163 Total 37 27 35 33 74 72 67 55 64 91 83 97 735 •8 • Banks Branch* 19 9 6 7 29 30 15 11 10 24 11 22 193 18 18 29 26 45 42 52 44 54 67 72 75 542 to maintain their competitive position within existing bank ing markets. Both the extent of this bank office expansion and the type of office established were limited, however, by na tional and state banking laws. Either state or national supervisory authorities must grant permission for the establishment of a new bank, depending upon whether the new bank is a national or state bank. The number and location of new branches of existing banks are dependent upon the laws of individual states, as well as upon the authority of the national supervisory agencies. Without these restrictions, the number of banks and branches would undoubtedly have grown even more than it did. As the chart illustrates, the number of banking offices in the Sixth District states began to increase immediately after World War II. A marked upswing in the total numNumber of Banks and Banking Offices in Sixth District States D ecem b er 3 1 , 1935-62 ber of offices occurred in 1955, however, and expansion has since continued at a rapid clip. Throughout the period, most of the growth has taken the form of new branches, rather than new banks. This tendency has been especially pronounced since 1955. Growth in banking facilities has varied widely among the six states lying partly or wholly in the Sixth Federal Reserve District. Florida accounted for 143, or 19 per cent, of the 735 new offices formed in the six states between 1950 and 1962. Although one branch was in operation in the early 1950’s, the banking laws of the state of Florida are now unique among the six states because they prohibit branch banking. All of the increase in bank ing offices, therefore, was in the form of new unit banks, although some were affiliated with several “chain” sys tems, i.e., unit banks under single ownership. It is also interesting to note that the 144 new banks formed in Florida represented 73 percent of the total new banks in the six states. Equally significant increases in the number of banking offices have also occurred in the other five states. In Louisiana, 155 new offices were formed during the 12year period. Tennessee had a gain of 153 offices, Georgia 111; Alabama, 90; and Mississippi, 83. Unlike Florida, these states permit branch banking; but the number and location of branches are rather strictly limited. Shifts in population occurring within the District dur ing the period also strongly influenced the location of new banking offices. As the table shows, the major gain in total banking offices occurred in “standard metropolitan statistical areas,” which include major urban centers and surrounding suburban areas. These centers experienced Net Changes in Banking Offices, 1950-62 S ix th D istrict States Member Banks Total Nonmember Banks Banks Branches Total All Banks Banks Branches Total Banks Branchc Alabama Metropolitan Areas Other 46 20 —4 6 50 14 10 14 2 10 8 4 56 34 —2 16 58 18 Florida Metropolitan Areas Other 44 22 44 22 0 0 52 25 53 25 —1 0 96 47 97 47 —1 0 Georgia Metropolitan Areas Other 76 7 3 —2 73 9 6 22 3 14 3 8 82 29 6 12 76 17 Louisiana Metropolitan Areas Other Mississippi Metropolitan Areas Other 67 23 4 4 63 19 22 43 6 18 16 25 89 66 10 22 79 44 11 34 0 3 11 31 4 34 0 — 12 4 46 15 68 0 —9 15 77 Tennessee Metropolitan Areas Other 65 43 —1 0 66 43 20 25 1 —3 19 28 85 68 District States 458 Metropolitan Areas 309 Other 149 79 46 33 379 263 116 277 114 163 117 65 52 160 49 111 735 423 312 0 —3 196 111 85 539 312 227 85 71 rapid gains in population during the 12-year period, while rural areas in most of the states recorded only small gains or, in some cases, declines. The higher incomes of urban areas, moreover, provided a more attractive market for bank services than did smaller towns. The Atlanta metro politan area had an increase of 53 banking offices. Bir mingham was second with 32 banking offices. Over the period, 423 banks and branches were opened in the metro politan areas; only 312 were established outside these areas, and many of them, moreover, were in the larger rather than the smaller towns. The spillover of population from the major urban cen ters to the suburban areas also affected the type of new banking office established. Except for Florida, branches accounted for a much higher proportion of new offices in metropolitan areas than they did in the other areas of the District states. Many bankers believe that the limited de mand for loans and other banking services in residential sections of urban centers make unit banks unprofitable. Their preference to serve such areas by establishing branches of existing banks was denied in many cases, how ever, by state laws that limit the number of branches even in the same county. Traditionally, a higher proportion of banks in the South east have been nonmembers of the Federal Reserve Sys tem than is true for the nation as a whole. Similarly, this Changes in Bank Structure, 1950 and 1962 S ix th D istrict Sta te s Percentage of all banks that are: Par Clearing Members of F.R.S. Alabama Florida Georgia Louisiana Mississippi Tennessee District States United States 1950 1962 1950 1962 57 65 28 37 20 69 46 86 66 88 34 47 30 75 58 88 41 37 17 28 15 28 26 47 39 42 16 28 18 28 28 45 Population per banking office 1962 1950 1 2 ,2 % 13,847 7,864 11,135 8,130 8,419 9,755 8,033 . 9,785 15,843 7,410 8,534 6,442 6,713 8,767 7,212 9 . Deposits per banking office 1962 1950 (Thousands of $) 5,106 7,038 10,042 16,190 4,994 4,063 8,319 7,616 3,048 4,387 5,272 7,011 7,880 5,469 8,242 11,769 region has been a stronghold of nonpar banks, i.e., banks that deduct an exchange charge for checks drawn on them. Although these conditions are still true, the Sixth District states have improved somewhat in both respects between 1950 and 1962, as the preceding table indicates. The number of member banks as a percent of all banks in creased from 26 percent in 1950 to 28 percent in 1962. At the same time, the par bank percentage rose from 46 percent to 58 percent. Among the individual states, Flor ida showed the greatest relative increase in both types of banks, and, significantly, this state also has the smallest proportion of nonmember and nonpar banks. B a n k A n n o u n c e m e n ts The North Shore Bank, Miami Beach, Florida, a state member bank, converted into a national banking asso ciation as of the close of business on September 30, opening as a national bank under the title of City National Bank of Miami Beach on October 1. Capital is $1,250,000, and surplus and undivided profits, $1,770,000, as reported by the Comptroller of Cur rency at the time the conversion was approved. On October 17, The Harbor City National Bank of Eau Gallie, Eau Gallie, Florida, a newly organized member bank, opened for business and began to remit at par for checks drawn on it when received from the Federal Reserve Bank. Officers are C. Robert Brown, President; W. Lansing Gleason and Joe H. Wickham, Vice Presidents; and Charles R. Choate, Assistant Vice President and Cashier. Capital is $400,000, and surplus and undivided profits, $350,000, as reported by the Comptroller of Currency at the time the charter was granted. The Peoples Liberty National Bank of North Miami, North Miami, Florida, a newly organized member bank, opened for business on October 21 and began to remit at par. Officers include Leonard Usina, President; Frank H. Wilier, Vice President; and Roland M. Staf ford, Vice President and Cashier. Capital is $400,000, and surplus and other capital funds, $200,000, as re ported by the Comptroller of Currency at the time the charter was granted. On October 23, the Liberty National Bank of Fort Lauderdale, Fort Lauderdale, Florida, a newly organ ized member bank, opened for business and began to remit at par. Officers include Foy B. Fleming, Chair man of the Board; Scott L. Moore, President; Clyde W. Mauldin and J. H. Collins, Jr., Vice Presidents; and James P. McNatt, Cashier. Capital is $250,000, and surplus and undivided profits, $125,000, as reported by the Comptroller of Currency at the time the charter was granted. The Commercial Bank at Fort Pierce, Fort Pierce, Florida, a nonmember state bank, converted into a national banking association as of the close of business on October 29, opening as a national bank under the title of First National Bank of Fort Pierce on October 30. Officers are Henry M. Jernigan, President and Chair man of the Board; James H. Wiles, Vice President; and Donald C. Hebert, Vice President and Cashier. Capital is $400,000, and surplus and undivided profits, $232,000, as reported by the Comptroller of Currency at the time the conversion was approved. Debits to Individual Demand Deposit Accounts In su re d C o m m ercial B an k s in the S ix th D istrict (In Thousands of Dollars) Percent Change Year-to-date 9 months Sept. 1963 from 1963 Aug. Sept. from 1963 1962 1962 Sept. 1963 Aug. 1963 Sept. 1962 2,752,301 49,099 1,002,264 48,698 41,793 114,076 331,820 211,900 34,551 66,051 2,784,907 48,727 1,017,022 42,508 43,146 113,229 320,989 2 3 4 ,4 .4 30,892 71,191 2,375,558 45,061 860,847 43,551 34,963 85,048 279,407 188,307 34,350 64,606 —1 +1 —1 + 15 —3 + 1 +3 — 10 + 12 —7 + 16 +9 + 16 + 12 + 20 + 34 + 19 + 13 + 1 + 2 + 12 +6 + 11 + 7 + 12 +30 + 11 + 14 +8 + 7 FLORIDA, Totalf . . Bartow* . . . . Bradenton* . . . Brevard County* Clearwater* . . Daytona Beach* Delray Beach* . . Ft. Lauderdale* Ft. MyersNorth Ft. Myers* Gainesville* . . Jacksonville . . . Key West* . . . Lakeland* . . . Miami . . . . Greater Miami* Ocala* . . . . Orlando . . . . Pensacola . . . St. Augustine* . . St. Petersburg . . Sarasota* . . . Tallahassee* . . Tampa . . . . W. Palm-Palm Bch.* Winter Haven* . . 5,981,904 20,554 39,962 131,710 65,185 67,149 17,998 198,778 6,034,169 20,162 41,922 134,857 63,567 65,036 17,693 201,034 5,001,684 n.a. 38,082 n.a. n.a. 53,170 n.a. 181,455 —1 + 2 —5 —2 +3 +3 +2 —1 + 20 n.a. +5 n.a. n.a. +26 n.a. +10 + 10 n.a. n.a. n.a. n.a. +13 n.a. +4 48,599 56,710 905,038 16,601 78,628 937,156 1,383,282 39,904 263,858 92,088 10,478 210,068 72,883 76,136 452,402 140,084 41,534 46,648 53,346 928,057 17,287 81,440 909,088 1,360,512 43,534 267,558 100,021 14,887 215,989 72,084 77,443 469,623 138,769 38,131 n.a. 48,525 772,195 15,604 71,585 850,332 1,233,766 n.a. 226,954 82,929 n.a. 187,802 63,585 66,280 392,446 135,786 n.a. +4 +6 —2 —4 —3 +3 +2 —8 —1 —8 — 30 —3 +1 —2 ■ —4 +1 +9 n.a. +17 + 17 +6 + 10 + 10 + 12 n.a. + 16 + 11 n.a. + 12 +15 +15 + 15 +3 n.a. n.a. + 13 + 4 +3 +5 +4 +6 n.a. + 11 +9 n.a. + 0 + 12 +9 +7 —1 n.a. GEORGIA, Totalf Albany . . . . Athens* . . . . Atlanta . . . . Augusta . . . . Brunswick . . Columbus . . Dalton* . . . . Elberton . . . . Gainesville* . . Griffin* . . . . LaGrange* . . Macon . . . . Marietta* . . Newnan . . . . Rome* . . . . Savannah . . Valdosta . . . . 5,757,164 66,512 46,122 3,373,244 134,784 32,918 138,457 71,629 9,613 56,577 23,437 16,542 147,732 41,257 20,374 55,560 189,883 37,349 5,823,543 60,541 48,848 3,394,562 143,122 33,536 138,354 59,402 12,314 60,558 22,449 16,254 151,767 46,758 23,599 52,879 201,675 44,566 4,269,258 55,613 40,454 2,348,846 125,215 29,484 115,323 53,497 10,669 52,610 21,250 16,375 128,364 36,366 19,797 47,036 176,295 33,653 —1 + 10 —1 —6 —2 + 0 + 21 — 22 —7 +4 +2 —3 — 12 — 14 +5 —6 — 16 +35 +20 + 14 + 44 +8 + 12 + 20 + 34 — 10 +8 + 10 +1 + 15 + 13 +3 + 18 +8 + 11 +16 +6 +4 + 21 +13 +6 +6 n.a. +3 +7 +6 —4 +9 +18 +0 +5 +6 +2 2,772,594 9,110 84,587 327,366 5,287 22,590 72,557 84,066 26,734 1,466,760 6,831 20,947 2,839,023 8,182 91,429 301,091 4,681 24,194 80,557 86,316 25,057 1,535,875 6,692 14,495 2,425,611 n.a. 75,757 272,346 6,152 n.a. 68,324 79,971 n.a. 1,306,373 6,875 15,068 —2 +11 —7 +9 + 13 —7 — 10 —3 +7 —5 + 2 + 45 + 14 n.a. + 12 +20 — 14 n.a. +6 +5 n.a. + 12 —1 +39 + 10 n.a. +7 + 11 n.a. n.a. + 12 + 2 n.a. +6 n.a. n.a. 949,256 70,402 39,555 389,535 29,775 53,039 27,850 985,230 71,786 40,007 393,193 30,835 50,434 28,547 815,145 56,143 38,643 338,445 25,710 46,832 24,342 —4 —2 —1 —1 —3 +5 —2 + 16 + 25 +2 + 15 + 16 + 13 + 14 +9 + 13 —1 +7 +3 +9 + 10 38,369 27,526 19,030 43,081 25,902 37,994 n.a. 22,828 n.a. — 11 +6 — 50 n.a. + 21 n.a. n.a. +11 n.a. 2,796,120 53,657 377,977 51,033 96,916 284,967 1,104,148 2,627,662 52,197 378,660 51,420 95,481 287,561 984,483 2,243,346 51,838 339,908 44,429 87,556 245,917 781,921 +6 +3 —0 —1 +2 —1 + 12 + 25 +4 + 11 + 15 +11 + 16 +41 +10 +4 +8 +9 +2 +7 +11 SIXTH DISTRICT, Total 20,827,339 Total, 32 Cities 12,851,989 21,094,534 12,884,700 17,130,622 10,481,237 —1 —0 + 22 + 23 +11 +10 310,800,000 300,500,000 263,300,000 +3 +18 + 10 ALABAMA, Totalf Anniston . . . . Birmingham . . Dothan . . . . Gadsden . . . . Huntsville* . . Mobile . . . . Montgomery . Selma* . . . . Tuscaloosa* . . . . . . . . . . . . . LOUISIANA, T o ta lt** Abbeville* . . . Alexandria* . . . Baton Rouge . . Bunkie* . . . . Hammond* . . . Lafayette* . . . Lake Charles . . New Iberia* . . . New Orleans . . Plaquemine* . . Thibodaux* . . . M IS SIS S IP P I, T o t a lt " Biloxi-Gulfport* . Hattiesburg . . . Jackson . . . . Laurel* . . . . Meridian . . . . Natchez^ . . . PascagoulaMoss Point* . . Vicksburg . . . Yazoo City* . . . TEN N ESSEE, T o ta lt** Bristol* . . . . Chattanooga . . Johnson City* . . Kingsport* . . . Knoxville . . . Nashville . . . . UNITED STATES 344 Cities . . . —b *N o t included in total for 3 2 cities that are part of the national debit series main tained by the Board of Governors. f P a rtly estimated. n.a. Not available. ♦♦Includes only banks in the Sixth District portion of the state. • 10 • Sixth District Statistics Seasonally Adjusted ( A ll d a t a a r e in d e x e s , 1 9 5 7 - 5 9 = Latest Month (1963) S IX T H One Month Ago Two Months Ago One Year Ago 37,946r 123 127 118 112 119 160 155 139 143 112 110 130 106 116 105 94 107 99 94 117 113 99 83 3.5 41.2 136 145 145 144 119 103 165 111 109 131r 105 114r 104 94r 106 99 94 111 112 98 87 3.7 40.9r 132 122 141 107 116 99 166r 111 110 132 105 113 103 93 107 99 94 115 112 100 92 3.7 40.7r 132 122 140 106 118 107 160 109 108 127 103 108 103 93 106 96 96 112 110 98 84 4.3 4 1 .I r 128 108 117 99 113 100 152 FINANCE AND BANKING Member Bank Loans* All B a n k s ....................................................... Sept. Leading C i t i e s ............................................ Oct. 158 154 154 150 153 144 139 137 Member Bank Deposits* All B a n k s ....................................................... Sept. Leading C i t i e s ............................................ Oct. Bank D e b i t s * / * * ............................................ Sept. 135 125 152 131 127 143 131 124 141 124 120 130 PRODUCTION AND EMPLOYMENT Nonfarm Em ploym ent.......................................Sept. M a n u fa ctu rin g ............................................ Sept. A p p a re l....................................................... Sept. C h e m ic a ls..................................................Sept. Fabricated M e t a l s ................................. Sept. F o o d .............................................................Sept. Lbr., Wood Prod., Furn. & Fix. . . . Sept. P a p e r ....................................................... Sept. Primary M e t a l s .......................................Sept. T e x tile s....................................................... Sept. Transportation Equipment . . . . Sept. Nonmanufacturing.......................................Sept. C o nstru ctio n ............................................ Sept. Farm Em p loym ent............................................ Sept. Insured Unemployment, (Percentof Cov. Emp.) Sept. Avg. Weekly Hrs. in Mfg., (H rs.)*** . . . Sept. Manufacturing P a y r o l l s ................................. Sept. Construction C o n t r a c t s * ................................. Sept. Residential ..................................................Sept. All O t h e r ....................................................... Sept. Electric Power P ro d u c tio n * * * ...................... Sept. Cotton Consumption** ................................. Sept. Petrol. Prod, in Coastal La. and M iss.** . Sept. Two Months Ago One Year Ago Personal Income, (Mil. $, Annual Rate) . . Aug. Farm Cash R e c e i p t s ...................................... Aug. Department Store S a l e s * * ............................Sept. 7,641 127 123 7,644r 135 124r 7,496r 117 114 7,167r 116 113 PRODUCTION AND EMPLOYMENT Nonfarm Em ploym ent.......................................Sept. M a n u fa c tu rin g ............................................ Sept. Nonmanufacturing.......................................Sept. C o n stru ctio n ............................................Sept. Farm Em ploym ent............................................Sept. Insured Unemployment, (Percentof Cov. Emp.) Sept. Avg. Weekly Hrs. in Mfg., (Hrs.) . . . . Sept. Manufacturing P a y r o l l s ................................. Sept. 114 109 116 Ill 82 2.8 40.4 135 113 107 116r 113 90 3.1 40 .2r 129r 113 108 115 116 97 3.0 39.7 128 75 3.2 40.4 126 164 137 174 158 133 168 156 137 153 143 128 135 110 106 112 111 FINANCE AND BANKING Member Bank L o a n s .......................................Sept. Member Bank D e p o s i t s .................................Sept. Bank D e b i t s * * ................................................. Sept. LO U ISIA N A INCOME AND SPENDING Aug. Aug. Sept. 6,068 119 111 6,066r 109 113 6,023r 112 111 5,680r 124 102 Sept. Sept. Sept. Sept. Sept. Sept. Sept. Sept. 103 99 104 92 90 3.7 42.8 128 102 98 103 91 98 4.0 42.0r 124r 102 99 103 94 96 4.1 42.1 124 101 97 102 82 91 4.5 43.2 120 Sept. Sept. Sept. 145 122 127 141 120 125 145 119 132 132 114 117 Aug. Aug. Sept. 3,048 137 102 3,065r 121 109 3,046r 127 97 2,879r 140 101 Sept. Sept. Sept. Sept. Sept. Sept. Sept. Sept. 114 117 113 109 66 4.3 40.9 141 114 117 113r 107 69 4.4 40.7r 140 115 117 113 112 78 4.8 40.4 139 112 114 111 106 77 4.7 40.5 132 Sept. Sept. Sept. 177 147 154 175 142 151 169 143 139 158 133 139 Aug. Aug. Sept. 6,546 106 114 6,564r 105 115 6,469r 103 106 6,104r 108 113 Sept. Sept. Sept. Sept. Sept. Insured Unemployment, (Percentof Cov. Emp.)) Sept. Avg. Weekly Hrs. in Mfg., (Hrs.) . . Sept. . Sept. 111 112 110 122 96 4.2 41.3 132 111 112 111 121 96 4.1 40.9r 131r 111 112 110 122 98 4.8 41.1 131 109 110 109 123 93 5.5 40.9 125 161 135 164 157 132 140 154 135 141 141 125 139 Personal Income, (Mil. $, Annual Rate) PRODUCTION AND EMPLOYMENT Insured Unemployment, (Percentof Cov. Emp.) Avg. Weekly Hrs. in Mfg., (Hrs.) . . . . Manufacturing P a y r o l l s ................................. FINANCE AND BANKING Bank Debits*/* MISSISSIPPI A LABAM A INCOME AND SPENDING 5,150r 137 109 Aug. Aug. Sept. 5,564 144 102 5,595r 119 107 5,457r 118 105 Sept. Sept. Sept. Sept. Sept. Sept. Sept. Sept. 107 101 109 94 83 4.1 40.7 122 106 102 109r 94 74 3.9 41.0 121 107 102 109 93 95 4.0 40.4 120r 105 101 107 93 87 4.9 40.6 117 Sept. Sept. Sept. 157 134 143 154 131 137 153 133 135 137 124 130 Personal Income, (Mil. $, Annual Rate) PRODUCTION AND EMPLOYMENT PRODUCTION AND EMPLOYMENT Insured Unemployment, (Percentof Cov. Emp.) Avg. Weekly Hrs. in Mfg., (Hrs.) . . . . Manufacturing P a y r o l l s ................................. FINANCE AND BANKING FINANCE AND BANKING Bank Debits** One Month Ago INCOME AND SPENDING 40,610r 39,784r 122 107 122 95 120 114 130 130r 124 128 150 154 Insured Unemployment, (Percentof Cov. Emp.) Avg. Weekly Hrs. in Mfg., (Hrs.) . . . . Manufacturing P a y r o l l s ................................. Latest Month (1963) G EO R G IA D IS T R IC T INCOME AND SPENDING Personal Income, (Mil. $, Annual Rate) . . Aug. 40,455 Farm Cash R e c e i p t s .......................................Aug. 125 C r o p s ............................................................ Aug. 131 L iv e s t o c k ....................................................... Aug. 120 123p Department Store S a l e s * / * * ...................... Oct. Department Store S t o c k s * ............................Sept. 125 Instalment Credit at Banks, *(M il. $) New Lo a n s....................................................... Sept. 151 R e p a y m e n ts..................................................Sept. 159 INCOME AND SPENDING Personal Income, (Mil. $, Annual Rate) 1 0 0 , u n le s s in d ic a t e d o t h e r w is e .) TENNESSEE FLORIDA INCOME AND SPENDING Personal Income, (Mil. $, Annual Rate) . . Aug. Farm Cash R e c e i p t s .......................................Aug. Department Store S a l e s * * ............................Sept. 11,588 117 165 PRODUCTION AND EMPLOYMENT Nonfarm Em ploym ent.......................................Sept. M a n u fa c tu rin g ............................................ Sept. Nonmanufacturing.......................................Sept. C o n stru ctio n ............................................ Sept. Farm Em ploym ent............................................ Sept. Insured Unemployment, (Percentof Cov. Emp.) Sept. Avg. Weekly Hrs. in Mfg., (Hrs.) . . . . Sept. Manufacturing P a y r o l l s ................................. Sept. 119 124 118 92 109 3.0 41.8 164 118 123 117 90 108 3.0 41.2 162 3.0 41.2 160 115 94 97 4.0 41.8 155 157 138 147 154 134 137 153 129 138 136 126 130 FINANCE AND BANKING Member Bank L o a n s .......................................Sept. Member Bank D e p o s i t s ................................. Sept. Bank D e b i t s * * ..................................................Sept. ll,6 7 6 r 124 161 ll ,2 9 3 r 83 157 10,966r 132 147 INCOME AND SPENDING Personal Income, (Mil. $, Annual Rate) PRODUCTION AND EMPLOYMENT 118 123 117 91 110 116 121 . . , FINANCE AND BANKING Bank Debits* / * . . Sept. Sept. Sept. •For Sixth District area only. Other totals for entire six states. **Daily average basis. p Preliminary. r Revised. ••♦Figures reflect revision of seasonal adjustment factors. See Page 5 for note on new electric power series. Sources: Personal income estimated by this Bank; nonfarm, mfg. and nonmfg. emp., mfg. payrolls and hours, and unemp., U. S. Dept, of Labor and cooperating state agencies; cotton consumption, U. S. Bureau of Census; construction contracts, F. W. Dodge Corp.; petrol, prod., U. S. Bureau of Mines; elec. power prod., Fed. Power Comm.; farm cash receipts and farm emp., U.S.D.A. Other indexes based on data collected by this Bank. All indexes calculated by this Bank. • 11 • D I S T R I C T B U S I N E S S C O N D I T I O N S I I I I I | I I I I >I I I I I I ......... I I I I I I | I I I I I . B illio n s o f D o lla r s I he economy continues to climb upward. M easured by construction contract aw ard s, building activity rem ained a strong force in this region's business. Nominal but fa irly w idespread gains in em ploym ent also occurred, with advances in transportation equipm ent, metal fabrication, and food processing foremost among them. In the farm economy, banner crop yields a re lifting incomes to higher levels. M eanw hile, retail sales rose som ewhat. U* U* is Building activity held at a high level. Construction contracts for the first nine months of this year stand well above those for the same period last year. Residential construction outside major metropolitan areas continues to exhibit the greatest vitality. Contract awards for other purposes throughout the region show less strength. v* U* Nonagricultural employment edged upw ard, and manufacturing employment in important lines also advanced. An expansion in nonagri cultural employment occurred in all states except Tennessee, where it declined only slightly. Employment in most manufacturing categories rose somewhat in September and boosted payrolls. The transportation equipment industry, rebounding from the slower pace associated with auto model changeovers, marked up the largest gain in employment. Construction employment also increased. In fact, the only sizable dip in manufacturing employment occurred in the apparel industry. )S Reports from farm ing are a s tell of a banner fall season for farm ers. Crops are yielding bountifully, and, overall, prices have slipped down only slightly. In line with these developments, farm creditors surveyed by this Bank report excellent debt repayment by farmers this season. A major adverse development, however, is a widespread fall drought that is stunting pastures and delaying fall plantings. An upswing in bank credit in October also contributed to economic growth. Viewed on the basis of weekly reports from member banks in leading cities, total bank credit advanced somewhat further from recent high levels, as gains in bank loans more than offset declines in investments. Although total deposits receded a bit, banks met vigorous loan demands by drawing down excess reserves and by reducing their holdings of securities. Consumer and real estate loans at member banks have increased substantially. On the fiscal side of financial developments, bond sales by state and municipal gov ernments slumped in September, but the region’s total sales that month were still slightly above those of a year earlier. Rising employment and p ayrolls helped m aintain a high level of retail spending. Following the dip in August, personal income apparently . P E R C E N T O F R E Q U IR E D R E S E R V E S Excess Reserves 9l> m Borrowings from F. R. Bank f t n w i t n«w 1962 1961 http://fraser.stlouisfed.org/ *Seas. adj. figure; not an index. Federal Reserve Bank of St. Louis rose during September. Meanwhile, consumer debt outstanding shrank during the month, as the volume of automobile loans was reduced and consumers borrowed less for home repair and modernization, consumer durables, and personal affairs. Sales at furniture stores spurted upward, as activity height ened in Florida and Mississippi. After registering no change in September, department store sales dipped slightly in October. Scattered reports indicate, however, that the pace of automobile sales in October became more brisk. N o t e : D a t a o n w h ic h s t a te m e n t s a r e b a s e d h a v e b e e n a d ju s t e d w h e n e v e r p o s s ib le t o e lim in a t e s e a s o n a l in flu e n c e s.
@FedFRASER