Full text of Economic Review (Federal Reserve Bank of Atlanta) : November/December 1977, Volume 62, Number 8

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F e d e ra l R e se rv e B an k
o f A tla n ta
November / December 1977

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id.eral Reserve Bank of Atlanta
ideral Reserve Station
lanta, Georgia 30303
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Atlanta, Ga.
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FEATURES:
International Banking in the Sixth District.. . . . . . . . . . . 127
Expansion of international banking in the Southeast has
outpaced rapid national growth in recent years. A closer
look into this phenomenon reveals a pattern in the develop­
ment of international banking and a tendency to specialize
in Latin American finance at District banks.
Federal Food Dollars Go South................................ ..

135

Needy households in the South should receive a generous
helping of new Federal subsidies called for by the reform of
the Food Stamp Program.
Banking Note: The Recent Strengthening in
Real Estate Lending.

142

After causing some serious problems during the recession,
real estate loans are once again on the rise at many of the
District's larger banks.
The New Chapter m Florida Banking.............................. .... 144
A progress report on infant branch banking in Florida.
Working Paper Abstracts
• Fundamental Determinants of
Craft Volume: A Survey
and Regional Application. .................................. ...

147

Local demand, rather than national monetary reserves,
determines the volume of credit within a region.
• A Framework for Examining the Small,
Open Economy: An Application
of the Macroeconomics of Open System s...................... ...

148

A theoretical approach commonly used to analyze global
influences on a national economy can be adapted to ex­
amine regional economies.

Director of Research: Harry Brandt
Editing: Patricia Faulkinberry
Production and Graphics:
Susan F Taylor and Eddie W Lee, Jr
Economic Review, Vol. LX11, No 8 Free
subscription and additional copies available
upon request to the Research Department,
Federal Reserve Bank of Atlanta, Atlanta,
Georgia 30303. Material herein may be
reprinted or abstracted, provided this
Review, the Bank, and the author are
credited Please provide this Bank's Research
Department with a copy of any publication
in which such material is reprinted




• Holding Company Power
and Market Performance:
A New Index of
Market Concentration.................................................................... 149

Redesigning a conventional index of banking market con­
centration to reflect the presence of holding company sub­
sidiaries improves its ability to measure market per­
formance.
Index for 1977 ............................................ ..................... 150

PATTERNS EMERGE

INTERNATIONAL BANKING IN THE SIXTH DISTRICT
by Donald Baer and David Garlow
Although international banking activity has
expanded rapidly nationwide in recent
years, Sixth District international activity
has grown even faster. Today, 39 commer­
cial banks in the Sixth District boast active
international departments. The scope and
horizons of commercial banks' interna­
tional departments run the gamut from a
desk or two on the main floor or in a
remote corner of the bank to a m ultioffice
operation with domestic subsidiaries,
foreign branches, and representation
abroad.
THE RECORD: SIXTH DISTRICT
INTERNATIONAL BANKING GROWTH
The "a c tiv e " international departments
in the Sixth District are concentrated in
the Southeast's ports and major inland
cities (see Table 1). Although certain port
cities have had small international opera­
tions for decades, most District inter­
national departments have been estab­
lished since 1960. It was not until the
1970s, however, that District international
banking activity really mushroomed.
Growth in international banking at
domestic offices in District banks has
outstripped the national average. From
December 1973 to June 1977, foreign
deposits in these offices increased 171
percent, from $447 million to over $1.2
billion. District loans to foreigners in­
creased even more rapidly.2 But activity at
foreign branches of District banks has
grown less than it has nationwide (see
Table 2). The overall trend, however, is
clear: International banking is becoming
an increasingly expected and accepted
’This article complements our analysis of Edge Act corporations in Miami
which appeared in the Federal Reserve Bank of Atlanta's September/October
1977 Economic Review.
2All banking data in this article exclude all Edge Act activities of banks
headquartered outside the District




CH ART 1
DISTRICT CO M M ERCIA L BA N KS’ ACCOUNTS
WITH FO R EIG N ER S
BIL. $

Source: U.S. Treasury and Federal Reserve data.

activity for larger banks located in District
trade centers.
THE PATTERN OF DISTRICT
INTERNATIONAL BANKING
FJas there been a pattern to the growth
of regional international departments?
After a series of interviews conducted
between October 1976 and October 1977
with over 30 District international depart­
ments and a thorough evaluation of the
data available, we have concluded that in
spite of great diversity, there have been 4
distinct phases in the development of
regional international banking.
The pattern to be described here is not
universal. Certain banks, upon reaching a
given phase, feel comfortable with the

T A B LE 1
DISTRICT COM M ERCIAL BANKS WITH
ACTIVE INTERNATIONAL
DEPARTM ENTS

ALABAMA (5)
Birmingham:
Birmingham Trust National Bank
First National Bank of Birmingham
Mobile:
American National Bank and
Trust Company of Mobile
First National Bank of Mobile
Merchants National Bank
FLORIDA (19)
Jacksonville:
Atlantic Bank
Barnett Bank of Jacksonville
Flagship State Bank of Jacksonville
Florida First National Bank of Jacksonville
Miami:
Bank of Miami
Barnett Bank of Miami
Central Bank and Trust Company
City National Bank of Miami
Coconut Grove Bank
Flagship Banks, Inc.
Miami National Bank
Pan American Bank of Miami
Peoples Downtown National Bank
Republic National Bank of Miami
Royal Trust Bank of Miami
Southeast First National Bank of Miami
Tampa:
Exchange National Bank of Tampa
First National Bank of Tampa
Flagship Bank of Tampa
GEORGIA (5)
Atlanta:
Citizens and Southern National Bank
First National Bank of Atlanta
Fulton National Bank
National Bank of Georgia
Trust Company Bank
LOUISIANA (5)
New Orleans:
Bank of New Orleans
First National Bank of Commerce
Hibernia National Bank in New Orleans
National American Bank of New Orleans
Whitney National Bank of New Orleans
MISSISSIPPI (1)
Jackson:
Deposit Guaranty National Bank
TENNESSEE (4)
Chattanooga:
American National Bank and Trust Company
Nashville:
Commerce Union Bank
First American National Bank
Third National Bank in Nashville




type of international department they have
and plan no further alterations of activi­
ties. The phases elaborated here pertain to
the development of District bank
international credit. Although it cannot be
denied that foreign deposits have been a
significant stimulus to the development of
international banking in the foreign de­
posit centers of Miami and New Orleans, it
is the credit activities which most necessi­
tate specialized international departments.
Furthermore, it is the types of credit activi­
ties undertaken by District international
departments which most clearly distinguish
the phases of international department
development.
Phase I: Trade Financing for Local
Exporters and Importers. The expanded
importance of U.S. merchandise imports
and exports explains in large part the
initial phase of this region's international
banking. In 1976, U. S. exports reached
$115 billion, nearly three times the 1970
level. Exports represented 6.7 percent of
1976 GNP, compared to 4.3 percent in
1970 and 3.9 percent in 1965. Import
growth has, been even more rapid. As
foreign trade has expanded, regional banks
in major District cities have been increas­
ingly called upon to finance and facilitate
their customers' trade. Somewhere along
the line, banks in our region, as elsewhere,
have been faced with a major decision:
Should such trade financing be directed to
their money center correspondent banks or
should the regional bank develop its own
international expertise? Thirty-nine District
regional banks have decided that it would
be opportune for them to finance such
trade directly.
Trade financing and payments involve
foreign collections, drafts, letters of credit,
acceptances, and direct loans. Banks
usually find that establishing corre­
spondent banking relationships abroad is
necessary to successfully undertake these
trade credits and payments, as a foreign
bank is either directly or indirectly re­
quired to help process documents.
In this first phase, international depart­
ments put forth a great effort to inform
their banks' customers of the trade
financing and other services that are of­
fered (travelers checks, foreign exchange,

T A B LE 2
GROWTH IN DOLLAR VOLUM E O F INTERNATIONAL A CCOUN TS WITH FO R E IG N E R S
SIXTH FE D E R A L R E S E R V E DISTRICT AND U. S. COM M ERCIAL BANKS

(percentage growth)
December
■
■

1973-1974

1974-1975

1975-1976

32.6
36.2
72.4
88.5
81.6
19.7

23.8
0.1
40.4
28.6
40.1
32.8

43.7
15.8

17.2
24.6

15.1
16.2

16.4
24.3

Dec. 1976J u n e 1977

Dec. 1973J u n e 1977

15.0
4.5
33.6
1.9
4.7

171.2
65.0
294.6
240.5
338.7
103.6

16.3

82.6

Parent Bank
Short-and LongTerm Liabilities
to Foreigners
Short-Term
Claims on Foreigners
Long-Term
Claims on Foreigners

District
U .S .

District
U .S .

District
U .S .

22.1

37.6
69.3
22.3

2.1

Branch
Total Assets

District
U .S .

Source: U. S. Department of the Treasury, Treasury Bulletin, and other Treasury and Federal Reserve data.

etc.). Such an effort is required to win a
share of the trade financing that has for­
merly gone to regional competitors or
money center banks. International depart­
ments sell their trade financing services
over a wider area than their domestic
credit services, since there are few
"a c tiv e " international bank departments
outside of major cities (see Table 1).
Trade financing activity has been and
still is the core of a typical regional bank's
international department. About a quarter
of District banks with international depart­
ments offer only this basic international
service at this time.
Phase II: Loans to Foreign Banks and
Loan Participations. As regional
international departments become more
fam iliar with the foreign countries with
which their customers trade and begin to
work regularly with the international
departments of U. S. correspondent banks
and with foreign commercial correspon­
dent and central banks, further profitable
international financial opportunities
typically become evident. These new fields
are usually participations in foreign loans
set up by money center banks and
extensions of lines of credit to foreign
commercial banks.
Participation purchases of loans
organized by money center banks provide
international departments with loan oppor­
tunities without extensive foreign travel.




Still, the proposals require evaluation; the
money center bank arranges the loan
participations but does not guarantee
them. Participation purchases generate
earnings for the regional bank as well as
offer a chance to learn to evaluate
international loans. Participations may
build stronger correspondent relationships
with the money center banks and "get the
bank's name around" but usually are of
limited value in terms of self-generated
future loans abroad.
Extension of direct lines of credit to
foreign commercial banks provides inter­
national departments with additional
opportunities to build loan volume and
evaluate foreign economies and financial
institutions. These loans normally involve
less risk and more limited foreign travel
than direct loans to nonfinancial foreign
firms.
Banks view the extension of interna­
tional department activity into partici­
pations and loans to foreign banks as a
decision for senior management (and the
international department) as major as the
initial decision to set up an international
department. The final decision hinges on
their assessment of local international
financial needs, competition, liquidity,
risks, current and potential profitability,
and availability of trained manpower.
About 40 percent of the District inter­
national departments interviewed may be
described by this second phase.

CHART 2
PATTERN O F GROWTH O F REGIO N A L INTERNATIONAL DEPARTM EN TS O F
COM M ERCIAL BANKS, (SIXTH DISTRICT)

PHASE I

PHASE II

Phase III: Direct Loans to Foreign
Nonfinancial Firms. As international
activity grows, regional banks begin to
develop contacts with nonfinancial firms
abroad. One channel is through direct
participations with foreign correspondent
banks who have local clients with financial
requirements they cannot meet com­
pletely. Closer contacts with the foreign
suppliers of U. S. imports and foreign
buyers of U. S. exports with whom the
regional bank may have dealt indirectly in
trade financing may also lead to direct
loans to foreign business firms. Typically,
the regional bank works with well-known,
established firms. Some District banks con­
centrating on the development of such




PHASE I

PHASE IV

foreign business loans open representative
offices in a strategic country abroad. Most,
however, have decided that recurrent
foreign travel from the home office
suffices.
International departments currently in
Phase III are those where trade financing,
bank participation purchases, and lines of
credit to foreign banks continue, but the
new activity, direct loans to foreign busi­
ness firms, accounts for an increasing
share of international departments' loan
portfolios. About a third of internationally
active District banks could be described as
in this phase. Four District international
departments have more or less jumped
from Phase I to Phase III without engaging

extensively in participation purchases and
loans to foreign banks. Such jumps have
been possible through contacts built in
offering personal banking services to
foreigners from head offices, particularly
in foreign deposit-taking centers such as
Miami and New Orleans, or through
extensive foreign travel.
Phase IV: Subsidiary Establishment and
Loan Syndication. Once an international
department is offering credits to diver­
sified types of institutions, many of the
distinctions between such a regional
international department and a money
center international department may be
eroded. The domestic marketplace, how­
ever, may still be perceived as the South­
east for the District regional bank, while
the money center bank may perceive the
U. S. as its domestic marketplace. The
regional bank may consider opening sub­
sidiary international offices in the U. S. as
Edge Act corporations or foreign fullservice branches or acquiring shares of
foreign banks. Eventually, as the regional
bank gains international financing stature,
it may regularly syndicate foreign loans.
This phase of international development
requires legal expertise as well as a con­
tinuing commitment to participation
purchases from other syndicating banks.
No District banks are fully into this final
phase, although a few are increasingly
performing certain functions that
characterize it.
THE DIVERSITY OF SOUTHEASTERN
INTERNATIONAL BANKING
The phases described above provide a
system of classification for the extraor­
dinarily diverse group of international
banking departments in the Southeast.
W ith this four-phase pattern in mind, we
now turn to a more detailed discussion of
the policies and portfolios of banks' inter­
national departments, as indicated by their
interview responses.
Type of Borrower Preferred. Southeast­
ern international bankers most frequently
indicated that they prefer to lend to
foreign banks as opposed to nonfinancial
borrowers. Since a correspondent relation­
ship with a foreign bank is often one of
the earliest additions to a bank's interna­
tional services, it seems natural that many
banks use these contacts to place funds




r
TABLE 3
TYPE OF LOANS PREFERRED BY INTERNATIONAL DEPARTMENTS
OF SIXTH DISTRICT BANKS

Type of Loan Preferred
To Private Foreign Banks
To Private Nonbank Foreigners
“ Guaranteed”
Those to Finance U. S. Customers’ Trace
Those Available for Export-lmport
Bank Support
No Special Preference
To Foreign Governments

No. of Banks
Preferring
This Type*
12
5
6
7
3
3
1

Source: Interviews
‘ Since many banks expressed preferences for more than one type
of loan, the column total is greater than the number of banks in­
terviewed. The types of loans are not mutually exclusive; for
example, a loan available for Eximbank support may carry an
Eximbank guarantee.

J
abroad. Loans to finance trade
transactions of U. S. corporate customers
and loans with some form of government
guarantee were also popular (see Table 3).
These preferences indicate that risk
avoidance may play at least as strong a
role in banks' foreign lending decisions as
maximization of the “ spread" (defined as
the interest rate received on a loan minus
the cost of funds to the bank). U. S.
corporations can be tried in U. S. courts in
the event of noncompliance with loan
agreements, and "guaranteed" loans
provide an increased measure of security.
Long-Term Lending. The attitude of
southeastern international departments
toward long-term lending is also rather
cautious. Almost 60 percent of the banks
visited stated that they had some loans
with maturities of a year or longer. South­
eastern bankers reduce their interest rate
exposure by making longer-term loans at
rates that are adjusted frequently.
However, their risk of incurring nonper­
forming loans is greater when they offer
funds with long maturities, thereby
reducing their freedom to reallocate funds
if individual borrowers experience d iffi­
culties. A bank that places a small pro­
portion of its portfolio in long-term loans
abroad is not throwing caution to the
winds, of course. Districtwide, a little less
than a fifth of the foreign portfolios of
parent banks (excluding branches and sub­
sidiaries) are long term and many bankers
interviewed were avoiding new long-term
commitments.

TABLE4
LATIN AMERICAN CONCENTRATION OF INTERNATIONAL BANKING
ACTIVITIES, SIXTH FEDERAL RESERVE DISTRICT MEMBER
BANKS COMPARED TO ALL U. S. COMMERCIAL BANKS

(Figures are Latin American percentages of corresponding
dollar totals for all foreigners as of December 31,1976.)
AH Sixth
District Reporters

All U.S.
Reporters

Liabilities of U. S.
Parent Banks to
Foreigners

89

17

Short-Term Claims of U. S.
Parent Banks on Foreigners

74

49

Long-Term Claims of U. S.
Parent Banks on Foreigners

82

41

Claims on Foreigners
Booked at Foreign
Branches of U. S.
Parent Banks

64

23

Source: U.S. Department of the Treasury, Treasury Bulletin and other
Treasury and Federal Reserve data.

V________________________________________________ J
This cautious attitude toward long-term
commitments is one factor that accounts
for the generally low participation of
D istrict international departments in
syndicated loan packages, which usually
have maturities of five to seven years.3
Less than half of all departments visited
had participated in such packages. Those
that had participated tried to subject these
participations to evaluations as stringent
as those they would make of domestic
loan applications. In a few cases, interna­
tional departments sought comments from
banks not associated with a proposed
syndicated package before deciding on
their own participation.
Geographical Specialization. Nineteen
District international departments have
chosen to concentrate on a particular
geographic area. In the majority of these
banks, the area includes part or all of the
Caribbean Basin.4 As of December 1976,
for example, about 82 percent of District
parent banks' long-term foreign claims
were on foreigners located in Latin
Am erica (a designation that includes the

’ Low participation in syndicated Eurodollar loans is. in turn, partially
responsible for the low growth rates in foreign branch assets at District
banks relative to the national average (see Table 2) District banks do not
face the high state and local taxes on income that have encouraged some
New York banks to book an increasing share of their international loans at
foreign branches See New York Times, M arch 3. 1977.
‘ The Caribbean Basin is defined to include Mexico, Colombia, Venezuela, all
of Central Am erica, the Caribbean Island economies. Guyana, Surinam, and
French Guiana




Caribbean Islands), compared to only 41
percent of reporting banks nationwide.
Sim ilar comparisons of parent banks' short­
term claims, their liabilities to foreigners,
and the assets of their foreign branches
also reveal the Latin American concen­
tration of District banks' international
portfolios relative to those of all U. S.
commercial banks (see Table 4).5
Bankers interviewed explained this
specialization as deriving from their
knowledge of the area, its closeness to
their U. S. location, and its importance to
the trade transactions of their customers.
Few banks cited other factors which one
would expect to influence this kind of
decision such as less competition or higher
growth prospects in a given country or
countries. It may be that profit and growth
prospects originally did influence the inter­
national departments' area choices, but
some of the bank o fficials we interviewed
were recent arrivals and were unaware of
the background of decisions made early in
the departments' history. But the reasons
given for area specialization and the fact
that these banks are concentrating their
efforts in only a few economies may also
reflect the heavy expense of establishing
expertise in foreign financial matters.
Future changes in banks' areas of
specialization may provide a clue to the
relative weights of the cost of investment
in expertise and the perceived profit
opportunities in decisions of where to
lend. International departments that make
only small and infrequent changes in the
foreign markets in which they choose to
lend probably prefer to build a fund of
knowledge about these economies rather
than react to short-run changes in the
fortunes of different areas.
Fourteen of the international
departments which lend to borrowers
abroad periodically establish specific
lending limits for individual countries,
although these limits are very flexible at
five banks. Most banks look at current
political and economic indicators when

HDne reason for this District concentration is that money which parent banks
lend to their foreign branches is counted as a claim on foreigners. Since
most of this money is relent by the branch-some of it to non-Latin American
borrowers-and since most D istrict foreign branches are located at Latin
American offshore banking centers, the percentages given in Table 4 slightly
overstate the Latin Am erican concentration in D istrict claims.

establishing country limits. Other consid­
erations, such as U. S. and state legal limits
on loans to one customer, customers'
needs, the purposes of loans, country
ratings established by the Export-lmport
Bank, and past experience in the country,
were mentioned occasionally as influences
on decisions on when to stop making new
loans to an econom y.6
Source of Loanable Funds. Funds for the
lending activities discussed above come
either from resources secured in the bank's
home area or, in the case of 10 District
banks that have established offshore
branches, from Euromarkets. Some banks
use only U. S.-generated resources and
some a mix of funds raised at home and
abroad. Those banks that made little use
of Eurodollars, as in Miami, were more
liquid in most cases. Higher liquidity in
Miami banks is due, in part, to the con­
stant stream of Latin American visitors
who contribute substantial resources in the
form of checking and savings accounts.
W hile some funds derive from accounts
which have been maintained at the same
bank for years, Miami offices also open a
large number of new accounts for for­
eigners annually and promote this service
when they travel abroad.
A few of the more sophisticated District
banks obtain funds for foreign lending in
both U.S. and Eurodollar markets. In deter­
mining how much to draw from each
source, they consider the interest rates
available and their own liquidity. When
short-term funds are inexpensive in the
U.S., they may fund domestically, moving
to the Eurodollar markets when rates
become attractive. In time of slack U.S.
loan demand, they fund foreign loans with
the deposits of U.S. customers to cover the
cost of these deposits and to continue
growing.
Profitability. No figures on the rate of
return on foreign operations are publicly
available for District banks. Nevertheless,
'Legal lim its usually refers to the provision that U. S. national banks and
state chartered banks in some states cannot have loans outstanding to one
borrower that are valued at more than 10 percent of the bank's capital and
surplus This provision may affect the country limits of money center banks,
especially those which lend extensively to the public sector, since a
government and its associated enterprises can be considered, in some cases,
to be a single borrower. But the international portfolios of D istrict banks
are, as yet, generally too small in relation to bank equity to be affected by
this provision, and these answers should be taken as reflecting the general
banking background of the officers we interviewed




almost all bankers who commented on
their international department's rate of
return on assets indicated that it was good
to excellent, often adding that it surpassed
the domestic loan department in this
respect. In all but two banks, foreign loan
loss experience had been generally better
than on domestic loans. So far, repayments
on foreign loans have been a problem for
only a few U.S. banks.7 The safety of
foreign loans underlines once again the
desire to minimize risks that prevail in
most District international departments.
Locational Factors. The site of
international banking operations greatly
affects bank efficiency, according to the
bankers we interviewed. The availability of
frequent and reliable transportation for
passengers, cargo, and mail was the factor
most frequently mentioned. Miami bankers
felt that the city's excellent airline and
shipping connections were a definite plus
to international banking. Bankers in some
other cities viewed transportation as a
negative factor, as poor airline connec­
tions led to costly travel delays. On the
other hand, a port location does not ap­
pear to consistently favor international
banking operations. Some banks located at
busy ports felt this was a valuable source
of international business, while other port
banks (sometimes in the same city) did
little trade financing.
Other factors mentioned as affecting
international banking location decisions
included the availab ility of personnel with
banking experience and the presence of an
international mentality. Miami and New
Orleans were attractive in both respects,
as bankers there felt that the Latin com­
munity provided both experienced
employees and an atmosphere that drew
Latin American visitors to the city. These
banks received deposits from the visitors
and were able to develop valuable con­
tacts with visiting businessmen.
A few banks mentioned proximity to
large U. S. exporters as an aid to gener­
ating foreign loans. Still, financing for
many major multinational corporations in
the Southeast is arranged in northern and
Pacific Coast cities. Increasing numbers of

'Fred Ruckdeschel, "Risk in Foreign and Domestic Lending Activities of U S
Banks," Columbia Journal of World Business X(4), winter 1975

TABLE 5
INTERVIEWEES’ EVALUATION OF GROWTH PROSPECTS OF THEIR
INTERNATIONAL DEPARTMENT, SIXTH FEDERAL RESERVE
DISTRICT COMMERCIAL BANKS
(Figures are numbers of international departments.)

Prospects

Miami
Banks Only

All Banks

Limited

1

15

Good to Excellent

6

11

Source: Interviews.

large corporations are moving their
international department headquarters to
the Southeast, however. This movement,
combined with greater expertise and
expanded exports from corporations long
established in the area, may be a source of
future growth for District international
departments.
Growth Prospects. Given the generally
favorable profit and repayments experi­
ence of international departments, we
might expect southeastern bankers to have
plans for rapid expansion of this segment
of their operations. However, bankers'
responses to this question differed, with
only half indicating that they had plans for
moderate to rapid growth. Miami bankers
were substantially more bullish (see Table
5), perhaps because of their locational
advantages. Bankers who felt that growth
prospects for their international depart­
ments were limited usually attributed this
to hesitancy on the part of upper-level
management or their own doubts about
their capability of handling increasingly
complex operations. Recent international
financial crises and newspaper articles
about the quality of loans to oil-importing
developing nations may help explain bank
directors' caution in expanding
international operations. Feelings of lack
of expertise reflect, in part, the relative
newness of many Southeast international
departments and the competition that
some face in finding and keeping
experienced personnel.




Use of Foreign Travel. Banks that
establish travel programs as part of their
international banking activities usually
develop a fam iliarity with the personalities
and business clim ate abroad which boosts
both the quality and size of their inter­
national portfolios. O ccasional trips by
senior bank management to countries
where the bank has made foreign loans
can build the kind of support at the top
that the international department needs to
strike out in new directions. More than
three-fourths of District international
departments have travel programs,
although at 12 banks, only 1 or 2 officers
make only a few trips per year. Restricting
travel to a few individuals means that the
growth momentum of the international
department could be checked if these
people leave. But the fact that so many
banks have set up travel programs means
that, in general, there are powerful forces
for evolution rather than stagnation in
District international banking.
SUMMARY
Interviews with active international
departments at southeastern commercial
banks suggest there is a four-phase
development pattern for such operations.
Since different banks are in different
phases, the Southeast exhibits a diversity
of size and scope in international opera­
tions. Bank preferences as to type of
borrower, maturity and geographical con­
centration of loan portfolios, and sources
of funds for international loans reveal that
both risk minimization and "spread"
maximization influence their credit
decisions. Proximity to good trans­
portation, a pool of skilled labor, and
attractions which draw international
visitors seem to favor international
banking operations. About half of the
bankers interviewed predicted moderate to
rapid growth for their international
departments in the near future. Foreign
travel programs at some District banks
may spur increasing sophistication in their
international departments.■

FEDERAL FOOD DOLLARS GO SOUTH
by Patricia Faulkinberry
The recently enacted Food and Agriculture
Act of 1977 includes a thorough overhaul
of the Food Stamp Program. Reforms are
aimed at simplifying the program, making
it more equitable, improving its safeguards
against abuse, and, above all, redirecting
benefits toward poverty households. Once
implemented, the changes will substan­
tially increase the number of food stamp
users, raise benefit outlays, and reduce
administrative costs. Since the South has a
larger share of poverty households than
other regions of the United States, the
restructuring of the program w ill result in
a redistribution of food stamp subsidies
toward the South.
PERSPECTIVE
The present Food Stamp Program,
initiated in 1961, has grown from a $13million-a-year operation, covering about
31/2 percent of the population in 8 project
areas, to a vast $5 billion-a-year-plus
undertaking, involving about 8 percent of
the population in 3,036 project areas in
every state, the Virgin Islands, Puerto Rico,
and Guam. Participation peaked at over 19
million recipients in early 1975, the worst
of the recession, and has fallen rapidly
with improving economic conditions.
Direct subsidies to participants account
for almost all of Federal program outlays:
In fiscal 1976, they totaled $5.5 billion, or
95 percent of total costs. Operating and
administrative expenses added another
$314 million for a total Federal expendi­
ture of $5.8 billion, almost 40 percent of
the U. S. Department of Agriculture's
(USDA) budget. State governments contrib­
uted at least $250 million more to program
administration. Participants in the "South"
Census region received 42 percent of total
benefits (see Box for definitions of Census
regions).




The processing of food stamps involves
thousands of public and private concerns
which w ill each be affected to some extent
by the new law. State agencies administer
local projects in cooperation with the
USDA. The Department of Health, Edu­
cation, and W elfare and the Labor
Department have small roles in the
program. The U. S. Treasury handles
financial transactions on behalf of the
USDA. Coupons are currently sold to
program participants by 13,250 banks, post
offices, welfare offices, check-cashing
firms, town clerks, fire stations, and stores.
Nearly 260,000 retail food stores and
another 12,500 food wholesalers, meal
delivery and communal dining services,
and alcoholic and drug treatment centers
are authorized to redeem food stamps.
Federal Reserve Banks collect and destroy
used stamps that have been "cashed in"
by retailers at commercial banks.
SUMMARY OF MAJOR PROGRAM
CHANGES
The Food Stamp Act of 1977 contains
some 20 sections, each providing for
changes in one or more aspects of the
current program. No attempt is made here
to describe or evaluate every modification.
This analysis is an examination of the
changes with significant economic impact,
particularly on income distributions and
regional incomes. These changes may be
classified as modifications of eligibility
requirements, the elimination of the pur­
chase requirement, and improvements in
operations and safeguards.
Changes in Eligibility Requirements. The
most important revisions to eligibility
requirements establish new income stan­
dards for participants. A household may
qualify for the current program if (a) 30
percent of its monthly income after

r D E F IN I T IO N S -----------O F C E N S U S REG IO N S

Northeast—Connecticut, Maine, Mas­
sachusetts, New Hampshire, New Jer­
sey, New York, Pennsylvania, Rhode
Island, Vermont.
North Central— Illinois, Indiana, Iowa,
Kansas, Michigan, Minnesota, Missouri,
Nebraska, North Dakota, Ohio, South
Dakota, Wisconsin.
West—Alaska, Arizona, California, Colo­
rado, Hawaii, Idaho, Montana, Nevada,
New Mexico, Oregon, Utah, Washing­
ton, Wyoming.
South—Alabama, Arkansas, Delaware,
District of Columbia, Florida, Georgia,
Louisiana, Maryland, Mississippi, North
Carolina, Oklahoma, South Carolina,
Tennessee, Texas, Virginia, West
Virginia.
\________________________ :________________
deductions is less than the cost of the
USDA's Thrifty Food Plan (the basis for
coupon allotments) for a household of that
size or (b) it is receiving grants under the
Aid to Families with Dependent Children
Program, the Supplemental Security
Income Program, or state and local general
assistance programs. The new law lowers
the net income limits to the O ffice of
Management and Budget's nonfarm
poverty income guidelines, commonly
known as the "poverty line" (though the
level varies by fam ily size), and eliminates
the automatic eligibility of public assist­
ance households. The result is a con­
siderable tightening: The current (fiscal
1978) net income ceiling of $6,800 per year
for a four-person household w ill be
reduced to $5,850 per year.
Households are presently allowed vir­
tually unlimited itemized deductions for
various expenses in calculating net
income. These w ill be replaced by a stan­
dard deduction of $60 per month, an
earned income deduction of 20 percent of
gross earnings, and two itemized deduc­
tions—for shelter costs exceeding 50




percent of income after all other deduc­
tions and for the dependent care expenses
of jobholders —which alone or together
cannot exceed $75 per month. The
establishment of deduction ceilings w ill
allow the introduction of gross income
limits for eligibility determination, clearly
excluding middle income fam ilies.
Even households with net incomes below
the limits must satisfy other tests to be
eligible for food stamps. These, too, have
been modified by the Act. "W ork require­
ments," which eliminated 381,747 house­
holds from the program and reduced the
benefits of 86,419 more from their intro­
duction in 1971 until September 1976, w ill
be stricter. The limit on the resources
(assets) a food stamp household may own
has been raised but w ill include the value
of an automobile (in excess of $4,500) for
the first time.
Elimination of the Purchase Require­
ment. The most sweeping program reform
measure, and one which w ill affect both
participation and administration, is the
elimination of the purchase requirement
(EPR). Presently, a household pays up to 30
percent (the average payment is 25.6
percent) of its net income for a coupon
allotment equal in value to the cost of the
Thrifty Food Plan. The amount of the
subsidy, i.e., the difference between the
allotment value and the payment, is
referred to as the "bonus" coupon value.
Under the new program, recipients w ill pay
nothing and receive stamps worth the cost
of the Thrifty Food Plan less a straight 30
percent of net income (known as the
"benefit reduction" rate). Thus, benefits
under the new program w ill be roughly
equivalent to current bonus values alone.
The purchase requirement has been a
significant barrier to program participation
for many eligible households. Because they
must retain cash for household expenses or
emergencies or because their income re­
ceipts are not timely, some needy fam ilies
are unable to make cash payments at the
appropriate times. W hile the USDA
estimates that about half of those eligible
participate in the current program, it
expects the proportion to rise to two-thirds
when the EPR's full effects are felt.
The EPR w ill also greatly sim plify
program operations and cut administrative

costs. Vendors w ill no longer handle cash.
Consequently, access to the program may
be improved, as more public agencies w ill
be encouraged to distribute the stamps
without the disincentives of safeguarding
and accounting for cash. State agencies'
payments to vendors may be reduced to
correspond to lighter responsibilities. The
volume of stamps circulating at a given
level of participation w ill be dram atically
reduced (by more than $3 billion under
current conditions), relieving much of the
burden on all concerns involved in any
phase of food coupon processing.
Other Operations Improvements. The
firming of eligibility standards and the EPR
w ill eliminate a lot of red tape from pro­
gram administration. They will also remove
many incentives and opportunities for
fraud. The new law specifically addresses
this problem by prescribing stiffer penal­
ties for program abuse and providing for
increased Federal funding of investigation
and prosecution of cases of suspected
fraud.
EXPECTED ECONOMIC IMPACT
At the outset, no one can predict with
certainty exactly how many people and
dollars w ill be affected by these sub­
stantial changes in the Food Stamp
Program. The USDA, with access to
detailed information about current recipi­
ents and income levels, has formulated a
set of projections of the impact on
participation, benefits, and costs.1 The
estimates rest on assumptions of future
economic conditions and a certain
schedule for implementation of program
changes (beginning May 1, 1978) which
may or may not be met. Despite their
limitations, the USDA projections may be
taken as rough indicators of the likely
direction and distribution of the reform's
effects.
People. Changes in eligibility standards
w ill lower the number of food stamp
recipients by about 5 percent. Though
altered deductions w ill bring in new
participants totaling 4 percent of the
current caseload, about 9 percent of
current food stamp users will no longer be
eligible or w ill drop out of the program
’The USDA's projections reflect the expected impact of only the most major
program changes-the EPR, the lowering of net income limits, the elimination
of categorical eligibility, the standardizing and limiting of deductions, and
the standardizing of the benefit reduction rate.




/

\

T A B LE 1
REGIO N AL PO VERTY R A TES, 1976*
Northeast
North Central
West
South

10.2%
9.9
10.5
15.2

U.S.

11.8

• Poverty population as a percent of total population
Source: U. S. Department of Commerce, Census Bureau.

V

J

due to small benefits. But the expected
one-third increase in the participation rate
(participants as a percentage of eligibles)
w ill more than offset the reduction. The
net impact of these changes should be an
increase of 14.5 percent (2.3 million
persons) in program participation, swelling
program rolls to over 18 million in the 50
states and the District of Columbia. But
participation changes w ill not be uniform
across income levels or across regions.
In accordance with reform goals,
virtually all ineligible households and
dropouts w ill have incomes above the
poverty level. The USDA projects that 80
percent of households with incomes
greater than IV 2 times the poverty level
and about 20 percent with incomes
between 100 percent and 150 percent of
the poverty level w ill be eliminated from
program rolls. No poverty households
meeting other requirements w ill be dis­
qualified. Moreover, two-thirds of new par­
ticipants w ill have gross incomes below
poverty lines.
Since poverty income participants w ill
account for a greater share of total partici­
pation under the new program, we might
expect a shift in the regional composition
toward regions with higher concentrations
of poverty population (poverty rates). As
Table 1 shows, the South's poverty rate is
noticeably higher than those of other
regions.
Table 2 illustrates the likely effects of
program changes on regional participation
(percentages are based on currently partici­
pating households rather than persons).
The changes resulting from modified
eligibility requirements have been
calculated from USDA projections. The

" \

T A B LE 2
P R O JEC TED REGIO N AL PARTICIPATION E F F E C T S
P ER C EN T O F CU R R EN TLY PARTICIPATING H O USEH O LD S
Northeast

Current participation
Changes resulting from
e ligibility changes:
Made ineligible
Dropouts
New non-EPR participants
Participation after
e ligibility changes
Estimated new EPR
participants*
Estimated new participation

West

South

100.0%

100.0%

100.0%

100.0%

9.3
0.5
9.3

- 12.6
- 0.5
+ 5.3

92.9

99.5

92.2

+ 16.3
109.2

+ 17.4
116.9

+ 16.1
108.3

- 10.7
- 0.4
+ 4.0

+

*17.5 percent of “ Participation after eligibility changes” expressed as a percentage of current participation.
Source: Calculated from information supplied by the U. S. Department o f Agriculture.

additions to the number of food stamp
households resulting from the EPR, and
thus the total participation gains, have
been estimated, however. The USDA has
made no estimates of the regional effects
of the EPR. But, if we assume that EPR
participation increases in each region are a
constant proportion (17.5 percent, as na­
tionally) of participation after eligibility
changes, the total increases w ill be as
shown by the bottom line of Table 2.
Table 3 gives the number of households
involved, as estimated from these
percentages.
As poverty rates would lead us to
expect, participation w ill increase most in
the South, about 18 percent compared to
the average of 14 percent for the 50 states
and the District of Columbia. And since
the South has the largest current caseload,
the number of households added w ill be
nearly twice as great as in any other
region. The percentage of households
eliminated w ill be lowest in this poorest
region and w ill be offset by new non-EPR
participants; other regions w ill experience
net reductions in participation as a result
of eligibility changes.
Poverty rates, however, cannot explain
all the regional differences in expected
participation changes. The percentage rise
in food stamp recipients in the North
Central region, with the lowest poverty
rate, w ill exceed the national average. To a
limited extent, such discrepancies may




50 States
+ D.C.

North
Central

+

100.0%

+

5.0
0.3
5.5

100.2
-'
jjljp jjl
+ 17.5
117.7

8.6
0.4
5.8
96.8

+ 16.9
113.7
•

t:;

:. r

.

.

'

^

.
J

reflect regional variations in the impact of
changes in allowable deductions, particu­
larly the tightening of the excess shelter
deduction, whose influence would vary
with housing costs and utility bills. More­
over, poverty rates provide only a very
rough measure of program eligibility: They
reflect gross household income, while food
stamp eligibility is determined by net
household income. There are no data
available on the number of households
with incomes just above the poverty level
that might be eligible in each region,
though some of these households are
reflected in the USDA's projected partici­
pation increases.
Another source of regional differences in
program growth may be participation
rates. If the proportion of eligibles partici­
pating varies by income level and by
region, participation changes may not jibe
with eligibility changes. Moreover, if par­
ticipation rates do vary by region, it may
not be reasonable to assume, as we have
done in estimating the number of house­
holds brought into the program by the
EPR, that participation rates w ill rise
uniformly throughout the nation. Though
the USDA makes no estimates of partici­
pation rates by region, the ratios of food
stamp users to poverty population, shown
in Table 4, suggest that there may be some
regional differences. O f course, many
households with gross incomes above the
poverty level legitimately receive food

\

T A B LE 3
P R O JEC TED REGIO N AL PARTICIPATION E F F E C T S

(thousands of households)
Northeast

North
Central

West

South

50 States
+ D.C.

1,217

1,114

1,032

2,071

5,434

Changes resulting from
e ligibility changes:
Made ineligible
Dropouts
New non-EPR participants

- 130
5
+ 47

- 104
6
+ 102

- 130
5
+ 53

- 104
9
+ 112

- 468
- 25
+ 314

Estimated new EPR
participants
Estimated new participation

+ 198
1,327

+ 193
1,299

+ 166
1,116

+ 362
2,432

+ 919
6,174

Net change

+

110

+ 185

+

+ 361

+ 740

Current participation

84

Source: Estimated from information supplied by the U. S. Department of Agriculture.

T A B LE 4
RATIOS O F PARTICIPATION TO
PO VERTY POPULATION
BY REGION, 1976
Northeast
North Central
West
South
50 States + D. C.

.80
.63
.63
.60
.65

Source: Average monthly participation was calculated from U. S.
Department of Agriculture Food Stamp Program statistical
summaries; poverty population estimates were supplied by
the U. S. Department of Commerce, Census Bureau.

stamps. But the wide range of these ratios
and scanty information on regional income
distributions lead us to suspect that fac­
tors other than income influence regional
participation. Whether the EPR w ill
maintain, widen, or narrow any discrep­
ancies in the ratios of recipients to
eligibles is unknown. Regional partici­
pation rates are a "gray" area of the
USDA's projections and could cause actual
changes in the number of food stamp
households to deviate significantly from
expectations.
Benefit Dollars. The USDA projects that
annual food stamp subsidies w ill rise by
$412 million, or 8.9 percent of the current
benefit level, once the implementation of
program changes is complete and the full
impact of the EPR is felt. All of the
increase w ill derive from the participation




gains induced by the EPR. Tighter eligi­
bility requirements and standardizing the
benefit reduction rate would reduce
annual benefits by $120 million if the pur­
chase requirement were retained. The
regional distribution of benefits under the
new program w ill reflect both participation
increases and the redirection of subsidies
toward poverty households.
The great majority (about 80 percent) of
participants in the new program w ill be
households that are eligible for both the
current and the new programs. Table 5
presents projections of the impact of
program changes on the benefits received
by these "co re" households according to
the level of household income. A larger
share of poverty households w ill gain
benefits, and a smaller share w ill receive
smaller subsidies than the higher income
groups. In general, the higher the house­
hold income group the larger w ill be the
share of benefit losers and the smaller w ill
be the proportion of benefit gainers. Over
half of all households remaining in the
program w ill experience little or no change
in their food stamp subsidies, however.
Unfortunately, the USDA has provided no
estimates of the dollar amounts to be
gained or lost in each category. But, in
general, the largest benefit increases and
the smallest losses w ill apply to poverty
households.
New participants, of course, w ill be the
greatest benefit gainers. Even though they

T A B LE 5
B EN EFIT E F F E C T S ON H O USEH O LD S REMAINING IN TH E PROGRAM
BY INCOM E L E V E L

Below
Poverty Level

Gross Household Income
100-150%
Poverty Level

Above 150%
Poverty Level

Total

100.0 %

100.0 %

100.0 %

100.0 %

18.4
51.7
29.9

33.1
55.2
11.7

63.6
27.3
9.1

21.4
52.0
26.6

4,044

837

60

4,941

Households remaining
in the program
Receive smaller benefits
No change in benefits*
Receive larger benefits

Number of households
represented by 100%
(000’s)

‘ Gain or lose $5/month or less.
Source: Calculated from information supplied by the U. S. Department of Agriculture.

entering the program for the first time can
suggest the direction of new benefit flows
(see Table 6). The South w ill have the most
benefit gainers and new participants in
both relative and absolute terms. Benefit
losers, including households eliminated,
w ill comprise a small percentage of this
region's caseload as well. An impact study
prepared by the Congressional Budget
O ffice for an earlier version of the reform
bill lends support to the conclusion that
the South w ill probably receive the largest
chunk of new subsidy payments. Low
income levels further imply that the ex­
pected decline in average benefits per
household may not be as pronounced in
this region.
Costs. The EPR and operations improve­
ments should eventually reduce Federal
administrative costs by about $25 million a

w ill be predominantly poverty households,
they w ill generally receive smaller sub­
sidies than current participants. Conse­
quently, average benefits per household
w ill fall to $71.86 per month from the
current mean of $75.90. The altered
eligibility standards and benefit formula
w ill reduce average subsidies slightly (97
cents a month); the EPR w ill account for
the additional $3.07 per month drop. The
reason is that new EPR participants w ill be
primarily households that would have had
the larger purchase requirements and, thus,
receive the smaller subsidies.
The regional economic impact of food
stamp reforms w ill generally be a function
of the distribution of Federal food dollars.
In the absence of projections of regional
changes in total benefits, the number of
households gaining and losing benefits and

T A B LE 6
REGIO N AL B E N EFIT E F F E C T S

(thousands of households)
Northeast

Eliminated
Continuing from current program:
Lose benefits
No change in benefitsi
Gain benefits
New participants2

North
Central

South

50 States
+ D.C.

110

135

113

493

364
619
99
245

195
511
298
295

229
480
188
219

268
958
732
474

1,056
2,568
1,317
1,233

1 Gain or lose $5/month or less.
2 Includes estimated new EPR participants.
Source: Estimated from data supplied by the U. S. Department o f Agriculture.




West

135

year, offsetting some of the expected rise
in benefit costs. The USDA projects a net
addition of $387 million a year to total
Federal food stamp outlays. Furthermore,
the Food Stamp Act of 1977 places ceilings
on congressional appropriations for fiscal
years 1978-81, the life of the new program,
and provides for benefit reductions if costs
threaten to overrun the limits. If partici­
pation increases are even slightly larger
than projected or economic conditions are
not as favorable as assumed, a lowering of
subsidy levels is a very real possibility.
Adm inistrative expenses of the states
should also fall. Not only will the EPR and
sim plifications of operations save them
money but Uncle Sam w ill step up reim­
bursements for their contributions to ad­
ministration of the program.
IMPLICATIONS
W hat kind of economic impact can we
expect from directing a greater amount of
Federal dollars to a larger number of the
nation's poor? The general effect w ill be a
redistribution of income, which should
result in some improvement in the living
standards of low income households.
Moreover, food stamp recipients as a
group w ill be able to purchase not only
more food but more of other commodities
as well. The money that participants would
have used to purchase food stamps w ill be
freed for other uses by the EPR. In fact,
less may be spent for food under the new
program than under the current program.
Including purchased stamps, the USDA
currently issues well over $7 billion of
food coupons annually. The EPR will
reduce distribution to less than $6 billion a
year, even with the large expected partici­
pation increases. Uses of the discretionary
cash w ill determine the type of sales which
w ill benefit. Thus, even though the




increase in annual program outlays of less
than one-half a billion dollars w ill not
pack much of an economic punch, the
freeing of $1 to $2 billion a year for
discretionary purchases may disperse the
stimulus of Federal food stamp expen­
ditures to a wider range of commodities.
The South, as we have seen, is likely to
be the most strongly affected by this eco­
nomic stimulus. Regional differences in
income levels and prices may enhance the
participation and benefit effects of the
new Food Stamp Program on the region's
"re a l" living standards. Since national
averages determine the income limits for
program eligibility, below-average income
levels are largely responsible for expec­
tations of above-average participation
growth in the South. But since its prices
are generally lower as w e ll,2 many new
southern participants may already be
better off (have greater purchasing power)
than their counterparts in other regions
and their new benefits may go further.
Inflation could either erase or broaden
any such disparity. Food stamp benefit
levels, income limits, and deduction
ceilings w ill be periodically adjusted to
reflect changes in national price indexes.
Regional inflation rates and wage increases
(as well as levels) often differ from
national averages, however. If income
levels rise more rapidly in the South than
in the nation as a whole (as they have in
recent years), a disproportionate number
of southern participants could be disquali­
fied despite adjustments to income limits.
And if prices continue to rise more rapidly
in the South, an elevation of the benefit
level according to national inflation will
not entirely prevent erosion of purchasing
power. ■

2For evidence of lower prices in the South, see "Cost-of-Living Comparisons:
Oasis or Mirage?" by lames T Fergus, this Review, July/August 1977

SIXTH DISTRICT BANKING NOTES
The Recent Strengthening
in Real Estate Lending
Since the first of this year, the District's 32
largest commercial banks have been
adding real estate loans to their portfolios
at an annual rate of nearly 17 percent. In
contrast, business loans have been advanc­
ing at an annual rate of about 13 percent
and total loans more slowly, at an 11-percent annual rate. Real estate loans have
accounted for about one-third of the
dollar growth in total loans so far this
year.
Renewed interest in real estate loans on
the part of the large banks and their con­
solidated real estate subsidiaries follows a
period of about two years in which real
estate loans were very much out of favor.
From 1971 through 1973, real estate loans
had surged nearly $1.5 billion and growth
had averaged over 30 percent a year. But
in 1974, recession hit the real estate in­
dustry and many large banks experienced
severe problems with their direct real
estate loans and loans to firms financing
the real estate industry. Loans involving
construction, land development, and
various types of commercial property, the
most rapidly increasing real estate loan
category in the early '70s, inflicted heavy
losses at certain banks. Some borrowers
defaulted; others were allowed to delay,
defer, or make reduced interest payments.
Some banks took title to real estate
directly through foreclosure, agreement
with borrowers, or asset swaps with other
financial institutions. Foreclosures were
especially troublesome at larger banks in
Georgia, Tennessee, and Florida. As a
result, banks' real estate holdings other
than their premises increased by over $200
million and earnings declined sharply at
many large banks.
Some of the recent strength in real
estate lending can be attributed to locally
weaker business loan demand. In three of
the District states —Tennessee, Mississippi,
and Florida —there has been above-average




growth in real estate loans but business
lending has been relatively weak. The
sluggish business loan demand may have
encouraged these banks to seek additional
real estate loans in order to expand loan
volume. However, the strongest growth in
real estate loans this year has occurred at
the large Alabama banks, where business
loans have advanced nearly twice as
rapidly as in the remainder of the District.
This part of the region generally escaped
the earlier real estate problems. Large
banks in Louisiana have also had aboveaverage growth in both real estate and
business loans. At the larger banks in
Georgia, where corporate loan demand has
exceeded the District pace, real estate
loans have continued to decline.
There are several reasons District banks
are again actively financing real estate.
Although business loan demand is stronger
now than it has been since 1974, it is
probably lower than many bankers ex­
pected. W ith adequate deposit gains, many
banks have sought the higher yields of
loans instead of the lower returns of short­
term securities. Also, real estate markets
around the District have improved
significantly from their depressed levels of
the recession. New projects once again
seem financially viable.
During the first half of 1977, real estate
loans to finance commercial properties
have accounted for over one-half of the
increase in real estate loans, with the
strongest gains at the larger banks in
Tennessee, Georgia, and Florida. This
development is a little surprising, since
these same states were most severely
impacted by problem loans of this type
less than three years ago. Loans to finance
construction and land development,
although essentially unchanged in the
District as a whole, have been rising quite
strongly at the larger banks in Alabama
and Louisiana. Conversely, banks in
Georgia and Tennessee are still reducing
their real estate loans for such projects.
Residential mortgage loans, which ac­
count for nearly one-third of the large

MIL. $

140

120

banks' total real estate loans, have grown
at a faster pace than total real estate
loans. Single-family mortgage loans have
advanced most rapidly in Alabama and
Florida. District banks are not major
R EA L ESTA T E LOAN GROWTH




lenders for m ultifam ily residential proper­
ties, and all growth in this area has come
in Tennessee and Florida.
The recent strengthening in real estate
loans at the larger banks suggests that
many of these institutions feel that they
have overcome the real estate-related
difficulties of the last recession and that
real estate financing is more readily
available. It is also a sign that real estate
markets have revived and that new proj­
ects are moving from the drawing board to
the development and marketing stages. If
the region's largest banks can draw on
their previous experiences with the con­
sequences of rapid real estate loan growth,
this revival can be taken as a good sign for
the banks and the region. Hopefully,
recent advances w ill not result in a replay
of earlier excesses.

John M . Godfrey

RESPONSE TO COUNTY W ID E BRANCHING

THE NEW CHAPTER IN FLORIDA BANKING
by Ruth Goeller
In our 1975 assessment of Florida banking
structure, we observed that the rapid
proliferation of new bank holding com­
panies had almost run its course and that
subsequent changes were likely to come in
response to amendments to Florida
banking laws which have recently been
enacted.1 Specifically:
"A ny bank may establish up to
two branches per calendar year
within the limits of the county in
which the parent bank is located
and, in addition, may establish
branches by merger with other
banks located within the county
in which the parent bank is
lo cated ."2
Until the amendment took effect at the
beginning of 1977, Florida was essentially a
unit banking state. A 1973 law did permit
each bank one limited facility for accept­
ing deposits and loan payments within one
mile of its main office, but mergers and
branch offices were prohibited.
The new law broadened these limits
considerably, providing two types of
branching opportunities. First, each bank
is now allowed to establish up to two
branches per year in its own county,
subject to the approval of designated state
and national regulatory authorities. During
the first seven months of 1977, seventy-six
full-fledged branches were established
under this authority.
The second newly available branching
opportunity is more complicated: Two or
more banks in the same county can merge,

'B Frank King, "Banking Structure in Florida," this Review, September 1975,
pp 142-147 For an earlier perspective, see Charles D Salley, "A Decade of
Holding Company Regulation in Florida," this Review, July 1970, pp 90-97.
F lo rid a Statute 659 06(1 Xa)1




with regulatory approval, into a single
bank as a head office and one or more
branches. This opportunity was expected
to be particularly appealing to banks
already under the common control of a
multibank holding company, since ap­
proval by the banks themselves is sim­
plified in such a case. Although commonly
owned banks are often operated much as
a branch system, merger would permit the
full benefits of branch bank organization.
In this state, where branching has
previously been precluded, where holding
company development has already con­
solidated control of many banks into
single organizations, where rapid popula­
tion and income growth has elevated the
demand for bank services, and where
competition is strong from thrift institu­
tions, which can branch statewide, what
has been the response to the new law?
And, more importantly, why has it been
what it has? Over and above our obvious
interest in Florida's changing banking
structure, this offers a case study of banks'
response to a new legislative opening.
What happened? The new opportunity
for countywide consolidation of holding
company affiliates, so attractive in theory
and to the amendment's proponents, has
been used less than many anticipated. Out
of Florida's 29 holding companies which
have eligible affiliates, 15 have actually
used the eligibility in the first seven
months of this year. Forty-four new
branches were created by merger of
existing affiliates, twenty of which were
effective by the end of January. Including
applications pending approval as of
September 1, 1977, a total of 99 affiliated
banks have asked to be converted to
branches. Our records indicate that 206
other Florida banks which are eligible for

conversion have not applied. Roughly onethird of the potential conversions have
been attempted, in other words.
This contrast between the number of
merger applications and the number of
potential mergers indicates that conversion
of banks to branches may not be as at­
tractive to Florida bank holding companies
in reality as it was in prospect or that
conversion has been impeded for other
reasons. Several possibilities may be
suggested:
1. Potentially unfavorable reactions
from the personnel of the merged
bank might, at best, require careful
long-term planning or, at most,
discourage the merger altogether.
Redesignations of bank presidents as
branch managers, for example,
would probably not be well received.
2. Sim ilarly, since a branch bank does
not need a board of directors,
directors of the merged bank would
have to be added to the parent
board of directors or to an advisory
board, if bylaws permit, or dropped.
Hesitation to displace these direc­
tors, who are typically prominent
community leaders, could deter
mergers.
3. Merging the accounting functions
and records of banks involved might
require several months to plan and
coordinate.
4. Any bank merged before it has
exercised its new option to establish
two branches in any given year for­
feits that option. It may be that
bank holding companies have been
postponing mergers to maximize
branch proliferation.
To check out these possibilities, we
contacted officers in charge of acqui­
sitions and expansion at six Florida holding
companies. Three of these officers
represent holding companies which had
not submitted applications to merge at the
time we talked to them. The other three
officers represent holding companies
which had submitted merger applications.
We asked each officer what he regarded as
the main incentives to convert banks to
branches and his company's future plans
with reference to the merger option.




Where appropriate, we questioned each
officer about the impediments hypothe­
sized above.
The banks were basically in agreement.
The holding companies which had not yet
done so were indeed planning to submit
applications to merge certain affiliates. All
holding companies agreed that there were
economic incentives for converting af­
filiates to branches. One officer told us
that cost studies his holding company had
prepared indicated that merging ten banks
in three counties would save the organiza­
tion $375,000 a year "o ve rall," based on
1977 expenses.
The contention that branch operation
provided better customer service was the
second most frequently emphasized in­
centive to merge. The bankers saw a
competitive advantage in the ability to
offer a customer the same service at any
county location with records consolidated
on on-line equipment. Others mentioned
that arranging loan participations was
somewhat more complicated among af­
filiates than among branches. One
representative stated that branches would
offer customers the services of parent
banks more readily than affiliates would
offer the services of other affiliates.
Another felt that consolidation of manage­
ment in one place would speed and im­
prove communication within the bank,
thus improving bank service.
Since most bankers told us they had
determined that converting unit bank
affiliates to branches was com petitively
advantageous, most of our questions about
"reasons not to merge" were answered in
terms of "d ifficu lties to overcom e." All six
bankers confirmed that considerable care,
long-term planning, and diplom acy had
been or would be expended in making
merger-related changes in managements
and boards of directors. In fact, bank
holding company officers speculated or
confirmed that the first conversions made
were among banks where close affiliation
had already created management and/or
board overlaps that minimized disruption
of the organizational hierarchy in con­
solidation. Some bankers described pro­
grams developed by their organizations to
show why consolidation was desirable, to
dispel employees' fears about the change,
and to demonstrate how branching could

enhance career opportunities. One banker
mentioned the coincidence of some
"tim ely resignations" with the an­
nouncement of his holding company's
merger plans. Another officer indicated
that future promotions in his holding
company would probably be made with
reference to the employee's current duties
and his likely position in the merged bank.
It is clear that the potential impact on the
people involved is a major factor in
holding companies' consolidation plans.
The mechanical adjustments necessary
for consolidation —the merging of the
general ledger and related accounting
functions —appear to have gone or are
expected to go much more smoothly and
easily than the personnel adjustments.
When consolidation requires change in the
calculation of interest on savings or when
duplication of account numbers in the
consolidated files requires customer noti­
fication, an additional 30 to 90 days may

be needed to coordinate bookkeeping. In
some situations, sim ilarity of operating
techniques and accounting methods
among merged banks made the transition
easier. One officer told us that physical
merger of the general ledger was done
overnight but was a major headache. None
of these bookkeeping problems were
viewed, however, as a major reason to
delay submitting merger applications.
In answer to questions about factors
which could be delaying mergers, nearly
every banker we interviewed speculated
that perhaps other holding companies were
waiting to determine whether a county's
projected growth rate and customer
demand opportunities justified use of the
full branch potential of the affiliate before
applying to merge it. In Florida's fastest
growing counties, this may be a reasonable
contention. ■

, C O N V E R S IO N A N D FED M E M B E R S H IP ---------------------------------------------------One interesting by-product of this merger conversion process may be expansion of
the deposit base subject to Federal Reserve requirements. Banks affiliated with
registered Florida bank holding companies vary in membership status. On the whole,
however, the larger banks tend to be members of the Federal Reserve System. If every
holding company in Florida which has affiliates eligible for conversion should use that
eligibility, merging the smaller affiliates into the largest affiliate in each county while
maintaining the largest affiliate's membership status, then $1.3 million in deposits
would shift from nonmember to member banks (according to mid-1977 deposit levels).
Most discussions of Federal Reserve membership changes focus on membership
costs and benefits. Here, however, is a case where membership patterns may change
significantly for another reason.
So far, this has not happened. Current membership data indicate that as of
September 1, 1977, eleven nonmember banks are pending merger into member banks.
Six member banks would be merged, upon approval, into nonmember banks. Two of
these members are smaller than the nonmember into which they w ill be merged; four
will be merged into smaller nonmembers. But earlier mergers show that the predomi­
nant pattern followed by holding companies in consolidating affiliates is merger of the
smaller affiliate into the larger. Although our statistics do not yet reflect a membership
gain, a continuation of that trend should increase the volume of deposits subject to
member bank reserve requirements.




WORKING PAPER ABSTRACTS
The following articles summarize staff analyses that may interest those in the
economics and banking professions as well as others. They are more technical than
the typical Economic Review article. The analyses and conclusions are those of the
authors. Studies of this kind do not necessarily reflect the views of the Federal
Reserve Bank. Each complete study is available as part of a series of Federal Reserve
Bank of Atlanta Working Papers. Single copies of these and other studies are available
upon request to the Research Department, Federal Reserve Bank of Atlanta, Atlanta,
Georgia 30303.
_____

FUNDAMENTAL DETERMINANTS OF CREDIT VOLUME:
A SURVEY AND REGIONAL APPLICATION
by Robert E. Keleher
There has long existed a confusion
between credit and money in the history of
monetary analysis. Whereas some econo­
mists contend that no important difference
exists between money and credit, others
draw a sharp distinction between the two.
This confusion has had some important
consequences, particularly with respect to
the analysis of credit. In many cases, for
example, credit has been treated as if it
were synonymous to money and, therefore,
its volume has been assumed to be
determined by the Federal Reserve, even in
relatively short-run time frames. This study
is an attempt to clarify some of the issues
regarding the fundamental determinants of
the volume of credit as distinct from
money and to present empirical evaluation
of credit determinants.
In general, two positions regarding the
short-run determinants of the volume of
credit in a large, closed economy have
evolved from the extended confusion. One
view is that money and credit behave in a
sim ilar fashion and the same analytical
treatments are appropriate for each. An
implication of this position is that changes
in both money and credit precede and are
determinants of movements in nominal
income. That is, the transmission of mone­
tary impulses runs from changes in the
volume of money and credit to changes in
expenditures and income. Moreover, the




main channels of monetary effects on the
economy are the credit flows through
financial institutions. Movements in credit
volume, according to this view, are
essentially determined by supply factors.
Another position maintains an important
distinction between money and credit.
Accordingly, proponents of this view
contend that the volume of money and the
volume of credit behave differently over
the business cycle. Although changes in
the volume of money precede movements
in income, changes in the volume of credit
may follow changes in income. That is, the
volume of credit may be influenced to a
larger degree by demand factors than is
the volume of money. In this case, the
transmission of monetary impulses runs
from changes in the volume of money to
changes in income to changes in the vol­
ume of credit. Credit, then, is a derived
demand or demand-determined.
When the determinants of the volume of
credit are examined in the context of the
small, open economy, the position that
credit is demand-determined receives
additional support. Recent theoretical
work on the monetary aspects of the
balance of payments concludes that the
volume of credit in a small, open economy
is determined by demand factors and not
necessarily those of supply, as might be
the case in a large, closed system. In short,

#

the determinants of the volume of credit
in a small, open economy may differ from
those of a large, closed economy.
After examining previous empirical
studies related to these various arguments,
this study provides some preliminary
empirical evidence of the determinants of
regional loan volume, i.e., credit in a
small, open economy. Applying elements
of the monetary approach to the balance
of payments to an open regional economy,
an estimating equation incorporating both
national supply and regional demand
factors was developed. Data on national

reserves, Sixth Federal Reserve District
loans, and regional and national income
were used to test the relative importance
of national supply and regional demand
determinants of loan volume. The
empirical evidence indicates that regional
demand plays a more significant role than
national supply factors in explaining the
growth of regional loans. Thus, whereas
aggregate (national) credit volume may be
influenced to some extent by the monetary
authority, the distribution of that volume
of credit among regions apparently is
demand-determined. ■

A FRAMEWORK FOR EXAMINING THE SMALL, OPEN
REGIONAL ECONOMY: AN APPLICATION OF THE
MACROECONOMICS OF OPEN SYSTEMS
by Robert E. Keleher
One area of research conducted at Federal
Reserve District banks is the examination
of relationships between real variables of
the region and financial variables under
the influence of the central bank. W hile
some markets affecting the regional
economy are clearly national markets,
others are influenced by the peculiar
characteristics of the region. Unfor­
tunately, there are several reasons why
most theoretical frameworks commonly
employed to analyze regional economies
have not been particularly useful for
analyzing interactions between the
monetary and real dimensions of regional
economic activity.
This Working Paper describes an alterna­
tive theoretical framework for the
examination of monetary and credit
variables of the small, open regional econ­
omy. Recently, a considerable amount of
theoretical work in monetary economics
has been devoted to analyzing small, open
economies. Specifically, the monetary
approach to the balance of payments, or
the so-called “ global monetarist" school,
offers some unique and interesting insights
into the economic analysis of the small,
open economy (SOE) and, in particular,
clarifies its monetary and credit
dimensions.




The global framework and its proposi­
tions are by no means new theoretical
positions. Rather, they represent a return
to an older, pre-Keynesian approach to
monetary analysis. The global approach
essentially examines the small, open
economy within a closed world framework.
Whereas most fam iliar monetarist
propositions apply to the closed world
system, they do not necessarily pertain to
the small, open economy within the larger
global aggregate.
The balance of payments must be taken
into consideration when shifting from a
closed to an open analytical framework
and as one examines an economy which
constitutes a relatively small proportion of
the aggregate of which it is a part; other
considerations are relevant as well.
Propositions of the global approach rest
on the "law of one price" and the assump­
tion that the small, open economy is too
small in terms of both production and
consumption to influence either world
prices or interest rates. Thus, interest rates
and prices (inflation) in the SOE are
determined in world markets and, there­
fore, are given exogenously to the SOE.
Based on this contention, the global
approach draws some important
conclusions regarding the functioning of

the SOE that differ quite radically from
contemporary models of closed
economies.
After describing alternative versions of
the "global" approach, the paper argues
that the proper framework for analyzing
the small, open regional economy is one
analogous to the global monetarist frame­
work. Since the U. S. economy is large
enough to warrant analysis as a closed
economy, it can assume the role of the
closed world economy in the normal
global framework. The regional economy,
then, can be analyzed as a small, open
economy within the larger, closed national
framework. The particular version of the
global framework pertinent to the small,
open regional economy is the fixed
exchange rate version, since the monetary
environment of the regional economy is
analogous to that of a small, open

economy in a common currency area. In
addition to having some important
empirical advantages, this particular
framework may be even more applicable
to the contemporary regional economy
than to contemporary national economies.
Many of the critical assumptions upon
which the theory rests are more in
accordance with the actual circumstances
of the regional economy than they are
with the national economic environment.
For those interested in analyzing the
regional economy, the regional dimensions
of money ancj credit markets, the regional
transmission of monetary policy, or the
various interrelationships between real and
financial variables of the region, the global
model offers some important insights and
conclusions that differ from those models
commonly employed to examine the
regional economy. ■

HOLDING COMPANY POWER AND MARKET
PERFORMANCE: A NEW INDEX OF MARKET
CONCENTRATION
by David D. Whitehead
In the late 1960s, multibank holding
company acquisition activity began to
accelerate and, consequently, became a
new element in the structure of the
commercial banking industry. As an
organizational form, the multibank holding
company approximates statewide branch
banking in that it allows one organization
to actively compete in a number of
geographically dispersed banking markets.
These two forms of banking organizations
(statewide branching and multibank
holding companies) have created
analytical problems in assessing the
competitive conditions within relevant
geographic banking markets. Con­
centration ratios have traditionally been
used as predictors of a market's com­
petitive performance. Concentration
measures applied to the banking industry
have not taken account the presence of
multimarket organizations in a given




geographic market. Subsidiaries of multi­
market organizations may enjoy increased
market power as a result of their af­
filiation with a larger financial organi­
zation. If the presence of multimarket
organizations significantly affects compe­
tition within banking markets, then our
traditional measures of market structure
are inadequate.
The purpose of this paper is to expand
our knowledge on this question by
adapting and testing a measure of market
concentration which takes into account
the presence of multimarket organizations
in local banking markets. The Herfindahl
Concentration Index, a conventional
measure of concentration, is modified by a
"booster coefficient" to reflect the
presumed additional market power of
banks which are subsidiaries of multi­
market organizations. The "booster
coefficient" reassigns market shares by

proportionately reducing the shares of
independent banks and increasing the
shares of banks belonging to multimarket
organizations. The hypothesis that sub­
sidiaries of multimarket organizations
enjoy increased market power is based on
the assumption that the larger parent
organizations are able to offer their subsid­
iaries increased financial strength, in­
creased management talent, scale
economies, and various other benefits
which make their subsidiaries more
competitive. The "booster coefficient" is a
function of the size of the multimarket
organization, the relative size of the
subsidiary of the multimarket organization
in the given market, and the size of the
market. The basic hypothesis tested in this
study is whether a concentration index
which takes account of multimarket
organizations w ill give a better measure of
market structure than those measures
currently being used. To test this
hypothesis, we compared the predictive
powers and statistical significance of the
"boosted" index with those of five
alternative concentration measures which
do not account for the presence of multi­
market organizations.
The new index of market concentration
and a set of five conventional concen­
tration measures were calculated for each

of the 130 banking markets in the Sixth
Federal Reserve District, as designated by
the Board of Governors of the Federal
Reserve System. A general regression
equation is specified and used to hold
constant a set of six independent variables
which proxy market supply and demand
conditions. A set of eight market per­
formance variables is then specified —
three price variables, three efficiency
measures, a profit measure, and a resource
utilization measure. The standard
regression equation is then estimated six
times for each performance variable,
changing only the market structure
measure.
An analysis of the significance and
predictive powers of the new index
compared to the five standard measures of
market concentration indicated that the
new measure is a better predictor of the
unregulated market price variable (average
interest charged on loans). In addition, the
new index proved to be significant where
any of the other five conventional concen­
tration measures proved significant, except
in predicting the regulated price variable
(average rates paid on time and savings
accounts). The study concludes that multi­
market organizations and other outside
market forces are important in explaining
market performance in banking. ■

Index for 1977
January..................................... pages 1-12
Feb ru ary .......................................... 13-28
M a rc h ............................................... 29-44
A p r il................................................. 45-60

AGRICULTURE
Farmers Reap Record Cash in 7 6
Gene D. Sullivan and Patricia
Faulkinberry, May/June, 80
Federal Food Dollars Go South
Patricia Faulkinberry,
November/December, 135
Fewer Farms Produce More
Gene D. Sullivan and Cheryl Odom,
May/June, 75
High Cotton Prices Spur M ore Plantings
Gene D. Sullivan, May/June, 69




M a y /Ju n e ....................................... 61-80
July/August................................... 81-100
September/October ..................101-124
Novem ber/Decem ber............... 125-152

Updating Agricultural Loan Data
Gene D. Sullivan, March, 31
Wheat Production to Decline
Gene D. Sullivan, March, 37
BANK ANNOUNCEMENTS
2
BANK LENDING
Business Borrowing Recovers
John M. Godfrey, May/June, 78

The Recent Strengthening in Real Estate
Lending
John M. Godfrey, November/December,
142
Updating Agricultural Loan Data
Gene D. Sullivan, March, 31
BANKING (see also BANKING NOTES)
Changes in Seller Concentration in Banking
Markets
B. Frank King, March, 41
Expansion o f M iami Edge A c t Corporations
Donald E. Baer, September/October, 112
M ultibank Holding Companies:
Convenience and Needs
Joseph E. Rossman and B. Frank King,
July/August, 83
New Tests o f Banking Market Limits
B. Frank King, M arch, 39
Patterns Emerge: International Banking in
the Sixth D istrict
Donald E. Baer and David C. Garlow,
November/December, 127
The Recent Strengthening in Real Estate
Lending
John M. Godfrey,
November/December, 142
Response to Countywide Branching: The
New Chapter in Florida Banking
Ruth Goeller, November/December, 144
Southeastern Banking During the Recovery
John M. Godfrey, April, 54
Updating Agricultural Loan Data
Gene D. Sullivan, March, 31
BANKING NOTES
Bank Earnings Recover Slightly in 1976
John M. Godfrey,
September/October, 118
Business Borrowing Recovers
John M. Godfrey, May/June, 78
The Recent Strengthening in Real Estate
Lending
John M. Godfrey,
November/December, 142
BANKING STRUCTURE
Changes in Seller Concentration in Banking
Markets
B. Frank King, March, 41
Holding Company Power and Market
Performance: A New Index of Market
Concentration
David D. Whitehead,
November/December, 149




Multibank Holding Companies:
Convenience and Needs
Joseph E. Rossman and B. Frank King,
July/August, 83
New Tests o f Banking Market Limits
B. Frank King, March, 39
Response to Countywide Branching:
The New Chapter in Florida Banking
Ruth Goeller, November/December, 144
BOARD OF DIRECTORS
24-25
CAPITAL EXPENDITURES
Southeastern Industrial Investment
W illiam D. Toal, May/June, 63
COST OF LIVING
Cost-of-Living Comparisons: Oasis or
Mirage?
James T. Fergus, July/August, 92
COTTON
High Cotton Prices Spur M ore Plantings
Gene D. Sullivan, May/June, 69
CREDIT
Fundamental Determinants o f Credit
Volume: A Survey and Regional
Application
Robert E. Keleher,
November/December, 147
DEBITS TO DEMAND DEPOSIT ACCOUNTS
11,27, 43, 59
DISTRICT BUSINESS CONDITIONS
12, 28, 44, 60
ECONOMIC AND FINANCIAL CONDI­
TIONS IN THE SOUTHEAST
Farmers Reap R eco rd Cash in '76
Gene D. Sullivan and Patricia
Faulkinberry, May/June, 80
Long-Term O utlook
James T. Fergus, January, 8
Southeastern Banking During the Recovery
John M. Godfrey, April, 54
Where Are the jobs?
W illiam N. Cox, III, and staff economists,
January, 3
EDGE ACT CORPORATIONS
Expansion o f Miami Edge A c t Corporations
Donald E. Baer, September/October, 112

EM PLOYM ENT
Where Are the jobs?
W illiam N. Cox, III, and staff economists,
January, 3

MONEY M U LTIPLIER
Component Ratio Estimation o f the M oney
M ultiplier
Stuart G. Hoffman, September/October,
120

ENERGY
Energy Dependence and Southeastern
Econom ic Growth: An Input-Output
Analysis
James T. Fergus, September/October,
103

MONEY STOCK
Component Ratio Estimation o f the M oney
M ultiplier
Stuart G. Hoffm an, September/October,
120

FARM S
Fewer Farms Produce M ore
Gene D. Sullivan and Cheryl Odom,
May/ June, 75
FEDERAL EXPENDITURES
The South's Share o f the Federal Pie
W illiam D. Toal, April, 47
FOO D STAMPS
Federal Food Dollars Go South
Patricia Faulkinberry,
November/December, 135
H O LD IN G CO M PAN IES
Multibank Holding Companies:
Convenience and Needs
Joseph E. Rossman and B. Frank King,
July/August, 83
Holding Company Power and Market
Performance: A New Index o f M arket
Concentration
David D. Whitehead,
November/December, 149
IN TERN A TIO N A L BANKING
Patterns Emerge: International Banking in the
Sixth D istrict
Donald E. Baer and David C. Garlow,
November/December, 127
LIV IN G COSTS
Cost-of-Living Comparisons: Oasis or
Mirage?
James T. Fergus, July/August, 92
M IG R A TIO N
New Faces in the South
Patricia Faulkinberry, February, 15




PO PULATIO N
New Faces in the South
Patricia Faulkinberry, February, 15

R EG IO N A L ECONOM Y
A Framework for Examining the Small, Open
Regional Econom y: An Application o f the
M acroeconom ics o f Open Systems
Robert E. Keleher, November/December, 14.
Fundamental Determinants o f Credit
Volume: A Survey and Regional
Application
Robert E. Keleher, November/December, 14
SIXTH D ISTR IC T BAN KIN G NOTES
See BANKING NOTES
SIXTH D ISTR IC T STATISTIC S
10, 26, 42,58
SO UTHEASTERN ECONOM Y
Energy Dependence and Southeastern
Econom ic Growth: An Input-Output
Analysis
James T. Fergus, September/October, 103
The South's Share o f the Federal Pie
W illiam D. Toal, April, 47
Southeastern Industrial Investm ent
W illiam D. Toal, May/June, 63
W HEAT
Wheat Production to D ecline
Gene D. Sullivan, March, 37
W O RKIN G PAPERS
41,62, 82,102,120,147