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Monthly
Review
F E D E R A L R E S E R V E BANK O F A T L A N T A
Volume XXXIII
Atlanta, Georgia, September 30, 1948
Number 9
The Tourist Industry in the Sixth District
industrialization of the South is one o f the outstand ered productive. Although economists now consider any activ
ing economic developments of the present century in the ity that satisfies a want to be productive, in popular thinking
United States. Although no exact date can be given for thethere remains a holdover from the past in the form of atti
beginning of this development, it may be said to have coin tudes such as that sometimes expressed concerning the tourist
cided roughly with the period following the First World War. industry. It should be realized that the provision of facilities
Especially during and since the Second World War has it for recreation is just as productive as the provision of food
gathered increasing momentum, until the South now shares and clothing. The tourist industry, therefore, is as legitimate
with the West the distinction of being among the most rapid as any other from an economic standpoint. It is not a para
ly growing industrial areas of the country.
site, but exists rather to satisfy one of the most fundamental
Discussions of the industrialization of the South usually needs of man.
assume that industry is synonymous with manufacturing.
Psychological Basis
This is not necessarily true. The South’s rapidly changing in One of the basic traits of human nature, rooted in physical
dustrial pattern includes not only new manufacturing indus and psychological necessity, is the propensity to break the
tries but also nonmanufacturing industries of great importance.
Among the many industries that have taken root through rhythm and routine of daily existence and to seek change and
out the Southland, there is one of the second type that de relaxation in different climates and unaccustomed places.
serves more attention than it has so far received. This is The tensions and monotonies of life in complex and mechan
the industry that serves the tourist trade. Indeed, the many ized urban centers reinforce the necessity for such periods of
thousands of individuals and business establishments that respite and escape, but the fundamental necessity has always
receive all or part of their income from the tourist trade been present.
Just how important this urge to escape the inhibitions of
have scarcely recognized the fact that they constitute an
industry. If an industry, however, is defined as an organiza everyday environment and to seek recreation of body and
tion of related or complementary economic activities directed mind in a change of scene has been in the great mass mi
toward the satisfaction of some human want, then the business grations of history cannot now be determined. There is every
of caring for. tourists and vacation travelers is truly an reason to suppose, however, that it had more than a little to
industry. The organization of an industry may be loose and do with some of these historic phenomena. When the medie
almost unconscious, growing out of the inherent .interdepend val knight or baron from the bleaker parts of western Europe
ence of its parts, as the tourist business is at present. Or it set his wife down to her knitting and embroidery, put his
may be the result of conscious co-operation and integration castle in the custody of bailiff or chamberlain, and rode off
which the tourist business may achieve as it becomes more to reconquer the Holy Sepulchre in the wars of the Crusades,
self-conscious. More and more, those who derive income from he may have been animated in part by religious piety. Some
the tourist trade will feel themselves bound together in a students of history are inclined to believe that he was also
common enterprise and will tend to organize for its promo animated by a desire to take a vacation. Beyond the Alps
tion and advancement.
lay sunny Italy, and at the end of the road lay the golden
There has been a curious feeling on the part of some sands and olive groves of Palestine. Midway in the journey
people, who should know better, that those who gain their the fabulous wealth and exotic pleasures of the Saracenic
livelihood by serving the needs of tourists and vacationists capital on the Bosporus spread their net of allurement. When
are unproductive in any real sense. Before the tourist in the knights returned to their homes they brought back with
dustry can achieve full maturity this erroneous attitude must them new tastes and new ideas that eventually remade the
be corrected. At one time agriculture was considered the only consumption habits of all Europe. Commerce by land and
productive occupation and all others were considered more sea revived; industry flourished; art and architecture took
or less parasitic living, it was said, off the income that was on new color and form. The shadows of the Dark Ages re
created only by agriculture. Thinking on this subject changed, ceded before the light of the coming Renaissance. It was the
however, and it later came to be admitted that manufacturing vacation aspect of the Crusades rather than their religious
was also productive because it turned out tangible objects aspect that produced the most profound effects on the eco
that people needed to satisfy their wants. But it was still later nomic development of Europe.
that the rendering of intangible services came to be consid
The wandering armies of armored knights and barons are
he
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no longer with us, but they have a modern counterpart in the
army of tourists moving over the country in all directions in
search of relaxation. The armor has given way to sport
clothes, and in place of the charger there is now the family
car, perhaps with a trailer drawn behind it. Wife and chil
dren, however, are no longer left decorously at home but
are bundled into the car along with luggage and fishing
tackle. This is the modern knight-errant—the vacationbound American. At night the paths of his migration are
clearly marked by the multicolored neon lights of tourist
courts and filling stations, roadside clubs and trailer camps,
stretching endlessly along the highways that lead him to his
destination in the mountains or at the seashore, to some
quiet resort where he can rest and relax; or to strange cities
where, in the unfamiliar surroundings of luxurious hotels,
he can experience old pleasures and excitements while still
enjoying the illusion that they are new.
Economic Foundations
Although the need for rest and recreation is a fundamental
want of man, the scale upon which it is satisfied depends
upon the technical advancement and economic well-being of
society at any particular time. The elaborate scale of the
tourist business in modern America has been made possible
by the development of the internal combustion engine that
has put the nation on wheels and has sent it winging through
the air. It is now technically possible for the modern va
cationist to travel over distances that would have been un
thinkable a half century ago. Equally important, however,
has been the enormous productivity of our modern economic
system, for this has created both leisure and the financial
means of spending that leisure in travel. The growth in the
amount of leisure time is one aspect of modern prosperity
that is of overwhelming importance for the tourist business.
It all began perhaps when Divine Providence decreed that
man should work six days and rest on the seventh. Left to
his own devices, man has attempted to improve on this situa
tion by cutting down little by little the time spent in work
and by enlarging the amount of leisure at his disposal. Even
as late as 1840 in the United States, he had not yet made
much progress in this direction. Out of the 168 hours in a
week it has been estimated that the average American in 1840
spent 78 hours at work and 86 hours in eating, sleeping,
washing, dressing, and all the other necessary tasks involved
in living. He had approximately four hours a week left in
which to enjoy himself. By 1940, however, the situation had
radically improved. Although what has been called mainte
nance time remained the same (86 hours), the hours spent at
work had declined to 38 and the amount of leisure time had
increased to 44 hours a week.
In addition to the shortening of the workday and work
week, the spread of paid vacations has also increased the
amount of leisure time. The annual two-weeks vacation with
pay used to be enjoyed in business only by employees on the
highest levels. Today, however, it is a matter of course for
nearly all white-collar workers and is rapidly spreading
to all types of labor. At present about 85 percent of all
organized workers are working under contracts containing
paid vacation clauses.
Population experts also tell us that as a nation our life
expectancy is increasing. This is one of the fruits of medical
progress and improved public hygiene. It means, therefore,
that a growing proportion of the population is falling into
the high-age groups in which retirement from active em
ployment is normally to be expected. Taken in conjunction
with the spread of pension and retirement plans in many
industries, this means that a rapidly growing number of
elderly people will be spending their declining years on what
amounts to a modest but continuous vacation.
The present dimensions of the industry catering to the va
cation and tourist traffic thus depend upon the enjoyment
of a considerable amount of leisure time by wide segments
of the population. Leisure depends in turn upon the mainte
nance of a high degree of productivity in the economy and
on technological progress. Because of this dependence, and
because it is highly vulnerable to adverse changes in the
general business situation, the tourist industry has every rea
son to wish for a stable and expanding economy and to fear
all developments that tend to reduce productivity and em
ployment. Barring any irreparable or prolonged breakdown
in the economic system, therefore, the tourist industry may
confidently look forward to continued growth. The upward
trend of the industry’s growth curve, however, may not be
smooth but may be marked by sharp fluctuations.
The Tourist Seeks the South
Because of its actual and potential stake in the tourist in
dustry, the Sixth District is vitally interested in the industry’s
future. Few regions in the nation can excel the Southeast in
the number and variety of tourist attractions. The whole
periphery of the Sixth District is dotted by vacation areas
and centers of tourist traffic. In many cases these are already
highly developed; in others they are merely potential re
sources, the future of which will depend upon the wisdom,
energy, and imagination displayed by public and private
agencies in their development.
Of all the vacation areas in the District, Florida, of course,
is by far the most important. The whole state is virtually one
great playground. Enjoying an unusually favorable climate,
spangled by its 30,000 lakes, washed by the Atlantic on its
eastern shore and by the blue waters of the Gulf along its
western shore, the state of Florida has long exercised a
powerful attraction on people seeking health and recreation.
The Fountain of Youth for which Ponce de Leon sought may
have been a myth, but the reality of the myth has neverthe
less been found by many in the state of Florida.
Northward from Florida, the islands lying off the Georgia
coast already attract considerable numbers of tourists and
vacationists. Their full possibilities, however, are yet to be
developed. Westward from Florida the Gulf coast provides
another natural vacation area. Alabama dreams that some
day Baldwin County may rival Miami or Gulfport and Biloxi
as a vacation center. With proper co-ordination of effort by all
interested state and private agencies there is reason to sup
pose that this dream may be realized to a considerable extent.
In the northeast corner of the Sixth District the Great
Smoky Mountains rise in splendor to attract those who enjoy
hiking, fishing in mountain streams and lakes, and the cozi
ness of open fires in mountain lodges in midsummer. Along
the Tennessee River in the northern part of the District
stretches the chain of lakes behind the dams built by the
Tennessee Valley Authority incident to its program of flood
control, navigation, and hydroelectric development. Although
this area’s recreational potentialities are yet to be fully ex
ploited, its future possibilities for the tourist industry are great.
In the western part of the District lie three important
centers of historic interest that attract thousands of tourists
each year. Natchez, that enclave of the Old South embedded
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in a rapidly changing world, still preserves in the dignity
of its old homes and in the rhythm of its daily life much
of the charm and grace of the age of crinoline. Nearby
Vicksburg was the site of one of the desperate but losing
battles that the Old South fought for its right to live. Farther
down the broad-bosomed Mississippi lies New Orleans over
which have flown the flags of Spain, the fleur-de-lis of the
French monarchy, the tricolor of the Republic, the Union
Jack of Great Britain, the Stars and Bars of the Confederacy,
and the Stars and Stripes of the re-united United States.
Bathed in the romance of its past, New Orleans has long been
a favorite rendezvous for gourmets and pleasure seekers from
the whole country. The madness of the Mardi Gras season,
which annually attracts to the city in the neighborhood of
100,000 visitors, may die in the ashes of Ash Wednesday,
but something of the gaiety of that season remains in the
spirit of the city throughout the year.
Even those interior parts of the Sixth District that can
boast of no special attractions for tourists are interested in
the tourist industry. To reach their destinations, tourists must
necessarily traverse these interior areas and, in doing so,
they distribute a considerable amount of purchasing power
for food and lodging and for their incidental needs. Indeed,
there is no part of the District that is unaffected by the va
cation and tourist trade.
The South Seeks the Tourist
Richly endowed as it is with tourist resources, the Sixth
District has a large financial stake in the tourist trade.
Florida claims four to four and a half million tourists a year
who spend in the neighborhood of 700 million dollars. Just
how important this business is to the state can be realized
when it is noted that the state’s farm income is a little over
400 million dollars annually; the value of its manufactured
products is about 500 million; the annual production of its
forests is valued at 65 million; the annual value of its mining
products is 30 million; and that of its fishery products is
20 million. Obviously the tourist business is the state’s most
important industry. This is true even if a certain amount
of exaggeration lurks in the 700-million-dollar figure.
Mississippi claims that something like 200 million dollars
is being spent annually on travel and recreation within the
state. How much of this consists of expenditures by tourists
and vacationists cannot be determined but the amount is
undoubtedly large. In Louisiana, tourist expenditures are
estimated at 100 million a year, an amount in excess of the
value of the state’s entire cotton crop. Eighty percent of
this amount is said to be spent in the New Orleans area.
Tourist expenditures in Georgia are estimated at 105 million
dollars a year, in Alabama at 50 million, and in Tennessee
at 150 million.
Although these estimates are probably the best that the
various states can make under the circumstances, they must
be taken only for what they are—estimates and informed
guesses. The true figures may actually be greater than the
estimates, or they may be somewhat smaller. With all due
allowance for the admitted inadequacy of these estimates,
however, the magnitude of the tourist trade is such as to
raise the industry that caters to it to a position of major
importance in the South’s industrial pattern. Quite clearly
the tourist industry should be a matter of concern to all
the states of this district. It is an industry well worth cul
tivating.
There are two good reasons for cultivating the tourist indus
9 5
try although they may not be of equal weight. The first of
these is that the tourist industry thrives upon regional differ
ences. Although it is pretty generally agreed that the South’s
economic future is closely bound up in its industrialization,
some southerners have deplored the tendency toward indus
trialization-thinking of it only in terms of manufacturing.
To them the industrialization of the South has meant the last
defeat of a way of life that was rooted in the land and was
marked by a charm and grace that has been almost com
pletely lost in modern industrial communities. Industrializa
tion, to these people, spells wasted acres, decaying manor
houses, and populations herded into cities over which indus
try casts not only a pall of smoke and stench but also a pall
of monotony and deadly uniformity.
The advocates of industrialization, on the other hand,
have pointed to the poverty that was so prevalent under that
earlier way of life. People represent potential markets, and
the size of the market depends upon the prosperity of the
people. Prosperity depends upon productivity, and produc
tivity depends upon the expansion of factories and machines.
In the eyes of the industrializers, the first group consisted
of romantic visionaries who would hold up the march of
progress for the sake of perpetuating a tradition of moon
light and magnolias.
There is little doubt that the industrializers are winning
in this unequal fight. Whether the romantics like it or not,
industry is coming south. The point to be made here is that
the tourist industry is one that may satisfy both groups.
Tourists do not go thousands of miles to see the things they
could see as easily at home. They move from place to place
seeking different sights, different climates, different foods,
different ways of life. Novelty of experience is the magnet
that attracts the tourist and vacationist. If there are places
in the South where there remain vestiges of the era that the
romantics would preserve, and if tourists find such places
attractive, it would be good business to preserve them. They
would constitute a basic asset of the tourist industry. If a
tourist wants moonlijght and magnolias, there should be no
objection to selling them to him. At this point the interests
of those seeking to develop the South’s industrial possibilities
and of those seeking to preserve the old coincide. The tourist
industry thrives on those geographical and cultural differ
ences that tourists find attractive. Its interests are opposed to
uniformity and drabness. On the contrary, they lie entirely
in the direction of encouraging sports and pleasures, manners
and customs, and ways of living that cannot be duplicated
elsewhere.
The second reason why the South should be particularly
interested in cultivating the tourist trade and the industry
that serves it is that the tourist trade is really a kind of export
market. The South has long been an area that has tended to
suffer from an adverse balance of trade with the more indus
trialized sections of the country. To the extent that the value
of its exports has not covered the cost of its imports, the
South has become indebted to the North and East. Relief
from the burden of debt could come about either by restrict
ing imports from other sections or by expanding exports. As
long as exports consisted largely of raw materials and agri
cultural products it was difficult if not impossible for the
South to achieve a balance in its inter-regional trade. To
restrict imports would only serve to reduce still further the
standard of living in a region where it is not yet high enough.
In the case of the tourist business, however, the market
comes to the goods instead of the goods going to the market.
9 6
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The many services that the tourist industry performs for va
cationists and pleasure seekers are export commodities that
otherwise would not find a market. How else could a widow
with a couple of rooms to rent to overnight guests export her
lodging facilities? How could a filling-station operator ex
port his services? How could the owner of a fishing boat
otherwise enter the export market? By way of the tourist
industry the thousands of people who cater to the wants
and whims of tourists do become exporters, and thereby
help redress the South’s unfavorable balance of trade. The
700 million dollars worth of food, lodging, sport, recrea
tion, sunshine, and surf-bathing that Florida exports through
its tourist industry is a factor of prime importance in that
state’s economy. It is a similar—if less striking—factor in
the economy of every other state in the Sixth District. If the
tourist business should suddenly disappear entirely from this
district, a devastating blow would have been dealt its whole
economy. The tourist industry, therefore, deserves careful
and businesslike development because it is a method for
exporting many millions of dollars worth of goods and
services that would otherwise remain unexportable.
One step in building up the tourist industry consists of
advertising and promotion. Potential customers must be made
aware of what the South has to offer to the pleasure-seeking
tourist and vacationist. The states of the Sixth District have
not been remiss in this type of activity. State development
agencies, state and local chambers of commerce, public-utility
companies, and tourist promotional organizations are doing,
in one way or another, what they can to advertise the tourist
attractions of the region. Brightly colored and well-illustrated
pamphlets and leaflets have been broadcast like seed across
the nation in the hope of reaping a harvest of tourists. In the
aggregate a great deal of money is being spent by state
governments on this sort of promotion although it must be
admitted that the work of attracting tourists is not equally
well financed in all states.
Another step in building up the tourist industry is de
velopmental in character. It consists of providing facilities
for the comfort and convenience of the tourist who is at
tracted southward. Nothing can be more detrimental to a
would-be vacation area than for tourists, who have been lured
to it by advertising, to discover transportation difficulties in
reaching it; to find inadequate or undesirable living ac
commodations; or to discover that the facilities for sport,
amusement, and recreation are few and poorly organized.
This developmental step is much more difficult than pro
motion for it involves close co-ordination of effort by many
public and private agencies. State agencies must provide
roads and highways; must inspect and approve eating and
lodging places in the interest of cleanliness, health, and
morals; must develop and maintain state parks and shrines,
and defend the public interest in water fronts and fishing
grounds; must aid and advise local governments with respect
to the zoning of tourist and recreational areas so that valua
ble sites may not be destroyed through promiscuous and illconsidered exploitation. These and many other things may
be done by state agencies, depending upon their statutory
powers. The actual investment in tourist facilities, however,
is chiefly dependent on private initiative. The best interests
of the tourist industry in any area are well served only when
private investors and operators of tourist facilities co-operate
with each other and with the state in the maintenance of high
standards. Of great importance, also, is co-operation in exer
cising some degree of control over hew developments. The
tourist industry is inherently highly competitive. Unless sub
jected to reasonable voluntary restraint, the force of com
petition can easily lead to a destruction of values and ulti
mately to a loss of the more desirable tourist traffic.
Statistical M easurem ent
One other thing is needed by the tourist industry if its growth
is to be rational and economically sound. This need is for
some continuous statistical measure of the industry’s opera
tions. In almost every important industry, the manager of an
individual enterprise has at his disposal certain statistical
measures of current operations for the whole industry so that
he may compare his own experience with that of others.
Such statistical measures are indispensable instruments of
managerial control. The one important industry that so far
possesses no current statistical record of its short- and longrun fluctuations is the tourist industry. State officials and
officers of chambers of commerce can usually give an in
quirer fairly accurate monthly information about any of
the state’s major industries, but they are often embarrassed
if asked for specific current information about the tourist
business. Vague impressions, figures of dubious statistical
parentage, and mere guesses are about all that they can
offer in behalf of the tourist industry. This is no fault of the
officials and officers who are called upon to answer such
inquiries. The fault lies within the tourist industry itself in
not yet having developed a sufficiently strong sense of com
mon interest to realize the importance of such statistical
measuring rods and to demand that they be provided by
some appropriate agency.
It is sometimes argued that the tourist industry is com
posed of so many small and heterogeneous elements that it
is impossible to measure it. There are, it is true, many thou
sands of small businesses serving tourists and vacationists
that should be considered part of the tourist industry but
that also serve the permanent population of their communi
ties. For such businesses to determine what part of their
operations was concerned with the tourist traffic and what
part was not would obviously be difficult, if not impossible.
Measurement of the industry’s operations fortunately need
not involve measuring everything. A rough unit of tourist
travel is a night’s lodging spent away from home. All other
tourist expenditures tend to vary directly with the number
of guest nights spent in lodging places, chiefly in hotels and
tourist courts. If a representative group of hotels and tourist
courts in each major vacation and tourist area in the District
were to report monthly certain data on their operations to
some appropriate agency, a reasonably accurate picture of
what is happening to the industry could be obtained. Such
reporting should be on a strictly voluntary basis and the data
should be held in strict confidence. Figures should not be
released in such a way as to divulge the operations of any
individual enterprise and they should not be made a means
to other ends such as tax inquiry or control.
The amount of data that should be reported would not be
overwhelming. Six or seven items would suffice—guest ca
pacity; the number of guest nights spent during the month
together with the state origin of guests; gross receipts for
the month; the number of persons employed during the
month and the monthly wage bill; and finally, figures on ad
vance registrations for the next few months. These items to
gether with the ratios that can be computed from them could
provide valuable information for the guidance of everyone
concerned with the tourist business.
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Consider what a proprietor of a tourist court, for example,
could learn from such measurements if they were available.
He knows, of course, that the tourist business is highly sea
sonal in character and that it is also extremely vulnerable to
cyclical business fluctuations. In a period of normal seasonal
decline he finds his business also declining. What he should
know is whether his own business is declining more or less
than can be attributed to seasonal factors alone. He should
also know if his business is declining more or less than it
is for the same general type of establishment in his area; and
whether the change in his own area is greater or less than
in other vacation areas. Only by making such comparisons
can he determine his relative position in a highly competi
tive industry and do whatever seems appropriate to improve
it. Comparisons of this kind would be possible with the sort
of monthly reporting suggested.
Information that could be developed from these statistical
measures would also be valuable to many persons other than
proprietors of hotels and tourist courts. Promotional agen
cies would find in them some check on the effectiveness of
their efforts. Knowing the state origin of overnight guests,
they would also have some basis for allocating expenditures
for state advertising.
Banks, too, would profit from such a statistical service
if it were available. Proprietors of tourist facilities like other
businessmen must come on occasion to their banks for loans.
Loans are granted or refused on the basis of the moral and
financial risk involved. The financial risk in any particular
case, however, cannot be determined solely on the basis of
the borrower’s individual operations, for the borrower’s in
come outlook is contingent upon the general state of the busi
ness in which he is engaged. Statistical measures of the cur
rent state of the tourist business would give a banker a rea
sonable basis upon which to erect his personal appraisal of
the loan under consideration.
Are such statistical measures of the tourist industry in the
Sixth District feasible? Certainly the dimensions of the in
dustry in this district justify them. The pioneering work of
the Federal Reserve Bank of Boston in developing similar
measures for the tourist industry of New England shows that
they are undoubtedly feasible elsewhere. What is needed is
sufficient interest on the part of the industry to demand
these measures, and a spirit of co-operation on the part of in
dividual proprietors of tourist facilities sufficiently strong to
induce them to report continuously to an appropriate agency.
The tourist industry is a big business by any measure.
Tourist expenditures in the United States are variously esti
mated at from 6 to 10 billion dollars a year, and the Sixth
District has a large and growing stake in this business. The
further expansion of this industry through wise promotion,
development, and financing can make it an increasingly
valuable contributor to the prosperity of the South. Pro
motion, development, and financing can proceed intelligently,
however, only on a basis of reasonably accurate current in
formation as to the conditions of the business. At present
the lack of such information is one of the greatest weaknesses
of the tourist industry. This weakness, however, can be over
come just as soon as the industry becomes sufficiently selfconscious to recognize it and sufficiently co-operative to sup
ply the data that would eradicate it. Only when the District’s
tourist industry has achieved such a degree of maturity that it
guides its operations and plans its future on the basis of knowl
edge, can it take its permanent and rightful place in the
industrial pattern of an expanding and a prosperous South.
E arle L. R auber
9 7
S ix t h D is tr ic t I n d e x e s
DEPARTMENT STORE SALES*
A djusted**
P lace
A u g u st
1948
402
452
439
413
384
366
415
399
326
466
363
464
38 1
469
D IST 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 t ta n o o g a . . .
J a c k s o n ..................
J a c k s o n v il le —
iC n o x v ille .............
M ia m i.......................
M o n tg o m e r y .. .
N a s h v ill e .............
N ew O r le a n s ..
T a m p a ....................
U n a d ju ste d
Si
A u g u st
1947
A u g u st
1948
39,2
408
422
400
380
327
424
422
299
410
387
417
357
482
352
397
364
365
329
314
429
303
330
420
342
394
306
465
354
443
395
384
042
337
365
367
27 1
312
323
418
332
408
ISS
314
326
354
344
315
261
A u g u st
1947
310
389
328
32 1
292
289
378
278
274
281
305
355
267
405
m
35fl
20(3
291
314
334
285
400
DEPARTMENT STORE STOCKS
A djusted**
P lace
A u g u st
1948
330
472
298
418
554
344
D IS T R IC T ..................
A tla n ta ....................
B ir m in g h a m .. . .
M o n tg o m e r y . . .
N a s h v ill e .............
N ew O rle a n s . . .
U n a d ju ste d
ISii
A ug u st
1947
A ugust
1948
July
1948
A u g u st
1947
333
432
306
455
611
367
273
413
224
294
444
281
356
460
300
414
553
323
343
418
277
364
529
337
295
403
225
291
444
264
GASOLINE TAX COLLECTIONS***
A djusted**
Place
A u g u st
1948
202
204
177
181
206
197
237
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 ..........
{&
A ug u st
1948
lu ly
1948
A u g u st
1947
193
201
185
184
209
186
206
181
187
165
171
168
193
196
200
206
172
185
208
203
239
189
196
172
179
205
181
208
179
189
160
174
170
199
198
COTTON CONSUMPTION*
T O T A L ...............
A l a b a m a ....
G e o r g ia .. . .
M is s i s s i p p i.
T e n n essee.
ELECTRIC POW ER PRODUCTION*
lu ly
A ug.
1 9 48
1 9 48
1947
130
138
130
60
117
1.1©
125
121
60
97
134
135
136
91
124
A ug.
P lace
P lace
P lace
lu ly
lu n e
1 9 48
1 9 48
I 947
144
157
1129
132
10 9
150
153
14 5
157
132,
1 33
.141
1 5 2r
155
141
15 2
111
126
142
1,55
152
CONSUMERS' PRICE INDEX
Item
ALL IT E M S ...
A ug.
1948
July
1948
S IX S T A T E S ..
H y d ro g e n e r a te d
F u e lg e n e r a te d
July
lu n e
lu ly
19 48
1948
1947
321
332
276
221
233
20 1
452
462
376
CONSTRUCTION CONTRACTS
MANUFACTURING
EMPLOYMENT***
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 ia
L o u i s i a n a ..
M is s is s ip p i.
T en n essee.
U n a d ju ste d
A ug u st
1947
D IS T R IC T .. .
R e s id e n tia l.
A l a b a m a .. .
G e o r g ia ... .
L o u i s i a n a ..
M is s is s ip p i.
T en n essee.
June
1948
July
1947
438
445
435
385
549
465
397
293
529
518r
715r
422r
453
633
482
350;
,182
630
353
464
299
324
487
345
301
236
.259
ANNUAL RATE O F TURNOVER O F
DEMAND DEPOSITS
A ug.
1947
178
180
166
F o o d ...............
222
205
m
C lo th in g ...
204
20 1
185
F u e l, e l e c .,
an d ic e . . .
137
129
138
H o m e f u r
n is h in g s . .
190
179
193
M is c ...............
208
201
143
P u r c h a s in g
p o w e r of
d o l l a r ..........
.5 6
.5 6
.60
* D a ily a v e r a g e b a s is
**A d ju s te d fo r s e a s o n a l v a r ia tio n
** 1 93 9 m o n th ly a v e r a g e = 100;
o th e r in d e x e s , 1 9 0 5 -3 9 «= 100
lu ly
1948
A ug.
1948
U n a d j u s t e d ..
A d ju s te d * * ...
In d e x * * .............
18.1
2 0 .4
82.9
July
1948
A ug.
1947
18 .9
16.2
20.1
1 8 .3
81.5
7 4 .2
CRUDE PETROLEUM PRODUCTION
IN COASTAL LOUISIANA
AND M ISSISSIPPI
U n a d j u s t e d ..
A d ju s te d * * . .
r R e v is e d
A ug.
1948
July
1948
A ug.
1947
296
296
290
290
256
256
9 8
M
o n t h l y
R e v ie w
o f th e F e d e r a l R e s e rv e B a n k o f A t la n t a f o r S e p te m b e r 1 9 4 8
District Business Conditions
Bank Loans and Bank Reserves
o
this quarter, Sixth District member banks have
neither expanded their loans at a rate equal to that for
the corresponding period last year, nor at a rate equal to
that for the nation this year. Total loans at District member
banks during July declined 3 million dollars; in August,
they fell 8 million dollars more. Unless the trend of loans
through September 15 at all member banks differs from that
of the weekly reporting banks in leading cities, total loans at
Sixth District member banks rose only 12 million dollars
since the end of June.
By this time last year the 100-million-dollar-loan expansion
which took place between July 1 and December 31 in the
District was well under way. Almost 75 million dollars of
the increase occurred between the first of July and the end
of September.
Throughout the nation member bank loans increased in
July this year, in contrast with the decline in the District.
The 212-million-dollar increase was about 75 percent of the
increase that took place during the corresponding period last
year. Moreover, the weekly reports of member banks in leading
cities throughout the nation indicate that loans expanded fur
ther in August although District member bank loans declined.
Seasonal needs for credit will possibly expand District
member bank loans during the fourth quarter of this year.
Unless the expansion is much greater than that which took
place during the same period last year, however, it will not be
enough to bring the six-month increase up to that of last year.
S
f a r
The smaller banks, especially the country banks—those
outside the reserve cities of Atlanta, Birmingham, Jackson
ville, Nashville, and New Orleans—have in many instances
increased their loans, a tendency carried over from the first
half of this year. Between the first of this year and the end
of June, total loans for member banks with deposits of less
than one million dollars—banks located primarily in the
small cities—expanded 35 percent. Banks with deposits of
from 1 to 10 million dollars increased their loans 9 percent;
those with deposits of from 10 to 100 million dollars in
creased their loans 3 percent. At the banks with deposits of
over 100 million dollars, loans were 5 percent less at the end
of June than they were at the first of the year.
The tendency for loans to increase most rapidly at the
country banks was prevalent in each state of the District.
Despite the increases in loans at the smaller banks, however,
total loans of all member banks in Florida were approx
imately 4 percent less on June 30 than they were the first
of the year. In Louisiana, loans declined 3 percent. Georgia
member banks, as a group, had approximately the same
amount of loans at midyear as they had at the beginning
of the year. Loans increased 6 percent in both Alabama and
Mississippi, and 3 percent in Tennessee.
Although member bank total loans were approximately the
same at midyear as they had been at the beginning of the
year, real estate loans advanced 6 percent during that time.
The over-all expansion occurred despite decreases reported
by many member banks. Increases were more moderate at
the larger banks than at the smaller ones; about one-quarter
W A R A N D P O S T W A R DEPOSIT C H A N G E S , A L L SIXTH D ISTR IC T BAN KS
DEPOSITS OF INDIVIDUALS, PARTNERSHIPS, AND CORPORATIONS BY MAJOR AREAS, DECEMBER 31
1941-1944
P E R C E N T INCREASE I
H 180and OVER
S 3 159 - 179
ggffi 122 - 158
WM no - 121
VZ\ UNDER110
In the three years between the end of 1941 and
the end of 1944, the rate of increase in business
and personal deposits in every major area of the
District exceeded the national rate of increase,
which was 60 percent, and that of every other
Federal Reserve District except Dallas. The District
rate of increase was 121 percent.
K ey t o a r e a s : I. N a s h v i ll e 2 . K n o x v ille 3 . T r i-C itie s -B r is to l 4 . C h a t t a n o o g a
5 . B ir m in g h a m 6 . A n n i s t o n - G a d s d e n 7 . A t la n t a 8 . M o n t g o m e r y 9 . C o l u m
bus
10. M a c o n
II. A u g u sta
12. N a t c h e z
13. J a c k s o n
14. H a t t i e s b u r g M e r id ia n -L a u r e l 15. M o b i l e 16. D o t h a n 17. S o u th G e o r g i a
18. S a v a n n a h
1944-1947
P E R C E N T IN C R EA SE
| 60 AND OVER
3 50 - 59
40 - 49
30 - 39
UNDER30
Between the peak of war activity in 1944 and the
end of 1947, business and personal deposits con
tinued to expand in every area of the District.
This expansion, however, in 12 of the 27 areas of
the District was less than the national increase of
35 percent. The District increase of 38 percent
was exceeded by the increases of six other Federal
Reserve Districts.
19. A le x a n d r ia - L a k e C h a r l e s 2 0 . B a to n R o u g e 2 1 . N e w O r l e a n s 2 2 . L a fa y e t t e - l b e r i a 2 3 . P e n s a c o l a 2 4 . J a c k s o n v il l e 2 5 . O r l a n d o 2 6 . S t. P e t e r s b u r g T a m p a 2 7 . M ia m i
M
o n t h l y
99
o f th e F e d e r a l R e s e rv e B a n k o f A t la n t a f o r S e p te m b e r 1 9 4 8
R e v ie w
of the banks throughout the District reported increases of and demand deposits declined. The decline amounted to 4
more than 25 percent in real estate loans. In Florida, how percent at all member banks throughout the country, where
ever, 39 percent of the banks reported that their real estate as that for this district’s member banks amounted to 6 per
loans were smaller on June 30 than th£y had been on Decem cent. District member bank total deposits were about one
percent greater at the end of July this year, however, than
ber 31, 1947.
In Alabama 21 percent of the banks decreased their real they were on the corresponding date last year. Those for
estate loans; in Georgia, 27 percent; in Louisiana, 20 per the United States were up 1.4 percent.
cent; in Mississippi, 16 percent; and in Tennessee, 27 per
The use of the Treasury surplus to retire Federal Reserve
cent. Despite these decreases, however, total real estate loans held Government securities explains much of the general de
increased in every state except Tennessee.
cline in deposits. In the District, however, there have been
marked variations from bank to bank that can only be ex
S ix th D istrict M em b er B ank L oans
plained by differences in the seasonal trend in the flow of
P e rc e n t C h a n g e Ju n e 30, 1948, Irom D e ce m b e r 31, 1947
deposits or by variations in economic conditions from com
T otal L oans
Size oi B ank
munity to community. Despite the general decline, over one(T otal D ep o sits,
A la.
F la .
G a.
La.
M iss. T en n .
D istrict
in M illions)___
third of the banks increased their deposits during the first
+ 3 4 .7
+ 2 7 .1
six months of this year although most of the increases were
+ 4 3 .6
B e lo w 1 . . .
+ 8.6
1-10.....
i+ 9 .9 ,+ 3 .1 + 1,1.0 + 9 .8 + 1 4 .0 + 6.8
less than 5 percent. On the other hand, at a little less than
+
4
.8
+
3
.2
+
4
.8
+
1
1
.3
+
0
.9
— 4 .1
;+ 9 .3
10-100...
*
— 4 .9
—6.2 — 2 .4 — 9 .6 —1.0
O v e r 1 0 0 ..
one-third
of the banks, deposit decreases exceeded 10 per
+
0
.7
+
3
,4
+
3
.4
— 3 .6 + 0 .5 — 3 .4
A ll s i z e s . .
+ 5 .5
cent. At 4 percent of the banks, deposit decreases exceeded
25 percent. A greater proportion of the banks in Florida re
R eal E sta te L oans
Size oi Bank
(T otal D ep o sits,
ported deposit increases than did the banks in any other state.
M iss. T enn.
D istrict
La.
G a.
F la.
Ala.
in M illions)
B e lo w 1 . .
1-10.....
10-100...
O v e r 100.
A ll s i z e s . .
+ 4 .3
+ 8 .9
+ 1 4 .0
*
+ 7 .0
+ 6.6
—0.0
+ 8.0
+ 3 .5
+ 7 .3
+ 1 2 .4
+ 1 3 .6
+ 11.0
+11.2
+ 7 .1
+ 1 1 .9
+ 9 ,1
+ 5 .4
+ 5 .8
+ 5 .7
—3 4 .3
+ 1 3 .5
—<10.6*
—1.8
— 3 .7
+ 9 .4
+ 5 .1
S ixth D istrict M em ber B ank Total D ep o sits
P e rc e n t C h an g e June 30, 1948, irom D e ce m b e r 31, 1947
+ 1.2
+ 5 .7
* W ith h e ld to p r e v e n t d is c l o s u r e of in d iv id u a l b a n k o p e r a t io n s , b u t in c lu d e d
in s ta t e a n d D is tric t to ta ls .
Size oi B ank
(T otal D e posits,
in M illions)
B e lo w 1 . .
The result of the general real estate loan expansion has
been to bring more banks closer to the legal maximum of
real estate lending than they were six months earlier. At that
time about one out of every 10 banks in the District had
reached its capacity in real estate lending according to the
legal limits for national banks. On June 30 almost one out
of every five banks had reached that limit. Contraction of
real estate loans by the banks with deposits of over 100
million dollars, however, brought real estate loans down
enough so that none of these banks had used as much as
50 percent of their legal lending power.
A deliberate policy of limiting loans probably explains
in part the failure of total loans to expand this year at the
rate at which they expanded last year. Many banks have
been following the policy of voluntary restraint in extending
new loans advocated by the American Bankers Association
and other groups. In addition, many banks have taken steps
to reduce their loans, particularly real estate loans.
Part of the variation from bank to bank in the District
has been caused, of course, by variations in the economic
activity in the different sections, which in turn have led to
variations in demands for loans by agriculture and business.
Some of these variations are reflected in the behavior of
deposits at individual banks.
Since the first of the year, total deposits of Sixth District
member banks have declined as have deposits throughout
the country. By the end of July, they were 303 million dol
lars less than they were at the first of the year. Both time
B a n k D ep o sits by C o u n ties
A tabulation of bank deposits by counties in the Sixth
Federal Reserve District for December 31, 1941, 1942,
1944, and 1947 is available upon request to the Re
search Department of this bank.
1-10.....
10-100...
O v er 100.
A ll s i z e s . ,
A rea
A la.
— 1 4 .4
— 9 .1
—6.6*
— 7 .8
F la.
■1.1
• 4 .7
■ 3 .8
■ 3 .8
G a.
6 .9
• 7 .8
• 4 .8
• 5 .8
La.
— 4 .8
+ 0.8
— 4 .6
— 3 .5
M iss.
T enn.
D istrict
— 3 .6
- 3 4 .3
— 0 .7
— 2 .4
— 5 .3
—6.2
— 5 .2
—8.1
- 0 7 .2
— 5 .2
*
— 5 .1
— 6 .3
• W ith h e ld to p r e v e n t d is c l o s u r e o f in d iv id u a l b a n k o p e r a t io n s , b u t in c lu d e d
in s ta t e a n d D is tric t to ta ls .
More serious drains on reserves have naturally resulted
from these deposit decreases at some banks than at others.
Because they have been subject to less serious drains on
their reserves some member banks, therefore, were much
better prepared than others to meet the new reserve require
ments that were effective this month. Since September 24,
the reserve city banks have been required to maintain re
serves with this bank amounting to 22 percent of their
net demand deposits instead of 20 percent as formerly, and
to
percent of their time deposits instead of 6 percent.
Since September 16, country banks have had to maintain
reserves of 16 percent of demand deposits and 7y2 percent
of time deposits instead of 14 and 6 percent, respectively.
The combined effect of these changes upon reserve city
banks and country banks was to raise required reserves ap
proximately 90 million dollars. Because member banks, as a
group, had excess reserves in August of approximately 60
million dollars, only 30 million more was needed to meet
the new requirements. If the new requirements had been in
effect in August, member banks over the District as a whole
would have been deficient in reserves by 4 percent, whereas
under the then existing requirements they had excess reserves
amounting to 9 percent of required reserves.
Member banks began to build up their reserves soon after
the new requirements were announced. By September 15,
total member bank reserves at this bank were 765 million
dollars, which is almost 50 million more than they were
August 18.
Were the new reserve requirements imposed during the
period of brisk demand for loans, and were the banks in
the District intent on expanding their loans, the effect of
this new regulation would be slight. They could sell their
100
M
o n t h l y
R e v ie w
o f th e F e d e r a l R e s e rv e B a n k o f A t la n t a f o r S e p te m b e r 1 9 4 8
Government securities not only to meet the neW reserve re
quirements but also to expand loans. So far this year, how
ever, bankers seem to have exhibited caution in making loans.
In addition, because the new reserve requirements will be
felt keenly by banks that have been losing deposits more
rapidly than others, the higher requirements may have more
of a dampening effect on credit expansion than some people
seem to think.
C. T . T .
Farm Land Prices
During the past year, in marked contrast with the war years,
the farm real estate market has been relatively inactive.
District farm land prices, according to the Department of
Agriculture’s index, increased about 6 percent in the year
ending in July 1948. Since the 1935-39 base period, however,
District prices increased 123 percent, while farm land prices
for the entire nation increased only 109 percent. Only in
Florida and Louisiana where land values increased 59 per
cent and 89 percent, respectively, were the price increases
less than they were for the nation.
On the whole, there has been little evidence of speculative
activity in the District farm land market during the past year.
About two-thirds of all farm land sold has been bought by
farmers, most of whom already owned some land. Sales have
largely been between farmers in the same community in
which the buyer added land to his present farm. Most of
the recent farm land buyers, therefore, are concerned pri
marily about the long-time trend of farm land values rather
than the course of prices in the next year or two. A man who
buys farm land to make a living from it for several years
estimates the present worth of all the future net incomes from
the land. Although most buyers probably do not consciously
go through the process of capitalizing the expected net in
come, their thinking is often expressed in such terms as “farm
landforisFRASER
worth only what it will produce.”
Digitized
Farm land values apparently have risen faster in the Dis
trict than they have in the nation as a whole since the pre
war years, but it does not follow that District farm land
buyers are expecting greater increases in net returns from
land than the nation’s farmers are. The price of farm land
is also influenced by such factors as the residence value of
the farm house, the home-site value, and the possibilities for
combining part-time farming with nonfarm work. Sales of
small farms and farms of below average quality have been
reported more frequently in the District states than in other
agricultural regions. The selling price of these small tracts
undoubtedly has been governed more by their value for non
agricultural uses than by their ability to produce farm
products.
Although the data are subject to some decided limitations
because of the sampling procedure followed, a survey of the
farm loans of District member banks in 1947 shows some of
the changes that have occurred in the land market. Of all the
farm real estate loans, the proportion on tracts of 40 acres
or less increased from 14 percent of all loans in 1939-43
to 30 percent of all loans in 1947. Since the appraised value
per acre of the small tract averaged about three times the
value per acre of the more-than-40-acre tracts, the average
sale price of all land probably does not measure accurately
the changes in value of land that is to be used strictly for
agricultural purposes. Although the farm land value index
prepared by the Department of Agriculture showed an 8-per
cent rise in District land values from July 1946 to July 1947,
the appraised value per acre on tracts of more than 40 acres
that were used as security for member bank loans declined
3 percent. More conservative appraisals may account for
this decline in appraised value but it seems unlikely that
appraised value would go down at a time when -selling price
was going up. From the loan survey data, it appears that the
price of District land used primarily for agricultural pur
poses has increased at about the same rate as farm land
in the whole nation, and that District land prices leveled off
or even declined slightly in the past two years.
That the price increases for District land used entirely
for agricultural purposes have not exceeded those for the
nation is no assurance, of course, that future difficulties
attributable to high land prices can be avoided. Despite a
small acreage relative to prior years, cotton accounted for
one-fourth of District farmers’ cash receipts in 1946. Before
the war, cotton prices were held above world levels by Gov
ernment action. The increased income from the cotton price
supports was, to a large extent, capitalized into land values.
The wartime increase in land values, therefore, were imposed
on a level of land values artificially created by the Govern
ment. The effects of drastically lower support prices for cot
ton or abandonment of farm price-support programs cannot
be estimated accurately, but there is little doubt that it would
cause serious financial difficulties for some farmers and
would remove the basis for part of the present value of
farm land. To the extent that alternative crops for cotton
can be grown which provide comparable per acre returns,
or to the extent that farming systems centering around live
stock are developed, the effect on land values of lower sup
port prices for cotton would be lessened. Neither of these
developments, however, is likely to cushion effectively a drop
in land values. In the first place, some of the more widely
grown cash crops, such as peanuts, that have been substi
tuted for cotton, are themselves subject to price supports.
Lowering price supports for these crops would have much
M
o n t h l y
R e v ie w
the same effect on land values as lowering the support price
for cotton would. A second consideration is that a shift to
farming systems that are not dependent upon a cash crop
is extremely difficult for many farmers, particularly those
with small acreages.
Even though the nation’s requirements for food crops con
tinue to expand, as seems likely if we continue to have full
employment and high personal incomes, heavy exports or
Government price supports, or both, may be required to main
tain the present price of many District crops. The level of
farm land values which will be warranted by probable future
incomes, therefore, probably depends more upon public pol
icy than it does upon the domestic supply and demand for
farm products. Although prices for District farm land that
is used exclusively for agriculture may not have increased
any faster than farm land prices generally, uncertainties in
the price outlook for District crops call for continued cau
tion on the part of lending institutions and farm land buyers.
B. R. R.
FARM COMMODITY PRICES IN THE
SIXTH DISTRICT STATES
I te m
U n it
lb.
ton
lb.
bu.
bu.
box
cwt.
cwt.
lb.
doz.
cwt.
C otton......................
C ottonseed.............
P ean u ts.....................
C orn..........................
Rice..........................
O ran g es...................
Beef cattle...............
H o g s........................
C hickens.................
E g g s..........................
Milk..........................
101
o f th e F e d e r a l R e s e rv e B a n k o f A t la n t a f o r S e p te m b e r 1 9 4 8
A u g u st
1 9 48
J u ly
1 9 48
A u g u st
1947
(Dollars) (Dollars) (Dollars)
.,316
.342
.340
72.00
87.33
74.33
.10
.10
.91
2.09
2.19
2.23
2.50
2.82
3.10
,40
14.77
19.25
19.48
22.28
25.00
23.93
.325
j332
.336
.503
.509
.467
5.16
5.90
5.75
0
— 8
3
+
io
— 5
— 19
- 6
— 11
_
1
4-
4
_
1
+ 30
+ 12
-1- 2
44-
9
3
+
1
4- 14
INDEX (1935-39 = 100)
Truck c ro p s.............
All farm p ro d u cts, , ,
194
274
194
288
‘221
276
0
-
5
IN STALM ENT C A SH LO A N S
L e n d ers
Federal credit u nions.........
State credit unions...............
Industrial banking
com panies..........................
Industrial loan com panies..
Small loan com panies.........
Commercial b an k s...............
V o lu m e
O u ts ta n d in g s
P ercen t C h a n g e
A u g u s t 1 9 4 8 fro m
P e rc e n t C h an g e
A u g u s t 1 9 48 fro m
Ju ly
19 48
A u g u st
1 9 47
41
24
— 8
4- 19
4- 33
4- 59
44-
6
+ 55
4- 47
11
__ 4
— 7
+
+
+
4-
4- 0
H- 0
4- 2
+ 3
4- 11
4- 43
19
44
34
2
4-
+
3
A u g u st
1 947
Ju ly
1 948
19
12
14
33
3
+
4-
6
RETAIL FU R N ITU R E S T O R E O PE R A T IO N S
N um ber
of
S to r e s
R e p o r tin g
Ite m
Total sa le s...........................................
Cash sa le s...........................................
Instalment and other credit sa le s..
Accounts receivable, end of month
Collections during m onth.................
Inventories, end of m onth...............
— 12
i
item
P ercen t C h a n g e
A u g u s t 1 9 4 8 fro m
A u g u s t 1 9 47
J u ly 1 9 48
4- 36
4- 15
4- 41
4- 9
93
84
84
92
92
—
4—
444+
1
— 4
66
32
18
42
49
11
12
The value of construction contracts awarded in the Sixth
District was 16 percent less in July than it was in June, but
was 24 percent more than it was in July last year. The July
volume was larger than the monthly average for the first
quarter of the year, but it was well below the average for
the second quarter. It was, however, larger than the total
for July of any earlier year except 1942.
The July decline from June was due to a 38-percent re
duction in the value of residential construction contracts.
Residential awards in July were smaller in total value than
they had been in any month since January, and they were
smaller than in any of the last six months of 1947. Alabama,
Florida, Georgia, and Tennessee shared the July decline, but
Louisiana and Mississippi reported small increases. Other
than residential construction contracts were up 3 percent
from June, the increase being shared by five of the states,
offset slightly by a small decrease in Alabama.
Residential contracts accounted for 33 percent of total
contracts awarded in July, against 45 percent in June and 43
percent in July last year. As in other recent months, Florida
had the largest total amount of awards and the largest amount
for residential construction, and awards in that state ac
counted for 39 percent of the District’s total in each instance.
SA LES
IN V E N T O R IE S
P ercen t C h a n g e
N o . of
F irm s A u g u s t 1 9 48 fro m
R e p o r t
A u g u st
Ju ly
in g
1947
1 9 48
P e rc e n t C h a n g e
N o . of
F irm s A u g . 3 1 ,1 9 4 8 , fro m
R e p o r t J u ly 31 A u g . 31
in g
1 9 48
1 9 47
Automotive supplies.
Electrical group
W iring supplies
A ppliances.............
General h ard w are...
Industrial h ard w are. .
6
4-
2
4-
6
5
— 3
4- 14
5
- 3
4- 3
4- 7
4- 6
4- 36
4444—
19
7
10
5
7
4
— 5
+ 6
— O'
+ 4
4- 7
4- 16
16
3
3
4- ’9
4- 20
+ 11
- 7
4- 5
+ 47
—
0
4* 6
3
4-
8
4- 5,1
+ 19
4- 14
4
-
3
3
4- o
4- 21
— 0
4
— 9
4- 25
+ 10
4- 7
4- 7
4- 8
+ 45
4- 14
2
2
4- 8
4- 27
— 12
8
7
5
5
Plumbing and heat
ing su p p lies...........
4
Confectionery...........
4
Drugs and sundries. . 10
Dry g o o d s...................
17
Groceries
Full lin es.................
36
Specialty lin es.......
6
Tobacco p ro d u c ts... .
9
M iscellaneous...........
15
Total............................ 137
11
-
22
+
4—
—
—
3
5
1,3
85
30
5
—
1
0
4- 11
*Based on U. S. Department of Commerce figures
D EPARTM ENT S TO R E SA L ES AND IN V E N T O R IE S
Industry and Employment
N o . of
L en d ers
R e p o r t
in g
W H O L E S A L E SA LES AND IN V E N T O R IE S*
P erc e n t C h an g e
A u g u s t 1 9 4 8 iro m
J u ly 1 9 48 A u g . 1 9 47
— 7
— 18
S ix t h D is tr ic t S ta tistic s
SALES
P la c e
‘ALABAMA
Birmingham. . . .
M obile...............
Montgomery. . .
FLORIDA
Jacksonville. . . .
Miami.................
O rlando ...........
Tam pa...............
GEORGIA
A tlanta...............
A ugusta...........
C olum bus.......
Macon...............
Rome.................
S avannah.........
LOUISIANA
Baton Rouge. .
New Orleans. . .
MISSISSIPPI
lackson .............
M eridian...........
TENNESSEE
Bristol...............
C hattan o o g a...
Knoxville.........
N ashville.........
OTHER CITIES*. .
DISTRICT.............
N o . of
S to r e s
R e p o r t
in g
IN V E N T O R IE S
P ercen t C h a n g e
A u g u s t 1 9 4 8 fro m
J u ly
1 9 48
N o . of
S to r e s
R e p o r t
in g
A u g u st
1 9 47
P ercen t C h a n g e
A u g . 3 1 ,1 9 4 8 , fro m
J u ly 31
1 9 48
A u g . 31
19 47
4
5
3
444-
6
1
3
4- IB
4- 17
4- 6
3
4-
8
+ 34
3
+
ii
4- 4 2
4
4
3
5
+
4
— 3
4" 8
4- 3 7
4- 1
3
3
4-
3
4- 16
4- 2 2
f
7
44-
8
2
3
— 2
4- 10
4- 15
6
4
3
4
3
3
f 36
4- 9
4- 11
f 16
5
3
-f 10
2
4- 14
4- 3 2
— 8
•f 9
4 - 14
4- 5
4- 24
1
4- 3
-j- 14
4
+
—
4
4-
9
+ 16
‘4- 21
4- 24
4
4
-f 12
— 4
4- 42
4- 22
4
3
+ 29
4- 17
4- 5
4
6
-
9
4- 13
3
4
4- 21
4- 8
4" 5
4- 25
4- 1
4- 11
4- 17
+ S2
4- 18
3
3
4- 10
4- 8
4- 17
4- 13
5
4
6
19
103
4-
+ 14
4- 5
4- 13
5
1I
1
22
72
io
4- *5
f
4-
3
4
0
-f 25
4- 21
4- 21
*When fewer than three stores report in a given city, the sales or stocks
are grouped together under "other cities."
102
M
o n t h l y
R e v ie w
o f th e F e d e r a l R e s e rv e B a n k o f A t la n t a f o r S e p te m b e r 1 9 4 8
S ix t h D is tr ic t S ta tis tic s
C O N D IT IO N O F 2 8 M EM BER BA NK S IN L E A D IN G C IT IE S
( I n T h o u s a n d s o l D o lla r s )
S e p t. 2 2
1948
Ite m
A ug. 25
1948
S e p t. 24
1947
P ercen t C h a n g e
S e p t. 2 2 ,1 9 4 8 , fro m
A ug. 25
1948
S e p t. 2 4
19 4 7
1/yms a n d in v e s tm e n ts —
T o t a l................................................. 2,267,156 2„3Q2,163 2,337,084
791,425 750,741
816,204
L o a n s — N e t ......................................
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 l e 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 rry 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 .....................
I n v e s tm e n ts —t o t a l . . . . . ----B ills , c e r tif ic a te s a n d
—
4+
2
3
3
— 3
4* 9
4- 10
+
3
+ 17
— 10
— 20
823,656
798,809
750,741
506,215
489,590
430,835
6,102
6,772
7,634
54,127
80,654
54,430
64,929
59,518
63,202
6,354
5,600
5,125
185,929
179,690
166,500
1,450,952 1,510,738 1,586,,343
—
1
4- 3
+ 24
4- 3
— 4
- 33
4* 9
+ 13
4- 12
— 9
— 11
— 1
+
1
+
1
0
4- 10
— 16
— 1
— 1
+ 2
+
—
4- 10
0
3
+ 10
— 9
— 50
397,608
861,465
447,753 362,589
872,131 1,029,826
O th e r s e c u r i t i e s ......... ............
191,879
190,854
193,928
R e s e r v e w ith F . R . B a n k . . . .
437,178
430,705
440,088
C a s h in v a u l t ............. . . . . ...........
43,830
43,103
43,893
B a la n c e s w ith d o m e s tic
b a n k s ............................ ............. • • 190,343
172,930
174,599
D e m a n d d e p o s it s a d j u s t e d . 1,745,394 1,765,263 1,746,6*34
T im e d e p o s i t s .................................
530,908
548,807
533,900
U . S . G o v 't d e p o s i t s ..................
40,106
36,387
38,463
D e p o s its o f d o m e s tic b a n k s .
441,255
484,500
440,585
B o r r o w in g s ......................................
4,000
2,500
8,000
4-
9
1
1
4
+
o
—
4- 60
—
—
D EBITS 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 of D o lla rs )
P la c e
N o . of
B anks
R e p o r t
in g
A u g u st
1948
J u ly
1948
A u g u st
1 9 47
P erc e n t C h an g e
A u g u s t 1 9 4 8 fro m
J u ly
1948
A u g u st
1947
A LABAM A
A n n is to n .............
B ir m in g h a m .. .
D o th a n ..................
G a d s d e n .............
M o b ile ..................
M o n tg o m e r y . . .
3
6
2
3
5
3
18,630
298,007
11,789
16,645
135,579
71,464
19,349
320,672
10,688
17,484
153,890
64,963
17,283
267,880
9,970
14,765
116,319
63,987
4
7
4- 10
5
— 12
+ 10
+
44444-
F L O 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 la n d o ...............
P e n s a c o l a ..........
S t. P e t e r s b u r g .
T a m p a ..................
3
7
13
3
3
3
3
244,610
211,834
301,703
45,340
33,176
43,618
101,123
264,456
231,467
315,249
47,780
34,256
48,673
98,616
228,083
180,592
243,491
35,729
30,526
38,587
89,887
— 8
—, 8
— 4
— 5
— 3
— 10
+ 24
4-
3
G E O R G IA
A lb a n y ..................
A tla n ta ..................
A u g u s t a . .............
B r u n s w i c k ..........
C o lu m b u s ..........
E l b e r t o n ...............
G a i n e s v i l l e * .. .
G riffin * ..................
M a c o n ....................
N e w n a n ...............
R o m e * ....................
S a v a n n a h .............
V a ld o s ta ...............
2
4
3
2
4
2
3
2
3
2
3
4
2
15,903
815,966
52,957
9,028
58,205
3,445
12,913
10,136
63,966
7,192
19,603
87,857
24,266
16,304
780,417
53,997
9,491
41,062
3,558
14,362
10,639
58,575
8,556
20,404
105,113
17,737
13,261
655,694
43,956
7,733
53,959
3,211
12,008
9,914
59,796
7,922
17,509
82,287
36,008
—
2
5
2
5
42
3
10
5
9
16
4
16
37
44+
4+
44+
4+
4—
LO U ISIA N A
B a to n R o u g e . . .
L ake C h a rle s ..
N ew O rle a n s ..
3
3
7
105,324
33,060
648,123
94,407
34,674
646,660
73,038
25,764
551,712
+
12
5
0
+ 44
4- 28
+ 17
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
16,083
129,103
27,243
22,641
16,288
125,410
27,527
22,634
14,567
103,485
24,109
18,959
—
T E 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 ill e .............
4
4
6
133,065
105,272
288,743
128,124
113,003
300,731
121,756
99,043
261,815
SIXTH D IST R IC T
32 C it ie s ...............
110
3,879,257
3,916,572
U N ITED STATES
333 C it ie s .............
—
—
+
—
—
+
—
—
+
—
—
4-
+
8
11
18
13
17
12
+
7
4- 17
4- 27
4* 9
4- 13
+ 12
20
24
20
17
8
7 '
8
2
7
9
12
7
33
1
3
1
0
4444-
—
4
7
4
4- 9
4- 6
4 -1 0
3,351,683
—
1
4- 16
97,940,000 102,942,000 84,427,000
—
5
4- 16
*N ot in c lu d e d in S ix th D is tric t to ta l
44+
—
10
25
13
19
For the January-July period total awards in the District
were 47 percent larger than they were during the correspond
ing period of 1947; residential contracts were 42 percent
larger; and other awards were up 50 percent.
The District’s cotton-textile mills used, on a daily average
basis, 9.4 percent more cotton in August than they did in
July, recovering less than half the decrease from June to
July. August consumption averaged 2.4 percent less than it
was a year ago; an increase of 2.6 percent in Alabama was
more than offset by decreases in the other states. There are
many reasons for the decline this year in textile manufactur
ing and for the reluctance of mills to build up their inven
tories. The size of the current cotton crop makes lower prices
a possibility; buyers of many textile products have appar
ently been holding off in their purchases in the hope of price
declines; exports of cotton goods have been much less this
year than last, and textile industries in foreign countries are
increasing their production and their exports; and, finally,
textiles are facing increasing competition from other fibers
and other materials.
Coal output in Alabama and Tennessee, the two coal-producing states in this district, was greater in August than it
was in July, when production was reduced because of idle
ness at the mines in the early part of the month. August pro
duction averaged about the same as it was in August last
year; a decrease in Alabama was offset by an increase in
Tennessee. In the January-August period production in Ala
bama was about 7 percent less than it was in that part of
1947, and in Tennessee it was about 3 percent less.
Steel-mill operations in the Birmingham-Gadsden area
continued in August at 102 percent of rated capacity, ac
cording to the Iron Age. There was only a slight reduction
in the week that included the Labor Day holiday. For the
country as a whole, operations in August averaged about 93
percent of capacity.
Weekly figures of revenue freight-car loadings reported by
Southern railroads averaged 6 percent larger in August than
those in July, and 1.5 percent larger than those in August
1947. Car loadings declined about 10 percent in July from
June, largely because of reductions in the movement of coal
and miscellaneous merchandise. In August loadings of mis
cellaneous merchandise registered a further slight decline,
and there were decreases in loadings of grain and grain
products, livestock, coke, and ore—offset by gains in loadings
of coal, lumber and forest products, and merchandise in lessthan-carload-lots. Compared with those of August 1947, load
ings of coal, forest products, and ore were larger, but there
were decreases in the other groups.
Employment trends in July varied in different parts of
the District and in different industries. At midsummer, opera
tions at fertilizer factories, cottonseed-oil mills, and citrus
canning and packing establishments were at a seasonally low
level. Employment in construction work increased in July
in a number of places. In some areas, however, there were
reductions in the number of workers engaged in construction
projects, attributed in some instances to an increasing re
luctance of would-be buyers to pay the high and increasing
costs of construction, and in a few instances to shortages of
brick or other materials. In June and July the labor force
was augmented by the addition of students out of high schools
and colleges for the vacation period, but many of them will
soon be returning to their studies and to some extent the
number of available workers will thus be reduced.
In the Atlanta area there was an increase in the over-all
M
o n t h l y
R e v ie w
o f th e F e d e r a l R e s e rv e B a n k o f A t la n t a f o r S e p te m b e r 1 9 4 8
total employment in July, but in construction work the num
ber employed declined about 4 percent. There were only
minor changes in the manufacturing industries. In the Au
gusta area small declines in the manufacturing group were
offset by gains in construction work. In the Macon area in
creases in employment in the paper and paper-products in
dustry offset declines in other lines. No significant changes
were reported from Savannah, with the exception of an in
crease in construction toward the latter part of July. Con
struction workers at Columbus are fully employed, and em
ployment in general continues at a high level.
Alabama reported employment increases in lumber and
machinery industries, at blast furnaces, at fabricated metal
products establishments, and in some other lines; but em
ployment in textile plants and in plants manufacturing ap
parel declined. In the Mobile area there were further lay
offs at the shipyards and in seasonal food-processing plants.
In the Montgomery area decreases in food processing and
in some lines of trade were more than offset by increases in
the textile and farm-machinery industries, and by smaller
increases in construction and trade.
Employment increased in the Jacksonville area at ship
yards, in construction, and at food-processing plants, and in
some of the service industries; but declined in wholesale and
retail trade. In the Miami area there were seasonal layoffs
in the service industries and in wholesale and retail trade that
were more than sufficient to offset the gains in construction,
finance, insurance, and real estate. At Tampa the over-all
decline in July was small, the principal decreases being in
tobacco manufacturing, construction, and the service indus
tries. The decreases were offset only in part by an increase in
chemicals and allied products.
In the Chattanooga area receipt of additional orders and
other seasonal factors caused increased employment in chem
icals, textiles, fabricated-metal products, and some other
manufacturing industries; but lack of materials and lack of
orders caused declines in food, lumber, furniture, and ma
chinery industries. Nonmanufacturing employment remained
stable. Employment declined in the Nashville area in con
struction, trade, and in most manufacturing industries. In the
Knoxville area increases in some manufacturing industries
were not sufficient to offset decreases in others; increases in
construction, in the service industries, and in government
employment more than offset a decrease in trade.
d.
E . M.
Trade
Sixth District department-store sales now compare better with
those of the rest of the nation than they have at any time
since the end of the war. During July, August, and the first
half of September, the rates of increase in sales at the Dis
trict stores over those in the corresponding months last year
were greater than the increases in any other Federal Reserve
District. Sales for the first two weeks of September were up
16 percent from those of the corresponding period last year.
August sales were up 13 percent, compared with 8 percent
for the nation; and July sales were up 15 percent, compared
with the national rate of 11 percent.
Until recent months the District’s gains in sales had been
lagging behind those of several other Districts. In May the
District rate of increase was exceeded by that of five of the
Districts and in June by four.
Total sales at department stores in the Atlanta Federal
Reserve District for the first seven months of last year were
5 percent greater than those for that period in 1946. This
1 0 3
year the District’s seven-month total exceeded last year’s
9 percent. Moreover, this year’s increase exceeded the na
tional increase of 8 percent, and it was exceeded by the
rates of increase in only four other Districts. Last year the
increase of 5 percent for the first seven months was less than
the national increase and was exceeded by increases in nine
other Districts. For the first seven months of 1946, the Dis
trict’s rate of increase over the corresponding months in 1945
was exceeded by the increases in seven other Districts.
Even though consumer spending is only partly reflected
in department-store sales, the relative standing of various
regions may be fairly well measured by them. Changes in
sales, moreover, have reflected the District’s relative income
position since the war. The recent changes in sales may, there
fore, indicate an improvement in the District’s postwar in
come position.
Although most District states have registered income gains
since the close of the war, these gains have been exceeded
in several other regions. In 1946, according to Department
of Commerce estimates, total income payments to individuals
in the Sixth District states exceeded 1945 payments 2 percent.
Throughout the Southeast as a whole, income payments were
up 5 percent, compared with 9.9 percent throughout the
United States.
During 1947, the District’s relative standing was some
what improved. For the District states as a group, income pay
ments were up 11 percent from those for 1946. With pay
ments up 13 percent in Alabama, 4 percent in Florida, 10
percent in Georgia, 11 percent in Louisiana, 15 percent in
Mississippi, and 11 percent in Tennessee, the rate of increase
in each District state except Florida exceeded that of any of
the other five Southeastern states. Although the District gain
was only slightly less than the national increase of 13 per
cent it was exceeded by those of the Middle East, the South
west, the Central States, and the Northwest.
A multitude of factors is required to explain the slowing
down of income gains in the District states during the post
war period, compared with gains during the war years. One
of the reasons is that much of the war industry created in
the Sixth District states was the type that could not be readily
converted to peacetime production. Although new industrial
facilities were being built in the area, they did not immedi
ately furnish employment to replace the war-industry jobs;
and the postwar boom in manufacturing was in the durablegoods industries rather than in the nondurable-goods indus
tries predominant in this region. Moreover, the greatest agri
cultural price increases were for commodities other than those
in which District farmers specialize; and increases in indus
trial wage rates in some District industries lagged behind
those of industries concentrated in other regions.
In recent months conditions have become more favorable.
More and more of the new industrial facilities are coming
into production. Wage-rate advances in the District have be
come more widespread. Agricultural price changes are no
longer so favorable to the grain-growing regions. Even should
cotton prices decline to the support level, the estimated high
production promises a higher income for District farmers
this year than they received last year. Offsetting these factors
has been a moderation in textile employment and in some
other District industries. On the whole, however, in many
quarters it is expected that during the remainder of the year
the relative improvement in the District’s income position
that seems to be reflected in department-store sales will be
continued.
c. T . T .
1 0 4
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 1 9 4 8
N ational Business Conditions
output in August and the early part of Septem
to be slightly higher than the level during the second quarter,
sonal increase. Prices of some additional industrial products
were raised, while prices of farm products and foods gen
erally declined somewhat from the beginning of August to
the latter part of September.
largely as a result of increased loadings of coal and mis
cellaneous merchandise. Shipments of grain decreased some
what from the high July level, and livestock shipments in
creased less than normally for this season.
n d u s t r ia l
ber regained most of the decline which occurred in July. when the index was 309 percent of the 1935-39 average.
IDepartment-store
sales showed about the usual marked sea Loadings of railroad revenue freight increased in August,
Industrial Production
Commodity Prices
The Board’s seasonally adjusted index of industrial produc
tion was 190 percent of the 1935-39 average in August, as
compared with 186 percent in July and 192 percent in June.
Most of the increase in August reflected larger output of
nondurable goods, but activity in these lines was about 2
percent below the June rate.
Steel production increased in August and was at a rate
of 93 percent of capacity. During September steel-mill ac
tivity has been scheduled at a somewhat higher rate. Output
of lumber and of stone, clay and glass products was some
what larger in August than in the preceding month. Activity
in the automotive industry, however, decreased in August and
in the early part of September, primarily as a result of work
stoppages at plants of parts suppliers and shortages of sheet
steel. Output of most other durable goods continued in Au
gust at about the July rate.
Production in nondurable-goods industries in August re
covered most of the decline shown in July, when plant-wide
vacations sharply reduced output of textiles, leather, paper,
and some other products.
Cotton consumption rose 11 percent in August but was at
a rate somewhat below the same month a year ago. Shoe
production showed a marked seasonal gain in August, accord
ing to trade estimates. Activity also increased in the paper
and printing, chemicals, and rubber products industries.
Output of manufactured foods, on the other hand, declined
in August, reflecting mainly a further sharp reduction in the
volume of meat production and a less than seasonal rise in
the canning industry.
Production of fuels increased in August and was at a rate
7 percent above the same period a year ago. Output at metal
mines remained at the July rate. In the early part of Septem
ber crude petroleum output declined somewhat as a result
of a west coast refinery strike.
The general wholesale price index declined one percent in
the latter part of August but advanced again in the middle of
September, reflecting chiefly fluctuations in meat prices. In
the latter part of September wholesale prices of farm prod
ucts and foods, including meats, were somewhat lower than
in the early part of August, while average prices of industrial
products were higher.
The Consumers’ Price Index increased further by one-half
percent from mid-July to mid-August, reflecting advances in
prices of all major groups of items except foods. Retail food
prices, following a rise of 7 percent from March to July,
have apparently shown little change since that time.
Construction
Value of construction contracts awarded in August, according
to reports of the F. W. Dodge Corporation, declined mod
erately from the high levels of recent months. The number
of new non-farm dwelling units started in August was 83,000,
as compared with 94,000 in July and a peak of 98,800 in
April, according to preliminary estimates of the Bureau of
Labor Statistics. Value of construction activity on jobs under
way continued to increase during August.
Distribution
Department-store sales during August and the first half of
September showed about the usual marked seasonal expansion
and the Board’s adjusted index for the third quarter is likely
Bank Credit
Federal Reserve System support purchases of United States
Government bonds sold by insurance companies and other
non-bank investors continued heavy in August and the first
half of September. System sales of short-term Government se
curities both to banks and others were also large, and the
total portfolio of Government securities was little changed.
In the first half of September bank reserves were substan
tially increased by a decline in Treasury balances at the
Reserve banks, but in the third week of the month these bal
ances were rebuilt by large tax receipts.
In the early part of September the Board of Governors
announced an increase in reserve requirements of 2 percent
age points on net demand deposits and i y 2 percentage points
on time deposits, effective September 16 for member banks
outside reserve cities and September 24 for reserve city and
central reserve city banks. This action increased by 2 billion
dollars the amount of reserves that member banks are re
quired to hold.
Pursuant to legislative authority granted in August, the
Board of Governors reinstituted the regulation of consumer
instalment credit, effective September 20.
Commercial and industrial loans increased by 700 million
dollars at banks in leading cities in August and the first half
of September. Real estate and consumer loans also expanded
further. Bank holdings of Government securities were little
changed, despite the retirement for cash of about 400 million
dollars of bank-owned Government bonds on September 15.
Interest Rates and Security M arkets
Interest rates showed little further change in the first three
weeks of September, following a rise in short-term money
market rates in August. Common stock prices showed further
moderate weakness, but prices of high-grade corporate and
municipal bonds changed only slightly.
T h e
B oard
o f
G o vern o rs
@FedFRASER