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M O N T H L Y R E V IE W OF B U S I N 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. VII San Francisco, California, July 16, 1923 Summary of National Conditions Production of basic commodities declined in June, but employment was maintained at last month’s high level, freight shipments were ex ceptionally large, and the volume of wholesale and retail trade continued heavy. Wholesale prices showed a further decrease. Production. The Federal Reserve Board’s index of production in basic industries, which makes allowance for seasonal variations, was 4 per cent lower in June than in May and stood at about the level of the late winter. Mill con sumption of cotton, steel ingot output, and sugar meltings showed particularly large re ductions. The value of permits for new build ings and of contracts awarded declined more in June than is usual during that month. The Department of Agriculture forecasts, on the basis of July 1st condition, a large increase in the cotton crop, a slight reduction in the corn crop, a winter wheat crop of about the same size as last year, and a spring wheat crop which will possibly be about forty million bushels below 1922. The number of factory employees at work in June in the country as a whole was about as large as in May, though a reduction was re ported by New England establishments. The proportion of factories reporting full time oper ations decreased, and consequently average earnings per employee were smaller. W age advances continued to be reported in June, but they were not nearly so numerous as in April or May. M IL L IO N S PER C E N T No. 7 O F D O LLA RS 160 B I L L IO N S O F D O L L A R S 140 ,/AI22 120 100 \ > 8° \ . Mf* J tv 60 40 20 .t-.1— t.,. .1 11..J 0 131 19 1920 1921 1922 1923 Index of Production in Basic Industrie* Combination of 22 individual series corrected for seasonalvariation (1919 average = 100 per cent) Prices Bank Credit Bank Credit Index numbers of wholesale prices. United States Bureau of Labor Statistics (1913 averas:e=100 percent) All Federal Reserve Banks 800 member banks in leading cities A substantial, black, cloth-covered, three-ring binder, large enough to contain one year’ s (12) issues o f this review, will be mailed prepaid to any address on our mailing list upon receipt o f one dollar to cover actual costs. 98 M O N T H L Y R E V IE W OF B U SIN E S S C O N D IT IO N S Trade. Distribution of commodities, as meas ured by railroad freight shipments, was active throughout June. The number of cars loaded exceeded a million in each of four successive weeks, and in the week ended June 30th was the largest on record. The volume of whole sale and retail trade in June was about the same as in May and continued to be substan tially larger than in 1922. Sales of groceries and dry goods were much larger in June, and this increase was reflected in an advance of 4 per cent in the Federal Reserve Board’s index of wholesale trade. This index, which makes no allowance for seasonal changes, was 9 per cent above the June, 1922, level. Department store and mail order sales were smaller, as is usual at this season, while sales of reporting chain stores were at about the same high level as in May. Stocks of merchandise at depart ment stores were reduced about 6 per cent. Wholesale prices. The decline in commodity prices which began late in April continued during June and the first two weeks of July, and the index of the Bureau of Labor statistics for June was 2 per cent less than for May. The largest decline, amounting to 4 per cent, oc curred in the prices of building materials, and decreases were shown also for all the other commodity groups, except house furnishings which remained unchanged. During the first half of July, price declines were shown for wheat, sugar, petroleum, and lead, while the price of corn and hides advanced. Bank credit. Bank developments between the middle of June and the middle of July largely reflected the payment of income taxes on June 15th, dividend and interest payments at the turn of the half year, the demand for additional currency for the July 4th holiday, and the return flow of currency after that date. A t the end of the period the volume of member bank and Federal reserve bank credit in use was approximately at the same level as a month earlier. A t the Federal reserve banks the amount of discounts for member banks on July 18th was about $100,000,000 larger than on June 13th, but this increase was practically balanced by a decline in holdings of accept ances and government securities. During the month of June gold and gold cer tificates in circulation increased by over $40,000,000, and this increase is reflected in an equivalent decline of gold held by the Federal reserve banks. Money rates were slightly firmer, as is usual at this season of the year. Summary of District Conditions Production and distribution in the Twelfth District during June, although proceeding at levels below those of the first quarter of the year, have continued in normal or greater than normal volume, with full employment of all classes of labor. Loans of member banks and discounts of the Reserve Bank have increased moderately. Production and shipments of lumber de clined during June, and new orders received were smaller in volume than in the previous month or in June, 1922. Lumber mills report a sufficient quantity of unfilled orders still on hand, however, to necessitate capacity opera tion. Production of the principal metals of the district declined slightly during the past month. The market for copper, lead, and zinc has been inactive with prices falling, and the silver mar ket has been temporarily disorganized by the completion of government purchases of domes tic silver at the fixed price of $1.00 per ounce. The price of silver in the open market aver aged 65 cents per ounce during June. Drilling of wells in the newer oil fields of California has continued, and despite efforts of the larger producers to curtail production, output and stored stocks have increased rapidly. There were 79 new wells completed during June with an initial daily production of 152,974 barrels. Total production during the month reached the record daily average of 755,570 barrels. No appreciable decline in the volume of projected building construction was indicated by figures of building permits issued in the principal cities of the district during the past month. Labor continued fully employed, a fact which is at tested by the difficulty encountered by farmers of the district in securing adequate harvest help. Debits to individual accounts at banks in principal clearing house centers, an approxi mate measure of the total volume of business transacted in the district, were 20.7 per cent greater during June, 1923, than during June, 1922, and were 19.6 per cent greater during the first six months of 1923 than during the same period in 1922. The value of sales at retail, as reported by 34 department stores in seven cities, was 13.4 per cent greater during June, 1923, than during June, 1922, a larger increase than was reported in the two previous months, but below the increases of 20 per cent reported in February and March. Trade at wholesale continued greater in value than a year ago, but the increases in most reporting lines dur- SUMMARY OF PROVISIONS OF THE AGRICULTURAL CREDITS ACT OF 1923 PREPARED BY FEDERAL RESERVE BANK OF SAN FRANCISCO San Francisco, California, July 16, 1923 H E Federal Reserve Board, in a statement for the press on July 7, 1923, suggested that Federal Reserve Banks should give to the public information regarding the added facilities for agricultural financing made possi ble through legislation enacted during the last Congress. In conformity with this suggestion there is submitted herewith a comparative digest of those provisions of the Agricultural Credits Act of 1923 which it is thought will be of most interest to member banks, co-operative marketing agencies, and purchasers and buyers of agricultural products. Information other than that herein contained may be had by addressing the Federal Intermediate Credit Banks at Berkeley, California, and Spokane, Washington, and, with respect to National Agricultural Credit Corporations, the Comp troller of the Currency, Washington, D. C. T In substance, the Agricultural Credits Act was designed to provide additional credit facili ties to agriculturists and producers of livestock through the discount of their paper ranging in maturity from six months to three years. Provisions of the Act relating to the Federal Reserve System are summarized on page 4 herein. The Act also provides two separate and distinct organizations for supplying credit to agriculturists and those engaged in the live stock industry, viz., the Federal Intermediate Credit Banks and the National Agricultural Credit Corporations. Federal Intermediate Credit Banks may dis count for the following agencies : National banks; State banks and trust companies ; Incorporated livestock loan companies ; Savings institutions; Co-operative banks ; Co-operative credit or marketing associations of agricultural producers ; Any other Federal Intermediate Credit Bank. Federal Intermediate Credit Banks may also lend direct to co-operative associations en gaged in producing or marketing staple agri cultural products or livestock when the notes of such associations are secured by warehouse receipts, shipping documents, or mortgages on livestock. Federal Intermediate Credit Banks may not do business direct with individual borrowers. The maturity of the notes redis counted by Federal Intermediate Credit Banks must be not less than six months nor more than three years, and the proceeds of the notes must have been used in the first instance for agricultural or livestock purposes. Federal In termediate Credit Banks may make such notes the basis of debenture issues. These banks are supervised by the Federal Farm Loan Board in Washington. One is located at each of the twelve Federal Land Banks, and has the same officers and directors, but is entirely indepen dent in capital, assets and liabilities. The capi tal for each Federal Intermediate Credit Bank is to be $5,000,000, supplied by the Treasury of the United States. National Agricultural Credit Corporations, on the other hand, may lend direct to individ uals engaged in agriculture and the fattening of livestock upon notes having a maturity not exceeding nine months, and to individuals en gaged in the breeding of livestock or in the dairy industry upon notes having a maturity not exceeding three years. The United States Government supplies no capital to these asso ciations, their number is not limited, and they may be organized anywhere by a minimum of five incorporators, provided they have a sub scribed capital of not less than $250,000, of which one-half is paid in in cash. National Agricultural Credit Corporations (Rediscount Corporations) having an authorized capital of $1,000,000 or more may, instead of doing busi ness with the public, rediscount paper of the kind above described for other national agri cultural credit corporations, or for banking in stitutions which are members of the Federal Reserve System, and also purchase direct from co-operative agricultural associations, notes secured by warehouse receipts, shipping docu ments, etc., and having a maturity not exceed ing nine months. All National Agricultural Credit Corporations will operate under a Fed eral charter and be under the supervision of the Comptroller of the Currency. A compara tive summary of the foregoing and other im portant features of the Agricultural Credits Act is appended hereto. Additional copies o f this summary may be obtained upon application to the Federal Reserve Bank o f San Francisco A G R IC U L T U R A L C R E D IT S A C T O F 1 9 2 3 ( A P P R O V E D M A R C H 4 , 1 923) N a tio n al A gricu ltu ral Credit Corporations National Agricultural Credit Corporations (R e d isco u n t C orporations) F edera l In term ed iate C redit B an ks (S e c . 2 0 7 ) Where Located None yet authorized to do business. None yet authorized to do business. One at each of the twelve Federal Land Banks. In this district, one at Berkeley, California, and one at Spokane, W ash . To W hom May Lend Private individuals; partnerships; associ ations and corporations. M ay rediscount for National Agricultural Credit Corporations and banks which are members of the Federal Reserve System ; may lend direct to Agricultural Co-opera tive Societies. National Banks; State Banks; Trust C om panies; Agricultural Credit Corporations; Incorporated Livestock Loan Com panies; Savings Institutions; Co-operative B anks; Co-operative Credit or marketing associ ations of agricultural producers; other Federal Intermediate Credit Banks. Lending Powers (1) M ay make advances upon, discount, rediscount or purchase notes, drafts and bills of exchange, and accept drafts and bills of exchange which are issued or drawn for an agricultural purpose, or the proceeds of which have been or are to be used for an agricultural purpose, and which are secured by warehouse receipts on non-perishable, readily marketable staple agricultural products or chattel mortgages on livestock which is being fattened for market. (2) M ay make advances upon, discount, rediscount or purchase notes secured by chattel m ortgages upon maturing or breeding livestock or dairy herds. (1) M ay rediscount for any National Agricultural Credit Corporation or for any bank or trust company which is a member of the Federal Reserve System, on its endorsement, notes, drafts, bills of exchange or acceptances which conform to the requirements of paragraphs 1 and 2 in previous column. (2) M ay discount or purchase notes, drafts, or bills of exchange issued or drawn by agricultural co-operative asso ciations and secured by warehouse re ceipts on non-perishable, readily market able agricultural products. (1) M ay discount or purchase any note, draft, bill of exchange, debenture, or other such obligation the proceeds of which have been advanced or used in the first instance for any agricultural pur pose or for the raising, breeding, fatten ing or marketing of livestock. (2) M ay make loans or advances direct to any agricultural or livestock co-opera tive association if the notes are secured by warehouse receipts or shipping docu ments covering staple agricultural prod ucts, or mortgages on livestock, such loans not to exceed 75 per cent of mar ket value of security. Maturities (1) N ot exceeding nine months at time of discount or purchase if made under paragraph (1) above. (1) In case of rediscounts for National Agricultural Credit Corporations or for member banks of Federal Reserve Sys tem, the same maturities as required for discount of the paper in the first instance by those institutions. (2) In case of discount for or purchase from co-operative associations of agri culturists, not exceeding nine months. N ot less than six months nor more than three years at time of discount. Federal Farm Loan Board has ruled that, for the present, maturities shall not exceed nine months. (2) N ot exceeding three years at time of discount or purchase if made under para graph (2) above. W hat Constitute “ Staple Agricultural Products” N ot yet defined. N ot yet defined. Grain, cotton, wool, tobacco, peanuts, broom corn, beans (including soy beans), rice, hay, nuts, canned fruits and vege tables. Rate of Interest N ot to exceed the maximum rate allowed by law of state in which corporation is located, e. g., in states of Twelfth Dis trict these limits are: A r i z o n a ................................................. 10% California ....................................No limit I d a h o ..................................................... 10% Not to exceed the maximum rate allowed by law of state in which corporation is located, e. g., in states of Tw elfth D is trict these limits are: A r i z o n a ................................................. 10% California ....................................No limit T o be established by each Federal Inter mediate Credit Bank with approval of Farm Loan Board. After debentures is sued, may not exceed by more than 1 per cent the rate of last preceding issue of debentures. N o borrower allowed to discount paper with Federal Intermediate T H a h n .............. ................. ................ .............. 10^ (b) Surplus Earnings (c) Debentures N o p rovision. M ay issue, subject to regulations by Comptroller of the Currency, collateral trust notes or debentures, maturity not to exceed three years, secured by the obligations it has discounted. N o government liability therefor. N ot to exceed, together with other liabili ties, ten times its paid-in and unimpaired capital and surplus. (d) Rediscounting M ay not rediscount with Federal Reserve Banks or Federal Intermediate Credit Banks. May rediscount elsewhere, not to exceed, together with other liabilities, ten times its paid-in and unimpaired capital and surplus. Stockholders Private individuals. An y member bank in Federal Reserve System may apply to Comptroller of the Currency for permission to purchase stock of one or more of the National Agricultural Credit Corporations, not to exceed 10 per cent of its paid-in and un impaired capital and surplus. Supervised by Comptroller of the Currency. Directors Five. Federal Reserve Banks Federal Reserve Banks may purchase and sell debentures of, when within six months of maturity. M ay purchase and sell acceptances of. M ay act as depositaries for and Fiscal Agents of. in within six months. No provision. M ay issue, subject to regulations by Comptroller of the Currency, collateral trust notes or debentures, maturity not to exceed three years, secured by the obli gations it has rediscounted or purchased. No government liability therefor. No limit in law as to total amount which may be issued. Comptroller of the Cur rency to prescribe this limit. One-half of net earnings annually to be paid to United States and other half to be credited to surplus until surplus equals 100 per cent of capital; thereafter 10 per cent of net earnings annually to be added to surplus; balance of net earnings being paid to United States. M ay issue and sell tax exempt collateral trust debentures or similar obligations, maturity not to exceed five years; interest not to exceed 5 per cent per annum, se cured by cash or by the notes it has dis counted. N o government liability there for. Each bank primarily liable for its own debentures, but all twelve banks are liable for loss of interest or principal on the debentures of one or any of them, in proportion to the aggregate of capital, surplus and debentures of each outstand ing. May not rediscount with Federal Reserve Banks or Federal Intermediate Credit Banks. N o limit in law as to total amount which may be rediscounted elsewhere. Comptroller of the Currency to prescribe this limit. M ay rediscount with Banks. (See below.) Private individuals. Any National Agricultural Credit Cor poration may purchase stock not to ex ceed 20 per cent of its paid-in and unim paired capital and surplus. A n y member bank in Federal Reserve System may ap ply to Comptroller of Currency for per mission to purchase stock of one or more of the National Agricultural Credit Cor porations, not to exceed 10 per cent of its paid-in and unimpaired capital and sur plus. Government of the United States. Federal Reserve Comptroller of the Currency. Federal Farm Loan Board. Five. Same officers and directors as Federal Land Bank at which located. Federal Reserve Banks may purchase and sell debentures of, when within six months of maturity. Federal Reserve Banks may purchase and sell debentures of, when within six months of maturity. M ay purchase and sell acceptances of. M ay rediscount notes and drafts if drawn for an agricultural purpose or based upon livestock and having maturity at time of discount not to exceed nine months, pro vided such notes do not bear the en dorsement of a non-member bank or trust company which is eligible for m em bership in the Federal Reserve System. M ay purchase and sell acceptances of. M ay act as depositaries for and Fiscal Agents of. at« ,, r „ ------ 1 __i AM ENDM ENTS OF FED ERAL RESERVE A C T BY A G R IC U L T U R A L C R E D IT S A C T O F 1923 (Concerning matters other than relations with Federal Intermediate Credit Banks or National Agricultural Corporations) Federal Reserve Banks— 1. May discount notes of factors issued as such, making advances exclusively to purchasers of staple agricultural products in their raw state; the maturity of such notes not to exceed 90 days. (Sec. 13, par. 1.) 2. May discount or purchase demand and sight bills of exchange drawn to finance domestic shipments of non-perishable, read ily marketable staple agricultural products, secured by ship ping documents conveying title thereto, provided such bills be forwarded promptly for collection and on no account held by Federal Reserve Bank in excess of 90 days. (Sec. 13, par. 2.) 3. May discount bankers’ acceptances with six months, instead of customary 90-day maturity, if drawn for agricultural purposes and secured by documents conveying title to readily market able staples. (Sec. 13, par. 4.) 4. May discount notes and drafts drawn for agricultural pur poses, or based on livestock, with a maturity of nine months instead of six months as heretofore. (Sec. 13a.) 5. May admit as members, State banks having a paid-up capital of not less than $15,000 instead of $25,000 heretofore required as minimum, upon condition that such capital be increased to $25,000 out of earnings. (Sec. 9, par. 9.) The Federal Reserve Board has published a regulation announcing that this in crease must be accomplished within five years from date of entrance into the system. The Agricultural Credits Act also extends to February 29, 1924, the time during which the W ar Finance Corporation may make advances and purchase notes, drafts, bills of exchange, or other securities. FEDERAL RESERVE A G E N T A T S A N FRANCISCO 99 ing June, 1923, compared with June, 1922, were Crop Conditions not as great as those reported in previous Weather conditions during the past month months of the present year. Five lines re have been generally favorable for the normal ported a decline in the value of sales during growth of late sown grain crops and the har June, 1923, as compared with May, 1923, but vesting of earlier sown fields. Threshing is these decreases were largely seasonal. There now in progress in the southern states of the was a marked decline in both number and district. In California it was estimated that liabilities of business failures during the month. approximately 50 per cent of the wheat crop Increase in loans of member banks and of and 70 per cent of the barley crop had been the Reserve Bank continued during June. placed in sacks by July 16th. Partly in re Total loans of 66 reporting city member banks sponse to continued favorable weather condi reached a new peak in the upward movement tions during June and partly in response to which began in February, 1922, but later de unexpectedly large threshing returns in states clined, and were but $1,000,000 higher at the where harvesting has begun, the United States close of the month than at its beginning. Total Department of Agriculture has increased its deposits of these banks gained $7,000,000 dur previous estimates of yields of grain in this ing the same period. Discounts of all member district. Revised estimates, as of July 1st, place the 1923 yield of all wheat in the principal banks at the Federal Reserve Bank increased producing states of the district at 131,847,000 by $23,000,000 during the four weeks ending bushels compared with the June 1st estimate July 11th, and at $84,000,000 on that date were of 122,929,000 bushels. Pertinent figures relat higher than at any time since October, 1921. ing to the condition of the district’s wheat crop The amount of Federal Reserve Notes in cir and forecasted yields of this grain are pre culation increased, partly due to seasonal sented in the following table : causes, from $202,000,000 on June 13th to $217,Winter Spring Wheat 000,000 on July 11th, the latter figure being Wheat Forecasted Actual Condition Condition Yield* Yield* $21,000,000 above the low point of recent years (Per Cent of Normal) AH Wheat A ll Wheat July 1, July I. July 1, July 1, July 1,1923 1922 reached on April 25th. Succeeding weeks will 1923 1922 1923 1922 (bushels) (bushels) reveal to what extent these increases in re California . 14,589 15,308 98 78 97 88 24,275 27,106 discounts and note issue were temporary and . . 96 85 97 70 19,744 24,527 . . 95 78 93 89 6,243 5,682 incident to the fiscal year requirements of Washington . . 98 67 101 63 59,382 32,444 June 30th. Interest rates charged by commer Totals . . 131,847 97,453 cial banks have remained steady. United States. 76.8 77 82.4 83.7 821,000 ______ 862,000 The downward movement of prices which *000 Omitted. began in May continued during June. The The 1923 barley crop in California is now general level of prices as shown by the United States Bureau of Labor’s index number of placed at 34,724,000 bushels by the Department wholesale prices declined 2 per cent. Impor of Agriculture, compared with a 1922 crop of tant individual declines which contributed to 36,864,000 bushels. the general fall in prices were those reported W heat markets of the district have been for wheat and for building materials. The relatively inactive during the past cereal year. present price level at 153 (1913 prices=100) Export movement of wheat from Portland and is 3.8 per cent below the peak of April, 1923, the Puget Sound ports from July 1, 1922, to and 10.9 per cent above the post armistice low June 30, 1923, totaled only 18,985,766 bushels, of January, 1922. compared with a movement of 44,776,459 Another month of favorable growing weather bushels during the 1921-1922 cereal year and greatly benefited the crops of the district and 29,837,894 bushels during the 1920-1921 cereal it now appears that the total volume of agri year. The trend of wheat prices continued cultural production will be greater than last downward during the past month, and on July 14th milling wheat in the San Francisco mar year. The canning fruit crops of California are being harvested, and growers and canners ket was quoted at $1.87 per cental ($1.12 per have finally agreed upon the prices to be paid bushel), compared with $1.90 per cental ($1.14 for the various fruits. They average approx per bushel) on June 15, 1923, and $1.88 per imately 50 per cent below the prices paid a cental ($1.13 per bushel) on July 14, 1922. year ago. Revised prices on unsold stocks of There is reported a tendency among growers 1922 crop dried fruits held by California pro to hold their grain in expectation of an advance ducers’ associations have recently been named, in prices later in the season. An exception is entailing substantial reductions in every in noted in the case of brewing barley in Califor stance. Livestock of the district are reported nia which is being freely sold at present prices ranging from $1.00 to $1.45 per cental. to be in excellent condition. M O N T H L Y R EVIEW OF BUSINESS CONDITIONS 100 Planting of the major field crops has been completed in all sections of the district and figures on acreage and estimated production (United States Department of Agriculture esti mates for cotton, sugar beets, beans, and po tatoes, and commercial estimates for rice pro duction) are now available. The profitable results of last year’s operations have evidently induced a marked increase in the planting of sugar beets, the acreage for this year being 19 per cent in excess of the 1922 acreage and the forecasted yield greater by 22.5 per cent. Figures for the principal producing states fol low . California Idaho . . . Utah . . . Estimated Acreage 1923 (acres) Condition Forecasted Acreage (PerCent Yield 1922 of Normal) July 1.1923 (acres) July 1.1923 (tons) 70,000 48,000 83,879 62,200 25,000 78,894 District . 201,879 166,094 87 100 97 543,000 404,000 940,000 Final Yield 1922 (tons) 441,000 279,000 819,000 1,887,000 1,539,000 Plantings of potatoes on the other hand, of which there was a bumper crop last year mar keted with difficulty at relatively low prices, are 20 per cent less than they were in 1922. The estimated yield from 219,000 acres planted in California, Idaho, Oregon, and Washington is 32,738,000 bushels, compared with 40,740,000 bushels produced on 276,000 acres in these states during 1922. Preliminary estimates place the 1923 plant ings of cotton in Arizona at 133,000 acres and in California at 81,000 acres. Final estimates of plantings in 1922 were 100,000 acres for Arizona and 88,000 acres for California. The condition of the 1923 crop on June 25th was slightly over 90 per cent of normal in both states, indicating a yield of 119,000 bales. There were 76,000 bales produced in 1922. Plantings of Pima long staple cotton in Ari zona have decreased from 77,000 acres in 1922 to 43,000 acres during the present season. The 1923 plantings of rice in California are estimated at 105,500 acres, a decrease of 34,500 acres, or 24.5 per cent, from the 1922 figure of 140,000 acres. The crop is generally in good condition, but a smaller yield than last year’s production of 3,717,000 bags (100 pounds each) is expected, due to the marked decrease in acreage. The rice growers association which controls the bulk of the crop in California esti mates that unsold holdings of 1922 crop rice in all hands amounted to approximately 750,000 bags of 100 pounds each on July 1, 1923. This figure is equal to 20 per cent of the previous year’s crop. The carryover on June 15, 1922, was estimated at 1,000,000 bags of 100 pounds each, or 37.7 per cent of the 1921 crop of 2,646,000 bags. Growers have received from $2.35 to $2.65 per 100 pounds of paddy rice for that part of the 1922 crop already sold. During the 1921-1922 season they received from $2.52 to $2.70 per 100 pounds of paddy rice. The rice market has been inactive during recent weeks. Estimates of the United States Department of Agriculture, as of July 1st, show that there are 299,000 acres planted to all varieties of beans in California, compared with 1922 plant ings of 325,000 acres. Plantings of lima beans have been reduced from the 115,000 acres re ported in 1922 to approximately 98,000 acres this year. The present condition of the bean crop indicates a yield of 3,070,000 bushels of dry beans and 1,400,000 bushels of lima beans, according to commercial estimates. In 1922 there were 2,653,300 bushels of dry beans and 2,125,000 bushels of lima beans produced in California. The condition of deciduous fruit crops throughout the district improved during June, and in many cases estimates of forthcoming yields have been increased. Department of Agriculture figures for some of the principal fruits grown in California are given in the fol lowing table : Conditiono|1 Forecasted Final July 1st (Per Cent of Normal) 1923 1922 Apples* ............... 82 85 Apricots ..............102 59 C h e r r ie s ............................... G rapesf ............... 96 97 Peaches ............... 92 98 Pears ................... 80 80 Prunes ................. 63 76 Yield July 1, 1923 (tons) Estimate of Yield 1922 (tons) 6,977,000* 210,000 14,500 1,743,000 393,000 112,000 80,000 7,656,000* 120,000 12,000 1,660,000 420,000 125,000 110,000 *Total crop (commercial and non-commercial, in boxes), tIncluding all varieties (table, wine, and raisin). Similarly large yields of most fruits are ex pected in the Pacific Northwest. The 1923 commercial apple crop in Washington, the principal apple producing state in the district, is now estimated at 26,031,000 boxes, com pared with 21,312,000 boxes produced in 1922. The important berry crops in Oregon have been damaged by rain during the past month, but only ripe fruit already on the vines was affected, and later maturing fruits will prob ably be benefited by the additional moisture. Railroad figures on shipments of fresh de ciduous fruits from California thus far this season indicate that there will be an unusually heavy movement during the present year. The following table gives the total shipments up to July 8th of the past two seasons: 1923 Season to July 8th (cars) 1922 Season to July 8th (cars) 519 Apricots .............................................. Cherries .............................................. 612 G r a p e s ................................................ 1 P e a c h e s ............................................... 243 Pears .................................................... 885 Plums ................................................. 3,346 193 502 141 7 1,188 Totals ........................................... 5,606 2,031 101 FEDERAL RESERVE AG EN T A T SAN FRANCISCO The low prices offered for canning fruits and the uncertainties surrounding the future mar ket for dried fruits have apparently led many growers to ship a larger proportion of their crops than usual to the fresh fruit markets. Previous estimates of the 1923 Valencia orange crop in California remained unchanged at 10,278,000 boxes on July 1st. Approximately 40 per cent of the crop had been shipped by that date. Total shipments of oranges and lemons up to July 1st of the past two seasons have been as follows: N ov. 1st to July 1st 1922-1923 1921-1922 (cars) (cars) O r a n g e s .............................................. 38,021 Lem ons .............................................. 6,149 24,011 7,534 Canned and D rie d F ruits The canned fruit situation is at present (July 16th) complicated by the inability of canners and growers of fruit to agree upon the prices to be paid for green fruit and by the uncertain ties surrounding the future market for canned fruit products. During the past month can ners have announced prices which they will pay for apricots, and growers’ organizations have named selling prices for canning pears and peaches. The figures are given in the following table, together with corresponding prices of a year a g o: Number One Grade Apricots, canners’ offering p ric e.. Clingstone Peaches, growers’ o f fering p r i c e ........................................ Freestone Pfeaches, growers’ offer ing price .............................................. Bartlett Pears, growers’ offering price ....................................................... 1923 (per ton) 1922 (per ton) $20-$35 $75—$100 45* 60 35f 45 52.50$ 71.25 *Subsequently reduced to $30 per ton, which price was accepted by canners. tSubsequently reduced to $25 per ton, which price was accepted by canners. $ Subsequently reduced to $35 per ton, which price was accepted by canners. Reports continue to indicate that a majority of canners are planning to pack a quantity of fruit only sufficient to fill orders actually re ceived or undoubtedly in prospect, a decision probably influenced by the quantity of 1922 pack fruit still unsold and the small volume of future sales consummated thus far this year. The domestic canned fruit market is reported to have strengthened slightly during the past month. Foreign buyers are reported generally out of the market. Recently announced opening prices for canned blackberries and loganberries are higher, and for canned cherries are lower, than the 1922 opening prices of these varieties, as shown by the following table: Q ni Price. Spo, Price. Choice Grade, N o . 2V* Can 1923 (per doz.) Blackberries ........................$3.05 Cherries, black.................. .3.15 Cherries, Royal Anne . 3.45 Loganberries .......................2.45* 1922 (per doz.) $2.60 3.75 3.90 2.15* July 14.1923 (per doz.) $2.35 3.50 4.15 1.75* * Standard Grade. The dried fruit market has remained rela tively inactive. Buyers have thus far this year (July 16th) shown little interest in spot stocks of 1922 crop fruit or future stocks of 1923 crop fruit at prevailing prices. Carryover stocks of all classes of dried fruits are larger than a year ago. The packers recently have reduced prices for old crop dried apricots, peaches, and raisins, and announced their 1923 opening prices for dried apricots and figs. The 1922 and 1923 opening prices, and present spot prices for 1922 crop dried fruits in California are given in the following table: Dried Fruits ( Choice Grade, in 251b. Boxes) Spot Price July 16,1923 (cents per pound) Opening Prices 1923 1922 (cents per pound) Apples* .............................. 6^-624 •• 12 10 10 24J4 Apricots, Northern........... Figs, White Adriatic......... fc/i 8$4 .. 14J4 Figs, Black Mission........... Peaches, Unpeeled Yellow 7 .. 11$4 Pears.................................. .. 15 Prunes, 40/50......................9J4-10 .. 11^-12 Raisins, 4 cr. Loose Mus catel ................................ 8 .. 10 Raisins, Thompsons......... 8 . 10 *B ulk in 50-lb. boxes. Livestock W ith the exception of small areas in Arizona and southern Utah, the livestock ranges of the district are in excellent condition. In the ex cepted areas rainfall has been deficient, feed has deteriorated, and the condition of livestock has declined. Some stock has been reported shipped from Arizona to ranges outside of the district. The situation in the dry areas was greatly improved by showers during the first week of July, however, and if rainfall during the remainder of July be normal in amount little permanent harm will have been done. Receipts of all classes of livestock, except sheep, at eight principal markets of the dis trict were greater in June, 1923, than in June, 1922. The decline in receipts of sheep is a reflection of the generally improved condition of the sheep industry resulting from the ex cellent market which has prevailed for wool and lambs during the past few months. Sheep raisers are retaining a larger proportion of their flocks this year than has been the case for some time past. A greater than seasonal decline in receipts of sheep during June, 1923, 102 M O N T H L Y REVIEW OF BUSINESS CONDITIONS as compared with May, 1923, furnishes addi tional evidence of this tendency among sheep men to build up their flocks. Commercial re ports of a growing demand for stocker and feeder animals, both cattle and sheep, have been received from several markets, particular ly from those in the Pacific Northwest. Receipts of Livestock at Eight Principal Markets Cattle Calves Hogs June, 1923.............. 74,750 May, 1923.............. 67,895 June, 1922.............. 67,866 19,915 20,511 14,201 179,457 170,364 109,622 Sheep 229,663 440,028 246,044 THO USAN DS Western markets, where shippers were at tracted by the relatively high prices prevailing on the Pacific Coast. Prices on July 16th were approximately 4.9 per cent higher than one year ago. For some time past they have aver aged 25 per cent above prices in the spring of 1922. The heavy movement of eggs into cold stor age which has been a feature of recent months diminished during June, and total holdings of cold storage eggs increased only 16 per cent. Increases have ranged from 65 to more than 100 per cent during the earlier months of the spring season of heavy production. Holdings of cold storage eggs in the six principal mar kets of this district on July 1, 1923, were 15.3 per cent greater than on July 1, 1922. A summary of the cold storage holdings of butter and eggs in the chief markets of the Twelfth Federal Reserve District is presented in the following table: July 1, 1923 June 1, 1923 M ay 1( 1923 July 1. 1922 Butter (pounds). 4,666,429 2,041,196 532,956 3,926,977 E ggs (c a se s). . . . 633,519 514,751 314,697 549,031 Prices Receipts of Livestock at Eight of the Principal Markets of the District 1922-1923. (Los Angeles, Ogden, Portland, Salt Lake City, San Francisco, Seattle, Spokane, and Tacoma included) Prices for hogs and cattle at the principal markets of the district were relatively stable during the past month. Prices for sheep and lambs advanced slightly. In the national mar kets, prices for hogs fell to the lowest levels in recent years during June, and at times quoted prices were below the pre-war price level. Dairy and Poultry Products The usual seasonal increase in butter pro duction was reported during June, and large quantities of butter were placed in cold storage. Holdings of cold storage butter in the four principal markets of this district, which were more than doubled during the month, were 18.8 per cent larger on July 1, 1923, than on July 1, 1922. Present holdings of 4,666,429 pounds were slightly above the 1922 peak of 4,664,416 pounds, reached in August of that year, and nearly equal to the 4,815,484 pounds stored on August 1, 1920, the highest figure reached since accurate records have been kept. Butter prices declined slightly on the San Francisco wholesale market during the last week in June, following heavy receipts of but ter from local producers and from Middle Continuance of the steady decline in wheat prices which has been in progress for two months past was the feature of the price situa tion during June and the first weeks of July. By July 16th the price of July wheat on the Chi cago market had fallen to 97 cents per bushel, the lowest quotation since 1914. During the six weeks period beginning June 1, 1923, the price of wheat declined approximately 13 per cent. Prices for cotton, wool, and sugar declined during June, but continued well above prices a year ago. Spot middling upland cotton on the New Orleans market was quoted at 27 cents per pound on July 6th, one cent below the quotation at the beginning of June. Present prices for cotton are approximately 25 per cent higher than in July, 1922. The average of 98 wool quotations on the Boston market declined 2 cents during June, but at 81.93 cents per pound on July 6th was still 10 per cent above the level of one year ago. Sugar prices con tinued to move in an erratic manner, but the general tendency was downward during the past month. Granulated cane sugar in the San Francisco market was quoted at $9.90 per 100 pounds on June 11th, $9.45 per 100 pounds on June 28th, $8.75 per 100 pounds on July 12th, and $9.00 per 100 pounds on July 17th. Revised prices for unsold stocks of 1922 crop dried fruits produced in California have re cently been announced by the growers’ associa tions which control the majority of the output. Marked reductions in prices of dried apricots, peaches, prunes, and raisins have been made in 103 FEDERAL RESERVE AGENT AT SAN FRANCISCO an effort to move present stocks before the 1923 crops come on the market. (The figures are given in table “A ” .) The general price tendency among other than agricultural products of the district has also IN D E X been downward during recent weeks. A few declines in lumber prices have been reported, and prices for non-ferrous metals have regis tered further fractional losses. Milling NUM BERS ________ Wholesale Prices and the Cost of Living, 1920-1923 U n ited States Bureau of Labor In dex o f W h o le sa le Prices ( 1 9 1 3 = 1 0 0 ) N ation al Industrial C on feren ce Board In dex o f th e C ost of L iving (July 1 9 1 4 = 1 0 0 ) Figures furnished by sixteen large milling companies which report regularly to this bank indicate that flour millers of the district in creased their purchases of wheat as the price of that grain declined during recent weeks. Stocks of wheat held by these companies ad vanced from 2,288,340 bushels on June 1st to 2,899,607 bushels on July 1st, and on the latter date were more than twice as large as stocks held on July 1, 1922. Production of flour in creased during June in response to a more active market demand. The output of sixteen reporting mills was 345,342 barrels, compared with 302,129 barrels produced during May. Production during June, 1923, was 14.4 per cent greater than during June, 1922. Stocks of flour held by the same mills declined from 517,704 barrels on June 1st to 492,571 barrels (A) Commodity Prices— Commodity Unit Tw enty Basic Commodities (F. R. B. of N. Y .) 1913=100. W holesale Prices (U . S. Bureau of Labor) 1 9 1 3 = 1 0 0 .......... Cost of Living (National Industrial Conference Board) July, 1914=100 .................................................................................... Cattle (Native B e e f). . .W eekly average price at C h icago.. 100 lbs. Sheep .................... Lambs .................. ........... W eekly average price at C h ica g o.. 100 lbs. H og s ..................... ........... W eekly average price at C h icago.. 100 lbs. W h e a t .................. Chicago contract prices for July W h e a t., bu. B a r l e y .................. Shipping Barley f. o. b. San F ra n c isc o ... cental Rice ...................... . California Fancy Japan at San Francisco cental C o t t o n .................... Middling Uplands— W eek ly range of spot quotations at N ew O rleans........................ lb. W o o l ...................... Average of 98 quotations at B osto n ........... lb. Flour ...................... First Grade Family Patent f. o. b. Pacific Coast mills ........................................................bbl. S u g a r ...................... Cane granulated f. o. b. San Francisco., lb. Oranges ................Valencias, Special Brands, L os Angeles, box Lem ons .............. .Market pack at Los A n g eles........................ box Dried A p p le s .... Choice in 50-lb. boxes f. o. b. California, lb. Dried A p ricots.. .Choice in 25-lb. boxes f. o. b. California, lb. Prunes .................. Size 40/50 in 25-lb. boxes f. o. b. C alif... lb. Raisins ................ Loose Muscatel in 25-lb. boxes f. o. b. California ..........................................................lb. Canned Apricots.C hoice, sliced 2y2s f. o. b. California.........doz. Canned Peaches. .Cling, Choice, sliced 2 ^ s f. o. b. C alif... doz. Canned P e a r s ...,.Bartlett, Standard 2 ^ s f. o. b. California doz. Raw M ilk .............. .Pacific Coast— June average........................ 100 lbs. Butter .....................93 score at San Francisco............................... lb. Eggs ...................... .Extras— San F r a n c isc o ................................... doz. Copper ...................Electrolytic; N ew Y o rk S p ot........................ lb. Lead ...................... N ew Y o rk S p o t................................................... lb. S ilv e r ...................... New Y o rk Foreign ............................................ oz. Z i n c ...................... .East St. Louis S p o t.......................................... lb. P e tr o le u m .............California 35° and above............................... bbl. Douglas F ir ........ .2x4, 16-ft. N o. S1S1E f. o. b. Seattle......... M ft. D ouglas F ir ........ .12x12 Tim bers f. o. b. Seattle........................ M ft. *1923 Crop prices. July 6.1923 152.4 153.0 One Month Ago 157.6 156.0 One Year Ago 143.6 150.0 160.1 155.4 160.3 $10.05 $ 9.85 $ 9.40 6.15 6.50 6.50 15.65 13.50 12.90 7.05 7.10 10.05 1.015^-1.0354 1.093^-1.13^ 1 .1 3 ^ -1 .1 5 ^ 1.35-1.50 1.25-1.35 1.35-1.40 4.65 4.45 5.25 27.00-28.75* 28.00-28.50* 81.93* 83.93* 21.50-22.50* 74.01* 7.44 9.45 3.75-4.50 4.50-5.50 .0634 .1 0 -.1 0 ^ * .0 9 ^ -.1 0 7.96 6.90 7.75-8.50 2.50-2.75 .12-1254 .23 *¿-.24 .09 3.30 2.75 2.75 2.67 .423^ .3 2 ^ .1454 6.50* .633/6 5.85-5.90* 1.04 22.50 26.00 7.56 10.10 3.75-4.50 3.00-3.50 .06^2 .12^-.123/i* .1 0 ^ -.ll .11 3.30 2.75 2.75 2.69 .4 4 ^ .32 .14*4 7.35* .655^ 6.40* 1.04 23.50 26.00 .uy2-.i2y4 .1 5 ^ 3.15 2.60 2.85 2.12 .40 .31 .13JÍ-.14 5.75* .7 1 « 5.50* 2.45 17.50 17.00 104 M O N T H L Y R EVIEW OF BUSINESS CONDITIONS on July 1st, and are now only slightly in ex cess of the 484,695 barrels held on July 1, 1922. Figures for sixteen milling companies for which a continuous record is kept are given in the following table: June. 1923 M ay, 1923 June, 1922 Output of Flour......... 345,342 302,129 301,825 Stocks of Flour*......... 492,571 517,704 484,695 Stocks of Wheat*...... 2,899,607 2,288,340 1,317,926 *A s o f the first day o f the following month. where wholesalers and retailers bought heavily during the first four months of the year, and, with current demands satisfied, are not now anticipating future requirements. Production of lumber continues at record levels despite the continued decline in the volume of orders received. The volume of unfilled orders held by the mills is large, ship ments on old orders have been heavy, and stocks generally have needed replenishing. Figures showing the activity of approximately 200 reporting mills follow (000 omitted) : Production........ Shipments............ O rders................. Unfilled Orders.. .. THO USAN D BARRELS 9001-------- ~1 June, 1923 (board feet) M ay, 1923 (board feet) June, 1922 (board feet) 647,408 600,160 482,498 487,690 680,193 618,534 535,299 561,690 578,293 577,228 525,763 502,213 Logging camps continued active during June and increased their output both as compared with May, 1923, and with June, 1922. The almost total absence of forest fires this year contrasts with the situation a year ago, and has favored a record production of logs. Mill requirements have been heavy, however, and no surplus of logs has been reported. 700 100: 0 n~; TTT i _n L~LTTrT^TTTTirr 1922 M IL L IO N S OF B O A R D F E E T HT i 1923 jTT] Monthly Flour Output, and Stocka of Wheat and F l««r at Bnd *f Month, of 16 Reporting Milling Companies Production of forty-eight flour mills, as re ported by sectional millers’ associations, de creased 2.8 per cent during June as compared with May. A heavy decline of production in Washington was responsible for the reported decrease in the district. Figures follow: California ... Idaho ......... Oregon Washington District ... . . . . --------- Output June, M ay, 1923 1923 (barrels) (barrels) 10 3 17 18 10 3 16 18 212,468 201,150 6,362 7,021 109,993 85,687 167,637 218,635 5.6 10.3 28.3 —23.3 I OO 1 N o .o f M ills Reporting June, M ay, 1923 1923 Per Cent Increase or Decrease ( —) June, 1923 Compared with M ay, 1923 47 497,119 511,834 — 2.8 Lumber A decline in building activity in some sec tions, and the usual summer lull in lumber buying have combined to restrict the market for lumber products of the district. Orders received by reporting mills during June were less in volume than during May, and, as in that month, were considerably smaller in amount than in the corresponding month a year ago. The principal declines in the volume of new business have occurred in the domestic market Lumber Production, Orders Received, and Shipments in Twelfth Federal Reserve District as Reported by Four Lumber Associations. 1922-1923 Despite the nation-wide building activity, demand for shingles has been weak through out the present year. It is estimated that not over 50 per cent of the shingle mill capacity of the district was in operation on July 1st. A s usual the majority of the logging camps and lumber mills closed down for varying periods of time during the first two weeks of July. Equipment was repaired, employment changes made, and stocks checked during the time when operations were suspended. Mining Despite a marked decrease in demand and consequent falling prices during the past two months, there has been little decline in pro duction of the principal non-ferrous metals in 105 FEDERAL RESERVE AG EN T AT SAN FRANCISCO this district. Final national figures for June are not yet available, but preliminary reports indicate that in general there was a slight cur tailment of production as compared with May. The figures of national production for May, 1923, April, 1923, and May, 1922, follow : Copper (lbs.) M ay 1923 April, 1923 M ay. 1922 (mine production) 124,784,916 118,423,571 92,048,036 Silver (oz.) (commercial bars) 6,835,221 6,615,535 4,257,973 Zinc (tons) 47,347 46,866 27,419 (slab) .................... Figures for lead are not available. The metal market, both in this country and abroad, has been dull, and prices have declined steadily during the past three months. Present quotations for copper are 11 per cent, for lead 13 per cent, for silver 4 per cent, and for zinc 21 per cent below the recent peak levels of March, 1923. The effect of this situation on production of metals has now been accentuated by the completion of government purchases of domestic silver under the Pittman Act of 1918, which fixed the price at which the government must buy such silver at $1.00 per ounce. Final tenders of silver under this act were accepted by the Director of the Mint as of June 2, 1923, and domestic silver mined henceforth must be sold in the open market. The average open market price for silver during June was 64.86 cents per ounce, and it is doubtful whether all of the ores profitably mined when domestic silver was selling at the fixed price of $1.00 per ounce can continue to return a profit at this price. The mines which produce silver only, and which have been operating at ab normally high levels during the past few months in an attempt to produce as much silver as possible for sale under the terms of the Pittman Act, have been most seriously affected by the completion of the government pur chases. They have greatly curtailed their activities and are now planning to develop only the richer ore bodies on their properties. Lead mines of the district which also produce large quantities of silver have, with few exceptions, maintained production at previous levels. Copper and zinc mines have been less af fected by developments in the silver market than have the silver and lead mines, as the value of their silver output in most cases is not large. Their response to price declines in their own markets has thus far been limited. The large size of most of the copper operations makes it difficult to adjust output to fluctua tions of the market which may prove to be temporary, and no decline in copper produc tion has followed the fall in prices for that metal. A significant feature of the copper mar ket during the past month was the report of the Copper Export Association that the 400,000,000 pounds of copper earmarked for export in 1921 has now been completely sold. Pro duction of zinc during June was slightly less than in the previous month in Utah, but fully equal to May production in Idaho. On July 1st zinc mines in the principal eastern pro ducing districts, faced with increasing stocks and falling prices, announced a drastic cur tailment of their output. Average prices quoted for copper, lead, sil ver, and zinc during June, 1923, May, 1923, and June, 1922, are given in the following ta b le : ---------------- A v e r .,« P rice .---------------- . June, 1923 M ay. 1923 Jane, 1922 (cents) (cents) Copper (lb.) (cents) N ew Y o rk Electrolytic.. 14.91 Lead (lb.) 7.14 N ew Y o r k .......................... Silver (oz.) N ew Y ork Foreign......... 64.86 Zinc (lb.) St. L o u i s ............................. 6.03 15.69 13.82 7.30 5.74 67.04 71.15 6.62 5.34 Petroleum Efforts of producers to curtail production of petroleum in California have not been entirely successful, drilling having continued actively in the newer fields in southern California. Seventy-nine new wells were brought in dur ing June, and production at 755,570 barrels per M I L L IO N S C A L IF O R N IA Production, Shipments, and Stored Stocka of Petroleum, and Refinery Stored Stocks of Gasolene. 1922-1923 day exceeded the record figures of the previous month by 8.7 per cent. Present production is 112 per cent greater than production a year ago. Consumption of petroleum, as indicated by shipments from California fields, did not show 106 M O N T H L Y R EVIEW OF BUSINESS CONDITIONS the usual seasonal increase during June, and at 650,345 barrels per day was 26,830 barrels per day less than in the record month of May. As a result of greatly increased production and a small decline in consumption there was a large increase in stored stocks during the month. On July 1st they stood at 72,637,147 barrels, compared with 69,480,405 barrels on June 1st, an increase of 4 per cent. On July 1, 1922, stored stocks of petroleum amounted to 43,477,237 barrels. The upward movement of stocks of gasoline in California which had been in progress for 10 months prior to April, 1923, was resumed during May. Stocks of gasoline held at re fineries on June 1, 1923, totaled 147,125,960 gallons, compared with 136,684,477 gallons held on May 1st, and 138,058,780 gallons held on April 1st. On June 1, 1922, stored stocks of gasoline at refineries in California amounted to 56,394,512 barrels. Electric Energy Industrial activity in this district, as indi cated by sales of electric power to industrial consumers, continued through May at levels approximately 20 per cent above those of a year ago. Some decline in the volume of sales for agricultural purposes was noted, a reflecM1LLI0NS OF K I L O W A T T HOU RS Total Industrial Sales (K .W . H .) of 20 Power Companies in Twelfth Federal Reserve District. 1922-1923 tion of the smaller amount of irrigation due to more abundant rainfall this year as compared with last year, but this was more than offset by marked increases in the use of power in the mining, lumbering, oil producing, and manu facturing industries. Percentage comparisons of sales of 20 of the principal power companies by certain industries and by sections of the district are presented in the following table: Percentage Increase or Decrease (—) M ay, 1923, compared with M ay, 1922 Total Agricul Manu* Industrial facturing ture Mining Sales California ..................... — 1.6 — Pacific Northwest 14.9 Intermountain States. 11.6 Tw elfth District ......... — .4 6.2 33.2 17.6 21.9 35.9 10.4 40.6 26.6 34.7 12.6 41.2 20.1 Compared with April, 1923, sales of electric power during May, 1923, were greater by 8.5 per cent. All of the industries for which segre gated figures are available purchased increased amounts of power except the mining and petroleum industries in California. Voluntary curtailment of production of petroleum in some of the older oil fields of that state was prob ably responsible for the latter decrease. Figures showing the number of industrial consumers and industrial sales of reporting companies during May, 1923, and May, 1922, follow : Number of Industrial Consumera M ay, M ay. 1923 1922 California .................. 57,719 50,687 Pacific Northwest . . 11,876 10,723 Intermountain States 2,851 3,146 Tw elfth District ... 72,446 64,556 Industriai Sales K .W . H . M ay, M ay, 1923 1922 227,674,794 193,479,259 71,234,656 63,058,471 63,216,546 44,650,681 361,967,921 301,346,486 Retail Trade The dollar value of sales of 34 reporting department stores in this district was 13.9 per cent greater during June, 1923, than during June, 1922. This increase as compared with a year ago is slightly greater than the increases reported during the two previous months, but is considerably less than the increases of 20 per cent reported in February and March, 1923, as compared with February and March, 1922. A decline of 12.9 per cent in the value of sales during June, 1923, as compared with May, 1923, was a seasonal movement. Total sales of reporting stores during the first six months of 1923 have amounted to $83,000,000, an in crease of $11,000,000, or 15 per cent, over total sales during the first six months of 1922. Stocks held by reporting stores declined during June, as goods bought in the spring were cleared from the shelves preparatory to purchasing new fall stocks of merchandise. A t the close of June, 1923, the value of stocks (selling price) was reported as 4.4 per cent less than at the close of May, 1923, but 11.6 per cent greater than at the close of June, 1922. The average rate of turnover of stocks in all stores as indicated by the relation be tween sales and stocks during June was 2.8 times per year. 107 FEDERAL RESERVE AG EN T A T SAN FRANCISCO A detailed statement of the percentage changes in the value of sales and stocks of reporting department stores in this district follow s: Percentage increase Percentage increase or decrease (— ) in or decrease (— ) in value of value of sales June, 1923, stocks June, 1923, compared with compared with N o. of June, M ay, June, M ay, Stores 1922 1923 1922 1923 L o s A n g ele s......... Oakland ................ Salt Lake C i t y ... San Francisco___ Seattle ................... Spokane ................ District* 6 4 4 9 5 5 .......... 34 22.6 13.8 13.4 6.5 10.5 4.9 — 3.4 9.1 — 11.0 — 33.4 1.8 2.8 13.9 — 12.9 17.9 0.3 8.5 — 5.6 — 14.8 — 6.7 12.1 — 6.9 13.7 — 7.1 4.2 — 2.9 11.6 — 4.4 *Figures for one store included in district figures, but not in cluded in figures for cities shown above. M IL L IO N S causes. In the automobile tire business one or two manufacturers announced reductions in prices during June and retailers immed iately curtailed their purchases in expectation of similar reductions by other manufacturers.The extent of the movement is indicated by the decline in wholesale tire sales during June, 1923, as compared with June, 1922, which amounted to 29.5 per cent. Percentage increases or decreases (— ) in the value of June sales of all reporting firms in each line of business are presented in the following table: Si* Mo„,h. OF D O L L A R S Ending June June, 1923. 30,1923, corncompared with pared with June, M ay, same period 1922 1923 in 1922 Number of Firms Agricultural Implements Autom obile Supplies___ Autom obile T ir e s............ D r u g s .................................... Dry G oo d s........................... Electrical E q u ip m en t... Furniture ............................ Groceries ............................ Hardware ........................... Shoes .................................... S ta tio n e ry ........................... 23 20 18 9 14 6 17 29 20 13 29 2.4 16.0 — 29.5 9.8 8.4 9.2 23.2 7.0 15.7 9.2 21.7 8.6 .2 — 4.0 -— 1.4 — 8,8 5.1 8.7 11.3 — .4 — 6.9 10.5 13.8 26.2 19.8 11.2 33.9 27.1 33.4 14.3 31.4 17.8 21.3 JUNE PRICES 1 9 2 2 = 1 0 0 ^ = JUNEI922 SALES U.S.BUREAU OF LABOR INDEX NO. WHOLESALE PRICES AGRICULTURAL IMPLEMENTS AUTOMOBILE SUPPLIES AUTOMOBILE TIRES DRUGS DRY G O OD S Net Sales of 31 Department Stores in Twelfth Federal Reserve District (in M illions o f D ollars) FU R NITU RE Wholesale Trade Signs of decreasing activity in wholesale trade which first appeared in May were con firmed during June in reports received by this bank from 198 firms engaged in 11 lines of business in the district. Although trade in all but one of the eleven lines was greater in June, 1923, than in June, 1922, the increases compared with a year ago were less than they have been for some months past. This dimin ishing margin of increase can partly be ac counted for by the fact that wholesale prices were increasing during the first six months of 1922 whereas they have decreased during the past two months of 1923. The general level of wholesale prices, according to the index number of the United States Department of Labor, was but 2 per cent higher in June, 1923, than in June, 1922. As compared with May, 1923, sales during June, 1923, were greater in six lines and less in five lines, but the declines in most cases may be assigned to seasonal GROCERIES HARDWARE SHOES ST A T IO N E R Y 2 0 40 60 80 100 120 140 160 Dollar Value of Sales of Representative Wholesale Firms and General Wholesale Prices in June, 1923, compared with June, 1922 Collections during the past three months have been reported as follows: Number of Firms Reporting Collections as Excellent Good Fair Poor April, May, 1923........................... 7 1923........................... 6 50 69 74 60 10 6 June, 1923........................... 3 56 72 8 Automobile Registrations Sales of new automobiles, as indicated by new car registrations, have continued greatly in excess of the figures for a year ago. In four states of the district for which comparative M O N T H L Y REVIEW OF BUSINESS CONDITIONS 108 data are available there were 68 per cent more new passenger cars and 26.5 per cent more new commercial vehicles registered during May, 1923, than during May, 1922. During the first five months of the present year the increase in sales as compared with the same period in 1922 has been 91 per cent and 52 per cent for pasenger cars and trucks, respectively. The figures foll0W: T o « .. N ew Passenger C ar« Registered Jan. 1, to Junel. 1923 1922 Arizona ................. 3,950 1,380 California ............ 94,057 52,166 Idaho ..................... 3,671 1,654 O r e g o n .................. 14,521 5,543 U t a h ........................ 4,337 * W ash ington -----18,899 5,966 Total (4 states) 116,199 60,743 T o ,.I N ew Commercial Cars Registered Jan. 1, to June 1, 1923 1922 292 9,555 235 577 422 * 10,659 72 6,346 170 424 * * 7,012 *N o t available. Total registrations of old and new automo biles in six states of the district (figures for Nevada are not available) during the first half of 1923 amounted to 1,409,345 cars as compared with 1,105,429 cars registered during the first half of 1922, a gain of 27.5 per cent. National production of automobiles during June declined slightly from the record levels of the previous month, but continued far greater than in 1922. The following production figures collected from manufacturers represent ing over 90 per cent of the national output have been compiled by the Federal Reserve Bank of Chicago. June, 1923* M ay. 1923 June, 1922 Passenger C ars................... 337,048 T r u c k s .................................... 39,945 Production 350,073 42,373 262,384 25,373 Total ................................... 376,993 392,446 287,757 ^Preliminary figures. During the first six months of the present year more automobiles have been produced than during any like period in the brief history of the industry. The estimated production has been 2,024,023 passenger cars and trucks. Dur ing the first half of 1922 there were 1,146,102 automobiles produced. ticularly acute in Oregon, Washington, and Idaho, and farmers in those states have found it necessary to advance wages of farm laborers as much as 20 per cent over those paid one year ago in order to attract men to the harvest fields. Capacity production continues in the lumber industry and the number of men employed in the principal lumbering districts is greater than one month ago or one year ago. Available figures for the camps of the Pacific Northwest show that there were approximately 95,000 men on the payrolls of the lumber companies on July 1, 1923, compared with 92,000 on June 1, 1923, and 89,000 on July 1, 1922. Full em ployment of all skilled miners is reported from the Intermountain district, the need for men being equal to or slightly greater than the number available. Some unemployment has been reported in the oil fields of Central Cali fornia, but this is a purely local condition re sulting from the temporary curtailment of pro duction on some of the oil producing proper ties in that section. The demand for building trades craftsmen continues active in all states, and shortage of plasterers and bricklayers is reported. Employment in manufacturing industries in the four principal cities of the district increased during June, 1923, as compared with June, 1922, as shown by the following figures based on the reports of 40 large firms usually em ploying 501 men or more. Per Cent Number Increase June, of Number of Men on Payroll* 1923, over Firms June, 1923 June, 1922 June, 1922 Los A n geles.......... Portland ................ San Francisco-----Seattle .................... 16 8 10 6 32,846 9,082 8,133 2,377 26,250 7,811 7,067 2,282 *These figures do not represent the total number of men engaged in manufacturing activities in these cities, but only the pay roll figures of a selected number o f firms. Business Failures Business failures in this district during the first six months of 1923 were less, both in num ber and liabilities, than during the first six months of 1922. The figures follow: Employment A shortage of farm workers became appar ent in many sections of the district as the de mand for harvest hands increased toward the close of June. Men usually available for seasonal farm work have apparently found more remunerative employment in other in dustries this year, and farmers are experienc ing difficulty in securing the help necessary to harvest their crops at the wages they are offering. The shortage appears to be par 25.12 16.29 15.08 4.16 First H alf 1923 First H alf 1922 N u m b e r ............. 1,078 1,148 Liabilities ......... $14,296,328 $19,885,666 Percentage Decrease 1923 Compared with 1922 6.0 28.1 In the country as a whole, the record for the first six months of 1923 compared with the same period in 1922 shows a decline of 27.3 per cent in the number of failures and of 30.6 per cent in the liabilities of failures involved. The record of business failures in the states of this district during June, 1923, shows a de 109 FEDERAL RESERVE AG EN T A T SAN FRANCISCO cline of 27 per cent in the number of failures as compared with both May, 1923, and June, 1922. Liabilities of failures during June, 1923, were respectively 21 per cent and 37 per cent less than those of failures reported for May, 1923, or June, 1922, and were smaller than in any month since February, 1921. The average liabilities of business failures during June, 1923, were $10,478, compared with $9,657 in May, 1923, and $12,248 in June, 1922. R. G. Dun and Company’s figures of the number and liabilities of business failures in the states of this district during June, 1923, and May, 1923, follow: N o. A r i z o n a .......................... C a lifo rn ia .............. 74 Idaho ...................... 5 N e v a d a ........................... Oregon .................. 22 Utah ....................... 8 W a s h in g to n ......... 41 D is t r ic t .............. 150 June. 1923 Liabilities N o. ..2 $ 849,910 93,489 .. 203,751 16,701 407,120 $1,570,971 $ M ay, 1923 Liabilities 45,500 109 742,669 7 40,137 3 16,074 32 272,003 10 56,089 44 826,584 207 $1,999,056 NO. OF F A IL U R E S LIABILITIES IN M ILLION S ---- 1250 10 A NO OF 200 150 IOO ^ L IA B IL IT IE S 50 Q U__ I__ l_Ll__ I__ U j __1__ lJ j__ t__LJJ__ 1— L_U--- 1--- lJ j__ I__ u u __ i__ U Q 1922 1923 Business Failures, Twelfth Federal Reserve District. 1922-1923 Building Activity All reports indicate that there has been no decline in the volume of building construction in this district during the past month. Plans of builders for coming months of the year, as reflected in the figures of building permits issued in 20 cities during June and the months immediately preceding, do, however, reveal a slight decrease in the volume of building proposed, as compared with that for which contracts have been let during the past spring. Building permits issued during June, 1923, were less in number than those issued during May, 1923, and were considerably less both in number and value than the record figures of March, 1923. They were substantially greater than the figures for June, 1922. The compari sons with May, 1923, and June, 1922, are pre sented in the following table: Percentage Increase or Decrease (— ) in the Number and Value of Building Permits June, 1923. compared with June. 1922 M ay, 1923 Number of Permits Issued............. Value of Permits Issued................ Building permits issued in the 20 reporting cities during the first half of 1923 were greater, both in number and value, than in any previous half year of which there is record. From January to June, 1923, inclusive, 70,364 permits valued at $209,483,151 were issued, compared with 59,482 permits representing construction valued at $157,287,598 issued during the first 16.4 33.4 —5.7 .5 Building Permits Issued in 20 Principal Cities, Twelfth Federal Reserve District. 1922-1923 six months of 1922. The increase in 1923 compared with 1922 was 18.2 per cent by number and 33.1 per cent by value. Accord ing to the United States Department of Labor the wholesale price level of building materials increased 16 per cent in the year period June, 1922, to June, 1923. The greater increase in the value of construction authorized than in the cost of building materials is significant in- (B) Building Permits— N o. B e r k e le y ........ L ong B e a c h .. L os A n g ele s. . Oakland ......... Pasadena ___ Phoenix ......... P o r tla n d ......... Reno ................ Sacramento . . Salt Lake City San D ie g o ____ San Francisco San Jose.......... Seattle ............. Spokane ......... Stockton ........ T a c o m a .......... 188 91 126 396 5,094 894 39 278 88 1,155 10 282 179 429 868 100 892 241 97 378 D is t r i c t ___ 11,825 Value $ N o. 527,175 86,913 242,306 3,422,324 15,074,446 2,751,751 126,650 1,265,854 111,122 2,166,470 19,625 990,485 521,075 1,390,720 4,213,34 6 301,550 5,230,445 426,510 269,560 353,463 216 70 190 239 3,751 773 60 306 45 1,317 22 240 178 379 648 76 892 267 101 386 $39,491,790 10,156 Value $ 671,800 51,639 433,195 1,123,049 10,652,265 3,381,045 137,375 900,092 140,380 2,230,855 44,200 753,914 738,737 608,326 3,336,701 215,150 2,892,030 391,575 221,060 674,990 $29,598,378 110 M O N T H L Y R EVIEW OF BUSINESS CONDITIONS asmuch as it indicates that there has been an increase in the physical volume of building as well as in its value expressed in dollars. Build ing materials prices have declined during the past two months and are now 4.9 per cent below the recent peak figures of April, 1923. Bank Debits The volume of business transacted in this district during June, 1923, was fully as great as or greater than in any previous month of the present year, according to the figures of debits to individual accounts reported by banks in 21 principal clearing house centers. An in crease of 6.4 per cent as compared with May, 1923, was reported, and of 20.7 per cent com pared with June, 1922. This is the fourteenth consecutive month during which bank debits have been greater than in the corresponding month a year ago, and the sixth consecutive month during which the increase has exceeded M I L L I O N S OF D O L L A R S creased in 17 of the 21 reporting cities. Com pared with May, 1923, a slight increase was noted in all cities except Ogden and Pasadena. Savings Accounts The total amount in all savings accounts in 75 banks in seven cities increased 2.2 per cent between May 31st and June 30th, or from M IL L IO N S OF D O L L A R S 1000 T O T A L 500 400 S A ^ F R A N C Ii CO 300 L DS A N G EL 200 100 O A KLAN D SEA T T LE 50 40 P DRTLAN D 30 5 A LT L A K E C IT Y 20 SPO KA N E 10 I ...]__ L__ 1__ L 1 1 1 1 .i .i 1 l i t 1 1922 1 ilL i L ..L ..J 1 .,1.... ! . . L 1 923 Savings Accounts in Banks in Seven Principal Cities of the Twelfth Federal Reserve District. 1922-1923 $898,827,000 to $918,794,000. Increases were reported by all cities except Spokane where a (C) Bank Debits*— Four weeks ending June 27.1923 Debits to Individual Accounts in 20 Principal Cities, Twelfth Federal Reserve District. 1922*1923 15 per cent. In the six months period January to June, 1923, bank debits in 20 reporting cities (figures for 21 cities not available) totaled $14,483,194,000, compared with $12,103,037,000 in the corresponding period of 1922, an increase of 19.6 per cent. As noted in previous reviews, the increase in debits to individual accounts during the year period has been considerably greater than the increase in commodity prices since the early months of 1922, an indication that there has been a gain in the physical volume of business transacted as well as in its money value. Considered geographically, bank debits dur ing June, 1923, compared with June, 1922, in Berkeley ......................................... $ B o i s e ................................................. Fresno ............................................. Long Beach.................................... L os A n g eles................................... Oakland .......................................... Ogden .............................................. Pasadena ........................................ Phoenix .......................................... Portland ......................................... Reno ................................................. Sacramento ................................... Salt Lake C ity .............................. San D ie g o ........................................ San Francisco............................... San J ose........................................... Seattle .............................................. Spokane .......................................... Stockton ......................................... Tacom a ............................................ Yakim a ............................................ 15,034 12,482 42,753 56,165 644,384 127,060 21,968 29,263 19,406 140,556 10,492 32,326 60,588 42,619 759,692 18,457 164,973 46,627 23,260 42,062 8,635 Total .............................................$2,318,802 *000 Omitted. Four weeks ending June 28.1922 $ 15,544 11,615 37,086 29,132 475,926 79,698 10,615 23,620 18,335 128,370 10,710 58,992 50,402 36,374 667,003 17,900 139,669 43,047 19,966 36,103 9,348 $1,919,455 111 FEDERAL RESERVE AGENT A T SAN FRANCISCO slight decrease occurred. Savings accounts in the seven cities are now 16.9 per cent greater than one year ago. Substantial gains are shown for all cities, those for Los Angeles and Seattle being especially large. Detailed changes in the amount of savings deposits since one month and one year ago as reported by 75 banks in seven cities follow: D ~ . Per Cent Number of Reporting Banks O a k la n d * 13 25.6 1.6 7 17.4 3.1 3.1 ,. 9 16.5 8 9.4 .9 16 2.5 16 11.2 22.0 2.9 6 7.9 — 1.5 75 16.9 2.2 Salt Lake City. . Increase or Decrease (— ) June. 1923. compared with June, 1922 M ay, 1923 The increase of $23,000,000 in total discounts of the Federal Reserve Bank of San Francisco during the four weeks ended July 11th was the largest monthly increase during the present year, and brought discounts on that date to $84,000,000, the highest figure reported since October, 1921. Since January 10, 1923, when they reached the lowest point in recent years, total discounts of this bank have increased $61,000,000, or 265 per cent. The increase of $23,000,000 between June 13th and July 11th was apparently due to more than seasonal in fluences. During the same four weeks in 1922 total discounts increased $2,000,000; in 1921 they decreased $3,000,000; and in 1920 they in creased $5,000,000. *Includes one bank in Berkeley which was form erly a branch of an Oakland bank. Banking and Credit Situation Although in June both total loans and total deposits of 66 reporting member banks in the principal cities of the district reached new high points on the upward movements begun in 1922 and 1921, respectively, they declined during the latter days of the month and on July 3rd loans were but $1,000,000 and deposits 400 M I L L I O N S OF DO LLA RS 300 320r TOTAL 260 R E S E R V 'E S \ r \ 240 200 V rF E D E R A L rU / F ESERVE NOTE V J / r 1922 C IR C U L A T IO N 1923 Total Deposits, Loans and Discounts, Investments, and Bills Payable and Rediscounts of Reporting Member Banks 160 120 IN V E S T Ì l E N T S ^ 00 •V e * * '* * 40 — * ' T O T A L B IL L S V 1 1 D IÎ C O U N T E 1 1..... ..._ l___ 1___ 1922 ..... ,1___ L. ) *. 11 1 .. 1 1923 1 ___ 1___ 1___ Total Reserves, Federal Reserve Note Circulation, Bills Discounted, and Investments, Federal Reserve Bank of San Francisco $7,000,000 above the figures of June 6th. In vestments during the four week period in creased $3,000,000, but on July 3rd were still slightly below the 1923 high point reached in May. These changes signify comparative stability in the volume of credit extended by these banks during recent weeks. The slowing down in the rate of loan expansion is in part of a seasonal character. During May and June, 1922, a similar decline was noted. On January 10, 1923, the city banks of the district were borrowing from the Reserve bank $14,000,000 and the country banks were bor rowing $19,000,000. On June 13th the city banks were borrowing $43,000,000 and the country banks $25,000,000. On July 3rd the city banks were borrowing $50,000,000 and the country banks $27,000,000. Most of the in crease in city bank borrowings has occurred at San Francisco. Accompanying the increase in total discounts of the Federal Reserve Bank there has been a steady decline in the bank’s investments, amounting to $16,000,000 during the four weeks ended July 11th. Total earning assets there fore increased only $7,000,000 during the period. The first noteworthy increase for several months in the amount of Federal Re serve Notes in circulation has occurred re cently. The increase during the four weeks 112 M O N T H L Y REVIEW OF BUSINESS CONDITIONS ended July 11th was $15,000,000. How much of it was due to holiday requirements is not yet ascertainable. Since April 25th, when notes in circulation were the smallest in recent years, they have increased $21,000,000. The tendency of interest rates at New York to seek slightly lower levels, which became noticeable the latter part of April, did not con tinue during the second half of June and the first week of July. The rate on time money at that center rose one-quarter of 1 per cent to 5 } i per cent during the three weeks ended July 7th. The prevailing rate on commercial paper continues at 5 per cent. The average rate charged by San Francisco banks on prime paper of customers continued at S y 2 per cent during June. Rates on acceptances remained at A 1 /^ per cent during June. Reports received by this bank from 35 of the principal accepting banks of the district show the following changes in the amount of bills purchased and accepted during June, 1923, compared with May, 1923, and June, 1922: Jane, 1923, compared with M ay, 1923 June. 1922 Am ount of bills accepted . . Am ount of bills b o u g h t ____ Am ount of bills held at close of m o n t h ............................... + 1 0 .9 % — 39.6% + 3 3 .6 % — 24.3% — 18.7% — 8.6% The principal commodities upon which these acceptances were based were coffee, sugar, rice, grain, raisins, and canned fruits and vege tables. PRINCIPAL RESOURCE AND LIABILITY ITEMS OF REPORTING MEMBER BANKS IN RESERVE CITIES IN TWELFTH FEDERAL RESERVE DISTRICT July 3,1923 N u m b e r o f R e p o r t in g B a n k s .......................................................................... 66* June 6,1923 July 5,1922 66* 68* Loans and Discounts (including rediscounts)........................................ $1,000,985,000 $ 999,912,000 $ 857,278,000 Investments ............................................................................................................. 366,017,000 Cash in Vault and with Federal Reserve B an k...................................... 119,307,000 Total D e p o s it s ....................................................................................................... 1,321,379,000 Bills Payable and Rediscounts with Federal Reserve Bank........... 50,247,000 362,709,000 122,060,000 1,314,502,000 43,056,000 325,910,000 105,516,000 1,169,037,000 16,275,000 •M ergers have reduced the number o f reporting banks, but comparisons o f resource and liability items have not been affected. COMPARATIVE STATEMENT OF CONDITION OF FEDERAL RESERVE BANK OF SAN AT CLOSE OF BUSINESS, JULY 11. 1923 FRANCISCO RESOURCES July U . 1923 June 13. 1923 July 12. 1922 T otal R e s e r v e s .......................................................................................................$262,567,000 Bills D isc o u n te d .................................................................................................... 84,078,000 Bills Bought in Open M arket....................................................................... 18,827,000 United States Government Securities........................................................ 9,185,000 $261,598,000 60,629,000 24,962,000 19,210,000 $253,765,000 43,990,000 15,264,000 62,104,000 Total Earning A sse ts......................................................................................... $112,090,000 $104,801,000 $121,358,000 A ll Other Resources*......................................................................................... 62,293,000 T otal Resources..................................................................................................$436,950,000 56,579,000 49,840,000 $422,978,000 $424,963,000 $ 23,077,000 154,047,000 202,441,000 $ 22,617,000 142,422,000 218,939,000 L IA B IL IT IE S Capital and Surplus..............................................................................................$ 23,038,000 Total D e p o s it s ....................................................................................................... 153,206,000 Federal Reserve N otes in Actual Circulation.......................................... 217,423,000 A ll Other Liabilities-)-......................................................................................... 43,283,000 Total Liabilities..................................................................................................$436,950,000 ♦Includes “ Uncollected Item s” ....................................................................... ■¡■Includes “ Deferred Liability Item s” ........................................................ 45,564,000 41,503,000 43,413,000 $422,978,000 43,363,000 41,582,000 40,985,000 $424,963,000 43,303,000 35,991,000 T h o s e d esirin g th is review sent th e m reg u la rly w ill receiv e it w ithout ch arge u p o n ap p lication.