Full text of Economic Review (Federal Reserve Bank of Atlanta) : September 30, 1945, Volume 30, Number 9

The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.

Hohthly
F E D E R A L

R E S E R V E

Review
B A N K

O F

A T L A N T A

Atlanta, Georgia, September 30, 1945

Volume XXX

F in a n c in g

E x p o rts

in

th e

S ix th

Number 9

D is tric t

the states of the Southeast have always been

with customers whose creditworthiness might be less well

that its staple agricultural crops, its lumber, its naval stores,
and, in later years, its mineral and metallurgical products
have found in foreign markets.
Interest in the export trade, however, has not been confined
to primary producers. It has also characterized large num­
bers of individuals and businesses in manufacturing, trans­
portation, and the service trades that are more or less
dependent upon exports. Among these latter businesses are
the banks.
Banks have both direct and indirect interests in the export
trade. Insofar as this trade is carried on by means of credit,
it is obviously a field in which interested banks may find
employment for their funds. Whether or not the banks of the
region actively participate in the financing of exports, how­
ever, they are necessarily affected by the state of this trade
because of its general importance in the Southern economy.
The export of particular commodities, of course, need not
be financed by banks of the region in which they originate or
that possesses the ports through which they move. They may
be financed through any bank, domestic or foreign, that has
the necessary funds, facilities, experience, and marketing
information required by the peculiarities of the export trade.
The extent to which any Southern bank participates in this
business in the coming years, when foreign trade is expected
to undergo a great expansion, will depend largely upon its
own policies—whether or not it chooses to employ its funds
in this field of finance and sets up a competent foreign
department to handle the business.
Once a bank has made the initial decision to engage in the
business of financing exports, the policy of its foreign depart­
ment will tend to be governed by one or the other of two
points of view. On the one hand, the dominant attitude may
be a strictly banking point of view in which profitableness
and safety are primary concerns, irrespective of the effects
that the bank’s policy may have on the export trade in gen­
eral, or it may be an export point of view in which the bank’s
role as a stimulator of foreign trade is given more weight.
The first of these viewpoints would tend to be cautious and
conservative, favoring large exporters of unimpeachable
credit standing and financial responsibility and their foreign
customers of whose creditworthiness the bank would also
have fully assured itself. The second point of view, on the
other hand, would tend to be more venturesome, encouraging
smaller
American businesses to participate in foreign trade


utilized in peace, the maximum expansion of markets, foreign
as well as domestic, will have to be achieved not only by the
nation’s larger businesses but also by smaller concerns. In
the past, not many of the latter firms have seriously entered
the export field. Whether they will be willing, and able, to
do so in the years immediately ahead may well turn upon the
financial services offered them by the banks.
In the Sixth District, export financing is concentrated
almost wholly in the hands of eight banks in the ports of
New Orleans, Mobile, and Savannah. Of these, five have
regularly organized foreign departments. In the others, one
of the officers handles whatever foreign business the bank
has. Foreign departments, where they do exist, are not all
equally well staffed, nor are they all equally well provided
with up-to-date and accurate information bearing upon for­
eign economic conditions and the credit standing of foreign
buyers. The best of these departments, however, are prob­
ably as competent and as well informed as any in the
country.
The year 1938 was the last reasonably normal year before
foreign trade had been completely dislocated by the war,
although some banks claim to have experienced a decline in
their foreign business even by that time. In that year Sixth
District banks handled export business in an amount exceed­
ing 34 million dollars. Not all of this amount, however, rep­
resented actual financing of exports by the banks, for 9.1
million dollars, approximately 29 per cent, consisted of items
handled by the banks for collection only. In such cases the
exporters themselves provided the financing and bore the
risks.
Of the amount of export business financed by Sixth Dis­
trict banks in 1938, approximately 80 per cent was financed
by the purchase, or discount, of drafts drawn by exporters on
foreign buyers or banks and by advances made against such
drafts. The remaining 20 per cent, approximately three
million dollars, consisted of letters of credit opened by the
American banks for the account of foreign buyers or banks.
American exporters, of course, were the ultimate beneficiaries
of these letters of credit, against which their foreign cus­
tomers authorized them to draw for payment of commodities
sold abroad.
During the years since 1938 the proportionate relationship
between export business financed by means of drafts and that
financed by means of letters of credit has been radically

is t o r ic a l l y

,

concerned with the export trade. The prosperity known.
Hvitally
of the region has depended to a large extent upon the access If America’s wartime productive potential is to be fully



9 8

M

o n t h l y

R e v ie w

o f th e F e d e ra l R e s e rv e B a n k o f A t la n ta f o r S e p te m b e r 1945

altered. The extraordinary political and economic risks and
uncertainties incident to the war compelled American
exporters, in self-protection, to insist upon receiving pay­
ment by means of letters of credit. The withdrawal, tempo­
rary or otherwise, of some of the most important foreign
competitors from the export market had the effect of rein­
forcing this demand of American exporters. The coming of
peace and the probable early reappearance bf competition in
the foreign market will undoubtedly see a decline in the
volume of transactions handled by letters of credit and an
increase in the purchase, or discount, of drafts.
Almost without exception drafts have been negotiated by
Sixth District banks with full recourse to the exporters.
Moreover, these drafts have ordinarily had a tenor of less
than six months. Indeed, the vast majority have been drawn
for periods of 90 days or less and banks have tended to look
askance on those running for as much as 120 days. It has
been felt by the banks that four months allow more than
ample time for commodities to reach their destinations, be
accepted, and move into consumption or marketing channels.
Banks report virtually no requests to handle drafts for
periods in excess of six months.
A consideration of the past activity of Sixth District banks
in the field of export finance shows them to have followed
policies that were generally conservative in character and
that tended to afford the maximum of safety for bank funds
employed in this way. These policies resulted in financial
services to exporters that were adequate, in all probability,
to the needs of the trade at the time and were certainly justi­
fied from the standpoint of safety to the bank. Whether or
not the same policies will prove equally adequate in the
period following the transition from war to peace is a matter
about which banks should now be thinking.
Any prediction of what the dimensions of the nation’s
export trade will be when it has again settled down to a nor­
mal basis is extremely hazardous because of the many
unforeseeable and uncontrollable factors, both political and
economic, upon which it will be contingent. Even more diffi­
cult, of course, is an accurate prediction of the dollar volume
of exports that may move through Southern ports—that part
of the export trade in which Southern banks would logically
be most interested.
During the year 1939, exports from
the United States amounted to 3.2 bil­
lion dollars, of which 872 million dol­
lars represented exports through the
ports of 15 Southern customs districts.
For the year 1944, exports from the
United States, including military and
lend-lease shipments, exceeded 14 bil­
lion dollars. It is quite unlikely, of
course, that peace-time exports will
reach this figure in the visible future.
The level to which United States ex­
ports will finally tend to be adjusted
will probably lie somewhere between
the figure for 1939 and that for 1944.
Just where an estimator will place that
level depends upon the optimism of
his underlying assumptions regarding
tariff
reductions, the rate of foreign



investment, and many other factors. Within the Department
of Commerce, estimates of postwar exports run from seven
billion dollars to as high as 12 billion. If the conservative
seven-billion-dollar figure is accepted and if it is assumed
that the ports in the 15 Southern customs districts maintain
the same relative position they had in 1939, then exports
through Southern ports would be expected to reach a level of
approximately 1.7 billion dollars, or, roughly, twice the dol­
lar volume of 1939.
Though there may be some exaggeration even in this con­
servative estimate, the probable volume of exports through
Southern ports at the time normal conditions are re-established will undoubtedly still be enough larger than it was in
1939 to constitute it a substantial economic opportunity both
for exporters and banks. Heretofore the export trade has been
predominantly in the hands of large exporters. With this
trade reaching dimensions that seem most probable in the
years immediately ahead, however, smaller concerns may
develop a greater interest in it.
Participation in the export trade by small concerns, how­
ever, tends to be limited by certain handicaps to which they
are subject. For one thing, small concerns commonly lack
adequate information about foreign markets. Although the
Department of Commerce and certain private agencies are in
a position to provide exporters with a great deal of informa­
tion of this sort, these services are frequently unknown to
small businesses, which are unaccustomed to using them.
Moreover, the basic data available from governmental and
other agencies ordinarily require considerable refinement,
interpretation, and co-ordination before being applied to the
problems of an individual concern. Larger businesses are
usually better able to do this than are small concerns.
The complexities of foreign exchange, of export packing
and shipping practices, and of foreign customs regulations
may also serve to deter small businesses from entering this
field. Higlily competent personnel is required in order to
cope with such problems and to keep in touch with the agents
of common carriers by water and with foreign freight ^brokers
and forwarders. It is also necessary to keep in touch with the
foreign freight agents of railways, because rates and tariffs
are not always made public but must be secured by direct
application. Small concerns may well feel that such a staff
is a luxury they cannot afford.
Another disadvantage experienced
by small businesses in the export field
is a lack of suitable representation
abroad. A small concern can seldom
afford foreign agents who will dili­
gently spend their energies in build­
ing a paying volume of orders and
who will carefully investigate the
credit standing and general business
integrity of prospective foreign cus­
tomers.
A small concern may also find itself
at a cost disadvantage in foreign mark­
ets, compared with larger competitors
even of the same country. Manufac­
turing and production costs are not
necessarily higher for small businesses
than for large ones, although this

M

o n t h l y

R e v ie w

o f th e F e d e ra l R e s e rv e B a n k o f A tla n ta f o r S e p te m b e r 1945

often happens to be the case. Nevertheless, shipping as it
does in smaller quantities and perhaps to numerous con­
signees abroad, the small business may find that the cost of
its product at destination is markedly higher than would be
the case for a large-scale competing concern. In some foreign
markets, particularly in certain Latin-American countries,
price is frequently the decisive factor in a transaction, out­
weighing quality, terms of sale, and all other surrounding
conditions. The Latin-American aphorism “We’re not mad
with our own money” well expresses the importance of price
in determining the beneficiary of orders. Unless a small busi­
ness can compete on a price basis when seeking such foreign
orders, it may find itself at a fatal disadvantage in the export
trade.
To some extent the cost of goods at destination could be
reduced for individual exporters if they would combine in
export associations under the terms of the 1918 WebbPomerene Act. Unfortunately, because of Government suits
brought against a number of such associations and Govern­
ment investigation of others, considerable uncertainty has
developed concerning what can or cannot be done under the
terms of the act. The device of export associations, conse­
quently, has been relatively ineffective in increasing exports
by drawing small businesses into the field. A judicial clarifi­
cation of the meaning of the act or a Congressional amend­
ment might make of this device a more useful instrument in
the future than it has been in the past.
Finally, it has been said that small business is handicapped
in the export trade by its inability to get credit on favorable
terms from the banks. The disadvantages under which small
businesses labor, however, and the high degree of risk
involved in their foreign transactions are sufficient reasons
for banks to exercise exceptional care in extending them
credit.
In a statement made on April 17, 1945, by Secretary of
Commerce Henry A. Wallace before the Subcommittee on
Foreign Trade for Small Business, the suggestion was made
that some sort of export-credit guaranty or insurance might
be useful in getting more favorable credit accommodations
for small businesses that want to enter the export trade.
Export-credit guarantees, of course, are not something new
or untried. Eighteen countries have made use of them at one
time or another since World War I. Of the systems still func­
tioning, that of Great Britain is probably the most important.
The most recent addition is the Canadian system established
by act of the Canadian House of Commons on August 2, 1944.
Export-credit guaranty systems are usually set up for the
protection of exporters against losses stemming from certain
specific hazards. One of these risks arises from the possibility
that a foreign debtor may find himself unable to liquidate a
debt because governmental blockage or restriction of exchange
prevents him from converting the currency of his own coun­
try into that of the exporting country. The hazards that a
debtor may turn out to be insolvent or that he may default on
his obligations are what may be considered the normal busi­
ness risks.
All exporters, regardless of size, are subject of course to
these risks but not to the same degree. The large business is
able to reduce these risks to a minimum because of its greater
knowledge of foreign markets and foreign economic and
political conditions, its careful choice of customers, and the




99

information and services available through the well-organized
foreign departments of the banks that negotiate its drafts. An
export-credit guaranty system, therefore, although theoreti­
cally not discriminating among exporters would in practice
tend to be of greater value to the small business than to the
large business.
In an export-credit insurance plan a choice of various
risk-bearing agencies is possible. All risks may be covered
by insurance with the Government or some governmental
agency, as is the case in Great Britain. On the other hand, they
could be carried by private companies or by private com­
panies that are reinsured by the Government. If any such in­
surance plan were to be inaugurated in the United States,
the national predilection in favor of private enterprise would
undoubtedly favor the last of the three carriers mentioned,
at least for normal credit risks. The risk of blockage or re­
striction of exchange, however, since it arises from the un­
predictable actions of governments and can be met only by
governmental action, would probably be considered uninsurable by a private company and would have to be carried
by the Government itself or some governmental agency.
Whether or not a system of export-credit guarantees would
have the desired effect of attracting more small businesses
into the export field would depend partly, although to a
minor extent, on the way in which bank policy would be
affected by the existence of this kind of insurance. Bank
policy, in turn, would depend to some extent upon the de­
tails of the plan, if and when it is set up.
Although banks cannot be expected to know at the present
time just how they may react under an export-credit insurance
plan since all future factors are so uncertain, current discus­
sion in the press and in banking circles has given rise to some
tentative attitudes that may be indicative of future bank pol­
icy. Most District banks would probably be interested in
financing more exports for concerns that have the same credit
standing as those firms they now finance if exporters were
protected by export-credit insurance. A few, indeed, might
even be willing to negotiate drafts for some exporters that
are now considered marginal. Moreover, if exporters were
covered by insurance against the insolvency or default of their
customers, some banks, in all probability, would be willing
to increase the amount of financing they would provide on a
given export transaction.
A bank’s ultimate safeguard in extending export credit lies
in the recourse that it has to the exporter when the foreign
debtor, after accepting the exported commodities, proves
unable to pay or unwilling to do so. Export credit insurance
would seem quite unlikely to induce many banks to forego
this safety factor.
One of the arguments sometimes advanced in favor of the
guaranty of export credit is that such protection is necessary
if American exporters are to meet successfully the competition
of exporters of other countries. Foreign exporters, it is said,
are able to give their customers better terms than American
exporters because export-credit insurance makes banks more
willing, to negotiate long-term drafts. Although there is some
indication that Sixth District banks may react in this way, the
tendency is probably not very strong. All banks, presumably,
would be willing to handle more drafts with a tenor of six
months or less, if the exporters were protected by credit
insurance, and some banks probably would be willing to dis-

100

M

o n t h l y

o f th e F e d e ra l R e s e rv e S a n k o f A t la n ta f o r S e p te m b e r 1945

R e v ie w

S ix th D is t r ic t S t a t is t ic s
R ETAIL JEW ELRY S T O R E O PE R A T IO N S
Ite m
T o ta l s a l e s ...........................................................
C a s h s a l e s ...........................................................
...............................
C r e d it s a l e s .............
A c c o u n ts r e c e iv a b l e , e n d o l m o n th .
C o lle c tio n s d u r in g m o n t h .......................

N um ber
oi
S to r e s
R e p o r tin g

P er C ent C h an g e
J u ly 1 9 4 5 to A u g u s t 1 9 45

30
27
27
30
30

+ 14
+ 16
+ 12
— 1
— 2

D EPARTM ENT ST O R E SALES*
A d ju s te d * *

D IS T R IC T ..................
A tla n ta ..................
B a to n R o u g e . . .
B ir m in g h a m . . . .
C h a tta n o o g a . . .
J a c k s o n ..................
J a c k s o n v i l l e .. . .
K n o x v ille .............
M a c o n ....................
M ia m i.....................
M o n tg o m e r y . . .
N a s h v ill e .............
N ew O rle a n s . . .
T a m p a .....................

U n a d ju s te d

A ug.
1 9 45

Ju ly
1 9 45

A ug.
1944

A ug.
1 9 45

J u ly
1 9 45

A ug.
1944

274
3.10
318
253
298
328
352
324
287
267
306
329
230
331

300
345
320
277
326
320
376
373
294
326
312
3 41
248
378

243
266
216
239
276
280
329
303
278
220
267
282
2 11
339

244
299
277
231
249
263
302
292
217
1 80
245
279
212
260

225
245
249
216
230
224
300
266
209
184
223
2 41
188
276

216
257
227
218
23.1
224
282
273
210
149
213
239
194
266

DEPA RTM EN T S T O R E S T O C K S
U n a d ju s te d

A d ju s te d * *

D IS T R IC T ..................
A tla n ta ..................
B ir m in g h a m . . . .
M o n t g o m e r y .. .
N a s h v ill e .............
N ew O rle a n s . . .

A ug.
1945

J u ly
1945

A ug.
1944

A ug.
1 9 45

J u ly
1945

A ug.
1944

187
296
165
233
336
115

197
295
185
298
377
132

188
288
154
234
321
1 67

202
288
166
2 31
336
107

203
286
168
238
326
121

203
280
155
232
320
157

C O T T O N C O N S U M P T IO N *

TO T A L ..........................
A la b a m a ................
G e o r g i a ...............
T e n n e s s e e ..........

C O A L P R O D U C T IO N *

A ug.
1945

J u ly
19 45

A ug.
1944

A ug.
1945

J u ly
1945

A ug.
1944

137
140
137
125

137
137
138
121

152
1 60
151
134

152
163

163
1 77

163
17,1

127

i3 3

139

G A S O L IN E TAX
C O L L E C T IO N S

M A N U FA C T U R IN G
EM PLO YM EN T***

SIX S T A T E S ..........
A la b a m a ................
F l o r i d a ....................
G e o r g i a ...............
L o u i s i a n a .............
M is s is s ip p i..........
T e n n e s s e e ..........

J u ly
1 9 45

Ju n e
19 45

J u ly
1944

A ug.
1 9 45

J u ly
1 9 45

A ug.
1944

133
162
118
129
135
119
121

1 37
16 6r
12 7r
13 1r
142
125r
125

158
188
1 69
147
170
143
136

115
119
97
112
110
126
140

110
115
97
108
1 04
114
132

98
1 02
87
99
1 02
95
108

EL E C T R IC P O W E R P R O D U C T IO N *

C O S T O F L IV IN G

ALL IT E M S ..
F o o d .............
C lo th in g . . .
R e n t...............
F u e l, e le c tic ity , a n d
i c e ...............
H o m e f u r­
n is h in g s . .
M is c e l­
la n e o u s . .

J u ly
1945

Ju n e
1945

J u ly
1 9 44

134
150
142
114

133
146
1 42
114

130
144
137
114

SIX S T A T E S ..
H y d ro g e n e ra te d . .
F u e l­
g e n e ra te d . .

Ju n e
19 45

J u ly
1944

270

272

260

228

241

209

323

313

327

110

110

109

ANN U A L RA TE O F T U R N O V ER O F
D EM AN D D E P O S IT S

143

143

138

130

129

126

A ug.
1 9 45

J u ly
1945

A ug.
1944

1 3 .3
1 5 .2
5 8 .6

1 4 .7
1 5 .6
6 0 .3

1 5 .0
1 7 .J
6 6 .0

C R U D E PETR O LE U M P R O D U C T IO N
IN C O A STA L L O U ISIA N A AND
M IS S IS S IP P I*

U n a d j u s t e d ..
A d ju s te d * * . .

J u ly
1945

A ug.
1 9 45

J u ly
1 9 45

A ug.
1 9 44

209
209

208r
208r

199
199




U n a d ju s te d ..
A d j u s t e d * * ...
I n d e x * ...............

‘ D a ily a v e r a g e b a s is
“ A d ju s te d for s e a s o n a l v a r ia tio n
* * * 1 9 3 9 m o n th ly a v e r a g e = ilOO;
o th e r in d e x e s , 1 9 3 5 -3 9 = 100
r R e v is e d

count drafts running as long as a year. Few, if any, however,
could be expected to discount drafts of more than a year’s
tenor because of the added protection.
If export-credit insurance would make little difference in
the tenor of drafts that banks would be willing to handle, it
would probably make still less difference in the rate of dis­
count that would be charged. Although most banks undoubt­
edly would be willing to finance a larger volume of exports
for creditworthy customers at rates that would be the same for
those customers covered by insurance as for those not so cov­
ered, few might be willing to handle the drafts of insured
exporters at lower rates.
Current opinion among Sixth District banks that have been
actively engaged in the financing of exports seems to indicate
that export-credit insurance would lead to only slight modifi­
cations in the practices common before the war. Insurance, it
is believed, would make the banks willing to extend credit to
a few concerns now considered submarginal from a banking
point of view, and it would probably increase to some extent
the amount of credit that banks would be willing to grant on
an export transaction. On the other hand, it is the prevailing
opinion that insurance would not lead to the abandonment of
a bank’s recourse privileges. Neither would it lengthen a
great deal the maturities of drafts that banks would be willing
to handle nor reduce the discount rate.
Banks obviously intend to conduct their export-financing
business in the future as they have in the past on what are
considered sound banking principles, and credit insurance
would, probably not cause them to deviate appreciably from
this course. When the ultimate liability for a debt lies in a
foreign country, with all the uncertainty that this implies,
and a contingent liability rests upon the bank’s American
customer, the bank can protect itself only by the most careful
choice of risks and the fullest possible knowledge of the
credit standing and business integrity of both parties to an
export transaction. In a determination of these factors, exportcredit insurance would probably be held to play such a neg­
ligible role that it would have little or no effect on bank
policy.
In conclusion, therefore, it would seem that if small busi­
nesses that are newcomers to the export field are to play any
considerable role in postwar foreign trade, their entrance
into the field will not be eased by any relaxation of bank
policies that is induced by credit insurance. This conclusion
implies no reluctance on the part of banks to finance the
export trade. It simply means that new exporters, large or
small, will have to measure up to the standards that banks
have followed in the case of their older customers. They will
have to guard sedulously their own credit standing and busi­
ness reputations and will have to exercise the utmost caution
in their choice of foreign customers. For banks to act other­
wise and, by any loosening of credit because of an exportcredit guaranty against the risks of insolvency and default,
to encourage the hasty entrance of new and inexperienced
firms into export markets might expose such firms to unin­
sured or only partly covered risks that could easily prove
disastrous. The risk of loss arising from political action that
blocks or restricts the transfer of foreign currencies, how­
ever, is another matter. Insurance against this risk would
probably be more generally favored since banks and exporters
can do little to avoid the risk and since there is no private
agency willing and able to assume it.
E a r l e

L. R a u b e r

M

o n t h l y

R e v ie w

o f th e F e d e ra l R e s e rv e B a n k o f A tla n ta f o r S e p te m b e r 1945

T h e

V ic to ry

L o a n

D riv e

a n d

Its

101

S e ttin g

teed obligations, stood at 43 billion dollars. On the cor­
H E Victory Loan Drive, which for individuals will extend
from October 29 through December 8, will be launched in responding date in succeeding years the public debt, in bil­
the midst of the difficulties and confusion incident to the endlions of dollars, has stood as follows: 1941, 49.0; 1942, 72.4;
of the war. Lacking for the most part will be the emotional 1943, 136.7; 1944, 201.0; 1945, 258.7. By the end of August
stimulus that has sold so many bonds to individuals during this year 4 billion dollars more had been added to the public
previous drives. Absent also will be the sense of urgency debt, and revised Budget estimates indicate that the public
and need that has characterized the earlier campaigns. Such, debt will be 273 billion dollars by June 30 of next year.
Highly significant in its relation to business activity is the
however, is the vastness of the purchasing power that has
been generated through war-financing procedures that there continuation of Federal deficit financing. So long as the Gov­
can be little doubt but what the offerings in the aggregate ernment continues to pipe additional purchasing power into
the business life of the nation by means of public-borrowing
will be oversubscribed substantially.
The Victory Loan Drive will have a goal of 11 billion dol­ operations, business must operate in an expansionary setting.
lars of subscriptions to a variety of Government securities. The wartime increase in the Government debt has been accom­
Major emphasis will again be placed on sales to individuals, panied by a continued expansion of total bank deposits. Dur­
who are expected to invest 4 billion dollars — half of it in ing the period from June 30, 1941, to June 30, 1942, deposits
Series E bonds. The remaining 7 billion dollars, it is hoped, at all banks of the country expanded from 78.5 billion dollars
will come from other nonbank investors. Sales to these in­ to 129.4 billion dollars, and by June 30, of this year such
vestors will begin on December 3. The drive will close on De­ deposits were in the neighborhood of 151 billion dollars. With
cember 8, but all Series C savings notes and Series E, F, and the decline in the rate of growth of the Federal debt that will
G bonds processed through the Federal Reserve Banks be­ probably take place in ensuing months, the rate of growth in
tween October 29 and December 31 will be credited to the bank deposits will also decline.
Nor is a balancing of the Federal Budget, which would act
drive.
The marketable issues will be approximately the same as to restrain expansionary trends, immediately in sight. Though
those sold during the Seventh War Loan Drive except that no the war is ended, the armed services will continue for some
intermediate term bond will be offered. They will include 2X/2 time to be voracious users of public funds. The costs of occu­
and 21/4 per cent Treasury bonds and % Per cent certificates pation forces, of homeward transportation and mustering out,
of indebtedness. A new Series E bond, issued in memory of and of hospitalization and rehabilitation will be substantial.
Foreign nations, moreover, are asking, or are about to ask,
the late Franklin Delano Roosevelt, will be available at the
beginning of the drive. This bond will have a maturity value for reconstruction and rehabilitation loans. Russia is reported
as asking for a six-billion-dollar loan. The demands of Great
of $200 and an issue price of $150.
Commercial banks, defined as those banks accepting de­ Britain, too, in current negotiations are expected to fall some­
mand deposits, will be allowed to invest part of their time where between three billion dollars and six billion dollars.
deposits in Series F and G bonds, in 2*4 and 2y 2 per cent The British demand for funds, furthermore, will not be met
Treasury bonds, and in % per cent certificates offered in the through the extension of an ordinary loan, for the British have
drive under certain limitations. No credit toward the drive already indicated that they are expecting assistance in a form
that will be something like Lend-Lease. What happens in the
quota, however, will be given for such purchases.
The Treasury Department has again requested banking case of the Russians and the British will probably set some
institutions to co-operate in its program of selling as many sort of pattern for similar deals with other European
securities as possible outside the banking system. Banks are countries.
asked to refrain from making speculative loans for the pur­
Other potential drains upon the Treasury are to be found
chase of Government securities and to decline subscriptions in the spending proposals now before Congress. Such pro­
from customers that appear to be made solely for the pur­ posals involve appropriations for a wide variety of purposes:
pose of realizing upon the premium that may arise in subse­ the Inter-American highway, veterans’ facilities and other
quent trading. Moreover, banks are requested to refrain from hospitals, the Commodity Credit Corporation, aeronautical
making purchases of outstanding securities with the under­ experiments, school-lunch programs, rural electrification,
standing that approximately the same amount of the new se­ national food-allotment stamp plan, public education, public
curities will be subscribed through such banks and, thus, housing, elimination of river pollution, United Nations Re­
enable them to expand their war-loan deposit balances.
lief and Rehabilitation Administration, and other projects.
The Victory Loan Drive has been preceded by seven war- The aggregate total of all such demands may well run the
loan campaigns. The aggregate sales of bonds, in billions of Budget up to 50 billion dollars or more.
dollars, made during these drives were: First 12.9, Second
At the same time these additional demands are made upon
18.6, Third 18.9, Fourth 16.7, Fifth 20.6, Sixth 21.6, and the Treasury some reduction in Federal revenue from tax­
Seventh 26.3. These drives have been necessary to provide ation may be experienced. Modifications may quite confi­
funds to cover the yearly deficits arising in the Federal dently be expected in excess-profits taxes, personal-income
Budget. Expressed in billions of dollars, the deficit for each taxes, and in wartime excise taxes. All in all, therefore, an
fiscal year since June 30, 1940, has been: 1941, 5.1; 1942, early balancing of the Federal Budget need not be antici­
19.6; 1943, 55.9; 1944, 50.0; 1945, 53.9. The deficit for the pated. The Victory Loan Drive is thus probably only the first
fiscal year to end June 30, 1946, is estimated at 30.4 billion of several major borrowing operations that will be necessary
dollars. On June 30, 1940, the public debt, excluding guaran­ to finance the peace.

T




102

M

o n t h l y

R e v ie w

o f th e F e d e ra l R e s e rv e B a n k o f A t la n ta f o r S e p te m b e r 1945

A d d itio n s

to

P a r

L is t

u r i n g the period from August 22 to September 26, the
Shellie Reagan, cashier; and Frank Hales, assistant cashier.
Federal Reserve Bank of Atlanta announced the addition Its directors are H. O. Murphree, E. W. Buffington, Shellie
of ten more nonmember banks to the Federal Reserve Par
Reagan, C. V. Porter, S. E. Jackson, Curtis E. Snead Jr.,
List for the Sixth District. Three of these banks are in Ala­ James E. Snead, and W. H. Jackson.
bama, three in Tennessee, one in Florida, one in Georgia, and
Boaz is in Marshall County, in the northeastern part of
two in Louisiana.
Alabama. It is about 70 miles northeast of Birmingham and
has a population of 1,927.
Bank of Atmore
The Bank of Atmore, Atmore, Alabama, will be added to the
The First State Bank
Federal Reserve Par List on October 1, 1945. Effective on
that date the bank will remit to the Birmingham Branch of the The First State Bank, Jacksboro, Tennessee, opened for busi­
Federal Reserve Bank of Atlanta at par for checks drawn upon ness at Jacksboro on September 4 and on that date started
accepting and paying at par for all items drawn on it. This
it by its depositors and submitted by the branch.
bank was formerly the First State Bank, Caryville, Tennessee,
Officers of the bank are E. F. Goldsmith, president; H. H. and was first organized in 1934.
Dees, vice president; R. Leon Jones, vice president; W. E.
The bank on the first of this year had capital of $25,000,
Coker, cashier; and Abbie Lou Fischer, asssitant cashier.
surplus and profits of $17,000, and deposits of $883,000. At
Directors of the bank are George Bowab, Frank P. Currie, that time, its officers were R. L. Gallaher, president; J. W.
H. H. Dees, W. E. Dunaway, E. F. Goldsmith, R. Leon Jones, Goans, vice president; C. J. Lindsay, vice president; Dewey
W. R. Maxwell, L. B. McCoy, Guy E. Sharpless, T. H. Stall- Lumpkins, cashier; and Margaret Nelson, assistant cashier.
worth, and J. B. Swift.
Jacksboro, the seat of Campbell County, had a 1940 popu­
The bank has a capital of $50,000, surplus and profits of lation of 1,200. It is located in the northeastern part of the
$28,000, and deposits in excess of $1,500,000. It was organ­ state about 27 miles from the Kentucky-Tennessee line.
ized in 1904.
The Bank of Hendersonville
Atmore,a town of 3,200, serves as a shipping center for an
extensive truck-farming area. It is located about 50 miles The Bank of Hendersonville, Hendersonville, Tennessee, went
northeast of Mobile in Escambia County.
on the Par List on September 17, 1945. This bank was estab­
lished in 1906 and on September 15 of this year had capital
Rison Banking Company
stock of $25,000, surplus and undivided profits of $10,000,
The Rison Banking Company, Huntsville, Alabama, located and deposits of $357,000. The officers of the bank are Dr.
in the territory served by the Birmingham Branch, began J. H. Stephens, president; Sarah Berry, vice president; Harold
remitting at par September 1, 1945, for checks drawn on it B. Roney, cashier; and E. N. Roney and James E. Wright,
when received from the Federal Reserve Bank. This bank assistant cashiers. The directors are Sarah Berry, H. J. Willis,
dates from the year 1866. On September 19, 1945, it had Dr. J. H. Stephens, B. F. Hurt, H. L. Willis, S. S. Bloodworth,
capital of $100,000, surplus and undivided profits of $96,000, E. F. Hurt, W. A. Shivel, and W. C. Breedlove, attorney.
and deposits of $2,732,000. H. M. Rhett is president, A. W.
Hendersonville is in Sumner County about 20 miles north
White is vice president, Ashford Todd is cashier, and I. W. of Nashville. It has a population of 750.
Walker and F. L. Newman are assistant cashiers.
The Sullivan County Bank
The directors are J. F. Chambers, George S. Elliott, M. H.
Lanier, H. M. Rhett, Ashford Todd, A. W. White, and G. W. The Sullivan County Bank, Kingsport, Tennessee, a newly
organized nonmember bank located in the territory served by
Yarbrough.
the
Nashville Branch, began remitting at par on September
Huntsville, the seat of Madison County, has a population
4,
1945,
for checks drawn on it that are received from the
of 13,050. In addition to its large cotton mills, Huntsville’s
principal industrial plants, there are broom, mop, and mat­ Federal Reserve Bank. This bank has capital of $100,000, sur­
tress factories. The leading agricultural products of the sur­ plus of $25,000, and its opening day deposits were $528,000.
Carroll Reece is president of the bank, Earl M. Reasor is
rounding districts are hay, cotton, corn, and tobacco. At the
present time, the city’s trade area embraces some 26,000 per­ executive vice president, W. B. Halbach is cashier, and Wil­
sons and in its manufacturing area are several of the South’s lard York is assistant cashier. Directors of the bank are J. L.
Latimer Jr., chairman, and Thad A. Cox, Dr. Fred M. Ducklargest textile plants.
wall, Charles T. Herndon Jr., James Hoffman, Earl M.
The Sand Mountain Bank
Reasor, Carroll Reece, and Carl Young.
The Sand Mountain Bank, Boaz, Alabama, began remitting at
Kingsport, with a 1940 population of 14,404, is located in
par September 15, 1945, for checks drawn on it that are Sullivan County. It is an industrial city on the shores of the
received through the Federal Reserve Bank. This bank was Holston River in the heart of the Southern Appalachians.
founded in 1934 and at the close of business on June 30 of Among the many diversified manufacturing units located in
this year had capital of $25,000, surplus and undivided profits Kingsport are a plant manufacturing cellulose acetate, the
of $32,000, and deposits of $1,308,000.
world’s largest book-manufacturing plant, a book-cloth estab­
Officers of the bank are E. W. Buffington, president; H. 0. lishment, a cotton spinning and weaving mill, and a belting
Murphree,
vice president; C. V. Porter, vice president; plant.


D



M

o n t h l y

R e v ie w

o f the F e d e ra l R e s e rv e B a n k o f A tla n ta f o r S e p te m b e r 1945

Florida Bank at Fort Pierce
The Florida Bank at Fort Pierce, Fort Pierce, Florida,
scheduled for opening on September 27, will remit at par for
checks drawn on it that are received through the Federal
Reserve Bank. Capital stock of the bank is $100,000, surplus
is $25,000, and undivided profits are $12,500.
Officers of the bank are C. F. Shewmake, president; Her­
man C. Eberts and J. Lamar Paxson, vice presidents; and
W. W. Mangham, cashier. The directors are C. F. Shewmake,
H. C. Eberts, W. W. Mangham, Dean S. Campbell, and J.
Lamar Paxson.
Fort Pierce is on the east coast of Florida 58 miles north
of West Palm Beach. It is the seat of St. Lucie County and in
1940 had a population of 8,040. It is the local center of fall
and winter vegetable growing and is rapidly becoming an
important factor in the citrus industry. In addition to the
usual commercial establishments, the city contains several
large packing houses, including fruit processing plants and
facilities of two large co-operative growers associations. Fort
Pierce’s excellent harbor is regarded as an important factor
in the future growth of the city.
Rome Bank and Trust Company
The Rome Bank and Trust Company, Rome, Georgia, a newly
organized nonmember bank, will remit at par effective Octo­
ber 1, 1945, for checks drawn on it that are received from
the Federal Reserve Bank. The capital of the new bank is
$125,000, and its surplus is $25,000.
Officers of the bank are J. B. Dodd, president; J. B. Dodd
Jr., vice president and cashier; Vann Enloe, vice president,
inactive; and Mrs. Nell F. Hanson, assistant cashier. The
directors are T. H. Selman, chairman, and J. B. Dodd, Jerre
Dodd, Fred C. Higgins, Harold Clotfelter, Victor Yeargan,
C. B. McMullan, D. N. Blanton, Scott Rogers, W. H. Austin,
and Vann Enloe.
Rome is an important manufacturing and agricultural cen­
ter of northeast Georgia. In 1940, it had a population of
26,282.
Bank of Abbeville and Trust Company
Scheduled to go on the Par List on October 1 is the Bank of
Abbeville and Trust Company, Abbeville, Louisiana. Officers
of this bank are F. W. Kerksieck, chairman and president;
Dr. H. A. Eldredge, vice president; E. L. Terrier, cashier; and
M. E. Harrington, assistant cashier. The bank’s directors are
O. H. Deshotels, H. A. Eldredge, M. E. Harrington, E. W.
Henry, Felix J. Samson, E. L. Terrier, Joseph A. Villien,
Dixon Vincent, and F. W. Kerksieck.
The bank’s capital at the first of the year was $100,000, sur­
plus and undivided profits were $73,000, and deposits were
$3,778,000. The bank was founded in 1894.
Abbeville in 1940 had a population of 6,672. It is the seat
of government of Vermilion Parish, which lies to the west of
New Orleans and borders on the Gulf of Mexico. The town
is the center of a fertile rice-growing region.
Also going on the Par List with its parent bank is the
branch of the Bank of Abbeville and Trust Company at
Maurice, Louisiana. At the first of the year J. A. Villien was
manager and P. E. Trahan was assistant manager.
Maurice in 1940 had a population of 420. It is also in
Vermilion Parish and is situated 10 miles north of Abbeville,
halfway
between Abbeville and Lafayette.



1 0 3

S ix t h D is t r ic t S t a t is t ic s
C O N D IT IO N O F 2 0 M EM BER BANKS IN SELE C TED C IT IE S
( I n T h o u s a n d s of D o lla r s )
I te m

L o a n s a n d in v e s tm e n ts .—•
T o ta l...................................................
L o a n s — t o t a l ....................................
C o m m e r c ia l, in d u s tr i a l,
a n d a g r i c u lt u r a l l o a n s . .
L o a n s to b r o k e r s a n d
d e a le r s in s e c u r i t i e s ___
O th e r lo a n s fo r p u r ­
c h a s in g a n d c a r r y in g
s e c u r i t i e s .................................
R e a l e s ta te l o a n s .....................
L o a n s to b a n k s ..........................
O th e r l o a n s .................................
In v e s tm e n ts — t o t a l .......................
U. S. d ir e c t o b l i g a t i o n s . . .
O b lig a tio n s g u a r a n t e e d
b y U. S ........................................
O th e r s e c u r i t i e s .......................
R e s e r v e w ith F . R. B a n k ___
C a s h in v a u l t ....................................
B a la n c e s w ith d o m e s tic
b a n k s ................................................
D e m a n d d e p o s it s a d j u s t e d . .
T im e d e p o s i t s .................................
U . S . G o v 't d e p o s i t s ..................
D e p o s its of d o m e s tic b a n k s .
B o r r o w in g s ......................................

P er C ent C hange
S e p t. 1 9 , 1 9 4 5 , from

S e p t. 19
1 9 45

A ug. 22
1 9 45

S e p t. 2 0
1 9 44

1 ,9 8 1 ,9 2 0
3 3 1 ,8 5 2

1 ,9 9 2 ,2 7 2
3 3 5 ,9 8 2

1 ,7 1 7 ,,2 28
2 8 9 ,2 7 5

1 7 6 ,6 0 6

1 7 4 ,3 8 9

,159*247

+

-1

+

9 ,7 0 5

9 ,4 0 6

5 ,2 8 1

+

3

+ 84

—
+

7
2
1
4
0
0

+
—
+
—
+
+

65
6
72
0
16
17

— 56
+
1
+ ‘1
+ !1

—
+
+
+

92
21
16
13

16

—
+
+
—
+

5
15
33
20
16

A ug. 22
1 9 45

5 4 ,8 8 2
5 9 ,1 4 3
3 3 ,3 1 2
2 3 ,6 5 3
2 5 ,6 6 3
2 4 ,1 9 1
1 ,7 6 3
,1,0 2 7
1 ,7 7 6
6 4 ,7 0 5
6 7 ,6 1 5
6 4 ,7 4 5
1 ,6 5 0 ,0 6 8 1 ,6 5 6 ,2 9 0 il ,4 2 7 ,9 5 3
1 ,5 0 5 ,4 8 8 .1 ,5 1 0 ,8 1 6 1 ,2 8 9 ,5 6 2
1 ,6 3 8
1 4 2 ,9 4 2
3 6 3 ,7 7 2
3 0 ,1 4 0

3 ,7 1 0
1 4 1 ,7 6 4
3 6 1 ,9 0 5
2 9 ,9 3 2

2 0 ,5 4 3
1 1 7 ,8 4 8
3 ,13,826
2 6 ,5 7 4

1 3 9 ,9 3 7
1 4 7 ,5 5 2
1 6 5 ,7 4 1
1 ,2 8 0 ,4 1 9 .1 ,2 6 4 .1 0 8 1 ,1 1 0 ,2 5 3
3 9 2 ,4 2 9
30 2,.12 0
4 0 3 ,2 9 0
2 4 8 ,6 0 6
1 9 9 ,6 3 0
2 5 3 ,6 8 3
5 3 4 ,9 6 4
4 4 6 ,0 0 3
5 1 6 ,8 9 6
4 ,0 0 0

S e p t. 2 0
1 9 44

1
1

—
—

—

—
—
—

+ . '15
+ ' 15

+
3
— 21
— 3

11

D EB ITS TO IN D IV ID U A L BANK A C C O U N T S
(I n T h o u s a n d s o i D o lla r s )
N o . of
B anks
R e­
p o r tin g

Per C en t C hange
A u g . 1 9 45 fro m

A ug.
19 45

J u lv
1 9 45

A ug.
1 9 44

3
3
2
3
4
3

1 7 ,3 7 7
1 7 1 ,7 8 3
7 ,1 0 8
1 0 ,3 9 8
1 0 4 .4 1 3
3 8 ,2 7 6

1 7 ,7 5 6
1 8 2 ,1 3 3
7 ,0 8 0
1 0 ,1 0 2
9 8 ,7 2 1
3 5 ,4 7 1

1 7 ,2 9 5
1 6 7 ,6 0 8
6 ,8 9 2
9 ,5 9 4
1 1 2 ,3 6 4
3 5 ,5 5 0

—
—
+
+
+
+

2
6
o
3
6
8

+
+
+
+
—
+

o
2
3
8
7
8

3
6
10
2
3
3
3

1 6 8 ,8 4 9
1,23,889
1 6 4 ,0 6 6
2 6 ,0 8 9
2 8 ,9 4 8
2 4 ,5 7 5
6 9 ,7 0 5

1 6 2 ,4 2 2
1 3 3„ 16 5
1 7 4 ,5 2 3
2 8 ,2 9 4
2 5 ,4 7 7
2 6 ,0 4 9
6 9 ,2 6 8

1 7 0 ,9 3 3
1 1 4 ,6 6 1
1 4 9 ,2 6 6
2 2 ,7 8 5
2 3 ,7 9 5
1 9 ,7 6 9
6 9 ,5 7 3

+
4
— 7
— 6
— 8
+ 14
— 6
+
1

—
+
+
+
+
+
+

1
8
10
14
22
24
0

2
4
3
2
4
2
3
2
4
2

8 ,7 8 1
4 7 2 ,3 5 4
3 2 ,3 5 7
11 ,1 7 1
3 6 ,9 8 1
.1,798
44,40(1
5 ,6 6 9
7 7 ,4 3 0
2 0 ,9 7 0

8 ,2 9 3
4 7 6 ,7 2 5
3 3 ,4 5 1
1 1 ,4 6 0
3 2 ,6 9 9
1 ,8 7 0
4 0 ,9 7 9
5 ,9 2 4
6 6 ,0 3 4
1 0 ,2 5 7

8 ,1 6 2
4 7 6 ,0 3 8
3 3 ,9 3 4
1 3 ,2 0 0
3 0 ,4 8 1
1,73,1
4 3 ,1 0 8
4„128
8 9 ,7 5 4
1 5 ,9 4 0

+
6
— 1
— 3
— 3
+ 13
— 4
+
8
— 4
+ 17
+ 104

+
—
—
+
+
+
+
—
+

8
1
5
15
21
4
3
37
14
32

LO U ISIA N A
B a to n R o u g e . . .
L ake C h a r l e s ...
N e w O r le a n s ... .

3
3
7

4 0 ,0 0 5
16 ,2 9 1
4 0 2 ,5 9 2

4 3 ,6 8 6
1 7 ,0 3 1
4 1 7 ,9 1 2

3 7 ,9 4 7
1 5 ,4 9 0
4 0 6 ,8 6 2

—
—
—

8
4
4

+
+
—

5
5
1

M IS S IS S IP P I
H a ttie s b u r g .. . .
J a c k s o n ..................
M e r id i a n ...............
V ic k s b u r g .............

2
4
3
2

1 1 ,0 5 1
6 3 ,0 9 8
1 7 ,5 2 5
1 2 ,8 7 9

1 0 ,9 3 8
6 5 ,8 4 4
1 6 ,5 2 0
1 7 ,7 4 8

12,6,19
5 9 ,7 3 4
1 5 ,4 8 8
1 6 ,1 8 2

+
—

1
4

— 27

— 12
+
6
+ 13
— 20

TE N N ESSEE
C h a t t a n o o g a .. .
K n o x v ille .............
N a s h v ille .............

4
4
6

8 0 ,9 2 2
1 2 2 ,7 7 7
1 8 8 ,7 3 0

8 7 ,5 4 2
1 1 0 ,3 9 6
1 9 8 ,9 2 5

7 8 ,5 3 7
1 0 0 ,5 4 3
1 7 1 ,1 7 8

— 8
+ 11
— 5

+
3
+ 22
+ 10

SIX TH D ISTR IC T
3 2 C it ie s ...............

104

2 ,4 5 9 ,1 9 2

2 ,4 7 0 ,1 7 2

2 ,4 0 1 ,8 7 5

—

0

+

2

7 3 ,2 3 1 ,0 0 0 7 9 ,1 6 3 ,0 0 0

6 9 ,1 2 4 ,0 0 0

—

7

+

6

P la c e

ALABAMA
B ir m in g h a m .. . .

M o n tg o m e r y .. .
FLO R ID A
J a c k s o n v i l l e .. . .
M ia m i..................
G r e a te r M iam i*.
O r l a n d o ...............
S t. P e t e r s b u r g . .
T a m p a ....................
G E O R G IA
A lb a n y ..................
A u g u s t a ...............
B r u n s w ic k ..........
C o lu m b u s ............
E l b e r to n ...............
N e w n a n ...............

U NITED STATES
3 3 4 C it ie s .............

* N o t in c lu d e d in S ix th D is tric t to ta l

Ju lv
1 9 45

A ug.
1944

1 0 4

M

o n t h l y

T h e

R e v ie w

o f th e F e d e ra l R e s e rv e B a n k o f A t la n ta f o r S e p te m b e r 1945

D is tr ic t

B u s in e s s

N September, sales at department stores in the Sixth Dis­
trict have increased, as they did in August, but by an
Iamount
less than might have been expected on the basis of
past experience. The seasonally adjusted index declined in
both months after reaching an all-time high in July. Whole­
sale distribution increased only slightly in August and was
3 per cent below the August 1944 level. The volume of life
insurance written in August was down 6 per cent from that
sold in July, but it was 5 per cent greater than the amount
written in August of last year. Coal output declined somewhat
in August, but steel-mill activity continues at a high rate.
Lumber and textile mills, on the other hand, are still handi­
capped by a shortage of labor. Current estimates are for 15
per cent less cotton than was produced in 1944.
Progress in Reconversion
District industry for the most part is making progress in its
preparations to resume its peacetime functions. Utilization of
the strictly war-purpose plants, expansion of existing plants,
and construction of new plants are still largely in the plan­
ning stage. Manufacturing plants whose conversion problems
are essentially a matter of shifting production from that for
war uses to that for peacetime uses have been in a position to
make much more rapid progress in converting. In these
plants, notably textile establishments, the problem has been
essentially one of getting additional workers. Obtaining such
workers, however, is a matter that takes time for some work­
ers are reluctant to go on a peacetime basis immediately,
whether they served in war plants or in the armed services.
The problem of utilizing the strictly war-purpose plants is
one that has no easy solution. It is complicated at the moment
because the large plants have not yet been made available to
private operators and plans for their utilization must neces­
sarily be tentative in nature. One of the most stubborn prob­
lems will be that of finding uses for the great aircraft plants
that were developed during the war. Heading the list in diffi­
culty is the utilization of the Bell Bomber plant at Marietta,
Georgia. This plant was one of the largest single manufactur­
ing employers that the South has ever known, reaching a peak
employment of more than 28,000 workers in February of this
year. Currently, the plant is rapidly reducing the number of
its workers, and the number has already fallen to about 5,000.
The main plant, which has almost four
million square feet of floor space, is air
conditioned, solidly constructed, and
equipped with an extensive array of
modern machinery. No enterprise that
could use the entire establishment on a
permanent basis has yet expressed inter­
est in doing so, but numerous firms have
indicated an interest in renting portions
of the available space.
Another of the District’s huge air­
craft plants, that of the Bechtel-McCone
Corporation at Birmingham, offers a
similar reconversion difficulty. This
plant served as an aircraft modification
center and processed during the war




S itu a tio n

period some 1,200 B-29s. At peak activity the plant employed
15,000 workers. A local committee is now exploring the pos­
sibility of acquiring the facilities of the corporation for sub­
lease to a variety of small industries.
Another aircraft plant that will be available for peacetime
use is the lake-front establishment of Consolidated Vultee Air­
craft Corporation at New Orleans. This plant has completed
the last of 31 PBY Catalina bombers for the Navy. At one
time the plant employed 6,200 workers, but now the number
of employees is around 400 and these are being retained pri­
marily for dismantling purposes. The company’s plant at
Miami is also virtually closed down. Peacetime use of this
plant is hampered by its location. Built near an airport, the
plant is without railroad facilities, and if such facilities were
established, a hazard would be created for aircraft using the
field.
Successful use of the District’s ordnance plants is not at
all promising. The giant Coosa River Ordnance plant at
Talladega and the even larger ordnance plant at Childersburg, both in Alabama, have not yet been declared surplus
property. The Childersburg plant, which produced explosives
during the war, seems especially suitable for some sort of
chemical manufacturing. One suggestion that seems to have
merit is that the plant might be used for manufacturing
newsprint from Southern slash pine by the Herty process. A
group of newspaper publishers is reported to have made an
inspection of the plant with this purpose in mind. The plant
is also suitable for the production of rayon and other cellu­
lose substances. Citizens of both Talladega and Childersburg
have formulated plans for the organization of local groups
whose purpose will be to work out some use of these huge
wartime establishments that will otherwise stand idle. The
Talladega organization, for example, is known as the Talla­
dega War Plants Conversion Corporation.
The shipbuilding plants in large measure will be peacetime
casualties, and most of them are gradually finishing up their
work. In mid-September the Southeastern Shipbuilding Cor­
poration at Savannah launched its one hundred and sixth
ship, its last under contract, and it is probable that shipbuild­
ing will cease entirely at Savannah by the end of the year. At
Mobile, also, the Alabama Drydock and Shipbuilding Com­
pany has only one ship remaining to be launched under con­
tract with the United States Maritime
Commission, but the company still has
considerable ship-repair work to com­
plete. The company on September 21
launched its one hundred and twentyfirst ship. Of those previously launched
101 have been 22,400-ton tankers. The
huge Delta shipyard at New Orleans is
also virtually closed, and prospects are
against its revival as a shipbuilding
base. A program had been proposed
that would permit the use of the in­
stallation on a multiple-tenant basis, but
under present requirements of the Mari­
time Commission, requiring that its
shipyards must continue to serve mari­

M

o n t h l y

R e v ie w

o f th e F e d e ra l R e s e rv e B a n k o f A t la n ta f o r S e p te m b e r 1945

time purpose, such tenanacy is not possible. The St. Johns
River Shipbuilding Corporation and the J. A. Jones Construc­
tion Company’s plants at Panama City, Florida, and Bruns­
wick, Georgia, face the same bleak prospects for conversion.
The outlook for the Panama City yard, however, has been
brightened somewhat by reports that the facilities may be
converted for use by a large glass manufacturer.
The outlook for new plants and plant expansions continues
to be favorable, and to a large extent these developments will
offset the depressing effect brought about by curtailed opera­
tions at the special-purpose war plants. Some of the an­
nounced expansions are of major proportions. The Hercules
Powder Company has announced an addition to its naval
stores plant at Brunswick, Georgia, that will cost $1,250,000.
This addition is expected to be in operation by April of next
year. The Muscogee Manufacturing Company of Columbus,
Georgia, has let a contract for the erection of a plant that
will cost $250,000. The American Can Company at Tampa,
Florida, has initiated an expansion program that will cost
$1,250,000. Plans for the establishment in Macon, Georgia,
of a $6,000,000 pulp mill by the Armstrong Cork Company
have almost been completed. The 0. B. Andrews Company of
Chattanooga, Tennessee, is beginning a $500,000 expansion
program that involves the establishment of a new container
plant in Knoxville and additions in equipment and buildings
for its plants in Chattanooga and Atlanta. The Southern Rail­
way System, which serves a large part of the Sixth District,
has announced the placing of 10 million dollars in contracts
for the new Diesel electric engines. Johns-Manville Company
has announced a 40-million-dollar expansion program that
will include the enlargement of the company’s facilities in
Atlanta and the erection of a new manufacturing plant some­
where in Georgia. Sherwin-Williams Company has announced
plans to construct a two-million-dollar paint-manufacturing
plant in Atlanta. Pointing towards future industrial develop­
ment in the region is the announcement that the Southern
Regional Research Institute, Birmingham, Alabama, is in­
augurating a campaign to raise $2,500,000 to finance an
expansion of the institute’s facilities. It is expected that this
campaign will be completed in 90 days. The origin, purposes,
and functions of this institute were reported in the September
1944 issue of the Review.
Here and there in the District considerable progress has
been made by some of the smaller industrial plants in con­
verting to peacetime production. The Walters Manufacturing
Company of Morristown, Tennessee, for example, is now con­
centrating on the making of a new kind of stoker. During the
war this company became almost exclusively engaged in pro­
ducing bomb parts and other war material. The Southeastern
Garment Company at Greeneville, Tennessee, which manufac­
tured armored vests for combat fliers during the war, is now
preparing to make women’s dresses. Miller Trailers, Incorpo­
rated, at Bradenton, Florida, a company that put all of its
facilities on special work for the armed forces during the war,
is now turning to the production of refrigerated, generalfreight, platform, and other special trailers. The Chatsworth
Manufacturing Company, Chatsworth, Georgia, is shifting
from the manufacture of parts for the atomic-bomb plant at
Oak Ridge, Tennessee, to producing a new type of lawn and
garden sprinkler, an improved barrel pump, and radiator and
gasoline-tank caps.
conversion problem of the District’s textile mills has
Digitized The
for FRASER


1 0 5

S ix t h D is t r ic t S t a t is t ic s
IN STALM ENT C A SH LO A N S
L ender

N um ber
oi
L en d ers
R e p o r tin g

F e d e r a l c r e d it u n io n s -..............................
S ta te c r e d it u n i o n s ....................................
I n d u s tr ia l b a n k i n g c o m p a n ie s ..........
I n d u s tr ia l lo a n c o m p a n ie s ....................
P e r s o n a l f in a n c e c o m p a n ie s ...............
C o m m e rc ia l b a n k s ......................................

39
24
9
>19
5,1
34

P er C ent C hange
J u ly 1 9 4 5 to A u g u s t 1 9 45
V o lu m e
+
—
—
+
—
+

O u ts ta n d in g s

20
44
17
6
4
10

+
—
—
+

2
1
7
2

+

2

RETAIL F U R N ITU R E S T O R E O PE R A T IO N S
N um ber
oi
S to r e s
R e p o r tin g

Ite m

P er C ent C h an g e
A u g u s t 1 9 4 5 iro m
J u ly 1 945

86
76
76
83
83
74

C a s h s a l e s ........................................................
I n s ta lm e n t a n d o th e r c r e d it s a l e s . .
A c c o u n ts r e c e iv a b l e , e n d of m o n th
C o lle c tio n s d u r in g m o n t h ....................
I n v e n to r ie s , e n d of m o n t h ....................

+
+
+
+
+
+

A u g u s t 1 9 44

5
3
8
(2
'1
7

+
7
+ 24
+
5
+
7
+ 13
+ 25

W H O L E S A L E SA L ES AND IN V E N T O R IE S* — A U G U ST 1 9 4 5
IN V E N T O R IE S
SALES
N o. oi
F irm s
R e p o r t­
in g
12
A u to m o tiv e s u p p l i e s .
C lo th in g a n d
3
f u r n i s n i n g s ..................
6
D ru g s a n d s u n d r ie s ..
12
D ry g o o d s ..........................
7
E le c tric a l g o o d s ..........
F r e s h f ru its a n d
3
v e g e t a b l e s ..................
3
F a rm s u p p l i e s ...............
5
C o n f e c tio n e r y ...............
G r o c e r ie s — fu ll lin e
36
w h o l e s a l e r s ...............
G r o c e r ie s —s p e c ia lty
lin e w h o l e s a l e r s . .?
10
B e e r .........................................
3
H a rd w a re — g e n e ra l. .
13
H a r d w a r e — in d u s tr ia l
6
M a c h in e ry — e q u i p ­
m ent a n d s u p p lie s .
3
T o b a c c o a n d its
p r o d u c t s .......................
9
17
M is c e l la n e o u s ...............
T O T A L .......................
148
Ite m

P er C ent C hange
A u g . 1 9 4 5 iro m
A ug.
1944

J u ly
19 45
+
9

+

+
+
+
+

3
3
5
4

— 4
— 4
— 20
+ 21

+
+
+

12
2
10

+
9
— 24

12

N o. oi
F irm s
R e p o r t­
in g
7
3
6
5

Per C en t C h an g e
A u g . 1 9 4 5 iro m
J u ly
1945

A ug.
1 9 44

+

2

+ 32

—
+
+

1
6
1

+ 5
— 19
+ 43

— 15

—

2

15

+

6

— 33

+
—
4+

8
5
5
2

— 4
— 14
+
2
+ 11

6
3
5

—
+
—

9
3
6

+ 4
+ 23
— 10

+

4

— 21

+ 22
+ 20
+
2

+ 6
— 17
— 3

— 12
— 2
— 0

+
1
— 19
— 9

3
16
69

‘ B a s e d o n U . S. D e p a r tm e n t of C o m m e rc e fig u r e s
D EPARTM ENT S T O R E SA LES AND S T O C K S
SA LES
P la c e

ALABAMA
B irm in g h a m . . . .
M o b ile ....................
M o n tg o m e r y .. .
FLO R ID A
J a c k s o n v i l l e .. . .
O r l a n d o ...............
G E O R G IA
A tla n ta ..................
A u g u s t a ...............
C o lu m b u s ..........
M a c o n ....................
L O U ISIA N A
B a to n R o u g e . . .
N ew O r le a n s ...
M IS S IS S IP P I
J a c k s o n ..................
T E N N ESSEE
B r is to l....................
C h a t t a n o o g a .. .
N a s h v ille .............
O TH ER C IT IE S*
D IST R IC T

N o. oi
S to r e s
R e p o r t­
in g

IN V E N T O R IE S

Per C ent C hange
A u g . 1 9 4 5 iro m

N o. o i
S to r e s
R e p o r t­
in g

P er C ent C hange
A u g . 1 9 4 5 iro m

J u ly
1945

A ug.
1944

5
5
3

+ 11
+
7
+ 14

— 2
— 12
+ 11

4

—

1

+

3

—

3

—

0

4
4
3
5

+
+
+
—

+
+
+

3
3

+
+

2
1

+
+

14
10

3

—

3

+

1

6
4
3
4

+ 27
+ 17
+
7
+
8

+ 12
■f 23
+
4
— 1

5
3

+
—

1
4

+
+

3
10

4

+

o

—

6

4
4

+
+

16
17

+
+

17
5

4
3

— 1
— 11

4

+

22

+

13

4

—

3

+

1

+ 18
+ 13
+ 14
+ 21
+
2
+ 14

+
+
+
+
+
+

18
4
3
12
11
7

3
3

— 3
— 11

—
—

5
7

+
+
—

+
+
—

4
o
1

3
4
4
6
18
93

5
2
6
2

4
11
10

5
22
72

A ug.
1944

Ju ly
1945

3
3
1

7

+
6
- h 32

‘ W h e n le s s th a n 3 s to r e s r e p o r t in a g iv e n c ity , th e s a le s o r s to c k s a r e
g r o u p e d to g e th e r u n d e r " o t h e r c i t i e s ."
_____________

1 0 6

M

o n t h l y

R e v ie w

o f th e F e d e ra l R e s e rv e B a n k o f A t la n ta f o r S e p te m b e r 1945

been primarily one of obtaining additional workers. Few of and some time must elapse before real progress can be
the mills have had any layoffs, and to a very considerable achieved.
extent they have absorbed, or are ready to absorb, workers
Retail and Wholesale Trade
from ordnance, munitions, and other war-purpose plants, as For some years past, Sixth District department store sales
well as workers discharged from the armed forces.
have, in each successive month, been larger than they ever
Another hopeful conversion development was the Interstate were in corresponding months of earlier years, and it seems
Commerce Commission’s action on September 19 of authoriz­ probable that this trend will continue for some time to come.
ing the War Shipping Administration to begin operating The declines from May to June and June to July were less
coastal and intercoastal services between Atlantic, Gulf of than usual this year, and the sales index, after allowance
Mexico, and Pacific ports. This authorization will expire at was made for seasonal influences, reached a level in July
the end of the year, for Government operation of these ship­ never before attained. In August, however, sales increased
ping facilities is regarded as being preparatory to returning less than they usually do in that month, the adjusted index
the lines to private operators. The Alcoa Steamship Company, declining by about 9 per cent. Moreover, a preliminary index
Incorporated, has already resumed commercial shipping from for September, based upon reports of less than the full num­
Mobile and New Orleans to the Dominican Republic and ber of reporting stores for the first two weeks of the month,
expects to resume other services in October.
indicates a September increase in dollar sales also smaller
As yet the conversion process in the District has not been than might be expected and a further decline of about 4
greatly slowed by strikes and walkouts among industrial per cent in the adjusted index.
In the first half of September, sales reported by more than
employees though some have occurred. A minor walkout
occurred during September at the McWane Castiron Pipe thirty stores averaged 13 per cent greater than those reported
Company at Birmingham. Another minor strike developed in August and 7 per cent greater than those for September of
among the employees of the Summerville Iron Works in last year. In sales, August was up 14 per cent from July and
North Chattanooga, but this was settled at the end of August. 7 per cent higher than August 1944. Furthermore, total sales
Still a third strike developed among the 3,300 employees of were 14 per cent larger in the first eight months of 1945,
the Savannah Machine and Foundry Company, Savannah, January through August, than they were in that part of last
Georgia. Unrest and dissatisfaction among textile workers year. Increases over the corresponding period a year ago
offers possible difficulty. The textile plant of the Athens ranged from 9 per cent at New Orleans and Birmingham to
Manufacturing Company, Athens, Georgia, was strike-bound 23 per cent at Montgomery. The only decrease, 2 per cent,
during the latter part of the month. Potential strike situations was reported for Mobile.
Merchandise distribution through Sixth District whole­
in other textile mills in the District are indicated, including
mills at Jacksonville, Alabama, and Atlanta, Greensboro, salers in August increased over that in July by only 2 per
cent, and sales were 3 per cent less than they were in August
Carrollton, and Union Point, Georgia.
On the whole the resumption of peacetime manufacturing 1944. Almost all reporting lines had increases over their
in the District has moved rather slowly. Apparently, however, July volume, the exceptions being groceries and beer. Com­
job openings have kept reasonable pace with job layoffs. parisons with August of last year vary all the way from a
Restoration of peacetime production, however, is no easy task, decrease of 24 per cent in confectionery to an increase of
21 per cent in electrical goods. Wholesale inventories at the
end of August were about the same as those of a month
earlier but were smaller by 9 per cent than they were at the
AMENDMENT TO REGULATION W
corresponding time a year ago.
Life Insurance Sales
The Board of Governors of the Federal Reserve System
Sales of life insurance in the District’s six states continued
adopted, to be effective October 15, 1945, Amendment
in August to compare favorably with those of the correspond­
Number 18 to Regulation W, relating to the control of
consumer credit under the authority of a Presidential
ing period a year ago. A decline of about 6 per cent below the
Executive Order. This latest amendment removes all re­
July volume occurred in August, but the decrease is about in
strictions on the extension of credits for home repairs
line with what frequently happens at that time of the year.
and improvements, and it lengthens from 12 months to
Compared with sales in August last year, there was a decrease
18 months the maturity limitation on loans that are not
of 11 per cent in Mississippi, but increases in the other states
for the purpose of purchasing consumers’ durable goods.
ranged from 2 per cent in Louisiana and Tennessee and 3 per
cent in Georgia to 10 per cent in Alabama and 12 per cent
Until consumers’ goods come on the market in sufficient
in Florida. For the January-August period, increases over
supply to meet demands, the Board of Governors believes
that part of 1944 ranged from 10 per cent in Mississippi
the use of consumer credit should, in so far as possible,
through 12 per cent in Alabama, 14 per cent in Tennessee,
be discouraged. Accordingly, the Board, since review­
ing Regulation W now that the war is ended, has con­
and 15 per cent in Georgia to 18 per cent in Florida and
cluded that the Regulation should not be substantially
Louisiana.
amended at the present time except in the two particulars
Banking
specified.
The volume of Sixth District Federal Reserve notes in actual
Copies of the amendment will be distributed to all
circulation continues to rise. In August the increase amounted
registrants in the Sixth District before the effective date
to almost 38 million dollars, whereas the rise in July totaled
of the amendment.
28 million dollars. During recent months the increase in net
circulation of notes of the larger denominations — those of



M

o n t h l y

R e v ie w

o f th e F e d e ra l R e s e rv e B a n k o f A t la n ta f o r S e p te m b e r 1945

50 dollars or more—has been a good deal smaller propor­
tionately than it was last year. In August, notes of the larger
denominations in actual circulation increased six million dol­
lars and those of the 5-, 10-, and 20-dollar denominations
increased 32 million dollars. Whereas a year ago notes of the
larger denominations accounted for only 31 per cent of this
bank’s total net circulation, the percentage had increased by
the end of March 1945 to 32.6 per cent. At the close of
August these larger notes accounted for only 30 per cent of
the total.
At weekly reporting member banks in selected cities of the
District the volume of loahs has changed little in recent
weeks, although since mid-year the total has declined about
40 million dollars. A large part of the decrease has been in
loans on securities. These 20 banks on September 12 had
increased their holdings of United States securities to 1,520
million dollars, but this total declined more than 14 million
dollars the following week.
Though their demand deposits adjusted also declined by
14 million dollars during the same week, these deposits were
still 15 per cent greater than they had been a year earlier.
Deposits of other banks also declined by the same amount
during the seven days following the 12th, but they were 16
per cent larger than they had been on the corresponding
report date last year.
Agriculture
In the six states located wholly or partly in the Sixth Federal
Reserve District, cotton-crop prospects declined 5 per cent
during August, according to the September 1 report made by
the United States Department of Agriculture. The September
estimate of 4,194,000 bales in these six states is 15 per cent
less than the 1944 crop. Moreover, in only two years, 1940
and 1941, during the past 10 has the cotton crop in these six
states been smaller than that in prospect for 1945.
In Alabama, prospects improved somewhat in the northern
part of the state during August but deterioration lessened
them in other sections. The September estimate of 900,000
bales was, therefore, the same as that made a month earlier.
In Tennessee generally favorable weather resulted in a 5 per
cent increase over the August estimate. In Georgia the fre­
quent rains of July continued throughout most of August
making impossible an effective poisoning program and result­
ing in particularly heavy weevil activity. The section of the
state hardest hit is the southern part, but weevils are present
also in force in the northern area. The reduction of 70,000
bales from the August 1 estimate is one of the largest reported
for the state for any 30-day period in recent years. The
Florida estimate also declined, 10 per cent, from August to
September. In Louisiana and the southern part of Mississippi
excessive rainfall caused weevils to spread rapidly. As a
result, the estimate for Louisiana declined 15 per cent and
that for Mississippi 5 per cent.
In addition to forecasting declines in cotton, the September
estimates when compared with the August estimates show
reductions of 4 per cent in peanuts, 2 per cent in rice (in
Louisiana), and 1 per cent in pecans, as well as a slight
decline in tame hay. They indicate no change in wheat, oats,
and sugar cane, however, and point toward increases of 1 per
cent in sweet potatoes, 6 per cent in tobacco, and 10 per cent
in corn. The increase in the corn estimate indicates that the
crop
will be 7 per cent larger than that of 1944; earlier esti­



1 0 7

mates had indicated a smaller crop than last year’s. Though
the wheat crop is estimated to be II per cent smaller than
that in 1944, an increase of 0.4 per cent is expected for sweet
potatoes, 3 per cent for rice, 4 per cent for peanuts, 5 per
cent for pecans, 7 per cent for corn, 8 per cent for tobacco,
10 per cent for oats, 13 per cent for sugar cane, 31 per cent
for potatoes, and 33 per cent for tame hay.
Industry
In spite of the cancellation of Government orders for large
amounts of lumber that followed close on the Japanese sur­
render, lumber mills continue under the serious handicap of
a shortage of both labor and equipment. The removal of
restrictions on construction promised for October, therefore,
may not mean all that it would normally imply, and especi­
ally since skilled lumber workers are reported to be reluctant
to return from higher-paying jobs in war industries to work
in the sawmills and the woods. In addition the Government
cancellations seem to involve mostly lumber not yet produced,
and there is no large stockpile of Government lumber that
can be turned to civilian use. Mills are being besieged by the
retailer, but because of their inability to increase production
they hesitate to accept the large amount of business being
offered.
Textile mills in Alabama, Georgia, and Tennessee used a
total of 261,738 bales of cotton in August. This figure repre­
sents an increase of about 20,000 bales over the number
consumed in July. August contained two working days more
than July did, however, and the daily rate actually increased
only slightly from the five-year low point reached in the
earlier month. Activity in August this year was 10 per cent
below the rate for that month last year.
Steel-mill activity in the Birmingham-Gadsden area was
reported by the Iron Age as being 94 per cent of capacity in
each week between July 10 and September 4. The publication
reported further an increase of 1 per cent for the week ended
September 11.
On a daily average basis, 'coal production in Alabama and
Tennessee declined 7 per cent from July to August. It had a
like decrease from the rate in August of last year.

R e c o n n a is s a n c e
S ix th D is tric t S ta tis tic s f o r A u g u s t 1 9 45 c o m p a r e d w ith A u g u s t 1 9 4 4
PEB C E N T D EC R E A S E ^

P E R C E N T IN C R EA SE

D e p a r tm e n iflillla le s
Depariment| Store Stocks
F u m it u ilP e s
Constructicjn Contracts
Gasoline T a | | | | I l | f t s
CotlHHInsumption
Bank Debits
Member l | | | | I I »
Member B an f l l § | t e n l s
Demand D e p f | i | | | i l | e d

—
40

30

20

10

0

10

20

+
30

40

1 0 8

M

o n t h l y

T h e

R e v ie w

o f the F e d e ra l R e s e rv e B a n k o f A t la n ta f o r S e p te m b e r 1945

N a tio n a l B u s in e s s

S itu a tio n

and employment at factories dropped sharply of August and the early part of September were in almost as
after the middle of August when most military contracts large a volume as in the period prior to the week of Japanese
were cancelled. Activity in most other lines was maintained
surrender and only 7 per cent smaller than during the same
and the value of retail sales continued above last year’s high period last year. In the middle of September, shipments of
levels.
most classes of freight were as large or larger than a year
Industrial Production
ago; loadings, however, of miscellaneous manufactured prod­
Industrial production declined 11 per cent in August, reflect­ ucts, which include munitions, were at a reduced level.
ing primarily the sharp curtailment of activity in aircraft,
shipbuilding, and ordnance plants in the last half of the
Commodity Prices
month, and the Board’s seasonally adjusted index was 188 per Prices of agricultural commodities declined from the early
cent of the 1935-39 average, as compared with 211 in July. part of August to the early part of September but since that
The largest part of the decline was in the machinery and time have increased somewhat.
transportation-equipment industries, where activity during the
Maximum prices of petroleum products have been reduced
month averaged about 20 per cent below July. Output of steel somewhat since the early part of August, owing to lower
and of nonferrous metal products likewise declined with the transportation charges, while maximum prices of cotton goods,
sudden elimination of almost all military demands. In Sep­ building materials, and various other industrial commodities
tember steel output increased with the receipt of orders in have been increased.
large volume from the automobile and other steel-consuming
Agriculture
industries now rapidly converting to civilian production. Out­
Crop
prospects
continued
to improve during August, and total
put of lumber and stone, clay and glass products declined
production
is
expected
to
equal the record harvests of 1942
slightly in August.
and
1944.
Cotton
production,
however, is forecast at only 10
Production of nondurable goods in August was also below
the July level, reflecting primarily military contract cancella­ million bales, which is about 2 million smaller than last
tions affecting output in the chemicals and rubber products year’s crop and the average for the past 10 years. Total
industries. Cattle slaughter at Federally inspected plants carry-over of raw cotton in this country on August 1 was about
rose sharply in August and the first two weeks of September. 11 million bales, slightly more than in the two previous
Output of shoes and newspaper-publishing activity also in­ seasons.
Bank Credit
creased in August. Output of textiles, most manufactured food
products, and other nondurable goods showed little change In the first month of peace, Federal Government expenditures
or declined slightly. Immediately after Japan’s capitulation, though reduced were still well in excess of receipts, and warrationing was ended for gasoline, fuel oil, and canned fruits loan balances at commercial banks were accordingly reduced.
and vegetables. Increased supplies of dairy and meat prod­ Adjusted demand and time deposits of weekly reporting banks
ucts and tobacco products were also made available for increased by 1.8 billion dollars during the five weeks ended
September 19, while war-loan balances at these same banks
civilians.
Minerals production declined somewhat in August, reflect­ declined by 3.4 billion. Thus, as in other periods between
ing chiefly a 4 per cent decrease in coal production. In the Treasury financing drives, Treasury expenditures tended to
first part of September output of bituminous coal advanced. increase deposits of business and individuals at small banks
Crude-petroleum output was maintained in August at the rec­ more than at large ones.
ord July level, but owing to the substantial decline in military
The currency outflow continued and totaled 425 million
demand for petroleum products, the production rate in the dollars during the five-week period, but it was somewhat below
first half of September was about 8 per cent below August. the outflow of last year for the comparable period. TimeAwards for the construction of privately owned factories deposit expansion continued as rapidly as in recent months.
and commercial buildings continued to increase sharply in
Loans for purchasing and carrying Government securities
August. Contracts for private residential construction were at reporting banks were further liquidated during the five
awarded at about the same rate as in June and July, which weeks by 470 million dollars, and, in addition, reporting
was about twice the value of awards in the summer of 1944. banks reduced holdings of U. S. Government securities by 1.3
billion dollars to meet the increase in reserve requirements
and net deposit declines. Smaller banks appear to have been
Distribution
Department store sales in August were smaller than in July purchasing Government securities during the period.
Reserve funds during the five-week period were supplied by
on a seasonally adjusted basis but about 6 per cent larger
than in August last year. In the first half of August sales were an increase of 1.1 billion dollars in Reserve Bank holdings of
about 20 per cent larger than a year ago. In the last half of Government securities and by a small increase in member
the month and the early part of September, following Japan’s banks’ borrowings from the Reserve Banks. This increase met
surrender, sales slackened and were little changed from last the currency outflow and increased average reserve balances
year’s level. Sales in the two weeks ending September 22, by close to 550 million dollars; this was about as much as the
however, rose sharply and were 11 per cent larger than in the increase in required reserves, and excess reserves remained
near one billion dollars.
corresponding period a year ago.
T h e B o a rd o f G o v er n o r s
Railroad
shipments of revenue freight in the last two weeks


P

r o d u c tio n