The District's economy shows a mixed bag of pluses and minuses, according to the most recent reading. The situation for cattle producers is now considered more favorable than previous reports indicated. Bank lending remains strong in Tennessee despite the state's 10 percent usury ceiling. Residential building remains very weak. North Georgia's carpet industry is beginning to feel the effects of the decline in construction. Activity at four of the District's major ports is up over year-ago levels. Tourism continues to soar, after being depressed by gasoline shortages earlier in the year. Several large contracts have recently been awarded to District industries. Spending on pollution control in the region remains significant.

Reports from several District bankers indicate that conditions have brightened recently for the region's livestock producers. Rains have revived pastures somewhat and, for the time being, have reduced the need for purchasing high-cost supplemental feeds. Some improvement in cattle prices has brightened prospects of cattlemen, eventually succeeding in disposing of their unusually large calf inventories at favorable prices. Cattle loans continue to be renewed and extended to prevent growers from having to sell on depressed markets. Bankers are now more optimistic that these loans will be repaid from cattle receipts.

Crop reports are much improved by the recent substantial rainfall. Most District farmers stand to benefit from good yields and the high prices caused by drought damage to crops in other parts of the country.

Tennessee's 10 percent usury ceiling has apparently had little impact on reducing bank lending. Large weekly reporting banks report increases in business and consumer installment loans as well as lending to nonbank financial institutions. Real estate lending shows the only weakness. Apparently, Tennessee banks are able to skirt the usury ceilings in some instances by upping compensating balance requirements. Some large Tennessee bank holding companies did have a decline in second-quarter earnings, however, which may be partially related to the state's usury law. Many Tennessee banks, believing interest rates have peaked, are shortening the maturity structure of their liabilities by shifting from CDs to the Federal funds market.

Residential building remains very weak in the District. Latest information indicates increased outflows from savings and loan institutions. One bright spot is the Atlanta apartment market. Atlanta was overbuilt with apartments a year ago, but now there is a shortage partly because of the high price of single-family dwellings. This may also provide good news for the condominium market, which had come to a near standstill.

The decline in residential construction is beginning to affect north Georgia's carpet industry. According to one area banker, not only is carpet demand dropping off, but many materials are still difficult to obtain. The net result has been reductions in production and employment. This banker indicated that the demand for inventory loans by carpet manufacturers is up, with increased prices of raw materials given as the reason. There has been little, if any, demand for bank funds for capital expansion by the carpet industry.

Ports in New Orleans, Mobile, Jacksonville, and Palm Beach reported increases in tonnage shipped recently. Mobile had the third highest month in the port's history. The first Russian Merchant ship to call at the Savannah, Georgia, port has docked there to load wood pulp and cellulose for export to Europe and Russia.

Tourism has remained strong. Alabama' s second largest industry is tourism, and it may receive a shot in the arm as eight welcome stations are to be built along Alabama's borders to "sell" the state as a vacation spot. Florida is having a good summer as earlier reported. Disney World and Cypress Gardens are doing well. Two major tourist attractions in the Atlanta area have reported increases in visitors from a year ago. Atlanta' s convention business is booming, with activity coming in from all over the world. At the present time, there are around 16,000 hotel and motel rooms and, in two years, the number will be increased to around 26,000.

Representatives from an Atlanta area investment house indicated that they have received feelers from Arabs about possible investment in District income-producing property; they are currently negotiating several investments in the Atlanta area.

Several new contracts have been awarded to District industries. Textron's Bell Aerospace Division of Michoud, Louisiana, has been awarded a $36 million contract to conduct an advanced development program for the Navy's proposed 2,000 ton, high-speed surface effect ship. Rohn Industries of Winder, Georgia, received a $30 million contract from the United States Department of Transportation to build seven high-speed turbo trains for Amtrak. Lockheed, Georgia, received a $26 million contract for five aircraft for the Canadian Armed Forces.

Spending on environmental protection and pollution control continues. to be a sizable portion of District investment spending. Miami and Tampa, Florida, received two of the largest grants made by the Environmental Protection Agency to help clean up water pollution. Miami received $41 million; Tampa received $34 million. The Tennessee Valley Authority will invest a record $180 million this year on pollution-control projects at ten power plants.