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r e b t o c o d e ra l R e s e r v e B a n k o f A tla n ta In t h i s i s s u e : P e a n u ts: A C r o p T h a t B e lie s It s N a m e in t h e S o u t h e a s t M e e t in g R e se rve B a n k in g N o te s: D is tr ic t B u s in e s s R e q u ir e m e n ts C on su m e r C o n d it io n s L e n d in g ■ 1 9 7 3 P e a n u t s : B e l i e s I t s N S u i n t h e o A C r o a m t h e p T h a t e a s t b y G e n e D . S u lliv a n Peanuts is an im portant crop in Southeastern agriculture. M o s t of the U. S. crop is produced within the Southeastern states. In fact, o ne-h alf is produced on 700,000 acres w ithin A lab am a and Georgia. The off-farm processing and handlin g of peanuts is a sizable industry that contributes thousands of jobs to the e co n o m y du rin g the peak season and generates substantial payrolls w ithin concentrated areas of the Sixth Federal Reserve District.1 Financing institutions provide several hundred m illion dollars of credit to purchase expensive m achinery and to cover annual production and operating expenses of grow ers and processors. In addition, bankers finance the inventories o f processors for a six-to-nine-m onth period, extending credit equivalent to about 80 percent o f the crop's m arket value. The business is m ore than just peanuts in the Southeast. A t the Farm Level Peanut production o ccu pied about 1.5 m illion acres in the U nited States and produ ced over $500 m illion in farm cash receipts in 1972 (see Table 1). O v e r one-half o f this acreage, nearly 800,000 acres, is located in Sixth District states, and G eorgia alone accounts for over 500,000 of those acres. District farm cash receipts from peanuts reached $317 m illion in 1972, well over one -half of the U. S. total. The peanut enterprise is the largest single in c o m e -p rod u cin g crop in G eorgia, and it is second only to cotton in Alabam a. But it is not so im portant in Florida and M ississip pi, the other p e an u t-p ro ducing District states. Perm anent Legislation U nlike producers of m ost other agricultural com m odities, peanut grow ers have their ow n special governm ent program . It continues from year to year w ithout renewed authorization from C on gress and is, therefore, nonexpiring legislation. U n de r this program , as lo n g as producers vote for m arketing quotas, acreages that can be planted in peanuts are rigidly controlled. The Secretary o f Agriculture establishes a national ’The Sixth Federal Reserve District includes all of Alabama, Florida, and Georgia and parts of Louisiana, Mississippi, and Tennessee. Monthly Review, Vol. LVIII, No. 10. Free subscription and additional copies available upon request to the Research Department, Federal Reserve Bank of Atlanta, Atlanta, Georgia 30303. 150 O C T O B E R 1973, M O N T H L Y REVIEW acreage allotm ent deem ed sufficient to meet the production quota; this national allotm ent is then allocated to growers. A producer m ust have an acreage allotm ent based on historical production. These allotm ents can be transferred from one farm to another either through sales or leasing. Reflecting the profitability of peanut grow ing, acreage allotm ents have becom e quite valuable. In early 1973, land sold with an attached peanut acreage allotm ent co m m a n d e d around $400 m ore per acre than com parable land w ithout an allotment. The C o m m o d ity Credit C orporation guarantees a price to cooperatin g grow ers that m ay range from 75 to 90 percent of parity. (Parity is a m athe matical construct w hich show s the relationship of the prices farmers receive to the prices they pay for com m oditie s used in production.) A guaranteed price at 75 percent of parity m eans that farmers, by law, receive a price for their peanuts that is at least 75 percent o f production input prices. Peanut prices have been m aintained at the legal m inim um parity level (75 percent) for the past three years. Peanut farmers have generally been able to in crease land productivity through the use of new te ch n o lo gy at a faster rate than input costs have |---------------------------------------------------------------------------- CHART I Sixth District states accounted for over half of the U.S. peanut crop in 1972. Other U.S. 4 3 % N o te : F ig u r e s re p r e s e n t p e r c e n t of to ta l p o u n d s h a rv e s t e d . TA BLE 1 Peanuts Harvested For Nuts Year Ga. Fla. Ala. District States u. s. 2.0 4.0 9.5 10.0 9.5 744.0 754.0 767.5 773.0 775.5 1,451 1,467 1,454 1,486 1,502 600 1,100 1,735 1,600 1,700 1,750 2,060 2,380 2,410 2,280 1,743 2,031 2,066 2,203 2,257 1,200 4,400 16,483 16,000 16,150 1,317,710 1,555,315 1,827,823 1,863,530 1,855,050 2,528,744 2,979,465 3,005,118 3,274,761 3,389,230 $ 192 456 1,418 2,185 $168,403 202,519 240,190 317,395 $321,564 369,883 423,888 518,025 Miss. Acreage 1,000 Acres 1969 1970 1971 1972 1973 502.0 507.0 510.0 512.0 512.0 53.0 53.0 54.0 54.0 54.0 187.0 190.0 194.0 197.0 200.0 Yield Pounds Per Acre 1969 1970 1971 1972 1973* 1969 1970 1971 1972 1973* 1,855 2,220 2,490 2,620 2,600 946,270 1,125,540 1,269,900 1,341,440 1,331,200 1,605 2,075 2,590 2,550 2,550 85,065 109,975 139,860 137,700 137,700 1,525 1,660 2,070 1,870 1,850 Production1 1,000 Pounds 285,175 315,400 401,580 368,390 370,000 Cash Receipts 1969 1970 1971 1972 $122,295 142,113 166,810 228,509 $10,684 12,829 19,205 23,807 $1,000 $35,232 47,121 52,757 62,894 Source: USDA, Agricultural Statistics 1972; Crop Production, Sept. 1973; Farm Income State Estimates, 1959-1972. ♦Indicated ] Not necessarily the product of yield times acres because of rounding and data revision. FEDERAL RESERVE BANK O F ATLANTA 151 increased; and peanut production, even at prices set at 75 percent of parity, has continued to be quite profitable. For example, at the program 's inception, yields were ranging from 700 to 800 p ou nd s per acre. W ith the use o f output-increasing technology, grow ers are n ow able to average yields of w ell over 2000 p ou nd s per acre, nearly three times production in the 1930's. Peanut Production and M arketin g A begin n in g farm er obtains the right to grow peanuts by either leasing or bu ying peanut acreage allotm ents from other grow ers w ithin his county. A llotm ents from several farms may be c o m bined in one area if a grow er so desires. It is usually advantageous for a grow er to have his total peanut acreage within a concentrated area rather than have several sm all fields scattered over different farms. In this way, it has often been possible to transfer peanut acreage from less desirable to m ore productive land and thereby increase yields from fixed acreage allot ments, in addition to the efficiencies resulting from large scale operations. Preparing land for planting peanuts involves about the sam e operations used for other crops. The application of chem ical herbicides, both prior to planting and after the plants have TABLE 2 Estimated Inputs and Variable Costs of Producing Peanuts Quantity Value Estimated1 Total Cost District States (Per Acre) Preharvest Inputs: Labor 5.31 Seed 65.00 Fertilizers 7.75 Lime .167 Power & Equipment 3.09 ----Insecticides ----Herbicides Interest on Money !$56.78 hrs. lbs cwt. ton hrs. Total Preharvest Cost $ 6.22 22.10 11.23 1.29 8.38 6.04 6.08 2.65 $ 4,808,060 17,083,300 8,680,790 997,170 6,477,740 4,668,920 4,699,840 2,048,450 $63.99 $49,464,270 3.91 6.97 10.78 3,022,430 5,387,810 8,332,940 Harvest Inputs: Labor Power & Equipment Cleaning & Drying Commodity Commission 3.33 hrs. 2.33 hrs. .98 ton .98 ton Total Harvest Cost Total Variable Cost .98 757,540 $22.64 $17,500,720 $86.63 $66,964,990 Source: USDA, Selected U. S. Crop Budgets, Yields, In puts, and Variable Costs, Volume 1, Southeast Region, ERS 457, April 1971. ’ Cost per acre multiplied by total acreage of peanuts harvested in District states in 1972. 152 em erged, has largely replaced w e e d in g by hand and has also m inim ized cultivation. Seed is the m ost expensive single item in peanut produ ction (see Table 2). Fertilization and disease and insect control through the a p p li cation o f chem ical insecticides and fu n gicides are also m ajor expenditures in production. They have contributed im portantly to increasing yields per acre. Preharvest expenditures account for approxim ately three-fourths of ou t-o f-p o cket production costs. H arvesting expenses remain significant although they do not account for as high a proportion of production costs as once w as the case. H arvesting techniques have changed drastically over the past 20 years. There is no longer any hand stacking o f peanuts or p icking nuts from the vines by hand. Formerly, harvest began in late A u gu st and Septem ber and ended around January; since the advent of m echanical com bines for picking, harvest is usually com plete within four to six w eeks after it begins in late August. M e ch an ize d harvesting techniques have im proved over time. O rig in a lly harvesting involved d ig g in g the peanuts or p lo w in g them out of the ground, placin g them in w in d ro w s for drying to 10- to 12percent moisture, c o m b in in g them, and eventually b a gg in g and b rin gin g the crop into receiving points. N e w te ch n ology n o w elim inates several steps. After diggin g, the peanuts are allo w ed to dry o nly for a day or tw o until they reach ab o u t 20 percent moisture, at w hich poin t they are co m b in e d and brought directly into the sh elling facility w here m echanical drying further reduces m oisture content to just under 10 percent. Federal and state gradin g of peanuts occurs at the sheller, and the farm er receives paym ent for his peanuts based on the grade of his crop. The percentage of sound, mature kernels (SM K ) plays a large role in determ ining peanut grade and the price received. A t this point in the m arketing process, the farmer has the option of placin g his peanuts under a C o m m o d ity C redit C orp oration (C C C ) loan or selling outright to a sheller. M o s t usually, farmers are ready to sell their peanuts at the time of delivery because only rarely w o u ld they ever realize a price increase as a result of storing their crop with the C C C . Peanuts are usually placed in C C C storage o nly at the recom m endation of the sheller after he has received all peanuts for w hich he has edible markets. G row ers then place their crop under C C C loan to be kept in w arehouses (typi cally at the shelter's facilities w hich are rented to the governm en t for peanut storage). The grow er ordinarily view s this action as a sale to the governm ent. In the event that the sheller foresees his peanut sup ply for the year running short, he can redeem O C T O B E R 1973, M O N T H L Y REVIEW TABLE 3 T o ta l S u p p ly and D isp o sitio n of S h e lle d P e a n u ts U n ite d S ta te s Year Total1 Supply Exports Crushed2 Edible Use Consumption Per Capita (lbs.) ------------------------------------------- 1,000 Pounds------------------------------------- 1955 1960 1965 1966 1967 1968 1969 1970 945,726 1,329,856 1,776,937 1,796,708 1,885,587 1,853,202 1,851,037 2,106,556 1,318 57,172 175,221 166,316 148,295 79,623 100,051 213,027 182,534 258,009 373,547 418,292 483,992 491,447 437,127 600,855 595,414 794,596 969,893 947,326 1,004,966 1,031,940 1,062,857 979,467 3.6 4.4 5.0 4.8 5.0 5.1 5.2 4.8 1 Includes stocks, production, and imports. 2 Used as peanut oil and meal. Source: USDA, Agricultural Statistics 1972. the am oun t he needs to fill dom estic markets for edible peanuts from C C C storage. He w o u ld do this by repaying the loan plus about 5 percent for interest and handlin g charges. Because m ost shellers m ake slightly over-optim istic estimates of the peanuts they can sell, there is a tendency to overbuy from grow ers at the begin n in g of the season in order to avoid the m ore expensive procurem ent from C C C at a later date. Thus, redem ptions of C C C loans on peanuts are rare. After the sheller purchases peanuts from the farmer, he begins processing them im m ediately in order to finish as quickly as possible. Shellers typically operate their plants five days per week for a period of five to six months. Ideally, shellers are finished with processing operations by January, but quite often the season continues into April. C o st per unit is reduced if the processing season is spread over additional m onths because it serves to keep em ployees on hand perm anently and it allow s the use of equipm ent to be spread over a longer time. O n the other hand, if the harvesting season shou ld stretch m uch beyond April, the peanuts processed w o u ld be labeled as old crop and becom e less valuable. A n y peanuts processed in excess of those for w hich sales have been m ade are put into cold storage where they can be kept with little or no dete rioration. O ld crop peanuts are m ore difficult to sell, however, as the time of the prospective new crop approaches. Peanut Utilization O f total peanuts used dom estically, about 50 percent are processed into peanut butter, ap proxim ately 25 percent are consum e d in salted form, and another 25 percent go into candies. M o s t peanuts have already been marketed to m anufacturers well before they are harvested. The sheller usually markets over the period FEDERAL RESERVE BANK OF ATLANTA of a year, based on fall delivery. A n y m arketings for postfall delivery typically carry som e price m arkup to reflect carrying charges. Manufacturers, therefore, try to buy in advance as m uch as possible to escape these extra charges. Total U. S. peanut production has, in fact, rapidly grow n beyond the am ount that can be used for edible purposes in the U nited States. Less than 60 percent of the crop is marketed in edible form dom estically (see Table 3). The balance of annual production enters C C C storage under nonrecourse loans to farmers. O w n e rsh ip of the rem aining 40 percent of the U. S. peanut crop is eventually taken over by the C C C and disposed of at bid auction. D om e stic shellers can and do bid for C C C peanuts, but they must either crush and process them into peanut meal and peanut oil (both usually low er-valued products than edible peanuts)2 or they m ust export the nuts w ho le to foreign buyers at w orld market prices. The W o r ld M arket A lth o u gh the U nited States accounts for a m inor proportion o f total global production (see Table 4), it has reportedly becom e the num ber one supplier o f peanuts sold for edible purposes around the w orld. This is largely attributed to the intensive effort directed tow ards produ cin g an attractive product for w hich foreigners have keen dem and. In particular, the attention that U. S. grow ers have paid to ridding their product of m o ld disease has assured foreign buyers o f high quality. D e p e n d ab le quality coupled 2ln mid 1973, the demand for peanut oil and meal had advanced to the point that the value of processed peanuts approached the value of peanuts sold for edible purposes. However, this is not expected to be a long-run situation. An early realignment of prices to their historical pattern is anticipated. 153 TA BLE 4 W orld A cre ag e and P ro d u ctio n of P e a n u ts 1969 United States Brazil Nigeria Senegal China Mainland India Other World Harvested Acreage — 1,000 Acres-------------------1971 1970 1,451 1,516 3,000 2,370 4,900 17,607 14,416 45,260 1,467 1,375 3,000 2,440 5,190 18,021 14,360 45,853 Production ----------------- 1,000 Metric Tons1969 1970 1,147 754 1,360 800 2,350 5,130 5,144 16,685 1,454 i 3,000 2,718 5,315 i i 47,244 1971 1,357 800 1,000 875 2,700 5,800 5,611 18,143 1,351 928 775 554 2,650 6,065 5,005 17,328 ’ Data unavailable. Source: USDA, Agricultural Statistics 1972. with com petitive pricing m ade possible by export subsidies have substantially increased the dem and for U. S. peanuts. A radical change in w orld price patterns has occurred in 1973 w hich may further affect the d e m and for the crop. Until recently, prices hovered around 23.5 cents per p o u n d for edible peanuts sold in the United States and 11.5 cents per p ou n d for those sold in w orld markets. By mid 1973, however, the price o f edible peanuts sold abroad had advanced to about 25 or 26 cents a pound, even exceeding the dom estic price. In view of the current w o rld -w id e fo od and protein meal shortages, industrial spokesm en state that both the dom estic and w orld market prices for edible peanuts m ay be about 27 cents per po u n d in the 1973 m arketing year. In that eventuality, the price offered to farmers for the current crop w o u ld be substantially above the C C C loan rate and the portion of the crop acquired by the C C C is likely to be sharply dim inished. Thus, the role o f the C C C and the cost of the peanut program in 1973 m ay be drastically reduced. the peanut program in order to reduce the governm ent outlay. U n de r norm al market c o n d i tions, these prop osals w o u ld reduce the profitability of peanut produ ction to grow ers w h o naturally resist them. C o n trib u tion to Off-Farm Businesses Peanut program changes that substantially reduce acreage, however, w o u ld affect m ore than producers. The e c o n o m y th ro u gh o u t the gro w in g area w o u ld receive a shock from the drastic p ro duction curtailm ent likely to ac co m p an y dom estic prices that are com petitive in the w orld market over the lo n g run. The increasing use o f nonfarm inputs also represents gro w in g sales o f farm supplies by nonfarm businesses in the peanut area. Table 2 show s that peanut farm ers' annual variable or outo f-p ocket cost for p ro d u c in g peanuts averaged about $87 per acre in 1970. W ith recent cost increases, the District's total peanut acreage could easily incur annual farm produ ction expend- Program C osts The governm ent subsidy to peanut grow ers be com es evident at the tim e o f the C C C auction sale. Until recently peanuts have been sold at prices substantially b elo w those paid to farmers w hen the stocks were acquired, resulting in net losses to the C C C (see Table 5). Because yield-increasing te chn ology has boosted production so rapidly w hile dom estic consum p tion has stabilized, a larger quantity o f peanuts has been acquired by the C C C each year and disp ose d of at a loss. Thus, year by year, until 1973, the peanut program has been gro w in g increasingly costly to the G overnm ent. Projections for increasing losses in the years ahead have led to proposals for alterations in 154 Year TA BLE 5 Peanut Price Support Operations United States 1955-72 CCC Realized Percent of Net Loss Total Per Pound Price Under Support Cents 1955 1960 1965 1970 1971 1972 12.24 10.062 11.20 12.75 13.425 13.95 % $Million Cents 20.3 20.5 30.7 36.4 41.3 1 17.1 16.7 44.3 66.3 112.7 105.0* 6.4 5.6 6.4 6.2 8.3 1 ’ Data not available. ♦Forecast Source: USDA. Fats and Oils Situation, November 1972. Agricultural Statistics, 1972. O C T O B E R 1973, M O N T H L Y REVIEW CHART II itures o f $70 m illion or more. This m oney represents purchases o f labor, seed, fertilizers and lime, insecticides, herbicides, fuel, lubricants, m achinery m aintenance,and repairs. These figures d o not include purchases o f farm m achinery and other fixed investm ent items. W h e n allow ances were m ade for interest and depreciation on fixed investment, annual costs o f ou tstan din g producers were reported as high as $215 per acre o f peanuts produced. The investm ent in m achinery for each 100 acres o f peanuts am ounts to approxim ately $100,000 or an estim ated $775 m illion for the District as a w hole. M o s t equip m e nt is replaced, on average, about every five years. A lth o u gh m achinery has som e salvage value, the rapid pace o f m echanization and increasing prices probably result in annual m achinery sales to peanut farmers o f w ell over $100 m illion — a sizable source of business to District farm m achinery establishments. Peanut shelling facilities and com plem entary eq uip m e nt reflect an estim ated investm ent of at least $50 m illion. Em ployees w o u ld num ber 1750 on a relatively full time basis, running as high as 6500 du ring peak seasons w hen peanuts are bein g delivered from farms to receiving stations. A n nu al payrolls at shelling facilities and receiving points prob ab ly reach as high as $12 m illion. Shellers' operating costs are estim ated at $4.7 m illion, covering such items as fuel, bags, and other m iscellaneous supplies, all o f w hich represent sales vo lu m es of other area businesses. Charges for m aintenance, taxes, depreciation, and interest on investm ent w o u ld am oun t to about $7.5 m illion each season. Thus, d u ring the year, the off-farm e c o n o m y realizes nearly $25 m illion of incom e from the operations of peanut shellers alone. Figures are not available on the contribution of peanuts to the business vo lu m e o f various p ro c essing and m arketing facilities through w hich they flow after leaving the sheller. How ever, the various m anufacturers o f peanut butter, salted peanuts, peanut candies, peanut oil, and peanut meal, as w ell as the c o m m o d ity brokers and shippers, u ndo u bte dly also contribute significantly to the region's e m plo ym en t and business volum e. Financing the Industry Financing institutions have a large stake in each stage o f the peanut production and m arket ing process. G ro w e r fin ancing accounts for a m ajor segm ent o f the loan vo lu m e of agricultural len ding agencies throu gh ou t the peanut belt. G o vern m e nt price guarantees under the parity form ula ensure that grow ers' prices alw ays m ove up with rising input prices. W ith the increasing yields that peanut farmers have alm ost consistently obtained, the program has, in effect, ensured FEDERAL RESERVE BAN K O F ATLANTA U.S.D.A. projections for continued rapid growth in CCC losses on peanuts have generated pro posals for program alterations. M il. I I Crop value I I CCC losses $ 1000 600 - 200 n tL '6 0 S o u rc e : '6 5 '7 0 =L '7 2 Q. '8 0 '8 5 U S D A , F a ts an d O ils S itu a tio n , N o v e m b e r, 1 9 7 2 . grow er profits as well. A s w o u ld be expected in such an industry, there is brisk com petition a m o n g lending agencies for the peanut producer's business. Typical financial arrangem ents include pro duction credit averaging about $75 per acre, w hich is advanced in the early spring and is repaid from crop receipts around Septem ber or October. Thus, the d ollar am oun t used to finance District peanut producers' operating capital require ments for each production season is w ell over $50 m illion. The interest incom e to lenders from this loan vo lu m e is quite substantial, particularly at the high interest rates du ring the 1973 production season. Farmers' m achinery and equipm ent needs represent substantial additional capital require ments that are largely met through borrow ing. These are interm ediate type loans ranging up to five years in term. A llo w in g for ow ner's equity and norm al loan repayments, an estimated $250 m illion of production and harvesting equipm ent inventory is financed at any given time. As the harvested crop leaves the farm and enters the processing channels, the inventories acquired by the processors m ust also be financed. Shellers typically use bank credit to acquire raw product for the co m in g year's processing. Typical arrangem ents involve bank financing of about 80 percent o f the peanut inventories' value. W are h o u se receipts on the stored c o m m odity serve as collateral for the loan. Thus, within the Sixth District, bankers extend credit am o u n tin g to about o ne-h alf the crop's gross value to finance sheller inventories. This also has been a relatively safe loan for the banker because the peanuts are on hand in on-site storage bins and have been checked by governm ent crop inspectors and verified to be of the grade specified. Because shellers usually acquire only lim ited am ounts o f peanuts in excess o f current m arketing needs, the risk that 155 they w ou ld be unable to dispose of supplies on hand at cost-covering prices has been m inim al. These inventory or c o m m o d ity loans to peanut shellers have other attractive features to bankers. Individual len ding limits do not apply to c o m m o d ity loans, so relatively sm all banks in rural areas are able to m ake these loans that m ight otherwise exceed their limits. This credit dem and com es at the end of the production season, pro vidin g a use for funds w hen other dem ands for credit are relaxing. Bank loans to peanut shellers are not loans to farmers and are not reported as agricultural credit. Thus, m any people both in and outside of the b an king industry are unaw are of this su b stantial loan vo lu m e that is outstanding from six to nine m onths o f each year, a vo lu m e w hich is directly dependent upon agriculture within the area served by each bank. Inform ation is not available on the extent to w hich annual operating expenses of peanut p ro c essors and m anufacturers are financed. How ever, it is highly likely that banks also play a m ajor role in su p p lyin g the capital required for payrolls, supplies, and inventories at each processing establishm ent from the tim e the raw product is acquired until the processed product is sold. U nquestionably, a large num ber o f business establishm ents and financial institutions in peanut areas are dependent on the peanut industry for sizable portions o f their business. A n y sharp curtailm ent in production m ight create an even greater effect in the off-farm e co n o m y than in the farm sector itself. S o m e Policy C onsideration s Regardless of the program 's substantial im pact in peanut p ro d u cin g areas, the industry may have to accept som e changes if the pop ulace as a w ho le feels that the subsidy has grow n too N O W expensive. So m e cost-redu cin g program alterations cou ld be made, short of com pletely a b a n d o n in g the price support system. Less extreme changes m ight w ell be weathered w ith little disruption of the econom y. Evidence o f this possibility is that considerable acreages o f cotton, soybeans and feed grains are profitably produ ced w ithin the p e an u t-grow in g area. That practically no peanut acreage has been planted to these alternative crops despite their recent profitability increase m ay indicate that som e reductions in support prices and governm en t costs co u ld be accom p lished w ith o ut m uch decline in peanut acreage. From a national standpoint, the justification for con tin u in g to subsidize the produ ction o f a crop, a large and gro w in g proportion o f w hich has been eventually exported at a loss, is subject to question. A lth o u gh such a subsidy is not unique to peanut growers, it is true that the m ajor benefits of the program accrue to producers in rather concentrated areas, w hile the costs are shared by the w ho le country. Farmers in other sections of the country are reportedly eager to grow additional peanuts but cannot secure the necessary acreage allot ments. If they w o u ld be w illin g to produ ce peanuts at com petitive m arket prices or even at low er support prices than current grow ers are w illin g to accept, there w o u ld seem to be som e justification for allo w in g them to do so. Som e observers feel that 1973 m arket c o n d i tions represent a perm anent shift in w orld foo d dem ands and that the favorable peanut prices existing in w orld markets are likely to continue. If that observation sh ou ld prove correct, then U. S. peanut grow ers w o u ld no longer need costly governm ent supports to m aintain profits. That w o u ld be a happy solution indeed to a problem that otherw ise seem s likely to generate gro w in g p u blic concern. A V A IL A B L E E c o n o m ic C h a r a c t e r is t ic s A compilation of Sixth Federal Reserve District statistics based on 1970 Census data and intended to depict local area economic structures on the basis of trade and banking areas and Standard Metropolitan Statistical Areas. Single copies available to individuals and banking and educational institu tions from the Research Department, Federal Research Bank of Atlanta, At lanta, Georgia 30303. 156 O C T O B ER 1973, M O N T H L Y R E V IEW M R e e t i n g R e q u i r e m e s e r v e e n t s b y W illia m N . C o x , III All banks must meet reserve requirements. Those which are members meet their requirements by leaving, at their regional Federal Reserve Bank, enough funds to equal a stipulated fraction of each bank's own deposits. Behind this statement lies the reserve calculation process, through which the Fed and the commercial banks cooperate to ensure that reserve requirements are satisfied. Since the Fed's ability to use reserves in controlling national deposit levels depends, in a mechanical sense, on the effectiveness of this calculation process,1 this article provides a bird's-eye view of how it works. Calculating Required Reserves To be sure of meeting its reserve requirements, a bank has to know the levels of its own deposits, for it is from these that required reserves are derived. At the end of every business day, the bank pushes its adding machine button or quizzes its com puter to see how many dollars of deposits it owes to its customers. (On days when the bank is closed, it repeats the previous day's figures.) At the end of each banking week, which by custom runs from Thursday to W ednesday, the daily totals are sum m ed and divided by seven to get a weekly average. Problems do arise, of course. Daily deposit totals, reflecting complex transactions tailored to the needs of diverse banking customers, often raise questions about what to include and when. These questions are usually resolved by published interpretations from the Fed's A ccounting Department, supplemented by telephone calls or correspondence. A d d in g the time deposits is usually straightforward. All time deposits are subject to reserve requirements, and what problems do arise are usually about bank liabilities similar to large-denomination certificates of deposit. The bank groups its time deposit totals by type (passbook, etc.), regardless of w ho holds them. Calculation of the bank's dem and deposit totals is a bit more complicated, however. It must distinguish am ong those dem and deposits it owes to the U. S. Treasury, to other banks, and to other depositors. 1See "C o n tro llin g M o n e y with Bank Reserves," this FEDERAL RESERVE BANK OF ATLANTA Review, April 1973. 157 A C - 7 9 (6 -7 3 ) F E D E R A L R E S E R V E BANK OF A TLA N TA AND BRA N CH ES REPORT OF DEPOSITS SUBJECT TO RESERVE REQUIREMENTS AND OF VAULT CASH — F o r M a in ta in e d P e r io d E n d e d _ F o r B ase D e p o sit Pe rio d E n d e d . 7 -3 o -73 B a la n c e s a t th e C L O S IN G O F B U S I N E S S ea ch d a y sh o u ld b e re p o rte d fo r th a t d a y ; h o w e v e r, S u n d a y and h o lid a y fig u re s a re th e c lo sin g b a la n c e s o f th e p re v io u s b u sin e ss d a y . (Stated in Nearest Thousands of Dollars) R E S E R V E R E Q U IR E M E N T C A L C U L A T IO N S DAY OF W EEK T h i s is r e s e r v e a c c o u n t i n g f o r m Mo. Day A C -7 9 , fro n t a n d (a) Dem and Deposits o f Ban ks (Item s 7 , and 8 Sch edule E Report o f C on d itio n ) M illions Thu. b u t h y p o t h e t i c a l S ix t h D i s t r i c t m e m b e r b a n k d u r i n g t h e b a n k i n g w e e k o f J u ly 5 - 1 1 , 1 9 7 3 . F o r s im p lific a t io n , th is e x a m p le m e m o ran d u m o m its b o th ite m s s u p p lie d th e by each b a n k a n d th e m a r g in a l re s e rv e r e q u ir e m e n t s w h ic h a p p ly to la r g e -d e n o m in a t io n c e r t if ic a t e s o f d e p o s i t a n d to n o n d e p o s it s o u r c e s o f fu n d s. Over $2 Million to $10 Million I (o, 3 9 (d Over $ 10 Million to $100 Million - O - [Thousand s M illions (Thousands M illions (Thousands 3. N ET DEMAND DEPO SITS (b) Balances S ubject to Im m ediate W ith C olum ns 1 (a ). 1 (b) drawal D ue from and 1 (c) less colum ns Other B an ks (Item 2 , 2 (a) and 2 (b) Sch edule D Report o f C o n d itio n ) M illions (Thousand s M illions (Thousands 4. TIM E AND SAVIN G S DEPO SITS (a) Savings Deposits (Ite m 1 Sch edule F R eport o f C on d itio n ) M illions (b) O th er T im e Deposits (Item s 3 , 4 , 6 . 7 ,8 , 9 , and 10 Sch ed. F R eport o f C on d itio n ) (Thousands M illions (Thousand s 5. V A U L T CASH (Ite m 5 Sch ed ule D R eport o f C on d itio n ) M illions {Thousands (a 0 0 3 5 O fl3 L 3 a 93 J93 5 95t> <o 5 0 1 Id ?&>*h 1. The ban k records each d a y 's d e m a n d d e p o sits clo sin g levels (c h e c k in g a c c o u n t balances) o f other banks, the U. S. G o v e rn m e n t, and other d e m a n d dep o sito rs, then a d d s to get seven -d ay totals for each d u rin g the w e e k o f July 5-11, 1973. 9. o o o ./3& 7 -5 /& o First $2 Million or Less .u 'k M illio n s (a) Cash Item s in Process o f C ollectio n (Item 1 Sch edule D Report o f C on d itio n ) (BACK) N E T D E M A N D D E P O S IT S (C o lu m n 3 A C 7 9 ) ■i o Vj - Sch ed ule E R eport of C o n d itio n ) (c) O th er Demand Deposits (Item s 1 , 2 , 5 , 6 , and 9 Sch ed ule E R ep o rt o f C on d itio n ) th a t date should be show n as zero . R E Q U IR E D R E S E R V E S 2 .0 0 0 (Thousands (b) U .S . G overnm ent Demand D eposits (Item 4 700/ /340 LoZO A8-5H3 0 5 9 3 732 73M Fri. U o / 0 9 b J 5 ’/22- 7 0 0 5 10 781 AO M 7-(* 757.. 3 0 W LLO Sat. 7 0 0 5 ' 3 0 9 * 9 5 0 S / J /O 78! I 096? 77 751 £>bo 7005~ JO Sun. / 0 9 b 5 5 /5JiO 78! 7 5 7 o® 7-X 705/ Mon. a o is o 7 9 7 . % 4 / 5 IO 741 743 I44i JbW I 7-<? Tue. 7 '/o IU 7 7044 209 .553 .£! S 4 7 // 57 K ? Wed. ? 2 k o Q/O 1 3 $ '$ 7-// 4^7 3 1 4 4 5 48578 7 0 6 / (9 5 9 4 Totals 1^ 4 7 0 5 4 9 17P- I 4 C 7i t 4 / <302- 4 m . J I l f M 7 0 2 5 1 5 I8 A .J If Dem and Deposits are less than the D e d u ctio n s, N et Dem and D eposits on A V E R A G E BA LA N C ES AO 7 0 5 740 \ M 3 8 i> 7 0 2 5 b a c k , a s it m i g h t h a v e b e e n f i l l e d o u t b y a r e p r e s e n t a t i v e s u p p le m e n t a r y DEDUCTIO N S A LLO W ED IN COMPUTING R E S E R V E S |2 . 1. G RO SS DEMAND DEPO SITS o- l4 l SHOULD YOUR TIME DEPOSITS BECOME SUBJECT TO THE MARGINAL RESERVE REQUIREMENT OR SHOULD YOU INCUR EURODOLLARS OR OBLIGATIONS OF AFFILIATES OR SUBSIDIARIES SUBJECT TO RESERVES, PLEASE CONTACT US FOR THE PROPER REPORTING FORMS. Over $100 Million to $400 Million - •I ? Q -. -o - O Over $400 Million 2. The bank re co rd s each d a y 's c lo sin g levels o f uncolle cted cash item s a n d the b a n k 's o w n d e m a n d b a la n ce s at o th e r banks. These, too, are totaled o ver the se v e n -d a y b a n k in g w eek. r* 3 0 1 ? S A V IN G S (C o lu m n 4 a A C 7 9 ) • 0 3 x _______ 7026 3. The item s p o ste d in Step 2 are d e d u c te d from the d e m a n d d e p o sits po ste d in Step 1, y ie ld in g the net d e m a n d d e p o sits a gain st w h ic h reserve requirem ents a p p ly ($26,386,000, o n average, for the w eek). From this figure, the reserves required aga in st the b a n k 's d e m a n d d e p o sits ($3',048,000) are calculated u sin g the back o f the report form . A IL 5000 • 0 3 C o lu m n 4 b A C 7 9 u p to $ 5 M illio n •0 5 15 1 0 3 x C o lu m n 4 b A C 7 9 in E x c e ss o f $ 5 M illio n T O T A L R E Q U IR E D R E S E R V E S LES S V A U LT CASH 4. The p ro c e d u re o f po stin g, a d d in g , a v e ra g in g and calcu latin g required reserves is repeated tw ice, for p a ssb o o k sa v in gs d e p o sits and for oth er tim e deposits, y ie ld in g average required reserves o f $211,000 an d $905,000, respectively. T h ese tw o figures, w h e n a d d e d to the $3,048,000 required against net d e m a n d de p o sits, indicate the total required reserves ($4,164,000) the b a n k m u st h old a gain st its July 5-11 d e p o sit levels. (M a rg in a l (S u m o f L in e s A b o ve) (C o lu m n 5) N E T R E Q U I R E D R E S E R V E S T O B E M A I N T A IN E D A T FE D E R A L R E S E R V E BAN K A LLO W A B LE C A R R Y FO RW A RD (2 % o f T o ta l R e q u ire d Reserves) 158 for FRASER Digitized 0 ; 13 OCTOBER 1973, MONTHLY REVIEW FEDERAL RESERVE BANK OF ATLANTA reserve req u ire m e nts o n la rg e -d e n o m in a tio n C D 's a n d n o n d e p o sit sou rce s o f fu n ds, if a p plicable, are calcu lated o n a separate fo rm and in c lu d e d in this total.) 5. V a u lt cash, as reco rded and a veraged by the b a n k d u rin g the w e e k o f July 5-11, is a llo w e d to c o u n t to w a rd satisfaction o f reserve requ irem ents o n d e p o sits held that sa m e w eek. 6. T he re m ain d e r ($3,424,000) c o m p rise s the net required reserves to be m a in tain e d at the Federal Reserve B an k o f A tlanta, in the b a n k 's reserve accou nt. T h is is the level that m u st be met, on average, d u rin g the w e e k o f July 19-25, tw o w e e ks later. 7. T h e b a n k can "c a rry fo r w a r d ," into the fo llo w in g w e e k o f July 2 6 -A u g u st 1, a reserve b a la n ce excess or d e fic ie n c y o f u p to 2 p e rce n t ($83,000). 159 From its overall demand deposit total, furthermore, each bank is allowed to make two deductions to avoid double-counting. The first deduction is called "cash items in the process of collection." For the most part, these are checks which have been written against customers' accounts, deposited in another bank, and routed back to the first bank, but which have not yet been charged against the checkwriter's account. Since these funds have been added to the depositor's bank account but have not yet been subtracted from the checkwriter's bank account, they are counted twice, in two different deposit accounts at two different banks. To offset this double-counting, the original bank is allowed to deduct these items from its demand deposit totals. The second deduction reflects the fact that when two banks hold reciprocal demand deposit accounts with each other, only the net or the difference between the two reciprocal accounts is meaningful. So each bank deducts the deposits it holds at other banks from its daily dem and deposit total. At the end of every business day, then, each member bank records its gross dem and deposits, "cash item s" deduction, "d u e from other banks" deduction, and time deposits. It reports these items weekly to the Fed, generally on Thursday or Friday after the end o f the banking week on W ednesday, along with a few other items of information.2 Accounting for Reserve Balances Just as in the case of the bank's own deposits, reserve funds count only if they are on deposit at the Fed at the close of a business day. (On holidays and weekends, just as with customer deposits, the Fed repeats the previous day's totals. This is one reason why "b a n k " holidays are coordinated am ong the banks and with each Federal Reserve office.) Reserve accounts may show much or little ac tivity, depending on the size of the commercial bank and how it uses its reserve account. A billion-dollar bank, settling transactions on behalf of m any correspondents and dealing with other banks around the country, will often show thousands of transactions each day. A small rural bank, on the other hand, may show only a handful o f small transactions. Reserve account transactions also vary in nature. Some are payments on credits for checks deposited through the Fed's check collection system. Som e are payments for currency shipments 2These reports are also the keystone o f the Fed's m easurem ent o f national m on ey and deposit totals. 160 between the bank and the Fed. Others are intercity transfers of funds through the Fed's wire system, and still others reflect borrow ing from the Fed through the discount window. To help each bank keep up with these transac tions and their effect on reserve balances, the Fed sends each bank a daily statement, much like the m onthly checking account statement a commercial bank provides its customers. In the Sixth District, a courier delivers this statement before the bank opens on the follow in g day. Com paring Reserves Against Requirements W hen a bank reports its weekly deposit data to the Fed, it calculates its required reserves on the back of the same report form. These calculations involve the follow ing steps: 1. A d d in g dem and deposits owed to other banks, to the U. S. Government, and to others to get gross dem and deposits. 2. Deducting "cash item s" and "dem an d deposits due from other ban ks" to get net dem and deposits. 3. Calculating the am ount of reserves required to be held against these net dem and deposits according to the reserve percentages established by the Fed.3 4. Calculating the am ount o f reserves required to be held against reported levels of savings deposits, again according to the established percentages. 5. Similarly, calculating the am ount of reserves required to be held against other time deposits, including large-denomination certificates of deposit. 6. A d d in g the three reserve calculations to determine the total am ount of required reserves. For all but a handful of the m em ber banks in the Sixth District, these steps com pletely describe the calculation of required reserves.4 But before the bank and the Fed can make the obvious com parison of required reserves versus reserve balances held at the Fed, they must take account of the fact that vault cash— the am ount of currency and coin held by the bank itself— counts toward satisfying reserve requirements. The am ount o f vault cash held at the close of each day, a figure the bank has also recorded on •’ Reserve requirem ent ratios are listed in the m onthly Federal Reser\'e Bulletin, T able A-9. 4THe exceptions, a few large banks involved in borro w ing funds through foreign branches o r h o ld in g com p an y affiliates, m ust calculate and m eet additional requirem ents against these borrow ings. For details, see the Federal Reserve Bulletin, June 1973, pp. 445-46. OCTO BER 1973, MO NTH LY REVIEW the deposit report, is then subtracted from the total o f required reserves. The result, the basic result o f the bank's w eekly report to the Fed, is the m inim um am oun t of net reserve balances the bank is required to hold. ("N e t " denotes that vault cash has been deducted.) O n c e the calculations are com plete to this point, all that remains is to see w hether or not the reserve balances held at the Fed are sufficient to satisfy the requirements. There is a lag involved in the com parison, however. A bank must hold en o ugh reserve balances at the Fed, on average du ring a particular week, to satisfy the net required reserves calculated from the deposits and vault cash reported tw o w eeks earlier. For example, this m eans that the deposit and vault cash averages reported by a bank du ring the w eek of July 5-11,1973, determ ined the average level o f reserve balances w hich the bank had to hold at the Fed du ring the w eek of July 19-25. This tw o-w eek lag aids banks in m anagin g their reserve balances because the banker know s for a fact the am oun t o f reserve balances his bank m ust maintain, on average, du ring a particular week. It was for this purpose that the tw o-w eek lag w as introduced in 1968. For m uch the sam e purpose, another reserve FEDERAL RESERVE BANK OF ATLANTA accou nting feature w as also added then: the 2percent carry-over. If a bank's average reserve balances are w ithin 2 percent of its net required reserves average, it can m ake up the deficiency or apply the excess du ring the fo llo w in g week. (It cannot carry the deficiency or excess m ore than one week, however.) Like the lagged reserve feature, the carry-over provision w as designed to reduce the banks' cost and difficulty of m anagin g their reserve balances, w ithout obviating the Fed's ability to use reserves as its instrum ent o f deposit and m oney control. W h a t happens if, despite these aids, banks carry m ore reserves than they need to, or are deficient? (Excess reserves nationally am o un t to about $250 m illion from w eek to week.) The bank pays a self-im posed penalty in the form of foregone interest, since excess reserve balances earn none. Banks w hich are deficient in their reserve balances, on the other hand, m ust pay the Fed a prescribed penalty equivalent to a rate of interest 2 percent above the discou nt rate. A deficient bank becom es subject to the Fed's adm inistrative scrutiny. If reserve deficiencies are repeated, the Fed will intensify its scrutiny and can ultimately invoke legal sanctions against the bank involved. This is quite rare, however.® 161 Bank Announcements August 21, 1973 C A H A B A BANK & TRUST C O M P A N Y Trussville, Alabama Opened for business as a par-remitting nonmem ber. Officers: Samuel J. Lisenby, Jr., president; Lee W. Ormond, vice president and cashier. Capital, $375,000; surplus and other funds, $375,000. September 6, 1973 EXCHANGE BANK OF D U N ED IN Dunedin, Florida Opened for business as a par-remitting nonmem ber. Officers: H. E. Long, president; Carl H. Keltner, vice president; Charles Jay Marvin, cashier. Capital, $500,000; surplus and other funds; $500,000. September 10, 1973 CITIZENS BANK OF BLOUNT C O U N TY Maryville, Tennessee Opened for business as a par-remitting nonmem ber. Officers: Joe Bruce, president; Carl Wyatt, cashier. Capital, $900,000; surplus and other funds, $900,000. September 10, 1973 CITIZENS BANK & TRUST C O M P A N Y A N D BRANCH Covington and Mandeville, Louisiana Began to remit at par. 162 September 12, 1973 BISCAYNE BANK Miami, Florida Opened for business as a par-remitting nonmem ber. Officers: Harry Joe King, president; Gonzalo J. Menendez, vice president and cashier. Capital, $875,000; surplus and other funds, $875,000. September 26, 1973 THE A M ER IC A N BANK OF O RAN G E C O U N T Y Orlando, Florida Opened for business as a member. Officers: William T. Wallis, chairman; J. C. Barfield, Jr., president; Thomas W. Gurley, III, vice president and cashier; T. Robert Richmond, vice president. Capital, $500,000; surplus and other funds, $500,000. September 26, 1973 M A R IN E BANK OF PUNTA G O R D A Punta Corda, Florida Opened for business as a member. Officers: John N. Elder, chairman; Aubrey B. Campbell, president; Kenneth W. Kemmerly, vice president; Edward E. Phinney, cashier; Theodore J. Zolkos, assistant cashier. Capital, $500,000; surplus and other funds, $500,000. September 27, 1973 AM ER IC A N BANK OF LAKELAND Lakeland, Florida Opened for business as a member. Officers: Jerry R. Hetfield, president; John Teal, vice presi dent and cashier. Capital, $500,000; surplus and other funds, $500,000. O C T O B ER 1973, M O N T H L Y REVIEW R e c e n t P u b lic a tio n s AVAILABLE UPON REQUEST Please address all requests for publications to the Research Departm ent, Federal Reserve Bank of Atlanta, Atlanta, G eo rgia 30303. Federal Reserve Policy-Making and Its Problems A review o f the principal tools of m onetary policy, the problem s faced by those w h o form ulate policy, and the actions taken by m onetary authorities du ring the past several years. Published in 1964, this collection o f articles w as updated and revised in 1972. Single copies are available to individuals and ban king and educational institutions. International Finance and Trade: A Southeastern Perspective A collection of articles w hich covers several institutional aspects of the w orld m onetary system, describes the grow th o f international trade and banking in the Sixth District and exam ines som e aspects o f financing eco n o m ic deve lopm en t in less developed nations. N o w available with these limits: single copies to individuals; five copies to ban king and educational institutions. Monthly Review Reprints Comparative Advantage and the Changing Composition of U. S. Output, Exports and Imports John E. Leimone, Septem ber 1973 The Paradox of Bank Reserves W illiam N. Cox, III, Septem ber 1973 Controlling Money With Bank Reserves W illiam N. Cox, III, A pril 1973 Member Bank Borrowing: Process and Experience A rn o ld A. Dill, A pril 1973 The Discount Rate: Problems and Remedies W illiam N. Cox, III, June 1972 Liability Management Banking: Its Growth and Impact; Its Practice in the Sixth District A rn o ld A. Dill, February and D e ce m b e r 1971 FEDERAL RESERVE BAN K O F ATLANTA BANKING STATISTICS Billion $ -3 4 ■36 •30 32 •26 28 -20 ■14 •16 10 Other S e cu ritie s •8 U.S. G o v ’t. Se cu ritie s I I I I I I I I I I II I I I I I I I I I I I I I I I I I J J DJ J 1972 LATEST M ONTH PLOTTED: DJ 1973 I I I I I I I I I I I I I I I I I II I I I I I I I I I I J J J 1974 DJ J 1972 DJ 1973 J 1974 SEPTEMBER ‘ F ig u r e s a r e fo r th e la s t W e d n e s d a y o f e a c h m o n th * * D a ily a v e r a g e f ig u r e s . S I X T H C D I S T R I C T o n s u m B A N K I N G e r N O T E S L e n d i n g E x p a n d s R a p i d l y Consumer creditexpansion continues. % 1972 1973* payment consumer lending modernization loans consum er goods ‘ D e c e m b e r 1 9 7 2 to J u n e 1 9 7 3 a t a n n u a l ra te F ig u r e s s h o w n c o v e r a ll S ix t h D is t r ic t m e m b e r b a n k s 164 O C T O BER 1973, M O N T H L Y REVIEW Southeastern consum ers continue to m ake heavy use o f bank credit to finance a spen ding spree of unprecedented size. D u rin g 1972, consum er loans at m em ber banks grew by 21 percent, or $1.16 b il lion, the largest dollar increase in consum er lending ever recorded and the largest percentage increase since 1950. T hrough the first half o f 1973, consum er loans at the sam e banks grew at an even higher annual rate o f 24 percent. slightly below 1972's slo w rate, perhaps indicating the Southeast. O f course, changes in this category are erratic and prom otions by a few large banks can still strongly influence credit card lending. Banks throu ghou t the District have show n a w illingness to expand consum er loans rapidly, but during the first half o f 1973, G eorgia (up 17 percent) and Florida (up 14 percent) were clear leaders in consum er credit expansion in the Southeast. O th er District states registered gains o f 10 percent or less for the period. Both G eo rgia and Florida scored above-average gains in several loan categories, but G e o rgia's surge in single-paym ent loans and Flori da's co ntin u in g exceptional strength in m obile hom e lending contributed a go o d deal to the clim b in consum er credit for these states. A lth o u gh District consum er lending accelerated rapidly in the first half of 1973, the rate of grow th may be tapering off. Estimates of consum er instal ment credit outstanding, seasonally adjusted and based on a sam ple of m em ber and n on m em ber banks, sh ow grow th in instalm ent credit m ay have reached a peak in M arch 1973, tapering off in the fo llo w in g four months. N e w loan extensions d ropped only slightly in the second quarter, but repaym ent of previously existing debt accelerated. As a result, the rate o f grow th in total consum er credit outstanding m oderated slightly from its earlier torrid pace. The series on w hich that estimate is based, C o n sum er Instalm ent Credit O u tstan d in g at C om m e rcial Banks in the Sixth District, is published m onthly by this Bank. It is calculated from data supplied by a sam ple of all com m ercial banks in the Sixth D is trict. Benchm arked to the june 1971 Reports of C ondition , the new Sixth District data were p u b lished begin n in g in April 1973. Benchm arking the series resulted in an upw ard revision of approxi mately 20 percent. In addition to ben chm arkin g the series, a change in definitions w as initiated, m aking all categories of data published by the Bank for the Sixth District com parable to categories published by the Board of G overnors of the Federal Reserve System for all com m ercial banks in the United States. Beginn in g in April 1973, bank credit card loans were included in the category "O t h e r C o n sum er G o o d s " and consum er len ding m ade through check credit plans w as added to the category of "Personal Loans." Prelim inary data published by this Bank are n ow revised m onthly, and these re visions m ake the Sixth District com m ercial bank consum er loan data directly com parable to the consum er loan data for com m ercial banks published by the Board o f Governors. Prior year data are available from this Bank upon request. that this particular b an king market has m atured in BRIAN D. DITTENHAFER A s usual, bo rrow in g follo w ed the pattern set by spending. The current bo o m in consum er bu ying began in the auto sector and did not spread to other consum er go o d s until late in 1972. F ollo w in g that pattern, consum er credit grow th in the first half o f 1972 w as paced by auto lending; nonauto b o rro w in g did not pick up until late in the year. D u rin g 1973, however, nonauto bo rro w in g is nearly m atching the fast rate set by autos. Bo rro w ing to finance m obile hom es slow ed from last year's 30-percent rate o f gain; but for the first six m onths of 1973, such len ding was gro w in g at the still substantial rate of 25 percent. This im portant category m akes up an increasing portion of total c onsum er loans in the Southeast, as it does in the nation. In the D e ce m b er 1972 Reports of C ondition , m obile hom e financing m ade up 9 percent of D is trict m em ber bank consum er loans and 7.2 percent of the U. S. m em ber bank total. D u rin g 1972, m obile hom e financing grew faster in the nation (36 per cent) than in the District (30 percent), as banks in the rest of the nation fo llow ed the District's, lead in this gro w in g and profitable len ding activity. Single-paym ent loans are the District's largest single consum er loan category and were a m ajor factor in overall consum er credit grow th here. In the first half of 1973, single-paym ent loans grew at an annual rate of 26 percent, far surpassing the 1972 rate of 19 percent. Loans to repair and m odernize h o u sin g and personal loans have both increased at an annual rate of 22 percent du ring the same period, slightly less than the 24-percent average increase for all consum er lending. Personal loans are just m atching 1972 gains, w hile repair and m odernization loans are reb ou n din g from last year's sluggishness. The grow th rate o f len ding through chargeaccount credit plans continued to slow in 1972. Lending in this category expanded at an unsustain able rate in the late 1960's as bank credit cards were introduced in m uch of the Southeast. The annual rate of increase for the first six m onths o f 1973 was FEDERAL RESERVE BAN K OF ATLANTA 165 S i x t h D i s t r i c t S t a t i s t i c s S e a s o n a l l y A d ju s t e d (A ll d a ta a re in d e x e s, u n le s s in d ic a t e d o th e r w is e .) L a te s t M onth O ne M onth Ago Tw o M o nth s Ago O ne Year Ago S IX T H D IS T R IC T U n e m p lo ym e n t R a te (P e rc e n t o f W o rk F o r c e ) ......................... A ug. Avg. W e e k ly H rs. in M fg. (H r s .) . . . A ug. IN C O M E AN D S P E N D IN G M a n u fa c tu rin g P a y r o l l s ............................... F a rm C a sh R e c e i p t s ...................................... C r o p s ..................................................................... L iv e s to c k ......................................................... In s ta lm e n t C re d it at B a n k s * / 1 (M il. $) N ew L o a n s ......................................................... .................................................. R e p a y m e n ts Aug. J u ly J u ly J u ly 161 217 267 198 161 180 189 191 160 164 239 184 147 167 191 158 . Aug. . Aug. 6 34 533 686r 5 88 r 661 570 632 469 . . . . Aug. Aug. Aug. Aug. Aug. Aug. Aug. Aug. Aug. Aug. Aug. Aug. Aug. Aug. A ug. Aug. Aug. Aug. Aug. Aug. Aug. Aug. Aug. Aug. Aug. 125.9 114 .3 111 .9 100.3 109.5 111.1 111.1 1 25 .0 106.4 1 17 .3 110.3 121.5 110.0 127.0 143.8 108.9 130.0 133.6 122.1 131.9 137.0 134.9 100.0 134.4 8 3.8 125 .6 113 .9 1 11 .9 101.1 110.1 111.1 1 11.3 123 .5 1 07 .4 116 .5 1 10 .4 120 .2 108 .9 126.8 141.9 108.3 129.7 132.7 121.9 132.1 136.6 134.2 9 9.3 134.3 8 5.5 124 .9 114.2 112.3 101.6 110 .8 110 .8 111 .2 123.2 107 .0 116.5 110.2 119 .8 111.1 126.6 141.4 107.7 128.8 131.2 121.9 131.3 136.0 134.0 99.2 131.9 8 4.0 121.0 111 .9 110.6 1 02 .0 107 .2 110 .0 110 .0 120.1 105 .4 113 .5 108 .4 115 .2 108.8 120.2 132.6 110.2 124,2 125.1 116.8 125.5 130.1 130.6 100.0 126.5 81.7 . Aug. 3.7 3.7 3 .8 3.9 2 .9 4 0.5 283 288 278 188 82 113 301 245 189 291 297 224 161 310 367 203 193 206 253 288 472 871 462 1.8 4 0.6 242 281 204 187 84 114 292 242 188 286 291 223 161 3 08 352 198 191 206 241 289 452 797 447 1.8 4 0.7 275 308 242 186 80 115 292 244 188 288 296 223 163 308 349 200 192 207 232 2 89 449 7 68 4 54 2.2 4 0 .9 246 305 188 168 86 128 277 237 187 272 290 218 163 298 325 197 187 182 208 268 4 28 720 423 .• A ug. . Aug. 243 229 238 223 234 218 189 174 . A ug. . A ug. . Aug. 198 174 252 198 175 246 195 173 236 171 150 198 . A ug. . J u ly 159 266 157 205 160 224 148 176 115.8 1 13 .0 117.1 119.9 6 9.9 115.3 112.7 116.5 118 .9 7 2.4 1 14 .6 112 .4 115 .6 115.4 70.1 112.0 110.7 112.6 113.8 7 5.7 . . . . . . . . . . , . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Aug. Aug. Aug. Aug. Aug. D ec. J u ly S e p t. Ju n e Ju n e Ju n e Ju n e Ju n e Ju n e Ju n e Ju n e Ju n e Ju n e Ju n e Ju n e Ju n e Ju n e Ju n e Ju n e Ju n e F IN A N C E A N D B A N K IN G Loan s* A ll M e m b e r B a n k s ................................ L a rg e B a n k s .................................................. D e p o sits* A ll M em b er B a n k s ...................................... L a rg e B a n k s .................................................. B a n k D e b its * / * * ............................................ 166 O ne Year Ago 4 .2 4 0.5 4.3 4 0.4 4 .3 4 1 .4 4 .7 4 1 .3 224 190 2 09 219 190 214 2 14 186 205 180 165 182 164 279 164 197 161 214 145 213 144.1 1 48 .4 181 .0 106.1 143 .8 120 .8 148 .2 179 .9 1 13 .8 141.6 119 .6 145 .8 177.7 102 .8 1 3 3 .9 1 1 5 .8 137 .3 1 58 .4 100.1 2 .7 4 0 .9 2 .7 4 0 .8 2 .8 4 0 .9 3.0 4 1 .2 273 230 306 268 230 284 263 2 24 271 2 08 193 230 156 176 159 174 154 178 144 133 121 .2 108 .5 127 .7 127 .5 82.1 121 .9 109.3 127.7 1 25 .9 8 0.9 119 .7 108 .5 1 24 .9 124 .7 8 1 .6 3 .7 3 .8 4 0 .6 3.7 3 9.7 3 .8 4 0 .2 241 183 278 239 185 261 2 32 182 2 64 184 151 206 146 147 159 147 234 140 166 1 13 .0 1 04 .3 1 14 .8 9 3.7 7 5 .9 113 .2 104 .2 115 .0 9 3 .4 7 4 .5 112.7 104 .3 114 .4 9 2.2 7 5 .7 1 10 .9 1 03 .6 1 1 2 .4 9 1 .3 7 3 .3 4 1 .7 5 .6 4 1 .9 6 .2 4 1 .6 6 .0 4 2 .6 2 24 171 191 2 14 172 192 2 14 173 187 166 157 165 183 2 38 182 2 02 182 118 162 2 06 1 22 .3 1 26 .3 1 20 .5 1 13 .3 7 1 .5 1 21 .2 1 26 .4 1 1 8 .9 1 10 .0 8 2 .6 1 21.1 1 2 6 .4 1 18 .6 1 09 .1 8 0 .9 118 .7 123 .7 1 1 6 .4 1 10 .4 7 7.1 F IN A N C E A N D B A N K IN G M em b er B a n k L o a n s ............................................ A ug. M em b er B a n k D e p o s i t s ......................................A ug. B a n k D e b i t s * * .........................................................A ug. F L O R ID A M a n u fa c tu rin g P a y ro lls ................................Aug. Fa rm C a sh R e c e i p t s ............................................ J u ly EM P LO YM EN T N o n farm E m p l o y m e n t ......................................Aug. M a n u fa c tu rin g .................................................. Aug. N o n m a n u fa c tu rin g ......................................Aug. C o n s t r u c t i o n ...................................................Aug. Fa rm E m p lo y m e n t .................................................. Aug. U n e m p lo ym e n t R a te (P e rc e n t o f W ork F o r c e ) ......................... Aug. Avg. W e e k ly H rs. in Mfg. (H rs .) . . . Aug. 121.8 F IN A N C E A N D B A N K IN G M em b er B a n k L o a n s ............................................ Aug. M em b er B a n k D e p o s i t s ......................................Aug. B a n k D e b i t s * * .........................................................A ug. G EO R G IA IN C O M E M a n u fa c tu rin g P a y r o l l s ......................................Aug. Fa rm C a sh R e c e i p t s ............................................ J u ly EM P LO YM EN T N o n farm E m p l o y m e n t ......................................Aug. M a n u fa c tu rin g .................................................. Aug. N o n m a n u f a c t u r in g ............................................ Aug. C o n s t r u c t i o n .................................................. Aug. Fa rm E m p lo y m e n t ...................................................A ug. U n e m p lo ym e n t R ate (P e rc e n t o f W ork F o r c e ) ..........................Aug. Avg. W e e kly H rs. in M fg. (H rs .) . . . Aug. 122.6 109.1 1 28.7 1 28 .6 87.1 F ’ N A N C E AND B A N K IN G M em b er B a n k L o a n s ............................................ A ug. M em b er B a n k D e p o s i t s ................................Aug. B a n k D e b i t s * * .........................................................Aug. LO U IS IA N A IN C O M E M a n u fa c tu rin g P a y ro lls ................................Aug. F a rm C a sh R e c e i p t s ............................................ J u ly 211 EM PLO YM EN T N o n farm E m p l o y m e n t ......................................A ug. M a n u fa c tu rin g ...................................................Aug. N o n m a n u f a c t u r in g ............................................ Aug. C o n s t r u c t i o n ...................................................A ug. F a rm E m p l o y m e n t ...................................................A ug. U n e m p lo y m e n t R a te (P e rc e n t o f W o rk F o r c e ) ......................... Aug. Avg. W e e k ly H rs. in M fg. (H rs .) . . . Aug. 6.2 M em b er B a n k L o a n s * ......................................A ug. M em b er B a n k D e p o s i t s * ................................A ug. B a n k D e b its * / * * ...................................................A ug. IN C O M E M a n u fa c tu rin g P a y r o l l s ......................................A ug. F a rm C a s h R e c e i p t s ............................................ J u ly EM PLO YM EN T EM PLO YM EN T Tw o M o nth s Ago M IS S IS S IP P I IN C O M E N o n fa rm E m p l o y m e n t ................................ M a n u fa c tu rin g ............................................ N o n m a n u f a c t u r in g ...................................... C o n s t r u c t i o n ............................................ F a rm E m p lo y m e n t ............................................ O ne M onth Ago F IN A N C E A N D B A N K IN G A LA B A M A M a n u fa c tu rin g P a y ro lls ......................... F a rm C a sh R e c e i p t s ...................................... M onth IN CO M E E M P L O Y M E N T A N D P R O D U C T IO N N o n fa rm E m p l o y m e n t ................................ M a n u fa c tu rin g ............................................ N o n d u ra b le G o o d s ................................ F o o d ............................................................... T e x t i l e s ................................................... A p p a re l .................................................. Paper ......................................................... P r in t in g a n d P u b lis h in g . . C h e m i c a l s ............................................ D u ra b le G o o d s ...................................... L b r ., Wood P ro d s ., F u rn . & F ix S to n e , C la y , an d G la s s . . . P r im a ry M e t a l s ................................ F a b ric a te d M e t a l s ......................... M a c h i n e r y ............................................ T ra n sp o rta tio n E q u ip m e n t N o n m a n u fa c tu rin g ................................ C o n s t r u c t i o n ...................................... T ra n s p o rta tio n ................................ T r a d e ......................................................... F in ., in s ., and re a l e s t. . . . S e r v i c e s .................................................. F e d e ra l G o v e rn m e n t . . . . S ta te and L o c a l G o v e rn m e n t. F a rm E m p l o y m e n t ............................................ U n e m p lo ym e n t R a te (P e rc e n t o f W ork F o rc e ) . . . . In su re d U n e m p lo ym e n t (P e rc e n t of C ov. E m p . ) ......................... Avg. W e e k ly H rs. in M fg. (H rs .) . . C o n s tru c tio n C o n t r a c t s * ......................... R e s i d e n t i a l ......................................................... A ll O t h e r ............................................................... E le c tr ic P o w e r P ro d u c tio n ** . . . C otton C o n s u m p t i o n * * ................................ Pe tro le u m P r o d u c t i o n * * ......................... M a n u fa c tu rin g P ro d u c tio n . . . . N o n d u ra b le G o o d s ...................................... Food ......................................................... T e x t ile s .................................................. A p p a re l ................................................... Paper ......................................................... P r in tin g an d P u b lis h in g . . C h e m i c a l s ............................................ D u ra b le G o o d s ............................................ L u m b e r a n d W ood . . . . F u rn itu r e an d F ix t u r e s . . S to n e , C la y , a n d G la s s . . . P r im a ry M e t a l s ................................ F a b ric a te d M e t a l s ......................... N o n e le c tric a l M a c h in e ry . . E le c tr ic a l M a c h in e ry . . . . T ra n s p o rta tio n E q u ip m e n t La te st . . . . . Aug. A ug. Aug. Aug. Aug. N o n fa rm E m p l o y m e n t ......................................A ug. M a n u fa c tu rin g ...................................................A ug. N o n m a n u f a c t u r in g .............................................A ug. C o n s t r u c t i o n ...................................................Aug. F a rm E m p l o y m e n t ...................................................A ug. O C T O B E R 1973, M O N T H L Y REVIEW O ne M onth Ago L a te s t M onth Tw o M o n th s Ago O ne Year Ago L a t e s t M onth O ne M onth Ago Tw o M o n th s Ago O ne Year Ago EMPLOYMENT U n e m p lo y m e n t R a te (P e rc e n t of W o rk F o rc e ) . . A vg. W e e k ly H rs. in M fg. (H rs .) Aug. Aug. 4.0 4 0.6 4 .2 4 0.7 N o n farm E m p l o y m e n t ......................... M a n u fa c tu rin g ...................................... N o n m a n u f a c t u r in g ................................ C o n s t r u c t i o n ...................................... F a rm E m p lo y m e n t ...................................... U n e m p lo ym e n t R a te (P e rc e n t o f W o rk F o rc e ) . . . Avg. W e e k ly H rs. in M fg. (H rs .) . F IN A N C E A N D B A N K IN G M e m b e r B a n k L o a n s * ......................................Aug. M em b er B a n k D e p o s i t s * ................................Aug. B a n k D e b its * / * * ..................................................Aug. 236 196 200 225 193 227 2 28 195 2 19 189 172 187 163 164 252 149 152 Aug. Aug. Aug. Aug. Aug. 122 .8 114.7 127.3 119.7 9 6.3 123.1 114 .8 127 .7 119.7 9 3.2 123.7 115.9 128.0 120 .6 9 2.6 1 1 9 .4 112.3 1 23.4 1 20.8 8 8.0 . . Aug. .. . Aug. 3.1 4 0.6 3.4 4 0.5 3.0 40.5 3 .5 4 0.8 . Aug. . Aug. 226 182 205 221 182 191 219 178 198 185 165 166 . . ■ • • . . • • • TEN N ESSEE F IN A N C E A N D B A N K IN G M a n u fa c tu rin g P a y r o l l s ............................... Aug. F a rm C a s h R e c e i p t s ............................................J u ly 165 197 202 * F o r S ix th D is t ric t a re a o n ly ; o th e r to ta ls fo r e n tir e s ix s t a t e s B a n k D e b its * /* * * D a ily a v e ra g e b a s is t P r e lim in a r y d a ta r*R evised N .A . Not a v a ila b le Note: Indexes for bank debits, construction contracts, cotton consumption, employment, farm cash receipts, loans, petroleum production, and payrolls: 1967 = 100. AM other indexes: 1957-59 = 100. S o u rce s : M a n u fa c tu rin g p ro d u ction e s tim a te d by th is B a n k ; n o n fa rm , m fg . a n d n o n m fg . e m p ., m fg. p a y ro lls an d h o u rs, and u n e m p ., U .S . D ept, of L a b o r an d co o p e ra tin g s ta te a g e n c ie s ; cotto n c o n su m p tio n , U .S . B u re a u of C e n s u s ; c o n stru c tio n c o n t ra c t s , F . W . Dodge D iv ., M cG ra w -H ill In fo rm a tio n S y s te m s C o .; p e tro l, p ro d ., U .S . B u re a u of M in e s; in d u s tr ia l u se of e le c . p o w er, F e d . P o w er C o m m .; fa rm c a s h re c e ip ts an d fa rm e m p ., U .S .D .A . O th e r in d e x e s b a se d on d a ta c o lle c te d by t h is B a n k . A ll in d e x e s c a lc u la t e d by t h is B a n k . 'D a ta b e n ch m a rk e d to Ju n e 1971 R e p o rt o f C o n d itio n 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 In s u r e d C o m m e r c ia l B a n k s in th e S ix t h D is t r ic t (In T h o u s a n d s o f D o lla r s ) P ercent Change Percent Change A u g u st 1973 J u ly 1973 A u g u st 1972 A u g u st 1973 fro m d a te 8 m os. J u ly Aug. 1973 1972 from 1972 ST A N D A R D M E T R O P O L IT A N S T A T IS T IC A L A R E A S * * B irm in g h a m . . G ad sd e n . . . . H u n ts v ille . . . M o b i l e ......................... M o ntg o m ery . . . T u s c a lo o s a . . . . B a rto w -La k e la n d W in te r H aven D ayto n a B e a c h F t. La u d e rd a le H o llyw o od . . . F t. M yers . . . . G a in e s v ille . . . Ja c k s o n v ille . . . M elbourneT itu s v ille - C o c o a M iam i ......................... O r l a n d o ........................ P e n s a c o la . . . . S a ra so ta . . . . T a lla h a s s e e . . . T a m p a -S t. P e te W. P a lm B e a c h D o th an S e lm a 3 .4 19 ,8 83 9 4 ,7 1 9 3 04 ,5 22 1 ,1 1 4 ,5 9 4 6 4 9 ,5 1 6 2 2 9 ,3 71 3 ,6 6 2 ,8 8 8 9 5,05 9 3 45 ,9 64 1,0 30 ,9 21 6 58 ,3 27 2 1 9 ,6 2 6 3 ,2 01 ,4 83 88,237 2 68,5 23 9 50 ,5 81 51 9 ,2 1 6 175,061 7 7 1 ,1 7 0 5 1 8 ,6 77 8 0 6 ,7 63 46 9 ,9 2 4 6 67 ,1 67 3 1 4 ,7 1 0 1 ,7 9 2 .9 6 9 3 1 0 ,0 6 6 2 5 5 ,1 4 8 4 ,4 7 3 ,7 6 3 1 ,8 37 .5 22 28 8 ,1 3 2 2 4 1 ,6 8 4 3 ,8 5 6 ,6 5 9 4 4 1 ,5 7 4 6 ,9 6 9 ,8 9 9 1 ,7 2 6 ,9 6 7 4 5 8 ,4 4 5 4 9 6 ,2 2 9 1 ,0 39 ,4 37 4 ,0 9 5 ,1 6 1 1 ,2 29 ,5 56 4 2 7 ,9 11 6 ,9 7 9 ,2 9 6 l,5 6 6 ,9 6 1 r 4 3 7 ,2 6 2 5 2 0 ,3 9 2 8 5 5 ,9 2 3 3 ,9 3 0 ,3 9 6 1 ,2 34 ,5 21 A lb a n y ............................... 1 9 7 ,5 82 A tla n ta . . 16 ,5 6 5 ,1 1 6 A u g u sta ......................... 579 ,6 11 C o l u m b u s ........................ 4 4 7 ,2 3 2 M acon ............................... 5 6 2 ,1 26 Savannah ......................... 5 4 0 ,0 88 7 _ 0 —12 + 8 — + 4 + 7 + 7 + 13 + 17 + 25 + 31 + 19 + 17 + 18 + 15 + 22 +28 _ 4 + 10 + 16 + 65 + 25 + 30 1,6 78 ,3 77 2 2 2 ,4 3 8 2 1 1 ,9 6 0 3 ,3 4 9 ,0 6 4 2 + 8 + 6 + 16 + 7 + 39 + 20 + 34 + 15 + 35 + 23 +24 3 2 9 ,5 6 6 5 ,0 5 0 ,9 0 7 1 ,2 4 1 ,7 3 0 3 8 7 ,2 39 33 5 ,3 2 6 6 6 1 ,2 3 9 3 ,0 4 6 ,9 9 8 8 3 8 ,0 6 3 + 3 — 0 + 10 + 5 — 5 + 21 . 4 0 + 34 + 38 + 39 + 18 + 48 + 57 + 34 + 47 + 28 + 29 +25 + 12 +48 +46 +26 + 38 187 ,1 76 1 5,28 0,48 7 520 ,4 11 4 3 1 ,5 6 9 5 4 0 ,3 15 5 3 7 ,7 83 164,120 11,41 1,78 1 4 6 5 ,4 6 5 3 9 4 ,3 4 3 4 5 9 ,5 1 2 4 5 9 ,8 0 6 + 6 + 8 + 11 + 4 + 4 + 0 + 20 + 45 + 25 + 13 + 22 + 17 + 19 + 42 + 19 + 11 + 19 + 19 4 A le x a n d ria . . . . B ato n R o uge L a f a y e t t e ......................... L a k e C h a r le s . . . New O rle a n s . . . 2 52 ,0 73 1 .3 25 ,2 93 2 7 5 ,0 4 6 228 ,6 81 4 ,1 9 7 ,2 1 8 2 5 9 ,9 1 9 1 ,4 13 ,5 81 2 7 6 ,1 2 6 2 2 7 ,2 0 4 4 ,4 2 0 ,8 0 9 2 11 ,7 71 1 .1 5 2 ,7 3 4 236 ,1 21 1 9 2 ,6 70 3 ,6 9 7 ,8 9 3 _ _ + - 3 6 0 0 5 + 19 + 15 + 16 + 19 + 14 + 19 + 14 + 21 + 10 + 13 B ilo x i-G u lfp o rt . . . Jackso n ......................... 2 5 6 .2 7 3 1 ,4 08 ,5 06 2 80,701 1 ,4 6 6 ,4 3 6 2 5 0 ,5 1 7 1 ,2 3 5 ,3 8 8 - 9 4 + 2 + 14 + 20 + 23 C h atta n o o g a . . . K n o x v ille . . . N a s h v ille . . . . 1 .3 79 ,9 80 9 4 3 ,9 4 4 3 ,4 8 1 ,0 3 3 1 ,2 8 6 ,8 2 0 9 4 9 ,1 3 3 3 ,1 8 2 ,1 9 3 9 4 2 ,2 07 7 4 8 ,3 2 0 2 .7 0 1 ,4 9 8 + 7 _ 7 + 9 + 46 + 26 + 29 + 24 + 21 + 21 1 09 ,7 70 1 05,479 101,173 + 4 + 8 + 14 O TH ER C E N T E R S A n n isto n ......................... . A u g u st 1973 fro m . . . . . . . . B ra d e n to n . . M onroe C o u n ty O ca la . . . . S t. A u g u stin e S t. P e te rs b u rg . Tam pa . . . . A th e n s . B ru n s w ic k D aito n . E lb e rto n G a in e s v ille G riffin . L a G ra n g e N ew n a n . Rom e . V a ld o sta . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A b b e v ille . B u n k ie . . . Ham m ond . New Ib e ria P la q u e m in e T h ib o d a u x . . . . . . . . H a ttie sb u rg . L a u re l . . . . M e rid ia n . . N a tc h e z . . P a sc a g o u la M o ss P o in t V ic k s b u rg . . Y a zo o C ity . . . . . . A u g u st 1972 d a te 8 m o s. 1973 J u ly A ug. fro m 1973 1972 1972 1 3 1 ,1 18 6 5 ,9 2 7 + 12 + 10 + 55 + 24 + 41 + 28 1 3 3 ,0 06 58,90 1 146 ,5 39 3 3 ,9 1 5 r 7 4 8 ,2 9 6 1 ,4 7 3 ,6 0 2 - 3 + 17 + 4 - 1 - 9 + 11 + 36 + 49 + 41 + 30 + 34 + 37 + 31 + 33 + 40 + 20 +37 + 22 1 6 4 ,5 06 1 02 ,8 83 1 6 6 ,7 00 1 9 ,4 6 9 1 4 1 ,1 30 7 2 ,2 9 6 3 9 ,7 9 3 5 6 ,7 9 0 1 42 ,8 80 9 8,96 3 147 ,0 83 7 9 ,5 2 2 155 ,6 95 2 1 ,4 5 9 1 11 ,8 72 5 8,82 2 3 6,07 6 5 0 ,3 8 8 1 2 2 ,7 56 91,26 1 + 11 + 8 + 17 + 12 + 2 + 7 + 5 -11 + 3 - 0 + 24 + 39 +26 + 2 + 28 + 31 + 16 - O' + 20 + 8 + 14 +33 + 15 + 2 + 29 + 24 + 24 + 37 + 16 +13 1 5,63 6 1 0,29 0 8 7 ,1 4 0 6 1 ,0 8 7 2 6 ,6 0 5 4 2 ,2 4 3 18,94 2 11,131 9 5 ,1 9 2 6 2 ,9 1 7 2 8 ,0 9 2 3 8 ,3 5 3 14,723 8 ,6 19 6 3 ,0 0 4 5 0,89 6 15,911 2 9 ,6 5 7 -17 - 8 - 8 - 3 - 5 + 10 + 6 + 19 + 38 +20 +67 +42 + 5 + 24 + 36 + 14 + 60 + 16 A u g u st 1973 J u ly 1973 2 0 3 ,2 9 8 8 1 ,9 8 4 1 8 0 ,9 55 74,84 1 1 8 0 ,8 9 4 87,61 1 2 07 ,2 91 4 3 ,9 4 7 1 ,0 01 ,0 26 2 ,0 2 3 ,3 2 7 186 ,6 13 7 5 ,1 8 8 2 0 0 ,0 8 4 4 4 ,1 8 7 1 ,0 9 7 ,9 4 7 1 ,8 2 4 ,4 5 6 1 8 2 ,4 08 1 1 0 ,6 57 1 9 5 ,5 60 2 1 ,8 8 8 1 43,651 77,26 1 4 1 ,9 0 0 5 0 ,3 1 8 1 4 7 ,5 97 9 8 ,6 6 8 . . . 131 ,6 20 7 2 ,7 4 9 1 21 ,1 43 5 4 ,8 5 2 1 37 ,7 97 7 6 ,0 5 0 1 37 ,5 48 5 3 ,5 1 5 1 0 8 ,7 1 9 6 3 ,3 6 4 105 ,9 97 4 7 ,0 2 8 - 4 - 4 -1 2 + 2 + 21 + 15 + 14 + 17 +23 + 19 + 19 + 14 . . . . . . 8 6 ,5 9 3 6 9.59 5 3 8 ,9 3 0 1 3 9 ,0 59 7 8 ,3 6 8 46,98 1 1 4 9 ,7 99 5 6,03 4 3 0 ,7 6 7 -3 8 -11 -1 7 -4 2 +24 + 27 + 10 + 24 + 10 B ris to l ......................... Jo h n so n C ity . . . K in g sp o rt . . . . 1 15,391 1 7 6 ,7 56 2 6 7 ,9 7 8 116 ,4 92 1 88,371 25 9 ,9 8 7 1 28 ,7 02 1 41 ,3 20 2 2 7 ,5 0 4 - 1 - 6 + 3 -1 0 + 25 + 18 - 2 + 18 + 18 D is t ric t To ta l . . . . 7 6 ,8 9 7 ,7 7 8 7 4 ,9 6 6 ,7 2 2 r 6 0 ,2 1 1 ,2 6 2 r + 3 +28 +26 A la b a m a . . . . 8 ,4 0 7 ,9 0 2 F l o r i d a ......................... . 2 7 ,0 4 1 ,7 3 6 G e o r g i a ........................ 2 2 ,5 2 5 ,1 3 4 L o u is ia n a ' . . . . 7 ,5 7 5 ,8 1 9 M is s is s ip p i' . . . . 2 ,9 0 1 ,2 3 3 Ten n e sse e ' . 8 ,4 4 5 ,9 5 4 8 ,6 0 4 ,7 4 1 7 ,2 8 9 ,7 3 5 2 5 ,8 9 5 ,2 08 r 2 0 ,2 3 6 ,6 0 2 r 2 1,1 5 2 ,6 6 3 1 6,62 8,73 2 7 ,9 13 ,6 81 6 ,5 6 9 ,3 8 0 3 ,2 0 1 ,7 1 8 2 ,7 0 1 ,7 15 8 ,2 28 ,7 11 6 ,7 8 5 ,0 9 8 + + + + 15 + 34 + 35 + 15 + 7 + 24 +20 + 27 + 34 + 21 + 19 + 20 2 4 6 4 9 3 1 D is t ric t p o rtio n o n ly r-R e vise d * C onfcfrm s°toS°M SA3 dVf?nfti o n s a s *of* De c e m b e r 31 ^ 972^ " 8UreS PU b" Shed FEDERAL RESERVE BANK OF ATLANTA " B a n k DebitS a " d D eP ° Si‘ T U rn ° V er" by B ° ard 0 f G ° ve m 0 rS of th e F e d e ra l S» 167 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 Mfg. Producti on 1 9 5 7 - 5 3 =1 0 0 S e t s . Adj. Unemployment Rate *Seas. adj. figure; not an index Latest plotting: August, except mfg. production, June, and farm receipts, July. The Southeast e c o n o m y still displays considerable resistance to a slo w d o w n , alth ou gh som e elem ents are m oderating. C onstru ctio n activity continued to increase despite a lackluster perform ance by the h o u sin g sector. Agricultural prices m o ved up then d o w n sharply, and crop prod u ction prospects im proved. The grow th in em p lo ym en t m oderated in the face of lo w u n e m p lo ym e n t rates and high labor dem an d. Bu si ness loans at banks have resum ed a slow er pace after a brief resurgence, and con su m e r sp e n d in g is less exuberant. V a lu e o f construction contract aw ards w as pushed Em p loym ent e dged u pw ard in A u gu st, th o u gh at to new heights by record levels of non-residential a slow er pace than in recent m onths. Nevertheless, awards. C o m m e rcial and engineering construction labor dem an d rem ains high. Job levels of m an u accounted for m uch o f the strength in the n on facturing and construction were up in all reporting residential sector in August. The value of residential states. contract aw ards changed creased in all states except Louisiana. Both factory little from July's level. N o n m an u fa ctu rin g e m p lo ym e n t also in Activity in the residential sector continued to be b elo w levels recorded in late 1972 and early 1973. R ising interest rates on construction and perm anent hours and earnings m aintained achieved the previous m onth. loans, rising construction costs, and net outflow s from thrift institutions continued to be problem s for August, particularly business loan s to textile and service industries. D e p o sits also surged; the in the residential sector. Agricultural prices in A u gu st sh ow ed the largest crease w as entirely attributable to increases in tim e deposits. B o rro w in g from the Federal Reserve and on e -m on th increase o f record, fo llo w in g the re purchases o f Federal funds also rem ained at very m oval o f the price freeze on m ost fo o d Bank le n d in g sh ow e d the unexpected high levels strength in com high levels. By m id-Septem ber, however, larger D is for meats and trict banks had returned to the m o deratin g levels increased livestock m arketings have co m b in ed to of business len ding o f early sum m er and were re produce d u cin g their purchases o f large-den om in ation C D 's. m odities. How ever, slack dem and sharp price reductions through early Septem ber. Recent crop production forecasts in d i cate im proved yield prospects for the C o n su m e r instalm ent credit gre w m oderately in District's A ugust. N e w c onsum e r len din g at com m ercial banks soybeans, cotton, and peanuts, but the rice crop slackened from this year's earlier extrem ely high w as d am aged by heavy rainfall. Broiler placem ents levels, as all categories except direct auto loans grew have declined from a m onth ago, principally re less than in the previous m onth. Prelim inary retail flecting reductions in A lab am a and Louisiana, but sales indicators sh ow c o nsum e r sp e n d in g c o n tin u eggs ing strong, particularly for autos. How ever, grow th set for broilers have increased. Farm cash receipts continue at least one-fourth higher than in consum e r sp e n d in g is less exuberant than 1972's levels in five of six District states. earlier m onths this year. 1 6 8 for FRASER Digitized in O C T O B E R 1973, M O N T H L Y REVIEW