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IN THIS ISSUE:
MONTHLY
REVIEW
• Banking in a Developing Economy:
Latin American Patterns
• Chemicals Bring Changes to
the Southeast
• Banking Notes
• District Business Conditions
FED ER A L RESERVE B ANK OF A T LA N T A
N O V EM BER
1970
B a n k i n g in a D e v e l o p i n g E c o n o m y
La tin A m e r ic a n P a tte rn s
Although U. S. bank involvement in international
finance has surged rapidly in recent years, it is
not widely recognized that a substantial propor
tion of this financial activity has been conducted
with Latin American countries. For example,
as of June 1970, Latin American countries
accounted for nearly 30 percent of U. S. bank
short-term claims on foreigners and 42 percent
of U. S. bank long-term claims on foreigners.
Moreover, of 459 overseas branches of U. S.
member banks, 203 were located in Latin
America at the end of 1969, although the region’s
share of total overseas branch liabilities and as
sets was considerably smaller than its share of
overseas branches. In the Sixth District, the lion’s
share of international transactions of commercial
banks is conducted with Latin American coun
tries, as might be expected from the geographical
proximity of Sixth District banks to the region.
Thus, Latin American countries account for over
Monthly Review, Vol. LV, No. 11. Free subscription
and additional copies available upon request to the
Research Department, Federal Reserve Bank of
Atlanta, Atlanta, Georgia 30303.
154
half of District banks’ short-term claims on
foreigners and an overwhelming proportion of
short-term liabilities to foreigners (the two major
categories of activity).
Despite the contacts with Latin American
banks entailed by the international financial ac
tivity of both U. S. and District banks, relatively
little is known in the United States about the
characteristics of banks and related financial in
stitutions in the region. The purpose of this
article is to describe in broad terms the structure
and regulation of Latin American banking sys
tems and how they are shaped by the economic
context in which they operate.1 The term “bank
ing system” in this article includes a number of
deposit-accepting institutions, distinct from com
mercial banks, that typically fall under the regu
latory control of regular banking authorities.
’Because of limited space, it has not been possible
to describe in greater detail specific types of financial
practices and institutional structures or to take note of
specific variations among individual countries in the region.
Moreover, because of the lack of information on recent
changes and on the international activity of Latin American
banks, these topics have been entirely excluded from discus
sion.
M O N TH LY
R E V IE W
Sixth District banks have close ties with Latin
America.
Short-Term Claims on Foreigners
Sixth District Banks
U. S. Banks
Short-Term Liabilities to Foreigners
Sixth District Banks
U. S. Banks
J u n e 1 9 7 0 figures.
E c o n o m ic E n v ir o n m e n t
Although considerable economic diversity exists
among Latin American countries, they typically
share certain common characteristics which dif
fer markedly from the economic environment
familiar to United States residents. These
characteristics directly affect the nature of Latin
American banking systems through market
forces. Because of their influence on national
goals, such as the acceleration of economic de
velopment, they also shape the particular set of
laws and regulations under which banks operate
in countries throughout the region.
Per capita incomes in Latin American coun
tries, ranging from $200 to $800 annually, are
much lower than in most industrialized nations.
At these income levels, per capita savings tend to
be quite low. Moreover, individuals do not utilize
the banking system nearly as much for effecting
economic transactions as they do in more in
dustrialized countries. For example, in most
Latin American countries, the supply of currency
equals or exceeds the amount of outstanding de
mand deposits in banks; in contrast, the ratio is
about one to four in the United States. Hence,
in the absence of capital flows from abroad, Latin
American banks have more limited access to fi
N O V EM BER
1970
nancial resources than banks in highly developed
nations.
In contrast to the scarce supply of funds avail
able to the banking system, the demand for bank
credit is quite large. For example, commercial
firms in Latin America have larger needs for
working capital than do firms in more industrial
ized countries. The practice of maintaining large
inventories, partly attributable to deficiencies of
transportation facilities and to hedging against
inflation, accounts to a significant degree for the
large working capital requirements. Moreover,
the high cost of capital goods typically requires
greater capital investments per unit of output
than in more developed countries. Although com
mercial firms have a greater need for financing,
internally generated funds tend to meet a smaller
portion of these needs than in more developed
countries. Consequently, commercial firms must
frequently resort to borrowed funds. But because
the poor development of capital markets makes it
difficult to raise capital directly, commercial
firms must depend more heavily on the banking
system to satisfy their credit needs than do their
counterparts in more developed countries.
Governments also depend heavily upon the
banking system for financing their expenditures.
On the one hand, pressing needs for economic
development have accelerated government de
mands for funds to be used for basic social and
economic investment. For these and other rea
sons, governments have found it difficult to re
strain expenditures. On the other hand, low in
comes and inefficient tax systems are the major
factors tending to inhibit the growth of tax reve
nues. In addition, the limited development of
money and capital markets restrains the placing
of government securities with the nonbank public.
As a result of this combination of factors, the
banking system is usually called upon to fill the
gap in governmental budgets.
Apart from pressures arising from short sup
plies and heavy demands for funds, the banking
sector in Latin America must also cope with con
siderable inefficiency or, in some cases, even the
virtual absence of money and capital markets.
These problems may be traced to several under
lying factors. First, the smallness of the domestic
economy and of the domestic market for funds
in most Latin American countries restrains the
expansion and diversification of banks and other
financial institutions. Secondly, the issuance and
transfer of financial assets are inhibited by
periodic or continual inflation in many cases and
limited public knowledge about securities trans
155
actions and institutions issuing debt securities.
Finally, governmental or central bank regulations
that limit the rate of interest payment on various
types of financial assets, particularly government
securities, have reduced the desirability of pur
chasing or holding such assets, especially under
inflationary circumstances.
The central bank plays an extremely large
role in the financial activities of most Latin
American countries.
Central B a n k S h a r e of Total B a n k i n g
Assets
0
20
40
60
T h e In s tit u t io n a l F ra m e w o rk
The economic environment just described has a
strong influence on the structure of Latin Amer
ican banking systems and on types of banking
activities. Three distinctive features of Latin
American banking are (1) the dominance of the
central bank within the total financial structure,
(2) the greater importance of commercial banks
relative to other financial institutions ('excluding
central banks) than in more advanced countries,
and (3) the significant role of official banking
and credit institutions designed to channel credit
to selected sectors of the economy.
The Central Bank
The importance of the central bank is illustrated
by financial resources of the central bank either
equaling or exceeding the resources of all com
mercial banks in 9 out of 17 Latin American
nations. Moreover, in 12 countries, the resources
of the central bank accounted for at least onethird of the resources of the banking system and
in three others, over one-fifth.2
The dominance of central banks in the financial
structure reflects the many responsibilities these
institutions have tried to fulfill. Apart from the
traditional tasks of monetary policy—including
the regulation of the supply of money and credit
and the maintenance of smoothly functioning
financial markets—many Latin American central
banks have also became deeply involved in fi
nancing economic development, in actively foster
ing the growth of financial institutions, and in in
fluencing the flow of credit to meet national
priorities.
Latin American central banks have had to take
on a substantial part of the burden of financing
economic development because of the insufficient
development of other financial institutions. Much
of this task consists of financing governmental
2The banking system includes the central bank, official banks,
commercial banks, and other banking institutions, as defined
in the introduction.
156
Note: 1969 figures, except for Brazil, Colombia, and Mexico:
1968; and Peru and Uruguay: 1967.
Panama has no central bank.
deficits, often magnified by attempts to accelerate
economic development. Although some of this
financing is done through direct advances made
to the government, central banks more normally
fulfill this task by purchasing government securi
ties. Unfortunately, private individuals and in
stitutions tend to find interest rates on these
securities unattractive. Therefore, many central
banks, acting as residual buyers, have often
added excessive amounts of these securities
to their own portfolios, hence contributing direct
ly to inflationary pressures. However, some cen
tral banks have attempted to broaden public
M O N T H L Y R E V IE W
holdings of government securities through meth
ods such as: allowing or requiring banks to meet
some of their reserve requirements through pur
chases of government debt, selling participa
tions in their own portfolio of government debt
to the public, and supporting the existing mar
kets for such securities to enhance their liquidity
and reduce large fluctuations in their value.
M any Latin American central banks also fi
nance development by supporting public financial
institutions created for specialized types of ac
tivities. Support may involve subscribing to part
of the capital of an institution, buying its securi
ties, or providing loans, discounts and advances.
Other types of development lending include the
financing of agricultural price support programs
and the financing of important categories of
foreign trade. A few central banks also have com
mercial departments that deal directly with the
public.
Besides financing specific economic sectors,
some central banks have also tried to influence
the flow of bank credit to priority areas and re
strict credit to other areas through regulatory
methods. For instance, they have formulated re
serve requirements to channel commercial bank
credit toward preferred sectors, such as agricul
ture or industry. As previously mentioned, cen
tral banks have also made use of reserve require
ments to increase commercial bank purchases of
government securities. At times, they have placed
quantitative limits on certain types of bank lend
ing to restrict credit to sectors considered of
low priority. They have also employed differ
ential discount rates, based on class of borrower
or type of underlying paper, to influence sectoral
flows of credit.
The active role in financing development, in
promoting the growth of money and capital mar
kets, and in influencing the allocation of credit
has in a number of cases led central banks to
neglect their responsibilities for controlling ag
gregate money and credit. Moreover, central bank
participation in development financing and their
support of security markets have directly contrib
uted to inflationary pressures. To some extent,
however, the inflationary impact of direct central
bank financing of development has been miti
gated when the funds have been obtained from
central bank profits, foreign borrowing, or
through the running-down of foreign exchange re
serves. But often these noninflationary sources
of financing have been far too inadequate to meet
the overall credit demands on the central banks
affected.
N O V EM BER
1970
Nevertheless, inadequacies of general monetary
policy cannot be entirely attributed to central
bank administration; instead, these inadequacies
may result from characteristics of some Latin
American economies which may frustrate central
bank action. For instance, in those countries
where the external sector is quite substantial,
large cyclical or seasonal fluctuations in the
balance of payments may alter commercial bank
reserves beyond the central banks’ ability to con
trol them adequately. Furthermore, large govern
ment deficits often place a severe strain on mone
tary policy. In addition, the tendency of commer
cial banks to maintain relatively high liquidity
ratios often inhibit central bank efforts to control
bank credit through discount policy, whereas
open market operations are often limited by the
inefficiency of money and credit markets. Hence,
to help overcome these obstacles to their control
over bank credit, Latin American central banks
have resorted to less traditional measures such as
prior deposits on imports, quotas on bank lending,
and marginal reserve requirements. The success
of these additional measures has varied con
siderably among Latin American countries.
Commercial Banks
Latin American commercial banks also differ
from their U. S. counterparts in several respects.
For example, as is characteristic of countries in a
lower stage of development, commercial banks
account for a larger portion of assets in the total
financial system than in more advanced nations.
Moreover, branch banking in Latin America is
widespread, and in several countries, banks and
other financial institutions form closely inter
related financial groups. Nevertheless, few Latin
American banks maintain branches or offices
outside their respective countries. On the other
hand, Latin American branches or subsidiaries of
European and American banks participate signifi
cantly in the financing of foreign trade and in
vestments and to some extent in local business
as well. Nevertheless, in some Latin American
countries, especially Mexico, the activities of
foreign-controlled banks are closely limited.
Latin American commercial banks depend prin
cipally upon demand deposits as a source of
funds and, in some countries, may pay interest
on such deposits. To a lesser degree, they obtain
additional funds from time and savings deposits.
In many Latin American countries, banks also
accept deposits denominated in foreign cur
rencies, but normally these deposits have not
157
Latin American banks typically rely more
heavily on demand deposits than on time and
savings deposits.
D e m a n d D e p o s i t s a s P e r c e n t of
D e m a n d a n d T i m e Deposits
0
20
40
60
80
Note: 1969 figures, except for Brazil, and Colombia: 1968;
and Peru and Uruguay: 1967.
been large. Moreover, regulations governing these
deposits have usually been stricter than for de
posits denominated in domestic currencies.
Mortgage departments of commercial banks
also issue mortgage bonds to the public and loan
the proceeds for construction and acquisition of
buildings. The use of these instruments in central
bank monetary operations has enhanced their
popularity with the public in countries that have
not suffered high, chronic rates of inflation.
Commercial banks channel a major portion of
158
their funds into short-term lending to commercial
and industrial firms. These borrowers, in turn, use
the funds for inventories, working capital, and
financing sales to customers. The emphasis on
short-term lending is derived largely from bank
management’s desire to maintain a comfortable
position of liquidity and, in some cases, from
central bank regulations that restrain the grant
ing of long-term credits. In addition, private
firms in Latin America depend more heavily on
short-term bank loans than firms in more ad
vanced countries, thus reducing the supply of
bank funds for long-term purposes.
This large demand for short-term funds stems
partly from the practice of maintaining large in
ventories as a hedge against inflation and as a
way of mitigating some of the drawbacks of less
efficient transportation and distribution systems.
Moreover, many Latin American firms need
greater amounts of working capital to provide
credit to customers who may have limited access
to other forms of credit. Finally, the less de
veloped character of money and capital markets
restricts the availability of alternative sources of
funds to firms. Despite the indicated short-term
character of bank lending, however, the wide
spread practice of renewing credits effectively
provides more medium- and long-term lending
than is apparent.
Latin American commercial banks typically
carry a smaller proportion of securities in their
investment portfolio than do banks in the United
States, largely because of unattractive interest
rates and the more common incidence of infla
tion. Moreover, in some Latin American coun
tries, central bank regulations have directly con
strained commercial bank investments in securi
ties. Of long-term investments that are made, a
substantial portion of funds are placed in long
term government securities, often in response to
reserve requirements designed to regulate credit
or to obtain resources for financing governmental
needs. Furthermore, the selective discount and
reserve policies of the monetary authorities pre
viously described stimulate some long-term
loans to agriculture and other specified sectors.
Other long-term investments include mortgage
loans and investments in chattel securities.
Official Banks
Another important banking institution present in
most Latin American countries is the official
credit institution, including the development
bank. These institutions often play an important
M O N T H L Y R E V IE W
role in providing funds for specific economic sec
tors (e.g., agriculture, government-owned indus
tries, transportation) that are given high priority
in development efforts. Alternatively, they may
finance a wide variety of projects that often have
difficulty in obtaining funds elsewhere but that
are generally considered beneficial to the econ
omy. Those serving specialized sectors often pro
vide technical assistance and, at times, partici
pate in management in addition to supplying
capital. Their financing activities include making
available short- and long-term credit, mortgages,
and investments in fixed and variable securities.
Normally, their portfolios consist of a much
higher proportion of long-term investments than
do the portfolios of commercial banks.
These institutions are usually capitalized en
tirely or in large part through direct govern
mental contributions and often have access to
central bank credit. They may also issue their
own fixed interest or variable return obligations—
backed either by governmental guarantee or by
secured credits and loans—or sell participations
in their loan portfolios. The status of some of
ficial credit institutions has also enabled them
to obtain credits from foreign commercial banks
or foreign official sources that are not normally
available to private domestic credit institutions
or firms. In some cases, these institutions have
floated long-term securities in international
capital markets. Finally, their importance in fi
nancial intermediation, combined with official
status, has frequently enabled these institutions
to play an effective role in fostering the growth
of domestic money and capital markets.
Private Investment Banks
In addition to the institutions described above,
a variety of institutions that may be collectively
referred to as “private investment banks” are
found to a greater or lesser degree in individual
Latin American countries. These include mort
gage banks (bancos hipotecarios), finance com
panies (financieras), savings banks (bancos de
ahorros), and other selected institutions. The
institutions within each of these groups vary
considerably from country to country and some
times within the same country as well. Hence,
they can only be described generally.
Perhaps the most important of the private in
vestment banks is the mortgage bank. These in
stitutions obtain funds primarily through the is
suance of their own bonds and certificates or, al
ternatively, by accepting savings deposits and
N O V EM BER
1970
channeling them mostly into construction. To
satisfy regulatory requirements, they also pur
chase government securities to some extent. Mort
gage banks tend to place the major portion of
their funds in long-term assets. Severe inflation
ary pressures in a number of Latin American
countries and the long-term nature of their opera
tions have tended to restrict the growth of mort
gage banks. To help offset some of these diffi
culties, mortgage banks in several instances have
been permitted to adjust the value of the prin
cipal of outstanding mortgages in accordance
with a specified price index. In order to continue
attracting funds, they similarly adjust deposits
and, in some cases, allow depositors to share in
profits.
Savings banks and savings and loan associa
tions can be found in some Latin American
countries. These institutions are of recent vintage
and have not yet developed on a large scale.
Typically, their basic source of funds is savings
deposits from individuals who have future plans
of obtaining a home mortgage from the institution
receiving the deposit.
Mortgage banks and savings and loan associa
tions have also become actively engaged in mak
ing loans against privately issued mortgage certif
icates (cedulas hipotecarias) and then offering
these certificates to their customers as an invest
ment. The practice of offering an informal guaran
tee to repurchase these instruments on demand,
coupled with their widespread use in monetary
operations by central banks, has made them
quite popular in some countries.
Private finance companies, of which there are
two basic types, have achieved notable impor
tance in a number of Latin American countries.
In Argentina and Brazil, financieras mainly fi
nance the purchase of consumer durables, espe
cially automobiles.
They operate on their own
capital, by accepting time deposits, and by issuing
commercial paper. In other countries, such as
Mexico and Colombia, financieras function more
as private development banks. Hence, they invest
in and underwrite corporate securities, make
short- and medium-term corporate and commer
cial loans, and carry out other activities outside
the usual scope of commercial banking. They ob
tain funds through time deposits, issuance of
their own certificates and bonds, sale of their
own stocks to banks and other institutions,
foreign borrowings, and especially in the case of
Colombia, through central bank credits. The
financieras channel a larger portion of their re
sources into longer-term assets than do commer
159
cial banks, but the majority of their portfolio,
nevertheless, consists of medium- and short-term
assets.
In many instances, these private investment
banks, particularly the mortgage banks and financieras, have close ties with commercial banks.
In fact, these ties have been stimulated by com
mercial banks eager to enter into new activities
restricted by commercial bank legislation and
regulation. In recent years, regulatory authorities
more cognizant of these ties, have extended and
tightened up regulations covering the various
types of private investment banks, some of which
are strangers to American finance.
160
As noted, these and other functional and opera
tional differences between Latin American bank
ing institutions and their counterparts in the
United States and other economically advanced
nations can be traced, to a considerable degree,
to a dissimilar economic environment. Thus, the
institutional framework that has steadily evolved
in these countries reflects efforts to cope with
the many difficult problems associated with
economic development efforts.
J o h n
E.
L e im o n e
M O N T H L Y R E V IE W
C h e m ic a ls
to
th e
B r in g
C h an g es
S o u th e a s t
The economic fabric of the Southeast has been
undergoing profound structural changes in recent
years. The relentless march of industrialization
has brought with it dramatic gains in several
capital-intensive industries, at the relative ex
pense of labor-intensive sectors that once domi
nated the economic scene. Apparel, which requires
a relatively large labor input, still clings to its
first-place position among manufacturing em
ployees in the states making up the Sixth Federal
Reserve District (Alabama, Florida, Georgia,
Louisiana, Mississippi, and Tennessee). In terms
of value added (value of shipments minus cost
of production m aterials), apparel ranks sixth and
accounts for less than 7 percent of the total.
The biggest contributors to value added are
chemicals and food processing, number one and
number two, respectively. Both of these sectors
are of very low labor intensity. About 15 percent
of all value added is in chemicals and allied
products, but employment-wise, the chemical
sector is outpaced by six other industries.
Chemicals are perhaps the outstanding exam
ple of what has been happening to the South
east’s industrial economy. During the last twelve
N O V EM BER
1970
years, production of chemicals has increased by
two and a half times its 1957-59 level and has
modernized processes and developed new
products at an extremely fast rate.
Im p o r ta n c e
of C h e m ic a ls
There are 140,000 persons working in chemicals
and allied products in the District. This is about 7
percent of total factory employment. And in addi
tion to holding the number one position in value
added, the industry ranks high in value of
shipments. In 1967, chemicals moved nearly $6
billion worth of goods, being surpassed only by
food processing, which shipped $8.5 billion of
merchandise in the same year.
Also, chemicals have fairly consistently been
the most impressive investor in plant and equip
ment. In 1967, such expenditures in the District
amounted to $750 million compared with less
than $200 million for food processing, the runnerup.
In this region, chemicals are relatively more
important than they are in the nation. While
the District accounts for only about 8.5 per161
customers. However, they also serve diverse cate
gories of industrial, agricultural, governmental,
and foreign users.
If the industry is to be defined at all, it must
be in terms of the production processes involved.
Basic chemicals and chemical products are put
together by processes that can only be defined
as peculiarly chemical in nature. The SIC man
ual breaks down chemicals into three major
categories:
1. Basic chemicals, i.e., acids, alkalies, salts,
and organic chemicals (compounds contain
ing carbon atoms in a form similar to those
found in plant and animal m atter),
2. Chemical products to be used in further
manufacture, i.e., synthetic fibers, plastics
materials, dry colors, and pigments,
3. Finished chemical products to be used for
ultimate consumption, i.e., drugs, cosmetics,
and soaps; or to be used as materials or
supplies in other industries such as paints,
fertilizers, and explosives.
cent of total value added in U. S. manufacturing,
it accounts for about 13.5 percent of total value
added in chemicals and allied products. The most
important chemicals here and in the nation are
basic organic and inorganic industrial chemicals,
along with plastics and synthetics. But in Ala
bama and Florida, agricultural chemicals pre
dominate, and altogether the region produces
about 40 percent of U. S. value added in this in
dustry. This region also predominates in gum
and wood chemicals, although the total regionally
and nationally is diminutive.
A
H e te ro ge n e o u s
Tennessee is the region’s leading chemical
producer; Louisiana ranks second.
Value
A d d e d , Million $
- 1967 Figures
-1200
C o n g lo m e r a t io n
Attempts at defining chemicals must have been
the undoing of more than one lexicographer. Any
definition must be vague enough to include every
thing from a bag of fertilizer to a bar of soap,
with enough leeway for charcoal briquets and
sulphuric acid to be included. So generalization
by product type is meaningless. Equally vague is
classification by market sector served; basic
chemicals firms are probably one another’s best
162
In this region (especially Tennessee), the pre
dominant chemicals are organic and inorganic
industrial chemicals (basic chemicals), such as
alkalies, chlorine, industrial gases, dyes, and
pigments. The second most important chemicals
are plastics and synthetics, and these are found
primarily in Tennessee but are not insignificant
in Louisiana. These chemicals are also produced
in Georgia; however, disclosure problems make it
impossible to quantify precisely. Agricultural
chemicals run a close third in the District and
-800
-400
Ala.
Fla.
Ga.
La.
Miss. Tenn.
M O N T H L Y R E V IE W
are the predominant chemical product in Ala
bama and Florida.
Tennessee is the largest producer in the region
and shipped more than one-third of the District’s
chemical output in 1967. Louisiana ranks second
and is rapidly closing the gap, producing a little
less than one-fourth of the region’s total. Alabama,
Florida, and Georgia are also important chemical
producers, but each accounts for less than onesixth of the total. The industry is least important
in Mississippi, which accounts for only about 5
percent of total shipments.
When measured in terms of production, em
ployment>and productivity, the chemical in
dustry in the District has grown more rapidly
than in the nation.________________ 1957-59=1001
Production
A N a t u r a l fo r C h e m ic a ls
To the extent that the presence of natural deposits
is a key location factor for manufacturing, there
are parts of the South that lend themselves partic
ularly well to a number of chemical products.
This is especially true in Louisiana, where petro
leum and natural gas are abundant and provide
the basic ingredient for most plastics and synthet
ics. Also, but to a much lesser extent, petroleum
is a factor in Tennessee, and the presence of coal
mining is important there as well, since coal tar
derivatives are the raw material for several basic
chemicals. Market factors are also important in
Tennessee because nearby textile plants, espe
cially those in South Carolina and Georgia, are
big customers for synthetic fiber and staple.
Sulphur, a basic input for the production of the
workhorse chemical sulphuric acid, is found in
Louisiana and Mississippi. Sulphur is also ob
tained as a by-product of copper refining, some of
which is located in Tennessee. Phosphate rock, a
significant agricultural chemical raw material, is
found in Florida and Tennessee.
In some instances, a seaport location becomes
important when large quantities of production
materials must be brought in from other regions,
e.g., sulphur from the Texas gulf coast or potas
sium from South America. The presence of large
quantities of water is also an essential considera
tion because of the requirements of steam genera
tion and cooling. This helps to explain the heavy
concentration of plants along the Mississippi
River in southern Louisiana.
S o u th
P u llin g A h e a d
Both the nation and the Southeast have shown
phenomenal growth in chemicals, but the South
east has grown more rapidly. First, chemicals
employment in the District has nearly doubled
N O V E M B E R 1970
’60
’62
’64
’66
’68
since 1950, whereas in the nation it has risen
about 65 percent.
At the same time, the productivity or output
per man-hour has risen sharply in both the region
and the nation, with the region holding a slight
edge. The net effect of all this is that the Dis
trict’s output growth has outpaced the nation’s.
Expansion of chemical production, both region
ally and nationally, has been made possible by
massive investment in plant and equipment. In
1967, 14 percent of all factory investment at the
national level was in chemicals and allied prod
ucts. This was exceeded only by primary metals,
amounting to 15 percent. At the District level,
chemicals investment was a whopping 30 percent
of the manufacturing total, reflecting the South’s
relative advantage in the industry. Chemicals in
vestment was 25 percent of value added, whereas
in the nation it was 12 percent.
The largest expansion in District chemicals
163
has occurred in Louisiana, and this is quite
natural if the extent of the petroleum resource
base in that area is considered. Tennessee is still
by far the District’s largest producer of chemicals,
but Louisiana, because of its impressive capital
expansion programs, is rapidly gaining ground
and will most likely surpass Tennessee one day.
The most rapidly expanding sector is basic
industrial chemicals (alkalies, chlorine, indus
trial gases, dyes, pigments, and coal tar crudes),
and this, too, is not surprising, since these prod
ucts become basic production materials in the
manufacturing and processing of many other
chemical goods. The other sector showing im
pressive growth is plastics and synthetics, derived
largely from petroleum and natural gas.
C h a n g e s in R e c e n t Y e a r s
The pace of expansion in the industry has not
slowed, but there have, nevertheless, been pro
found structural changes occurring that are
quietly revolutionizing the production processes.
While production and employment continue to
expand, the number of establishments has in
creased very little since 1958. This small expan
Number of Chemical
Establishments in
the Sixth District
states
1958
1963
1967
1105
1251
1324
sion in the number of plants has been accom
panied by a small growth in average employment
per establishment. Value added per plant, on the
1958
1963
1967
(millions of dollars)
Average Value
Added Per Plant
1.3
1.7
2.4
fleeted in the output per man-hour, commonly
called productivity, which has jumped about 60
percent in the last decade.
P a tt e r n s o f C o m p e t it io n
During the last decade, District chemicals pro
duction rocketed 126 percent, whereas man-hour
utilization rose only 39 percent. This underscores
the vital role of an accelerating technology in an
industry that had a low labor intensity even in
1960.
This progress in efficiency, along with a degree
of price competition in chemicals, has in the last
ten years helped bring about a two-percent
decline in national chemicals prices. This is in
sharp contrast to the all-commodity index, which
has risen more than 15 percent. There is every
reason to believe that District chemical prices
are behaving the same as nationally. Productivity
has been increasing regionally and nationally at
about the same rate.
Price cutting has become a fact of life among
some industrial chemicals, especially the organics.
This practice is generally associated with excess
capacity, new entrants, and attempts at broaden
ing markets.
Chemicals face their stiffest competition from
other chemicals, other processes, and other in
dustries. Firms generally attempt to cope with
Chemical prices have been a major exception
to increases in wholesale prices.
Average Employment
Per Establishment
Average Production
Worker Employment
Per Establishment
1958
1963
1967
82
77
91
1957-59= 100
.
Total Wholesale
58
54
63
/
✓--------
✓
/
s
X
-115
^
-105
Chemicals
other hand, has climbed from about $1.3 million
in 1958 to $2.4 million in 1967. All this is re164
*
’60
i
i
’62
i
*
’64
i
i
’66
i
-95
i
’68
1
1
’70
M O N T H L Y R E V IE W
such problems via nonprice competition and em
phasize technical services, quality, and product
improvement through research and development.
In some products, such as synthetic fibers, brand
names become important.
A B o o n fo r the B a la n c e o f P a y m e n ts
While the chemical industry is facing increasing
competition in foreign markets, the exports of
chemicals and allied products are increasing more
NUMBER OF CHEMICAL FIRMS EMPLOYING MORE THAN 100 PERSONS, 1967
N O V EM BER
1970
165
rapidly than total merchandise exports. Chemical
imports are rising at an even faster rate, but in
dollar terms, chemical exports are still growing
more rapidly. Because of this, the trade surplus
in chemicals continues to widen.
B o r r o w in g O u t s id e th e D is t r ic t
The region’s chemical industry borrows a great
deal of funds from banks outside the region. In
1969, even though chemicals (and chemicals and
rubber combined) were relatively more important
in the District than in the nation, loans by large
District member banks to chemical and rubber
concerns made up 9 percent of total manufactur
ing loans, compared with 11 percent nationally.
And the District’s share of loans to the chemical
industry was only 2 percent of the nation’s total
loans to this industry. In contrast, total District
manufacturing loans were 3 percent of the na
tional total.
In general, chemical firms are capable of gen
erating large sums of funds internally for sea
sonal working capital needs as well as for long
term uses. And in those cases where bank financ
ing is used, there seems to be little problem in
procuring either short-term or intermediate-term
credit for capital expansion.
Loans made by Sixth District banks show a
seasonal pattern that recurs in a regular fashion:
Loans outstanding generally increase sharply in
early spring and then decline irregularly until
about year-end. Typically, the peak seasonal
lending comes in the spring, when such lending
increases about 5 percent. A seasonal decline,
amounting to about 5 percent, follows late in the
year. This seasonal pattern of loan demand is
superimposed on a rising trend of bank lending
to chemical firms that has doubled since 1964.
Should the region’s chemical industry continue
to grow as expected, there is little reason to doubt
that it will be an increasingly important customer
for District banks.
R o b e r t E. W i l l a r d
B a n k A n n o u n c e m e n ts
On October 1, Livingston State Bank & Trust Co.,
Denham Springs, Louisiana, a nonmember bank, began
to remit at par for checks drawn on it when received
from the Federal Reserve Bank.
A newly organized nonmember bank, Florida South
ern Bank, Palm Springs, Florida, opened for business
on October 9. Officers are James K. Siebrecht, chair
man of the board; Carleton S. Lucius, president and
director; and J. T. Jones, executive vice president and
cashier. Capital is $450,000; surplus and other capital
funds, $250,000.
166
M O N TH LY
R E V IE W
R e v ie w s o f S ix th D is tr ic t S ta te E c o n o m ie s
Reprints of Monthly Review articles
(Single copies only)
A
A
A
A
A
A
R e v ie w
R e v ie w
R e v ie w
R e v ie w
R e v ie w
R e v ie w
of
of
of
of
of
of
A la b a m a ’s E c o n o m y , 1 960-70, S e p te m b e r 1970, 35 p p .
F lo r id a ’s E c o n o m y , 1959-70, J u l y 1970, 35 p p .
G e o r g ia ’s E c o n o m y , 1960-70, A u g u s t 1970 , 35 p p .
L o u is ia n a ’s E c o n o m y , 1959-70, A u g u s t 1970, 32 p p .
M i s s is s ip p i’s E c o n o m y , 1960-69, F e b r u a r y 1970, 28 p p .
T e n n e s s e e ’s E c o n o m y , 1960-69, F e b r u a r y 1970, 27 p p .
S ta tis tic a l C o m p ila tio n s
(Single copies only)
S t a t i s t i c s o n t h e D e v e lo p in g S o u t h , 1970.
S t a t i s t i c a l ti m e s e r ie s fo r t r a c i n g lo n g - r u n e c o n o m ic c h a n g e s in
t h e S o u t h e a s t a n d U n i t e d S t a te s .
S t a t i s t i c s o n C o m m e r c ia l B a n k s , S i x t h D is tr ic t, 1940-69, s e le c te d d a te s .
S t a t i s t i c a l ta b l e s a n a ly z in g c h a n g e s in lo a n s , in v e s tm e n ts , a n d d e p o s its
o f c o m m e r c ia l b a n k s in t h e S ix th D i s tr ic t.
These publications are now available upon request to
the Research Department, Federal Reserve Bank of
Atlanta, Atlanta, Georgia 30303.
N O V EM BER
1970
167
BANKING STATISTICS
Billion $
DEPOSITS
-
2 3 .5
-
2 2 .5
9.8
Net Demand*
- 9 .2
vSls
- 6.2
2 1 .5
5 .7
1 3.5
5.2
Loans (net)**
Time*
1 2.5
Investments*
4 .6
7 .0
Savings*
i i i i i i i i i i i I i i i i i i i i i i i 6.0
J
J
1969
D J
J
19 7 0
J
D
4.0
i i i t i l i I i I I I I i I l i i I l l I i
J
DJ
J
D
1970
1969
LATEST MONTH PLOTTED: SEPTEMBER
mbe banks.
Note: All figures are seasonally adjusted and cover all Sixth District member
♦Daily average figures. ** Figures are for the last Wednesday of each month.
S IX T H D IS T R IC T
B
A
N
K
I N
G
N
O
T
E
S
CHANGES IN BUSINESS LOANS
Million $
-6 0
-
Durable
Goods Mfg.
Nondurable
Goods Mfg.
Mining
Wholesale & Transportation Construction
Retail Trade Comm, & P. U.
40
Services
Note: Figures shown are cumulative changes for the first nine months of each year and cover 23 large commercial banks
in the District.
168
M O N T H L Y R E V IE W
Large banks in the Sixth District have been much
less active this year in making loans to businesses
than they were in 1969. During the first nine
months of 1969, business loans outstanding at 32
large commercial banks increased 6.9 percent,
whereas during the comparable 1970 period,
business loans changed little. These large banks
hold about one-half of the total of business loan
volume at all member banks in the Atlanta
District.
The curtailment of business loan growth re
flects the general slowdown experienced by the
Southeastern economy. Many businesses indi
cated that their sales have been below expecta
tions, and that output in many sectors either
has leveled off or declined. With this decline in
activity, the businessman has had less need for
short-term funds to maintain inventories of raw
materials and finished goods, except in cases
where inventories have built up. Lower employ
ment levels also have meant less funds have been
needed to meet payrolls.
A shift by businesses from bank- to nonbankfinancing may have also contributed to the soften
ing in business lending activity at District banks.
In 1969, many business firms that normally had
secured long-term funds in the capital markets
to finance long-term projects were unable to ob
tain such funds. Often, if funds were available,
they could only be secured at record-high costs.
Therefore, businessmen turned to banks for short
term, temporary financing of their long-term
projects. With this year’s greater availability of
credit in capital markets and lower long-term
rates, some business firms have been able to
arrange for long-term financing outside the bank
ing system and have used the proceeds to repay
their loans to banks. In addition, some business
firms have also gone to nonbanking sources in
order to obtain funds needed for additional long
term financing.
Although the impact of the business slowdown
and the greater availability of nonbank credit
N O V EM BER
1970
BUSINESS LOANS
Million $
32 Large Banks
; v \ 1969 y \ )
/V
\A -\ f '
I
i
J
t
i
i i i
i i
rN
/ N
-200
i i i
J
D
Note: Figures shown are cumulative changes from first of year.
has been reflected in all types of business lend
ing activity, the greatest impact at Sixth District
banks has been on their lending to nondurable
goods manufacturing firms and service concerns.
At the 23 large banks that report their loans by
business of borrower, nondurable manufacturing
loans rose only $8.5 million during the first nine
months of 1970, compared with $58 million dur
ing the first nine months of last year.
Outstanding loans to some types of businesses
have actually declined during the first nine
months of 1970. Construction loans have shown
the most persistent decline. Loans to service-type
businesses declined slightly in 1970, in contrast
to the sharp increase during the comparable
period in 1969. Service loans include loans to
nonbusiness services, such as lodging, amuse
ment, recreation, medical, legal, and educational
services. Loans to mining concerns and transpor
tation, communication, and public utility bor
rowers also declined from their end-of-1969 level.
J o sep h
E.
R o ssm an ,
J r.
169
S ix t h D is t r ic t S t a t is t ic s
Seasonally Adjusted
(All data are indexes, 1957-59 = IOO, unless indicated otherwise.)
L a te st M o n th
197 0
O ne
M onth
Ago
Tw o
M o n th s
Ago
O ne
Year
A go
262r
22 8
197
2 62
1 78
1 67
183
255
177
167
178
One
M onth
A go
Tw o
M on th s
A go
O ne
Ye a r
Ago
36 2
154
3 61
220
352
1 74
3 35
178
. Sept.
181
173
182
128
89
179
175
18 1 r
1 30
93
180
175
181
133
97
176
178
176
137
85
. Sept.
. Sept.
3.7
40.6
3.5
40.5
3.3
40.9
41.6
. Sept.
. Sept.
401
288
3 02
398
27 6
3 05
395
269
284r
37 4
25 8
282
258
1 36
2 67 r
207
267
166
2 63
156
Sept.
Sept.
Sept.
Sept.
Sept.
151
138
1 58
126
49
151
139
157
12 7 r
47
151
139
157
130
46
152
145
156
151
50
Sept.
Sept.
4.0
39.3
3.7
40.1
3.7
40.3
3.1
40.7
Sept.
Sept.
Sept.
3 55
24 7
328
355
240
3 33
35 0
238
33 2
341
23 6
31 9
Sept.
Aug.
23 2
269
224
2 34
222
2 16
245
Sept.
Sept.
Sept.
Sept.
Sept.
131
120
12 0 r
120
134
1 19
43
1 34
117
44
134
1 18
47
Sept.
Sept.
6.6
42.6
6.4
42.5r
41.2
Sept.
Sept.
Sept.
296
198
209
29 5
1 94
287
1 89
222r
2 10 r
275
178
203
Sept.
Aug.
286
173
280r
239
284
203
27 9
18 4
Sept.
Sept.
Sept.
Sept.
Sept.
152
159
1 48
163
46
151
15 8 r
1 48
162
46
150
158
147
160
48
151
161
146
17 0
44
Sept.
Sept.
5.0
40.2
4.9
40.6
4.3
41.1
Sept.
Sept.
Sept.
43 6
29 5
290
4 33
291
264
396
2 72
3 01
L a te st M o n t h
197 0
S IX T H D IS T R IC T
IN C O M E A N D S P E N D I N G
M a n u f a c tu r in g P a y r o lls
..............
F a rm C a s h R e c e i p t s ......................
C r o p s ........................................
L i v e s t o c k ....................................
In s ta lm e n t C re d it at B a n k s * (M il. $)
N e w L o a n s ................................
Rep aym ents
.............................
.
.
.
.
Sept.
Aug.
A ug.
A ug.
2 63
167
149
169
. Sept.
. Sept.
341
3 07
359
3 07
344
3 26
32 6
287
N o n fa rm E m p l o y m e n t t .................. . Sept.
M a n u f a c tu r in g
......................... . Sept.
A p p a re l
.................................... . Sept.
C h e m i c a l s ................................ . Sept.
F a b ric a te d M e t a l s ...................... . Sept.
F o o d ........................................... . Sept.
Lbr., W ood Prod., Furn . & Fix. . . . Sept.
Paper
........................................ . Sept.
P rim a ry M e t a l s ......................... . Sept.
T e x tile s
.................................... . Sept.
T ra n sp o rta tio n E q u ip m e n t
. . . . Sept.
N o n m a n u f a c t u r i n g t ...................... . Sept.
C o n s t r u c t i o n ............................. . Sept.
F a rm E m p l o y m e n t ......................... . Sept.
U n e m p lo y m e n t Rate
. Sept.
(P e rc e n t o f W o rk Fo rceJt . . . .
In s u r e d U n e m p lo y m e n t
Sept.
(Pe rcent o f C ov. E m p . ) ..............
Avg. W e e kly H rs. in M fg. (H rs.) . . . Sept.
Sept.
C o n s tru c tio n C o n t r a c t s * ..............
Sept.
R e s i d e n t i a l ................................
Sept.
All O t h e r ....................................
Ele ctric Pow e r P r o d u c t io n * *
. . . . Aug.
Aug.
C otto n C o n s u m p t i o n * * ..................
Petrol. Prod, in C o a sta l La. a n d M iss.* '« Sept.
Aug.
M a n u f a c t u r in g P ro d u c tio n
. . . .
Aug.
N o n d u r a b le G o o d s ......................
Aug.
Aug.
T e x tile s
................................
Aug.
Aug.
Paper
....................................
Aug.
P r in t in g a n d P u b lis h in g . . .
Aug.
C h e m i c a l s .............................
Aug.
D u ra b le G o o d s .........................
L u m b e r a n d W o o d ..................... Aug.
F u rn itu re a n d F i x t u r e s .............. . Aug.
Aug.
Stone , C la y a n d G la s s . . . .
Aug.
P r im a r y M e t a l s ......................
F a b ric a te d M e t a l s .................. . Aug.
N o n e le ctrica l M a c h in e r y . . . . Aug.
E le ctrica l M a c h i n e r y ................... Aug.
T ra n sp o rta tio n E q u ip m e n t
. . . Aug.
152
145
174
142
175
118
105
125
128
151
145
1 74
141
173
1 18
1 06 r
125
126 r
151
150
175
144
17 8
113
112
112
192
154
128
55
1 95 r
153
130
55
151
146
175
140
173
118
106
127
129
113
192
153
132
55
4.6
4.5
4.3
3.5
2.9
40.4
229
2 76
189
168
99
28 3
244
206
167
229
26 2
192
1 68
252
287
170
185
169
198
239
36 2
611
37 8
1.9
4 0.9
196
217
178
160
99
264
238
2 10
. Sept.
EM PLOYM ENT
N o n fa rm
E m p lo y m e n tt
. Sept.
. Sept.
E M P L O Y M E N T A N D P R O D U C T IO N
212
152
141
55
. Sept.
. Sept.
3 58
30 2
3 56
298
352
298
331
276
. Sept.
. Sept.
. Sept.
249
2 06
2 83
242
200
2 37
196
278r
226
189
270
20 1
159
2 30
248
197
168
2 56
2 82
168
196
167
193
236
3 93
585
366
M a n u f a c tu r in g P a y ro lls
.................. Sept.
Fa rm C a s h R e c e i p t s ......................... Aug.
EM PLOYM ENT
N o n fa rm
E m p lo y m e n t t
U n e m p lo y m e n t Rate
(P e rc e n t of W o rk Fo rceJt . . .
Avg. W e e k ly H rs. in M fg. (H rs.) .
F IN A N C E A N D B A N K IN G
185
EM PLO YM ENT
N o n m a n u f a c t u rin g
C o n s tru c tio n
F IN A N C E A N D B A N K IN G
Loans*
All M e m b e r B a n k s ......................
L a rg e B a n k s .............................
D e p o s its *
All M e m b e r B a n k s ......................
L a rg e B a n k s .............................
B a n k D e b i t s * / * * .............................
2.6
F IN A N C E A N D B A N K IN G
130
134
117
3.0
40.4 r
2 63
183
1 68
108 r
294
2 45
208
166
236r
261
193r
167 r
261
2 91 r
168
182 r
166
198 r
239r
379r
616r
382r
Avg. W e e k ly Hrs. in M fg. (H rs.) .
111
3.3
40.1
246
216
271
165
92
310
2 44
2 07
166
236
262
194
166
2 63
288
167
183
165
199
238
359
6 05
381
220
U n e m p lo y m e n t Rate
131
131
133
123
135
132
50
U n e m p lo y m e n t R a te
287r
ALABAM A
Avg. W e e kly H rs. in M fg. (H rs.) .
6.2
4.9
41.5
F IN A N C E A N D B A N K IN G
M IS S IS S IP P I
IN C O M E
M a n u f a c tu rin g P a y ro lls
................... Sept.
F a rm C a s h R e c e i p t s ...................... . A ug.
EM PLOYM ENT
N o n fa rm E m p l o y m e n t t .................. .
M a n u f a c tu r in g
......................... .
N o n m a n u f a c t u r in g
.................. .
C o n s t r u c t i o n ......................... .
Fa rm E m p l o y m e n t ..............................
U n e m p lo y m e n t R a te
(Percent of W o rk F o r c e lt . . . . .
Avg. W e e k ly H rs. in M fg. (H rs.) . . ,.
231
153
225r
194
2 27
171
2 18
177
Sept.
Sept.
Sept.
Sept.
Sept.
131
133
130
104
52
133
133
132r
12 1r
57
133
134
133
123
51
133
137
132
127
59
Sept.
Sept.
5.1
40.2
5.0
40.4r
4.9
40.1
3.9
41.0
EM PLO YM ENT
F IN A N C E A N D B A N K IN G
M e m b e r B a n k L o a n s ......................
M e m b e r B a n k D e p o s i t s ..............
B a n k D e b i t s * * .............................
170
U n e m p lo y m e n t R a te
(P e rc e n t of W o rk Fo rce )t • •
Avg. W e e kly H rs. in M fg. (H rs.)
5.2
40.1
F IN A N C E A N D B A N K IN G
. Sept.
. Sept.
. Sept.
3 23
231
241
32 6
23 0
249
321
2 26
236
294
2 12
225
4 33
30 0
294r
M O N T H L Y R E V IE W
L a te st M o n t h
1 97 0
One
M on th
Ago
Two
M on th s
A go
One
Yea r
A go
La te st M o n th
1 97 0
TEN N ESSEE
IN C O M E
M a n u f a c t u r in g P a y ro lls
F a rm C a s h R e c e ip t s .
24 7
159
245r
1 64
2 50
174
2 43
14 9
148
153
146
151
147
153
148
157
M onth
A go
M o n th s
Ago
A go
. Sept.
. Sept.
. Sept.
145
149
60
144
143 r
58
144
143
57
143
155
61
. Sept.
. Sept.
4.8
39.5
4.8
39. 8 r
4.5
40.1
3.6
40.4
M e m b e r B a n k L o a n s * ..................... . Sept.
M e m b e r B a n k D e p o s i t s * ..................
B a n k D e b i t s * / * * ............................. . Sept.
354
230
2 85
34 3
22 3
28 0
344
218
2 97
312
2 03
2 77
N o n m a n u f a c t u r i n g ......................
C o n s t r u c t i o n .........................
F a rm E m p l o y m e n t .........................
U n e m p lo y m e n t Rate
(P e rc e n t of W o rk Fo rceJt . . . .
Avg. W e e k ly H o u rs in M fg. (H rs.) .
F IN A N C E A N D B A N K IN G
EM PLOYM ENT
N o n fa rm E m p lo y m e n t t •
M a n u f a c t u r in g
. . .
*F o r S ix t h D istrict a re a only; o th e r totals fo r en tire six sta te s
D a ily a ve ra ge b a s is
t P re lim in a ry data
r-R ev ised
N.A. N ot ava ila b le
S o u rc e s : M a n u f a c tu r in g p ro d u ctio n e stim a te d by t h is B a n k ; non farm , m fg. a n d n o n m fg . emp., m fg. p a y ro lls a n d hou rs, a n d unem p., U.S. Dept, of L a b o r a n d co o p e ra tin g
state a g e n cie s; cotto n c o n su m p tio n , U.S. B u re a u of C e n s u s; c o n stru c tio n contracts, F. W. D o d g e Div., M cG ra w -H ill In fo rm a tio n S y s t e m s Co.; petrol, prod., U.S. B u re a u of
M in e s; in d u s tria l u s e of elec. power, Fed. P ow e r C om m .; fa rm c a sh re ce ip ts a n d fa rm emp., U .S.D.A. O th e r in d e x e s b a se d on d ata collected b y t h is B a n k . All in d e x e s
c a lc u la te d b y t h is B a n k .
Debits to Demand Deposit Accounts
Insured Commercial Banks in the Sixth District
(In Thousands of Dollars)
P e rce n t C h a n g e
P e rce n t C h a n g e
Sept.
197 0
Aug.
197 0
Sept.
1 96 9
Yea r
to
Sept.
date
197 0
9 m os.
Fro m
197 0
Aug. Sept. fro m
197 0 196 9 1 96 9
S T A N D A R D M E T R O P O L IT A N
S T A T IS T IC A L A R E A S f
B ir m in g h a m
. . . .
G adsden
. . . .
H u n tsv ille
. . . .
..............
M o b ile
2,00 0,990
1,914,094
1,810,454
+
5
+ 11
+
+
-
5
4
+ 12
+
6
-
2
+
9
+
5
+ 17
+
75,1 73
72,172
6 7,2 34
2 0 4 ,819
213 ,145
208 ,930
64 0 ,619
643 ,896
6 0 8 ,416
-
1
M on tg om e ry
. . .
383 ,659
371 ,027
364,291
+
3
T u s c a lo o s a
. . .
137,681
121,281
123,132
+ 14
Ft. L a u d e r d a le H o lly w o o d
. . . .
. . . .
J a c k s o n v ille
M i a m i ..................
.
O r l a n d o ..............
P e n s a c o la
. . .
W. P a lm B e a c h
A lb a n y
. .
. .
..............
A tla n ta
..............
A u g u s t a ..............
B a to n
Lafayette
. . .
. .
. . . .
. . . .
9
. . .
40,4 36
4 0,1 90
37,875
+
7
+
7
87,283
O ca la
. . .
St. A u g u s t in e
St. P e te rsb u rg
3
+ 14
+ 13
+
+ 15
5 6 6 ,036
8
+ 6
+13
+14
+ 10
8
+ 14
+ 15
+
+
4
289,011
+
5
+ 3
+ 3
+ 14
+ 15
+ 5
+ 4
344 ,976
323 ,903
3 4 6 ,458
313,375
30 0 ,9 6 8
3 4 0 ,567
7 8 4 ,380
169,624
8 07 ,276r
165,875
166,151
2,707,782
6
+
0
34 6 ,8 2 8
721 ,8 7 8
165,817
+
3
163,393
165,843
+
2
2
+
2
0
+23
+ 6
- 2
2,59 1,434
2,63 0,658
+
4
+
3
+
156,573
904 ,548
+
-
2
+ 14
- 7
3
3
1
1
+ 2
+
+
+
1
7
9
+
+
4
0
4
+26
+ 10
884 ,235
805 ,826
-
+
9
+ 12
580 ,665
572 ,265
-
3
+
3
1,838,571
597 ,826
l,8 2 1 ,0 6 7 r
+
1,866,335
+
2
+
7
+14
171,262
1,044,457
-
4
+
3
+16
7 3,1 44
69,5 87
-
0
+
5
+ 13
. . . . . .
121,913
129 ,999
101,998
-
+19
54,343
6 2,0 08
52,827
6
-1 2
+20
. . . . .
+
3
+ 10
. . . . . .
125,516
115,572
133,005
+
-
6
-
. . . . .
. . .
20,885
91,791
18,099
18,119
+ 15
+ 15
91,021
87,5 85
+
1
A thens
D alto n
G a in e s v ille
. . . .
46,3 74
43,1 82
40,8 32
+
7
. . . . .
22,931
23,231
23,4 88
-
1
-
. . . . . .
. . . . . . .
31,6 62
27,5 26
27,1 04
+ 15
+ 17
. .
L a G ra n g e
Rom e
86,4 09
93,9 46
+
9
-
0
68,3 40
-1 4
+
4
.
.
.
.
14,269
156,640
7,493
44,2 14
13,300
150,952
15,022
157,637
7,419
46,931
7,562
42,3 34
+ 7
+ 4
+ 1
- 6
+
Ne w Iberia
. . .
P la q u e m in e
. . .
T h ib o d a u x
. . . . .
42,2 85
38,871
40,2 29
+
9
+
5
+
5
12,941
24,1 60
14,157
-
9
-
9
-
3
23,965
14,275
26,9 48
+
1
-1 0
+
0
H a ttie sb u rg
. .
L au re l . . . . . .
M e rid ia n
. . . .
N a tc h e z . . . . .
P a s c a g o u la —
M o s s Point
. .
V ic k s b u r g
. . . .
.
.
.
77,1 07
55,4 50
72,7 26
7 9,2 31r
84,9 29
-
3
-
9
-
50,001
78,6 34
.
45,0 85
39,907
51,216
89,535
46,960
- 8
+13
+ 8
-1 9
- 4
-
7
4
.
84,975
91,393
84,232
-
+
1
+
7
.
55,0 07
47,6 28
48,2 46
+ 15
+ 14
+ 14
. . . . .
3 6,4 48
24,8 55
32,1 55
+47
+ 13
+
3
. . . . . .
J o h n so n C ity
. . .
K in g sp o rt
. . . . .
96,3 72
93,591
98,6 34
+
+
5
101,091
100,344
103,199
+
173,290
176,735
2
- 2
+ 0
+ 10
- 2
+
. . . .
. .
A b b e v ille
. . . .
A le x a n d ria . . . .
B u n k ie
. . . . .
H am m ond
. . . .
Y a zo o C ity
+ 11
+
1 03,145
8 9,0 12
86,611
+ 16
+ 19
+ 13
S e l m a ..................
51,7 76
47,6 64
52,024
+
9
-
0
+
1
34,6 72
33,187
34,119
+
4
2
+ 1
- 0
-
4
Alabama:):
B re va rd
C o u n ty .
D a y to n a
Beach
.
. .
.
.
95,3 23
82,095
94,777
2 0 8 ,846
209 ,522
96,6 39
195,118
97,6 79
131,544
119,495
121,087
93,399
'In c l u d e s o n ly b a n k s in the S ix th D istrict p ortion of the state
1970
+ 16
+
+
7
-
1
+
+ 10
+
S IX T H
D IS T R IC T
177,476
Total . 41,7 83,489
+ 11
3
-
5
1
1
4
-
+ 1
- 6
- 4
+
6
6
+ 10
40,4 19,842 r 39,9 84,908 r +
3
+
9
4,865,127
4,736,765
12,839,051r 12,474,207
+
4
+
7
+
7
. . . . . . 13,360,414
+
4
+
7
+ 10
. . . . . . 11,508,777
11,103,437
11,184,594
+
4
+
3
+ 12
2
2
2
+
3
+
-
4
+
6
8
+
3
+
7
. . . . .
5,082,064
+
4
-
3
G e o rgia^
3
+
4
L o u is ia n a f *
. . .
4,72 1,477r
4,643,637
+
1,891,172
l,8 5 4 ,2 6 4 r
1,965,078
+
+
3
M is s i s s i p p i f *
T e n n e s s e e t*
. . .
9
. . .
5,141,613
5,036,486
4,98 0,627r +
^E stim a te d
7
1
+ 2
F lo rid a t
tP a rt ia lly e stim a te d
8
+21
+ 6
+ 8
82,1 18
0
. . . .
+ 15
-
93,8 34
+
..............
2
4
+ 11
+17
7 1,0 14
V a ld o sta
B risto l
7
7
+ 5
+ 14
G riffin
N ew nan
9
-
+ 11
147 ,014
1,125,235
73,131
7 1,2 58
N O V EM BER
-
+20
159,017
78,7 86
Ft. M y e r s —
N. Ft. M y e r s
-1 6
6
+ 8
1,079,841
79,097
B a rto w
5
. . .
. . . .
..............
B ra d e n to n
+
. . .
+ 15
8
0
+ 2
27,0 95
398,681
94,2 95
. . .
Elb erton
+
+14
23,8 47
4 5 2 ,197
99,2 19
. .
8
+
5
22,7 43
4 7 9 ,034
. . .
. .
+
-
+20
8
+
. . .
. . .
S a ra so ta
4
+ 14
+ 10
W in te r H ave n
+
3
+
Tam pa
3,298,022
6 9 4 ,344
O TH ER C EN T ER S
A n n is to n
D o th a n
+
M o n ro e C o u n ty
B ru n s w ic k
178,989
8 7 4 ,360
9
6
+ 11
+
.
8
+
+
116 ,959
. . .
K n o x v ille
N a s h v ille
+
2
+ 1
8
2 48 ,2 0 8
873 ,377
5
3
1,892,153
174 ,175r
+
139,013
+
220 ,258
1 78,156
8 4 4 ,064
108 ,904
148,865
+
7,44 8,622
30 9 ,7 8 6
. .
112 ,280
151 ,754
2
8
2 ,043,640
5 87,656
117 ,819
. . .
+
+
Aug.
197 0
. . .
+
123,813
B ilo x i- G u lf p o r t
Jackson
..............
C h a tta n o o g a
9
Aug.
197 0
G a in e s v ille
9 5 3 ,124
+
Sept.
197 0
L a k e la n d
1,998,953
7,421,614
293,241
. . . .
N e w O r le a n s
5
133,668
. . .
L a k e C h a r le s
6
+
2 8 4 ,050
2 0 1 ,776
600,651
276,713
+
7,685,679
310 ,648
. . 3 0 4 ,422
. . . .
Rouge
7 7 1 ,2 7 ?
5
+ 12
2,052,451
.
C o lu m b u s
. . . .
M acon
..............
Savannah
1,005,185
1,892,075
3,40 6,134 r
79 1 ,350
. . . .
T a lla h a s s e e
T a m p a - S t . Pete.
1,028,649
2,051,455
3,556,012
5
Sept.
1 96 9
Yea r
to
date
9 m os.
197 0
Sept. fro m
1 96 9 1 96 9
Sept.
1970
F ro m
4,79 9,449
4
r-R ev ised
171
D is t r ic t B u s in e s s C o n d it io n s
A lth o u g h a few b r ig h t s p o t s h a ve a p p e a r e d , th e S o u t h e a s t e r n
re g io n c o n t in u e s to be d o g g e d b y s l u g
g is h e c o n o m ic a ctiv ity . T h e u n e m p lo y m e n t rate e d g e d h ig h e r in S e p te m b e r ; p r ic e s o f fa r m
ro se
b u t fa r m
c o n tin u e d
m o n th s.
and
p ro fits w ere sq u e e z e d ; a n d
th e ir
T o ta l
r e s tra in e d
s p e n d in g
c o n s tr u c t io n
c o n tr a c t
s a v in g s a n d
lo a n
a s s o c ia t io n s
r e s id e n tia l
b e h a v io r.
aw ards
b e n e fite d
both
m a n u f a c t u r in g
and
c o n tr a c t
a w ards
fe ll.
p ro d u cts
C o n su m e rs
N o n f a r m e m p lo y m e n t w e n t up, a fte r d e c lin in g fo r fo u r
in c r e a s e d on the str e n g th o f n o n r e s id e n t ia l a c tiv ity . B a n k s
fro m la rge d e p o s it in flo w s.
D e s p it e a s lig h t in c r e a se in th e u n e m p lo y m e n t
rate,
c o n s tr u c t io n
n o n m a n u f a c t u r in g
e m p lo y m e n t in c r e a se d . However, October’s man
ufacturing employment statistics will probably
show a decline because of the GM strike. In Sep
tember, only construction employment declined
significantly, largely because of a labor dispute
that idled about 8,000 workers in Birmingham.
In August, industrial production for durables and
nondurables reversed a three-month advance.
ty, Tennessee. Residential contract volume
declined. In contrast with the first half of the
year, there were relatively few large multi-family
apartment project awards in the third quarter.
With savings flows to District savings and loan
associations remaining strong, the outlook for
mortgage credit availability continued to im
prove.
A c c o r d in g to
in flo w s
p r e lim in a r y
at m e m b er
banks
in fo r m a tio n ,
in
d e p o s it
O c to b e r w ere
o n ly
up, re
s lig h t ly s m a lle r th a n th e la rg e in flo w s n o te d d u r
f le c t in g s h a r p ly h ig h e r p r ic e s fo r c orn , o ils e e d s ,
in g the tw o p re v io u s m o n th s. The easier reserve
positions of banks continued to be mirrored in
reduced borrowing at the discount window.
Larger banks paid off a substantial part of their
nondeposit liabilities.
S e p t e m b e r ’s a g r ic u lt u r a l p r ic e s m o v e d
In the livestock category, price
increases for milk and eggs overshadowed price
declines for hogs and beef cattle. Broiler prices
remained below year-earlier levels. High com
prices, resulting from the diseased crop, have
meant considerably higher feed costs for the
region’s farmers.
a n d v e g e ta b le s .
T o ta l c o n s tr u c t io n
c o n tr a c t a w a r d s re v e rse d
a
A sharp gain in
the nonbuilding category was accounted for by
a single large utility contract in Hamilton Coun
fo u r-m o n th d e c lin e in S e p te m b e r .
NOTE:
In
S e p te m b e r ,
the
v o lu m e
lo a n s m a d e to c o n s u m e r s
o f n ew
in s ta lm e n t
by c o m m e r c ia l
banks
d e c lin e d b u t s t ill e x c e e d e d the a m o u n t o f re p a y
m e n ts. Thus, total consumer credit outstanding
increased only fractionally. In October, depart
ment store sales remained sluggish, and auto
sales were depressed by the GM strike.
Data on which statements are based have been adjusted whenever possible to eliminate seasonal influences.
172
M O N TH LY
R E V IE W
@FedFRASER