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Georgia • 1960 is s u e : i'S ECONOMY DISTRICT BUSINESS HIGHLIGHTS SIXTH DISTRICT STi Anatomy of a Mortgage M arket A Decade o f Financing Home Building in the South Will the supply of mortgage funds be adequate to finance the anticipated expansion in home building in the South? Throughout the postwar period, this question has worried people intending to buy, build, and finance homes. Perhaps one reason why concern in the South about the availability of mortgage money has persisted is that our comprehension of today’s mortgage market developments and our vision of tomorrow’s have been obscured by inadequate knowledge of what has gone before. We have had for some time information relating to the volume of mortgage lending by savings and loan associations, commercial banks, and insurance companies located in the South. But a major stumbling block to analysts of the Southern mortgage market has been the lack of quantitative data on the volume of mortgage funds flowing into the region from financial institutions located outside the South. Such data, however, are now available as a result of a recent survey of mortgage companies conducted by this Bank. Now, all of the pieces of the mort gage puzzle are available and can be assembled. This article, therefore, endeavors to present a picture of the anatomy of the mortgage market as it has functioned in the past. Why have some regions in the South required more mortgage funds than others? Through what arteries have these funds flowed? These are the main questions to which we shall direct our attention, since answers to them are needed not only for our understanding of the present but also as a prerequisite to any prognosis of the future. M o r e People Plus Higher Incomes Equal More Housing The period 1946-49 was characterized by a housing shortage and a frantic search for a place to live. Underlying the strong demand for housing was the backlog of needs carried over from the depressed 1 9 3 0 ’s and the war years of the 1 9 4 0 ’s. On top of this came the post war boom in household formations resulting from a high marriage rate and an undoubling— the setting up of separate residences by units for merly sharing houses or apartments with other units. In these circum stances, it seemed almost necessary to be at least a blood-relative of the landlord and to be high on the social register—with no children—to rent an apartment. And almost anything with four walls and a roof could be sold as a house. By the end of 1949, the most pressing housing needs had been met but building activity continued to expand, stimulated by a growing and shifting population, more and more upgrading— movement of existing owners into larger and better equipped homes, rising consumer incomes, and continued availability of mortgage credit on liberal terms. During the 1 9 5 0 ’s developments in states that lie wholly or partly in the Sixth H ousing u nit in cre a se s and p o p u la tio n g ro w th during the 1950's were closely related. - O+ ■1 20 1 Percent Change, I960 from 1950 40 60 1 1 1 1 1 80 1 1 100 F lo rid a Population*7 Units Louisiana Georgia Tennessee Alabama K Mississippi District States i i i i ...... i ...... i..... . j — i— i— .— Expansion in re sid e n tia l m o rtg a g e d e b t on So u thern p ro p e rty generally paralleled activity in home building and was financed primarily by financial institutions with headquarters inside District states ~ Billion Billion | 4 I Debt Held by Institutio ns Headquartered Outside D istrict States Debt Held by In stitutio n s Dom iciled Within D istrict Sta tes 1949 1959 Florida 1949 1959 Georgia 1949 1959 Louisiana 1949 1959 Tennessee 1949 1959 Alabama 1949 1959 M ississippi Most of the increase in re s id e n tia l m o rtg a g e d e b t of financial institutions with headquarters inside District states was accounted for by savings and loan associations. Billion | 3 BilliOT * District— Alabama, Florida, Georgia, Louisiana, Missis sippi, and Tennessee— demonstrate clearly the relation ship between changes in population and changes in num ber of housing units. Even the slight decline in population in Mississippi from 1 9 5 0 to 1 960, for example, was ac companied by only a slight increase in the number of housing units, according to preliminary estimates of the Bureau of the Census. In Florida, on the other hand, where population expanded by a phenomenal 77 percent during the last decade, the number of housing units al most doubled. Although population growth was a basic factor in Flor ida’s housing boom, developments in that state also illus trate the importance of the shifting population and the tendency to concentrate in certain areas as stimuli to home building. It is estimated, for example, that about three out of four people added to Florida’s population in the last decade came from outside the state. An in-migration of this magnitude undoubtedly resulted in a larger number of households seeking living quarters than would have been the case if the growth in total population stemmed from a natural increase. In District states other than Florida the demand for housing, of course, was also influenced by changes in the number and composition of the popula tion and by the movement of families from rural to urban areas. Although increases and shifts in population create a need for living accommodations, the ability and willing ness to purchase housing, particularly single-family dwell ings, also depend upon current incomes and expectations of future earnings. As year after postwar year went by with no major depression, potential home buyers’ confi dence in the economic future probably increased. Such confidence turned out to be well-founded, since income expanded during the 1 9 5 0 ’s with only minor interruptions. From 1949 to 1 959, the average income of families in the nation after taxes rose from $ 3 ,8 6 0 to $ 5 ,8 8 0 , and the number of families earning $ 4 ,0 0 0 or more increased from 16.5 million to 36.5 million. The average Southern family made somewhat greater gains in income than the average for the nation, although the level of family earnings in the South was lower. M o re Home Sales Plus Easier Terms Equal M o r e Mortgage Credit Savings and loan associations accounted for the major share of the national increase in r e s id e n tia l m o rtg a g e d e b t on houses with 1-4 family units held by financial institutions. Demographic and financial factors being favorable throughout much of the postwar period, sales of houses skyrocketed, and mortgage debt on residential properties in District states held by financial institutions increased from an estimated $ 2 .2 billion in 1949 to $ 1 0 .6 billion in 1960. Debt on residential properties rose in every District state. In Florida, which had the greatest gain in the num ber of housing units in the last decade, mortgage debt increased over 6 0 0 percent. The growth in mortgage debt throughout District states reflects increased sales of new homes; construction of higher-priced, larger, better-equipped houses, rising con struction costs; and more liberal mortgage credit terms. The average downpayment on a conventionally financed house, for example, declined from over 4 0 percent in 1949 to about 32 percent in 1959; downpayments on . 2 • Outstanding Mortgages Serviced by Mortgage Companies Domiciled in Sixth District States by Type of Mortgage and by Type and Location of Institutional Investor, December 31, 1959 (M illio ns of D ollars) L ocation of M ortgage C om pany T ennessee Sixth D istrict States 200 704 5,347 831 381 401 49 17 184 60 113 11 16 671 244 335 92 33 4,941 2,029 2,398 514 406 526 304 183 461 221 166 147 21 32 413 157 134 2,768 1,492 1,087 428 208 206 171 366 128 61 293 58 34 84 24 289 156 142 117 2,168 1,090 971 1,118 A labam a F lo rid a G eorgia 829 1,755 1,013 848 . . . Ill . . . . . . . . 34? 356 79 52 1,582 655 738 189 173 899 348 457 94 114 Life Insurance Com panies....................................... . . . Mutual Savings B an ks............................................... . . . All O t h e r s ..................................................................... . . . 528 125 176 694 665 396 308 110 164 247 720 455 314 266 T otal T ype o f M ortgages M O u t s t a n d in g ............................... of L o c a t io n M ississippi ortgage R e sid e n tia l..................................................................... V A ......................................................................... FHA ..................................................................... C O N V ..................................................................... N on-Residential............................................................ T ype L ouisiana I n s t it u t io n a l of . . . . Investor I n s t it u t io n a l Investor New Y o r k ..................................................................... New E ngland................................................................. Sixth District States ............................................... All Other S t a t e s ........................................................ . . . . . . . . . . . . FHA and VA mortgages were also reduced. The easing in mortgage terms, while it necessitated a larger pool of mortgage funds, tended to broaden the market for homes. There is little indication, however, that the higher aver age mortgage debt has been more difficult for home own ers to carry than before. In 1958, as in 1948, mortgagors, according to a national survey, used about 12 percent of their income to meet their monthly mortgage payments. That mortgage debt expanded as it did during the last decade is ample evidence that savings were being accumu lated somewhere. From whence did these savings come and how were they channeled into the mortgage market? A substantial part of the savings was generated locally and flowed through financial institutions domiciled in District states. A large part, probably as much as 4 0 per cent, however, was financed by non-Southern savings. Debt financed in this way is held by establishments with headquarters outside the South. Tapping Southern Savings Savings and loan associations, commercial banks, and in surance companies in District states held about $6.5 billion of mortgage debt on Southern residential properties on December 31, 1959. Of this amount, insured savings and loan associations held $4.9 billion, or about 75 percent. The ability of these associations to finance such a large share of mortgage debt reflects the responsiveness and adaptability of financial institutions to basic market forces. Given the strong demand for homes during the last decade and, hence, the need for a huge supply of credit, associa tions, by investing primarily in mortgages with relatively high yields, were able to pay a rate of return sufficient to attract savings into the mortgage market. Life insurance companies also accumulate savings in large volume, but unlike savings and loan associations, they allocate these savings among mortgages, corporate securities, and other investments. Insurance company in vestments, moreover, may be scattered over a wide geo graphic area in contrast with associations that finance mortgages primarily on local properties. Of the mortgages held by the 2 0 largest insurance companies domiciled in District states in 1959, for example, about 4 0 percent were on properties located outside the South; the remain ing share, $773 million, represented debt on properties in District states. Commercial banks extend primarily short- and intermediate-term credit to businesses and consumers, in con trast to savings and loan associations and insurance com panies that make mostly long-term investments. Never theless, loans outstanding at insured commercial banks in District states, secured by residential real estate, totaled $85 3 million in 1959. This amount represents not only long-term mortgage financing of homes but also short term financing of mortgage companies and builders. Despite their sizable contribution, Southern savers and financial institutions could not by themselves have financed the expansion in home building without severely limiting the amount of credit available for businesses and govern ments. In the United States, credit flows relatively freely among regions. Financial institutions with excess funds and headquartered in capital surplus areas are constantly seeking investment opportunities. During the postwar period such opportunities were abundant in the South. Mortgage Companies Facilitate Flow of Funds In the structure of the mortgage market, the link between the South and financial institutions in other regions is the mortgage company. Mortgage companies domiciled throughout District states originate and service mortgages primarily for insurance companies and mutual savings banks. Since the activities of mortgage companies are less publicized than those of other financial institutions, it may be well to run through a typical transaction. An insurance company headquartered in New York, for example, may agree to purchase—over a period of time— $ 5 0 0 ,0 0 0 in mortgages from a mortgage company domi ciled in Georgia. The Georgia company, through its con tacts in the area, would seek to fill the order. After ferret ing out the mortgages, it would likely finance them through the commercial banks during the short interval between the closing and delivery of the mortgage to the insurance company. After closing, the mortgage payments •3 • are generally collected or serviced by the mortgage com pany and are then transmitted to the insurance company. The mortgage company thus earns its income through the originating and servicing of mortgages. Nine out of ten mortgages purchased by the mortgage company for the insurance company would probably be FHA and VA mortgages. It was the Government-insured mortgage, with its standard contract and minimum risk, that stimulated out-of-state mortgage investing by financial institutions. This, together with the boom in home build ing, contributed much to the phenomenal growth of South ern mortgage companies. Just how much they have grown and how much they have contributed to the expansion in Southern home build ing has been something of a mystery until recently. A sur vey of Southern mortgage companies conducted by this Bank, with splendid cooperation from the Mortgage Bank ers Association, however, has now provided us with a wealth of quantitative data on mortgage company activity. This information should be highly reliable, since almost all important mortgage companies domiciled in District states participated in the survey. According to the survey findings, the volume of out standing mortgages serviced by mortgage companies in District states increased from $1.1 billion in 1949 to $5.3 billion in 1959, or about 4 0 0 percent. As might be ex pected, the rate of expansion was greatest in those states where building was most active. The amount of funds channeled into residential and other mortgages in indi vidual District states, as well as the type and location of the financial institution providing the funds, is shown in the table on page 3. These findings are significant because they quantify former generalizations. We now know that mortgage companies service many residential mortgages for insur ance companies and mutual savings banks, located mostly in New York and New England, but more importantly we know to what extent they do so. These data, moreover, when combined with existing information from savings and loan associations, commercial banks, and insurance companies domiciled in District states, provide a reason ably clear picture of the structure of the Southern mort gage market. What Is Past Is Prologue Will the supply of mortgage funds be adequate to finance the anticipated expansion in home building in the South in the year ahead? If the experience of the postwar years may be used as a guide, the answer is a resounding “Yes.” In the past, expansion in population and households created a need for additional housing, and incomes rose sufficiently to pay for homes of higher quality and cost. With demographic and financial factors producing a strong demand for homes, market forces were set in motion which favored the development of two financial institu tions concerned primarily with mortgage financing: the savings and loan association, which channeled local sav ings into local mortgages, and the mortgage company, which broadens the market by channeling funds from cap ital surplus areas into mortgages in areas with a savings deficit. If the effective demand for homes continues strong in the years ahead, mortgage funds will likely be forthcoming, for who can say what new financing tech niques institutions may develop, or what new mortgage institutions may arise to challenge the old? “What Is Past Is Prologue” is a line inscribed on the front of the National Archives building that stands solidly on Pennsylvania Avenue in the nation’s capitol. We share the historian’s view that the past is the key to the present and the introduction to the future, although by no means do we expect ourselves or our readers to be omniscient because of having retread the recent path of Southern home building and mortgage activity. A l f r e d P. J o h n s o n Mortgage M arket Statistics Sixth District, 1949 and 1959 Detailed tables relating to mortgage market statistics of financial institutions in the Sixth District for the years 1949 and 1959 are available upon request to the Re search Department, Federal Reserve Bank of Atlanta, Atlanta 3, Georgia. Georgia’s Economy: Undecided at a High Level A look at the charts on the next page might raise some questions about the status of Georgia’s economy and the direction in which it is headed. Some indicators have been declining for the last few months; some have shown per sistent gains; the majority, however, have fluctuated to such a degree that it is difficult to tell which way they are going. Lines on charts usually represent totals or averages of a number of different factors, which may be following widely different trends. A closer look at the indicators charted, as well as a few others, therefore, may give us a better view of the economic scene. Nonfarm employment, an important gauge of the health of an economy, usually does not change much between April and July in Georgia. This year, however, employ ment dropped 16,0 0 0 during that period, bringing the sea•4 • sonally adjusted index down 2 percent and wiping out most of the gain made during 1959. The downturn was a result of offsetting changes in the various types of employment. Some smaller employers, such as service establishments, public utilities, banks, and insurance companies, added more new workers to their payrolls than they usually do in the spring and early summer. State and local governments, on the other hand, reduced their work forces substantially more than they normally do between April and July. Trade employment has not followed its customary pattern of rising during the early months of the year. The most serious aspect of the drop in nonfarm jobs is the recent downturn in manufacturing employment. Between April and July, manufacturing work forces dropped almost 6 ,0 0 0 , more than twice the usual decline in that period. A large part of the cutback was due to declines in textile and transportation equipment employ ment, although most other types slackened or failed to gain as much as they have in comparable periods of other years. Just as the 1958-59 upturn in business activity in Geor gia was accompanied by a revival of textile mill activity, so the current lack of vigor in the economy is paralleled by a reduction in textile employment and output. Employ ment in the state’s cotton, woolen and synthetic fiber pro duction and fabrication plants declined over 3 ,0 0 0 be tween March and July, following a 22-month period of almost uninterrupted gains. Coincident with the drop in textile jobs has been a mild downturn in apparel manu facturing work forces, which came after a 17-percent gain in less than a year and a half. In both these industries developments in the; next few months will probably follow national patterns. Nationally, a substantial backlog of unfilled orders has helped keep textile production fairly high, but a steady decline in new orders has clouded the outlook. Gradual cutbacks in the work force at a major aircraft assembly plant have been largely responsible for a drop of 4 ,0 0 0 in transportation equipment employment since last summer. Plant officials see no reversal of this trend in the immediate future. A pickup in automobile produc tion following model change-over, however, may provide enough new jobs to counteract continued small declines in aircraft employment. Despite the recent slide in the number of manufacturing workers, employment in the first six months of 196 0 aver aged about 1.5 percent above the comparable period of 1959. Manufacturing payrolls rose almost 3 percent, indi cating an increase in average hourly earnings. Larger manufacturing payrolls, together with rising cash receipts from farm marketings, substantial increases in government wage rates, and larger earnings in other fields have pro vided Georgians with the higher incomes that are the basis for a continued high level of economic activity. Total personal income in Georgia during the first half of 1960 amounted to about $3.1 billion, according to this Bank’s estimates, a gain of 5.5 percent over the com parable period last year. All sources of income shared in the increase, ranging from a fractional gain in farm cash receipts to an 11-percent rise in income from rent, divi ECONOMIC INDICATORS Georgia jit m 1111111 j i it 11j 111 mj11 it i j 11 it 11111111 it 111111111jf11 n| 1947-49* IOO __ Seasonally Adjusted __ I29^i<Nonfarm Employment Mfg. payrolls Mfg. Employment Bonk Debits Oept. Store Sales Member Bank Loans Member Bank Deposits •5 • dends, and interest payments. Substantial increases in gov ernment and wholesale and retail wage and salary pay ments also exceeded the overall gain and helped to estab lish a rate of increase almost as great as that of 1959. According to most available indicators, Georgians have been spending their larger incomes at a record rate. Dur ing the first eight months of 1960, bank debits, which measure check payments by businesses, individuals, and state and local governments, averaged 7 percent above a year ago, a somewhat larger gain than that recorded in neighboring states. Department store sales increased one percent during the same period. Sales at furniture and household appliance stores, on the other hand, fell below year-ago volumes during the early months of the year. Sales tax receipts, an indicator of retail sales and of spending for certain services, utilities, and manufactured products, exceeded the year-ago figure almost 5 percent during the first half of 1960. Receipts increased most in northwestern Georgia, the extreme southeastern part of the state, and in the Augusta area. Greater incomes, partly due to increased textile production earlier in the year and a turn-around in prices received for broilers, accounted for the gain in tax receipts in the northwestern area. Major construction projects have bolstered employment, income, and spending in the other two areas. Slackened sales, as measured by sales tax receipts, were confined mainly to the rural areas of central and southwest Georgia, where bad weather in the early months of 1 9 6 0 made the farm income situation uncertain, putting a damper on spending. R o b e r t M. Y o u n g Bank Announcements On September 7, the newly organized Southside Atlan tic Bank, Jacksonville, Florida, opened for business as a nonmember bank and began to remit at par for checks drawn on it when received from the Federal Reserve Bank. Officers are C. C. Space, Chairman; John H. Ek, President; J. L. Turner, Vice President and Cashier; Randall Hall and J. W. Kesler, Assistant Cashiers. Capital stock totals $480,000 and surplus and undivided profits amount to $240,000. On September 12, the Baker Bank and Trust Company, Baker, Louisiana, a nonmember bank, began to remit at par. Warren J. Landry is President, and Reymond E. Coxe is Cashier. Capital totals $200,000 and sur plus and undivided profits $300,000. On September 24, the newly organized Louisiana Bank and Trust Company, Crowley, Louisiana, opened for business as a nonmember, par-remitting bank. Officers are John V. Unverzagt, President; Elmo F. Orgeron, Executive Vice President and Cashier; Clyde Horn and William L. Hoffpauer, Assistant Cashiers. It has capital stock of $400,000 and surplus and undivided profits of $ 100 ,000 . The second volume of “Readings in Southern Finance” entitled C red it N e e d s o f B usiness B o rro w ers and L en d ing P o licies an d P ra ctices o f C o m m ercia l B an ks in the S ou th east is ready for distribution. In this collection of reprints from the M o n th ly R e v ie w , the studies describe how commercial banks have met the credit needs of businesses with different economic characteristics. Ad dress requests to Research Department, Federal Reserve Bank of Atlanta, Atlanta 3, Georgia. Debits to Individual Demand Deposit Accounts ______________________________(In Thousands of Dollars)__________________________________ Aug. 1960 July 1960 Aug. 1959 ALABAMA Anniston . . . . 41,674 41,850 42,305 Birmingham . . . 826,752 901,020 717^287 Dothan . . . . 33,104 34,925 31,585 Gadsden . . . . 38,436 35,979 35,073 Huntsville* . . . 65,467 60,402 59,015 Mobile . . . . 279,471 303,130 270,686 171,504 149,997 Montgomery . . . 158,590 23,894 21,994 Selma* . . . . 23,091 54,737 52,034 51,412 Tuscaloosa* . . . Total Reporting Cities 1,634,963 1,500,651 1,389,800 Other Citiesf* . . . 782,416 697,297 686,793 FLORIDA Daytona Beach* 61,705 57,797 59,630 Fort Lauderdale* . 192,881 187,810 178,304 Gainesville* . . . 39,957 43,462 36,455 879,318 Jacksonville . . . 783,739 744,780 Key West* . . . 15,802 14,300 13,476 Lakeland* . . . 79,886 71,392 70,351 Miami . . . . 847,425 833,401 781,864 Greater Miami* 1,255,999 1,236,037 1,157,618 Orlando . . . . 246,576 237,163 230,415 87,396 84,322 Pensacola . . . 87,912 St. Petersburg . . 199,959 211,036 199,602 Tampa . . . . 410,367 384,284 394,404 W. Palm-Palm Bch.* 118,263 117,589 114,369 Total Reporting Cities 3,430,764 3,588,109 3,285,483 Other Citiesf . . . 1,621,280 1,609,869 1,465,699 GEORGIA Albany . . . . 54,858 50,955 53,256 Athens* . . . . 40,005 40,651 35,709 Atlanta . . . . 2,209,861 2,018,820 1,990,180 113,982 Augusta . . . . 109,182 108,032 Brunswick . . . 25,749 24,713 22,304 Columbus . . . 113,650 103,255 103,166 Elberton . . . . 11,043 10,698 9,258 48,240 50,262 Gainesville* . . . 48,058 Griffin* . . . . 17,377 19,890 18j266 LaGrange* . . . 18,203 21,198 19,119 Macon . . . . 128,835 119,024 117,597 30,904 32,694 Marietta* . . . 31,711 Newnan . . . . 19,651 18,961 19,959 49,550 Rome* . . . . 47,813 42,619 Savannah . . . 202,791 191,308 188,436 Valdosta . . . . 43,453 34,121 48,451 Total Reporting Cities 2,891,032 3,130,665 2,856,121 Other Citiesf . . . 1,017,702 975,894 887,654 LOUISIANA Alexandria* . . . 69,769 71,566 72,780 Baton Rouge . . 281,476 265,618 263,966 Lafayette* . . . 60,951 59,733 61,270 Lake Charles . . 74,779 75,331 84,359 New Orleans . . . 1,377,647 1,307,356 1,302,882 1,864,622 Total Reporting Cities 1,779,604 1,785,257 Other Citiesf . . . 629,663 597,075 591,573 MISSISSIPPI Biloxi-Gulfport* 53,738 49,978 49,498 37,832 Hattiesburg . . . 38,876 35,857 Jackson . . . . 337,763 323,673 278,015 28,215 Laurel* . . . . 26,393 28,451 Meridian . . . . 46,736 42,067 42,914 Natchez* . . . . 22,088 21,820 23,053 20,712 Vicksburg . . . 19,306 18,214 547,084 Total Reporting Cities 522,113 476,002 Other Citiesf . . . 273,057 265,576 268,920 TENNESSEE 45,214 Bristol* . . . . 46,632 43,713 327,721 304,902 Chattanooga . . 332,198 Johnson City* . . 42,893 43,225 41,311 Kingsport* . . . 83,291 86,911 82,713 Knoxville . . . . 250,050 238,413 217,203 797,546 705,552 Nashville . . . . 706,915 Total Reporting Cities 1,546,715 1,426,998 1,422,690 Other Citiesf . . . 622,284 593,176 579,513 SIXTH DISTRICT . 17,258,560 16,290,049 15,695,505 Reporting Cities 12,312,158 11,551,162 11,215,353 4,946,402 Other Cities . . . 4,738,887 4,480,152 Total, 32 Cities . . 10,638,041 9,905,047 9,585,870 UNITED STATES 344 Cities . . . 241,809,000 223,608,000 208,130,000 Percent Change 8 Months Aug. 1960 from 1960 July Aug. from 1959 1959 1960 —1 +9 +6 +7 + 11 +8 +14 +9 +5 +9 + 12 +0 + 26 +11 + 10 +8 + 12 +8 +3 -f-6 + 18 + 14 +2 +4 +8 —1 —0 +5 —1 +5 +6 +3 +5 + 10 +3 —8 + 12 + 11 +12 +2 +2 +4 +4 —5 +7 _|_1 + 10 + 10 +11 +8 + 10 + 18 + 12 + 14 +8 +8 +7 —1 +0 +4 +3 +11 + 11 —0 +4 +11 +6 —0 +7 +3 +2 +6 +1 —0 +2 —2 +10 +6 +8 —2 +9 +4 -f-4 + 10 +3 —4 + 14 — 14 +8 —5 +4 +4 +6 + 27 +8 +4 -f-3 + 12 + 11 +6 + 15 + 10 + 19 +0 +9 —5 + 10 —3 —2 +16 +8 — 10 +10 + 15 +7 +7 +7 +6 +5 +4 + 10 —2 +4 —4 +3 +4 + 12 + 14 — 0 —2 +6 +9 —3 +6 +2 —1 +5 +5 +5 —4 +7 —1 — 11 +6 +4 +6 "h i +2 —4 —9 +3 +2 +2 +8 —3 +4 +7 + 11 +1 +7 +5 +3 +9 +6 + 21 —1 +9 —4 + 14 + 15 +2 +4 +6 +6 +5 +0 +2 +5 +5 +5 —3 +7 —1 —4 +5 + 13 +8 +5 + 11 + 11 + 10 +7 +3 —1 +4 + 15 + 13 +9 +7 + 10 + 10 + 10 + 11 +3 +0 +4 +5 +5 +2 +2 +4 +4 +4 +6 +4 +8 + 16 +7 *Not included in total for 32 cities that are part of the national bank debit series. fEstimated. •6 • Sixth District Indexes Seasonally Adjusted (1947-49 = 100) 1959 SIXTH DISTRICT | 1960 JULY AUG. SEPT. OCT. NOV. DEC. | Nonfarm Employm ent.................................. 142 Manufacturing Employment . . . . 126 A p p a re l................................................... 191 C h e m ic a ls............................................. 134 Fabricated Metals .............................191 F o o d .........................................................114 Lbr., Wood Prod., Fur. & Fix. . . 81 Paper & Allied Products . . . . 166 Primary Metals ....................................104 T e x tile s ................................................... 89 Transportation Equipment . . . . 216 Nonmanufacturing Employment . . . 149 Manufacturing Payrolls.................................. ..228 Cotton Consumption**.................................. 110 Electric Power Production**........................359 Petrol. Prod, in Coastal Louisiana & M ississippi**.........................195 Construction Contracts* ............................ ..416 Residential................................................... ..425 All Other .....................................................410 Farm Cash Receipts........................................142 Crops.............................................................. ..122 L iv e s to c k ................................................... 188 Department Store S a le s * / * * .......................185 Department Store S tocks*............................ 214 Furniture Store S a l e s * / * * .......................159r Member Bank D e p o s its * .............................180 Member Bank L o a n s * .................................. .329 Bank D e b its*................................................... ..283 Turnover of Demand Deposits* . . . . 161r In Leading C itie s ........................................179 Outside Leading C i t i e s .............................124 ALABAMA Nonfarm Em ploym ent............................ 126 Manufacturing Employment . . . . I l l Manufacturing Payrolls .........................204 Department Store S a le s * * .......................168 Furniture Store S a l e s .............................139 Member Bank Deposits.............................160 Member Bank L o a n s....................................275 Farm Cash Receipts.................................. 122 ............................................. ..248 Bank Debits FLORIDA Nonfarm Em ploym ent...............................200 Manufacturing Employment . . . . 206 Manufacturing Payrolls .........................372 Department Store S a le s * * ...................... ..249 Furniture Store S a l e s ...............................178 Member Bank Deposits...............................239 Member Bank L o a n s ....................................544 Farm Cash R eceip ts.................................. ..239 Bank Debits ............................................. ..429 GEORGIA Nonfarm Em ploym ent.............................136 Manufacturing Employment . . . . 124 Manufacturing Payrolls .........................225 Department Store S a le s * * .......................172 Furniture Store S a l e s .............................159 Member Bank Deposits.............................157 Member Bank L o a n s....................................256 Farm Cash Receipts.................................. 159 Bank Debits ............................................. .. 260r LOUISIANA Nonfarm Em ploym ent............................ 130 Manufacturing Employment . . . . 95 Manufacturing Payrolls .......................175 Department Store Sales*/** . . . . 156 Furniture Store S a le s * ...............................205r Member Bank Deposits* .......................160 Member Bank L o a n s * ............................ ...302 Farm Cash Receipts.................................. ..107 Bank D e b its * ............................................. ..236 MISSISSIPPI Nonfarm Em ploym ent............................ 134 Manufacturing Employment . . . . 133 Manufacturing Payrolls ..........................250 Department Store Sales*/** . . . . 176 Furniture Store S a le s * ............................ 115 Member Bank Deposits* .......................197 Member Bank L o a n s * ............................ ...402 Farm Cash Receipts..................................108 Bank D e b its * ............................................. ..240 TENNESSEE Nonfarm Em ploym ent.............................125 Manufacturing Employment . . . . 124 Manufacturing Payrolls ..........................216 Department Store Sales*/** . . . . 165 Furniture Store S a le s * ............................ lOOr Member Bank Deposits* .......................165 Member Bank L o a n s * ................................288 Farm Cash R eceip ts.................................. 112 Bank D e b its * ............................................. ..244 141 123 190 135 184 113 81 164 79 88 215 149 220 94 359 141 122 190 131 186 114 80 166 79 89 214 149 216 93 351 142 122 190 130 182 115 81 164 79 88 221 150 214 93 350 142 123 189 130 183 116 80 161 97 87 195 150 215 91 346 142 123 191 132 185 113 80 160 103 87 199 149 220 91 345 JAN. 142 124 192 132 191 117 80 166 101 87 209 150 222 95 358 FEB. 142 124 190 133 193 117 80 165 100 87 208 150 218 95 375 MAR. 142 124r 191 132 190 115 79 164 95 88 206 149 214 94 387 APR. 143 125 194 135 188 116 79 166 98 87 210 151 223 95 363 MAY 143 126 195 135 192 117 79 167 99 87 211 150 227 94 366 203 440 444 436 123 95 179 184 219 161 183 330 259 154 174 115 207 380 440 331 153 140 187 186 222 149 183 331 281 150 164 118 215 350 441 276 160 149 179 188 225 158 182 331 271 147 153 108r 214 302 373 245 142 120 185 189 223 163 184 332 270 150 160 109 231 302 367 249 133 99 184 185 225 151 181 335 286 154 166 120r 227 328 351 309 124 93 169 180 225 166 182 337 275 154 166 119 226 345 366 327 124 96 176 175 223 143 181 340 294 156 168 120 228 333 360 311 121 95 179 162 225 129 180 344 288 153 167 119 224 333 356 315 126 100 188 192 223 149 178 347 278 148 167 114 222 351 384 325 132 111 185 176 223 145 180 350 277 163 181 126 122 103 179 177 143 160 269 121 221 122 102 172 167 139 160 270 154 243 122 100 173 172 138 159 272 159 236 125 107 188 162 134 159 272 112 224 125 108 194 163 128 158 273 112 247 126 108 198 165 148 159 279 113 236 125 107 192 158 133 158 283 122 245 124 106 190 156 112 160 284 125 244 125 108 195 176 127 157 296 122 240 200 206 378 262r 212 246 548 210 395 200 206 377 252 177 247 550 248 437 200 206 377 248 180 245 546 202 422 199 203 371 264 203 245 547 190 414 197 201 374 257 195 241 548 201 424 197 204 366 250 189 242 546 231 391 197 204 364 240 174 237 550 206 423 197 202 352 245 157 234 546 171 410 135 122 221 170 163 162 260 133 239 136 123 213 170 144 160 259 151 258 136 123 216 175 159 160 261 155 249 136 120 208 176 157 163 266 134 244 136 121 210 172 150 158 267 153 261 137 122 216 172 149 161 269 130 254 136 122 211 164 127 161 271 134 265 129 94 175 160 178 160 299 95 227 130 94 175 153 193 160 304 117 252 130 95 167 154 171 157 307 123 229 130 94 168 158 195 160 309 127 216 130 93 168 155 184 158 311 112 238 131 94 173 155 188 161 312 90 207 133 133 250 171 129 194 402 110 230 135 134 251 161 95 195 411 134 242 135 134 239 172 83 202 392 147 234 136 134 242 160 117 204 392 145 237 135 135 244 169 133 208 403 128 252 124 123 220 155 122 165 287 111 226 124 123 215 158 109 166 288 124 233 124 122 212 161 108 167 292 135 228 124 123 212 164 102 167 292 119 237 124 123 214 157 109 164 296 116 232 *For Sixth District area only. Other totals for entire six states. n.a. Not Available. JULY 143 125 197r 135 194 116 78 166 97 88 200 151r 234 93 382 AUG. 143 124 192 135 195 117 78 165 95 87 202 150 226 90 n.a. 220r 371 r 387 359r 132 98 192 183 227 142 181 351 288 159 183 119 227 375 376 365 127 83 194 194 227r 147 181 354 271 162 179 129 227 n.a. n.a. n.a. n.a. n.a. n.a. 178p 232p 150p 184 357 285 167 190 124 126 109 198 162 128 159 300 131 240 126 109 201 171 127 160 292 123 245 126 109 202r 178 126r 162 299 124 234 126 108 193 170 120p 164 294 n.a. 257 199 205 372 274 181 230 553 217 387 201 209 389 260 175 235 554 225 404 202 211 392 264 167 238 559 187 443 204 213 409r 277 167 239 563 204 399 203 215 407 263 215 244 571 n.a. 433 135 122 205 156 120 158 268 146 254 138 122 215 170 142 157 271 153 254 137 122 223 169 132 161 275 144 257 136 122 221 164 135 160 277 150 269 136r 121 226r 175 134r 157 278 125 258 135 120 216 159 145p 166 285 n.a. 264 131 95 173 150 192 159 316 90 224 130 95 176 147 172 160 335 94 244 131 95 179 156 176 163 332 89 233 131 95 178 152 175 161 338 101 233 130 95 178 161 184 161 333 119 253 130 95 177 r 159 203 160 334 102 225 130 94 177 152 155p 158 334 n.a. 238 138 135 253 161 106 200 414 92 226 137 134 247 154 99 202 422 91 244 136 133 254 155 94 205 418 115 246 137 134 249 169 100 199 422 101 236 137 135 244 154 113 198 433 105 222 136 134 256 175 107 195 438 97 243 136 133 253 175 112r 196 449 104 241 135 132 247 153 100 193 431 n.a. 254 124 124 219 154 104 166 296 88 235 124 123 219 145 95 161 300 90 252 123 123 208 137 98 161 303 86 242 126 124 225 159 103 163 304 100 236 125 124 223 146 111 165 310 95 247 125 124 223 155 107 167 313 102 245 126r 125 225r 167 93 169 316 109 236 125 124 225 1£1 106p 167 316 n.a. 245 p Preliminary. JUNE 143 125 195 136 194 116 79 165 99 87 206 150 230 93 375 r Revised. **D aily average basis. Sources: Nonfarm and mfg. emp. and payrolls, state depts. of labor; cotton consumption, U. S. Bureau Census; construction contracts, F. W. Dodge Corp.; petrol, prod., U. S. Bureau of Mines; elec. power prod., Fed. Power Comm. Other indexes based on data collected by this Bank. All indexes calculated by this Bank. •7 • S IX T H D IS T R IC T Nonfarm Employment Mfg Payro lls Mfg Employment E le ctric Power Production Construction * Contracts -mo moving avg. Cotton Consumption B U S IN E S S H IG H L IG H T S ( ^ r e d i t c o n d i t i o n s have b ec o m e so m e w h a t easier, as m e m b e r b a n k reserves a n d d ep o sits ha ve increased. E c o n o m ic c o n d itio n s have ch a n g ed less dra m a tica lly, b u t so m e im p o rta n t m ea su res o f a c tiv ity are no longer e x p a n d in g or ha ve d ip p e d slig h tly. T o ta l nonfa rm e m p lo y m e n t in A u g u s t re m a in ed un ch a n g ed , b u t m a n u fa c tu r ing e m p lo y m e n t d ro p p e d fu rth e r. C o tto n tex tile a c tiv ity has slo w ed d o w n so m e w h a t. T h e fa rm sector, on the o th er h a n d , has n o t w e a k en e d a p p reciably, a n d various m easures o f c o n su m e r sp e n d in g c o n tin u e to sh o w m ix e d trends. Member bank loans, seasonally adjusted, increased in August with Florida showing the largest gains. Member bank deposits, seasonally adjusted, continued a moderate uptrend in August as gains in Alabama, Florida, and Georgia more than offset declines in Louisiana, Mississippi, and Tennessee. Borrowings from the Federal Reserve Bank of Atlanta dropped further in September to a new low for the year. In August, seasonally adjusted nonfarm em ploym ent continued near the level of the four preceding months. Manufacturing employment decreased further from the May record. This, together with a decline in the averag e w ork w eek, was reflected in a substantial decrease in m anufacturing p ay rolls. Farm Cash Receipts Dept Store Stocks Dept Store Sa le s Member Bank Loan: Member Bank Deposit! R A T IO TO R EQ U IR ED R E S E R V E S Borrowings from F, R Bank E x c e s s R e serves The seasonally adjusted three-month a verag e of construction contracts changed little in July. Although contracts were substantially above late 1959, they continued well below the record high of the second quarter of 1959. Cotton consumption, after holding up well in July, declined in August, indi cating a further slackening in cotton textile activity from the high volume last April. Crude oil production in Coastal Louisiana and Mississippi continued at near record volume. Steel mill operations, however, remained at a reduced rate. Seasonally adjusted departm ent store sales in August declined substan tially from July’s record. Preliminary estimates indicate that a further decline may have occurred in September. Household appliance store sales were unchanged, after allowance for seasonal variation. Furniture store sales, on the other hand, rose to the highest level since January, with substantial gains occurring in Florida, Georgia, and Tennessee. Seasonally adjusted bank debits, a measure of spending by individuals, businesses, and state and local governments, rose in August, following a downtrend that began in mid-winter. Consumer savings in the form of savings and loan shares and member bank time deposits increased at better-than-seasonal rates during August in all District states. The increase in consumer instalm ent credit outstanding at commercial banks fell short of normal August gains, largely because of a relatively small increase in automobile lending. Outstanding balances at credit unions and consumer finance companies, on the other hand, continued to increase more than seasonally. Total farm production is rising. Favorable yields of rice, peanuts, tobacco, and soybeans have boosted output and the cotton crop is virtually equaling the 1959 crop. Weather favored harvests in most places early in September and in the last two weeks. Strong winds and heavy rain in September, however, damaged citrus, avocados, and vegetables in Florida. Prices received by farm ers have made slight gains recently as farmers received more for eggs, citrus, and milk. Prices for broilers and beef, however, declined under pressure from larger marketings. Farm em ploym ent, seasonally adjusted, declined from July to August.
@FedFRASER