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MONTHLY REVIEW
OF
B U S IN E S S
C O N D IT IO N S
ISAAC B. NEWTON, Chairman of the Board and Federal Reserve Agent
Federal Reserve Bank of San Francisco
San Francisco, California, June 20,1928
Vol. X II
No. 6
S U M M A R Y O F N A T IO N A L C O N D IT IO N S
Prepared by the Federal Reserve Board
Industrial production continued during May
in about the same volume as in the three pre
ceding months. W holesale and retail trade
increased in M ay and the general level of com
m odity prices showed a further advance. Secur
ity loans of member banks, which were in
record volume in May, declined considerably
during the first three weeks in June. Condi
tions in the money market remained firm.
Production. Production of manufactures was
slightly smaller in May than in April, when
allowance is made for usual seasonal variations,
while the output of minerals increased some
what. Production of steel declined in May from
the high level attained in April, but was in about
the same volume as a year ago. Since the first
of June buying of steel products has been light
and there have been further decreases in pro
duction. Daily average production of automo
biles was in about the same volume in May as
in April, and preliminary reports for the first
three weeks in June indicate that factory opera
tions were maintained at about May levels. A c
tivity of textile mills was somewhat larger in
May than in April. There were also increases
in the slaughter of livestock and in the produc
tion of building materials, non-ferrous metals,
and coal, while the production of petroleum de
clined. The value of building contracts awarded
during May, as reported by the F. W . D odge
Corporation for 37 states east of the R ocky
Mountains, was larger than in any previous
month, and awards during the first half of
PER CENT
June exceeded those for the corresponding
period of last year. Indicated production of
winter wheat, as reported by the Department
of Agriculture on the basis of June 1 condition,
is 512 million bushels— 40 million bushels less
than the harvested production of 1927.
Trade. Distribution of merchandise, both at
wholesale and at retail, was in larger volume in
May than in April. Making allowances for cus
tomary seasonal influences, sales in all lines of
wholesale trade showed increases, although in
most lines they continued in smaller volume
than a year ago. Department store sales were
larger than in April, and at about the same level
as a year ago, while sales of chain stores and
mail order houses showed increases both over
last month and over last year. Volum e of
freight carloadings increased further during
May, but continued smaller than during the
corresponding month of either of the two pre
vious years. Loadings of miscellaneous com
modities, however, which represent largely
manufactured products, were larger in May of
this year than in that month of any previous
year.
Prices. The general level of wholesale com
modity prices, as indicated by the Bureau of
Labor Statistics index, increased by more than
one per cent in May, standing at 98.6 per cent
of the 1926 average — the highest figure re
corded for any month since October, 1926.
There were increases in most of the principal
groups of commodities, but the largest ad-
PER CENT
)
>
100' \
r~
y
— WITH SEASONAL ADJUSTMENT
— WITHOUT ADJUSTMENT
50Wrj924
1925
1926
1927
I N D U S T R I A L P R O D U C T IO N
Index number of production of manufactures and minerals combined,
adjusted for seasonal variations (1923-1925 average = 100).
Latest figure. M ay, 109.
1928 ~W
B U IL D IN G C O N T R A C T S A W A R D E D
Federal Reserve Board’ s indexes of value of building contracts awarded
as reported by the F . W . Dodge Corporation (1923-1925 average
= 100). Latest figures, M ay, adjusted index 152;
unadjusted index, 163.
42
M O N T H L Y R EVIEW OF BUSINESS CONDITIONS
vances in May, as in April, occurred in farm
products and foods. Contrary to the general
trend, prices of pig iron, hides, raw silk, fer
tilizer materials, and rubber showed declines
during the month. Since the middle of May,
there have been decreases in prices of grains,
hogs, sheep, pig iron, and hides, while prices
of raw w ool, non-ferrous metals, lumber, and
rubber have advanced.
W H O L E S A L E P R IC E S
Index of United States Bureau of Labor Statistics (1926 prices=*100,
base adopted by Bureau). Latest figure, M ay, 98.6.
Bank Credit. Loans and investments of
member banks in leading cities on June 20
showed a decline from the high point which
was reached on May 16. Loans on securities,
which had increased by more than one billion,
200 million dollars since May, 1927, declined
200 million dollars; while all other loans, in
cluding loans for commercial and agricultural
purposes, increased somewhat. There was a
June, 1928
small increase in total investments. During the
four weeks ending June 20, there were with
drawals of nearly 75 million dollars from the
country’s stocks of gold, and the volume of
reserve bank credit outstanding increased
somewhat, notwithstanding a decline in mem
ber bank reserve requirements. Member bank
borrowing at the reserve banks continued to
increase and early in June exceeded one billion
R ESE R VE B A N K C R E D IT
Monthly averages of daily figures for 12 Federal reserve banks.
Latest figures are averages of first 22 days in June.
dollars for the first time in more than six years.
Acceptance holdings of the reserve banks de
clined considerably, while there was little
change in their holdings of United States g ov
ernment securities.
After the middle of May, firmer conditions in
the money market were reflected in advances
in open market rates to the highest levels since
the early part of 1924.
T W E L F T H F E D E R A L R E S E R V E D IS T R IC T C O N D IT IO N S
General business in the Tw elfth Federal R e
serve District was seasonally more active dur
ing May and early June than in April and
volume of production and trade approached the
levels of one year ago.
The 1928 agricultural season has progressed
satisfactorily thus far, due to favorable weather
and market conditions in most regions of the
district.
Seasonal increases in industrial activity were
reported during May, and industry generally
operated at levels about the same as or slightly
below those of a year ago. Considerable unem
ployment of unskilled laborers and building
crafts tradesmen was reported, but increased
labor demands of agriculture and of the food
packing and w ood manufacturing industries
helped to relieve the situation. Figures of value
of building permits issued during the month
indicated a continuance of the downward trend
in building activity, which has been apparent
in this district since 1925. Further im prove
ment was noted in the condition of the lumber
industry. Regulation of production continued
satisfactorily and lumber output was exceeded
both by mill shipments and by orders received,
with a consequent reduction in mill stocks and
increase in unfilled orders. The metal mining
industry was active during the month. Some
stability of output was maintained and prices
strengthened as demand increased.
Distribution and trade increased in total
volume during May. Comparison with M ay a
year ago is complicated by the fact that there
was one more business day in May, 1928, than
in May, 1927. If allowance be made for this
difference, it appears that distribution and trade
have recently proceeded at about the same rate
as in May, 1927. Total monthly sales at whole
sale, sales of new automobiles, and carloadings
increased seasonally to a greater extent than
did sales at retail.
Despite a decline during recent weeks, the
general level of com m odity prices was higher
than in April, 1928, and May, 1927, largely be
cause of price advances for farm products.
During May, credit demands arising from the
needs of those engaged in agricultural and com
mercial pursuits, were smaller than one month
and one year ago. Bank loans on securities and
bank investments, however, continued to ex
pand. Borrowing at the Reserve Bank likewise
increased. Interest rates hardened during the
month and the rediscount rate of the Fed
eral Reserve Bank of San Francisco was ad
vanced from 4 to 4
per cent on June 2, 1928.
J u n e, 1928
fe d e r a l rese rv e a g e n t a t san fra n c isc o
Agriculture
W eather conditions during May and early
June were generally favorable for the develop
ment of grow ing crops in the agricultural areas
of the Tw elfth Federal Reserve District. In
the “ dry farming” regions of eastern Oregon
and W ashington and northern Idaho, however,
some crops (principally grains) suffered from
lack of rainfall during May.
The United States Department of A gricul
ture’s forecast of winter wheat production in
this district, made as of June 1, was 78,928,000
bushels, a decrease of 3.5 per cent from the May
first forecast. There are 3,687,000 acres of winter
wheat to be harvested this year. Last year
87,458,000 bushels of winter wheat were har
vested from an area of 3,631,000 acres, the yield
per acre being unusually high. Comparative
figures of production and condition of winter
wheat follow : W I N T E R w h e a t
/--------- Condition----------\ »------Production------- ^
(Per cent of normal)
(in thousands of bushels)
June 1,
Forecast
Actual
1928
1927 1918-1927 June 1,1928
1927
Average
93
90
1,206
1,450
A r iz o n a ............................. 90
C a lifo rn ia ........................ 84
88
80
15,114
13,642
I d a h o .................................. 85
91
90
9,690
12,274
100
95
122
120
N e v a d a .............................. 98
O r e g o n .............................. 89
88
90
17,598
23,400
U ta h .................................... 93
94
90
3,164
2,888
W a s h in g t o n ..................... 84
89
84
32,034
33,684
T w e lfth D i s t r i c t ...................................................
78,928
87,458
72.2
78.2
512,252
552,384
U n ite d S t a t e s ................. 73.6
S ou rce:
U n it e d S ta tes D e p a r tm e n t o f A g r ic u ltu r e .
Condition figures as of June 1 for the prin
cipal spring sown grains of the district are
shown in the follow ing ta b le:
C O N D I T I O N O F S P R IN G S O W N G R A I N S
(Per cent of normal)
Spring Wheat
Oats
June 1,
June 1,
1928 1927 1928
1927
A r i z o n a ............................................... 90
88
C a l i f o r n i a ................................... ........ 88
86
I d a h o ...................... 87
94
86
93
N e v a d a ................... 93
95
98
95
O r e g o n ................... 83
87
87
93
U ta h ........................ 94
93
95
91
W a s h in g t o n .......... 84
82
85
86
U n ite d S tates . . . 79.0 86.8 78.3 79.9
S ource:
Barley
June 1,
1928 1927
90
90
84
86
86
94
95
95
88
87
93
92
83
87
82.7 81.5
Rye
June 1,
1928
1927
85
93
88
94
91
67.9
92
90
92
87.6
U n ite d S tates D e p a r tm e n t o f A g r ic u ltu r e .
The condition of the apple crop in the dis
trict is, on the whole, better than in 1927, as
indicated by recent figures published by the
United States Department of Agriculture.
A P P L E P R O D U C T I O N - T W E L F T H D IS T R I C T
Condition
Commercial Production
(Per cent of normal)
(In thousands
(------- June 1, -------^
of bushels)
1928
1927
1926
1927
1926
A r iz o n a .................................... ..60
55
78
30
33
C a lifo rn ia ............................... ..89
58
79
4,656
6,144
I d a h o ......................................... .80
81
80
5,400
2,775
N e v a d a .................................... ..75
55
70
O r e g o n .................................... .80
67
90
2,925
5,250
U ta h ......................................... .86
83
88
402
480
W a s h in g t o n ........................... 85
64
82
22,302
25,950
T w e lft h D i s t r i c t .....................................................
35,715
40,632
U n it e d S ta tes ..................... ..72.2
57.2
78.3
77,700
117,357
Deciduous fruits in California are reported to
have developed satisfactorily during May and
early June. Current production estimates and
condition figures indicate larger yields of all
43
of the principal fruits, except prunes and apri
cots, during 1928 as compared with 1927. As
always, however, weather and market condi
tions during the next few months will be im
portant factors in determining the volume of
the deciduous fruit crop to be harvested this
year.
d e c id u o u s f r u it s a n d n u t s
(California)
Condition
Production
(Percent
(In thousands
of normal)
of tons)
June 1,
Forecast Actual
1928 1927 June 1,1928 1927
70
65
...
12
55
61
173
208
62
47
...
12
100
87
...
1,443
96
88
...
348
96
92
...
473
A lm o n d s ..................
A p r ic o t s ....................
C h erries ....................
R a isin G r a p e s ____
T a b le G ra pes ____
W in e G ra p es ____
P e a ch e s
( C l i n g s t o n e ) ...........................
P e a ch e s
( F r e e s t o n e ) .............................
79
68
P e a rs .........................
P lu m s ........................
83
67
P ru n e s ......................
71
74
W a ln u ts ....................
63
95
Sou rce:
Bearing Acreage
1928
1927
92,159
84,445
85,314
80,710
12,641
11,521
341,725
346,985
141,133
144,524
173,691
167,019
395
322
83,959
74,299
207
226
71
167
...
170
181
57
190
42
69,581
62,521
34,875
172,006
83,252
67,637
56,515
33,458
165,161
75,307
C a lifo rn ia C ro p R e p o rt.
The Navel and Valencia orange crops in Cali
fornia are reported to be in much better condi
tion than a year ago at this time. The California
Crop Reporting Service estimated the condition
of the combined crop on June 1 as 95 per cent
of normal, which may be compared with a con
dition of 79 per cent of normal reported a year
ago. Similarly, the condition of the lemon crop
in California is 87 per cent of normal as com
pared with 76 per cent a year ago. Shipments of
oranges and lemons from California totaled
5,477 and 1,753 carloads, respectively, during
May, 1928. There were 6,657 carloads of oranges
and 1,971 carloads of lemons shipped during
May, 1927. Prices for California oranges and
lemons (f. o. b. shipping point) averaged ap
proximately 21 per cent and 47 per cent higher,
respectively, during the November, 1927-June,
1928, period than during the same period a year
ago.
Generally satisfactory reports concerning the
condition of ranges and livestock have been re
ceived from the livestock industry of the dis
trict. Prices have been at comparatively high
levels during recent months. Receipts of cattle
at eight principal markets during the first five
months of 1928 totaled 347,756 head as com
pared with 396,998 head received during the
same period a year ago. Prevailing high prices
for breeding stock during the past two years
have tended to discourage restocking of herds,
and this tendency may now be affecting the
volume of marketing. A normal calf crop, with
light losses, has been reported from range areas
of the district.
The early spring lamb crop in Idaho, Oregon,
and Washington is estimated to be approxi
mately 5 per cent larger in number than a year
ago. The movement of California spring lambs
to eastern markets, now almost completed, has
been the largest in recent years. During the
last weeks of the movement this year, the pro
44
M O N T H L Y R EVIEW OF BUSINESS CONDITIONS
portion of market receipts sold for “ feeders”
rather than for slaughter increased, reflecting
the poor range conditions which existed in
California during April.
C A L I F O R N I A S P R IN G L A M B S H IP M E N T S
TO EASTER N M ARKETS
March 15 - June 15
Live
Dressed
Total
1928
373,996
57,687
431,683
1927
339,600
56,000
395,600
1926
227,000
59,019
286,019
1925
280,000
75,000
335,000
1924
none*
195,352
195,352
1923
256,358
25,000
281,358
35,000
265,000
1922 ......................................... 230,000
*S h ip m e n ts o f liv e la m b s p r o h ib ite d b e c a u s e o f p r e s e n c e o f fo o t
a n d m o u th d isea se in th e state.
M ost of the w ool clip of the district has been
sold on contract and is now m oving to ware
houses both in the district and in Eastern stor
age centers. Prices paid growers this year have
generally averaged about six cents per pound
above those of a year ago, and have ranged
from 32 to 42 cents per pound according to
grade of w ool and time and place of sale.
Industry
Daily average volume of industrial produc
tion in the Tw elfth Federal Reserve District,
is estimated to have been greater during May,
1928, than during April, 1928, but smaller than
during May, 1927. The April-to-M ay increase
INDEX NUMBERS
C A R L O A D IN G S O F “ O T H E R T H A N M E R C H A N D IS E A N D
M I S C E L L A N E O U S F R E I G H T ” — T W E L F T H D IS T R I C T
Index adjusted for seasonal variation; 1923-1925 daily average=100.
Latest figure, M ay, 111.
was not so great as that which usually occurs
at this season of the year. Shipments of indus
trial commodities increased by more than the
usual seasonal amount during May and were
larger than a year ago, a reflection chiefly of in
creased shipments of lumber and forest prod(A ) Industry—
ucts. This bank’s index of daily average rail
way carloadings of other than merchandise and
miscellaneous freight advanced from 104 (19231925 daily average=100) in April to 111 in
May. A year ago, the index stood at 110.
Seasonal expansion in agricultural and in
dustrial operations during May helped to re
duce the number of unemployed in the district,
although a surplus of unskilled and semi-skilled
laborers and of building trades craftsmen was
still reported. Increased activity in food can
ning and packing plants and other food prod
ucts industries, in w ood manufactures, in water,
light and power plants, and in a group of small
miscellaneous industries, brought employment
in these fields to higher levels than a year
ago. The increases were relatively slight, how
ever, and were more than offset by decreases
in other industrial groups. Available reported
data indicate that the total number of workers
on industrial payrolls of the district during
May, 1928, was perhaps 5 per cent smaller than
in M ay of last year.
The downward trend in value of building
permits granted in 20 principal cities of the
Twelfth District, which has persisted since
1925, continued during May, and cumulative
figures for the first five months of 1928 were
smaller than during the same period of any
year since 1921. As compared with last year,
the reduction amounted to 16 per cent. The
reported 4.5 per cent reduction in value of per
mits granted in May as compared with April,
1928, was partly seasonal in character.
In the seven western states comprising the
Twelfth Federal Reserve District the value of
contracts awarded for heavy construction and
engineering projects declined during May,
1928. The figures for this type of construction,
as reported by The Engineering-News Record,
were 26.4 million dollars during May, 1928,
(B ) E m ploym ent—
'
Industries
A ll Industries...........
S to n e , C la y and
G lass P r o d u c t s .
L u m b e r and W o o d
M a n u fa ctu re s . .
Indexes of daily average production, adjusted for seasonal variation.
=100)
M anufactures:
F lo u r .....................................
S la u g h te r o f L iv e s t o c k
L u m b e r ................................
C e m e n t ..................................
W o o l C o n s u m p t io n . . . .
M in e r a ls :
P e t r o le u m (C a lifo r n ia ) f
C o p p e r (U n it e d S ta te s ) $
L e a d ( U n it e d S ta te s ) $ .
S ilv e r (U n it e d S t a t e s ) $
M is c e lla n e o u s :
M ay
99
98
101*
143
110
-1 9 2 8 —
Apr.
119
105
102
148
112
77
M ar.
118
105
106
147
110
65
1927
M ay
112
104
107
148
116
101
96
110
100
87
92
103
100
86
93
101
109
92
95
107
113
90
111
1040
1050
110
*P r e lim in a r y . f N o t a d ju s te d fo r s e a so n a l v a r ia tio n . { P r e p a r e d
b y F e d e ra l R e s e r v e B o a rd . § O th e r than M e r ch a n d is e and
M is c e lla n e o u s . ^ R e v is e d .
June, 1928
C lo th in g , M illin e ry
a n d L a u n d e rin g .
F o o d s , B e v e ra g e s
and T o b a c c o . .
W a te r , L ig h t an d
P o w e r .................
O th e r I n d u s t r ie s f.
M is c e lla n e o u s
....
-California-----— Oregon ..........—\
N o . of
N o . of
N o. r~ Employees —>
N o.
t— Employees —>
M ay,
M ay,
of
of
May,
M ay,
1927 Firms
Firms 1928
1928
1927
157
786 150,598 157,961
27,189
27,506
( - 4 .7 )
( -1 .2 )
7,336
149
8,081
3
48
258
( — 9 .2 )
( — 4 2 .2 )
17,427
61
17,690
125 26,972 26,762
(0 .8 )
(1 .5 )
12
19
2,481
2,799
2,046
2,066
( — 1.0 )
(:— l i . o )
469
9*
445
7,660
61
7,676
( 0 .2 )
(5 .4 )
1,479
41
27,033
1,555
169 27,328
(— 4.9)
(1 .1 )
7,921
7,516
5
(5 .4 )
344 68,643
75,915
( — 9.6)
5,755
5,356
2,195
31
2,231
15
(— 6.9)
(1 .6 )
* L a u n d e r in g o n ly , t ln c l u d e s th e f o llo w in g in d u s t r ie s : m eta ls,
m a c h in e r y and c o n v e y a n c e s ; le a th e r a n d r u b b e r g o o d s ;
ch e m ic a ls , o ils a n d p a i n t s ; p r in tin g and p a p e r g o o d s .
F ig u r e s in p a re n th e se s in d ic a te p e r c e n ta g e c h a n g e s fr o m M a y ,
1927.
June, 1928
compared with 35.8 million dollars during May,
1927, and 31.0 million dollars during April,
1928. Cumulative value figures of contracts
awarded in this district during the first five
months of 1928 amount to 135.8 million dollars
compared with 153.8 million dollars for the
January 1-June 1, 1927, period, a decrease of
nearly 12 per cent.
Improvement in the lumber industry has
been a noteworthy feature of the first half of
1928, and has had a favorable effect upon the
business situation in this district. Although
activity of Pacific Coast lumber mills has
shown an upward trend thus far in 1928, con-
L U M B E R P R O D U C T I O N - T W E L F T H D IS T R I C T .
1923-1925 daily average = 100. Latest figures, M ay, adjusted, 101
(preliminary), unadjusted, 106.
structive efforts to keep production within the
limits of demand have been successful to the
extent that shipments have exceeded cut of
lumber by a considerable margin, and stocks at
mills have been materially reduced. Orders re
ceived by mills reporting to the four associa
tions in the district have exceeded both ship
ments and production, and unfilled orders early
in June were larger than at the beginning of
1928. These factors in the current situation
have all contributed to the higher prices for
lumber now being quoted. The index of soft
w ood lumber prices in the United States computedbyThe Lumber Manufacturer and Dealer
advanced to 28.5 in May as compared with 27.9
in April and 30.7 in May, 1927. The demand for
lumber arising outside this district has been
active in recent months and both rail and water
shipments have been heavy.
The increased flow of crude oil from Long
Beach wells during recent weeks has more than
offset the voluntary restriction of output in
other oil producing sections of California and
daily average production of petroleum during
May, 1928, was at the highest rate since Sep
tember, 1927. This bank’s index of California
petroleum production advanced to 96 (19231925 daily average=100) in May, compared
with 92 in April, 1928; 95 in May, 1927; and 96
in September, 1927. Combined surface stocks
of heavy and light crude oil have continued to
decline and amounted to 114,764,848 barrels on
May 31, compared with 115,175,716 barrels on
December 31, 1927.
45
FEDERAL RESERVE AG EN T A T SAN FRANCISCO
A more or less natural economic allocation of
production among the lower-cost copper pro
ducers has resulted in a certain stability of out
put of that metal during the past year. Con
currently there has been a growth in foreign
and domestic demand for copper and prices
have strengthened. Quotations for electrolytic
copper at New York City, as reported by Min
ing and Engineering Journal, averaged 14.203
cents per pound in May, compared with 13.986
cents per pound in April, and 12.621 cents per
pound a year ago. Copper was quoted at 14,525
cents per pound on June 13, 1928.
Output of flour, which during 1928 has been
well above the average of recent years, decreased
sharply during May. This bank’s seasonally
adjusted index of flour production, based on the
operations of 19 mills of the district, declined to
99 (1923-1925 monthly production=100) in
May, compared with 119 in April, 1928. A year
ago the index stood at 112.
Continued active domestic demand has
tended to place Twelfth District flour prices
above an exporting basis, according to trade
reports, so that in May, as in April, there was
little flour shipped to foreign markets. Demand
for flour was not so active in May as in April,
however, and prices were reduced.
A V E R A G E F L O U R P R IC E S A T T W E L F T H D IS T R I C T M IL L S
(Dollars per barrel)
First Grade
Family Patent
M ay,
A p r., M ay.,
1928
1928
1927
$8.90
$9.15
$8.65
M ay,
1928
$8.85
First Grade
Bakers Patent
A p r., M ay,
1928
1927
$9.10
$8.20
Straight Grade Export
(Soft Wheat)
M ay, A p r.,
M ay.
1928
1928
1927
$6.35
$6.70
$6.65
Distribution and Trade
The volume of distribution and trade in the
Twelfth Federal Reserve District increased by
more than the usual seasonal amount during
May, 1928, and approximated that of a year ago
(allowance being made for the additional trad
ing day in May of this year). Excepting San
Francisco and interior central California, im
provement in trade was general throughout the
district. Total volume of wholesale and retail
sales was greater during May, 1928, than in
either May, 1927, or April, 1928, but the num
ber of carloadings, although seasonally larger
than in April, 1928, was smaller than in May,
( C) Distribution and Trade—
C a rlo a d in g s , T o t a l f ........................
C a rlo a d in g s , M e r ch a n d is e and
M is c e lla n e o u s f ...............................
S ales at W h o l e s a l e ! ........................
Sales at R e t a i l f ..................................
S to ck s , R e ta il § ..................................
S t o c k T u r n o v e r , R e ta il If...............
C o lle c tio n s , R e ta il f[
R e g u l a r ..............................................
I n s ta llm en t ....................................
,---------------1928----------------■>
1927
M ay
Apr.
M ar.
M ay
t--------------Index N u m bers*-1 >
110
1080
1080
114
109
101
114
109
1120
92
123
104
1110
98
114
111
118
96
113
107
t------------ Actual Figures-------------0.24
0.24
0.24
0.23
47.4
14.6
45.5
15.7
47.0
15.4
43.9
15.5
* A d ju s t e d f o r se a so n a l v a r ia tio n , 1923-1925 a v e r a g e = 1 0 0 . f D a i l y
a v e ra g e . { M o n t h ly to ta ls o f e le v e n lines c o m b in e d . § A t en d
o f m o n th . ^ P r o p o r t io n o f a v e r a g e s to c k s so ld d u r in g m o n th .
j|Per c e n t o f c o lle c t io n s d u r in g m o n th to a m o u n t o u t s t a n d
in g at first o f m o n th . O R evised.
46
M O N T H L Y REVIEW OF BUSINESS CONDITIONS
1927. The decrease in carloadings, as com
pared with last year, was the result chiefly of
smaller loadings of merchandise and miscel
laneous freight in California.
D IS T R I B U T I O N A N D T R A D E - T W E L F T H D IS T R I C T
Indexes adjusted for seasonal variation. 1923-1925 average = 100. Daily
average figures of department store sales and railway carloadings
of merchandise freight. Monthly figures of sales at wholesale.
Sales of new automobiles have increased
rapidly in all parts of the district during recent
months, and the number of sales in May, 1928,
was approximately the same as in May, 1927.
Examination of the chart on page 48 indicates
that the volum e of sales during May approxi
mated the average monthly sales of recent
years.
R E T A I L T R A D E —Twelfth District
,--------- N E T S A L E S *---------Jan.1 to
M ay 31,1928.
M ay, 1928,
compared with
compared
Jan. 1 to
with
M ay 31,1927
M ay, 1927
2.2
( 61)
D e p a r tm e n t S t o r e s f . • •
4.1 ( 61)
— 0.6 ( 2 7 )
A p p a r e l S to r e s ............
7.0 ( 2 7 )
— 3.1 ( 4 1 )
F u rn itu r e S to r e s .......... — 0.8 ( 4 1 )
1.4 (1 2 9 )
A ll S to r e s ........................
3.7 (1 4 2 )
ST O C K S*
M ay, 1928,
compared
with
M ay, 1927
0.6 (4 8 )
— 4.3 (1 5 )
— 5.6 (2 5 )
— 1.5 (8 8 )
-).
F ig u r e s in p a re n th e se s
* P e r c e n ta g e in c re a se o r d e c r e a s e (■ .
f ln c l u d e s d r y g o o d s
in d ica te n u m b e r o f s to re s r e p o r tin g ,
s tores.
Sales of 142 retail department, dry goods,
specialty, apparel, and furniture stores, when
reduced to a daily average basis, were slightly
(D ) B ank D ebits* —
M ay,
M ay,
1927
1928
12,517
,$
13,888 $
B a k e r s fie ld
9,619
10,566
B e llin g h a m
20,312
21,958
B e r k e le y
............
11,299
14,675
B o i s e ......................
8,401
8,357
E u g e n e .................
13,770
13,543
E v e r e t t .................
32,198
35,380
F r e s n o .................
50,231
58,409
L o n g B ea ch . . ,
882,385
L o s Angeles . .,. 1,164,699
213,981
252 ,824
O a k la n d ............ .,
13,582
15,806
O g d e n ................
40,828
43,691
P a sa d e n a ...........
28,721
36,871
P h o e n ix ............
179,868
P o r t la n d ............ .
2 0 1 ,1 3 6 t
9,527
9,167
R e n o ....................
774
920
R it z v ille ............ ..
38,637
47,393
S a c r a m e n to . . .
66,953
71,055
Salt Lake C ity.
11,690
10,813
S an B e r n a rd in o
55,732
65,874
San D ie g o . . . .
1,152,899
.
1,791,817
San Francisco .
24,432
26,854
S an J o s e ..........
14,000
13,219
S a n ta B a rb a r a .
261,450
202,958
Seattle ............... .
50,327
56,126
Spokane ............
29,170
25,463
S tock ton
..........
43,487
45,838
T a c o m a ............
12,343
12,239
Y a k im a ..............
D is t r ic t ............ .$ 4 ,3 3 5 ,3 9 6
$3,225,276
$
t— First Five Months —
1928
1927
73,405
$
66,312
49,454
49,749
109,152
106,605
62,982
68,646
36,184
35,403
62,752
63,357
193,775
168,052
254,429
272,505
4,821,743
5,376,869
1,105,545
1,258,523
87,479
83,849
216,073
216,979
141,051
175,535
822,080
8 2 8 ,0 9 3 t
43,394
43,911
3,839
4,623
155,183
238,766
340,271
363,807
50,871
52,790
321,595
318,345
5,999,478
7,787,510
135,023
127,548
69,407
67,083
1,213,194
1,018,295
278,361
270,313
144,492
132,605
224,851
223,514
62,662
61,337
$19,717,859
$16,841,790
*000 om itte d , f ln c l u d e s a p ro rata o f $15,510 ,00 0 r e p o r te d fro m
fo u r n ew r e p o r tin g b a n k s in P o r tla n d fo r m o n th o f M a y .
June, 1928
larger during May, 1928, than during May,
1927. All reporting lines, except furniture,
showed increased sales as compared with a year
ago. Stocks of these stores decreased more than
seasonally during the month and were approxi
mately 2 per cent smaller than one year ago.
Stock turnover was more rapid during May of
this year than during May, 1927, and collections
generally were reported as more satisfactory
this year than last.
Total monthly sales of 242 firms in eleven
lines of wholesale trade increased 4.0 per cent
during May, 1928, as compared with May, 1927.
Principal increases were reported in agricul
tural implements, drugs, dry goods, electrical
supplies, groceries, hardware, and paper and
stationery. This bank’s seasonally adjusted
index of wholesale sales, based upon reports of
135 firms stood at 101 (1923-1925 monthly average=100) in May, 1928; 92 in April, 1928; and
96 in May, 1927. Stocks on hand were 1.8 per
cent smaller at the end of May this year than
at the end of May a year ago.
Prices
Advances in com m odity prices during the
first four months of 1928 brought the general
price level at the close of April to the highest
point reached since the autumn of 1926. There
followed declines in prices of many com m odi
ties, but they were not large enough to offset
the rather sharp advances that had occurred
late in April, and the wholesale price index of
the Bureau of Labor Statistics stood at 98.6
(1926 monthly average=100) for May, as com
pared with 97.4 in April.
Prices for farm products have advanced
rather sharply since mid-March, and in May
were again largely responsible for the rise of
the all-commodity index. As was true of the
general price level, however, farm prices
reached a peak at the close of April, and de
clines have occurred in prices of most farm
products since then. W ith the exception of this
peak, however, the present level of prices of
farm products is fully as high as at any time
since late in 1925.
Some of the more important products in
cluded in this movement during the past few
weeks are wheat, corn, barley, oats, rye, cotton,
sheep and hogs. O f these commodities, wheat,
barley, and sheep are especially important in
the Twelfth District, and trends of prices of
these commodities at district markets have been
similar to trends for the United States as a
whole.
W ool prices have advanced practically with
out interruption during the past year, and are
now approximately 20 per cent higher than in
June, 1927. Prices for cotton have been rela
tively steady since early in May at levels 25 per
cent above those of a year ago.
Quotations for cattle at Chicago recently
FEDERAL RESERVE AG EN T AT SAN FRANCISCO
June, 1928
have been slightly higher than in April or May.
Changes in prices paid for hogs, sheep, and
lambs coincided with movements in the gen
eral price level, a spring peak being reached at
the close of April, since when they have de
clined slightly. Such a movement in sheep and
lamb prices usually occurs at this season of
the year.
Non-ferrous metals prices continued to ad
vance during May, and, with the exception of
silver, during the first week of June. Softwood
lumber prices advanced during M ay and early
June.
Banking and Credit
Changes in the banking and credit situation
in the Twelfth Federal Reserve District during
May and the first half of June were reflected
chiefly in the loan accounts of city banks and
in the Federal Reserve Bank's holdings of bills
and securities. Reporting city member bank
loans on securities continued to expand, while
their commercial loans showed little change
during this period, although the volume of such
loans rose moderately during the first half of
June, partially offsetting a decline reported in
May. A n expansion of member banks' invest
ment portfolios accompanied an increase in
deposits, which was of larger proportions than
the increase of loans reported during May and
June. Increases in total loans and investments
of city member banks were reflected in condi
tion statements of the Federal Reserve Bank of
San Francisco which showed increases in dis
counts for these banks. Total borrowings from
the Federal Reserve Bank by banks in agricul
tural areas changed little during this period.
MILLIONS OF DOLLARS
3 0 0
\ /
FEDERAL RESERVE V
NOTE ClRCULATION
------------
.•
------------^
---200>
100> _
....
^
\
iL------------—
1924
1925
.
INVESTMENTS
BILLS DISCOUNTE:d
...................... -_ J U ,
1926
(927
I92Ô
V
-,
R E S E R V E B A N K C R E D I T -T W E L F T H D IS T R I C T
Monthly average of daily figures. Latest figures are averages for
first two weeks in June.
From October, 1927, to May, 1928, the
volume of commercial loans at city member
banks showed only moderate seasonal changes,
recording a net gain for the period of less than
one per cent. During the same period, the
volume of loans on securities extended by these
banks increased 12 per cent. The trend of their
borrowings from the Federal Reserve Bank was
generally upward, and since the first of this
47
year the cost of such borrowing has been in
creased by successive raises in the Federal R e
serve Bank's rediscount rate. The rate was first
advanced from 3}4 to 4 per cent on February
4th and then from 4 to Ay2 per cent on June 2nd.
The Federal Reserve Bank's holdings of United
States Government securities have been steadily
reduced during this period (as have the hold
ings of the Federal Reserve System as a whole)
and stood at 17 million, 238 thousand dollars on
June 13th, compared with 46 million, 76 thou
sand dollars on January 4, 1928.
R E P O R T IN G M E M B E R B A N K S * — Twelfth District
(In millions of dollars)
Average Condition During Month
June,
M ay,
June,
1928t
1928
1927
T o t a l L o a n s an d I n v e s t m e n t s .................
1,983
1,972
1,817
T o t a l L o a n s .....................................................
1,337
1,330
1,306
C o m m e rcia l L o a n s .......................................
958
954
968
L o a n s o n S e cu ritie s ....................................
379
375
337
In v e s tm e n ts ................................................ .. .
646
642
511
841
830
781
N e t D e m a n d D e p o s it s ...............................
T im e D e p o s it s ................................................
1,015
1,011
951
B o r r o w in g s fro m F e d e ra l R e s e r v e
B a n k .................................................................
62
58
30
* T o t a l r e s o u r c e s o f r e p o r t in g b a n k s are a p p ro x im a te ly 46 p e r
c e n t o f total r e s o u r c e s o f all b a n k s and 62 p e r c e n t o f to ta l
r e s o u r c e s o f all m e m b e r b a n k s in the T w e lft h F e d e ra l R e
s e rv e D is t r ic t . R e p o r t in g b a n k s e m b r a c e m e m b e r b a n k s an d
b r a n c h e s lo c a te d o n ly in L o s A n g e le s , S an F r a n c is c o , O a k
lan d, P o r tla n d , T a c o m a , S ea ttle, S p o k a n e , S alt L a k e C ity,
and O g d e n .
fP r e lim in a r y — in c lu d e s first tw o r e p o r ts o f
J u n e o n ly .
During the first quarter of 1928, sales of
securities by the Federal Reserve Bank of San
Francisco were more than offset by increases in
its holdings of discounted bills and of accep
tances ; total earning assets increased during
this quarter, averaging higher in March than
in any other month since October, 1926. It
should be pointed out in this connection that
purchases of acceptances by reserve banks are
made only at the request of acceptance dealers
and at a rate established by the reserve banks.
During April, May, and June, earning assets of
the Reserve Bank tended downward. Total
holdings of bills and securities declined from
an average of 122 million dollars for the month
of March to 109 million dollars for May. R e
duction of the bank’s earning assets continued
during the first weeks of June. United States
Government securities were sold. H oldings of
bills bought in the open market commenced to
decline, in response to seasonal influences as
well as to increases in buying rates on accep
tances. B orrowing of city member banks from
the Federal Reserve Bank of San Francisco
continued upward during the first two weeks
of June, but a marked falling off in such bor
rowings was later reported.
F E D E R A L R E SE R V E B A N K O F S A N F R A N C IS C O
(In millions of dollars)
Average Condition During Month
June,
M ay,
June,
1928*
1928
1927
T o t a l B ills and S e c u r it ie s ......................
104
109
97
B ills D is c o u n t e d .........................................
68
64
40
B ills B o u g h t ..................................................
19
25
17
U n ite d S ta tes S e c u r i t i e s ........................
17
20
41
T o t a l R e s e r v e s ..............................................
272
260
269
T o ta l D e p o s its ...........................................
188
189
177
F e d e ra l R e s e rv e N o te s in C ir c u la tio n
168
158
175
* P re lim in a ry — a v e ra g e o f first 13 d a ys o f m on th .
S a le s o f N e w A u t o m o b i l e s in th e T w e lfth F e d e r a l R e s e r v e D i s t r i c t
The Division of Analysis and Research of the
Federal Reserve Bank of San Francisco has re
cently constructed a six-year series of monthly
index numbers of sales of new passenger auto
mobiles and of new commercial motor vehicles
in the Tw elfth Federal Reserve District. These
index numbers have been constructed from
monthly figures of new automobile registra
tions in the states of the district,* reduced to
daily averages and expressed as percentages of
1923-1925 daily average registrations, i. e., 19231925 daily average=100.
The figures of automobile registrations upon
which the indexes are based show the number
of new cars actually delivered to purchasers,
delivery usually being made a few days before
registration. The indexes may, therefore, be
accepted as a reliable record of fluctuations in
the number of automobiles sold and delivered
from month to month in the Tw elfth District.
T hey should not, however, be interpreted as
representing orders placed, which may at times
vary considerably from deliveries.
Since automobile registrations are subject to
considerable seasonal variation, indexes ad
justed for seasonal movements have been com
puted. (Seasonally adjusted indexes are shown
in the accom panying chart). These indexes ap
pear to reflect with some fidelity changes in the
income and purchasing power of the district.
The c harted figures reflect the upturn in busi*Sources of data —
Registrations in
Reported by
A r i z o n a ............ R ecord Reporter Recap.
California . . . .M o to r Registration N ew s
Idaho ................ Autom otive Statistical
Service
O regon ............ M otor R egister
U tah
................. Secretary of State
W ashin gton . .M otor Register
Address
Phoenix, Ariz.
O akland, Calif.
Boise, Idaho
O regon M otor
Register Co.,
Portland, Ore.
M r. H . E . Crockett,
Secretary of State,
Salt Lake City, Utah
M otor L ist Company,
Seattle, W ash .
ness in 1922, the maintenance of industry and
trade at relatively high levels in 1923, the
slackening of general business activity in 1924,
the recovery of 1925, and the sustained activity
of 1926 and the early months of 1927. Through
out 1927, and particularly after M ay of that
year, the number of cars registered, both pas
senger and commercial, declined. This decline,
although reflecting a moderate recession in gen
eral business activity, was due chiefly to the
sharp drop in national automobile production
caused by the complete cessation of output at
one large manufacturer’s plants during that
period. During the first five months of 1928,
sales of both new passenger cars and new com
mercial vehicles have increased rapidly in the
Twelfth District. Business recovery has been
evident during this period, but probably the
most important factor contributing to the in
creased volume of sales, at least, of new pas
senger cars, has been the delivery of cars on
orders which had accumulated during preced
ing months of curtailed production.
Comparison of the indexes with other avail
able indexes of industry and trade in the dis
trict shows that registrations of new com m er
cial vehicles tend to fluctuate with industrial
activity and registrations of new passenger cars
with changes in the volume of trade. These
tendencies are explained, in part at least, by
the essential difference between the purpose or
use of the two types of automobile. The com
mercial vehicle finds its use in the productive
and distributive activities of the district. The
passenger car (excluding busses and taxicabs
which, with trucks and trailers, are included
with commercial m otor vehicles) is used largely
for pleasure purposes, and consumer purchas
ing power is the force controlling fluctuations
in its sales.
PER C E N T
R E G I S T R A T I O N O F N E W A U T O M O B I L E S — T W E L F T H D IS T R I C T
Indexes of daily average registrations of new passenger cars and new commercial motor vehicles adjusted for seasonal variation (1923-1925
daily average= 100). Latest figures are for M ay, 1928.
@FedFRASER