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MONTHLY
REVIEW
1
U ^ n f t i e r n Mortgage
O *
Banking Matures
V
• A Perspective
On Florida’s Income
• Oistrict Business
Conditions
F E D E R A L
R E S E R V E
B A N K
OF
A T L A N T A
October 1967
S
o u t h e r n
B
a n k i n g
E s s e n tia l
M
M
o r t g a g e
a t u r e s —
R o l e in a G r o w i n g
P a r t
I
R e g io n
Will the supply of mortgage funds be adequate to
finance the anticipated expansion in home build
ing in the South? If this question seems familiar,
you might have read it seven years ago in an
analysis of home financing in the South (M onthly
Review, October 1960). At that time the South1
was confidently looking forward to continued im
provement during the “Soaring Sixties.” High
rates of population growth and migration were
matched by rising income as industrialization in
tensified. These trends were broadly based and
their extension in the decade ahead was expected
to generate sharp increases in capital needs. Of
course, the South’s savings were growing also,
but the outlook for heavy dependence upon out
side sources of financing persisted.
The magnitude of the capital importation job
offered opportunity and challenge to the region’s
financial institutions. One of the youngest of this
xI n the p re v io u s a n a ly sis, as in th is one, the S o u th
c o n sists of the states of A la b a m a , F lo rid a , G e o rgia,
L o u isia n a , M is s is s ip p i, a n d T ennessee, a ll o r p a rt
of w h ic h lie in the D is t r ic t served b y th is B a n k .
family was the mortgage banker, who by 1960
had become established extensively throughout
the area. He had made a substantial contribution
to financing the region’s growth by exporting
residential mortgages, mainly to New York and
New England life insurance companies and
mutual savings banks. By the end of the 1950’s,
however, his outside source of mortgage funds
was sharply curtailed. Rising interest rates and
more attractive investment choices for institu
tional investors challenged the mortgage banker
to find new ways to grow and maintain his service
to the region.
The southern mortgage banker and the region
he serves became substantial beneficiaries of a
new approach to fiscal and monetary policies in
the early 1960’s. This policy mix was oriented
toward stimulating more rapid growth in the na
tional economy. The South was ready to utilize
a larger share of the enlarged capital investment
possible under such policies, and the mortgage
banker was in a position to help bring lender and
borrower together.
How Has Southern Growth Fared?
M o n t h ly R e v ie w , V o l. L I I , N o . 10. F ree su b sc rip tio n
a n d a d d itio n a l copies a va ila b le u p o n request to the
R e se a r c h D e p a rtm e n t, F e d e ra l R e se rve B a n k of
A tla n ta , A tla n ta , G e o rg ia 30303.
1 3FRASER
0
Digitized for
The projections of rapid population growth, ris
ing income, increased housing needs, and expan
sion of public facilities beyond the savings capac
MONTHLY REVIEW
ity of the region continued to be met. Approxi
mately 1,350,000 housing units were built, total
construction volume rose year after year, and
private mortgage debt outstanding doubled be
tween 1959 and the end of 1966. Savers and bor
rowers participated in this growth bonanza, as
the region’s long established financial institutions
increased the rewards offered to savers and these
institutions in turn found or developed more pro
ductive uses for savings. Although their contribu
tions to a growing South are important, this is
not their story. It is, instead, the story of the
maturing mortgage banker who has learned to
serve his region better, even though he has had
to work with the least efficient instruments in the
capital markets.
A m o n g the “ b ig fo u r” fin a n cia l in stitu tio n s, co m m e rc ia l
b a n k s e x p e rie n ce d the g re a te st rate of grow th in m o rtga ge
debt h o ld in g s; life in su r a n c e c o m p a n ie s, the sm a lle st.
Percentage Increase
40
80
120
All Private
Commercial Banks
Savings & Loan Assn's.
Mutual Savings Banks
Life Insurance Co's.
A la b a m a a n d M is s is s ip p i led the s ix sta te s in the grow th rate
of m o rtga ge deb t d u r in g the 1 959-66 period.
What Is the Background of Increasing
Capital Needs?
While the total United States population was ex
panding by 10.6 percent, that of this region grew
by 14.4 percent in the seven years under review.
Total personal income expanded from 8.8 percent
of the national total to 9.3 percent. In terms of
annual levels, this amounted to an increase of
$20 billion, i.e., from $33.5 billion in 1959 to
$53.5 billion in 1966.
Changes of this magnitude might have been
expected to stimulate rising demand for more
and better housing. But this was only the begin
ning of the upward spiral of capital demands as
more people with more current income expanded
their goals. Pressure mounted for more and better
roads, schools, water and sewer systems, recrea
tional facilities, and all the other public capital
expenditures which help make a bigger house into
a better home. The potential home buyer found
P riv a te ly held n o n fa rm m o rtg a g e d e b t a g a in s t p ro p e rtie s in
the S ix t h D istric t sta te s m ore th a n d o u b le d betw een year-end
1 9 5 9 a n d 1966, w ith F lo rid a c o n t in u in g a s th e la rge st user.
Billions of Dollars
1966 r
25
15 —
Fla.
Ga.
La.
OCTOBER
1967
Tenn.
Ala.
Miss
_® *
States
Alabama
Mississippi
himself in competition for the available supply
of savings not only with business firms and con
sumers, but also stronger competition from his
own state and local government units.
Mortgage borrowers doubled their outstanding
debt against properties in the South. Mortgages
held by the “big four” financial institutions—sav
ings and loan associations, life insurance com
panies, commercial banks, and mutual savings
banks—increased from $12.7 billion to $25.6 bil
lion. State and local government units issued
$11.6 billion in securities, of which only a minor
part was for refunding purposes. Some measure
of the need for outside funds can be seen in the
total for these two types alone. Amounting to
more than $24 billion, they surpassed the entire
increase in long-term savings of the region by a
substantial margin.
A broader measure of the overall capital needs
of the South is total construction contracts, which
exceeded $38 billion in the period. Starting with
an annual level of $4.0 billion in 1960, each year
brought an unbroken string of advances. Even in
1966, a year of sharply restricted availability of
131
funds, the annual level had risen to $6.6 billion.
Nevertheless, residential construction continued
to be the single most important component of
building, amounting to $17 billion in the 1959-66
period. The proportion of residential to total
building averaged 44.5 percent of the total and
ranged from a high of 47.4 percent in 1965 to a
low of 41.4 percent in the sharp housing recession
of last year. Although firm data are not available
for the actual number of housing units built, the
seven-year total exceeded an estimated 1,350,000,
or about 14 percent of the U. S. total.
How Do You Get This Kind of Increase
in Capital?
You get it by spending future money. That’s
easy, you say? Then try this one: How much
future money can you spend? Only as much as
some present holder of money will turn over to
you in exchange for his appraisal of your credit
worthiness. Credit worthiness rests basically upon
future ability to pay, accompanied by formal as
surances of performance of obligations.
The bulk of “present money” available in our
economy is turned over by its owners to institu
tions, which relieve the owner of determining its
“best” use. They stand between the owner and
the eventual user of such funds, providing ser
vices to both sides of the savings-investment pro
cess. Each little rivulet of savings has the poten
tial of joining up with other flows through this in
termediary system. In practice the bulk of total
available savings thus goes into the central capi
tal markets where efficiency, speed, and the high
est possible degree of certainty in appraisal of
credit worthiness becomes crucial for the po
tential user. Getting the capital funds needed by
an individual, a community, state, or region de
pends upon the investment instruments and the
service institutions available to convey these bids
to the market.
Much of the South’s capital investment during
the past two decades was accomplished without
the bidding for a share of the national pool of
savings emanating from the region itself. This is
not to say that community initiative in getting
a new or expanded industrial plant, military in
stallation, or other forms of capital investment
was not important. However, the instruments
through which such bidding was registered, or
the institutional arrangement by which it was
transmitted, were not crucial. Indeed, a great
deal of investment was put in place through Fed
1 3 FRASER
2
Digitized for
eral government or giant corporation financial
initiative. Some of it may have been managed
from non-borrowed funds, either from current tax
flows or internal corporate savings which never
got into the mainstream of total current savings.
When such borrowing did occur, it was done
through instruments and an institutional frame
work developed over many decades. Their de
mands for funds were prime, subject only to
determination of a prime rate.
Some of the $11.6 billion of capital funds
needed to provide public improvements in the
South over the past seven years would fall into
the same “prime” classification, as would a minor
portion of the regionally headquartered corpora
tion borrowing. But for the bulk of the South’s
borrowing needs, the complex of ability to pay,
appraisal facility, efficiency of instruments, and
institutional services moves rapidly away from
“prime” toward the point where the market
rationing process cuts off some would-be borrower.
Now the region’s available instruments and insti
tutional family becomes crucial. Here a wellcapitalized mortgage banking industry is essen
tial to a growing region.
Let’s take a closer look at the $ 13-billion in
crease in mortgage borrowing demand in the
1960’s because it was the single largest sector of
the South’s total capital needs and a substantial
part of it is always so vulnerable to being cut off
by capital market rationing. The total lends it
self to three divisions in relation to the savingsinvestment flows of the capital markets.
Well over half the total was supplied from
local or subregional savings flows which never
got into the main flow of savings to the capital
markets. Instead, with one significant interrup
tion, these flows went directly to local savings and
loan associations, commercial banks, and local
life insurance companies. For the region as a
whole, the bulk of these savings came from in
creasing incomes of long-time residents, new en
trants into the labor market, and in many cases
from new, highly paid arrivals who came in with
expanding industry. In some cases—for instance,
Florida—incoming population brought significant
amounts of accumulated liquid savings which
went into the local savings institutions where
they located. Insofar as these savings flows
matched local demand for funds, neither saver
nor borrower was concerned further with capital
market instruments or institutions.
When one moves from this simplified but sel
dom encountered model, instruments and institu
tions take on increasing significance. Savings may
MONTHLY REVIEW
be attracted to deficit markets by a wide variety
of improved intermediary claims, which broadens
the reach of local institutions both within and be
tween regions. In the case of the South in the
1960’s, a great deal of this type of augmentation
of local savings flows was successfully undertaken
by its financial institutions. Similar augmenta
tion of local investment outlets was accomplished.
Few of these improvements and innovations
got even close to solving the main problem of free
and full access to the institutionally administered
mainstream of savings flows. The special province
of mortgage banking—whether carried on by a
specialized mortgage company, a bank, the in
stitutional investor itself, or by other firms—is
to solve this problem. In the absence of its solu
tion, a large slice of mortgage credit demand
would go unsatisfied, wide interest rate differen
tials would persist, differential regional growth
would be out of the question, and growth of the
entire economy would be substantially impaired.
Where Does the Money Come From?
Mortgage bankers encountered substantial shifts
in preferences among the major financial institu
tions to whom they transmitted the bids of their
borrowing clients. These shifts affected both the
sources of imported funds and the instruments
utilized. Their major contours are shown graph
ically in the upper right-hand chart.
The declining relative importance of New York
State as the principal geographic source of mort
gage funds serviced2 by the southern mortgage
banker was one change. This, in turn, was related
to the declining importance of life insurance
companies as purchasers of FHA and VA home
mortgages, a trend which began in the late 1950’s.
Many of the largest life insurance investors were
located in New York and had been among the
major buyers of these single-family mortgages.
2M o r t g a g e servicing, or m o rtg a g e a d m in istra tio n , is
a c o n tin u in g fu n c tio n w h ic h m o rtg a g e b a n ke rs view
a s th e ir m a in so urce of revenue a n d profit. I t is
u s u a lly done u n d e r con tract w ith the in ve stor-ow n er
of the m o rtg a g e a n d in c lu d e s tim e ly collection, a c
c o u n tin g for, a n d rem ittan ce of p a y m e n ts due; in
su r in g th a t p ro p e r h a z a rd in su ra n c e is m ain tain e d ,
th a t taxes a n d other ch arge s a g a in st p ro p e rty are
paid, th a t de lin q u en cie s a n d foreclosures are p ro p
e rly h a n d le d ; a n d the p e rfo rm a n ce of other services
as agree d upon. S e r v ic in g fees are u s u a lly p a id
m o n th ly on a p e rce n ta ge -o f-o u tsta n d in g-b a la n ce
b a sis a n d ra n ge fro m as m u c h as y2 p ercen t a n
n u a lly on s in g le -fa m ily m o rtg a g e s d o w n to less th a n
Ys percent on la rg e r m ortgages.
OCTOBER 1967
N ew Y o rk s u p p lie d le ss m o rtg a g e f u n d s to the S o u th e a s t in
the 195 9 -6 6 period, w h ile N ew E n g la n d a n d " a ll oth e r s ta t e s ”
in c re a se d th e ir h o ld in g s of m o rtg a g e s on so u th e rn properties.
Percent of Total Portfolio
0
10
20
1
1
30
1
40
1
New York
New England
.....................—1966
■ M H H H I ■ 1 -— 1959
Sixth District
States
All Other States
I
I
I
I
In order to retain these investors as clients, mort
gage bankers had to produce the kind of mortgage
instruments they preferred. They were unable to
overcome entirely this shift away from a mort
gage instrument with a very high rating for credit
worthiness (accompanied as it was by either FHA
insurance or VA guarantee) but which was im
paired in a competitive capital market by ceilings
on contract interest rates.
Some mortgage bankers were able to meet this
shift in part by becoming less specialized in resi
dential mortgages and expanding their origina
tions of nonresidential mortgages. In addition, in
many areas of the South, conventional residential
mortgages became relatively more credit-worthy
and at somewhat higher interest rates more ac
ceptable overall, as employment and incomes con
tinued to rise. Mortgage bankers in a number of
cases were thus able to expand their origination
of these mortgages as a partial offset to the de
clining importance of VA guaranteed mortgages.
N o n re sid e n tia l m o rtg a g e s had b e c o m e m ore im p o rta n t by
1966, but re sid e n tia l m o rtg a g e s re m a in e d the e sse n tia l v e h icle
fo r ca p ita l im p ortation.
0
Percent of Total Portfolio
25
50
t
Nonresidential
—
75
100
i
l
l
i
l
l
—1966
1959
Residential
FHA
VA
Conventional
t
133
M o rtg a g e b a n k e r s e x p a n d e d th e ir m o rtg a g e s e r v ic in g fo r m u tu a l s a v in g s b a n k s a n d o th e r in v e sto rs, o ffse ttin g the d e c re a se in
m o rtg a g e in v e s tm e n ts b y life in su r a n c e c o m p a n ie s.
overriding need for replacement sources of resi
dential mortgage funds through Government un
derwritten mortgages, led to a second significant
shift. M utual savings banks, located primarily in
New York and New England, took up some slack.
“All other” investors expanded from 20 to 24 per
cent of total servicing accounts.
Data for “all other” investors by type are not
available for 1959, but it seems likely that the
Federal National Mortgage Association accounted
for a substantially larger share of total servicing
But mortgage bankers must serve both sides of
the lender-borrower relationship, and tradition
ally they have been unable to move with investor
preferences any further or faster than the basic
conditions in their home territory permitted.
Since overall regional growth tended to vary
widely between particular urban subregions, it
was difficult for many mortgage bankers to in
crease staff, capital, and branching operations
enough to meet shifting investor preferences by
diversification. This fact, plus the continuing
T h e a v e ra g e m o rtga ge b a n k e r h a s
a lm o s t d o u b le d h is s e r v ic in g v o l
u m e s in c e 1959.
Average Size of Servicing Account
(Millions of Dollars)
A sse ts, c re d it lines, a n d ca p ita l
a n d net w o rth of firm s h a ve all
a d v an c e d .
T h e n u m b e r o f m o rtg a g e b a n k e rs
o p e ra tin g b ra n c h offices in c re a se d in
the 1 9 5 9 -6 6 period, b u t th e a v e ra g e
n u m b e r of b ra n c h e s m o v e d u p o n ly
slig h tly .
Hundredsof
Thousandsof Dollars
Millions of Dollars
1959
a
134
J r.
MONTHLY REVIEW
accounts than at the end of 1966. Mortgage com
panies typically service a large proportion of
FNMA holdings, in 1959 amounting to $910.5
million in the six states. At the end of 1966 they
had expanded by 44 percent, to $1.3 billion,
while the growth of holdings of life insurance
companies exceeded 70 percent and that of
mutual savings banks 106 percent. It thus ap
pears that mortgage companies were quite suc
cessful in developing alternative private sources
for mortgage funds. More than likely, the shares
of “all other” private investors in 1966, small as
they are, represent several-fold gains over 1959.
Have Challenges Been Met?
From the foregoing appraisal of the performance
of the industry between 1959 and 1966, it is pos
sible for reasonable observers to differ as to the
extent to which mortgage bankers have met the
challenges of the period. From the investor’s
standpoint, they have been unable to convince
all of the major life insurance company investors
that they can best handle all of their business in
the South. Evidence of this is the direct servicing
of an estimated $1.7 billion out of $8.2 billion life
insurance company mortgage investments in the
six states. It is also supported by the fact that a
number of larger commercial and other invest
ment property sponsors have found it unneces
sary to utilize their services in securing a mort
gage loan.
One bit of additional evidence which might
suggest that the mortgage banker is losing ground
is to be found in the changing proportions of
total mortgage debt in the South held by outside
investors. At the end of 1959 the proportion
of total southern nonfarm mortgage debt held
by its savings and loan associations and com
mercial banks amounted to approximately 46
percent. Life insurance companies located outside
the South, mutual savings banks, and FNMA
held approximately 52 percent. By the end of
1966 these proportions were reversed, amounting
to about 52 and 45 percent, respectively.
On the other hand, the reasonable observer
might conclude that the South has become better
able to finance more of its capital requirements
from its own savings. It might also be true that
the South now has a greater number of credit
worthy entities large and productive enough to
compete directly with other would-be borrowers
in the capital markets. To the extent that these
are acceptable conclusions, the mortgage banker
can take pride in helping to achieve these ac
complishments by this region. Perhaps more evi
dence is needed, and a good source for this is the
mortgage banker himself.
The accompanying graphic sketch of the repre
sentative southern mortgage banker has been
drawn from the replies of 106 mortgage bankers
to a questionnaire. The response amounted to 61
percent of the 174 mortgage bankers known to be
active and whose headquarters were located in
the six-state region. Coverage of dollar amount of
mortgages serviced by these 106 mortgage bank
ers amounted to $7.2 billion, or 89 percent of the
estimated total of $8.1 billion of servicing by
the 174 companies.
A concluding article will present a more com
plete analysis of the maturing southern mortgage
banker.
H iram J. H onea
Maturity Distribution of Outstanding Negotiable Time
Certificates of Deposit is now available monthly. If
you wish to receive this release regularly, please write
to the Research Department, Federal Reserve Bank of
Atlanta, Atlanta, Georgia 30303.
B a n k A n n o u n c e m e n ts
The Perry Loan and Savings Bank, Perry, Georgia, a
nonmember bank, began to remit at par on Septem
ber 1 for checks drawn on it when received from the
Federal Reserve Bank.
The Bank of Miami, Miami, Florida, a conversion of
the Southern Industrial Savings Bank, opened on Sep
tember 5 as an insured nonmember commercial bank
and began to remit at par. Officers are Willard M. Ware,
president; T. F. Ozburn, Jr., executive vice president;
M. E. Stephens, vice president; Robert D. Thornbury,
OCTOBER 1967
assistant vice president; and Edward M. Null, cashier.
Capital is $320,000; surplus and other capital funds,
$304,460.
On September 11, the Baton Rouge Bank and Trust
Company, Baton Rouge, Louisiana, a newly organized
nonmember bank, opened and began to remit at par.
Officers include Donald C. Haney, president; Wayne
McVadon and Jerry J. Hollis, assistant vice presidents.
Capital is $2,050; surplus and other capital funds,
$2,050.
135
A
P e r s p e c t i v e
o n
F l o r i d a ' s
Florida has been in a tight struggle for a place
among the nation’s leading income producing
states since 1963, when it first became tenth in
total personal income. At that time personal in
come amounted to $11.9 billion, or $52 million
more than the next ranking state, Indiana. Last
year it appeared that Florida was gaining ground,
with an income of $15.4 billion—approximately
$1.3 billion higher than the previous year and
$180 million more than was received by Hoosiers.
However, the differential narrowed again in first
quarter 1967, with Florida leading by $67 million.
In the past Floridians have managed to sustain
rapid aggregate personal income growth by creat
ing new income sources and modifying old ones.
Some of these efforts have been discussed in
M onthly Review articles highlighting Florida’s
changing seasonal and employment patterns.1
Other states have also changed and expanded
their income sources. Accordingly, we need to
compare the growth of various income sources in
Florida over the past four years with that of
other states.
I n c o m
e
Changes in Income Sources
Most income in Florida, as in other states,
arises from the exchange of labor for wages and
salaries. Two-thirds of the $3.5-billion rise in
Florida’s personal income from 1963 to 1966 was
accounted for by greater wage and salary dis
bursements. Strong gains in all 23 types of la
bor activity (e.g., manufacturing, trade, services,
etc.), for which state estimates are available,
helped keep Florida among the top ten states in
income. Percentage increases were greater in
Florida than in the nation for every type of wage
and salary disbursement except the military.
One of the fastest growing income sources in
Florida over this period was manufacturing, a
less important source there than in the nation.
Much of this accelerated growth came in the
durable goods area, where increased output of
transportation equipment and electrical machin
ery has brought rising employment. Although
these gains reflect to some degree the newness
of manufacturing in the state, more traditional
Florida sectors such as wholesale and retail trade,
iS e e A u g u s t 1965 a n d J u n e 1966.
Florida has held its place among the n ation’s top ten states in total personal incom e, but ranks only 29 in per cap ita incom e.
P E R CAPITA P ER SO N A L INCOM E
PERSO N A L INCOM E
P ercent
Percent
1st Quarter 1967
Rank
Am ount
Change
1963
Rank
Am ount
in Am ount
1966
Rank
($ M illions)
($ M illions)
Change
1963
Amount
Rank
Am ount
($)
in Am ount
($)
California
1
68,224
2
52,615
29.7
6
3,457
4
2,997
15.3
New York
2
66,919
1
52,697
27.0
4
3,497
5
2,979
17.4
21.2
Illin o is
3
40,204
3
30,228
33.0
2
3,532
7
2,915
Penn sylvania
4
35,961
4
27,847
29.1
19
2,968
19
2,441
21.6
Ohio
5
33,123
5
25,144
31.7
15
3,056
14
2,509
21.8
Texas
6
28,434
6
21,589
31.7
33
2,542
32
2,105
20.8
M ichigan
7
28,222
7
20,787
35.8
10
3,269
13
2,587
26.4
New Je rse y
8
24,966
8
19,400
28.7
7
3,445
6
2,965
16.2
M assachusetts
9
18,516
9
14,547
27.3
9
3,271
9
2,770
18.1
FLO RID A
10
16,061
10
11,865
35.4
29
2,614
31
2,145
21.9
Source: U .S . Departm ent of Com m erce.
1 3FRASER
6
Digitized for
MONTHLY REVIEW
contract construction, and services of all types
also outpaced national growth rates.
Among the non-wage sources of Florida in
come, transfer payments from the government to
citizens on pension or welfare, or for other pur
poses also advanced more rapidly than in the
nation. These gains were bolstered by increased
payments to citizens over 65, in part through
new programs such as medicare. Property income,
generally a relatively more important source of
income in Florida, increased at about the na
tional rate. On the other hand, proprietors’ in
come, the smallest of the three non-wage income
sources, grew less rapidly. Declining farm pro
prietors’ income, which accounts for the low
growth rate in this category, can be attributed
to labor and production expenses increasing faster
than gross receipts. Wage and salary disburse
ments to farm workers rose appreciably from
1963 to 1966, reflecting advancing production of
Florida’s labor intensive crops.
R is in g e m p lo y m e n t a n d in c re a se d
F lo rid a ’s in c o m e e x p a n sio n .
b a n k in g
a c tiv ity
m irro r
Seas. Adj.
Recent Developments
The pause in Florida’s personal income growth
during first quarter 1967 was generally experi
enced by other states as well. Nevertheless, there
is considerable evidence that Floridians will engi
neer another strong advance in personal income
this year now that national economic activity has
turned up. In fact, personal income in Florida
appears to have advanced faster than the na
tional rate, according to estimates made by this
Bank. Above-average gains for the state’s non
manufacturing employment, especially trades and
services, coupled with rising manufacturing pay
rolls, are providing the impetus. Considering the
upturn in contract awards in 1967, construction
employment should add to nonmanufacturing em
ployment gains later this year.
D ata for Florida member banks also point to
rising levels of economic activity, with debits,
deposits, and loans all showing sizable gains.
Growth in time certificates of deposits, which
expanded greatly in the first half of 1967, has
slackened recently. However, growth in passbook
savings accounts and a small revival in demand
deposit expansion indicate that Florida banks
are still being supplied with lendable funds.
In Perspective . . .
Even if Florida produces another $l-billionplus income growth, progress will be slow on
what is perhaps her major economic problem. De
spite expanding personal income, Florida ranks
only 29 in per capita income. Over the 1963-66
OCTOBER 1967
1963
1965
1967
period the state’s rate of increase in per capita
income, though generally topping other leading
income producing states, was only slightly above
the national average.
The state’s population growth has been slower
in recent years but remains well above that of
all but a few states. Considering the projected
growth of her population and present per capita
income rank, reaching the top ten in per capita
income is an impossibility for the near future.
Even further improvement in ranking, which de
mands continued rapid income gains, presents a
real challenge to the people of Florida.
P a u l A. C r o w e
137
S i x t h
D i s tr i c t S t a t i s t i c s
Seasonally Adjusted
(All data are indexes, 1957-59 = 100, unless indicated otherwise.)
Latest Month
(1967)
One
Two
Month Months
Ago
Ago
One
Year
Ago
SIXTH D ISTRICT
IN CO M E AND SP EN D IN G
) July 58,313
. Aug.
200
, July
146
. July
147
July
144
C r o p s ....................................
L iv e sto c k .................................
Instalment Credit at Banks* (Mil. $)
Aug.
New Loans ..............................
Repayments
.......................... • Aug.
57,786r 56,731r 53,115
198r
197
192
149
166
132
193
119
126
149
140
157
322r
270r
308
277
282
265
136
135
164
131
152
114
103
118
126
106
180
137
136
135
166r
130r
152
114r
103r
118
126
104r
185
137
136
135
165
130
152
114
133
135
167
130
150
112
107
115
130
106
175
132
127
69
102
62
121
68
119
125
105
181
136
123
65
4.1
4.1
4.1
3.6
2.3
40.9
188
179
195
148
107
279
2.5
40.7
159
177
144
145r
HOr
250
2.2
2.4
40.7
139
137
141
144
114
122
40.9
174
178
171
143
111
223
212
Loans*
All Member B a n k s ....................... Aug.
Large B a n k s ..............................Sept.
Deposits*
All Member B a n k s ....................... Aug.
Large B a n k s ..............................Sept.
Bank D e b it s * / * * ..............................Aug.
Personal Income (Mil. $, Annual Rate) July
Manufacturing P a y r o lls ....................Aug.
Farm Cash R e c e ip t s ....................... July
256
229
256
226
251
228
240
223
194
172
204
193
174
208
189
174
196r
180
159
184
. . Aug.
. . Aug.
157
149
108
78
157
150
110
83
156
149
109
95
153
142
110
80
. . Aug.
. . Aug.
3.0
42.4
3.1
42.3r
3.0
42.9
3.1
42.7
270
202
197r
261
198
190
245
181
175
Personal Income (Mil. $, Annual Rate) July 11,311 ll,1 77 r 10,959r
Manufacturing P a y r o lls .................... Aug.
202
202
199
Farm Cash R e c e i p t s ....................... July
141
151
133
10,157
190
135
Member Bank L o a n s .................
Member Bank D e p o s it s .............
Bank D e b it s * * ..........................
272
200
222r
GEORGIA
INCO M E
PRODUCTION AND EM PLOYM EN T
Nonfarm E m p lo y m e n t .................... Aug.
Manufacturing
...........................Aug.
N o n m a n u fa ctu rin g....................... Aug.
C o n s t r u c t i o n ...........................Aug.
Farm E m p lo y m e n t...........................Aug.
Unemployment Rate
(Percent of Work F o r c e ) ............. Aug.
Avg. Weekly Hrs. in Mfg. (Hrs.) . . . Aug.
135
130
138
124
62
135
131
137
124
63
135
131
137
128
59
131
129
132
121
64
3.8
40.7
3.5
40.4
3.8
40.5
3.9
41.1
265
212
225
263
210
223
260
203
217
252
196
199
3,509r
179
7,995
171
FINANCE AND BAN KING
Member Bank L o a n s ....................... Aug.
Member Bank D e p o s it s .................... Aug.
Bank D e b it s * * ................................. Aug.
LO U ISIANA
. Aug.
. Aug.
. Aug.
. Aug.
7,635
178
160
7,567r
177r
151
7,510r
175
136
7,099
178
157
125
122
126
121
66
125
121
126
119r
82
124
121
125
119
66
125
124
125
130
78
4.6
40.5
4.3
40.7r
4.6
40.9
4.2
41.4
241
190
184
238
187
200
235
183
184
224
178
181
FINA NC E AND BA N KIN G
Member Bank L o a n s .............
Member Bank Deposits . . .
Bank Debits**
....................
AND
8,648
181
159
8,571r
182r
155
127
120
129
127
62
126
119
127
121
64
126
5.3
41.6
5.5
42.6r
4.8
42.0
4.2
41.9
233
163
171
234
164
184
224
160
168
225
156
166
4,416
211
154
4,490r
211
210
EM PLO YM EN T
Nonfarm E m p lo y m e n t .................... Aug.
Manufacturing
.......................... Aug.
N o n m a n u fa ctu rin g....................... Aug.
C o n s t r u c t io n ...........................Aug.
Farm E m p lo y m e n t...........................Aug.
Unemployment Rate
(Percent of Work F o r c e ) ............. Aug.
Avg. Weekly Hrs. in Mfg. (Hrs.) . . . Aug.
120
128
134
66
123
115
125
142
67
FINA NC E AND BA N KING
Member Bank L o a n s * .................... Aug.
Member Bank D e p o s i t s * .................Aug.
Bank D e b it s * / * * ..............................Aug.
M IS S IS S IP P I
INCO M E
Personal Income (Mil. $, Annual Rate) July
Manufacturing P a y r o lls .................... Aug.
Farm Cash R e c e ip t s ....................... July
4,388r
213
139
3,966
207
177
PRODUCTION A N D EM PLO YM EN T
FLORIDA
INCO M E
Personal Income (Mil. $, Annual Rate) July 17,136
Manufacturing P a y r o lls ....................Aug.
245
Farm Cash R e c e ip t s ....................... July
140
16,851r 16,352r 15,340
243
244
230
175
128
137
PRODUCTION A N D EM PLOYM EN T
Nonfarm E m p lo y m e n t ....................Aug.
Personal Income (Mil. $, Annual Rate) July
Manufacturing P a y r o lls .................... Aug.
Farm Cash R e c e i p t s ....................... July
P R O D U C T IO N
PRODUCTION AND EM PLOYM EN T
Digitized for
1 3FRASER
8
One
Year
Ago
INCO M E
FINANCE AND BAN KING
Unemployment Rate
(Percent of Work Force) . .
Avg. Weekly Hrs. in Mfg. (Hrs.)
Manufacturing
....................
N o n m a n u fa ctu rin g.................
C o n s t r u c t io n ....................
Farm E m p lo y m e n t....................
Unemployment Rate
(Percent of Work Force) . . .
Avg. Weekly Hrs. in Mfg. (Hrs.) .
One
Two
Month Months
Ago
Ago
FINANCE AND BA N KIN G
286
256
PRODUCTION A N D EM PLOYM EN T
Nonfarm E m p lo y m e n t .................... Aug.
Manufacturing
.......................... Aug.
Apparel
.................................... Aug.
C h e m i c a l s ................................. Aug.
Fabricated M e t a l s ....................... Aug.
F o o d ........................................... Aug.
Lbr., Wood Prod., Furn. & Fix. . . . Aug.
P a p e r ........................................Aug.
Primary M e t a l s .......................... Aug.
Textiles
.................................... Aug.
Transportation Equipment . . . . Aug.
N o n m a n u fa ctu rin g.......................... Aug.
C o n s t r u c t io n ..............................Aug.
Farm E m p lo y m e n t.......................... Aug.
Unemployment Rate
(Percent of Work F o r c e ) ............. Aug.
Insured Unemployment
(Percent of Cov. E m p . ) .................Aug.
Avg. Weekly Hrs. in Mfg. (Hrs.) . . . Aug.
Construction C o n t r a c t s * ................ Aug.
R e s id e n t ia l................................. Aug.
All O t h e r .................................... Aug.
Electric Power Production**
. . . . July
Cotton C o n s u m p tio n * * ....................Aug.
Petrol. Prod, in Coastal La. and Miss.**Aug.
Latest Month
(1967)
151
151
150
144
Nonfarm E m p lo y m e n t .................... Aug.
M anufacturing
...........................Aug.
N o n m a n u fa ctu rin g....................... Aug.
C o n s t r u c t i o n ...........................Aug.
Farm E m p lo y m e n t...........................Aug.
Unemployment Rate
(Percent of Work F o r c e ) ............. Aug.
Avg. Weekly Hrs. in Mfg. (Hrs.) . . . Aug.
137
143
135
131
49
137
143
135
128
58
136
143
134
126
56
137
147
133
145
56
4.9
40.2
5.3
39.9r
5.1
40.8
4.0
41.0
310
231
220
309
232
202
298
222
203
283
228
208
FINA NC E AND BA N KIN G
Member Bank L o a n s * ....................Aug.
Member Bank D e p o s it s * .................Aug.
Bank D e b it s * / * * ..............................Aug.
MONTHLYREVIEW
Latest Month
(1967)
One
Month
Ago
Two
One
Months Year
Ago
Ago
TEN N ESSEE
INCOM E
Personal Income (Mil. $, Annual Rate) July
Manufacturing Payrolls . . . .
Farm Cash R e c e ip t s ............. . . . July
9,167
197
126
9,130r
191
141
9,013r
188
118
8,558
189
140
Latest Month
(1967)
N o n m an u factu rin g................ . . Aug.
C o n s t r u c t io n ................... . . Aug.
Farm E m p lo y m e n t....................
Unemployment Rate
(Percent of Work Force) . . .
Avg. Weekly Hrs. in Mfg. (Hrs.) . . . Aug.
133
158
67
One
Month
Ago
Two
One
Months Year
Ago
Ago
133
153r
69
133
154
65
130
157
77
4.3
40.2
4.5
39.7
4.7
39.8
3.1
40.7
239
181
207
246
181
231
248
181
219
231
174
195
FINANCE AND BA NKING
PRODUCTION A N D EMPLOYMENT
Nonfarm Employment . . . .
Manufacturing
................
. . . Aug.
. . . Aug.
136
143
136
142
136
141
135
144
Member Bank L o a n s * .............
Member Bank Deposits* . . . .
Bank D e b i t s * / * * ...................
. . Aug.
. . Aug.
*For Sixth District area only. Other totals for entire six states.
**Daily average basis.
r-Revised.
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; cotton 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.
D e b i t s
t o
D e m a n d
D e p o s i t A c c o u n t s
Insured Commercial Banks in the Sixth District
(In Thousands of Dollars)
Percent Change
August
1967
July
1967
Percent Change
Year-to-date
8 mos.
August 1967 from 1967
August July August from
1966
1967 1966 1966
STANDARD METROPOLITAN
STATISTICAL A REA St
August
1967
.............
Lakeland
Monroe County . .
1,477,655
57,809
176,276
490,263
282,629
97,380
l,457,579r
+4
66,624r + 12
190,426r +9
462,972r +7
342,541 r + 18
90,965
+5
+5
-3
+1
+13
-3
+12
+8
-5
+1
+7
+2
+9
602,758
1,385,776
2,159,795r
543,296
192,544
138,785
541,532r - 3
1,462,888r +10
1,945,954
+5
474,072r - 1
186,996r + 4
138,453r +9
+8
+4
+ 17
+14
+7
+9
+7
+5
+9
+7
+9
+ 15
G a in e s v ille .............
G r i f f i n ...................
LaGrange
.............
1,326,006
376,481
l,187,468r
347,332r
-0
+2
+12
+ 11
+ 10
+2
R o m e ...................
V a l d o s t a ................
Albany
.............
87,505
............. . 4,784,437
Atlanta
310,507
A u g u s t a .............
236,462
Columbus . . . .
261,107
Macon
.............
276,884
Savannah
. . . .
84,382
4,463,065
284,733
207,550
244,073
258,680
+4
90,235
4,481,252r
290,615r +9
206,730r + 14
241,273r +7
256,484r +7
-3
+7
+7
+14
+8
+8
-3
+8
+ 11
+ 10
+ 11
+9
Abbeville
.............
A le x a n d r ia .............
516,149
.
126,289
.
147,557
.
. . 2,369,108
523,088
126,595
147,250
2,374,956
499,606r
120,975
138,945
2,286,604r
-1
-0
+0
-0
+3
+4
+6
+4
+11
+4
+ 13
+2
652,518
568,504
639,107r + 15
590,569
469,205
1,541,642
571,171
445,659
1,535,269
Birmingham
. . . . 1,532,931
Gadsden
. . . .
64,612
193,104
Huntsville . . . .
522,778
Mobile
.............
Montgomery
. . .
333,933
Tuscaloosa
. . .
102,120
Ft. LauderdaleHollywood . . .
587,408
Jacksonville
. . . . 1,525,499
............. . 2,272,378
Miami
538,311
O r l a n d o .............
199,575
Pensacola
. . . .
Tallahassee
. . .
151,291
T a m p aSt. Petersburg
. 1,325,163
384,389
W. Palm Beach . .
Baton Rouge
Lafayette
.
Lake Charles
New Orleans
Jackson
.
.
.
.
.
.
.
.
.............
Chattanooga . . .
Knoxville
. . . .
Nashville
. . . . .
+7
569,280r
458,610r
l,426,395r
+2
+10
+3
+5
+0
+4
+2
+8
+6
+7
+19
OTHER CEN T ERS
Anniston
. . . .
Dothan
.............
S e l m a ................
Bartow
.............
Bradenton . . . .
Brevard County . .
Daytona Beach . .
Ft. Myers—
N. Ft. Myers . .
Gainesville
. . .
67,027
60,471
57,820
62,489
55,861r
44,712
64,499
56,913
41,776
+7
+8
+29
+4
+6
+38
+1
+10
+ 14
31,536
62,249
220,536
86,964
32,386
73,953
221,452r
93,540
35,976
57,044
209,867
86,087
-3
-1 6
-0
-7
-1 2
+9
+5
+1
-5
+24
+6
+7
74,177
78,448
75,254
74,639r
64,688
78,695
-1
+5
+ 15
-0
+8
+8
‘Includes only banks in the Sixth District portion of the state.
OCTOBER 1967
fPartially estimated.
St. Augustine
. . .
St. Petersburg . . .
.............
Sarasota
Winter Haven
. .
113,723
32,829
55,960
19,934
307,135
96,923
706,984
49,058
July
1967
123,027
32,089
56,128
21,798r
330,352r
101,273
685,195r
54,014
Year-to-date
8 mos.
August 1967 from 1967
August July August from
1966
1967 1966 1966
105,901
32,722
52,879
22,355
281,676
91,888
636,617
54,293
-8
+2
-0
-9
-7
-4
+3
-9
+7
+0
+6
-1 1
+9
+5
+ 11
-1 0
+5
+4
+4
+2
+11
+1
+7
+1
70,996
40,529
79,942
13,661
72,148
32,354
22,600
27,442
74,667
54,771
-3
-6
+6
+29
+6
-2
+1
-2
+8
+32
+1
+2
+2
+34
+5
+4
-8
-1 1
-2
+29
+7
+4
-4
+13
+6
+5
-5
-0
+1
+15
+7
+8
+11
+9
+11
+6
-1
+3
+14
+22
+16
-0
+14
+2
71,676
41,241
81,216
18,342
75,468
33,574
20,877
24,318
73,514
70,506
73,804
43,879
76,871
14,269
71,210
34,264
20,766
24,778
68,016
53,327
11,965
134,368
6,793
36,425
39,846
11,430
21,799
11,197
127,738r
7,105
38,086
35,185
11,369
22,032
11,152
+7
124,151
+5
6,128
-4
-4
33,460
35,864r + 13
10,769
+1
-1
21,984
Biloxi-Gulfport
. .
Hattiesburg
. . . .
L a u r e l ...................
Meridian
.............
N a t c h e z ................
Pascagoula—
Moss Point
. .
Vicksburg
. . . .
Yazoo C i t y .............
104,495
56,872
32,779
66,751
38,873
106,117
56,191
31,544
65,816
34,953
105,761
56,419
35,526
70,848
36,449
-2
+1
+4
+1
+11
-1
+1
-8
-6
+7
+9
+2
-4
+2
+7
55,321
42,427
51,164
54,519
40,463
31,100
52,983
43,526
46,892
+1
+5
+65
+4
-3
+9
+9
+4
+5
Bristol
................
Johnson City . . . .
Kingsport
.............
78,775
73,733
157,095
74,788
76,830
144,769
74,722
74,960
155,054
+5
-4
+9
+5
-2
+1
+4r
+8
+6
IXTH DISTRICT, Total 30,976,997
29,168,718
+6
+9
+8
3,863,944r + 10
8,091,308
+8
7,285,372r +8
3,874,614r +0
l,434,566r +11
3,841,819r + 1
+10
+15
+8
+3
+2
+6
+7
+8
+8
+4
+9
+12
B r u n s w i c k .............
Dalton
................
H a m m o n d .............
New Ib e r i a .............
Plaquemine
. . .
T h ib o d a u x .............
Alabam a!
. . . .
F l o r i d a ! .............
G e o r g ia ! .............
Louisianaf*
. . .
M ississippi!* • • ■
Tennessee!* . . •
4,244,759
9,335,686
7,853,322
3,989,398
1,469,852
4,083,980
3,865,263r
8,661,157r
7,304,322r
3,972,865
1,325,302
4,039,809
28,391,623r
{Estimated. r-Revised.
139
D i s t r i c t
B u s i n e s s
C o n d i t i o n s
The District’s economy is still on the upbeat. Manufacturing employment, after the midyear turn-around,
rose again in August; personal income and outstanding consumer credit increased; and construction con
tract volume rebounded. Harvesting of major crops is well underway, with good prospects for an increase
in total production. Loan expansion was unexpectedly weak, however, and time-deposit growth moderated.
Further gains in employment in August held the
unemployment rate steady. Manufacturing jobs
turned up for the second consecutive month. In
September, however, the transportation equip
ment industry was hit, as workers walked out on
a major auto producer and the District’s largest
airplane manufacturer laid off employees. The
region experienced a surge in new and expanded
plant announcements during the third quarter.
Most fall crops are being harvested throughout
the District. The stripping of Tennessee’s tobacco,
rice combining in Louisiana, and the digging of
Georgia and Alabama peanut crops are virtually
complete. Cotton and corn harvesting has begun.
Except for cotton, estimated production is ex
pected to exceed 1966 levels for all major crops.
However, price levels are generally below those
of last year and will have a modest dampening
effect on cash incomes. Egg, hog, and broiler
prices declined even further in August, but the
expected drop in their production may cause
some price strength in the period ahead.
Accompanying the August increase in personal
income was a rise in outstanding consumer credit
at commercial banks. Loans to purchase consumer
goods other than automobiles, mainly durables,
advanced. Automobile loans increased markedly
40
in July and declined in August, as did auto
mobile sales. Preliminary estimates suggest high
er sales for September.
Loan expansion in September was very slow at
large banks. Time-deposit growth was reduced,
with no compensating gain in demand deposits.
The slower growth reflected, in part, a small run
off of large denomination certificates of deposit.
Business loan demand at these banks was ap
parently very weak over the normally expansive
mid-month tax period. Country member banks
experienced a greater-than-seasonal increase in
demand deposits in September, but their rate of
time-deposit gain slowed further.
Improvement was evident in the District’s dollar
volume of construction contracts. The trend of
month-to-month gains for the current year con
tinues, and the year-to-year comparisons benefit
from the sharp downtrend of last year’s second
half. As a result, value of total construction con
tracts has now pulled slightly ahead of the com
parable eight-month period of 1966. However, the
outlook for mortgage funds suggests some future
slackening in the rate of recovery of homebuilding.
N O T E : D ata on w h ic h s ta t e m e n ts are b a se d h a ve been a d ju ste d
w h e n e v e r p o s s ib le to e lim in a te s e a s o n a l in flue nces.
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