The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
MONTHLY REVIEW OF BUSINESS CONDITIONS JOHN PERRIN, Chairman of the Board and Federal Reserve Agent Federal Reserve Bank of San Francisco Vol. V n i San Francisco, California, June 20,1924 Summary of National Conditions Production of basic commodities and factory employment showed unusually large declines in May and were considerably below the levels of a year ago. Purchases at wholesale and re tail also declined during the month and were somewhat below last year’s volume. Commer cial loans at member banks decreased, and there was a further decline in money rates. Production. The Federal Reserve Board’s index of production in basic industries, ad justed to allow for seasonal variations, de clined about 10 per cent in May to a point about 18 per cent below the peak reached a year ago. Particularly marked decreases were shown for production of iron and steel and mill consumption of cotton. Output of anthra cite coal, cement, and tobacco products, on the other hand, was slightly larger than in April. No. 6 Factory employment declined 4 per cent in May, the number of employees being reduced in almost all reporting industries. The largest reductions of working forces occurred in the textile, metal, automobile, and leather indus tries. The value of building contracts awarded in May was 13 per cent less than in the month before, and for the first time since the begin ning of the year fell below the corresponding month in 1923. Department of Agriculture forecasts, as of June 1st, indicated smaller yields of wheat, oats, and barley, as compared with the harvests of 1923. The condition of the cotton crop on May 25th was 5 per cent lower than a year ago and 7 per cent below the average condition for the past ten years. Trade. Railroad shipments showed a slight increase in May, but were 8 per cent smaller than a year ago. Carloadings of all classes of 1919 1920 1921 1922 1923 1924 Production in Basic Industrie* Index of 22 basic commodities corrected for seasonal variation (1919=100). Latest figure. May, 103. Wholesale Prices Index of U. S. Bureau of Labor Statistics (1913=100. base adopted by Bureau). Latest figure, May, 147. Those desiring this review sent them regularly will receive it without charge upon application. 82 MONTHLY REVIEW OF BUSINESS CONDITIONS freight, with the exception of grain and live stock, were smaller than in May, 1923. Whole sale trade decreased slightly in May and was 6 per cent less than in May, 1923. Sales of dry goods, shoes, and hardware were much smaller than a year ago, while drug sales were slightly larger. Retail trade at department stores and mail order houses declined more than is usual June, 1924 earning assets were somewhat larger than a month ago. The prevailing ease in the money market was reflected in a further decline from 4% to 3^2“ 3% per cent in rates on prime commercial paper in New York. The June 15th issue of six-month Treasury Certificates bore a rate of 2% per cent compared with 4 per cent on a PER CENT 1919 1920 1921 1922 1923 1924 Factory Employment M ember Bank Credit Index for 33 Manofactuinf Industri» ( 1919=100). Latest figure, May. 93. Weekly figures for member banks in 101 leading citie*. Latest figure, Jane 11. for the season during May, and was smaller than last year. Department store stocks were 4 per cent smaller in May, 1924, than in April, 1924, and 3 per cent larger than in May, 1923. Prices. Wholesale prices, as measured by the index of the Bureau of Labor Statistics, declined 1 per cent during May to a level about 8 per cent below the high point reached in the spring of 1923. Prices of all commodity groups, with the exception of food, declined in May. During the first half of June quotations on wheat, corn, rye, and milk increased, while prices of hogs, beef, cotton, and lumber de clined. Bank credit. Decreased demand for credit for current business requirements between the middle of May and the middle of June was re flected in a smaller volume of borrowings for commercial purposes at member banks in lead ing cities. Further purchases of corporate securities by these banks and larger loans on stocks and bonds, however, resulted in an in crease for the month in their total loans and investments. There was an unusually large increase in net demand deposits of these banks, which carried the total of these deposits to the highest figures on record. At the Federal re serve banks, between May 21st and June 18th, there was a further decline in discounts for member banks and in acceptances purchased in the open market. Government security hold ings, on the other hand, increased and total similar offering last December. Discount rates at the Federal Reserve Banks of Cleveland, Richmond, Atlanta, Chicago, St. Louis, and San Francisco were reduced from 4l/ 2 to 4 per cent during June, and the rates in Boston, New York, and Philadelphia were reduced to Zy2 per cent. Summary of District Conditions A moderate recession of business activity appeared in this district during May. Declines in production, noted during March and April, continued, and the first evidences of a decline in the distribution and consumption of goods were observed. Instead, however, of the in crease in demand by business men for bank accommodation which has heretofore charac terized the beginning of a major depression, the credit requirements of business in the dis trict have recently diminished promptly with the decline in trade activity, indicating that there are no large stocks of goods being with held from the market and carried by means of bank loans. Accompanying the diminishing demand for bank credit, interest rates at the banks have eased slightly. The trend of prices was downward during the month, continuing a movement begun in February. Foremost among the factors contributing to this decline in business activity have been the falling off in building permits which in May June, 1924 FEDERAL RESERVE AGENT AT SAN FRANCISCO 83 were 13 per cent less than a year ago but were time since April, 1918, and total earning assets still in relatively large volume; the hesitancy were down to levels approached only once (in in the market for lumber, following several the spring of 1922) since the summer of that months of large production; the unsatisfactory year. Interest rates at the principal financial condition of growing crops, which in every centers of the district in general declined state of the district except Arizona are re slightly during May and early June. Rates ported to have suffered to a material degree charged customers on ordinary commercial from lack of seasonal rainfall; the problems loans are now' uniform at 6 per cent except in facing copper mines because current produc tion cannot be sold at prices favorable to the San Francisco where the prevailing rate is 5 high cost producers; and the hampering effects to 6 per cent. Effective June 10, 1924, the Fed of the hoof and mouth disease of livestock in eral Reserve Bank of San Francisco reduced parts of California, a factor of declining im its rediscount rate from 4j4 to 4 per cent. The portance as eradication of the disease pro 4j<£ per cent rate had been in effect since March 21, 1923. gresses. Notwithstanding these unfavorable influ ences, figures of debits to individual accounts Agriculture (bank debits), which afford the best single An accumulated shortage of rainfall, amount available index of business conditions in this ing to more than 50 per cent of the normal pre district, declined only slightly during May, 1924, both as compared with April, 1924, and cipitation over large areas of the district, has May, 1923. (Allowance being made for changes resulted in unsatisfactory crop conditions on due to seasonal variation and normal year to unirrigated lands, and has threatened a short year growth.) The movement of bank debits age of water for irrigation purposes later in at 20 principal cities of the district during re the year. Temporary relief from drought con cent months is best shown by the following ditions was reported in the Pacific Northwest and in parts of the Intermountain States dur index numbers (n orm als 100) : ing the first weeks of June, when the long dry May, 1924.......... 104.2* February, 1924. . . . 113.5 spell was broken by generally heavy showers. April, 1924.......... 104.6* January, 1924. . . . 103.4 Further rainfall will be needed soon, however, March, 1924.......... 107.3 May, 1923. . . . 108.6 if normal yields of grains and field crops are •Prelim inary. to be harvested on unirrigated lands in these Irregularity in the wholesale trade situation states. The season when heavy rains normally has persisted, and nine of the eleven lines of fall in California has passed, and the general business reporting to this bank showed de lack of moisture in that state is now reflected creases in value of sales during May, 1924, as in the curtailed plantings of many field crops compared with May, 1923. It should be noted, and in the generally unsatisfactory condition however, that wholesale prices today are ap of all growing crops solely dependent upon proximately 5.7 per cent lower than a year ago. rainfall for moisture. The important wheat crop of this district Sales of retail dealers were also slightly smaller than a year ago, the value of sales of did not make satisfactory progress during May, 35 department stores in 7 cities of the district and reported conditions on June 1st were far being 0.6 per cent less than in May, 1923. below normal. Condition figures for both win While sales of these stores decreased, stocks ter and spring wheat on June 1 and May 1, held by them increased, so that the annual rate 1924, and June 1, 1923, and figures of acreage of stock turnover indicated by the relation be planted to spring wheat in 1924 and 1923 in the tween sales and stocks in May, 1924, was but more important grain raising states of the dis 2.88 compared with an indicated annual rate trict follow: Spring Wheat of 3.16 in May, 1923. Increases in the number Condition of Conditionf Winter Wheat (Per Cent and liabilities of business failures, both as com (Per Cent of Normal) of Normal) Acreage Sown* pared with one month ago and one year ago June M ay June June Jane 1924 1923 1,1924 1.1924 1,1923 1,1924 1,1923 (acres) (acres) were reported during May. .................................... California ... 54 64 91 Decreased demands for credit in the district 598 659 have been reflected during the past month in a Idaho .......... .73 91 96 88 97 70 95 230 242 decline of $13,000,000 or 1.3 per cent in total Oregon ....... .6596 97 114 124 loans of reporting member banks, of $9,000,000 U ta h ............ .60 93 93 85 94 1,000 1,124 or 2.5 per cent in their investments, and of Washington . 58 83 92 89 92 $8,000,(X)0 or 34.8 per cent in their borrowings T otals............................................ 1,942 2,149 from the Federal Reserve Bank. Total dis United States. 73.9 84.8 76.3 82.3 90.2 16,920 18,786 counts of the Federal Reserve Bank at $33,omitted. 000,000 on June 18th were lower than at any t*000 Figure« for H ay 1, 1924, not available. 84 MONTHLY REVIEW OF BUSINESS CONDITIONS June, 1924 The estimated condition of barley in Cali most crops. The condition of deciduous fruit fornia was 57.0 per cent of normal on June 1, crops in California is given in the following 1924, and the forecasted yield on that date was table: t----------- Condition------------ \ 10.055.000 bushels from 504,000 acres, or only (per cent of normal) Final 10 Yield 46.0 per cent of the acreage harvested in 1923. June 1st Year May 1st 1923 1924 1923 Average 1924 1923 (tons) There were 33,069,000 bushels of barley pro ........... ..63 75 72 61 75 11,000 duced on 1,095,000 acres in that state in 1923. Almonds Apples ............... ..75 76 79 90 80 5,196,000* Should the yield be no greater than the present Apricots ............ ..65 98 69 66 98 170,000 forecast, the 1924 barley crop in California will Cherries ............ ..62 75 74* 65 73 14,500 91 86 77 87 380,000 be the smallest on record since 1898. Esti Peaches ............. ..75 ................. ..68 75 78 70 90 128,000 mates of the total 1924 acreage and yield of Pears Plums ................ ..74 97 79f 78 95 69,000 all wheat, barley, and oats, and figures of the Prunes ............... ..68 60 75 68 60 80,000 total 1923 acreage and yield of these grains for W alnuts ............ ..80 89 79 .. .. 25,000 five important grain growing states of the dis *7*year average. average. trict (California, Idaho, Oregon, Utah, and 15-year jCommercial crop in boxes—total crop 8,450,000 boxes. Washington) are given in the following table: Damage to Pacific Northwestern deciduous Estimated Estimated fruits, the result of excessively cold weather in Acreage Acreage Yield Yield 1924 1923 1924 1923 April and early May, has proved less serious (acres) (acres) (bushels) (bushels) than at first reported, although present pros* All Wheat . . 4,927,000 5,653,000 71,691,000 141,388,000 pects indicate smaller yields than last year. B a r le y ........ 824,000 1,383,000 18,568,000 44,925,000 Condition figures (per cent of normal) for June Oats ........... 838,000 893,000 26,353,000 38,647,000 1st, and the 1923 yield of the important apple Commercial estimates indicate that the acre crop in the chief commercial apple producing age planted to rice in California this season is states of the district follow : Production approximately the same as the area harvested Condition (commercial) June 1st 1923 in 1923 (106,000 acres). The growing rice is 1924 1923 (boxes) in good condition and up to the present time California .................................75 76 5,196,000 96 4,800,000 has made better progress than during the same I d a h o ..........................................56 Oregon ......................................70 90 5,250,000 period in the 1923 growing season. Utah ...........................................70 95 780,000 Spring plantings of field crops have been W ashington .............................55 88 27,594,000 practically completed in this district and, ex Total 5 sta tes............................. .. 43,620,000 cepting plantings on unirrigated land in Cali 103,209,000 fornia, the crops (beans, cotton, potatoes, sugar United S ta tes............ .............. 71.6 75.5 beets, etc.) are generally in good condition. A slight decline in the condition of Califor Reports indicate, however, that further rainfall nia citrus fruits was recorded during May, but will be needed to insure satisfactory yields of normal yields of both oranges and lemons are still in prospect. Markets for both canned and dried fruits, although normally more sluggish during the (A) Movement o f Crops to Market* summer months than earlier in the marketing T W E L F T H F E D E R A L R E S ER V E D IS T R IC T season, continued relatively active during May, 1922-1923 1921-1922 1923-1924 absorbing substantial amounts of the 1923 Season to Season to Season to W heat E xportsf M ay 31,1923 M ay 31,1922 M ay 31.1924 carryover of these products. Portland and Puget Available data for roughly measuring the Sound ......... (bu.) 29,933,806 18,870,498 41,855,340 progress made in marketing certain crops of (19.3) (33.1) (20.9) Barley E xportsf the district are presented in Table“A.” San Francisco (bu.) 10,098,075 (21.7) Apple Shipm ents! T welfth Dis. (cars) 57,468 (99.4) Orange Shipments^ California . . . (cars) 27,883 (50.6) Lem on Shipments^ 7,264 California . . . ( c a rs ) (56.9) 15,655,825 (37.1) 16,570,954 (42.1) 40,989 (91.5) 50,868 (99.5) 32,526 (65.7) 21,818 (70.6) 4,720 (48.2) 5,867 (56.3) 'Figures in parentheses indicate percentage of crop, tSeason begins Ju ly 1st {Season be*ins November 1st. Livestock— Animal Products The condition of pastures and grazing lands in the Pacific Nprthwest and Intermountain States remained favorable to the livestock in dustry during May and early June. Seasonal rainfall over a large part of this area, excepting certain sections of Arizona, has been consider ably less than normal during the present year, however, and continuance of satisfactory con ditions depends in large degree upon the June, 1924 85 FEDERAL RESERVE AGENT AT SAN FRANCISCO amount of rainfall received in the immediate future. In California, livestock are beginning to suffer from the shortage of feed on pastures and ranges as a result of drought conditions prevailing throughout the state, and the situa tion has been further complicated by restric tions (due to the presence of hoof and mouth disease) upon the movement of live animals both within the state and into other states. The hoof and mouth disease of livestock, which has been present in parts of California since February, now appears to be under com plete control, the few remaining cases being confined to relatively small areas of the state. Up to June 1, 1924, losses on account of slaughtered animals and destroyed property totaled $3,732,406. Slightly more than 93,000 head of cattle, sheep, swine, and goats had been killed, or less than 2.0 per cent of the total of cloven footed animals in the state. Shearing of the 1924 wool clip in all but a few sections of the district was completed TH O U SA N D S California markets as a result of the presence of hoof and mouth disease in that state. L IV E S T O C K R E C E IP T S A T E I G H T M A R K E TS Cattle Calves Hogs Sheep May, 1924................. April, 1924................. May, 1923................. 4-year average*— M a y ........................ 4-year average*— April ...................... 70,029 23,088 209,506 371,778 64,086 15,348 184,021 204,675 67,895 20,511 170,364 440,028 62,463 17,698 150,864 64,144 14,353 401,750 141,766 214,808 *1921-1924. Receipts of butter in the district’s markets during May were greatly in excess of current needs, a situation due to a rapid seasonal in crease of production. Practically all of the surplus butter was placed in cold storage in anticipation of an early decline in the volume of production because of relatively poor feed and pasture conditions, particularly in Cali fornia which normally supplies more than half of the butter produced in the district. Cold storage stocks of butter on June 1, 1924, were greater than on June 1st of any previous year of which this bank has record and were 78.0 per cent greater than the 5-year average (in cluding June 1, 1924) for that date. A rapid but normal increase in holdings of cold storage eggs occurred during May, reflecting produc tion trends during the month. C O L D S T O R A G E H O L D IN G S O F B U T T E R A N D E G G S June 1* Butter (pounds) 1924 •Twelfth D istrict. 4,361,528 United States........22,328,000 Eggs (cases) tTw e lfth District. 429,049 U nited States........ 6,944,000 M ay 1, 1924 1,859,787 8,977,000 June 1, 1923 2,193,561 10,112,000 Five-Year Average June 1st 2,451,286 17,461,000 295,810 3,609,000 532,749 7,890,000 t 6,806,000 *Four markets. fS ix markets. (Figures not available. Price» Prices generally tended toward lower levels during May. The decline of the average price level for agricultural products of the Twelfth District was slight, decreases in livestock early in June. Previous estimates placing the prices, both at the district’s chief markets and total clip of the district at 78,500,000 pounds, at Chicago, and in wool, wheat, wheat flour and a somewhat larger yield than was produced in sugar prices being partially offset by small 1923, appear at this time to be approximately advances for some varieties of deciduous correct. Buyers of wool have been slightly fruits (fresh and canned) and for dairy and more active during recent weeks than they poultry products. Prices of other commodities were earlier in the season, and it is estimated within the group were relatively stable. Defi that approximately 75.0 per cent of the 1924 nite price declines among mineral and forest clip has now been sold or contracted for sale. products were recorded during the month. About 50.0 per cent of the clip had been sold Livestock prices at the principal markets of at this time a year ago. this district and at Chicago declined during Figures for total receipts of all classes of May as they had in April. In this district livestock at eight principal markets of the dis prices at the close of the month were higher trict during May are presented in the accom for cattle and hogs and lower for lambs than panying table and chart. As in April, depar on June 1, 1923. Average prices at Chicago tures from normal seasonal trends may be during the first weeks of June, 1924, were attributed largely to conditions prevailing in slightly higher for sheep, lambs, and hogs, and Receipt« of Livestock at Eight of the Principal Markets of the District 1923-1924. (L o s Angeles, Ogden, Portland* Salt Lake Cityf San Francisco, Seattle, Spokane, and Tacoma inchided) 86 June, 1924 MONTHLY REVIEW OF BUSINESS CONDITIONS lower for beef cattle than one year ago. Prices for July wheat at Chicago continued upward during May, then declined to a low point of $1.04^j per bushel on June 3rd, and later ad vanced to $1.12j^ per bushel (June 14th), the highest price for future wheat recorded at that market since February, 1924. On June 14, 1923, July wheat was quoted at $1.12^ per bushel at the Chicago market. Wool prices again declined during the month, the average of 98 quotations at Boston, at 77.34 cents per pound on June 6th, being 4.5 per cent and 7.8 per cent, respectively, lower than one month ago and one year ago. Prices offered growers in this district for unscoured wool during May ranged from 3 to 5 cents per pound lower than during April and were 3.0 to 8.0 per cent below those paid during May, 1923. On June 5th, sugar prices, which have been declining irregu larly since November, 1923, reached a low point for the present movement, granulated beet sugar at San Francisco being quoted at $6.60 per 100 pounds. On June 18th quota tions for the same grade and kind of sugar advanced to $7.10 per 100 pounds, which com pares with a price of $9.70 per 100 pounds on June 18, 1923. Quotations for canned fruits generally strengthened during the month, but many varieties continued at lower levels than a year ago. On June 16th the largest factor in the trade announced its 1924 opening prices for canned fruit. Opening prices for the past five years and spot prices on May 15, 1924, and 1923, for the more important varieties of canned fruits follow: t 1924 per doz. A p p le s .............. .,$2.20 A p r ic o t s ........... . 2.45 Blackberries ___. 2.85 Cherries, R. A ., . 2.85 Grapes, Muscat. 2.25 Plums, E g g .. . . . 1.85 Loganberries* ., . 3.10 Peaches, Y . C .. . 2.40 Peaches, Y . F .., . 2.25 Pears, Bartlett. . 3.00 Choice Grade N o. 2*/* Cant (f. o. b. cannery) 1922 1921 1923 per per per doz. doz. doz. $2.20 $2.25 $2.60 2.15 2.70 2.35 3.00 2.60 2.25 3.25 3.90 3.00 2.10 2.35 2.35 1.85 2.15 2.00 2.25 2.35 3.10 2.25 2.60 2.35 2.10 2.35 2.30 3.25 3.15 2.65 1920 per doz. t $3.85 3.00 4.50 4.15 3.40 4.15 4.15 3.90 4.65 Spot Price M ay 15, M ay 15. 1924 per doz. t $2.45 3.00 3.00 2.25 1.85 3.10 2.40 2.25 3.00 1923 per doz. t $2.75 2 .3 Í 4.15 2.35 2.15 t 2.75 t 3.10 *F. O. B. San Francisco. fN o t quoted. Average prices paid by canners for apricots, cherries, pears, and peaches during the 1922 and 1923 canning seasons and prices at present (June 20th) established for these fruits are given in the following table: Number One Grade 1924 Cnotng Fruit (per ton) A pricots ................ . . . $ 65 Cherries ....................... . . . 115 45* Peaches, Y. C........... Peaches, Y. F .............. Pears, B a r tle tt.. . . . . . . . . 6 0 *GïOVCfi* offering pricc. 1923 (per ton) 1922 (per ton) $25-$35 190-200 30 25 35 $75-$100 196 60 45 7125 Dried fruit prices displayed further weakness during May, and, for many varieties, stood on June 1st at substantially lower levels than one year ago. Butter and egg quotations ad vanced seasonally during May. Non-ferrous metals (excepting silver) sold for less during May and the first weeks of June than during April, 1924, or May, 1923. Copper, which was quoted at 13 cents per pound on May 20th, sold for 12^ cents per pound on June 20th, compared with a price of 15^8 cents per pound quoted on June 20, 1923. Lead prices declined from 7.25 to 7 cents per pound during the last week of May, but on June 20th the metal was again quoted at 7.25 cents per pound on the New York market, a quotation identical with the published price on May 20, 1924, and June 20, 1923. Average monthly prices for copper, lead, silver, zinc, and quick silver follow: May, 1924 Copper (lb.) New York E lectrolytic.. Lead (lb.) New Y ork......................... Silver (oz.) N ew Y ork ......................... Zinc (lb.) St. L ou is............................ Quicksilver (dollars per flask) San F rancisco___ A pr., 1924 M ay, 1923 (cents) (cents) (cents) 12.77 13.21 15.44 7.27 8.26 7.31 65.52 64.14 67.04 5.79 6.12 6.63 72.65 72.25 67.03 Prices paid producers for petroleum in California oil fields were unchanged during the month, the quotation for crude oil of 35 degrees gravity and above standing at $1.40 per barrel, compared with $1.04 per barrel one year ago. Lumber prices at Pacific Northwestern pro ducing centers continued downward during May. Declines for the month ranged from 4.0 to 8.0 per cent, and prices prevailing at the end of May were from 20.0 to 30.0 per cent lower than one year ago. The softwood index of “ Lumber” stood at 30.59 for the week ending June 6, 1924, compared with 31.72 one month ago and 35.40 one year ago. Industrial Activity Industrial activity during May, 1924, as in April, was below the levels of earlier months of the year and, if allowance be made for nor mal year to year growth, production was prob ably smaller in volume than in May, 1923. Although output of the lumber industry of the district continued large, 200 mills in four associations reporting a gain of 2.1 per cent as compared with April, 1924, the cut was 5.7 per cent less than in May, 1923. This decrease, as compared with a year ago, was the second re ported during the past two and one-half years, that reported in April, 1924, being the first The volume of shipments and of new orders June, 1924 87 FEDERAL RESERVE AGENT AT SAN FRANCISCO received by district mills continued the decline first reported in April and remained smaller than one year ago. Figures follow (000 omitted) : May, 1924 Apr.. 1924 May, 1923 A p r.,1923 (board feet) (board feet) (board feet) (board feet) Production ........... ..641,456 Shipments ............ ..558,490 Orders ................... ..500,096 Unfilled Orders... 384,370 627,838 618,267 530,011 455,846 680,193 618,534 535,299 575,280 649,400 619,512 580,014 628,419 Commercial factors report that logging oper ations in the Pacific Northwest have been sharply curtailed during recent weeks. Forest fires during May caused some loss to the lum ber industry in this district, and interfered with logging and lumbering operations. Fires have appeared earlier than usual this year owing to the unusually dry spring weather. Domestic lumber markets continued rela tively inactive during May. Foreign demand, however, increased, and the volume of new orders placed in overseas trade during the M IL L IO N S OF B O A R D F E E T recent weeks, particularly in the case of lead and zinc. Sales of copper have been reported in good volume, but present market prices are not attractive to many of the higher cost pro ducers of this metal. A slight decrease in the production of petro leum in California during May was accom panied by an even greater decline in consump tion, and stored stocks at the close of the month were 2.2 per cent greater than on May 1st Production of gasolene at California re fineries during April was 0.8 per cent greater than during March, a large part of the in creased output being added to stored stocks, M IL L IO N S 4 0 0 3 0 0 2 0 0 STORED ST DCKS OF GA SOLEN E X " (GALLONS) IO O 8 0 6 0 STORED S OCKS OF P :t r o l e u m ÍB B L S .) 4 0 PETROL ;U M PROD JCTION ÍD8LS.) 2 0 A! Í0LEUM SH IPMENTS (B B LS .) IO -------------------- 1924 1923 Production, Shipments, and Stored Stocks of Petroleum, and Refinery Stored Stocks of Gasolene, 1923-1924 Lumber Production, Orders Received, and Shipments in Twelfth Federal Reserve District as Reported by Four Lumber Associations, 1923-1924 month was more than twice as great as in April and slightly larger than in May, 1923. Preliminary reports for the mining industry of the district show a slight tendency towards decreased production during May, the decline affecting all of the principal metals. Figures for national production of copper, silver, zinc, and quicksilver during April, 1924, and April, 1923, (figures for May are not yet available) are given in the following table: Copper (lbs.) (mine A pr.. 1924 M ar., 1924 A pr., 1923 production) . . . . 131,600,000 128,560,000 118,424,000 Silver (oz.) (com mercial b ar s ) . . . 4,588,375 5,726,600 6,616,000 Zinc (tons) (slab) ................. 44,949 47,775 46,866 Quicksilver (flasks— __75 lbs., estimated) 1,120 1,165 * •Not available. Figures for lead are not available. The reported slackening of producers’ activi ties during May is no doubt a reflection of relatively sluggish market conditions ;during which on May 1, 1924, were 0.2 per cent and 80.4 per cent greater, respectively, than on April 1, 1924, and May 1, 1923. A statistical summary of the California oil industry fol1°W S * P ETR O LEU M Indicated Average Average Daily Daily Consumption Production (Shipments) May, 1924 Apr. 1924 Sept., 1923* May, 1923 (barrels) (barrels) 639,793 643,328 858,750 694,689 569,590 621,030 779,657 654,942 Stored r - New Wells — s Stocks at Daily End of Produe* Month Number tion (barrels) Opened (barrels) 99,511,937 97,335,651 85,496,609 70,169,898 150 97 93 56 56,451 37,937 139,960 96,420 •P e a k of production. GASOLENE A p r., 1924 M ar., 1924 A p r., 1923 M ar., 1923 (canons) (gallons) (calions) (râlions) Refinery O utput. 113,124,488 112,234,823 102,428,548 104,402,122 Stored Stocks*.. 246,600,953 246,170,979 136,684,477 138,058,780 *As of the last day of the month. Output of flour at 16 regularly reporting mills was greater during May than during April, this being the first time that May pro duction has exceeded that of the earlier month June, 1924 MONTHLY REVIEW OF BUSINESS CONDITIONS 88 since this bank began keeping the record in August, 1920. The increased production of millers evidently resulted from a more active market demand for their product, as it was accompanied by a decrease in reported stocks of flour. Production during May, 1924, was 39.6 per cent greater than during May, 1923, and 25.5 per cent greater than the four-year (1921-1924) average for May. Stocks of flour held on June 1, 1924, were smaller by 8.8 per cent, 13.3 per cent, and 10.2 per cent, respec tively, than on May 1, 1924, June 1, 1923, and the five-year average for June 1st. Reported stocks of wheat held at the close of May showed a decline of but 1.7 per cent and 0.9 per cent, from one month ago and one year ago, respectively, and an increase of 20.2 per cent over the five-year average. Figures fol low : Five-Year May. 1924 A pr., 1924 May, 1923 United States Department of Labor index number of building materials prices stood at 180 in May, 1924 (1913 prices=100). This is 1.9 per cent lower than a month ago, and 10.2 per cent less than a year ago (1923 peak). The Aberthaw index number of the total cost of constructing a reinforced concrete factory building stood at 199 on June 1, 1924 (100 in 1915), compared with 200 on May 1, 1924, and 207 on June 1, 1923, the most recent peak. Average (1920-1924) May Output (bbls.) 421,961 411,405 302,129 336,245f Stocks* Flour (bbls.) 449,346 492,486 517,704 500,211 W heat (bu.) 2,269,107 2,307,082 2,288,340 1,886,865 *As of the first day of the following month. fF our-year average, 1921-1924. Building Permits Issued in 20 Principal Cities, Twelfth Federal Reserve District, 1923*1924 Employment in the district generally con tinued at about the same level during May as in April, whereas the normal seasonal expec tation is an increase in the volume of employ ment during the later month. A slightly greater volume of unemployment was reported than in May, 1923. Factors principally respon sible for the present labor situation are the unfavorable agricultural outlook, hesitancy in the lumber industry, and the downward trend of building activity. Evidence continues at TH O U SA N D S OF B A R R E L S 900 / -v V j T O :k s off 5 -OUI*' 500 OUT ‘‘O p u t or FLOUR j (B) B uilding Permits— V** N o. B e r k e le y ........ IC O 1923 1924 Monthly Flour Output, and Stoeks of Wheat and Flour at End of Month of 16 Reporting Milling Companies A definite, though slight, downward trend in building activity is indicated by figures of building permits issued in principal cities of this district during recent months. In May, for the second consecutive month, the value of pros pective building permitted was less than in the preceding month, and, for the third consecu tive month, it was less than in the correspond ing month a year ago* The decline for May, 1924, compared with May, 1923 (187 per cent), was greater than the estimated decline of building costs over the same period. The Fresno ........... Long B each ... Los A n g e le s.. Oakland ........ O g d e n ............ Pasadena ----Phoenix ......... P o r tla n d ........ Sacramento . . Salt Lake City San D ie g o ___ San Francisco. San J o se ......... Seattle ............ Spokane ........ S to c k to n ........ Tacoma .......... May, 1924 Value 235 $ 747,004 77 47,009 98 130,903 411 2,027,373 3,817 8,789,932 1,013 2,240,983 53 144,750 287 691,220 83 102,415 2,535,760 1,251 21 28,700 948,872 290 516,525 193 1,260,208 483 5,478,111 932 249,650 90 4,758,170 960 372,670 236 249,750 86 589,010 340 D istrict ....1 0 ,9 5 6 $31,909,015 No. May, 1923 Value 247 $ 816,510 164,000 82 241,583 146 1,740,817 478 18,926,881 5,184 935 2,373,020 78 227,000 272 896,373 62 133,287 1,322 2,594,620 17 87,996 297 703,740 179 1,516,295 432 765,865 948 4,928,986 132 337,360 933 1,867,280 288 277,155 121 342,871 388 328,101 12,541 $39,269,740 June, 1924 89 FEDERAL RESERVE AGENT AT SAN FRANCISCO hand, however, indicating that an influx of casual laborers from other states has contrib uted to the present surplus of labor in this dis trict. Total industrial sales of electric energy in the Twelfth District during April, 1924, were 13.1 per cent greater than in April, 1923. The increase of sales to agricultural and manufac turing consumers more than offset a decline of 2.5 per cent in sales to the mining industry. The serious lack of seasonal rainfall through out the greater part of the district, necessitat ing more irrigation than in previous years, has caused a greater demand for power on farms. Although the increase during the year period in the use of electric energy by manufacturers (15.8 per cent) undoubtedly indicates a growth in the number and an expansion in the size of such enterprises, it should again be pointed out that a large proportion of this in crease is a result of the substitution of elec tricity for other types of power. A statistical summary of the industry in the Twelfth Dis trict is presented in the following tables: cities in the Twelfth District, 9 cities in the Twelfth District outside of California, and 11 cities in California during the first five months of 1924 and during May, 1923. Allowance has been made for seasonal variation in the re ported figures, and also for the extra business day in February, 1924. Twelfth District* 20 Centers 1924 M a y ........................ $2,519,700 April ...................... 2,532,000 March .................... 2,605,000 F e b r u a r y .............. 2,785,600 January ................ 2,510,400 Outside California* 9 Centers California* 11 Centers $550,900 560,300 557,500 545,100 528,800 $1,968,800 1,971,700 2,047,500 2,240,500 1,981,600 537,300 1,959,900 1923 May ........................ 2,497,200 *000 omitted. M IL L IO N S OF D O LLA R S Percentage Increase or Decrease (— ) in Volume of Sales April, 1924, compared with A pril, 1923 Total AgrtculMann- Industrial ture Mining facturing Sales California ....................... 7.5 Pacific N orthw est......... 25.5 Intermountain S tates... 17.3 T welfth D istrict............ 8.4 17.8 15.2 — 42.2 — 2.5 12.2 23.8 7.2 15.8 13.8 13.4 9.7 13.1 Number and Distribution of Industrial Consumers and Actual Volume of Sales Number of Industrial Consumers A pr., A p r., 1924 1923 C a lifo rn ia .................. 79,090 56,426 Pacific Northwest . . 13,067 11,686 Intermountain States 5,208 4,976 Tw elfth District . . . . 97,365 73,088 Industrial Sales K. W . H . A pr.. A pr., 1924 1923 243,143,710 213,532,197 77,465,818 68,262,220 56,782,239 51,731,780 377,391,767 333,526,197 General Business and Trade The moderate decline in business activity, first noted in California during March and April, became general throughout the district during May, and while trade continued large in volume it was below the high levels of the previous two months. Debits to individual accounts (bank debits) at banks in 20 principal clearing house centers, figures of which afford the best single avail able index of general business activity in this district, declined slightly during May, 1924, as compared with April, 1924, whereas there is normally a slight increase during the later month. As compared with May, 1923, bank debits for May, 1924, increased 0.9 per cent, an amount substantially less than the estimated rate of normal annual growth (6.5 per cent). The following table shows bank debits for 20 Debits to Individual Accounts in 20 Principal Cities, Twelfth Federal Reserve District. 1923*1924 (C) B ank Debits*— 1924 Four Weeks ending M ay 28 16,587 B e rk e le y ........... .$ 9,667 Fresno ................ 26,311 Long B e a c h ..... 49,993 Los A n g e l e s . . . . . 675,695 111,160 Oakland ............. 18,323 29,151 Pasadena ............ 19,900 146,840 P o r t l a n d .............. 7,161 Reno ......... .......... 41,536 Sacramento 56,728 S alt La k e C it y . 41,317 San Diego........... 718,556 S a n F r a n c is c o . . , 17,447 161,054 S p o k a n e ................ 41,228 Stockton ............ 20,077 36,569 8,561 Yakima ............... .$2,253,861 *000 omitted. 1923 Cumulative Total for Year to Week ending May 28 $ 90,789 $ 55,411 157,844 295,346 4,024,785 653,534 120,511 184,266 107,475 818,017 41,912 247,741 321,812 248,924 4,141,777 106,717 907,099 238,354 119,447 209,399 49,929 $13,141,089 Cumulative Four Total for Weeks Year to Week ending ending M ay 29 M ay 29 88,611 14,339 $ 62,662 10,777 242,992 38,640 289,243 52,949 625,922 3,440,980 622,067 105,914 25,856 152,358 30,071 165,827 94,623 16,799 133,324 734,214 8,670 49,264 41,290 247,653 55,391 317,306 40,784 239,230 703,928 4,007,008 18,260 114,060 149,082 837,729 42,076 242,026 20,720 114,325 34,101 189,136 8,349 49,043 $2,177,242 $12,300,357 90 June, 1924 MONTHLY REVIEW OF BUSINESS CONDITIONS The wholesale trade situation was less favor able during May than during April or March, months during which trade at wholesale had previously been characterized as irregular. Of the eleven lines of business which report to this bank, nine showed decreases in value of sales as compared with May, 1923. Retailers are buying cautiously, and as trade at retail has slackened moderately, their immediate MAY PRICES 1923=10094= MAY I9233ALE5 U.S4UKAU Of LABORM0EX MO. WHOLESALE PRICES AGRICULTURAL IMPLEMENTS AUTOMOBILE SUPPLES AUTOMOBILE TIRES cent larger than on May 31, 1923. The rate of stock turnover during May, 1924, was 2.88 as compared with a rate of 3.16 during May, 1923. A detailed statement of the percentage changes in value of sales and stocks of reporting de partment stores of the district follows: No. of Stores Los Ange l e s . . . 6 Oakland .......... 4 Salt Lake City. 4 San Francisco. 10 Seattle ........... .. 5 5 35 ♦District Percentage increase Percentage increase or decrease(— )in value of stocks value of sales May, 1924. May, 1924, compared with compared with A pr., May, May, A pr., 1924 1924 1923 1923 7.3 0.1 2.2 2.7 — 0.2 26.0 — 11.3 6.0 5.7 8.6 — 5.2 -- 2.4 — 0.6 4.6 24.0 4.7 12.7 0.9 0.8 — 4.5 7.8 — 4.7 —0.9 —3.6 —6.1 —3.0 —4.5 —4.7 •Figures for one store included in district figures not included in figures for cities shown above. DRUGS M IL L IO N S O P D O L L A R S j 2 6 1 I t 24 1 1 22 1 I 1 1 2 0 0 20 40 60 60 100 1 18 Dollar Value of Sales of Representative Wholesale Firms and General Wholesale Prices in May, 1924, compared with May, 1923 needs have diminished. Percentage changes in the value of sales of reporting wholesale dealers during May, 1924, as compared with one year ago and one month ago follow: Percentage Increase or Decrease ( — ) in the Valne of Sales During May, 1924, No. of compared with Firms May, 1923 A pril, 1924 Hardware . 21 17 21 8 15 6 . 17 , 28 21 15 27 —21.4 — 13.4 12.6 7.7 — 11.6 — 3.9 — 3.3 — 4.7 — 12.5 — 14.9 — 1.9 —19.1 — 4.8 14.8 — 6.9 0.1 —16.8 — 2.7 — 1.7 1.9 3.2 6.2 s, as indicated by reports received from 35 large department stores, were smaller in value during May, 1924, than during May, 1923, and showed less than the normal seasonal increase as compared with April, 1924. (Sales during the latter month were unusually large, however, due to the late Easter season.) The decline as compared with a year ago (0.6 per cent), although small, com pares with gains of 6.1 per cent in March-April, 17.7 per cent in February, and 13.6 per cent in Jaifuary compared with the corresponding months of the preceding year. Stocks of re porting stores on May 31, 1924, were 7.8 per 16 14 12 1924 N // v V/ ^ \ 19 s/ V 23 S/ 1 1 / IO rt 1 iii 1 1 ! -— - — ——J 1 ! 1 Net Sales of 35 Department Stores in Twelfth Federal Reserve District (In Million» of Dollars) Registrations (sales) of new automobiles in the states of this district during the first four months of 1924 (an index of purchasing power of the community) were less by 7.6 per cent than during the first four months of 1923, the number of new passenger cars and of new com mercial vehicles registered declining 7.2 per cent and 11.9 per cent respectively. These de clines were the result largely of declines in registrations in California and Washington. Total registrations of old and new automobiles during the first five months of 1924 were 29.2 per cent greater than during the first five months of 1923. Figures follow: A U T O M O B I L E R E G IS T R A T I O N S ■New Cara - Total Cars Passenger Commercial O ld and New Jan. 1 to M ay a y 11,, Jan. Ito M a y 1, Jan. 1 to June 1, 1924 1923 1923 1924 1924 1923 2,816 370 199 Arizona .............. 3,106 49,236 40,007 California .......... 62,780 71,463 5,433 7,103 1,167,475 901,274 2,336 373 158 88,941 Idaho ................... 3,927 49,070 821 428 Oregon ............... 12,634 10,925 159,148* 130,868 2,700 209 285 U tah .................... 3*524 62,608 48,638 Washington . . . . 11,732 15,075 1,421 1,616 219,773 182,443 To tal (6 states) 97,703 105,315 8,627 9,789 •Revised figure«. 1,747,181 1,352,300 June, 1924 FEDERAL RESERVE AGENT AT SAN FRANCISCO Production of automobiles during May, 1924, was less than during May, 1923, and April, 1924, by 20.5 per cent and 16.2 per cent re spectively. Figures compiled by the Federal Reserve Bank of Chicago follow: Apr., 1924 May, 1923 Passenger Cars............. 279,385 Trucks ............................ 32,326 May. 1924 336,968 34,977 350,073 42,446 Total ........................... 311,711 371,945 392,446 91 ures in the states of this district during May, 1924, and April, 1924, follow: No. Arizona ............... C alifo rn ia ............ Idaho ................... Nevada ................ O r e g o n ................ U t a h ..................... W ashington ....... May, 1924 Liabilities April, 1924 No. Liabilities 0 01 $ 114,570 127 $1,417,427 96 710,780 5 47,713 24 148,814 2 2,450 0 0 43 327,099 33 249,320 13 138,197 12 369,626 36 503,094 31 556,803 Savings deposits at 72 banks in 7 principal D is t r ic t ............ 226 $2,435,980 197 $2,149,913 cities declined during May for the second con secutive month, but were 9.6 per cent greater Percentage increases in the number and liabili than a year ago. This increase for the year ties of business failures in the Twelfth Federal period was considerably in excess of the in Reserve District follow: crease which could be attributed to interest M ay, 1924, compared with M ay, 1923 A p r., 1924 accruals alone. Detailed changes in the amount Number of Business Failures___ 9.1 Liabilities of Business F ailures.. 21.9 14.7 13.3 Banking and Credit Situation Savings Deposits of 72 Banks in Seven Cities of Twelfth District _____ (Base year 1919.) N o t e : Four per cent line represents Savings Deposits as of January 31, 1919, with interest accruals at a rate of 4 per cent compounded semi-annually, assuming no new deposits. of savings deposits during the month and year, as reported by the 72 banks, are presented in th e fo llo w in g t a b le : p „ c . 0, i « w« „ or Decrease ( — ) Number compared with of *May, •Apr., ♦May, May, A pr., Banks 1924 1924 1923 1923 1924 Los Angeles .. 13 $337,391 $ 341,228 $303,964 10.9 — 1.1 93,242 93,260 87,008 7.1 — 0.02 49,841 Portland . . . . . 9 49,837 44,825 11.1 — 0.008 28,068 Salt Lake City. 8 28,178 26,282 7.2 0.4 San Francisco. 14 407,998 408,111Î 376,593 8.3 — 0.03 Seattle ........ . . IS 65,442 65,114 57,042 14.7 0.5 Spokane . . . . 17,144 16,910 15,545 10.3 1.4 T o t a l ........ . . 72 $999,232 $1,002,532 $911,259 9.6 — 0.33 *000 omitted. f Includes one bank in Berkeley which was formerly a branch of an Oakland bank. {Revised. R. G. Dun & Company’s preliminary figures of the number and liabilities of business fail There was a marked decline in the requests for credit accommodation made upon member banks in the Twelfth District during May and early June, and an accompanying decrease in the amount of Federal reserve bank credit in use. This slackening in the demand for credit has contributed to the prevailing ease in in terest rates, which declined still further during the month ending June 14, 1924. The Federal Reserve Bank of San Francisco on June 10, 1924, lowered its rediscount rate on all classes of paper from 4j^ per cent, the rate prevailing since March 21, 1923, to 4 per cent. Total loans and investments of reporting member banks of this district amounted to $1,370,000,000 on June 11,1924, a decline of $22,000,000 (1.6 per cent) for the month, but an increase of $1,000,000 (less than 0.1 per cent) for the year. The decline for the month was due to decreases both in total loans and in in vestments, while the increase for the year was wholly the result of an increase in total loans. Time and demand deposits declined during the first four weeks of the period but advanced sharply during the fifth week, the two items showing a net gain for the five weeks of $9,000,000 or 0.7 per cent. Perhaps the most significant movement of this period was the increase of $16,000,000 in demand deposits dur ing the week ending June 11th, accompanied by an increase of $9,000,000 in loans and in vestments and a decrease of $6,000,000 in bor rowings from the Federal Reserve Bank. Changes occurring in the principal items of the statement of 74 reporting member banks in this district during the month and during the year are presented in the following table 92 June, 1924 MONTHLY REVIEW OF BUSINESS CONDITIONS (increases are indicated by plus, decreases by minus signs). The figures are in millions of dollars, numbers in parentheses indicating per centage changes: Change from One Month Ago Total Loans Investments Demand D eposits Time Deposits... Borrowings from Federal Re serve B a n k . . . , Change from One Year Ago +13 — 12 — 3 +25 — 13 (1.3%) — 9 (2.5%) + 8 ( 1 .1 % ) + 1 ( 0 .2%) — 8 (34.8%) (1.3%) (3.3%) (0.4%) (4.3%) Principal changes in the condition of the Federal Reserve Bank of San Francisco during the month and during the year follow (figures are in millions of dollars) : Con dition June 11, 1924 1,019 351 733 610 —21 (58.3%) 15 M I L L I O N S OF D O L L A R S Total Discounts. Investm ents __ United States Securities ___ Federal Reserve Note Circula tion ................. Total Reserves Condition June 18, 1924 Change from One Month Ago Change from One Year Ago — 8 (19.5%) + 7 (17.1%) —31 (48.4%) + 17 (54.8%) 33 48 + 1 0 (30.3%) + 3 4 (377.8%) 43 — 2 ( 1 .0 % ) 0 — 1 (0.4%) + 2 4 (9.0%) 205 292 M IL L IO N S OF D O L L A R S Total Reserve*, Federal Reserve Note Circulation, Bills Discounted, and Investments, Federal Reserve Bank of San Francisco Total Deposits» Loans and Discounts, Investments, and Bills Payable and Rediscounts of Reporting Member Banks Declining credit needs in the district further reduced the dependence of member banks upon the Federal Reserve Bank and discounts of the latter, at $31,000,000 on June 18th, were 19,5 per cent below one month ago and 48.4 per cent below a year ago. The Reserve Bank maintained its earning assets at approximately the levels of the previous month, however, by increasing its investment in United States Gov ernment securities, holdings of which on June 18, 1924, were nearly four times as large as on June 20, 1923. The volume of Federal reserve notes in circulation has shown only minor fluc tuations during recent weeks, the general trend being slightly downward. On June 18, 1924, the volume of notes in circulation was the same as a year ago. Interest rates declined during the four weeks ending June 14th to the lowest levels since 1917. The following table shows weekly aver age interest rates on various classes of paper in the New York market as reported by the Federal Reserve Bank of New York: June 14, 1924 Time M oney................. Commercial P aper__ 3 ^ -4 Bankers'A cceptances. 2Y% M ay 17, 1924 3^4-4% 4J4—4J4 Autumn June 16. Peak 1923 1923 sy2% 5% 4H 4.8 5 4Ms On June 9, 1924, the Secretary of the Treas ury announced an issue of United States Treas ury Certificates of Indebtedness date June 16, 1924 (Series TD2-1924), maturing December 15, 1924, and bearing interest at the rate of 2^4 per cent per annum, the lowest rate on any offering of government securities during the past ten years. Subscription books were closed on June 11, 1924, the issue oversubscribed ap proximately 3j^ times. NOTE: The following table summarizes changes in Federal reserve bank discount rates during the present year: Federal Reserve Bank of Boston ................. N ew Y ork ............ Philadelphia . . . . C le v e la n d ............. Present Rate t y 2% 3% -jf/ iA l 4 Former Rate 4 y2% »4 , T/ 4*4. 4j4 Date of Change June 12,1924 June 12,1924 t ,0 June 18,1924 June 1,1924 Federal Reserve Bank of Richmond ........... Atlanta ................. Chicago ................ St. L ou is............... San F rancisco__ Present Rate Former Rate 4 4 4 4 4 4^ 4}4 4J4 4{4 4J4 Date of Change June June June June June 14, 1924 18,1924 14,1924 19,1924 10,1924 *O n M ay 1, 1924, the New Y o rk bank reduced its rate from 4J4 to 4 per cent. T h e other Federal reserve banks (Minneapolis, Kansas City, and Dallas) all maintain a 4J4 per cent rate, having made no change this year.