A research department survey of department store executives indicated slight year to year gains in sales in December, continued purchases of less expensive merchandise, and an expectation of sluggish sales. According to newspaper reports, a steady stream of price increases continues and consumer loan rates have not been lowered in East Tennessee or Florida. Surveys conducted by directors of the Nashville Branch indicate adamant opposition to any type of incomes policy. The Jacksonville Branch Directors, on the other hand, expect some version of an incomes policy, with businessmen preferring guidelines to rigid controls.

On December 28, seven department store executives in Atlanta, Jacksonville, Birmingham, New Orleans, and Nashville were surveyed. The highest estimated year-to-year gain in December sales was 4.5 per cent. Most of the respondents reported a 1- to 2-per cent gain, though a store in Birmingham indicated that it experienced a 10 per cent decline. However, this was largely attributed to a construction strike that has now been settled. All respondents indicated that consumers continued to practice "buying down," that is. purchasing less expensive lines of merchandise. As might be expected, sales of "high-ticket' items, particularly TV's, were very slow. The sluggishness in TV sales is evidenced by the laying off of 1,600 workers at a TV tube plant in Knoxville. Toys, which are usually big sellers at Christmas, did not move as well as expected. The general consensus was that "sales will continue to be hard to come by" for at least the next six months.

Sluggishness in expensive merchandise was also reported by a factory representative for a high-quality line of men's clothing, who reported that orders were off 30 per cent this spring. On the other hand, retail sales were reported very strong in Orlando and Knoxville.

Many actual or proposed price increases continue to come to our attention: telephone rates for most Georgians and for residents of nine west central Florida counties, intrastate Florida telegraph rates on 15-word messages from $2.25 to $2.75, and gas rates in Knoxville up 20 per cent. Airlines have raised cocktail prices from $1 to $1.50. TVA recently raised construction workers' wages by an average of 11.35 per cent. A 2-cent per gallon increase in Georgia gasoline tax has been recommended. Railroads have also petitioned the ICC for a rate hike. Louisiana milk prices may be raised.

Special reports indicate that the Florida tourist season is mixed. The Gulf Coast trade is reported to be holding up well, but advance bookings are weak along the Gold Coast. The Tampa and Orlando areas remain prosperous. A 35-story office building is getting underway in Tampa, and the new $80-million airport will open there in March. Residential construction remains strong in South Florida. The late November freeze cut a swath through west Florida groves, but the crop is still expected to be so abundant that some fruit may be left to rot on trees.

Georgia businessmen surveyed by a local newspaper report they expect a modest pickup in business this year, mainly because of an increase in housing construction and consumer spending. They also think that inflation will be more of a problem in the state than unemployment.

An administrator of a publicly supported two-year college in the Atlanta vicinity reports that his institution has benefited from the transfer of students from expensive private colleges. He attributed the switching to the general economic slowdown. Meanwhile, several private colleges report a drop in enrollment due to economic conditions.

Our Nashville Directors and businessmen surveyed by them are nearly unanimous in their vigorous opposition to wage and price guidelines and in their strong support of a balanced Federal Budget. They argue that the time for jawboning is long past and that formal controls are philosophically repugnant and unworkable. Most of those surveyed are worried that the painful progress made by monetary restraint will be wasted away by easy monetary and fiscal policies. The only support for wage and price guidelines encountered by any Nashville Director was among workers in a barber shop.

According to reports, consumer loan rates have not been lowered in Florida or East Tennessee, although rate reductions are expected during the year. One explanation for the stability of consumer loan rates is that such rates did not rise along with other rates during 1969 and 1970. An increase in consumer loan delinquencies is reported at one Atlanta bank, especially in the Lakewood area, where workers are still striking at GM.