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Monthly F E D E R A L Volume X X X V I R E S E R V E R eview B A N K Atlanta, Georgia, November 30, 1951 O F A T L A N T A Number 11 A Decade o f District State Tax Revenues A constant search for greater revenues has dominated state finance during the last ten years. Our state gov ernments have been faced, not only with greater de mands for improved and expanded governmental services, but also with problems created by the rising price level. The greater-than-national rate of economic develop ment which the Sixth District states have shared with the rest of the South has also stimulated the growth in District state revenues. The effect of this develop ment has been two-fold. On the one hand, it has created a demand for new services and an expansion and improvement of services which the states have traditionally provided. On the other hand, economic development and the higher levels of income which accompany it have brought more or less automatic increases in revenue to those states whose tax systems respond to income changes. Demands for extended services, however, have outstripped automatic in creases in tax collections. RELATIVE IMPORTANCE OF LOCAL, STATE, AND FEDERAL TAXES IN THE UNITED STATES, SELECTED YEARS Source: U . S. D e p a r tm e n t o f C om m erce, National Income , 1951. N o te: T a x c o lle c tio n fig u res in c lu d e s o c ia l s e c u r ity c o n tr ib u tio n s, b u t e x c lu d e gra n ts-in -a id . Two major sets of factors, therefore, have influenced the trend of state revenues in the District: those which have been nationwide and those which have had a greater impact in this section than elsewhere. Both because of the importance of revenues in providing the governmental services necessary for an expanding economy and because of recent economic develop ments in this area, an examination of state revenue trends is essential for a complete economic analysis of the region. Such examination in turn may pose cer tain questions, the answers to which are of vital im portance to the economic development of the area. S t a t e T a x e s D e c l in e R e l a t i v e t o F e d e r a l B u t I n c r e a s e In A b s o l u t e T e r m s Growth in state revenues may sometimes be over looked because of the relatively greater expansion in Federal revenues. In order to place the increase in state tax collections in perspective, but without mini mizing that increase, it is helpful to note the changes in the revenues of all levels of government in this country. One major development has been the tendency for the-Federal Government to take an increasing propor tion of total tax revenue. The forces behind this change have been strong. In the first place, the people in this country decided to have more of their recurring needs satisfied through public, rather than private, action. Local and state governments, however, were unable to expand their revenues sufficiently to accommodate these additional requests. Consequently, the Federal Government provided the services, either through di rect action of its own agencies or by grants-in-aid to the state and local governments. Federal taxes had to be raised to meet these additional costs. Then, there has been the greater participation of the United States in world affairs. Whether this participa M o n t h l y R e v ie w o f th e F ederal R ese rv e B a n k o f A tla n ta fo r N o v e m b e r 1951 102 tion takes the form of military preparedness, a shoot ing war, or economic aid to potential allies, the drain on the Federal Treasury is heavy. In 1929, state governments took in 33 percent of total taxes collected. Even as late as 1940, the states were collecting 25 percent of the taxes, with the Fed eral Government taking in 50 percent. Rearmament and war reduced the states’ share to 19 percent in 1941 and to 10 percent in 1945. It seems certain that the Federal Government will continue to spend large sums to provide public services as well as to maintain this nation’s international position. As a consequence, there is little reason to suppose that state governments will collect anything like 25 percent of the total taxes levied in the future. Although state tax collections have declined in rela tive importance during the past decade, they have in creased significantly in absolute terms. Most of this increase has taken place in the postwar years. Collec tions in District states have grown 150 percent since 1945; the national gain was 105 percent. The in creases in individual states that have occurred since 1945 contrast notably to the relatively minor changes that took place during the war. Some increase in state tax collections has come about without the aid of initiating action on the part of legislatures, whereas some increases have resulted from definite changes in state tax systems by legisla tive bodies. The first category includes such factors as changes in the general price level, population in creases, and an acceleration of economic activity, with resulting increases in real income. I n f l u e n c e o f G e n e r a l P r ic e L e v e l The rise in the general price level, of course, has tfleen nationwide. Price rises most readily affect income and general sales taxes, with less effect on liquor and motor fuels taxes, which in almost every instance are on a gallonage basis. Because of the difficulties and expense of frequent property reassessments, changes in the assessed value of property lag behind changes in its market value. Thus, revenue from property tax is not readily responsive to changes in the general price level. Inflation in this country has been severe, although not as much so as in other nations. As is well known, the largest portion of the last decade’s price increase has been concentrated in the postwar years. The level TABLE I State Tax Collections TAX COLLECTIONS (Millions of Dollars) 1941 1945 1951 A l a b a m a .......................... ........52 F l o r id a ........................................59 G e o r g i a ....................................52 L o u is ia n a .......................... ........75 M i s s i s s i p p i ..............................35 T e n n e s s e e ......................... ........48 S ix th D is tr ic t S ta te s . 3 20 U n ite d S t a t e s .................. 3 ,6 0 6 Source: N ote: 63 117 67 2 0 5 62 153 101 2 6 2 52 101 5 4 166 4 0 0 1,004 4 ,3 4 9 8,9 3 2 PERCENT INCREASE 1941-45 1945-51 1941-51 22 14 20 35 51 12 25 21 86 2 07 144 158 93 2 08 151 105 126 249 193 250 190 245 213 148 U . S . D e p a r tm e n t o f C om m erce. D a ta in c lu d e d in th is an d fo llo w in g ta b le s are fo r fisc a l y e a rs an d do n o t in c lu d e c o lle c tio n s fr o m u n e m p lo y m e n t c o m p e n s a tio n le v ie s. of wholesale prices rose 21 percent during the war, whereas since 1945 it has risen 87 percent. To get right down to the changes in the quantity of resources commanded by the states, it is best to dip into a pool of information that has not been muddied by these price level changes. Even when we have eliminated the influence of inflation by “correcting” the dollar amounts of tax collections shown in Table I, it will be seen that increases in state revenues have been significant. TABLE II State Purchasing Pow er Changes Since 1941 TAX COLLECTIONS (Millions of 1941 Dollars) PERCENT INCREASE 1941 1945 1951 1945-51 1941-51 52 59 52 75 L o u i s i a n a ........................... 35 M is s is s ip p i.......................... 48 T e n n e s s e e .......................... , . S ix th D is tr ic t S ta te s . . . 320 U n ite d S t a t e s ................. ... . . 3,606 N ote: 52 55 52 84 43 44 330 3 ,589 56 98 73 126 48 79 481 4 ,284 8 78 42 50 12 79 46 19 9 67 42 68 39 65 51 19 U . S. B u rea u o f L ab or S ta tis tic s w h o le s a le p r ic e in d e x fo r a ll c o m m o d itie s u se d to a d ju st ta x c o lle c tio n s to 1941 d o lla rs. The District states in fiscal 1951 had 45 percent more actual purchasing power than they had in 1945. This is to be compared with a national gain of approxi mately 20 percent during the same period. Table II, which presents tax collection figures reduced to 1941 dollars, shows that Tennessee and Florida registered the most striking increases. Other District states, with the exception of Alabama and Mississippi achieved substantial, although smaller, gains. E ffe c t o f P o p u l a t i o n C h a n g e s An additional reason for the increase in state tax col lections is the gain in population which has taken place in the last ten years, particularly since the war. The population of the nation, as well as that of the M o n t h l y R e v ie w o f th e F ederal R eserve B a n k o f A tla n ta fo r N o v e m b e r 1951 District states, increased nearly 14 percent during the last decade. The national and District average in crease was approximated by four of the District states, which achieved gains ranging from 8 to 14 percent. Only Mississippi showed an absolute decline, while Florida enjoyed a 46-percent gain in population. The growth in population has brought forth a de mand for larger state expenditures for education and related services and has also contributed forcibly to a higher level of economic activity. The resulting greater sales volumes and higher incomes cause automatic in creases from nearly all the sources of state revenues. TABLE III Per-Capita State Tax Collections A l a b a m a ................................... F l o r id a ........................................ G e o r g ia ....................................... L o u is ia n a ................................... M is s is s ip p i................................ T e n n e s s e e ................................ S ix th D istr ic t S ta te s . . . U n ite d S t a t e s ........................... . . . . . . . . . . . . . . . . . . . . . 1941 1945 1951 $ 18 31 17 32 16 16 21 $ 28 $ 22 28 20 41 25 19 25 $ 33 $ 38 74 44 98 46 50 58 $ 60 An analysis of state tax collections on a per-capita basis is useful in arriving at some conclusions about the relative weight of the tax load among the different states of the country. Per-capita figures also are useful in measuring the extent to which citizens have their needs fulfilled by state, rather than by private, agencies. Although the differences between the percapita figure for the 48 states and that for the Sixth District states were narrowed during the last ten years, per-capita taxes in 1951 in the 48 states taken together were two dollars more than in the District states. Per-capita state tax collections are below the na tional average in all but two District states, Louisiana and Florida, where they are significantly above the national average. Louisiana has had the highest state tax collections per-capita in the District throughout the last decade. In 1941, Louisiana’s taxes per person were nearly twice those of Mississippi. By 1945, Ten nessee, with per-capita state taxes of nearly 19 dollars, had replaced Mississippi as the lowest state, and its citizens paid less than half the 41 dollars per capita levied on the people of Louisiana. Alabama had the lowest collection per capita by 1951, with each of its citizens paying a little more than one-third of the Louisiana figure of 98 dollars. If per-capita figures are to result in meaningful con clusions, care must be taken in their use. The alloca 103 tion of governmental responsibility between the state government and its local units, for example, varies greatly from state to state. In 1942, the latest year for which data are available, state tax collections were approximately 60 percent of total state and local col lections in the District states, compared with a 50percent figure for the nation as a whole. If this differ ence in allocation of governmental responsibility still holds in 1951, it will mean that state and local taxes per capita for the nation are higher than those for the District states by more than the 2 dollars shown in Table III, which is based on state taxes alone. The different weights which individual states are able to place on certain taxes also make it necessary that care be used in making per-capita comparisons. As an illustration, 22 percent of Louisiana’s total state tax collections in 1951 came from levies on the value of resources extracted from its land. On the other hand, Alabama collected only one percent of its total tax revenues from this source. Without determining too exactly the final payer of these taxes, it is not likely that the citizens of Louisiana are bearing a higher per-capita tax load because of them. Finally, the revenue turned over to the state treas uries by the liquor monopoly systems of several states is not counted as tax collections. In the District this applies to the revenues earned by the Alcoholic Bever age Control Board of Alabama. R is e in I n c o m e P a y m e n t s The sharp growth in income payments to individuals during the last ten years is the third major reason for the increase in state tax collections. This growth is, of course, a feature of the general rise in economic ac tivity. Another contributing factor to the gain in income payments, however, is the increase in the proportion of District income which has found its way to market. As a greater proportion of income is produced in the manufacturing and service sectors of the economy, with proportionately less produced by agriculture, relatively more of the total economic transactions be come subject to a tax, such as the general sales levy. Thus, this change in composition of economic activity is partly responsible for the increased collections achieved by the general sales tax. An outstanding ex ample of such a development is, of course, the in creased income resulting from the tremendous growth of the tourist trade in this area. M o n t h l y R e v ie w o f th e F ederal R e se rv e B a n k o f A tla n ta fo r N o v e m b e r 1951 104 From 1941 to 1951, income payments increased 186 percent in the United States and 245 percent in the District states. The postwar increase of 35 percent in the District states, however, fell behind that for the 48 states, which enjoyed a gain of about 42 percent. The increase in income payments has been accom panied by an automatic increase in tax collections from those sources of revenue most responsive to changes in income payments, that is, income, general sales, and motor fuels taxes. In order to estimate the changes in the relative weight of the state tax load among the different states in the nation, it is useful to consider these changes in income payments along with the changes in tax collections. TABLE IV State Tax Collections as a Percentage of Income Payments to Individuals 1941 A l a b a m a .......................... F l o r id a ................................ G e o r g ia .............................. L o u is ia n a .......................... M is s is s ip p i....................... T e n n e s s e e ....................... S ix th D is tr ic t S ta te s . ...................... 6.8 ...................... 6.5 ...................... 5.3 ...................... 8.8 ...................... 7.8 ...................... 5 .2 ...................... 6.6 ...................... 4 .8 1945 1951 3.2 2 .7 2 .6 4 .9 4.3 2 .3 3 .2 2 .8 4.6 6.1 4.5 9.3 6.6 5.2 6.0 4.1 Note: T a x c o lle c tio n s are fo r fisca l y ea r, b u t in c o m e p a y m en ts are fo r p rev io u s c a le n d a r y ear. Both in 1941 and 1951, the average citizen in the nation had slightly less of his income taken by state governments than did the citizens of District states. In the District states and throughout the rest of the country, however, 1951 state taxes are taking a smaller percentage of income payments than they were ten years earlier. In 1941, state tax collections as a per centage of income payments amounted to 4.8 percent in the United States and 6.6 percent in the District states. But by 1951, because income payments had risen more rapidly than state tax collections, this pro portion had fallen to 4.1 percent for the United States and 6 percent for the District states. Within the District this year in every state except Louisiana, citizens had a smaller percentage of their TABLE V Selected Taxes as a Percentage of Total State Taxes United States 1941 1945 1951 M otor F u e ls a n d V e h ic le L ic e n se G en era l S a l e s .................. ...................... I n c o m e .................................................... T ob acco . ............................................ 37 16 12 6 3 7 25 18 19 7 3 6 28 23 17 5 5 4 District States 1941 1945 1951 49 7 7 5 5 8 39 10 12 7 8 7 33 22 10 7 6 3 income payments removed by state tax collections than they did in 1941. Tennessee had the lowest figure in 1941 and 1945. In 1951, state tax collections as a per centage of income payments were lowest in Georgia. Louisiana had the highest figure throughout the tenyear period. But the entire amount of taxes which that state levies on the extraction of natural resources enters into the tax collection total. Very little of the value of the products upon which the levies are based, however, is reflected in the figure for income payments to individuals. H i g h l i g h t s o f L e g i s l a t i v e A c t io n Increases in state tax collections from revenue sources which are responsive to changes in the general price level and gains in income payments have been of great importance during the last decade. In addition to these more or less automatic gains in revenues, a significant increase in state tax collections has been brought about by legislative action. This legislation has been highlighted by increases in the rates of existing general sales taxes and by the introduction of the tax in several states. Louisiana, for example, raised its sales tax rate in 1949. Three Dis trict states introduced the general sales tax after the war. Tennessee began levying the tax in 1948; Florida applied it in 1950; and Georgia’s new 3-percent levy contributed revenue in April, May, and June of 1951. The emphasis which the District legislatures have placed on the sales tax in the last three years has made this tax as important in the revenue picture of the District states as it is in all the other states of the nation. As may be seen in Table V, this is a notable SOURCES OF TOTAL REVENUE, SIXTH DISTRICT STATES 1941-1951 M o n t h l y R e v ie w o f th e F ederal R eserve B a n k o f A tla n ta fo r N o v e m b e r 1951 change. In 1951, approximately 23 percent of the total state tax revenues in both the District and 48 states can be attributed to the general sales tax. This levy accounted for only 7 percent of total state tax collections in the District states in 1941, compared with the 16 percent attributed to this tax in the United States. The most important source of state tax revenues, not only in the District states, but also in all other states, is the motor fuels and vehicle license levy. The income tax has become relatively more important since 1941, but it is still not as prominent a feature of the District state revenue systems as it is in the 48 states. As Table V shows, the relative importance of the prop erty tax is declining. F u tu r e o f S t a t e T a x e s The preceding analysis points out the notable growth in District state tax collections over the last ten years. The analysis has not shown, however, whether the greater collections have been adequate to finance the level of governmental services necessary for an ex panding economy. Nor has it shown whether the revenues have been wisely spent. Considered apart from the public services provided, the growth of state tax revenues might be regarded as a burden that has retarded the growth of income in the District. On the other hand, since these revenues have helped provide the better education, improved roads, and other public services that are generally be lieved necessary for economic progress, there is the possibility that the expenditures made out of the ex panded collections have constituted a profitable public investment. District state tax collections are now tak ing a smaller proportion of total income than they did a decade ago. A broader question cannot be resolved by analysis of statistics. The income differential which exists be tween the District and the nation as a whole has widened rather than shrunk since the war. Will the state governments play a more positive role in the efforts to reduce this differential? In doing so, will they be able to finance this increased activity without undue burden in view of the present ratio of state taxes to income? Will the resulting increase in ex penditures and taxes be a profitable public investment? These decisions must be made by the citizens of the District states through their elected representatives. Courtney H. Taber 105 Sixth District Statistics CONDITION OF 27 MEMBER BANKS IN LEADING CITIES (In Thousands of Dollars) Item Loans and investments— Total.................... . Loans—Net............... . Loans—Gross............ Commercial, industrial, and agricultural loans . Loans to brokers and dealers in securities . Other loans for pur chasing and carrying securities.............. Real estate loans . . . Loans to banks........... Other loans............... Investments—Total . . . ,. Bills, certificates, and notes .............. U. S. bonds.............. Other securities........... Reservewith F. R. Banks. Cash in vault............... Balances with domestic banks ...................... Demand deposits adjusted ,. Time deposits............ U. S. Gov’t deposits. . . Deposits of domestic banks Nov. 28 1951 Oct. 31 1951 Nov. 29 1950 2,712,186 2,691,380 2,547,597 1,071,316 1,072,647 1,118,427 1,090,014 1,091,305 1,132,681 631,133 624,216 673,142 13,811 12,341 14,405 34,456 34,315 36,167 89,448 88,780 91,983 3,797 4,513 7,116 317,369 327,140 309,868 1,640,870 1,618,733 1,429,170 766,480 747,708 546,193 637,643 637,434 659,134 236,747 233,591 223,843 509,849 510,920 413,443 48,908 43,288 45,000 192,417 212,352 178,995 2,018,170 2,022,517 1,861,846 531,497 531,444 524,602 87,469 46,126 87,957 592,334 599,618 530,790 12,500 16,300 Percent Change Nov. 28,1951, from Oct. 31 Nov. 29 1951 1950 +6 +1 —0 — 0 —4 —4 +1 —6 +12 —4 +0 +1 —5 —3 —47 —16 —3 +1 +3 +0 +1 — 0 +13 —9 —0 +0 1 — 1 + — +2 + 15 +40 —3 +6 + 23 +9 +7 +8 +1 +91 + 12 —23 DEBITS TO INDIVIDUAL BANK ACCOUNTS (In Thousands of Dollars) Place ALABAMA Anniston . . . . Birmingham . . . Dothan . . . . Gadsden . . . . Mobile........... Montgomery . . Tuscaloosa* . . . FLORIDA Jacksonville. . . Miami............ Greater Miami* . Orlando . . . . Pensacola . . . . St. Petersburg Oct. 1951 Sept. 1951 Oct. 1950 Percent Change Oct. 1951 from Yr.-to-Date 10 Months Sept. Oct. 1951 from 1951 1950 1950 29,490 27,271 27,828 473,450 378,905 416,489 20,237 18,716 19,449 25,602 22,471 23,919 160,322 149,879 148,549 115,617 95,857 107,185 32,667 29,804 35,217 + 10 —7 371,404 293,290 445,123 66,589 41,645 72,429 151,263 316,376 260,978 388,829 61jl27 39,668 66,761 141,236 319,641 259,343 384,571 58,614 38,842 69,283 131,973 GEORGIA 34,964 32,483 32,061 Albany ........... Atlanta . . . . 1,151,874 972,068 1,121,301 91,011 87,641 79,375 Augusta . . . . 9,258 Brunswick . . . 13,360 1 1 ,6 6 8 Columbus . . . 79,453 76,779 68,386 5,411 Elberton . . . . 5,550 4,823 25,497 24,582 23,228 Gainesville* . . . 14,483 13,098 15,406 Griffin* . . . . 86,103 81,139 77,345 9,541 13,461 15,993 Newnan . . . . 28,262 22,608 27,882 112,727 111,032 107,316 Savannah . . . . 14,875 15,246 12,574 Valdosta . . . . LOUISIANA 45,567 42,348 41,619 Alexandria* . . . Baton Rouge . . 119,126 100,848 111,599 50,094 46,868 42,116 Lake Charles . . New Orleans . . 955,829 807,725 849,087 MISSISSIPPI 19,539 19,600 20,086 Hattiesburg . . . 179,833 165,615 159,874 Jackson . . . . 34,881 34,627 33,753 Meridian . . . . 40,011 32,173 31,488 Vicksburg . . . TENNESSEE 190,869 175,796 166,492 Chattanooga . . 132,068 129,939 132,125 Knoxville . . . . 428,433 388,674 386,067 Nashville . . . . SIXTH DISTRICT** 5,577,931 4,883,530 5,080,290 *Not included in Sixth District totals. **32 Cities. +14 +4 +7 +26 +14 +28 + 10 +8 +8 + 22 +12 +17 + 12 + 14 +9 +5 +8 +7 +16 +13 + 16 +14 +7 +5 +15 +15 +14 +16 +13 +16 +15 +13 +8 +9 +3 +15 +44 + 16 +3 +27 +15 +31 +30 +17 +8 +29 +9 +20 +25 + 11 +21 +24 +8 +25 +8 + 14 +7 + 21 +18 +4 + 14 +3 +15 +4 + 11 +6 +68 +25 +2 —2 +8 + 18 +7 + 18 — 0 +9 +24 +1 +6 +10 —6 + 11 +19 +1 +5 + 18 +9 +7 +19 +13 + 19 + 10 —3 +3 +27 +5 +13 + 11 +17 + 12 +9 +15 +2 10 —0 +11 + +14 +7 + 10 +19 +8 + 21 +16 + 17 +15 M o n t h l y R e v ie w o f th e F ederal R e se rv e B a n k o f A tla n ta fo r N o v e m b e r 1951 106 D is tr ic t B u s in e s s Contrasting Movements in Retail Sales District department store sales picked up less than seasonally in October and November. October sales increased 13 per cent from the September level and preliminary figures for November reveal a continuation of this trend. In the first quarter of 1951, sales at District department, furniture, and household appliance stores generally were higher than in 1950; in the next two quarters they were below the 1950 level. The final three months may bring another shift. SALES AT MAJOR DISTRICT RETAIL OUTLETS, 1951 PERCENT CHANGE FROM 1950 C o n d itio n s compared with 1950. In February, for example, sales were 4 percent higher than last year; in March, consumer purchases jumped almost 60 percent, but April sales toppled 30 per cent, from the level attained in 1950. This range of approx imately 90 percent exceeded that of department stores and household appliance stores within Georgia and that of fur niture stores in the other District states. SIXTH DISTRICT DEPARTMENT STORE SALES, 1951 _______________________ PERCENT CHANGE FROM 1950_______________________ DURABLE GOODS Dom. Floor Major Pianos, _________________ Furniture______Coverings________ HHA.____ Radios, etc. J a n u a r y ........................... + 3 3 +77 F e b r u a r y ..........................+ 1 4 +45 +64 M a r c h ............................... + 1 5 A p r i l ................................... +5 +23 M a y .................................... +0 +6 J u n e ................................... —3 +9 J u l y ....................................— 16 — 12 A u g u s t .............................. — 21 — 38 S e p t e m b e r ...................... — 2 2 — 27 O c t o b e r .............................. — 15 — 14 F ir s t T e n M o n th s . . . — 3____________ + 6 __________ +46 +12 — 11 — 23 — 40 — 39 — 66 — 32 44 +28 — 28__________ +53 +43 +17 — 21 — 20 —2 — 48 — 19 — 30 — 15 — 11 NONDURABLE GOODS Piece Women’s and Misses* Ready-to-Wear Men*s an(j ___________________ Goods_____Accessories_______ Apparel_____Boys* Wear In most months this year, compared with last year, depart ment store sales fluctuated less than sales at furniture and household appliance stores. In six out of ten months in 1951, sales more nearly approached 1950 levels at department stores than at either furniture or household appliance stores. Department store sales ranged from plus 24 percent in Janu ary to minus 16 percent in June. This 40-percent range com pares with 41 percent for furniture and 88 percent for household appliance stores. The relative stability of District department store buying in this ten-month period is attributable to fairly high and steady nondurable goods purchases, which offset wide fluctu ations within durable goods lines. Nondurables account for approximately three-fourths of total department store sales, which were 3 percent higher in the first ten months of 1951 than in that period last year. Each of the major soft goods lines registered year-to-date gains, but house furnishings purchases were off 7 percent for the period. Department Store Sales Steady Consumer buying through the first three quarters of 1951 at department stores in District states deviated little from 1950. Florida sales topped the six states with a 7 percent year-to-October gain, compared with the like period of 1950. Georgia’s 4-percent increase came second, followed by gains of 3 percent in Ala bama and one percent in Tennessee, and 2-percent declines in Louisiana and Mississippi. Most gains were accounted for by first-quarter increases. In the second and third quarters, consumer purchases hovered close to the 1950 mark. Furniture Store Sales Variable Furniture store dealers in Georgia reported wide variations in monthly sales this year, J a n u a r y ........................... + 4 2 F e b r u a r y ..........................+ 1 3 M a r c h ............................... +3 A p r i l ...................................+ 1 4 M a y ....................................— 1 J u n e ................................... +2 J u l y ....................................— 31 A u g u s t ...............................— 16 S e p t e m b e r ...................... — 10 O c t o b e r .............................. +5 F ir s t T e n M o n th s . . . +2 +27 +13 +21 — 12 +3 +5 — 12 —8 —2 +15 +5 +23 +11 +13 —3 +2 +6 +10 +3 +2 +15 +8 +18 +6 +22 — 14 —4 +8 —0 +4 +3 +22 +6 In other District states, furniture store sales were below those of last year in most months. In Mississippi, however, these sales were greater in five months of 1951; it was the only state showing gains for August and September. Household Appliance Store Sales Erratic Individual Dis trict states for which household appliance data are available, the District as a whole, and the nation experienced approx imately the same trends, but in varying degrees. Georgia household appliance store sales were up in each of the first four months of 1951. The rate of gain declined, however, from 31 percent in January to a slim 5 percent in April. From May through September, household appliance store customers in Georgia bought less in 1951 than in 1950. In Florida, household appliance store sales in January 1951 rocketed 130 percent over January 1950 and plummeted in July to a level 60 percent below the like period last year. When the first ten months sales compared favorably with those of 1950 in one type of retail outlet, remaining lines usually performed reasonably well. This was particularly true in Florida and Georgia. Conversely, poor sales volume in one line, department stores, for example, was accompanied by slow sales in the other lines. Tennessee and Louisiana merchants fell in the latter grouping, whereas those in Ala bama and Mississippi experienced conflicting movements. B. A . W . M o n t h l y R e v ie w o f th e F ederal R eserve B a n k o f A tla n ta fo r N o v e m b e r 1951 107 Sixth District Milk Production Sixth District Statistics From a production standpoint, 1951 has been a difficult year for dairy farmers in the District states. Despite an increase in the number of milk cows on farms, milk production declined during the first ten months of this year, compared with that period of 1950. A poor pasture season, caused by dry weather, is the main reason for the decline. Weather damage to southern pastures was the greatest since 1944. In Georgia, Alabama, and Louisiana, average pasture conditions were the poorest in 15 years or more. After a dry fall in 1950 that seriously hampered the estab lishment of fall-seeded pastures, the unusually cold weather caused heavy damage to some of the more important grazing crops. Crops that survived the cold weather furnished little green grazing during the winter months. In May this year, pasture feed production was again reduced by dry weather. The drought was most serious in Mississippi and Louisiana, where pasture conditions were the poorest in 85 years of record. Lack of rainfall hampered pasture growth in most areas for the remainder of the summer and fall. For the first ten months of this year, in Tennessee, milk production was 2.4 percent less than in the like period of 1950, and in Alabama it was 6.9 percent less. Mississippi production was 1.8 percent larger. According to data on rate of production per cow, there was only a slight decline in Georgia. Data are not available for Florida and Louisiana. The decrease in milk production, however, has been small in view of the poor pasture season. District farmers have kept production up by milking more cows and by feeding larger amounts of concentrates and roughages. For the entire nation, the number of milk cows on farms at the mid dle of this year was slightly smaller than at the same time in 1950. All the District states, on the other hand, had more milk cows on farms in June 1951 than in June 1950. In Ala bama, for example, where production rates per cow were lower than they were last year throughout the season, cow numbers were up 3.4 percent. Had Alabama farmers not increased cow numbers, production probably would have declined more than 6.9 percent. INSTALMENT CASH LOANS MILK PRODUCTION PER PERSON (Pounds) 1935-39 Average . . . A la b a m a . . . . F lo r id a . . . . G e o r g ia . . . . L o u isia n a . . . M is s is s ip p i. . . . . . T e n n e ss e e . . . U n ite d S ta te s . . . . 43 4 185 35 6 271 624 63 4 799 1946 1950 46 8 20 0 366 26 0 683 727 839 46 0 20 5 38 4 252 639 709 786 Percent Change 1950 1950 from from 1935-39 1946 6 11 8 —7 2 12 —2 —2 3 5 —3 —6 —2 —6 The amount of grain fed per cow is an indication of the extent to which farmers offset the poor pasture season by heavier feeding of concentrates. For the nation, the rate of grain feeding was slightly lower in 1951 than in 1950. For the District states that report this information, however, the rate of grain feeding to milk cows was higher this year. The rate was up 23 percent in Georgia, 4 percent in Tennessee, 19 percent in Alabama, and 26 percent in Mississippi. Lender Federal credit unions . . . . State credit unions............ Industrial banks............... Industrial loan companies . . Small loan companies. . . . Commercial banks............ Volume Percent Change Oct. 1951 from Sept. Oct. 1951 1950 +16 +43 +7 +71 +28 + 24 +5 + 14 —0 +25 +3 + 14 No. of Report ing 36 16 9 . . 10 . . 33 . . 30 Outstandings Percent Change Oct. 1951 from Sept. Oct. 1951 1950 +0 —7 +0 + 10 + 12 +1 +0 +4 +0 + 18 +0 —6 RETAIL FURNITURE STORE OPERATIONS Number of Stores Item Reporting Total sales.................................... 123 Cash sales...................................... 108 Instalment and other credit sales............ 108 Accounts receivable, end of month . . . . 83 Collections during month.................... 83 Inventories, end of month.....................84 Percent Change October 1951 from September 1951 October 1950 +12 +25 +12 +2 +4 +2 +22 +21 +24 —11 —4 +2 WHOLESALE SALES AND INVENTORIES* No. of Firms Report ing Type of Wholesaler Automotive supplies. . . . Electrical—Full-line . . “ Wiring supplies . “ Appliances. . 5 3 3 6 10 12 4 7 4 6 6 9 14 44 12 11 13 169 Sales Inventories Percent Change No. of Percent Change Oct. 1 9 5 1 from Firms Oct. 3 1 , 1 9 5 1 from Sept. Oct,, Report Sept. 3 0 Oct. 3 1 1951 1950 ing 1951 1950 +4 —2 +30 —2 + 13 + 17 Industrial supplies . . . . +4 + 14 Lumber & bldg. materials. Plumbing&heating supplies + 1 —9 Refrigeration equipment . . + 15 Confectionery............ + 10 Drugs and sundries . . . . . +4 . + 7 Groceries—Full-line . +7 “ Specialty lines . Tobacco products . . . . . + 13 Miscellaneous............ . —4 Total ..................... . +7 * Based on U. S. Department of Commerce figures. + 10 —3 +51 — 13 —0 +8 —8 — 31 + 6 — 18 +9 +12 +8 +14 +18 + 19 + 18 +7 4 + 10 —5 3 5 5 3 3 5 3 6 —i i —7 —3 +3 —4 +3 + 13 —4 +i9 +45 + 15 +11 +53 +18 +34 —6 10 32 6 9 10 104 — ii +6 + 11 +8 + 7 +1 +3 +2 +22 +6 +43 + 15 DEPARTMENT STORE SALES AND INVENTORIES* Percent Change Sales Oct. 1 9 5 1 from Sept. Oct. Place Birmingham............ Montgomery............ FLORIDA ............... Jacksonville........... St. Petersburg . . . . Atlanta............... Columbus............... Savannah .............. LOUISIANA.............. Baton Rouge . . . . New Orleans............ MISSISSIPPI........... 1951 . . . . . . . . . , . . . . —4 . +6 . +6 . +26 . +35 . +20 . +28 . +30 . . . . . . . . +11 +11 +10 +9 +4 +15 +23 +18 . . +15 . . +19 . . +9 . . +9 TENNESSEE ............ . . + 8 Bristol.................. . . + 0 Bristol-KingsportJohnson City . . . • • + 1 Chattanooga ............ . ■ + 2 . . +10 Nashville.............. . . + 1 3 OTHERCITIES** . . . . . +14 Yr. to Date 1950 19511950 + 10 +4 + 15 + 11 + 16 + 25 +6 +23 + 14 +23 +13 +8 +43 +21 + 14 +9 +29 + 13 + 10 + 13 +7 + 5 + 12 +12 +3 +3 +2 +6 + 1 +7 +8 +6 + 12 +8 +3 +4 + 1 + 19 +8 +8 —3 + 11 —2 —8 —1 —2 —4 —0 +1 —2 +5 +8 + 12 + 16 + 17 +13 + 1 + 1 +3 +0 +6 Stocks Oct. 3 1 , 1 9 5 1 , from Sept. 3 0 Oct. 3 1 1951 1950 +1 +2 — 13 — 13 —3 +5 +3 +8 — 16 +0 —5 + 1 +6 +5 +5 +6 +2 +2 + 10 +4 —2 —8 — 11 +2 —3 +5 —i —0 +1 —0 —0 —1 +2 — 13 — 12 — 13 —6 —8 +5 + 9 — io —2 +9 —^ 4 + 1 — 18 —1 —8 +4 +3 +0 +3 +3 . . +13 ^Includes reports from137 stores in the Sixth Federal Reserve District. **When fewer than three stores report in a given city, the sales or stocks are grouped together under “other cities.” They are, however, included in state figures. 108 M o n t h l y R e v ie w o f th e F ederal R eserve B a n k o f A tla n ta fo r N o v e m b e r 1951 Farmers’ experiences this year emphasized again that weather is a hazard to farm systems based upon grazing crops, as well as to those based upon row crops. Dairy farmers had to feed heavier and increase their costs sub stantially in order to prevent a substantial decline in milk production. The recent research information, however, tends to confirm the earlier recommendations for more and better pastures if the dairy industry is to continue to grow. NUMBER OF MILK COWS ON FARMS (Thousands) A l a b a m a ..................................................... F l o r id a .................................... ..................... G e o r g ia . . ...................... ..................... L o u is ia n a ..................................................... M i s s i s s i p p i ................................................ T e n n e s s e e ................................................. D istr ict S t a t e s ........................................... U n ite d S t a t e s ............................................ June 1 1950 June 1 1951 Percent Change 388 136 365 266 461 597 2 ,213 22 ,7 5 7 401 138 370 277 478 600 2,2 6 4 2 2 ,6 6 8 3 .4 1.5 1.4 4.1 3.7 0.5 2.3 — 0.4 Trends in per-person milk production indicate the prog ress already made in the District states, compared to that in the nation. In 1950, production per person for the nation was 2 percent less than the 1935-39 average, although all District states except Louisiana showed increases. From 1946 to 1950, production per person declined 6 percent for the nation and only about one percent for the District states. B. R . R. B a n k A n n o u n c e m e n ts On November 15, the First Bank & Trust Company, Pensacola, Florida , a nonmember bank, began remitting at par for checks drawn on it when received from the Federal Reserve. Bank . Officers o f this bank are: F. M. Turner, Jr., President; D. Yarbrough, Executive Vice President; George H. Malone , Vice President; L. W. Lard, Cashier; and E. H. McAdam, Trust Officer. Its capital stock amounts to $125,000; deposits, $10,045,345; and surplus and undivided profits, $360,799. The Bank of Mulberry, Mulberry, Florida, a non member bank, also went on the par list on November 15. C. H. McNulty is President; A. D. Denham, Vice President; F. H. McNulty, Cashier; and Hattie Cahill, Assistant Cashier. The capital stock amounts to $50,000; deposits, $1,287,018; and surplus and undivided profits, $121,093 . On December 15, the newly organized Colonial State Bank, Orlando, Florida, will open for business as a nonmember bank and will remit at par. This bank’s officers are: Charles O. Andrews, Jr., President; Phillip N. Igou, Vice President; and Maitland L. Bishop, Jr., Cashier. It has capital stock of $100,000 and surplus and undivided profits of $100,000. Sixth District Indexes DEPARTMENT STORE SALES* Oct. Place 1951 DISTRICT........... , . . 404 424 Atlanta............ 378 Baton Rouge . . , 372 Birmingham . . . 386 Chattanooga . . , 361 483 Jacksonville . . , 403 Knoxville . . . , Nashville . . . 449 New Orleans . . ., . . 380 . . . 549 Adjusted** Sept. 1951 408 427 343r 428 416 368 434 418 377 458 460 352 521 Oct. 1950 370 409 370 373 370 353 401 366 328 420 401 350 453 Oct. 1951 424 466 389 391 405 412 517 419 399 396 476 395 560 Unadjusted Oct. Sept. 1950 1951 424 388 474 449 381r 381 458 391 389 445 434 402 430 429 426 381 430 355 371 387 474 425 373 364 501 462 Oct. 1951 457 605 368 668 375 Unadjusted Oct. Sept. 1951 1950 441r 497 568 678 360 423 646 813 377 432 Oct. 1951 250 255 212 231 283 288 263 Unadjusted Oct. Sept. 1951 1950 250 275 278 243 227 199 254 251 302 296 288 242 326 277 DEPARTMENT STORE STOCKS Place DISTRICT. . Birmingham Nashville . NewOrleans . . . . . . . . . . . , . , . . Oct. 1951 . 419 . 522 , 335 . 607 . 364 Adjusted** Sept. 1951 429 521 343 603 373 Oct. 1950 456 584 385 739 419 GASOLINE T A X COLLECTIONS*** Place SIX STATES . . . . . . . Alabama............ . . . ... ... Louisiana . . . . . . . Mississippi . . . . . . . Tennessee ............ . . . Oct. 1951 255 258 233 233 276 283 264 Adjusted** Sept. Oct. 1951 1950 269 255 245 265 231 218 241 257 288 288 279 238 278 320 ELECTRIC POWER PRODUCTION* Sept. 1951 SIX STATES 447 Hydro generated 216 Fuel generated 750 Aug. 1951 462 237 756 Sept. 1950 416 339 517 MANUFACTURING EMPLOYMENT*** Place SIX STATES Alabama . Florida. . Georgia. . Louisiana. Mississippi Tennessee. Sept. 1951 ., 152 . 154 . 142 . 154 . 143 . 152 . 159 Aug. 1951 152 151 141 155 142r 152 159 Sept. 1950 152 154 134 156r 143 154r 158r C OTTON CONSUMPTION* Place TOTAL. . . Alabama . Georgia. . Mississippi Tennessee . Oct. 1951 . 157 . 160 . 161 . 95 . 125 Oct. 1950 180 192r 180 119 145 Sept. 1951 160 163 165 102 121 CONSTRUCTION CONTRACTS Place DISTRICT . Residential Other . . Alabama . Florida. . Georgia. . Louisiana . Mississippi Tennessee . Oct. 1951 630 1,077 413 533 906 626 574 208 526 Oct. 1950 540 850 390 726 549 538 451 514 440 Sept. 1951 534r 809r 400r 352 726 481 616 203 576 CONSUMERS PRICE INDEX flrf UCL. Sept 1951 1951 Item 192 ALL ITEMS . . 196 233 Food . . . . 233 214 Clothing . . 218 Fuel, elec., and refrig. 144 143 Home fur 201 nishings . 203 165 Misc. . . . 173 Purchasing power of .52 dollar . . . .52 *Daily average basis **Adjusted for seasonal variation * * * 1 9 3 9 monthly average= 1 0 0 ; Other indexes, 1935-39 = 100 r Revised Oct 1950 181r 213r 199r 142r 195r 158r .55r ANNUAL RATE OF TURNOVER OF DEMAND DEPOSITS Oct. 1951 Unadjusted . . 23.0 Adjusted** . . 21.9 Index** . . . 88.7 Sept. 1951 2 2 .8 23.6 95.7 4)ct. < 1950 24.0 2 2 .8 92.5 CRUDE PETROLEUM > PRODUCTION IN COASTAL LOUISIANA AND MISSISSIPPI* Oct. 1951 Unadjusted . . 376 Adjusted** . . 377 Sept. 1951 377 381 Oct. 1950 351r 352r
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