Full text of Review (Federal Reserve Bank of St. Louis) : October 1962

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Page

Current Economic Trends

2

THE ECONOMY has been growing, but the rate of advance has
moderated in recent months. Major problems facing the economy
continue to be an adverse balance of payments and a low rate of
resource utilization.

VOL. 44 • No. 10 • OCT. ’62
FEDERAL RESERVE BANK
OF ST. LOUIS
P. O. Box 442 • St. Louis 66, Mo.



Revised Money Supply Series

5

Farm Capital Rose in 1961

6

Economic Indicators

8

Current Economic Trends
THE ECONOMY has been growing, but the rate of advance has
moderated in recent months. Major problems facing the economy
continue to be an adverse balance of payments and a low rate of
resource utilization.

Introduction
I^ E C E N T ECONOMIC trends have been quite un­
certain. From early summer to September it appears that
moderate gains were made in business activity, but the
most recent information reveals that the expansion con­
tinues to lack the vigor necessary for full utilization of
resources. Following the stock market break in May and
along with the continued decline into June, there was
considerable concern that an economic recession might
be imminent. Some June economic statistics, when they
became available in July, seemed to reinforce this con­
cern for the state of the economy. From May to June
industrial production was about unchanged, the rate of
unemployment rose slightly, and retail sales edged down­
ward for the second consecutive month. On the other
hand, in this same period expenditures on new construc­
tion increased sharply.

of both the credit demands and the rate of saving thus far
in 1962, a policy in which interest rates are an important
consideration has brought forth a stable rather than ex­
panding supply of bank reserves and money.

Production, Capacity, and Investment
Industrial production rose from 118 per cent of the
1957 average in June to 119 in July and remained at this
level in August. Steel output has risen moderately since

When economic data for July became available in
August, the picture appeared brighter; the President de­
cided that the situation did not at that time call for
stimulative fiscal action. The statistics which have be­
come available since the President's report continue to
show the ambiguity of the previous month: no clear pic­
ture of either a strongly rising or declining economy.
These observations point to a need for perspective, a cau­
tionary note that too much significance should not be
attached to a single economic series, or to one-month
movements in any series.
The problems created by the deficit in the U. S. balance
of payments continue. Monetary policy objectives have
taken into account our net payments position and capital
movements in addition to domestic considerations. In an
effort to reduce the outflow of private capital and to
demonstrate to foreigners that the U. S. is taking the
necessary measures to reduce the payments deficit, the
System has given important consideration in the conduct
of monetary policy to the level of interest rates.1 In view
1 The importance of an interest rate objective was pointed out by
Chairman Martin in his testimony before the Joint Economic
Committee on August 16, in which he stated that ". . . we have
generally maintained short-term rate relationships with other major
financial markets such as to avoid encouraging outflows of short­
term funds. The fact that we have done and are continuing to do
this, as we strive to improve our basic balance-of-payments situa­
tion, is bound to strengthen confidence in the dollar at home and
abroad/’

Page 2




August, but the industry currently is operating at less than
60 per cent of capacity. The picture in auto assemblies is
somewhat clouded by the August model changeover. How­
ever, it appears that after allowance for this factor, August
assemblies were near July levels. Auto production rose
each week in September, reaching a total for the month
greater than in any September since 1953.
Since June 1961, when the previous peak in industrial
production was reached, output of the nation's mines,
factories, and utilities has risen 7.4 per cent. This gain
compares favorably with corresponding periods of prev­
ious economic expansions. During the comparable 14month periods of the two previous expansions, from Feb­
ruary 1959 to April 1960 and from March 1955 to May

1956, industrial production in­
creased 6.7 and 6.5 per cent,
respectively.2
Despite recent gains in industrial
output, the gap between produc­
tion and capacity has not been
materially reduced. Output of ma­
jor industrial materials (see chart)
has fluctuated around 80 per cent
of capacity since the third quarter
of 1961. A drop in steel output
was a principal factor in the de­
cline which took place during the
spring and early summer. With
steel output rising moderately in
recent weeks, however, capacity
utilization in September is likely
to exceed July and August levels.

M a jo r M aterial Output as a Per Cent of Capacity

* S t e e l s t r ik e p e r io d
S o u r c e : B o a rd o f G o v e r n o r s o f th e F e d e r a l

Perhaps more important than the most recent fluctua­
tions in use of productive facilities is the downward trend
of the last decade. Rates of output of major industrial
materials in trough quarters were 77 per cent of capacity
in 1954, 67 per cent in 1958, and 69 per cent in 1960.
Rates during peak quarters were 91 per cent in 1953,
92 per cent in 1956, and 87 per cent in 1959.
Most interpretations of how business expansions take
place emphasize the role of investment in new productive
facilities. The amount of unused capacity currently avail­
able could act as a dampening force on investment
growth. The effects of 1962 changes in depreciation
regulations and the investment credit feature of the tax
bill now being considered in Congress could of course
work in the opposite direction. According to the Securi­
ties and Exchange Commission-Commerce Department
Survey, published in September, spending on plant and
equipment in 1962 is estimated to be in excess of $37
billion. The previous survey in May, which took place
prior to the stock market episode and prior to changes
in depreciation regulations, also estimated a total of
$37 billion.

R e se rve

Sy ste m

August and September. At the corresponding period of
the previous economic advance in 1959-60, the unemploy­
ment rate was in the neighborhood of 5.3 per cent. At
the comparable stage of the 1955-56 upswing, unemploy­
ment averaged about 4.2 per cent of the civilian labor force.

Prices
Prices have shown mixed trends. The consumer price
index in August continued its slow upward movement,
rising to 105.5 per cent of the 1957-59 average, a rise from
105.3 in June. An upward drift of services plus a seasonal
increase in food prices were responsible for the overall in­
crease. The wholesale price index also rose slightly from
June to August (100.0 to 100.5 per cent of the 1957-59
average), with seasonal food increases causing the change.
Since 1958 the wholesale price index has been relatively

Status of the N ation al Labor Force
M illio n s of P e rson s ________ S e o t o n a lly

A d ju s t * d _________ M illio n s

of P e rso n s

Employment-Unemployment
Labor market statistics recently have received a major
share of attention. Total civilian employment, which had
been about unchanged from early 1962 to July, seasonally
adjusted, rose sharply from July to August to record levels
(over 68 million jobs), but declined again in September.
The latest estimates place employment at about the level
prevailing last spring. Unemployment, which had been
about 3.9 million from March to July, rose to roughly 4.2
million in August and September. As a consequence of
these developments, the proportion of the labor force un­
employed, which had been at about 5.5 per cent during
the spring and early summer, rose to 5.8 per cent in
2 Figures for the 1958-60 expansion are not strictly comparable
because of the steel strike during the second half of 1959 which
distorted output levels both before and after.




Per Cent

U n e m p lo y m e n t

a s o Per C e n t o f C iv ilia n L a b o r Force

Pe r C e nt

755
1955

1956

1957

1958

1959

1960

1961

1962

S o u r c e tU n ite d Sta te s B ure au o f L a b o r S t a tis t ic s
L a te s t d a t a p lo tte d: S e p te m b e r p r e lim in a r y

Page 3

stable; ind ustrial com m od ity prices in p articu lar have d is­
p layed alm ost no c y c lica l ch an g e. A ccord in g to quotations
on b asic ind ustrial com m od ities, it appears th a t th ere w ere

tion ally.
M o n etary reserves (total reserv es less reserves
beh in d T re asu ry deposits) co n tra c te d a t an an n u al rate of
abo u t 1 p er c e n t in this p eriod, as th e in crease in to tal

only m od erate p rice m o vem ents from A ugust to S ep tem ber.

reserves w as offset b y a rise in th e seasonally ad justed
lev el o f T re a su ry b a la n ces. T o ta l reserv es p resen tly are

Interest Rates, Bank Reserves
and Money Supply

sligh tly ab o v e the D e c e m b e r 1 9 6 1 lev el, and m on etary re ­
serves h av e rem ained ab o u t u n ch an g ed sin ce early this year.

In te re st rates have b e e n d riftin g dow nw ard sin ce early
Ju ly . T h e th ree-m o n th T re a su ry b ill rate, w h ich averaged
close to 3 .0 0 p e r ce n t in early Ju ly , av eraged 2 .7 5 per
cen t in th e w eek en d in g S e p te m b e r 2 8 . W ith th e re ce n t

Total R e s e r v e s of M e m b e r B a n k s
B illio n s o f D o l la r s

M o n t h l y A v e r a g e s o f D a i l y F ig u r e s

B illio n s o f D o lla r s

d eclin e, short-term rates are now at abo u t th e Ja n u a ry to -Ju n e av erage.
D e sp ite th e re c e n t d eclin e in the
U . S. T re asu ry b ill rate, th e re does n o t ap p ear to hav e
b e e n any ad d ition al in cen tiv e to m ove sho rt-term cap ital
abroad .

Y ield s on in term ed iate- and lo ng-term secu rities

h av e also d eclin ed from levels re a ch e d in early Ju ly .

Yields on U.S. Governm ent Securities
Per C e n t

M o n t h ly A v e r a g e s

of D a ily

Per Cent

F ig u r e s

5 f------------

------------5

W ith th e sharp d eclin e in sho rt-term in te re st rates in the
first h a lf of 1 9 6 0 and th e w orsening of th e U . S. paym ents
p osition in th e la tte r p art of th a t y ear, sh o rt-term in terest
rate con sid eratio n s b e ca m e im p o rtan t in System actions.
B an k reserv es w ere in creased su b stan tially in th e la tte r
p art o f 1 9 6 0 , b u t seasonal d em and s fo r funds w ere strong,
and in terest rates rem ain ed ab o u t u n ch an g ed . In th e final
m onths of 1 9 6 1 reserv es w ere ag ain exp an d ed m arked ly,
b u t in te re st rates rose in response to seaso n al fo rces and
exp an d ing bu siness activ ity (see ch art).

La te st d a ta

T h e m on ey supply d efined narrow ly has b e e n ab o u t u n­
ch an g ed thus far in 1 9 6 2 a fte r ad ju stm en t fo r seasonal in­
fluences. F ro m Ju ly to th e m on th end in g S e p te m b e r 15
th e m on ey supply co n tra c te d a t an an n u al rate of 4 p er

p lo t te d : S e p t e m b e r p r e l im i n a r y

i i 1i i I i i I i i I i i 1i i I i i 1i i
I9 6 0
So u rce :B o a rd

1961

1962

o f G o v e r n o r s o f the F e d e r a l R e s e r v e

c en t.

Sy ste m

T h e m on ey supply in creased su b stan tially in la te

1 9 6 0 and 1 9 6 1 .
C o n ce rn fo r sh o rt-term in te re st rates stem s from

the

sensitivity o f the U n ited S ta tes b a la n ce-o f-p a y m e n ts posi­
tion to m o v em en ts of sh o rt-term fun ds.

G iv en th e lev el

of sh o rt-term in te re st rates in th e U n ited S tates com p ared
w ith h ig h e r rates ab ro ad , th e F e d e ra l R e se rv e Sy stem has
avoided

actio n s

w h ich

m ig h t

have

p ro d u ced

lo w er

yields and thus h av e in cre a se d th e outflow o f sho rt-term
cap ital.

T h e larg e v o lu m e o f p riv ate saving, as re p re ­

sen ted by th e grow th in c o m m e rcia l b a n k tim e d ep osits
and

liab ilitie s

o f o th e r fin an cial in stitu tio n s,

com b in ed

w ith m o d erately rising d o m estic c re d it d em and s h av e p ro ­
d uced an exp an sio n o f to tal c re d it w ith re la tiv e ly sta b le
in te re st rates.

A n in c re a se in b a n k reserv es and m on ey,

i.e ., a larg e r in c re a se in th e su p p ly o f b a n k c re d it, in
such a situ atio n m ig h t h av e p ro d u ced

d ow nw ard p re s­

sure on in te re st rates.
F ro m Ju ly to th e m o n th en d in g S e p te m b e r

1 5 to tal

m em b er b a n k reserv es, seaso n ally a d ju ste d , in creased fra c ­

Page 4



M o n e y Supply

Of the total rise in loans at weekly reporting banks from
August 1961 to September this year about one-third was
in credit extended to business. Real estate and consumer
loans each accounted for about 25 per cent of the loan
expansion at these banks. The remainder of the expansion
was in loans to financial institutions.

Time deposits, which rose sharply earlier in the year,
have continued to expand, but at a decreasing rate. Since
July the expansion in time deposits has been about offset
by a decline in demand deposits and, as a result, money
supply plus time deposits has changed very little. Be­
cause of the lower reserve requirement on time deposits
relative to demand deposits, the rapid growth of time de­
posits in 1962 has made possible an expansion of bank
credit at a time when bank reserves were unchanged.

The normal increase in the demand for short-term
funds arising out of the movement of crops to market and
an autumn inventory buildup exerts an upward pressure
on interest rates during the last four months of the year.
In addition to the seasonal increase in private credit
demands, the Treasury recently has borrowed a large
amount of funds in the market and is expected to be a
net borrower of funds during the remainder of the year.
Despite these forces, the anticipated autumn increase in
interest rates has not yet materialized. If upward pres­
sures on short-term interest rates develop, the System’s
actions can be based to a greater degree on domestic
economic conditions and less on balance-of-payments
considerations.

Total loans and investments of commercial banks rose
$2.7 billion from July to August after adjustment for sea­
sonal variation and probably expanded somewhat further
in September. The August rise in bank credit was only
slightly larger than the June to July decline, and as a result
bank holdings of earnings assets have shown little net
change in recent months. This leveling off in the growth
of bank credit since June followed a 13 per cent annual
rate of increase in the period from April 1961 to June
1962. The major components of bank credit have in­
creased unevenly in the period since April 1961. Invest­
ments increased sharply from April through September of
last year but have since expanded at a relatively slow rate.
On the other hand, loans did not begin to rise until
August last year but from August 1961 to September
1962 have increased at an annual rate of 9 per cent.

Revised

Debt Management
In early September the Treasury announced an offering
to holders of $26.8 billion of certificates and notes, matur­
ing in February and May 1963, the right to exchange them
(continued on page 8)

CHANGES roise level of money supply only a little

M oney S u p p ly Series
HE DAILY AVERAGE MONEY SUPPLY series beginning in
1947, first published in I960, has
recently been revised. In addition
the related series on commercial
bank time deposits has been re­
vised to be consistent in coverage
with the demand deposit compo­
nent of the money supply. Al­
though the long-term movements
of the money supply series before
and after revision are highly cor­
related, there are short-term dif­
ferences in the two series which
are at times significant. The dif­
ferences in the series may alter
slightly an historical analysis of
when changes in the rate of change
of the money supply occurred. The
major features of the revision are
discussed in the August 1962 issue
of the Federal Reserve Bulletin.




1948

1950

1952

1954

1956

1958

1960

1962

Source: Board of Governors of the Federal Reserve System

Current data on the money supply
will continue to be available in the
Federal Reserve publication Demand
D ep o sits, Currency and R ela ted
Items (J.3 ). Two releases of this
document will appear monthly, sev­
en to ten days following the semi­
monthly period. This release may be

secured by writing the Publications
Section, Board of Governors of the
Federal Reserve System, Washington
25, D. C. The series will also ap­
pear monthly in the Federal Reserve
Bulletin, also published by the Board
of Governors of the Federal Reserve
System.

Page 5

Farm Capital Rose in 1961
T h e VALUE OF FARM ASSETS in the United States
rose $7.3 billion in 1961, reaching $207.3 billion at the
beginning of this year.1 Most of the gain reflected a $6.2
billion rise in real estate values, the largest increase in
the last three years. Farm debt also continued the postWorld War II upward trend. Proprietors’ equities were
$5.1 billion greater on January 1 this year than a year
earlier.

Farm Assets
After a two-year slowdown, farm asset values during
1961 resumed their uptrend of the past two decades, rising
3.7 per cent. A sharp increase of 5 per cent in farm real
estate prices was the major factor accounting for the gains.
In comparison, farm real estate values increased only 3 per
cent in 1959 and 1 per cent in 1960.
As a proportion of total farm asset values, farm real
estate continued its upward trend of recent years. At the

value per head of cattle and hogs was also up slightly. The
number of milk cows declined somewhat. Crop inven­
tories rose $0.7 billion, reflecting gains in cotton and soy­
bean holdings which more than offset a decline in wheat
stocks. The decline in value of household furnishings re­
flected a decrease in the number of farm families. On a
per farm basis such values have increased in most recent
years.
The value of farm financial assets turned upward in 1961
after decreasing in the previous two years. These assets,
totaling $17.8 billion, were up one per cent from the previ­
ous year. Investments in cooperatives account for all the
gain. Total liquid assets, including bank deposits, cur­
rency and United States savings bonds, were unchanged.
A slight increase in deposits was offset by a decline in
savings bonds.
TABLE 1

Comparative Balance Sheet of Agriculture, United States,
January 1, 1950, 1961 and 19621

V a lu e of Farm Real Estate
as a Per Cent of Total Farm A ssets
A SSET S
Physical assets:
Real estate
Non-real estate:
Livestock
M achinery and motor
vehicles
Crops stored on and
off farms
Household furnishings
and equipment
Financial assets:
Deposits and currency
United States savings
bonds
Investments in
cooperatives
Total

Source: U nited Sta te s Deportm ent o f A gricu ltu re

beginning of this year real estate constituted 66.6 per cent
of total farm asset values compared to 65.9 per cent a year
earlier and 57.1 per cent in 1949 when the uptrend began.
The value of non-real-estate physical assets rose slightly,
with gains in livestock and crop inventories more than off­
setting a decline in the value of household furnishings and
equipment. The number of cattle, hogs, and chickens on
farms was somewhat higher than a year earlier and the
1 The Balance Sheet of Agriculture 1962, United States Department
of Agriculture.

Page 6



C L A IM S
Liabilities:
Real Estate debt
Non-real-estate debt to—
Com m odity Credit
Corporation
Other reporting
institutions2
Nonreporting creditors
Total liabilities
Proprietors’ equities
Total
1 The

B alance

Sheet

of

1962
1961
1950
(Billions of Dollars)

1950-62

1961-62

(Per Cent Change)

75.3

131.8

138.0

83.3

4.7

12.9

15.5

16.3

26.4

5.1

11.3

18.2

18.2

61.1

0.2

7.6

8.0

8.7

14.5

8.6

8.6

8.9

8.3

—

3.5

— 6.0

9.1

8.7

8.8

—

3.3

1.0

4.7

4.6

4.5

—

4.3

— 3.5

2.1

4.3

4.5

125.0

5.5

131.6

200.0

207.3

57.7

3.7

5.6

13.1

14.2

153.6

8.5

1.7

1.4

1.9

11.8

34.2

2.8
2.4

7.0
4.0

7.5
4.1

171.4
70.8

8.2
2.5

12.5

25.5

27.7

121.1

8.9

119.1

174.5

179.6

51.0

2.9

131.6

200.0

207.3

57.7

3.7

1962,

U nited

A g ricu ltu re

States

D epartm ent

of
A gricu ltu re.
2 Loans of all operating banks, the production credit associations, and the
Farm ers H om e A d m in istration , and discounts of the Federal interm ediate
credit banks for agricu ltu ral credit corporation s and livestock loan com panies.

Production Assets Per Farm and Per Farm Worker
The value of production assets per farm and per farm
worker in 1961 continued the pronounced upward trend
of recent years. Gains in these assets (which exclude the
value of farm dwellings, household furnishings and equip­
ment, and a portion of the value of automobiles and liquid
assets) resulted from a decline in the number of farms
and farm workers coupled with an increase in the total
value of production assets in agriculture. The value of
production assets per farm, which averaged $47,632 at
the beginning of 1962, was 8 per cent greater than a
year earlier.

Rate of Return on Farm Production Assets
Per C en t

Per C e n t

Production assets per farm worker rose 6 per cent in
1961, boosting capital per worker to $23,259. The num­
ber of workers in agriculture, like the number of farms, has
declined consistently throughout most of the postwar period.

Debts
Farm debt in 1961 continued a steady upward post­
war trend. The rate of increase in farm debt was some­
what higher than the rate of increase in the value of
farm assets. Farm debt, excluding CCC loans, totaled
$25.8 billion at the beginning of this year, up $1.8 billion
or 7 per cent from year-earlier levels.
Farm mortgage debt rose $1.1 billion during the year.
As in most recent years, the increase in mortgage debt was
at a somewhat higher rate than the increase in other debt,
8 and 6 per cent, respectively. Since 1955 farm mortgage
debt has increased 71 per cent compared with a 60 per
cent increase in other debt.
In relation to assets, total farm debt, excluding CCC
loans, moved upward one percentage point to 13.4 per
cent, a new postwar level. However, this ratio of debt to
total assets was still well below the 18.9 per cent ratio of
1940.

Proprietors’ Equities
Equities of farm operators and other owners of farms
rose $5.1 billion in 1961 to $179.6 billion at the turn of the
year. Although debts have risen at a faster rate than
assets in most recent years, the large dollar volume of
asset gains has more than offset the debt increases. As a
result there has been a net growth in equity.

Returns on Farm Production Assets
In 1961 the rate of return on farm production assets con­
tinued its rise of the previous year. After having fallen to
a low of 3.4 per cent in 1959, the rate rose to 4.2 per cent
in 1960 and 5.0 per cent last year.2.
2 For a detailed explanation of calculating procedures see Current
Developments in the Farm Real Estate Market, February I960,
United States Department of Agriculture.




S o u r c e : U n it e d

State s

D e p a rtm e n t o f A g r ic u lt u r e

Although the rate of return on production assets in agri­
culture has increased for the past two years, it is still
only about average for the decade of the fifties and well
below levels for the 1940’s and the early part of the 1950’s.
From the prewar level of 5.2 per cent in 1940, returns on
such assets rose rapidly, averaging about 10 per cent for
the years 1942-1948, inclusive. Then, a downward drift
began with the rate dropping to about 5 per cent in 1953.
It held in the 4.3 to 5.5 per cent range subsequently
with the exception of lower rates in 1959 and 1960.
Changes in the rate of return on farm assets reflect
either changes in income accruing to farm capital or
changes in the value of capital assets. Since 1959, for
example, the residual returns assignable to farm capital
have increased sharply whereas value of production
assets has risen more moderately, especially in 1959 and
1960. This greater increase in returns to capital than in
the asset values resulted in the higher rate.
In addition, the rate of return on farm production assets
is a factor in the changing value of such assets. For ex­
ample, if investors expect farm real estate to yield a higher
rate of return than other forms of capital, they will tend to
bid up the value of farm real estate. On the other hand,
if returns on capital invested in farm real estate are low
relative to returns on other forms of capital, assuming that
risks and other factors are the same, investors will tend to
liquidate farm holdings, resulting in a reduction in their
value.
Numerous noneconomic factors enter into determina­
tion of the value of farm production assets. Many people,
for personal reasons, apparently prefer to own farm assets
rather than other forms of capital. Such personal prefer­
ences tend to be reflected in lower returns to assets in
agriculture.
Page 7

Economic Indicators
T h e f e d e r a l r e s e r v e b a n k o f s t . l o u is
has prepared a series of six economic indicators for
each of the four largest metropolitan areas in the
Eighth District. The current charts and tables for the
areas of St. Louis, Louisville, Memphis, and Little
Rock are presented on the following pages. Sets of
these local economic indicators will be made available
each month to those who request them. They may
be obtained by writing the R e s e a r c h D e p a r t m e n t ,
F e d e r a l R e s e r v e B a n k o f S t . L o u i s , P. O. Box 442,
S t . L o u i s 66, Missoxmi.
These materials will be of assistance in following
the economic progress of the four metropolitan centers.
The composite picture presented by examining all six
indicators together gives a better indication of the
current economic situation of an area than an exam­
ination of one indicator by itself.
All of the data have been adjusted for seasonal
variations. The August 1962 Review of this bank
discussed seasonal variations in these four metropol­
itan areas.
The series on electric power, department store sales,

C urrent Econom ic Trends —continued from

The basic data used come from several sources. The
index of the industrial use of electrical power is based
on data provided by the public utilities in each area.
Total employment data are developed by the respec­
tive Employment Security Offices. Cooperating de­
partment stores in each center provide total sales
figures.1 Check payments, or debits, are reported
monthly by commercial banks. The data for total
deposits and business loans are provided by the week­
ly reporting banks in each area. The monthly figures
for each of these latter two indicators are averages of
weekly data.
1 It should be recognized that these data are only for department
store sales and do not necessarily reflect trends and fluctuations of
other categories of retail sales or of total retail sales.

page 5

for a 3% per cent note due in 1967 or a 4 per cent
bond due in 1972. Holders of $7.8 billion of the eligible
securities exchanged them for $5.2 billion of the 5-year
note and $2.6 billion of the 10-year bond. This operation
lengthened by about 2 months the average maturity of the
Federal debt and may have exerted some downward pres­
sure on short-term rates.
During September the Treasury also announced that it
will offer, within the next six months, a long-term bond
issue of about $250 million for competitive bidding by
underwriting syndicates. The offering will be experi-

SUBSCRIPTIONS to this hunk^s

and check payments are presented as three-month
moving averages of seasonally adjusted data. The
three-month moving average is used to smooth out
erratic fluctuations in the data. It should be noted
that the last month’s index presented for each of these
three indicators is estimated by an average of the
last two months’ indexes. This estimate is subject
to revision.

R e v ie w

mental, designed to see if competitive bidding can be used
successfully to market long-term Government bonds.
In recent months the Treasury has made additions of
$100 million to the volume of weekly bill offerings and in
late September sold $3 billion in 172-day tax anticipation
bills. The Treasury's financing needs are usually large
during the latter part of the year because of the seasonal
decline in tax receipts. In the past this need has been met
by short-term borrowing, which, adding to the increased
private demand for funds, puts additional upward pressure
on short-term interest rates.

are dvaitable to the 'public without

institutions, and others. For information write: Research Department, Federal

Page 8



SELECTED ECONOMIC INDICATORS-MAJOR DISTRICT CITIES

ST. LOUIS METROPOLITAN AREA ECO N O M IC INDICATORS
Seasonally Adjusted
1 9 5 7 -5 9 -1 0 0

In d u s t r ia l

U se

of

E le c t r ic

Pow er

1 9 5 7 -5 9 = 1 0 0

*Debits to demand deposit accounts, except interbank and U.S. Government
accounts.

Industrial Use
of Electric Power
M illions of
Kilowatt
Hours
1960

Total Employment

Department
Store Sales

195759=100
In d e x **

Thousands
of Persons

195759=100
Index*

Unadjusted
Index

195759=100
In d e x **

Check Payments
Millions of
Dollars

195759=100
In d e x **

Total Deposits1
M illions o f
Dollars

195759=100
Ind e x*

Business Loans
by Banks1
1957M illions of 5 9 = 1 0 0
Ind e x*
Dollars

Jan.
Feb.
Mar.
Apr.
May
June
July
Aug.
Sept.
Oct.
Nov.
Dec.

197
202
203
200
212
211
204
226
219
216
201
197

110.4
111.2
109.9
109.0
108.6
108.8
107.8
109.4
110.7
110.7
109.4
106.9

829
830
820
836
840
850
844
842
843
841
834
839

106.3
107.1
105.8
106.7
106.7
106.6
106.5
106.6
106.0
105.9
105.6
105.5

84.0
75.7
79.8
103.9
104.3
97.4
85.3
98.4
107.3
109.2
123.2
180.5

104.1
101.6
103.7
104.7
107.1
104.5
104.0
104.1
104.3
103.8
104.0
103.1

2,872
2,836
3,186
2,848
2,921
3,256
2,921
3,142
3,010
3,001
2,937
3,242

111.7
111.6
113.8
111.2
112.5
111.7
115.1
114.9
115.0
113.2
112.5
115.1

1,151
1,130
1,125
1,126
1,111
1,113
1,116
1,126
1,117
1,131
1,127
1,165

95.4
95.3
95.5
94.7
94.4
94.2
94.3
94.8
94.7
95.7
95.6
96.6

371
381
415
413
409
398
390
397
407
400
401
389

113.7
117.4
122.2
123.5
123.8
122.1
118.5
118.9
120.3
119.9
120.5
118.8

1961
Jan.
Feb.
Mar.
Apr.
May
June
July
A ug.
Sept.
Oct.
Nov.
Dec.

194
182
199
198
217
222
205
216
203
226
213
209

106.5
106.4
108.7
109.1
110.8
109.8
108.6
107.2
108.0
111.3
115.1
116.3

818
805
810
807
815
828
821
818
824
823
819
824

104.9
104.0
104.5
103.1
103.7
103.8
103.5
103.5
103.7
103.6
103.6
103.6

82.3
75.8
91.7
86.9
99.7
98.9
84.5
99.6
107.1
105.4
125.1
175.4

103.4
101.0
100.3
99.6
102.5
103.2
104.4
103.9
103.3
103.6
102.9
101.0

3,181
2,743
3,376
2790
3,220
3,330
3,039
3,126
3,039
3,257
3,138
3,332

114.6
116.1
114.0
116.4
116.3
117.7
116.7
116.4
118.0
119.4
119.7
122.1

1,176
1,175
1,169
1,200
1,197
1,203
1,195
1,203
1,212
1,214
1,220
1,248

97.7
98.9
99.2
100.7
101.4
101.6
101.0
101.4
102.7
102.8
103.5
103.8

376
384
395
390
389
387
401
403
396
385
377
374

117.1
117.9
115.9
116.3
117.3
118.6
121.2
119.8
117.0
115.6
113.7
114.3

1962
Jan.
Feb.
Mar.
Apr.
May
June
July
Aug.

234
211
224
233
247
248
259
256

118.5
118.5
119.5
119.2
120.5
122.4
123.0
122.3e

793
802
804
810
823
832
829
827

101.6
103.5
103.6
103.4
104.6
104.3
104.6
104.6

77.0
78.4
90.2
97.2
108.8
96.5
88.3
98.7

101.5
105.0
107.6
108.8
105.7
107.0
104.7
105.9e

3,441
2,836
3,424
3,240
3,320
3,420
3,417
3,344

120.6
121.0
121.8
124.1
124.5
124.7
124.9
127.7e

1,255
1,232
1,220
1,232
1,206
1,216
1,234
1,225

104.8
103.7
103.4
103.2
101.9
102.5
104.3
103.3

381
379
382
383
383
390
403
411

119.2
116.3
112.2
114.0
115.3
119.3
121.3
122.1

Sept.
Oct.
Nov.
Dec.
* Seasonally adjusted
* * Three-month moving averages of seasonally adjusted data




e estimated
1 W eekly reporting banks

MEMPHIS METROPOLITAN AREA EC O N O M IC INDICATORS
Sea son a lly A d ju ste d

1957-59=100

C h e c k P a y m e n ts *

In d u str ia l U se o f E lectric Pow er

1957-59=100

140

140

Thiree-Month M o v in g A v e ra >•*
A ugust estimated

130

130

120

120

110

\

y

110

— 1— 1— 1— U — 1__1__L L . 1

L

1 1 t 1 1 1 i i 1 1 1

1 ! 1 1 1 1 1 1 1 1 1

T o ta l D e p o s it s
140

140
A u g u st

130

130

120

120

110

110

100

— L..I 1 1 1 L l - l

1, , i . 1 _ L

1 1 1 1 1 1 1 1 1 1

i

i

i

I

I

1 I i i i i

100

B u s in e s s L o a n s b y B a n k s
140

140

130

130

X A ugust

120

120
i i T i T T t

m

i i

_L1

1 1 1 1 1 1 1 1 1

1960

1 1 1 1 1 1 1 1 1 1 1

1961

1962

*Debits to d em a nd d e p o s it accounts, except interbank a nd U .S. G o v e rn m e n t
accounts.

Industrial Use
of Electric Power
M illions of
1957Kilowatt 5 9 = 100
Hours
In d e x **
1960
Jan.
Feb.
Mar.
Apr.
May
June
July
Aug.
Sept.
Oct.
Nov.
Dec.
1961
Jan.
Feb.
Mar.
Apr.
May
June
July
Aug.
Sept.
Oct.
Nov.
Dec.
1962
Jan.
Feb.
Mar.
Apr.
May
June
July
Aug.
Sept.
Oct.
Nov.
Dec.

Total Employment

Department
Store Sales

Thousands
of Persons

195759=100
Index*

Unadjusted
Index

195759=100
In d e x **

Check Payments
M illions of
Dollars

Total Deposits1

195759=100
In d e x **

Millions of
Dollars

195759=100
Index*

Business Loans
by Banks1
1957M illions of 5 9 = 1 0 0
Ind e x*
Dollars

100
99
103
98
96
91
87
96
85
94
92
90

123.1
122.6
121.3
120.9
119.2
118.4
116.7
115.5
115.9
114.7
114.8
111.9

233
233
232
236
237
236
235
236
236
236
237
239

102.6
102.9
102.0
103.3
103.3
103.4
102.9
102.9
103.0
102.8
102.7
103.3

81.7
80.7
83.8
107.2
107.9
89.1
93.3
104.4
97.4
111.5
119.2
176.7

106.8
104.0
106.1
106.0
108.9
106.6
105.9
103.4
102.9
101.6
102.7
102. Or

956
859
901
852
862
887
823
891
887
1,166
1,230
1,115

114.5
109.6
109.9
109.0
109.5
109.3
111.1
112.7
115.3
118.7
119.3
121.7

484
475
4 77
486
474
478
49 0
486
493
495
49 0
503

106.9
106.2
106.5
106.9
105.6
106.4
109.3
108.8
110.7
112.0
111.7
112.7

228
209
188
179
170
161
162
166
177
198
228
235

123.4
117.2
113.3
114.4
113.6
113.2
113.8
114.9
118.1
122.6
121.4
118.7

93
91
99
95
106
101
95
109
106
116
120
124

114.0
115.6
119.1
122.0
126.1
128.4
130.0
135.5
139.3
145.0
150.3
150.2

234
233
236
235
238
137
236
236
238
238
240
240

103.1
103.0
103.6
102.8
103.5
103.4
103.3
103.3
1Q3.6
103.7
103.9
103.8

78.4r
75.6r
91.Or
90.6r
102.9r
84.7r
89.4r
99.1 r
101.9r
106.9r
125.4r
184.9r

101.9r
100.8r
100.8r
T01.1 r
101.6r
101.lr
100.6r
101.7r
101.3r
103.6r
104.6r
104.0r

1,080
928
1,089
876
981
1,066
946
976
924
1,220
1,357
1,180

120.4
124.8
121.3
122.5
122.9
127.1
127.3
124.0
122.7
123.4
124.6
128.9

511
536
532
543
540
538
541
54 7
55 0
546
54 7
558

113.0
119.3
118.6
119.1
120.4
120.4
120.6
122.3
123.3
123.8
124.9
125.3

228
224
210
195
182
178
182
185
174
184
230
249

122.5
124.5
126.7
125.0
123.1
126.3
128.1
128.1
117.4
116.3
121.2
123.9

123
122
129
125
129
118
119
120

153.0
152.4
156.4
154.8
154.6
155.0
152.6
149.7e

233
235
235
236
239
240
242
239

103.0
104.0
103.4
103.3
103.7
104.6
105.8
104.3

75.0r
80.4r
89.0r
102.6r
118.3r
88.9r
101.8r
108.5r

104.1 r
104.3r
106.8r
109.8r
109.0r
1 12.2r
109.9r
112.0e

1,174
935
1,049
1,003
1,059
1,045
1,000
1,024

127.1
127.0
125.4
129.7
130.8
132.0
130.8
132.8e

553
559
566
57 6
578
591
589
59 7

122.4
124.2
126.1
126.3
128.9
132.5
131.3
133.3

237
229
218
203
192
188
185
187

126.5
126.4
130.8
130.7
130.0
134.6
130.3
128.9

* Seasonally adjusted
* * Three-month m oving averages of seasonally adjusted data
e Estimated on the basis of two months only




r Revised
1 W e e kly reporting banks

LOUISVILLE METROPOLITAN AREA ECO N O M IC INDICATORS
C h e c k P a y m e n ts * *

S easonally A d ju ste d

1957-59=100
130

In d u s t r ia l U se o f Electic P o w e r
Th ree-M onth M oving A ve ro ( ies

1957-59=100
130

120

Th ree-Month M o vin g A v e ra j 1**

August estimated

110
120

120

110

110

100

110
N

n

V

l

1 1 t 1

1 I 1 t t 1 1 1 I 1 1

1 1 1 1 1 1 1 1 I 1 I

T o ta l D e p o s it s
130

k

120

130

A ug u st estimated

100

100

120

120
A u g u st

90

.1

1 1 1 1 1 M i l l

1 1 1 1 M

1 1 I 1 1 1 1 1 1 ! 1

-L..1

90

T o ta l E m p lo y m e n t
105

105

110

100

100

90

A ugu st

100

110

100

-■ L l I I

1 1 1 1 1 11

._L 1 !

1 1 1 II

1 II

_1_1__L.. L i .1,1

90

B u s in e s s L o a n s b y B a n k s
130

130

120

120
1_L_1— I 1 1 1 1 1 1 1

1 1

LA

j J . .1 1 1 1

1

1 1 1 1 1 1 1 1 1 1 1

D e p a rtm e n t S to re S a le s

120

^

95

August

110

110

100

100

120
110

90

-1

1 1 1 1 1 1 1 L l 1_.

1960

M i l l

I . -L J

1 1 1

1 11

1961

M

L it

1, L l , .

1962

‘ Revision in sam ple.
**Debits to d em a nd dep osit accounts, except interb a n k a n d U.S. G o ve rn m e n t
accounts.

Industrial Use
of Electric Power
Millions of
Kilowatt
1960
Hours

Total Employment
_ _

Department
Store Sales

Check Payments

195759=100
In d e x **

Thousands
of Persons

59=100
Index*

Unadjusted
Index

195759=100
In d e x **

Millions of
Dollars

195759=100
In d e x **

Total Deposits1
M illions of
Dollars

Business Loans
by Banks1

195759=100
In d e x*

Millions of
Dollars

195759=100
Ind e x*

Jan.
Feb.
Mar.
Apr.
May
June
July
Aug.
Sept.
Oct.
Nov.
Dec.

100
98
104
102
101
98
95
95
95
95
88
87

109.5
111.2
105.5
113.2
111.6
110.5
105.5
102.2
100.5
99.2
98.8
96.2

273
272
271
280
283
284
283
284
284
273
2 77
276

100.8
100.6
99.9
100.6
100.2
100.1
100.0
100.4
99.6
97.5
98.8
98.8

71.9
67.9
75.9
114.3
100.3
104.7
73.4
82.0
89.4
98.8
111.2
179.3

101.4
98.8
99.6
99.6
106.9
101.1
98.3
91.7
93.7
94.3
94.3
93.0

924
889
929
904
922
9 77
880
959
932
933
907
1,065

104.0
103.2
103.7
102.0
103.1
101.3
103.3
104.0
104.9
103.3
103.1
103.8

440
423
421
42 7
413
414
415
414
417
422
426
424

101.1
99.2
99.4
100.8
99.0
98.4
98.7
99.5
100.8
100.5
100.0
99.3

123
121
123
123
123
123
122
119
119
121
129
140

105.0
107.7
108.2
108.2
107.9
109.1
109.0
109.7
111.3
111.8
112.0
112.4

1961
Jan.
Feb.
Mar.
Apr.
May
June
July
A ug.
Sept.
Oct.
Nov.
Dec.

90
90
86
88
82
84
84
88
95
93
93
93

97.8
97.7
98.6
94.3
93.9
92.5
94.3
97.5
98.2
100.9
102.9
104.0

269
266
267
270
275
2 77
276
276
280
277
279
280

99.1
98.3
98.4
97.3
97.4
97.5
97.4
97.6
98.2
99.5
99.5
99.9

63.5
61.6
87.6
90.8
95.7
92.1
87.5
88.5
97.5
103.6
120.5
197.8

92.5
92.9
92.9
94.3
95.7
100.9
102.4
103.7
101.2
101.4
101.5
100.5

92 7
864
1,001
827
981
1,006
956
953
910
1,033
1,004
1,071

104.1
104.8
102.1
103.6
103.0
107.3
106.8
106.2
107.5
109.8
110.5
113.2

434
428
429
4 27
421
4 37
467
438
443
440
452
455

99.8
100.8
101.3
100.8
101.6
103.8
111.3
105.2
106.1
105.2
106.2
106.7

133
130
132
131
132
129
130
127
123
124
136
149

113.5
114.6
115.9
115.3
116.2
114.7
116.2
116.6
115.4
115.4
118.4
119.2

125
120
128
125
132
131
129
126

103.5
105.1
106.4
108.3
109.6
110.8
109.0
105.3e

274
274
279
281
284
287
286
285

100.7
101.5
102.6
101.4
100.7
101.0
101.1
100.7

67.5
69.0
81.5
115.2
106.9
94.6
91.7
95.8

101.3
100.5
102.7
104.1
104.3
107.3
105.1
107.1 e

1,073
826
969
944
999
98 7
1,012
1,033

108.4
107.5
103.7
107.4
107.4
109.5
111.2
114.8e

468
462
466
468
459
462
469
464

107.6
108.7
109.8
110.4
110.9
109.6
111.6
111.3

134
126
125
125
120
124
123
123

115.0
110.8
109.4
110.3
105.5
110.7
109.8
113.2

1962
Jan.
Feb.
Mar.
Apr.
May
June
July
A ug.
Sept.
Oct.
Nov.
Dec.

* Seasonally adjusted
* * Three-month m oving averages of seasonally adjusted data




e Estimated on the basis of two months only
1 W eekly reporting banks

LITTLE ROCK METROPOLITAN AREA EC O N O M IC INDICATORS
S e a s o n a lly A djusted

1957-59=100

In d u s tr ia l U se o f Electric P ow e r

1957-59=100

Total Deposits

140

140
130

a

130

A ugust

120

120

110

110
100

1 1 1 1 1 1 1 1 1 1 1

1 1 1 1 1 1 1 1 1 1— I—

1 1 1 1 X..L M i l l . ,

100

B u sin e ss L o a n s b y B a n k s
170

170
A ug u st

160

160

150

150

140

140

130

130

120

120

110

1 1 I 1.1

1 1 1

1960

1 1 1 1 1 1 il

1 1 1

1 1 1 1 1 1 1 1 ] 1. 1.

1961

1962

110

•♦Debits to d e m a n d d e p o s it accounts, except interbank a nd U .S . Govi
account*.

Industrial Use
of Electric Power
M illions o f
Kilowatt
1960 Hours

195759=100
In d e x **

Total Employment

Department
Store Sales

Thou$ands
of Persons

195759=100
Index*

Unadjusted
Index

195759=100
In d e x **

Check Payments
M illions of
Dollars

195759=100
In d e x **

Total Deposits1
M illions of
Dollars

195759=100
In d e x*

Business Loans
by Banks1
1957M iflions of 5 9 = 1 0 0
Ind e x*
Dollars

Jan.
Feb.
Mar.
Apr.
May
June
July
Aug.
Sept.
Oct.
Nov.
Dec.

7.37
7.20
6.78
6.71
5.66
5.85
6.48
6.27
6.93
8.70
8.62
7.54

120.7
124.9
126.7
127.5
124.1
122.8
122.5
125.8
126.5
125.3
122.8
116.3

95
96
97
102
102
102
101
102
104
105
103
101

105.2
105.2
104.5
107.4
106.1
106.5
106.4
106.5
107.2
107.0
107.5
107.8

74.9
68.4
71.7
106.9
98.4
77.8
86.8
91.6
95.3
115.6
107.5
171.0

98.3
96.5
97.5
98.8
99.7
98.3
97.3
96.8
96.4
96.2
96.2
94.3

243
228
256
237
251
256
234
243
241
259
255
248

112.5
110.3
110.7
109.6
110.6
109.5
110.7
109.6
110.4
110.7
110.0
111.9

163
160
163
158
155
158
160
168
170
163
161
165

107.7
105.8
106.0
106.2
106.7
106.3
106.4
108.7
110.5
109.0
109.2
109.9

29
29
29
29
29
30
32
31
31
34
34
38

118.6
124.6
124.6
125.8
125.4
129.7
135.2
134.3
133.9
140.7
140.7
149.6

1961
Jan.
Feb.
Mar.
Apr.
May
June
July
Aug.
Sept.
Oct.
Nov.
Dec.

6.77
7.22
6.58
6.28
6.09
6.53
6.35
6.47
6.77
8.40
9.63
9.14

119.4
121.1
125.9
125.6
128.1
127.4
127.4
126.4
125.1
127.9
134.9
135.7

97
98
100
100
102
102
101
102
103
105
103
100

107.4
107.5
107.7
106.2
106.6
106.7
106.4
106.6
105.8
106.5
106.9
106.3

69.1
69.6
82.7
95.3
92.5
78.1
80.8
91.4
94.5
105.2
110.0
175.7

95.3
96.1
98.5
97.1
96.7
94.0
94.8
94.1
93.2
93.7
94.7
93.0

255
227
276
237
280
270
258
261
245
289
279
263

111.3
114.5
113.4
116.3
116.5
119.0
118.6
117.1
118.0
118.9
119.9
121.9

167
172
180
176
177
177
179
180
172
177
176
181

111.2
114.4
116.8
118.1
121.8
119.1
118.5
116.7
112.1
118.4
119.2
120.6

37
36
36
35
36
35
35
34
34
34
36
38

152.5
153.0
153.4
152.5
154.2
150.0
148.7
149.6
147.9
144.1
148.3
147.9

7.76
8.34
7.96
7.65
6.81
7.11
6.77
6.91

140.0
142.5
149.7
147.7
145.7
139.3
137.2
130.5e

97
100
101
103
105
105
104
103

106.9
108.8
109.2
109.0
109.3
109.3
108.9
107.5

62.9
69.1
77.5
93.2
98.2
76.2
84.6
93.6

93.1
89.7
95.7
96.3
98.6
96.6
96.1
97.0e

284
244
290
279
300
291
293
296

121.3
123.3
124.6
127.4
128.5
129.8
131.9
134.9e

185
187
189
187
186
185
188
193

123.1
124.4
122.7
123.4
127.2
124.4
124.6
125.3

36
36
34
34
36
36
36
36

149.6
150.8
147.9
149.1
151.7
156.8
153.0
157.6

1962
Jan.
Feb.
Mar.
Apr.
M ay
June
July
Aug.
Sept.
Oct.
Nov.
Dec.

* Seasonally adjusted
* * Three-month m oving averages of seasonally adjusted data



e Estimated on the basis of two months only
1 W e e kly reporting banks