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% [★ T E N f ___kVT\ jl . y * A LA \/ Ia 50 ^ j 'm / fla \ A tla n ta , G eo rg ia A ls o O c to b e r • in t h is ALABAM A’S 1965 is s u e : ECONOM Y EM ITS A HEALTHY GLOW SIX TH D IST R IC T S T A T IST IC S D IST R IC T B U S I N E S S C O N D IT IO N S % setve % t^g f j^ tfa n ta Aionthlu Review PIF—It’s Wonderful, Or Is It? T h e reg io n served b y this B a n k has lo n g had a friend in th e cap ital m ark ets. H is n ick n a m e is P IF . H is frien d sh ip is v o la tile, c a lcu la ted , and d em a n d in g . H is v isits during th e d e ca d e o f th e 1 9 5 0 ’s w ere m o st apparent in th e m ortgage m ark et, u su a lly g o t u n d er w a y sh o rtly after cy clica l p ea k s, w ere so m etim e s b rief, and at tim es th rea ten ed n ev er to be ren ew ed . P I F ’s fu ll n a m e is P ressu re o f In v e sta b le F u n d s, a term fa m iliar to m o rtg a g e b an k ers. H is cu rren t p erio d o f w arm frien d sh ip for this region b eg a n in early 1 9 6 0 and has b e e n lo n g and p ro d u ctiv e. N o t o n ly has it p ro m o ted sharp ch a n g es in th e sk y lin es o f our large citie s, b u t it a lso h as h elp ed to alter th e in d u strial, resid en tia l, and p u b lic fa cility c o n to u rs o f ou r to w n s and v illa g es. F u rth erm ore, P IF h a s a ssisted in im p rov in g th e d istrib u tion o f the r e g io n ’s ex p a n d e d h o u sin g in ven tory. M u ch o f this h as h a p p en ed b e fo re and in th e m o re d ista n t p ast has c o n trib u ted to difficult and so m e tim es p ro lo n g ed p erio d s o f ad ju stm ent. W ill this h a p p en again? T h e C o n d itio n s N e c e s s a r y fo r P IF ’s A m ity T h e fin an cial m a rk et p la ce is th e lo c u s o f P I F ’s o p era tio n s. H e is as tim ele ss and u b iq u ito u s as m o n e y itself. W h ile h e o p era tes in b o th the e q u ity and d eb t m ark ets, th e latter ty p ica lly absorb m o st o f h is tim e and atten tion . H e is o rd in arily n o t m u ch in e v id e n c e du rin g a strong c y c lic a l or secu la r u p sw in g in th e o v era ll e c o n o m y ; in fa ct, du rin g su ch p erio d s h e rea d ily ch a n g es h is p e rso n a lity and b e c o m e s m o re re co g n iz ab le as D e m a n d fo r F u n d s. P IF o p era tes at th e m argin o f the m ark et th rou gh th e to o ls o f c o m p e titio n and true y ield d ifferen tials. W h en d em a n d fo r fu n d s is strong r ela tiv e to su p p ly , c o m p e titio n a m o n g b o rrow ers n o t o n ly fo rces the c o st o f fu n d s to h igh er lev els b u t a lso lim its th e ran ge o f ch o ices th at su p p liers o f fu n d s m u st co n sid er. It is du rin g p erio d s o f relative e x c e ss in th e su p p ly o f fu n d s th at P IF is m o st effectiv e. R e lu c ta n ce o f len d ers to a c c e p t fa llin g y ield s o n a n arrow ed ran ge o f c h o ic es, togeth er w ith c o m p e titio n a m o n g su p p liers o f fu n d s, in v ig o ra tes th e search for a b road er range o f in v estm e n t o p p o rtu n ities. Id ea lly , th en , a gro w th reg io n th at requires large im p o rta tion s o f m o rtg a g e fu n d s c o u ld e x p e c t to b en efit m o st from a stron g P I F under tw o co n d itio n s. F irst, the to ta l su p p ly o f fu n d s sh o u ld g row v ig o ro u sly rela tive to d em a n d and n o t b e im p o u n d e d in m ark et secto rs th at ca n n o t be rea ch ed b y m o rtg a g e d em a n d . S e co n d , th e p erio d sh o u ld b e lo n g en o u g h to p erm it im p ro v em en ts in th e in stitu tio n a l a rran gem ents b y w h ich su ch d em a n d is p resen ted to the m ark et. In b o th r esp ects, th e cu rren t e x p a n sio n p erio d h as d iffered fro m th o se o f th e 1 9 5 0 ’s. C a p ita l m ark et co n d itio n s o v er th e p a st fou r and o n e -h a lf years h ave a p p ro a ch ed th e id ea l fo r P I F ’s o p era tio n s. G ro w in g d isp o sa b le in co m e fro m in crea sed em p lo y m e n t, lo w er ta x es, and risin g w a g es p erm itted co n tin u e d e x p a n sio n in savin gs. A b se n c e o f in flation ary p sy c h o lo g y and h igh c o m p etitiv e rates p aid b y sa v in g s in term ed ia ries h elp ed to ch a n n el the b u lk o f th ese savin g s in to ca p ita l m ark et in stitu tio n s. F ed era l G o v ern m en t b o rro w in g req u irem en ts w ere h eld to m od erate e x p a n sio n , w h ile state and lo c a l g o v ern m en ts fo u n d n ew cu sto m ers fo r th eir issu es. L ib era lized ta x trea t m en t o f g row in g co rp o ra te profits and oth er in tern ally g e n erated fun d s ten d ed to m u te th e n et d em a n d for fu n d s in the m arkets. T h e se and o th er ord erly b u t p o w erfu l ch a n g es w ere aid ed b y m o n eta ry and fiscal p o lic ie s th at w ere resp o n siv e to the tw in n eed s o f flex ib ility in fin an cial m arkets and grow th o f th e e co n o m y . T h is reg io n en tered the cu rren t p erio d o f ex p a n sio n w ith a large and varied b a c k lo g o f ca p ita l req u irem en ts. It had em erged from the 1 9 5 0 ’s w ith stron g grow th trends in ind ustrial d e v elo p m en t, n o n fa rm e m p lo y m e n t, and p o p u lation and w ith in co m e lev e ls th at w ere rising m ore rapidly than th o se o f th e n ation . D e sp ite large b u t in term itten t flow s o f m ortgage fu n d s from th e n a tio n a l ca p ita l m ark ets in the p o stw a r p eriod , h o u sin g n e ed s w ere acu te. T h e ratio o f sou n d to total e x istin g h o u sin g in the six D istrict states, for ex a m p le, averaged o n ly 7 2 p ercen t, co m p a red w ith a n a tio n a l average o f 81 p ercen t. O n ly in the largest cities, w h ich had m o n o p o liz e d P I F ’s h elp in the 1 9 5 0 ’s, w as this p ro p o rtio n an yw h ere n ear th at o f the n a tio n ’s. M o reo v er, as im p ro v em en t in th e D istr ic t’s e c o n o m ic b ase b ro a d en ed to in clu d e m o re and m o re m ed iu m -a n d sm a llersize co m m u n ities, h o u sin g d em a n d w as further stim u lated . T h e ev id en t n eed for in crea sin g flow s o f m o rtg a g e fu n d s w as thus m a tch ed b y a greater ca p a c ity to su p p o rt higher lev els o f co n stru ctio n . T h e rem a in in g e le m e n t o f th e p ro b lem w as to m a k e th is d em a n d m o re e ffectiv e in th e n a tio n a l ca p ita l m ark ets w h ere p a rticip a n ts a llo ca te fin an cia l resou rces largely o n th e b a sis o f true y ield differen tials. T h e region n eed ed a cc ess to a m ark et w ith a b road er g e o graph ic ran ge and a b ro a d er ran ge o f ty p es o f m o rtg a g e con tracts. T h is reg io n ’s m ortga g e b a n k ers, b ro a d ly d efin ed to in clu d e co m m ercia l b an k s and o th er n o n -sp e cia liz ed in ter m ed ia ries, b id for in crea sed d irect flo w s o f m o rtg a g e fu n d s th rou gh th ree ty p es o f co n tra cts: th e G o v ern m en t in su red or gu aran teed m o rtg a g e, th e c o n v en tio n a l resi d en tia l m ortgage, and th e c o n v e n tio n a l c o m m e r cia l or indu strial m ortgage. E a c h o f th ese in stru m en ts p la y ed a m ajor role in the net im p o rta tio n o f a lm o st $3 b illio n o f life in su ran ce and sav in g s b a n k m o n e y in to th e six D is trict states b etw een y ea r -e n d 1 9 6 0 and 1 9 6 4 . L e t’s n o w tak e a b rief lo o k at h o w e a c h in stru m en t w o rk s in c o n ju n ctio n w ith P IF , after w h ich w e ’ll return to rev ie w th e results o f their u se. P I F ’s m o s t p ro m in en t h elp er in th e resid en tia l m o rt g age m ark et during the 1 9 5 0 ’s w a s th e G o v e rn m en t u n d er w ritten m ortgage. F ro m in ce p tio n , b o th th e V A -g u a r a n te e d and th e F H A -in su r e d m o rtg a g e h a v e had o n e o u tsta n d in g p lu s and o n e eq u a lly o u tsta n d in g m in u s in term s o f their c o m p etitiv en ess in the ca p ita l m ark ets. W h en p rop erly ad m in istered , th ey are virtu a lly risk -free as to p rin cip al. A t the sam e tim e, th eir flex ib ility as ca p ita l m a rk et in stru m en ts is in h ib ited b y th eir co n tra ct rate ceilin g s. T o m e e t m ark et y ield s, th eir m a rk et p rice u su a lly m u st b e ad ju sted , eith er b y d isc o u n tin g or b y a d d in g a p rem iu m . T h is m eth o d o f ad ju stm en t to im p ro v e th e G o v e r n m e n t un d erw ritten m o rtgage d o es n o t m a k e it fu lly c o m p e titiv e w ith oth er ca p ita l m ark et in stru m en ts u n d er all co n d itio n s. P articularly w h en d em a n d for fu n d s is o u tra cin g th e a v a il ab le su p p ly , n u m ero u s d ifficu lties ap p ear. H o w e v e r , w h en the o p p o site is true and P IF is d o m in a n t, th e ad ju stm en t is a v ery effe c tiv e to o l in in flu en cin g b o th th e a v a ila b ility and c o st o f fu n d s. T h e fo llo w in g ta b le illu stra tes h o w th is m eth o d o f a d ju stm en t h as w o rk ed o u t from th e p eriod o f p ea k gross y ield s o f 6 .2 4 p e rcen t o n F H A m o rtg a g es in la te 1 9 5 9 to the p r e sen t 5 .4 5 p ercen t. Market Differentials in FHA Mortgage Prices Price as a Percentage oj Face Amount Differential U. S. A verage Northeast Southeast ,S E/U .S. S E /N E Sept. June Dec. Apr. Sept. June Dec. Dec. Dec. June Aug. 1, 19591 1, 1960 1, 1960 1, 1961“ 1, 19613 1, 1962 1, 1962 1, 1963 1, 1964 1, 1965 1, 1965 1Based on 5%% -Based on 5V2% "Based on 514% Source: Federal 95.8 96.6 97.7 97.7 96.5 97.2 97.8 98.5 98.6 98.6 98.6 97.7 91A 99.3 98.7 97.3 98.0 99.1 99.6 99.8 99.7 99.7 95.0 96.3 97.4 97.5 96.0 96.6 .8 .3 .3 .2 .5 .6 .4 .5 .6 .4 .3 91A 98.0 98.0 98.2 98.3 2.7 1.1 1.9 1.2 1.3 1.4 1.7 1.6 1.8 1.5 1.4 new-home mortgages (Sec. 203), 25 year, 10% downpayment. new-home mortgages (Sec. 203), 25 year, 10% downpayment. new-home mortgages (Sec. 203), 25 year, 10% downpayment. Housing Administration news releases. C o n v e n tio n a l m o rtg a g es, o n th e o th er h an d , h ave greater flex ib ility at th e p o in t o f o rig in a tio n b u t la ck the risk p r o tec tio n o f p rin cip a l o f th e F H A and V A m ortgages. T h e ap p raisal and d isc o u n tin g p ro c ess o f th e fin ish ed or p r o sp ec tiv e co n tr a c t is m u ch m o re in d iv id u a lized . P IF m u st th erefo re rely m o re h ea v ily u p o n h is in tra -reg io n a l orig i n atin g and serv icin g a g en ts— th e m o rtg a g e b a n k ers— to see th at m a x im u m c o m p e titiv e n e ss a tten d s th eir offerings. It is prim arily up to th em to fo llo w and to serve th e sh ifts in e c o n o m ic b a se, ty p es o f h o u sin g d em a n d , and th e o v era ll c r ed it-w o rth in ess o f their clien te le . R e g io n a l S h if t s in C o n s t r u c t io n M a rk e ts T h is reg io n h as b e c o m e a stron ger partn er o f P IF during th e p ast fo u r years. Its g ro w th rate in v irtu a lly all o f the fa cto rs th at en la rg e h o u sin g and o th er co n str u ctio n d em an d su b sta n tia lly e x c e e d e d th a t o f th e U n ite d S tates as a w h o le. T h e se fa cto rs in clu d e p o p u la tio n , n o n fa rm em p lo y m en t, to ta l p erso n a l in c o m e , per ca p ita p e r so n a l in c o m e , and p o p u la tio n sh ifts fro m rural to u rb an cen ters. G row th rates in the r e g io n ’s m ea n s o f fin a n cin g th e se in creased co n stru ctio n d em a n d s a lso e x c e e d e d n a tio n a l rates bu t b y m u ch sm a ller m argin s. O u r m o rtg a g e b a n k ers th u s team ed u p w ith P IF to b rid ge th e gap. T h e co n to u r s o f su rgin g c o n str u c tio n d em a n d in this D istr ic t are sh o w n in th e u p p er p a n e l o f th e ch art o n P a g e 3. D u r in g 1 9 6 1 - 6 4 , th e six -sta te a g gregate o f c o n stru ctio n co n tr a c t aw ard s w a s $ 4 b illio n , or 3 2 p ercen t, h igh er th an in th e p r eced in g fo u r yea rs o f h ea v y b u ild in g. T h e in tra -reg io n a l p attern o f g ro w th , h o w e v er, w a s q u ite d ifferen t in th e tw o p erio d s. F lo r id a and L o u isia n a had led th e u p su rg e in th e 1 9 5 7 - 6 0 p erio d , w h ile G e o rg ia , T e n n e sse e , and M ississip p i w ere th e lea d ers in th e current e x p a n sio n . A la b a m a a lso e x c e e d e d th e six -sta te grow th rate in th e cu rren t p er io d , b u t F lo r id a and L o u isia n a , c h iefly b e ca u se o f a la te start in th e 1 9 6 1 reco v ery , fell c o n sid e r a b ly b e lo w th e re g io n a l a verage. M ea su red in term s o f p er cen ta g e c h a n g e s b e tw e e n lo w s in th e tw o p erio d s, L o u isia n a e x p er ie n c e d th e sm a llest in c rea se— o n ly •2 • R ates of C hange in R esid en tia l C onstruction C onstruction C ontracts in th e Sixth D istrict P e rc e n t P e rc e n t C ontract Volum e Sixth District States, 1961 through 1964 Base, Average of 1959-60 Volume 4-Year Total 1961-64 Total 1964 4-Year Average 1964 as a as a Percentage Percentage of Base of Base (Millions of Dollars) Alabama 204.7 Florida 919.8 Georgia 292.8 Louisiana 232.5 Mississippi 98.5 Tennessee 224.2 Total, Six States 1,972.6 Source: Data computed from “Construction Contracts Bulletin,” Regions III and VI, F. W. Dodge Corporation. District construction has expanded sharply over the current economic expansion. Lumping of large industrial, utility, and missile-space contracts produced most of the sharp fluctuations. Residential contract volume, while more stable, also exhibited strength. R esid en tia l C onstruction in th e Sixth D istrict ♦January-June 1965. Source: D ata computed from “Construction Contracts Bulletin,” Regions III and VI, F. W. Dodge Corporation. Steady expansion in dwelling units and in dollar volume of residential construction took place from 1961 through mid-1965. Areas outside the 26 standard metropolitan areas sharply in creased their share of both dwelling units and dollar volume of contracts beginning in 1963. The apartment boom helped to maintain dwelling unit volume in the larger metropolitan markets. 1 .7 p ercen t— w h ile F lo rid a and M ississip p i rep orted in cr e a ses o f o n ly 5 .6 and 6 .4 p ercen t, r e sp ectiv ely . T e n n e s se e , G eo rg ia , and A la b a m a ex p e r ie n c e d ga in s b etw e e n th e tw o lo w p o in ts o f 4 6 .9 , 4 0 .9 , and 3 1 .7 p ercen t, r e sp e c tiv ely. R e sid e n tia l h o u sin g in th e D istr ic t ex p a n d e d so m ew h a t less rap id ly th an to ta l co n stru ctio n th ro u g h 1 9 6 3 . H o w ever, it h as b e e n m o re stab le th ro u g h o u t th e p erio d in to ta l v o lu m e o f an n u al co n tra ct aw ards. S in ce 1 9 5 7 , v o lu m e h as fa lle n b e lo w th at o f th e p r ev io u s year o n ly o n c e . T h is o ccu rred in 1 9 6 0 , w h e n th e six -sta te reg io n w a s retreatin g so m e $ 2 8 0 m illio n fro m a $ 2 . 1 -b illio n h o u sin g y ea r and w h e n F lo r id a a lo n e a cco u n te d fo r m o re th a n $ 1 5 4 m illio n o f th e d eclin e. M o reo v er, stren gth in th e resid en tia l secto r 1,091.1 3,683.1 1,749.9 1,254.2 514.1 1,189.1 9,481.5 343.2 1,035.1 535.0 419.2 162.6 371.2 2,866.3 133.3 100.1 149.4 134.9 130.5 132.6 120.2 167.7 112.5 182.7 180.3 165.1 165.6 145.3 h as b ee n e sp e c ia lly w ell d isp ersed in th e reg io n — b o th for the fou r years as a w h o le and fo r th e la st y ea r, 1 9 6 4 . S till a n o th er sh ift ap p eared and b ec a m e p articu larly n o tice a b le in 1 9 6 3 . C o n stru ctio n v o lu m e in th e D istrict’s n o n m etr o p o lita n areas b eg a n to ex p a n d fa ster th an in the 2 6 m etro p o lita n areas. T h e lo w er p a n el o f th e ch art sh ow s th at g row th “ o u tsid e th e 2 6 m etro p o lita n a rea s” w as greater in d o lla r v o lu m e th an in n u m b er o f d w ellin g units. T w o fa cto rs la rg ely a c c o u n ted fo r this ch a n g ed rela tio n ship. F irst, th e m u lti-fa m ily ap artm en t b o o m in th e larger c itie s, in v o lv in g lo w er o u tla y s per h o u sin g u n it, accelerated in 1 9 6 3 ; se c o n d , th e sm a ller cities and n o n u rb a n areas b eg a n to b u ild a greater v o lu m e o f m o re e x p e n siv e and larger sin g le -fa m ily d w ellin g s. Sharp c h a n g es in d em an d for n ew h o u sin g and for m o rtg a g e fu n d s a lso ap p eared w ith in th e D istr ic t’s 2 6 m etro p o lita n areas. In a n u m b er o f th e largest and m ed iu m -siz e cities, th e ratio o f n ew d w ellin g u n its to h o u se h o ld fo rm a tio n s a veraged less th an o n e o v er th e fou r years. In so m e c a se s, this ratio fell as lo w as .2 in th e sm a ller c ities. O u t o f th e to ta l o f 2 6 , e le v e n areas fe ll b e lo w .7 5 , and five areas h ad a ratio o f .5 or lo w er. In m o st o f th ese c a ses, e x c e ssiv e o v er-b u ild in g in th e la te 1 9 5 0 ’s or rela tiv ely large d ec lin e s in th e d em a n d fo r m ilita ry h o u sin g or h o u sin g a sso c ia te d w ith o th er G o v er n m en t p ro jects had o ccu rred . O n th e o th er h an d , a few cities h a d ratios for th e fo u r years o f 2 .0 or m o re, as large sh ifts in m ilitary and sp a ce req u irem en ts in or near th eir m etro p o lita n areas b o o ste d h o u sin g d em an d . In a n u m b er o f o th er cities, su sta in ed p o p u la tio n ex p a n sio n and e c o n o m ic grow th u n d erw rote co n tin u e d h ig h le v e ls o f h o u sin g ou tp ut. L ast year, m o re th an 7 0 p ercen t o f th e 2 6 m etro p o lita n areas w ere p ro d u cin g o n e or m o re d w ellin g u n its fo r e a ch n ew h o u se h o ld fo rm a tio n . S u ch are th e h ig h lig h ts o f a fo u r-y ea r resid en tia l c o n stru ctio n b o o m th at h as e x c e e d e d $ 2 b illio n in e a ch year and th at rea ch ed a lm o st $3 b illio n in 1 9 6 4 fo r this six sta te region . B e fo r e c o n c lu d in g th at P IF is w o n d e r fu l, h o w ever, it is u se fu l to rem em b er th at h e is also trea ch erou s. T h o se w h o en jo y h is fa v o rs are m o st v u ln era b le w h en th ey are stretch in g to ta k e fu llest a d van tage o f h is larg esse. T h e e c o n o m ic secto r or g ro w in g reg io n th at n eed s his c o n tin u in g h elp m u st th erefo re strike a b a la n ce b e tw e en sh ortan d lo n g -term b en efits. D u r in g p erio d s o f fa v o ra b le ca p ita l av a ila b ility and c o sts, it m u st co n tin u e to u p g ra d e ch a n n els o f a c cess to th e ca p ita l m ark ets u n d er p o te n tia lly less fa v o ra b le co n d itio n s. W h a t is th e e v id e n c e th a t th is reg io n h as m a d e so m e strid es in th is d irection ? •3 • G a in s a n d R isk s U n d e r PIF G a in s and risks u n d er P IF du rin g th e p ast fo u r years can b e id en tified in th e th ree areas a lread y ex p lo r ed , i.e., the ch a n g in g e c o n o m ic b a se, th e in stru m en ts o f m o rtg a ge c a p i tal im p o rta tio n , and th e fa m ily o f m a rk et in term ed ia ries serving this region. E v id e n c e confirm s th at th is reg io n h as im p ro v ed its e c o n o m ic b ase o v er the p a st fou r y ea rs, and cu rren t data for em p lo y m en t, in c o m e , and ca p ita l ex p en d itu res on n ew and ex p a n d ed p lan ts su g g est th at this gro w th is co n tin u in g . T h e relative im p o rta n ce o f co n str u c tio n in to ta l e c o n o m ic activity o n a reg io n a l b asis is d ifficult to ascertain , h o w ever. N ev e r th e le ss, the b e h a v io r o f co n str u c tio n e m p lo y m en t and o f in co m e fro m this so u rce su g g ests th at th e co n tin u in g h igh lev els o f co n str u c tio n are n o t o u t o f lin e w ith grow th in oth er reg io n a l in d icators. T h e ratio o f p erso n a l in co m e d eriv ed fro m co n tra ct co n stru c tio n to to ta l in c o m e is o n e m ea su re. W h ile this ratio w as sligh tly h igh er in 1 9 6 4 than in 1 9 6 1 in five o f th e six D istrict states, it w as m u ch lo w er th an in 1 9 5 7 or 1 9 6 1 . T h e sam e gen eral pattern is ev id e n t in th e b road er ratio o f w age and salary d isb u rsem en ts in co n str u c tio n , in su ra n ce, and real esta te to tota l w a g e and salary d isb u rsem en ts. W h ile n o t c o n c lu siv e , th ese tren d s su g g est th at c o n str u c tio n in this region , as in th e n a tio n , rep resen ts a d eclin in g p ro p o rtio n o f gross p rod u ct. O ur o cc u p a n c y p attern s and th e tren d s o f c o n stru ctio n in sp ecific m etro p o lita n m ark ets su g g est th at m o st o f the im p a ct o f sharp ch a n g es in D e fe n se n ee d s, sp a ce sp en d in g , and o v er-b u ild in g in th e late 1 9 5 0 ’s is u n d er co n tro l. T h e n um ber o f w ea k h o u sin g m ark ets d ec lin e d du rin g 1 9 6 4 and has co n tin u ed to d o so th rou gh m id -1 9 6 5 . T h ere ex ists, n ev erth eless, the risk th at so m e o f th ese m ark ets, th o u g h im p rovin g, m a y n o t co m p a r e fa v o ra b ly w ith oth er op p o rtu n ities for in v esto rs as fu n d s b e c o m e tighter. It seem s rea so n a b le to e x p e c t th at th e m ajor trends u n d erlyin g the recen t im p r o v e m e n t in this re g io n ’s e c o n o m ic b ase w ill co n tin u e . In d ee d , o n e o f th e m ajor factors that n o w appears lik ely to w e a k e n P IF w ith resp ect to m o rtgage in v estm en t is th e co n tin u in g e x p a n sio n o f c o r p orate n eed s for in v estm en t fu n d s. T h is a rea ’s p a rticip a tio n in n ew ca p ita l sp en d in g by su ch co r p o ra tio n s has b een stron g, h o w ev er, and th ere is n o p resen t su g g estio n th at it w ill ch a n g e greatly in th e n ear future. T h is reg io n also im p ro v ed th e in stru m en ts th rou gh w h ich it tap s th e n a tio n a l ca p ita l m a rk et for m ortgage m o n e y during the 1 9 6 1 - 6 4 p eriod . P artial ev id e n c e o f this im p ro v em en t is th a t th e d isc o u n t for G o v e r n m e n t un d erw ritten m o rtg a g es n o t o n ly te n d ed to g ro w sm aller, b u t th e sp read again st th e S o u th e a st a lso te n d ed to narrow . T h e q u a lity o f c o n v e n tio n a l m o rtg a g es as c o m p e titiv e c a p ital im p orters a lso rose if o n e m a y ju d g e b y th e rela tiv e in c r e a se in th eir u se. T h e r e g io n ’s u p g ra d ed e c o n o m ic b a se u n d o u b ted ly a cc o u n te d fo r part o f th e im p ro v ed a ccep t an ce o f b o th ty p es o f m o rtg a g es. It se e m s lik e ly th at th e r e g io n ’s m o rtg a g e b a n k ers and th o se p erfo rm in g m o rtgage b a n k in g fu n ctio n s p la y e d an im p o rta n t r o le th rou gh gro w th in e x p e r ie n c e in risk u n d erw ritin g , m o re effectiv e serv icin g , and greater flex ib ility . T h is b rings us to o n e o f th e m o re fa v o ra b le a sp ects o f th e o u tlo o k fo r c o n tin u e d h ig h le v e ls o f c o n str u ctio n and o f h o u sin g in p articu lar. In th e p o stw a r p erio d , this region has reacq u ired a v a lu a b le a sset in its n etw o rk o f m ortgage b a n k in g fa cilities. T h e se ca p ita l m a rk et in term ed iaries sp e c ia liz in g in th e im p o r ta tio n and a d m in istration o f m o rtg a g e fu n d s h a v e a c co m p lish e d su b sta n tia l c o n so lid a tio n and im p r o v em e n t in th eir te c h n iq u e s du rin g th e cu r rent p erio d o f reg io n a l grow th . T h e y h a v e a c tiv ely p a rtici p a ted in th e u p g ra d in g o f th e F H A - V A m o rtg a g e as a ca p ita l m a rk et in stru m en t th ro u g h le g isla tiv e an d ad m in is trative c h a n g es. P resen tly , th e y are serv icin g a large and g ro w in g sh are o f b o th G o v e r n m en t u n d erw ritten and c o n v e n tio n a l m o rtg a g es an d in m o s t ca se s h a v e m a in ta in ed d e lin q u e n c y and fo r ec lo su re rates lo w e r th an th e n ation al average. B y and large, th ese m o rtg a g e b a n k ers (in c lu d in g m a n y in the m a rk et w h o d o n o t lim it th eir a ctiv ities to this field, su ch as c o m m e r cia l b a n k s, real e sta te d e v e lo p m e n t firm s, and sev era l o th er ty p es o f firm s) h a v e d isp la y ed flex i b ility in servin g th e ch a n g in g n ee d s o f th e region . A id e d b y their in v esto rs an d in so m e c a se s b y th e regu latory au th o rities, th ey se e m to h a v e lea rn ed h o w to d etect at an earlier stage th o se w e a k e n in g m a rk ets th at sh o u ld n ot be o v ersu p p lie d w ith fu n d s. M o r e o v e r, th e sam e p artn er sh ip has d e v e lo p e d m ea n s o f e v a lu a tin g and im p rovin g the m a rk eta b ility o f h o u sin g and o th er large p ro jects and has u p grad ed th e u n d erw ritin g fu n c tio n in th e field. W ays also h ave b e e n fo u n d to aid b u ild ers and sp o n so rs d irectly in their c o st-c u ttin g and m a rk etin g a ctiv ities. A t th e sam e tim e, th e D istr ic t’s im p o rters o f m o rtg a g e fu n d s have a v o id ed m a n y o f th e p ra c tice s th a t e v e n tu a lly sw a m p ed their p red ec e sso rs in th e 1 9 2 0 ’s and in so m e earlier p eriod s. It seem s rea so n a b le to c o n c lu d e th at w h a tev er the d e gree o f P I F ’s a m ity fo r th is reg io n in th e n ear future, h is frien d sh ip in th e p a st h as n o t b e e n o v e r ly ab u sed . S om e m ista k es o f ju d g m en t and so m e in c re a se s in risks in so m e m ark ets h a v e o ccu rred . O n b a la n c e, h o w e v e r , P I F ’s c o n tin u ed c o o p e r a tio n u n d er ch a n g in g ca p ita l m a rk et co n d i tio n s se e m s a r e a so n a b le e x p e c ta tio n . H ir a m J. H o n e a Alabama’s Economy Emits a Healthy Glow E m p lo y m e n t b u lletin s from A la b a m a cu rren tly co n v ey g o o d n ew s a b o u t th e sta te ’s e c o n o m ic w ell-b e in g . T h e im p ressiv ely lo n g u p w ard tren d in n o n fa rm e m p lo y m en t has b een further e x ten d e d , and u n e m p lo y m e n t h as d w in dled. In A u g u st this yea r, u n e m p lo y e d w o rk ers in A la b a m a co v ered b y th e State In su ra n ce P rogram n u m b ered o n ly 1 3 ,3 1 7 , and th e se a so n a lly ad ju sted u n e m p lo y m e n t rate w a s 2 .3 , co m fo r ta b ly b e lo w th e 4 - to 5 -p er c e n t rate p re v a ilin g in m u ch o f 1 9 6 2 , 1 9 6 3 , and ea rly 1 9 6 4 . T h e se gain s left o n ly th ree sm a ll to w n s in A la b a m a — C la n to n , H eflin , an d Jasp er— cla ssified as areas o f su b sta n tia l u n e m p lo y m e n t in J u ly 1 9 6 5 . T h e sta te ’s tw o m a jo r c ities, B irm in g h a m and M o b ile , w ere cla ssified as h a v in g m od era te u n e m p lo y m e n t— 3 to 6 p e rcen t o f th e to ta l w o rk fo r c e — •4 • in th at m on th . T h e se im p ro v em en ts, m o rev er, occu rred in c o n ju n ctio n w ith ex p a n sio n s in b o th th e sta te ’s p o p u la tio n and lab or force. F a c t o r ie s Hum O u t s id e W h ile m u ch o f th e e c o n o m ic stea m in A la b a m a has b een gen erated b y th e step p ed -u p o p era tio n s o f n o n fa rm b u si n ess firm s and o f F ed era l, state, and lo c a l g o v ern m en t a g e n cies, the h o ttest b oilers h a v e b e e n in th e b u stlin g m a n u fa ctu rin g sector. L ead in g the u p w ard m o v e m e n t in m a n u fa ctu rin g e m p lo y m en t from 1 9 6 1 to 1 9 6 5 w ere firm s in the tran sp ortatio n eq u ip m en t, m a ch in ery and elec trica l eq u ip m en t, apparel, ch e m ica ls, p a p er and allied p ro d u cts, fab ricated m etals, and p rim ary m eta ls in d u stries. In July 1 9 6 5 , th ese in d u stries w ere e m p lo y in g ab o u t h a lf o f A la b a m a ’s 2 7 6 ,3 0 0 m an u fa ctu rin g w ork ers, a cco rd in g to the A la b a m a D ep a rtm en t o f In d u strial R e la tio n s. M o re o v er, w orkers in th ese m an u fa ctu rin g in d u stries h a v e b een receiv in g rela tiv ely high h o u rly earn in gs. T h o se e m p lo y e d in the p rim ary m eta ls industry, for ex a m p le , averaged $ 3 .1 5 an h ou r in July 1 9 6 5 , and th o se at ch e m ic a l firm s averaged $ 2 .5 1 an hour. A p p a re l w o rk ers, h o w ev er, r eceiv ed an average h ou rly w a g e o f o n ly $ 1 .4 6 . V irtu a lly th e sam e p ictu re em erg es w h e n w e n arrow ou r fo cu s to ch a n g es in the m a n u fa ctu rin g w o rk fo rce in the m ore recen t July 1 9 6 3 -J u ly 1 9 6 5 p erio d . A g a in the tra n sp ortation eq u ip m en t and m a ch in ery firm s h a v e e x p e rien ced the g reatest grow th in th e n u m b er o f w ork ers e m p lo y ed , w h ile ch em ica l and a p p arel firm s ran a c lo se se c o n d and third. P u lp and p ap er an d prim ary m eta ls firm s a lso g ave a p o w erfu l b o o st to e m p lo y m en t in this p eriod . O n th e oth er h an d , em p lo y m e n t h as in crea sed at a rela tiv ely slo w er rate in the tim ber and w o o d p ro d u cts and fo o d in d u stries. A la b a m a ’s saw m ills and p la n in g m ills a ctu a lly cu t Employment in Alabama, by Industry Classification (Thousands of Employees) Classification July 1961 July 1965 Percentage Change from J ulv 1961 231.2 542.4 773.6 276.3 591.3 867.6 + 19 + 9 + 12 23.2 8.0 43.6 11.5 9.3 8.9 23.0 37.0 26.1 12.2 5.7 8.5 23.9 8.1 48.1 13.7 13.3 17.2 24.9 37.1 36.5 14.2 6.4 11.0 + 3 + 1 + 11 + 19 + 43 + 93 + 8 + 0 + 40 + 16 + 12 + 29 11.8 43.9 7.7 51.7 -35 + 18 49.3 148.4 33.2 93.9 161.9 68.5 93.4 50.0 165.0 35.4 107.9 173.7 66.8 106.9 + 1 + 11 + 7 + 15 + 7 - 2 + 14 Nonagricultural Manufacturing Nonmanufacturing Total Manufacturing, selected subclasses Lumber and wood products Stone, clay, and glass Primary metals Fabricated metals Machinery, including electrical Transportation equipment Food Textile mill products Apparel Paper and allied products Printing and publishing Chemicals and allied products N onmanufacturing Mining and quarrying Contract construction Transportation, communications, and public utilities Trade Finance, insurance, and real estate Service and miscellaneous Government, total Federal State and local Source: Alabama Department of Industrial Relations. b a ck th eir aggregate w o rk fo rce. T e x tile e m p lo y m e n t also h as e x p a n d ed less rap id ly th an o th er seg m en ts o f m a n u factu rin g during this p eriod . th e F a c t o r ie s N o n m a n u fa c tu rin g e m p lo y m en t m o v e d u p at a slo w er rate th an m a n u fa ctu rin g e m p lo y m e n t in th e 1 9 6 1 -6 5 p eriod m a in ly b e c a u se few er w ork ers w ere e m p lo y e d in m in es and quarries and em p lo y m e n t in the tran sp o rta tio n , c o m m u n ica tio n , and p u b lic u tilities secto rs ro se rather slow ly. A siza b le g a in in co n str u c tio n em p lo y m e n t and a h ea lth y rise in to ta l g o v ern m en t em p lo y m e n t spurred th e in crease. H o w e v e r , th e m ajor im p etu s for n o n m a n u fa ctu rin g e m p lo y m e n t stem m ed from a ctive hiring b y trad e, c o n stru c tio n , and serv ice firm s, w h ich to g eth er e m p lo y a b o u t 5 5 p ercen t o f A la b a m a ’s n o n m a n u fa ctu rin g w o rk force. T h e se p attern s h a v e p ersisted from J u ly 1 9 6 3 to July 1 9 6 5 , alth o u g h n o t w ith o u t so m e m o d ifica tio n s. T h e g ro w th rate in fin an ce, in su ra n ce, real esta te, and services e m p lo y m e n t slo w ed a p p reciab ly. O n th e o th er h an d , fa v o r ab le d ev e lo p m e n ts in th e c o a l in d u stry m o d era ted th e d ro p off in e m p lo y m e n t th at has afflicted th e m in in g and quarry in g secto r for so m e tim e. F arm e m p lo y m en t has c o n tin u ed to d w in d le, reflectin g th e lo n g -term d o w n tren d stem m in g largely fro m the c h a n g ed in c o m e a ltern atives for farm lab orers and o p er ators. M a n y o f th ese w ork ers ap p aren tly are b e in g ab so rb ed in to n on farm job s. In v e s tm e n ts Spur A c t iv it y In c o n sid era b le d eg ree, A la b a m a ’s fa v o ra b le e m p lo y m en t tren d s reflect the large in v estm en ts m a d e for b u ild in g n ew in d u strial p la n ts, e x p a n d in g e x istin g p la n ts, an d m o d ern izin g m a n y e sta b lish ed p ro d u ctio n fa cilities. A c c o r d in g to th e A la b a m a State P la n n in g and In d u stria l D e v e lo p m e n t B o a rd , a record $ 4 0 6 m illio n to ta l in v e stm en t for th ese p u rp o ses w a s a n n o u n ced in 1 9 6 4 . In 1 9 6 3 and 1 9 6 2 , th e to ta ls w ere a lso large, $ 3 3 7 m illio n an d $ 1 4 3 m illio n , resp ectiv ely . M e ta l p ro d u cin g and fa b rica tin g p lan ts, p u lp and p a p er p la n ts, tex tile p la n ts, and c h e m ic a l p lan ts attracted n ew fu n d s in large am o u n ts. S ch ed u led e x p a n sio n o f a n y lo n p la n t near M o b ile w ill m a k e it th e largest o f its ty p e in th e n ation . A c c o m p a n y in g th ese in crea ses in p ro d u ctiv e c a p a city h as b e e n an em p h a sis o n th e a p p lica tio n o f c o st-cu ttin g tech n iq u es and related te ch n ica l p ro cesses. T h e first steel to b e p ro d u ced b y th e n ew b a sic o x y g en p r o cess in A la b a m a w a s tu rn ed o u t at G a d sd en in A u g u st this year. N o t o n ly w ill th e sp eed o f steel in g o t p ro d u ctio n b e m aterially in c rea sed , b u t th e o x y g e n fu rn aces w ill b e co n tr o lled b y a co m p u ter. A t th e sa m e p lan t, a $ 4 0 -m illio n e x p a n sio n to in co rp o ra te a large ste e l p la te m ill is cu rren tly u n d er w ay. B u rg e o n in g d em a n d fo r sh eet steel is o n e e le m e n t e n c o u ra g in g th ese in v estm en ts. In te x tile m ills, te c h n ica l ad v a n c e s in m a ch in ery d esig n and sy stem s and in fiber p ro c e ssin g h a v e b rou gh t a b o u t b etter lab or u tiliza tio n and im p ro v ed p la n t o p era tio n s gen erally. A la b a m a ’s im p ortan t p u lp and p ap er in d u stry a lso h as ex p e r ie n c e d p ro n o u n ced te c h n o lo g ic a l a d v a n ces, e sp e c ia lly in m e c h a n ica l h an d lin g o f p u lp w o o d and fin ish ed p ro d u cts and in th e in stru m en ta tio n o f m a c h in e p ro cesses. P la n t ex p a n sio n an d m o d e r n iza tio n a p p a ren tly w ill c o n tin u e at a rap id clip in A la b a m a fo r a w h ile lon ger. •5 • F ro m Jan uary 1 9 6 5 th ro u g h m id -y ea r, n ew co m m itm e n ts for th ese p u rp o ses to ta le d $ 2 0 0 m illio n , a cco rd in g to th e S tate C h am b er o f C o m m erce. P la n s fo r e x c e p tio n a lly large in v estm en ts in p la n t and e q u ip m en t n a tio n a lly , as an n o u n c e d b y m ajor in d u stries, im p ly c o n tin u e d g ro w th in A la b a m a as w ell. O n to p o f th is, th ere w ill b e so m e im p a ct from F ed era l, state, and lo c a l g o v e r n m e n t sp en d in g for a m u ltitu d e o f p u rp o ses in A la b a m a . B rid g e, road , and s c h o o l co n stru ctio n and o th er p u b lic w o rk s lo n g h a v e b e e n a p o sitiv e e c o n o m ic fo rce in th e state. F e d era l e x p e n ditures in H u n tsv ille, A la b a m a , fo r sp a c e ex p lo r a tio n c o n tinu e to be large, and th e m ilitary b u ild -u p b eg u n this year n o d ou b t w ill h ave an ex p a n sio n a r y effect u p o n th e state. In c o m e s R is e T h e ex p a n sio n in A la b a m a ’s m a n u fa ctu rin g e m p lo y m e n t and in seg m en ts o f its n o n m a n u fa ctu rin g e m p lo y m e n t in d u ced certain sn o w b a llin g effects in th e sta te ’s e c o n o m ic activity. A la b a m ia n s’ in c o m es h ave risen, and th eir sp e n d in g for co n su m er item s h as m o v e d in to h igh er gear. T o ta l p erso n a l in c o m e in the state has in crea sed virtu a lly w ith o u t in terru p tion sin ce J u ly 1 9 6 3 and in Ju ly 1 9 6 5 sto o d at $ 6 .8 b illio n o n an ann u al se a so n a lly ad ju sted b a sis, ac cord in g to estim a tes o f th is B a n k . T h e sh arp ly rising b an k d eb its in the p ast year reflect in crea sed co n su m e r sp en d in g as d o the step p e d -u p sa les in certa in retail esta b lish m en ts su ch as restau ran ts. In th e e n d , o f co u r se, o v era ll em p lo y m en t gain s m irror th e sp en d in g o f c o n su m ers as w ell as the in v estm en ts and sp en d in g o f b u sin e sses and g o v ernm ents. F u rth e r E m p lo y m e n t G a in s P o s s ib le ? W ith the u n e m p lo y m en t rate in A la b a m a n o w sign ifican tly red u ced , the p o o l o f e m p lo y a b le w ork ers g ro w in g rela tiv ely slo w ly , and m an y stu d en t p a rt-tim e w ork ers b a ck in sc h o o l, w ill further in creases in to ta l n o n fa rm e m p lo y m en t o ccu r in A la b a m a th rou gh early 1 9 6 6 ? J u d gin g fro m th e m ajor e le m en ts in the situ ation , th e an sw er c o u ld b e a q u alified yes. A further m o d est gro w th sh o u ld o cc u r in th e a v a ila b le lab or su p p ly for n on farm jo b s. T h en , to o , th e m a n u fa ctu r in g in d u stries ex p erie n c in g th e g rea test in crea ses in recen t years p ro b a b ly w ill co n tin u e to p r o v id e a m a rk et for A la b a m a labor. T h e final o u tc o m e fo r e m p lo y m e n t and for A la b a m a ’s e c o n o m y , h o w ev er, d e p en d s u p o n th e n a tio n a l e c o n o m y ’s p rogress. S h o u ld th e n a tio n a l e c o n o m y tak e o n larger d im en sio n s in the m o n th s ah ea d , A la b a m a u n d o u b t e d ly w o u ld further en h a n ce its e c o n o m ic stan d in g. A rthur H . K antner Bank Announcements On S eptem ber 1, T h e B a n k o f G e o r g i a , Atlanta, Georgia,a state m e m b e r bank, co nverted into a national banking asso ciation under the title o f T h e N a t i o n a l B a n k o f G e o r g i a . T h e P e o p l e s B a n k o f T a m p a , Tampa, Florida, a newly organized n o n m em b er bank, o pe n ed fo r business on Sep tem ber 1 an d began to rem it at p ar fo r checks draw n on it when received fr o m the F ederal R eserve Bank. Officers are C h a r le s W . M e t z g e r , P r e s i d e n t ; a n d O r l a n d o G a r c i a , Cashier. Capital is $4 20 ,0 00 , and surplus a n d undivided profits, $1 26,000. T h e V i d a l i a B a n k i n g C o m p a n y , Vidalia, Georgia, a state m e m b e r bank, con v erted into a national banking asso ciation under the title F i r s t N a t i o n a l B a n k a n d T r u s t C o m p a n y on S ep tem b e r 15. Debits to Demand Deposit Accounts Insured Commercial Banks in the Sixth District (In Thousands of Dollars) Aug. 1965 STANDARD METROPOLITAN STATISTICAL AREASf Birmingham . . . 1,247,100 Gadsden . . . . 57,480 162,432 Huntsville . . . . 414,724 Mobile....................... 276,225 Montgomery . . . 76,211 Tuscaloosa . . . July 1965 Aug. 1964 Percent Change Year-to-date 8 Months Aug. 1965 from 1965 July Aug. from 1965 1964 1964 1,258,477 57,856 158,294 406,253r 271,418 79,515 1,156,865 56,416 149,114 374,892 254,184 70,256 —1 —1 +3 +2 +2 —4 +8 +2 +9 + 11 +9 +8 + 10 +6 +7 +8 + 10 +4 Ft. LauderdaleHollywood . . . Jacksonville . . . M iam i....................... Orlando . . . . Pensacola . . . . Tampa-St Petersburg W. Palm Beach . . 458,626 1,353,836 1,657,715 384,444 181,092 1,010,334 311,810 474,081 1,452,227 1,738,386r 410,231 180,470 1,013.819 348,028 375,308 1,112,404 1,412,151 360.084 165,602 878,620 261,645 —3 —7 —5 —6 +0 —0 — 10 +22 + 22 + 17 +7 +9 + 15 + 19 + 10 + 14 +9 +0 + 12 +7 +8 Atlanta . . . . Augusta . . . . Columbus . . . . Macon....................... Savannah . . . . 83,178 3,810,083 184,859 196,915 193,214 231,118 81,580 3,719,177r 174,847 184,453r 194,392 230,864 64,478 3,321,265 172,486 181,542 171,970 204,668 +2 +2 +6 +7 —1 +0 + 29 + 15 +7 +8 + 12 + 13 + 21 + 11 +2 +8 +9 +4 Baton Rouge . . . Lafayette . . . . Lake Charles . . . New Orleans . . . 440,341 101,988 103,767 2,007,159 459,286 106,112 115,126 2,098,803 346,864 84,050 89,370 1,730,274 —4 — 10 —4 + 27 +21 + 16 + 16 +20 + 19 +8 + 12 Jackson . . . . —A 512,675 494,994 433,463 +4 + 18 + 11 Chattanooga . . . Knoxville . . . . Nashville . . . . 486,221 416,299 1,249,128 478,789 417,176 1,204,875 410,784 352,078 1,058,620 +2 —0 +4 + 18 + 18 + 18 + 10 +9 + 10 OTHER CENTERS Anniston . . . . Dothan ....................... S e lm a ....................... 57,078 45,984 33,128 58,950 48,714 35,859 49,799 43,888 31,946 —3 —6 —8 +15 +5 +4 +7 +5 +3 . . . . . . . 31,557 42,692 194,467 75,116 34,129 49,233 204,086 83,377 20,993 39,703 152,444 65,952 —8 — 13 —5 — 10 +50 +8 + 28 + 14 +22 +1 +16 +4 . . . St. Augustine . . St. Petersburg . . Sarasota . . . . Tallahassee . . . Tampa....................... Winter Haven . . 54,750 65,817 28,592 95,054 47,938 17,839 237,995 80,259 109,539 588,958 50,107 58,149 65,802 26,775 97,690 50,487 17,949 270,906 89,926 110,281 546,959 48,502 48,999 59,958 21,552 81,340 41,433 15,590 222,870 69,046 88,466 489,604 43,556 —6 +0 +7 —3 —5 —1 — 12 — 11 —1 +8 +3 +6 +9 + 19 +11 +6 +3 +5 +4 + 15 +11 +8 Athens ....................... Brunswick . . . Dalton....................... Elberton . . . . Gainesville . . . G riffin ....................... LaGrange . . . . Newnan . . . . R o m e ....................... Valdosta . . . . 63,782 39,615 78 658 13,159 66,343 29,492 19,457 25,639 66,265 55,172 65,809 38,975 77,798 12,099 76,021 27,596 20,008 26,392 62,123 45,937 51,234 36,908 71,323 10,567 60,761 25,112 17,615 23,050 55,079 47,543 —3 +2 +1 +9 — 13 +7 —3 —3 +7 + 20 + 12 + 10 + 33 + 17 + 16 + 14 +7 + 16 + 24 + 20 + 15 + 24 +7 + 10 +25 +9 + 17 + 10 +11 + 20 + 16 Abbeville . . . . Alexandria . . . Bunkie....................... Hammond . . . . New Iberia . . . Plaquemine . . . Thibodaux . . . 10,593 105,694 5,839 26,713 32,616 8,773 17,080 9,009 103,878 4,990 29,722 33,744 9,044 20,514 7,560 97,894 4,535 25,314 27,148 7,853 15,730 + 18 +2 + 17 — 10 —3 —3 — 17 + 40 +8 + 29 +6 + 20 + 12 +9 +13 +9 + 13 + 10 +5 +8 +7 Biloxi-Gulfport . . Hattiesburg . . . La u re l....................... Meridian . . . . Natchez . . . . Pascagoula- . . . Moss Point . . Vicksburg . . . . Yazoo City . . . 85,432 44,864 34,081 61,151 28,972 86,358 47,199 37,115 62,371 28,646 70,593 41,955 31,089 53,456 29,216 —1 —5 —8 —2 +1 + 21 +7 +10 + 14 —1 + 10 +8 +5 +6 +0 53,681 33,948 46,295 44,143 33,656 27,236 46,675 30,365 43,612 + 22 +1 + 70 + 15 + 12 +6 +5 + 15 + 12 Bristo l....................... Johnson City . . . Kingsport . . . . 61,936 64,025 122,778 61,863 63,292 126,469 53,801 56,195 105,530 +0 +1 —3 + 15 + 14 + 16 + 10 +8 + 13 24,760,767 21,216,067 3,248,370r 2,975,617 7,518,480r 6,096,400 6,113,719r 5,375,695 3,488,720 2,841,725 1,126,974 1,032,837 3,264,504 2,893,793 —1 —1 —5 +1 —4 +5 +2 + 15 +8 + 18 + 15 + 18 + 14 + 15 + 10 +7 +9 + 12 + 13 +9 +8 Bartow . . . Bradenton . Brevard County Daytona Beach Ft. MyersN. Ft. Myers Gainesville . Monroe County Lakeland . . . . . . . SIXTH DISTRICT, Total 24,424,235 Alabamaf . . . . 3,210,099 Floridaf . . . . 7,174,511 6,182,450 Georgiat . . . . 3,348,471 Louisianaf* . . . 1,178,147 Mississippif* . . Tennesseef* . . . 3,330,557 ♦Includes only banks In the Sixth District portion of the state. r Revised. •6 • + 15 +3 + 14 +8 +8 +11 +5 +2 +6 + 10 fPartially estimated, Sixth District Statistics Seasonally Adjusted (All data are indexes, 1957-59 Latest Month (1965) One Month Ago Two Months Ago 100, unless indicated otherwise.) One Year Ago Latest Month (1965) One Month Ago Two Months Ago One Year Ago 9,037 169 140 143 8,928 164 122 135 8,357 149 107 140 SIXTH DISTRICT G EO RG IA INCOME AND SPENDING Personal Income, (Mil. S, Annual Rate)*** Manufacturing P a y r o lls .................................. Farm Cash R e c e ip t s ........................................ Crops ............................................................... Livestock ......................................................... Department Store Sales*/ * * ....................... Instalment Credit at Banks, *(Mil. ) New Loans ......................................................... Repaym ents................................................... INCOME AND SPENDING Personal Income, (Mil. $, Annual Rate)*** Manufacturing P a y r o lls ................................... Farm Cash Receipts ........................................ Department Store S a l e s * * ............................ July 9,152 Aug. 171 July 121 Aug. 148 PRODUCTION AND EMPLOYMENT Nonfarm Employment........................................ M anufacturing.............................................. Nonmanufacturing........................................ Construction.............................................. Farm Employment.............................................. Insured Unemployment, (Percentof Cov. Emp.) Avg. Weekly Hrs. in Mfg., (Hrs.) . . . . Aug. Aug. Aug. Aug. Aug. Aug. Aug. 123 120 125 136 77 2.0 41.0 123 119 124 136 83 1.8 41.1 122 119 123 134 68 1.7 40.9 117 113 119 126 82 2.6 40.7 FINANCE AND BANKING Member Bank L o a n s ........................................ Member Bank Deposits .................................. Bank D e b its * * ................................................... Aug. Aug. Aug. 219 176 177 214 173 178 213 174 177 184 152 161 INCOME AND SPENDING Personal Income, (Mil. $, Annual Rate)*** Manufacturing P a y r o lls .................................. Farm Cash Receipts ........................................ Department Store S a l e s * / * * ....................... July Aug. July Aug. 7,383 157 137 136 7,287 160 126 131 7,202 155 115 125 7,045 137 133 126 PRODUCTION AND EMPLOYMENT Nonfarm Employment........................................ M anufacturing.............................................. Nonmanufacturing........................................ Construction.............................................. Farm Employment.............................................. Insured Unemployment, (Percentof Cov. Emp.) Avg. Weekly Hrs. in Mfg., (Hrs.) . . . . Aug. Aug. Aug. Aug. Aug. Aug. Aug. 115 110 116 125 79 2.8 42.9 115 110 116 126 80 3.0 42.6 114 109 115 123 81 3.0 42.8 109 105 110 107 89 3.3 41.8 FINANCE AND BANKING Member Bank L o a n s ........................................ Aug. Member Bank D e p o s its .................................. Aug. Bank D e b it s * / * * .............................................. Aug. 196 139 150 192 141 154 190 139 150 165 130 134 PRODUCTION AND EMPLOYMENT Nonfarm Employment........................................ Manufacturing.............................................. Apparel......................................................... Chemicals................................................... Fabricated M e t a ls .................................. Food............................................................... Lbr., Wood Prod., Furn. & Fix. . . . Paper ......................................................... Primary M e t a ls ........................................ Textiles......................................................... Transportation Equipment . . . . Nonmanufacturing........................................ Construction.............................................. Farm Employment.............................................. Insured Unemployment, (Percent of Cov. Emp.) Avg. Weekly Hrs. in Mfg., (Hrs.) . . . . Construction Contracts*.................................. Residential ................................................... All O th e r ......................................................... Industrial Use of Electric Power . . . . Cotton Consum ption**.................................. Petrol. Prod, in Coastal La. and Miss.** July 48,564 Aug. 170 July 132 July 122 July 134 Sept. 145 47,404 168 127 120 131 153 47,568 165 124 144 116 146 44,817 150 116 105 119 136 Aug. Aug. 219 220 221r 197 218 190 174 190 Aug. Aug. Aug. ^ug. Aug. Aug. Aug. /'ug. Aug. Aug. Aug. Aug. Aug. Aug. Aug. Aug. Aug. Aug. July Aug. Aug. 124 123 149 119 132 109 101 110 113 99 151 124 119 72 2.4 41.7 143 173 118 132 109 182 123 123 149 118 131 109 100 111 113 99 150 123 119 79 2.4 41.3 157r 170 147 127 114 182 122 122 149 116 130 107 100 111 111 99 143 122 119 80 2.3 41.5 147 162 134 129 111 183 118 117 141 112 123 108 96 107 108 96 124 119 112 79 2.9 41.0 129 145 116 121 110 170 209 194 206 192 206 189 181 170 162 149 166 160 151 167 161 148 163 146 138 151 FINANCE AND BANKING Member Bank Loans* All B a n k s ......................................................... Aug. Leading Cities .............................................. Sept. Member Bank Deposits* All B a n k s ......................................................... Aug. Leading Cities .............................................. Sept. Bank D e b it s * / * * .............................................. Aug. MISSISSIPPI ALA BA M A INCOME AND SPENDING Personal Income, (Mil. S, Annual Rate)*** July Manufacturing P a y r o lls .................................. Aug. Farm Cash R e c e ip t s ........................................ July Department Store S a l e s * * ............................. Aug. 6,673 162 142 123 6,541 162 139 120 6,476 157 127 111 6,003 137 126 118 PRODUCTION AND EMPLOYMENT Nonfarm Employment........................................ M anufacturing.............................................. Nonmanufacturing........................................ Construction.............................................. Farm Employment.............................................. Insured Unemployment, (Percentof Cov. Emp.) Avg. Weekly Hrs. in Mfg., (Hrs.) . . . . Aug. Aug. Aug. Aug. Aug. Aug. Aug. 116 116 115 113 73 2.5 41.4 115 115 115 112 84 2.6 41.7 115 115 115 113 78 2.5 41.4 111 108 113 113 73 3.0 41.0 FINANCE AND BANKING Member Bank L o a n s ........................................ Member Bank D e p o sits .................................. Bank D e b it s * * ................................................... Aug. Aug. Aug. 199 163 157 197 160 160 200 160 154 177 147 152 FLORIDA PRODUCTION AND EMPLOYMENT Nonfarm Employment........................................ Aug. Manufacturing.............................................. Aug. Nonmanufacturing........................................ Aug. Construction.............................................. Aug. Aug. Insured Unemployment, (Percentof Cov. Emp.) Aug. Avg. Weekly Hrs. in Mfg., (Hrs.) . . . . Aug. INCOME AND SPENDING Personal Income, (Mil. $, Annual Rate)*** Manufacturing P a y r o lls .................................. Farm Cash Receipts ........................................ Department Store S a l e s * / * * ....................... July Aug. July Aug. 3,700 185 145 115 3,660 182 138 107 3,747 175 118 99 3,386 157 128 110 PRODUCTION AND EMPLOYMENT Nonfarm Employment........................................ Manufacturing.............................................. Nonmanufacturing........................................ Construction.............................................. Farm Employment.............................................. Insured Unemployment, (Percentof Cov. Emp.) Avg. Weekly Hrs. in Mfg., (Hrs.) . . . . Aug. Aug. Aug. Aug. Aug. Aug. Aug. 126 135 123 122 57 2.2 41.3 126 134 122 124 70 2.4 41.0 125 134 122 124 83 2.4 40.4 121 125 120 122 67 3.4 40.3 FINANCE AND BANKING Member Bank L o a n s ........................................ Member Bank D e p o s its .................................. Bank D e b it s * / * * .............................................. Aug. Aug. Aug. 221 173 178 220 169 164 217 168 161 199 160 164 INCOME AND SPENDING July Personal Income, (Mil. $, Annual Rate)*** Manufacturing P a y r o lls .................................. Aug. Farm Cash R e c e ip t s ........................................ July Department Store S a l e s * / * * ....................... Aug. 7,709 166 119 129 7,532 161 127 123 7,512 158 107 120 7,124 149 110 124 Aug. Aug. Aug. Aug. Aug. Aug. Aug. 124 128 123 135 74 2.4 41.5 124 128 122 137 77 2.5 40.4 122 125 120 137 79 2.5 41.4 118 121 117 130 83 3.3 40.8 FINANCE AND BANKING Member Bank L o a n s ........................................ Aug. Member Bank D e p o s its .................................. Aug. Bank D e b it s * / * * .............................................. Aug. 204 161 177 203 158 178 203 164 168 184 149 161 TENNESSEE INCOME AND SPENDING Personal Income, (Mil. $, Annual Rate)*** July 13,947 Manufacturing P a y r o lls .................................. Aug. 192 Farm Cash Receipts ........................................ July 131 Department Store S a l e s * * ............................ Aug. 192 FINANCE AND BANKING Member Bank Loans . . . . Member Bank Deposits . . . Bank D e b it s * * ............................ LO U ISIAN A 13,347 188 99 181 13,703 190 142 175 12,902 177 103 179 134 135 133 107 80 2.2 42.6 133 134 133 106 86 2.2 41.9 132 132 132 106 92 2.2 42.4 129 131 128 103 84 2.5 41.6 215 163 163 211 162 163 211 162 160 185 147 145 *For Sixth District area only. Other totals for entire six states. **D aily average basis. Department of Commerce benchmarks. r Revised. p Preliminary. PRODUCTION AND EMPLOYMENT Nonfarm Employment........................................ Manufacturing.............................................. Nonmanufacturing........................................ Construction ............................................. Farm Employment.............................................. Insured Unemployment, ( Percent of Cov. Emp.) Avg. Weekly Hrs. in Mfg., (Hrs.) . . . . * * * Figures for personal inccme reflect revision of current monthly estimates to 1964 U. S. Sources: Personal income estimated by this Bank; nonfarm, mfg. and nonmfg. emp., mfg. payrolls and hours, and unemp., U. S. Dept, of Labor and cooperating state agencies; cottcn consumption, U. S. Bureau of Census; construction contracts, F. W. Dodge Corp.; petrol, prod., U. S. Bureau of Mines; industrial use of elec. power, Fed. Power Comm; farm cash receipts and farm emp., U.S.D.A. Other indexes based on data collected by this Bank. All indexes calculated by this Bank. •7 • D IS T R IC T I-Billions ............ " " I ........... of Dollars B U S IN E S S C O N D IT IO N S M Annual Rat* o s t e c o n o m ic m e a s u r e s fo r t h e D is tr ic t s h o w c o n t in u in g g r o w th . P e r s o n a l in c o m e , b o ls te r e d by an e s t im a t e d $ 9 0 m illio n in r e tr o a c tiv e s o c ia l s e c u r it y b e n e f it s , a p p a r e n tly r o s e in S e p t e m b e r , fo llo w in g i n c r e a s e s in J u ly a n d A u g u s t. S c a t t e r e d d a ta , h o w e v e r , in d ic a t e re ta il s a l e s s lip p e d in A u g u st fro m t h e J u ly h ig h . E m p lo y m e n t g a in s c o n t in u e d in A u g u s t a lth o u g h a t a s lo w e r p a c e th a n in J u ly . In t h e fa r m e c o n o m y , g e n e r a lly g o o d p r o d u c tio n a n d p r ic e t r e n d s p r e v a ile d . T h e rap id p a ce o f D istr ic t b a n k le n d in g h as b e e n an o u tsta n d in g featu re o f th e r e g io n ’s e c o n o m ic e x p a n sio n this year. A lth o u g h b a n k len d in g ex p a n d ed stro n g ly in A u g u st, rep orts fro m b a n k s in lea d in g cities in d ica te th e S ep tem b er lo a n in crea se w a s sm a ller th an last y e a r ’s. Is th is slo w d o w n in lo a n e x p a n sio n at lea d in g city b an k s an in d ic a tio n o f a ch a n g e in tren d or m erely a tem p orary flu ctu ation ? C otton C o n s u m p tio n 6-mo. moving av«rag« -P E R C E N T OF REQUIRED R E SER V ES B o r r o w i n g s f r o m F. R. B a n k s . s i ^ r r r r , , .t t t t t . i , . , , 1963 1964 *Se a s. adj. figure; not an index. , , , i7?,°,, l 1965 F ig u res for all D istrict m em b er b a n k s sh o w th at th e rate o f e x p a n sio n o f lo a n s for the first eig h t m o n th s o f 1 9 6 5 e x c e e d s e v e n th e h ig h rate o f e x p a n sio n th at has p rev a iled sin ce th e b eg in n in g o f th e cu rren t b u sin e ss up turn in early 1 9 6 1 . A lth o u g h S ep tem b er lo a n s m ig h t h a v e b e e n e x p e c te d to b e rela tiv ely u n d ram atic after th e u n u su a lly stron g g ro w th in A u g u st, th eir p erfo rm a n ce giv es r ea so n to w o n d er w h eth er th e D istr ic t’s rate o f lo a n e x p a n sio n is m od eratin g. D istrict b a n k s h a ve ev id e n tly e x p e r ie n c e d th e sa m e h e a v y d em a n d for b u sin ess lo a n s as b an k s th ro u g h o u t th e co u n try ; w e e k ly rep ortin g m em b er ban k s record b u sin ess lo a n in crea ses m o re th an tw ic e as large th is year as last year. S in ce Ju ly, h o w ev er, th e rate o f e x p a n sio n h as fa lle n b e lo w th a t o f p rev io u s years. T h e lo w er rate o f e x p a n sio n in S ep tem b er reflected m a in ly a sharp red u ctio n in b o rro w in g b y tra n sp o rta tio n , c o m m u n ic a tio n s, and o th er p u b lic u tilities, w h ich are seek in g lo n g er-term fin an cin g. H o w e v e r , retail, co n stru ctio n , and tex tile lo a n s reco rd ed ga in s th at w ere c o n sid e r a b ly h ig h er th a n is u su al for S ep tem b er. R e p lie s o f se v e n large D istr ict b a n k s to a q u estio n n a ire o n their S ep tem b er lo a n p ra ctices in d ica ted g e n era lly th at b u sin e ss lo a n d em a n d s w ere stron ger in S ep tem b er th an in Ju n e, w h ich a llo w e d th em to tak e a firm er stand o n th e term s and c o n d itio n s o f th ese lo a n s. C o n su m er lo a n s, w h ich m a k e up a third o f all lo a n s, a d v a n ce d o n ly m o d er a tely in S ep tem b er after a stron g sp u rt in A u g u st. T h e se lo a n s h a v e b een slu g g ish all year in co m p a riso n w ith th e ex p a n sio n in o th er lo a n ty p es, so the slo w g row th in S ep tem b er rep resen ted a return to th e p re v io u s pattern. R e a l esta te lo a n s h ave b e en th e fa ste st g ro w in g m ajor c a te g o r y o f lo a n s this year. H o w e v e r , sin ce Ju ly, th e y h a v e slo w e d c o n sid e ra b ly , and th e S ep tem b er g ain w a s w ell b e lo w th a t o f p r ev io u s years. L o a n s to n o n b a n k fin a n cia l in stitu tio n s p ro v id e d a siza b le p o rtio n o f the S ep tem b er lo a n in crea se. F r o m J u ly th ro u g h S ep tem b er, ga in s w ere n o t as far a b o v e th o se fo r p r ev io u s y ea rs as th e y h a d b e e n in th e first h a lf o f th e year, in d ica tin g th at th e d em a n d fo r fu n d s b y th ese c o m p a n ie s in th e latter part o f 1 9 6 5 m a y b e m o re in lin e w ith th at o f p a st years. A d d itio n a l p ro b lem s in m a in ta in in g th e lo a n e x p a n sio n m a y c o m e from the in a b ility o f so m e b a n k s to a cq u ire a d d itio n a l fu n d s to len d . T im e d e p o sit grow th at D istr ict b an k s slo w e d in J u ly and A u g u st and d ro p p ed d ra stica lly in S ep tem ber. T h e lo ss o f n eg o tia b le certifica tes o f d e p o sit, w h ic h a ffected th e S ep tem b er figures, m a y n o t be as large th r o u g h o u t th e rest o f th e y ear, b u t o n th e b a sis o f recen t tren d s tim e d e p o sit in crea ses w ill fa ll sh o rt o f th o se fo r th e first h a lf o f 1 9 6 5 . D istric t b an k s red u ced in v estm e n ts in A u g u st and S ep tem b er, so further red u ctio n s w ill lik ely b e m o d era te. T h e n , to o , e x c e ss reserv es h a v e b e e n sm all du rin g m o st o f th e y ear, lea v in g little r o o m to sq u e ez e o u t m o re fu n d s. N o t e : D a t a o n w hich statem ents are b ased have been adjusted w henever p o ssib le to elim in ate se ason al influences.
@FedFRASER