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MONTHLY REVIEW OF B U S IN E S S C O N D IT IO N S JOHN PERRIN, Chairman of the Board and Federal Reserve Agent Federal Reserve Bank of San Francisco Vol. X San Francisco, California, January 20, 1926 No. 1 S U M M A R Y O F N A T IO N A L C O N D IT IO N S Production and distribution of commodities value those awarded in November, although a was in larger volume in December than in N o seasonal decrease in building activity usually vember, and the volume of retail trade was occurs at that time of the year. Trade. Sales at department stores, chain larger than in any previous month. W holesale prices declined to the level prevailing last stores, and mail order houses in December in spring, which was the low point of the year. dicated the largest volume of Christmas trade Production. The Federal Reserve Board’s in on record. Trade at wholesale declined season dex of production in basic industries advanced ally, but continued larger than last year. Stocks 6 per cent in December to the highest level in at department stores showed less than the ten months. The rise in this index has been usual decline in December and were four per nearly continuous since last August, when the cent larger at the end of 1925 than a year volume of production was at the 1925 low point. earlier. Freight car loadings continued larger In December, production of iron and steel during December with shipments of merchan and of bituminous coal, and factory consump dise and miscellaneous commodities, coke, and tion of cotton increased considerably, and the coal particularly heavy. Prices. The general level of prices, as meas production of lumber, cement, and copper was maintained at relatively high levels. The ured by the wholesale price index of the Bureau volume of factory employment and payrolls, of Labor Statistics, declined by one per cent after increasing during the late summer and in December and at the end of the year was autumn months, continued practically un somewhat lower than a year earlier. The aver changed in November and December, with in age of wholesale prices for the year 1925 as a creases in some important industries offsetting whole, however, was the highest in five years seasonal declines in others. Building contracts and the changes in the price level during the awarded during December were the largest year were smaller than in any year in more than ever recorded for that month and exceeded in a decade. A m ong agricultural commodities, PER CENT PER CENT 1922 P R O D U C T IO N IN B A S IC IN D U S T R IE S In d ex o f 22 basic com m od ities corrected fo r seasonal variation (1 9 1 9 = 100). Latest figure, D e ce m b e r, 122. 1923 1924 1925 1926 W H O L E S A L E P R IC E S In d e x o f U . S. Bureau o f L a b o r Statistics (1 9 1 3 = 100, base adopted b y B u reau). Latest figure, D e ce m b e r, 156. T h o s e d e s i r i n g t h is r e v ie w s e n t t h e m r e g u la r ly w i ll r e c e iv e it w i t h o u t c h a r g e u p o n a p p l ic a t io n . 2 M ON TH LY REVIEW OF BUSINESS CONDITIONS prices of livestock and dairy products declined in December, while grain prices advanced. A m ong non-agricultural commodities, the prin cipal declines during December were in prices of cotton goods, paper, and rubber, while some what higher prices were shown for silk, coal, and lumber. In the first three weeks of Janu ary, quotations on hogs, coke, and hardwood PER CENT 250r Ja n u a ry , 1926 A t member banks in leading cities, total loans and investments, which had increased almost continuously during 1925, reached the highest level on record at the end of December, but declined by about $200,000,000 during the first two weeks of the new year. Both the increase in bank loans in the latter part of December and the decline after the turn CURVE 1 CURVE 2 1500|-------------------- 1---------- 1---------- ,----------,5500 RESERVE Bj!WK CREDIT 200 1000 V ' • * t 150 2/s t 1 y i 500 100 W / M / M0 v \ fi u •> 5000 / \ \ & ¡ % \ j w NET IM CIRC ULATION 4500 J » WITH SEASONAL ADJUSTMENT ■ WITHOUT ADJUSTM ENT 5 0 ‘*vw'- ____!________ I________ I____ 1922 1923 19ZA 1925 1926 19 2 2 D E P A R T M E N T ST O R E SALES 19 2 3 19 2 4 19 2 5 19 2 6 C U R R E N C Y A N D R E SE R V E B A N K C R E D IT In dex o f sales o f 359 stores (1919—100). Latest figures, D e ce m b e r; adjusted index, 142; unadjusted index, 228. lumber advanced while prices of corn, cattle, and rubber declined. Bank Credit. Changes in the demand for currency have been the principal factor in fluencing the volume of reserve bank credit in use since the middle of November. During the five weeks between November 18th and Decem ber 23rd, the reserve banks paid out into do mestic circulation a net amount of about $320,000,000 of currency in the form of gold and gold certificates, Federal reserve notes, and other kinds of money, and during the follow ing four weeks the return flow of currency from circu lation amounted to about $430,000,000. These currency movements were reflected in corre sponding changes in the volume of reserve bank discounts for member banks. M o n e y in circulation data are averages o f first-o f-m o n th figures. R eserve ban k credit data are m onthly averages o f daily figures. Latest figures, January (partly estim ated); m oney in circulation, $4,870,000,000; reserve bank credit, $1,242,000,000. of the year were largely in loans on securities, particularly at member banks in New York City. These changes in demand for loans at member banks were related both to changes in customers’ currency requirements and to end of year disbursements by many industrial and financial institutions. Conditions in the money market, which had become firmer in the last half of December, were easier in January. Rates on bankers’ ac ceptances increased follow ing the advance in the buying rate of the New Y ork Federal R e serve Bank, effective January 8th, while rates on commercial paper showed little change dur ing the period. T W E L F T H F E D E R A L R E S E R V E D IS T R IC T C O N D IT IO N S Statistical Summary— D e c., 1925 N o v ., 1925 D e c ., 1924 N o v ., 1924 150 146 125 125 Bank Debits— Index N um bersf— 20 cities......... Building Permits— 20 cities...................................... $37,071,485 $27,884,388 $31,478,701 $28,604,122 164 161 153 Retail Sales— 32 stores— Index N u m b ersf......... 146 $1,155,008 $1,130,251 $1,054,972 $1,027,261 Savings Deposits— 69 b an k s*§................................. 683,770 492,629 578,562 Lumber Production— 4 associations— board feet* 576,995 636,530 620,958 606,294 592,234 Petroleum Production^— California— b arrels.. . 483,092 510,946 530,949 403,681 Flour Production — 16 companies— barrels......... Reporting Member Bank Loans and Discounts|j * $1,186,206 $1,213,381 $1,040,889 $1,048,051 $1,633,464 $1,626,010 $1,486,787 $1,482,840 Reporting Member Bank Deposits||*.................... $25,227 $50,368 $7,614 $9,397 Federal Reserve Bank D iscounts^*...................... D e c ., 1925# com pared with D e c .. N o v .. 1924 1925 20.0 17.8 7.2 9.5 17.1 -- 2.4 -- 9.0 14.0 9.9 231.3 2.7 32.9 1.9 2.2 — 15.6 2.4 — 5.5 — 2.2 0.5 — 49.9 * I n th ou s a n d s . f A d ju s t e d fo r s e a so n a l v a r ia tio n s — 1919 m o n th ly a v e r a g e = :1 0 0 . Î D a ily a v e r a g e p r o d u c t io n . § N o t c o m p a r a b le w ith fig u re s p u b lis h e d in p r e v io u s re v ie w s . ||January 6, 1926, D e c e m b e r 9, 1925, J a n u a ry 7, 1925, D e c e m b e r 10, 1924. ^ January 13, 1926, D e c e m b e r 16, 1925, J a n u a ry 14, 1925, D e c e m b e r 17, 1924. # P e r c e n t a g e in c re a s e o r d e c r e a s e ( — ) . T C h e D e c l in in g u r r e n t L R a t io ia b il it ie s in o f B C a p it a l a n k in g I A sse ts t o n s t it u t io n s JOHN PERRIN, Chairman of the Board and Federal Reserve Agent Federal Reserve Bank of San Francisco Supplement San Francisco, California, January 20,1926 A review of banking experience in the United States from 1865 to 1925 shows that there has been a significant decrease in the ratio of in vested capital to individual deposits in banking institutions during that period.* The situation is presented graphically in the accompanying chart. PER CENT Vol. X — No. 1 and 34 in 1914, compared with 18 on June 30, 1925. Although the same general trend has been apparent in all parts of the United States, the movement has differed in intensity in different districts. The following table, giving data by Federal reserve districts for the years 1914 and 1925, illustrates these differences: IN V E S T E D C A P I T A L PER $100 O F IN D IV ID U A L D E PO SITS, N A T IO N A L B AN KS, O C T O B E R 31, 1914, A N D JU N E 30, 1925 Banks in Reserve Country Federal i— A ll Banks— ■ > '------ C itiesf------ > r------ B anks-------\ Reserve Oct. 31, June 30, Oct. 31, June 30, Oct. 31, June 30. District 1914 1925 1914 1925 1914 1925 A ll ....................... . $34 $18 $37 $18 $32 $17 B oston ............... 38 19 17 31 43 20 N ew Y ork ........ 33 17 28 13 26 14 21 Philadelphia . .. 33 37 22 32 21 Cleveland .......... 36 20 45 22 19 31 R ichm ond 21 44 39 22 21 36 46 17 43 18 46 17 30 16 31 15 27 17 41 19 51 20 St. Louis ......... 35 18 M inneapolis . .. 23 14 27 14 21 14 Kansas City . . 29 14 29 14 30 15 49 21 42 Dallas ................. 18 53 23 San Francisco . 33 15 38 15 29 15 N ew Y o rk C ity. . C ity o f C h ica g o .. 37 36 18 16 fE xclu sive of the cities o f N ew Y o rk and C hicago. R A T IO OF IN V E S T E D C A P IT A L T O I N D IV ID U A L D E PO SITS A ll National Banks in the United States The ratios reached their highest points in the years between 1865 and 1877, or during the first twelve years of the existence of the national banking system. During this period, capital of the banks amounted to approximately 75 per cent of their deposits, and their total capital funds at times exceeded their deposit liabilities. This situation could not long persist and the ratios moved sharply downward during the four years 1877-1881. Then followed a fluctuat ing horizontal movement until 1893 since when, with few interruptions, the trend has been downward. The ratio of capital, surplus, and undivided profits of all national banks to their deposits was 105 in 1874, 60 in 1881, 40 in 1900, It appears from these figures that the decline in the Twelfth Federal Reserve District, amounting to 54.5 per cent, from 1914 to 1925 has been greater than the average decline for the country as a whole, which amounted to 47 per cent. In this district, as in a majority of the other districts, there has been a greater de crease in the ratio for city banks than for coun try banks, so that whereas in the initial period the relative capital of the city banks was larger than that of the country banks, the ratios are now approximately the same in both city and country institutions. The underlying causes and the probable effects of the trend towards lower ratios of capital assets to current liabilities in the bank ing institutions of the country would seem to be proper matters for public and banker study and consideration. *Data for national banks only were used in this study because comparable figures for banks other than national banks are not available over such a long period of time. It is believed, however, that the figures of national banks reflect a situation prevailing among all banking institutions of the country. January, 1926 FEDERAL RESERVE AG EN T AT SAN FRANCISCO winter wheat for the states of this district and for the United States follow: Agricultural Activities Seasonal rain and snowfall has been less than normal in amount over a large part of the dis trict during the present winter, and the snow covering at the higher altitudes, particularly in California, is light. Midwinter temperatures have not been unduly low. R A I N F A L L — T w elfth District July 1,1924 July 1,1925 to Jan.12, 1925 J a n .12,1926 (Actual) (A ctual) (inches) A r iz o n a : (inches) 12.1 F l a g s t a f f ........................... 13.5 1.7 P h o e n ix ............................ 4.0 C a lifo rn ia : 20.0 14.0 E u re k a .............................. 3.0 F r e s n o .............................. 3.4 2.9 L o s A n g e l e s ................... 3.9 10.1 5.1 R e d B l u f f ........................ 7.3 S a c r a m e n to ................... 2.7 2.2 San D ie g o ...................... 6.3 11.9 S an F r a n c i s c o .............. 4.2 4.9 San J o s e ........................... 2.8 3.9 San L u is O b is p o .......... 3.5 Id a h o : 6.0 B o is e .................................. 6.0 6.9 L e w is t o n ........................ 5.0 N eva d a : 2.5 R e n o .................................. 3.6 O reg on : 3.6 B a k er C i t y ...................... 4.4 21.4 P o r tla n d ........................... 13.4 25.7 R o s e b u r g ........................ 10.9 U ta h : 7.6 S alt L a k e C i t y ............... 7.8 W a s h in g t o n : 19.7 S eattle ............................... 11.4 8.1 S p o k a n e ........................... 5.4 July 1 to Jan.12 (Normal) (inches) 12.8 5.7 19.4 4.2 6.1 8.2 11.4 3.9 9.6 6.2 7.7 5.4 6.4 4.5 5.8 23.5 17.1 6.7 20.1 9.7 Citrus fruit crops in California were slightly damaged by frost during the first weeks of January. Prompt use of orchard heating de vices quite generally prevented serious losses, however, and the state crop of oranges and lemons is reported to be better than average in condition and quality. Winter wheat and other growing or dormant crops are generally reported to be in good con dition except in parts of the Pacific Northwest where cold weather has damaged grain crops not sufficiently protected by a covering of snow. Preliminary estimates of the United States De partment of Agriculture indicate that the area planted to winter wheat in this district during the autumn of 1925 was 10.2 per cent smaller than the area sown to this crop in the autumn of 1924. Acreage and condition figures of W I N T E R W H E A T —Twelfth District -------- Condition---------^ t— Acreage*— ^ TenAutumn Autumn D ec.l, D e c .l, Yeart 1925 1924 1925 1924 Average California ........................ . Utah ........................ W ashington .................... . 33 788 478 2 920 152 955 94 90 92 97 82 96 68 33 804 478 2 1,000 148 1,240 89 88 82 95 87 86 77 93 89 88 90 91 87 83 3,328 3,705 T w elfth D istrict ........... 8Í 85 83 U nited States ............... ........ 39,540 39,956 *In thousands of acres. tD ecem b er 1st average, 1915-1924. N o te : D ecem ber 1st condition figures are the latest available. Agricultural marketing trends, as indicated by comparative figures of the movement of cer tain of the district’s important crops, figures of market receipts of livestock, and of cold storage holdings of butter and eggs, are shown in Table “A ” below. Exports of wheat from Pacific Northwestern ports during the 1925-1926 season to December 31st were smaller in pro portion to district production than were exports during the same period of the 1924-1925 season. Domestic demand for Pacific Northwestern wheat has been more active than last year but foreign demand has been unsteady, as United States prices have not alwrays been in line with those prevailing in world markets. Commer cial factors report that producers are still hold ing a considerable proportion of the 1925 crop. Livestock of the district generally are in satisfactory condition. Hay and other feeds have continued in ample supply. In some sec tions of the Intermountain and Pacific North western states the comparatively mild winter has prolonged the open range season and less feeding has been necessary than is usual during winter months. Industrial Activity Available statistical and non-statistical evi dence indicates that industrial activity and volume of employment in this district reached higher levels during 1925 than during 1924. Activity and volume of employment declined seasonally during December of 1925. (A ) Agricultural Marketing Activity— Monthly <---------Exports---------- \ --------- Garlot Shipments---------> Livestock Receipts Wheat* Barley* Apples* at Eight Markets in 12th District Portland and San 12th Orangesf Lemonst Cattle Puget Sound Francisco Dist. Calif. Calif. and (1000 bu.) (lOOObu.) (cars) (cars) (cars) Calves Hogs Sheep Decem ber, 1925.......................................... N ovem ber, 1925.......................................... D ecem ber— 5-year a vera g e...................... (1919-1923) 980 1,17911 2,334 Cumulative t------------------------- Crop Year ----------------------- r T o D ecem ber 31, 1925............................. 684 1,252 569 4,206 8,907 4,081$ 4,310 3,409 4,004 672 439 432 119,935 135,349 103,773|| 234,920 206,257 230,004|| 172,372 199,854 195,64111 (1000 (1000 lbs.) 2,164 2,409 1,17711 cases) 78 191 37|| ------------ Calendar Y e a r ------------3,1 87,876 7,896 9,475 38,706 7,719 1,111 1. 324,649 2,264,622 (7 .9 ) (20.7) (57.8) (15.1) (7.4) T o D ecem ber 31, 1924............................. 15,755 6,694 32,052 7,366 1,241 1, 291,097 2,675,825 (22.2) (32.7) (69.7) Five-year average to D ecem ber 3 1 . . . . 15,828 8,354 36,147$ 6,086 829 1. 153,774|| 2,014,708|| ____ 0 91 9 -1 92 3 ) (13.7) (20.7) (71.3) (12.8) (7.3) Figures in parentheses indicate percentage of new crop only. *Season begins July 1st. fSeason begins average (1922-1925). §At end of month. ¡|1921-1925. fiRevised. ColdStorage Holdings? 12th District Butter Eggs 3,198,301 (15.3) (10.8) 3,090,776|| November 1st. $Four-year 4 A new annual record in value of building per mits issued in 20 cities of the district was estab lished during 1925. A total of 133,702 permits authorizing construction valued at $421,594,906 was issued during the year. These figures are 1.8 per cent smaller in number and 7.5 per cent greater in value than those of 1924. The 1925 figures of value are slightly greater than those of 1923 ($419,726,721), the previous record year. A geographical grouping of annual value figures of building permits issued in 20 selected cities of the district during the past five years and the five-year (1920-1924) average value, to gether with index numbers based on these figures, follow s: B U IL D IN G PERMITS—Value Five-Year Southern 1925 1924 1923 1922 1921 1920-1924 California $199,525 $196,478 $247,458 $154,440 $111,698 $157,999 (126.3) (124.4) (156.6) (97.7) (70.7) (100.0) N orthern 85,214 123,305 117,132 104,486 97.216 53,285 California (144.7) (100.0) (137.5) (122.6) (114.1) (62.5) Pacific 84,397 35,938 48,863 56,209 68,323 50.216 N orthw est (172.7) (115.0) (102.8) (73.5) (100.0) (139.8) Interm oun 8,804 7,948 9,643 14,368 11,573 10,248 tain States (100.0) (149.0) (120.0) (91.3) (82.4) (106.3) Tw elfth 421,595 392,182 419,727 310,676 208,869 301,718 D istrict* ______ (139.7) (130.0) (139.1) (103.0) (69.2) (100.0) *20 selected cities. Figures in parentheses are index numbers. Base period 1920-1924 five-year a vera g e= 1 0 0 . A ll figures except index numbers are in thousands. Southern California includes L o n g Beach, Los A ngeles, Pasadena, and San D iego. N orthern California in cludes B erkeley, Fresno, Oakland, Sacram ento, San Fran cisco, San Jose, and Stockton. Pacific N orthwest includes P ortland, Seattle, Spokane, and T acom a. Interm ountain States include B oise, O gden, P hoen ix, R eno, and Salt Lake City. Figures of value of building permits issued during December, 1925, exceeded the figures of November, 1925, by 32.9 per cent and those of December, 1924, by 17.8 per cent. The usual seasonal increase from November to December is estimated at 5.4 per cent. The increases both during the month and year were chiefly due to large increases reported from Los Angeles and San Diego, California. Indexes of building materials prices and of construction costs follow : <----- Building Materials Prices*------ \ <-------- Construction C ostsf--------- ^ D ec., 1925. .177 1925 a v . . . 175 D ec., 1 92 5 .. 194 1925 a v . . . 195 N ov., 1925. .176 1924 a v . . . 176 N ov., 192 5 .. 194 1924 a v ...2 0 2 D ec., 1 92 4 .. 175 1923 a v . . . 189 D ec., 1 92 4 .. 197 1923 a v . . . 202 *U n ited States Bureau o f L a b or Statistics’ index (1 9 1 3 = 1 0 0 ). fA berth aw index o f con stru ctin g a reinforced con crete factory building (1 9 1 4 = 1 0 0 ). Production of lumber, as reported by four as sociations whose members operate in this dis trict, was approximately 11.1 per cent greater in volume in 1925 than in 1924. After making allowance for fluctuations in the number of re porting mills, it is estimated that the 1925 cut was approximately equal to, or slightly greater than, production in 1923, the previous record year. Total shipments in 1925 were approxi mately 12.5 per cent, 7.9 per cent, and 40.9 per cent greater, respectively, than the 1924, 1923, and five-year (1920-1924) average shipments. Total volume of orders booked by reporting January, 1926 M O N T H L Y REVIEW OF BUSINESS CONDITIONS mills of three associations during 1925 exceeded the 1924, 1923, and five-year (1920-1924) aver age volume of orders by 7.9 per cent, 3.6 per cent, and 33.5 per cent, respectively. Annual figures of production, shipments, and orders for each of four reporting associations for the past three years and the five-year (1920-1924) aver age, together with index numbers, follow : LU M BER A C T IV IT Y Five-Year Average ,-------1925------- * ,-------1924------- < ,-------1923------- >^-1920-1924-^ A ssocia (board Indexf (board Indexf (board Indexf (board Indexf tion feet)* feet)* feet)* feet)* W est Coast Lum berm en’ s§ P rodu ction 5,193 123.3 4,823 114.5 5,255 124.8 4,212 100 Shipments 5,383 130.8 4,936 120.0 5,351 130.1 4,113 100 O rders 5,377 133.0 4,918 121.7 5,266 130,3 4,043 100 W estern Pine Manufacturers || P rod u ction 1,838 141.0 1,605 123.2 1,717 131.8 1,303 100 Shipments 1,674 138.5 1,560 129.1 1,524 126.1 1,209 100 O rders 1,656 140.6 1,590 135.1 1,445 122.7 1,177 100 California W hite and Sugar Pine M anufacturers P rod u ction 1,479 193.0 1,148 149.8 •1,208 157.6 767 100 Shipments 1,281 245.5 889 170.5 522 100 736 141.2 Orders 1,007 California R edw ood 440 112.9 P rod u ction 391 100.5 390 100 492 126.2 Shipments 370 110.0 352 104.9 336 100 456 135.8 Orders 377 114.6 357 108.6 439 133.6 329 100 F our A ssociations P rod u ction 8,902 133.4 8,016 120.2 8,672 130.0 6,671 100 Shipments 8,708 140.9 7,738 125.2 8,068 130.6 6,179 100 O rd ersî 7,410 133.5 6,865 123.7 7,150 128.9 5,549 100 *000,000 om itted. fF iv e -y e a r (1920-1924) annual a vera g e= 1 0 0 . JFigures o f California W hite and Sugar Pine M anufacturers’ A ssociation not included. § O perating in W estern O regon and W ashington. j|O perating in Idaho, O regon, and W ashington. N o te : F igures reported b y N ational Lum ber M anufacturers’ A ssociation. D ifferences in num ber o f reporting mills from year to year are responsible for som e change in the figures, but have not seriously affected their value for com parative purposes. Seasonal decline in lumber production of the district continued during December, 1925. Re porting mills cut 15.6 per cent less lumber than in November, 1925, but 17.1 per cent more than in December, 1924. The volume of shipments increased during December and was 6.8 per cent and 12.3 per cent greater, respectively, than one month ago and one year ago. Orders received during the month were 1.1 per cent smaller in volume than in November, 1925, but 3.1 per cent greater in volume than those re ported in December, 1924. Figures of the vol ume of unfilled orders at the end of the month L o n g Beach ......... .. L o s A ngeles Sacram ento ......... Salt Lake C ity. . . . San D ie g o ........... San F rancisco . . .. December, 1925 No. Value 254 $ 568,402 37 43,324 106 229,394 419 1,143,550 3,159 16,810,677 919 3,881,109 20 578,750 232 454,387 102 147,104 849 1,801,410 11 82,600 198 929,595 74 271,741 678 3,176,108 761 3,243,915 84 1,464,330 690 1,164,590 122 126,900 93 215,489 184 738,110 December, 1924 No. Value 276 $ 705,651 23 10,581 68 633,280 401 1,793,176 11,923,961 3,486 851 3,227,514 10 314,000 288 1,245,976 75 101,764 819 1,890,190 7 5,200 159 452,361 40 219,666 620 1,242,790 5,519,031 763 81 402,735 594 843,745 105 304,925 77 210,695 166 431,460 8,992 8,909 $37,071,485 $31,478,701 January, 1926 were reported as 404,969,000 board feet in De cember, 1925, 386,268,000 board feet in Novem ber, 1925, and 467,784,000 board feet in Decem ber, 1924. Daily average production of petroleum in California declined during the last four months of the year 1925, but, at 620,958 barrels in December, was 2.4 per cent greater than in December, 1924. Daily average flow was 630,541 barrels in 1925, compared with 628,590 bar rels in 1924, and 722,545 barrels in 1923, the record year. Stored stocks of petroleum in creased from 97,829,374 barrels at the end of 1924 to 127,194,894 barrels at the end of 1925. P E T R O L E U M — California Pro- A verducing age <—------ Production--------- % Oil Active Daily Stored Stocks at W ells ProTotal Average End of Year C om - ducing Year (barrels) (barrels) (barrels) pleted W ells 1925... 230,147,000 630,541 127,194,894 948 11,393 1924 230,064,000 628,590 97,829,374 1,238 10,903 1923 263,729,000 722,545 89,274,244 980 8,928 1922 139,671,000 382,660 $ 837 9,410 1921 114,709,000 314,271 $ 704 9,425 1920 105,668,000 288,710 $ 572 9,299 1919 101,564,000 278,258 $ 559 -----------1918 ........... 97,532,000 267,211 $ 586 -----------$Comparable figures not available. So u rce: Am erican Petroleum Institute. National and Twelfth District production of non-ferrous metals was greater in 1925 than in 1924. Figures follow : N O N -F E R R O U S M E T A L S — P R O D U C T IO N * Unit Copper (lb .) .......... Lead (lb .) ............... Zinc (lb .) ............... Silver (o z.) ............ “ (d o lla rs)____ Gold (d o lla rs )____ Twelfth 1925 1,092,434 620,586 97,087$ 46,338 31,974 25,803 District 1924 1,050,238 530,263 47,286$ 44,914 30,154 26,980 <------United States-------* 1925 1924 1,693,000 1,634,000 1,302,000 1,132,000 1,102,000 1,032,000 65,723 65,407 45,612 43,823 49,127 52,277 *000 omitted, fln c lu d m g all of Arizona. $N o t including Arizona, O regon and W ashington. S o u rce: Bureau of M ines, United States Department of C om merce. t--------California— — n t----- ----- Oregon- ......... > No. of No. ^—•Employees—' No. of Dec., Nov., of Firms 1925 1925 Firms Industries All Industries.......... 701 Stone, Clay and Glass Products. .................... No. of — Employees —' Dec.. Nov.. 1925 18,043 C—5.2) 1925 19,023 145,453 ( -4 .7 ) 152,621 102 8,064 (1.9) 7,916 5 231 (— 2.5) 237 27,057 (0 .5 ) 12 2,333 (— 0.4) 28,332 44 14,205 (— 3.6) 14,732 2,343 5 1,029 (0.5) 1,024 45 Lumber and W o o d Manufactures . . 116 Textiles Clothing, Millinery and Laundering. 61 6,959 (1.5) 6,857 7 479 (0.2) 478 Food, Beverages and T o b a c c o ... 151 24,362 (— 16.5) 29,184 32 1,576 (— 20.4) 1,980 5 9,247 ( — 3.3) 9,564 W ater, Light and Power ................. . 65,536 66,449 (— 1.4) 13 1,895 1,976 572 9 523 Miscellaneous . . . . (— 8.6) (— 4.1) *Includes the following industries: m etals, machinery and con veyances ; > leather and rubber g o o d s ; chemicals, oils and p a in ts; printing and paper goods. Figures in parentheses represent percentage changes from N o vember. Other Industries*. 298 5 FEDERAL RESERVE AGENT AT SAN FRANCISCO The flour milling industry of the district operated at lower levels during the greater part of 1925 than at any time during the previous four years. The 1925 output of 16 large com panies, representing approximately 60 per cent of the total district production, was 20.9 per cent and 22.4 per cent smaller in volume, re spectively, than the 1924 output or the average output for the five years 1921-1925. F LOU R—-Production (16 companies) Total Year (bbls.) 1925. . . 4 674,316 1924. . . .5,907,329 1 9 2 3 ., . ,6,779,155 Monthly Average (bbls.) 389,526 492,277 564,930 Total Year ( bbls. ) 1 922.......... 5,944,977 1921.......... 5,652,981 1921-1925 average.. 5,751,752 Monthly Average (bbls.) 495,415 471,082 479,313 The low point of production for the year (231,456 barrels) was reached in May. The trend has been upward since that month and, since August, the volume of production has in creased more rapidly than is usual at this sea son. During December, however, output of re porting mills was 9.0 per cent less than in December, 1924, and 6.0 per cent smaller than the five-year average for that month. Stocks of flour held by millers decreased seasonally dur ing the early months of 1925, reaching a low point in August. From August to December stocks increased but the figures on January 1, 1926, were smaller than those of January 1, 1925, and the five-year January 1st average by 24.9 per cent and 20.1 per cent, respectively. Reported stocks of wheat in millers' hands on January 1, 1926, were 26.6 per cent greater than the five-year average for the first of the year. Official figures of the 1925 canned fruit and vegetable packs in California indicate a record output of these products. The largest canned peach and pear packs ever produced in that state and an unusually large pack of apricots were the chief items which made the 1925 canned fruit pack of record proportions. C A N N E D FRUITS A N D V E G E T A B L E S -P ack (California) Five-Year Average 1925 1924 1923 1922 1920-1924 F r u i t s .... 15,631,852 10,362,998 11,351,536 15,477,865 11,417,423 Vegetables 8,527,891 7,138,759 7,800,835 6,913,371 5,941,412 T o t a ls .. 24,159,743 17,501,757 19,152,371 22,391,236 17,358,835 Canned fruit markets, both foreign and do mestic, have been active during the present season, and remaining unsold stocks held by packers are relatively small in volume. General B usiness and Trade Activity in general business and trade in the Twelfth Federal Reserve District was at high levels during the year 1925. Increases in trade volume, in general, were larger than could be accounted for by normal increases in popula January, 1926 M O N T H L Y REVIEW OF BUSINESS CONDITIONS 6 tion and anticipated development of natural resources of the district. During December general business activity continued at the high levels of recent months. Debits to individual accounts (bank debits) at banks in 20 principal clearing house centers of the district, the best single measure of gen eral business activity now available, were 14.4 per cent larger during December, 1925, than during November, 1925, and 19.6 per cent larger than during December, 1924. The increase during the month exceeded the usual seasonal increase for December, and this bank’s index adjusted for seasonal variation, advanced from 146 to 149 (1919 average=100). In December, 1924, this index stood at 125. Total of bank debits at 20 reporting clearing house centers reported by 32 department stores, adjusted for seasonal movements, advanced from 161 in N o vember to 164 in December (1 919= 100). The computed rate of stock turnover was 3.13 times per year during 1925, compared with 2.94 times per year in 1924. Retailers’ inventories at the close of 1925 were 1.5 per cent larger than at the close of 1924. IN D E X N U M B E R S INDEX N UM BERS D E P A R T M E N T S T O R E S A L E S — T W E L F T H D IS T R I C T Index of 32 Stores in 7 cities (1919 monthly average=100). Latest figures, December, with adjustment, 164; without adjustment, 255. B A N K D E B I T S - T W E L F T H D IS T R IC T Index for 20 principal cities, Phoenix, Arizona, not included, (1919 monthly average=100). Latest figures, December, with adjustment, 149; without adjustment, 165. during the year 1925 ($33,261,381,000) ex ceeded the total for 1924 ($30,012,726,000) and 1923 ($29,424,384,000) by 10.8 per cent and 13.0 per cent, respectively. Trade at retail increased by more than the usual seasonal amount during December, 1925. An index based upon the dollar value of sales (D) Bank Debits*— December, 1925 20,220 Berkeley ........... $ B oise .................. 15,516 Fresno ............... 57,493 L o n g Beach . . . 57,421 880,620 L os A ngeles . .. . 176,211 Oakland ........... O gden ................ 38,308 37,308 Pasadena .......... P hoen ix ........... 30,610 179,552 Portland ........... . R eno .................. 9,544 37,900 Sacram ento . . . 95,995 Salt Lake City. vSan D ieg o 68,704 San Francisco . . 1,121,610 San Jose ............ 29,200 221,937 Seattle ............. . 58,751 Spokane ........... 30,982 S tockton ........... Tacom a ............ 47,703 14,989 Yakim a ............ Total ................$3,230,574 December, 1924 $ 17,329 14,216 34,521 48,520 801,463 127,422 28,507 33,217 27,023 163,451 8,471 34,892 85,561 52,957 885,396 24,390 186,810 47,908 27,029 41,540 12,421 $2,703,044 TwelveMonths 1925 1924 $ 218,936 150,889 467,680 572,133 9,458,157 1,719,991 320,144 416,687 286,547 1,998,792 103,927 438,395 865.294 668,987 11,496,447 311,179 2,424,902 626,986 317,432 524,436 159,987 $33,547,928 $ 208,743 140,483 399,659 606,796 8,920,579 1,480,935 286,211 387,114 255,740 1,942,036 96,274 513,378 779,768 579,628 9,767,845 275,811 2,166,8 76 566,914 286,302 480,283 127,091 $30,268,466 *000 om itted. N o te : O ctober, 1925, Bank D ebits figure for Oakland should be revised from $158,485,000 to $158,475,000. D E P A R T M E N T S T O R E S A L E S -I n d e x Numbers (1919 Monthly Averasre=100) Without Seasonal Adjustment San Salt Los O ak Fran Lake Spo Angeles land cisco City Seattle kane D ec., D ec., D ec., D ec., D ec., D ec., July, A u g., Sept., O ct., N ov., D ec., 1919. 1920. 1921. 1922. 1923. 1924. 1925. 1925. 1925. 1925. 1925. 1925. . . . . . . . . . . . . 189 215 219 257 334 335 188 210 193 238 230 361 189 206 187 207 232 243 117 138 133 178 145 268 D is trict 181 184 182 203 217 221 104 129 130 148 153 235 165 182 155 161 175 177 85 90 113 139 122 191 178 148 141 158 167 173 91 97 107 116 102 177 173 175 148 156 157 148 77 88 100 131 98 157 182 187 181 205 237 239 124 142 141 170 159 255 112 114 113 126 135 137 134 135 140 137 148 146 106 117 100 104 112 114 106 115 114 117 115 123 113 94 89 100 106 110 100 102 98 105 104 112 114 116 98 103 104 98 99 101 97 98 93 104 117 120 116 132 152 153 150 148 153 158 161 164 With Seasonal Adjustment D ec., D ec., D ec., D ec., D ec., D ec., July, A ug., Sept., O ct., N ov., D ec., 1919. 1920. 1921. 1922. 1923. 1924. 1925. 1925. 1925. 1925. 1925. 1925. . . . . . . . . . . . . 125 142 145 170 221 222 219 195 223 232 231 239 113 123 112 124 139 146 146 153 140 164 143 160 Value of sales of reporting wholesale firms in eleven lines of trade was 2.9 per cent greater in December, 1925, than in December, 1924. Seven of the ten lines for which complete data are available showed increased sales as compared with December, 1924, the increases ranging from 5.8 per cent for automobile supplies to 22.2 per cent for furniture. Total annual sales of an identical group of reporting wholesale firms in eleven lines of trade were $281,644,150 in 1925, compared with $274,937,820 in 1924. Total sales in three of the eleven lines, auto mobile supplies, dry goods, and groceries, were January, 1926 smaller in 1925 than in 1924. During June, July, August, and October, months of greatest activity in wholesale trade during 1925, per centage increases in total value of sales as compared with corresponding months of 1924 were respectively 13.8 per cent, 15.9 per cent, 6.9 per cent and 11.4 per cent. The general level of wholesale prices during these months ranged from 4 to 9 per cent higher in 1925 than in 1924. W H OLESALE TRADE Percentage increase or decrease (— ) f------------in Value of Sales------------ n Dec., 1925 D ec., 1925 N o v .,1925 compared compared compared N o. of with with with Firms Dec., 1924 Nov.,1925 N o v .,1924 Agricultural Im plem ents. 15 * * — 0 .4 f Autom obile Supplies . . . . 13 5.8 — 6.7 5.8 Autom obile T i r e s ............... 20 — 18.7$ — 14.5 — 28.7$ D rugs ...................................... 6 6.0 — 4.6 6.6 D ry Goods ............................ 15 — 4.6 — 26.6 10.2 Electrical Supplies .......... 9 17.5 11.4 14.8 Furniture ............................. 18 22.2 1.7 14.6 25 — 5.2 — 18.9 3.3 Groceries ............................... H ardware ............................. 20 7.7 2.3 8.0 Shoes ........................................ 11 12.7 — 25.7 8.3 Stationery ............................. 26 9.6 17.5 2.8 *N o t available. fRevised. $Decrease largely due to discontinu ance by certain of the larger companies of “ spring dating” sales, or the practice of advancing credit on sales made in autumn months until M arch, April, and M ay of the follow' ing year. On December 31, 1925, savings deposits at 69 banks in seven principal cities of the district were 2.2 per cent larger in amount than on No vember 30, 1925, and 9.5 per cent larger than on December 31, 1924. S A V I N G S D E P O S IT S Number of Banks Los Angeles . . 13 Oakland$ . . . . 7 Portland|| . . . . 7 Salt Lake City 8 San Francisco. 14 Seattle ............... 14 Spokane .......... 6 Total II .......... 7 FEDERAL RESERVE AG EN T AT SAN FRANCISCO Dec. 31, 1925* $394,181 100,796 54,681 29,935 476,445 78,971 19,999 Nov. 30, 1925* $385,862 99,337 53,230§ 29,661 465,432 77,080 19,649 Dec. 31, 1924* Dec. 3 1 ,1925f compared with Dec. N ov. 30, 31, 1925 1924 $349,357 12.8 95,037 6.1 5 3,679 § 1.9 29,285 2.2 435,202 9.5 71,858 9.9 20,563 — 2.7 69 $1,,155,008 $1,130,251§$1 ,054,972§ 9.5 2.2 1.5 2.7 0.9 2.4 2.5 1.8 2.2 *000 omitted. fPercentage increase or decrease (— ). $Includes one bank in Berkeley which was formerly a branch of an Oakland bank. §Revised. ||Not comparable with figures pub lished in previous Reviews. Prices The Bureau of Labor Statistics’ index of wholesale prices declined 0.8 per cent during December, 1925, and stood at 156.3 (1913=100), as compared with 157.6 in November, 1925, and 157.0 in December, 1924. Stability of the gen eral price level was a noteworthy feature of the business situation during the year 1925, par ticularly so because such stability is contrary to past experience in years of great activity in industry and trade. The Labor Bureau’s wholesale price index of non-agricultural commodities declined slightly during December as did the United States De partment of Agriculture’s farm price index, and the ratio between these two indexes, an indica tion of the relative purchasing power of farm products, remained unchanged at 87 for the month. In December, 1924, the ratio was 85. Wheat prices advanced during December, and on January 4, 1926, the May contract for new wheat sold for $1.80% to $1.83j4 Per bushel, the highest point reached since March, 1925. The 1925 high point for the May contract ($2.02 Y\ to $2.05^ per bushel) was reached on January 30, 1925. Cattle, sheep and lamb prices at Chicago de clined during December while quotations for hogs advanced. Livestock prices changed little at the chief markets of this district during the month. All classes of livestock sold at higher prices during December, 1925, than during De cember, 1924, both at Chicago and at Twelfth District markets. Chicago quotations are given in Table “ E .” Cotton prices were relatively stable during December at levels approximately 18.6 per cent below those of December, 1924. The aver age of 98 wool quotations on the Boston mar ket declined 4.6 per cent during December, and at 77.57 cents per pound on January 2, 1926, was 24.47 cents per pound lower than one year ago. (E) Commodity Prices— Commodity W holesale Prices (U . S. Bureau of L abor) 1913— 1 0 0 ...................................... Purchasing Power of Farm Products (U . S. Departm ent of Agriculture)* Cattle (N ative B e e f).W e e k ly average price at C hicago.................................... H ogs ................................W eek ly average price at Chicago..................................... Lam bs ............................. W eek ly average price at C hicago..................................... W h ea t ............................. Chicago contract price for M ay w heat......................... Cotton ............................. M iddling Uplands— W eek ly range of spot quotaW o o l ................................Average of 98 quotations at B oston................................ Sugar ............................. Beet granulated f. o. b. San Francisco......................... Apples ............................. W inesaps, medium to large extra fancy f. o. b. Prunes Raisins ............................ Size 4 0 /5 0 in 25-lb. boxes f. o. b. California. ...........................Thom pson Seedless Bulk in 25-lb. boxes f. Unit 100 lbs. 100 lbs. 100 lbs. bu. lb. lb. lb. box lb. lb. Lum ber (S o ftw o o d )..W e ek ly Index United S tates$...................................... January 2,1926 One Month Ago One Year Ago 156.3 87 $9.40 11.40 16.00 1.76-1.79*4 157.6 87 $9.95 11.15 16.10 1.67-1.72J4 157.0 85 $9.25 10.45 17.25 1 . 7 5 ^ - 1 .8 0 ^ 19.82-20.000 77.570 5 .1 0 0 1 19.50-20.050 81.330 5.350 23 .9 0 -2 4 .6 0 0 102.040 6.550 1 .75-2.0 0 .0 9 - .0 9 ^ 2 .00-2.1 5 .08J 4-.09 .0734 30.26 .0734 30.42 2.50 .lO -.lO X not quoted 31.18 * Ratio of farm prices (August, 1909-July, 1914=100) to wholesale prices of non-agricultural commodities (1910-1914=100). tjanuary 8, 1926. $As published by “ The Lumber Manufacturer and Dealer.” During the last half of 1925 prices of refined beet sugar at San Francisco ranged from $5.05 to $5.70 per 100 pounds, lower figures than had previously prevailed since the close of 1921 and the first months of 1922. The low point of $5.05 per 100 pounds was quoted during the period from November 5 to November 12, 1925. The published quotation on January 8th was $5.10 per 100 pounds. Dried fruit prices strengthened during the last months of 1925, and prune and raisin quo tations were advanced slightly by California packers during November and December. Canned fruit quotations continued firm at levels which have changed little since the late sum mer months of 1925, when slight advances over opening prices were announced for many varie ties. Monthly average prices of copper, lead, silver, and zinc, as reported by the “ Engineering and Mining Journal-Press,,, were generally higher in 1925 than in 1924. The figures follow : N O N -F E R R O U S M E T A L S P R IC E S COPPER N ew York (cents per lb.) 1925 1924 13.87 14.26 14.35 13.64 14.30 12.93 14.38 12.92 14.49 13.22 13.95 12.39 13.40 12.33 13.35 12.77 13.25 13.21 14.00 13.52 14.46 12.71 14.71 12.40 Monthly Average Decem ber . . . N ovem ber . . . O ctober . . . . September . . . A u gust July ............ . June ............ . ............ . M ay April ............ . M arch . February . . . January .. . . Annual Average . . 14.04 13.02 Five-year Average: 1920-1924 . 14.16 13.94 1909-1913 . 1913-1925 R ange: H ig h . . . . 33.50 (1 2 -1 6 --1916) 11.38 Low . . . . (8 -2 5 --1921) LEAD New York (cents per lb.) 1925 1924 9.31 9.21 9.74 8.69 8.24 9.51 8.00 9.51 9.19 7.83 7.12 8.15 7.02 8.32 7.99 7.27 8.26 8.01 9.01 8.91 9.43 8.55 10.17 7.97 9.02 8.10 S IL V E R New York (cents per oz.) 1925 1924 68.89 68.10 69.22 69.30 71.11 70.83 71.57 69.35 70.24 68.52 69.44 67.16 69.11 66.69 67.58 65.52 66.90 64.14 67.81 63.96 68.47 64.36 68.45 63.45 69.07 66.78 6.72 4.40 72.55 55.79 12.00 (6 -1 6 -1 9 1 7 ) 3.,75 (3 -2 --1921) 135.00 ( 1 - 3 1 - -1920) 46.25 ( 9 - 4 - ■1915) Z IN C St. Louis (cents per lb.) 1925 1924 8.57 7.37 8.61 6.80 8.28 6.32 7.75 6.18 7.58 6.18 7.21 5.90 6.99 5.79 6.95 5.79 6.99 6.12 7.32 6.49 7.48 6.76 7.74 6.43 7.62 6.34 6.20 5.73 27.00 ( 6 - 1 2 - ■1915) 4.13 ( 8 - 3 0 - ■1921) B a n k in g and Credit Situation Demand for credit at reporting member banks in the Twelfth Federal Reserve District decreased during the four weeks ending Janu ary 6, 1926, a partly seasonal movement. Total loans and investments of the banks declined by $47,000,000, or 2.8 per cent, during this period, the result of decreased loans of all classes and of smaller holdings of investments. Time de posits declined from $823,000,000 on Decem ber 9th to $778,000,000 on December 16th, then increased to $810,000,000 on December 30th, and subsequently declined to $800,000,000 on January 6th, movements which were probably allied with seasonal holiday and year-end needs of depositors. Demand deposits increased by $8,000,000, or 1.1 per cent, during the four January, 1926 M O N T H L Y REVIEW OF BUSINESS c o n d i t i o n s 8 weeks. Borrowings of reporting banks from the Federal Reserve Bank of San Francisco de clined by 60.4 per cent, or $36,000,000. R E P O R T IN G M E M B E R B A N K S — Twelfth District (In millions of dollars, percentage changes in parentheses.) Clondition Jan. 6, 1926 1,186 Total Loans ................. 915 Commercial Loans . . . 271 Loans on Securities. . . 457 Investm ents .................... T otal Loans and 1,644 Investm ents ............... 807 N et Dem and D eposits Tim e Deposits ............ 800 Borrow ings from F ed 24 eral Reserve B an k. One Month A go — 27 ( 2.2) — 20 ( 2.1) — 7 ( 2.6) — 20 ( 4.2) ges jfrom ■■■■■.......... One Year Ago + 145 ( 14.0) + 93 ( 11.4) + 52 ( 23.7) + 22 ( 5.1) — 47 ( 2.8) + 8 ( 1.1) — 23 ( 2.7) h 167 ( 11.3) - 12 ( 1.5) -1 2 2 ( 18.0) — 36 (60.4) + 14 (150.8) Movements in principal items of condition statements of the Federal Reserve Bank of San Francisco during December and early January have reflected the usual seasonal changes in demand for reserve bank accommodation which accompanied corresponding seasonal change in currency requirements incidental to holiday activity. During the four weeks ending Janu ary 13, 1926, decreases of $25,000,000 (49.9 per cent) in bills discounted and of $2,000,000 (7.8 per cent) in holdings of pur chased bills more than offset an increase of $11,000,000 (27.9 per cent) in holdings of United States securities, and total earning assets of the Reserve Bank declined by $17,000,000 (13.8 per cent). The volume of Federal reserve notes in circulation increased from $204,000,000 on November 25th to $214,000,000 on December 23rd, since when the subsidence of holiday demands for currency has caused a decline in Federal reserve note circulation to $196,000,000, the figure for January 13, 1926. During the year ending January 13, 1926, total bills and securities (earning assets) of the Fed eral Reserve Bank of San Francisco decreased $3,000,000 or 2.6 per cent, due to a decrease of $21,000,000 (42.3 per cent) in holdings of bills bought, which w^as slightly larger than the com bined increase of $18,000,000 (231.3 per cent) in bills discounted and $1,000,000 (2.1 per cent) in holdings of United States securities. Volume of Federal reserve notes in actual circulation declined $8,000,000 (3.9 per cent) during the year period, total deposits increased $10,000,000 (5.9 per cent) and total reserves increased $7,000,000 (2.6 per cent), and as a result of these various movements the reserve ratio was 75.6 on January 13, 1926, compared with 74.0 on January 14, 1925. F E D E R A L R ESER VE B A N K O F SA N F R A N C IS C O (In millions of dollars, percentage changes in parentheses.) C on dition Jan. 13. 1926 . 105 25 50 29 . 282 177 Total B ills and Securities Bills D is c o u n t e d ................. United States Securities. Bills B ought ........................ Total Reserves .................... Total Deposits .................... Federal Reserve N ote Circulation ........................ . 196 One Month Ago — 17 (13.8) — 25 (49 .9 ) + 11 (27 .9 ) — 2 ( 7.8) + 8 ( 2.9) + 2 ( 1.0) One Year A go — 3 ( 2.6) + 18 (231.3) + 1 ( 2.1) — 21 ( 42.3) + 7 ( 2.6) + 10 ( 5.9) — 12 ( 5.5) — 8 ( 3.9)
@FedFRASER