The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
Monthly
R eview
FEDERAL RESERVE B A N K OF S A N
FRA N C ISC O
A P R I L 1947
TWELFTH DISTRICT MEMBER BANK EA R N IN G S A N D EXPENSES— 1946
of Twelfth District member banks were closed at
the end of 1946 on another profitable year. Net profits
after taxes reached a new high, 13 percent above 1945
profits and about double annual profits in the years 194042. A markedly larger loan volume, a higher level of
security holdings for the year as a whole in spite of the
decrease during the year, and a slight increase in rates of
return on loans and securities, all contributed to the gain
in profits.
oo ks
B
Profit increase larger in District than in United States
Twelfth District member banks fared considerably
better than member banks in the country as a whole, in
large part because of the much more rapid loan expan
sion in this area. Net profits of all member banks declined
5 percent last year. Banks in major cities over the na
tion had a less favorable year than country banks, as the
earnings of larger city banks were more vulnerable to
the debt retirement program of the Treasury. Nationally,
net profits of central reserve and reserve city banks were
13 percent lower in 1946 than in 1945, but profits of
country banks rose 12 percent.
Within the Twelfth District, the gain in 1946 profits
of large banks over 1945 was far outdistanced by the
E a r n in g s a n d E x p e n s e s of M e m b e r B a n k s —
T w e l f t h D is t r ic t
profit increase of medium-sized and smaller banks. Mem
ber bank profits increased in each area of the District,
with the Intermountain states leading the way.
Loan increase major factor in larger total earnings
Total earnings of Twelfth District member banks in
creased from 1945 to 1946 by more than one-fifth, a gain
much larger than in any other recent year. The gain in
interest and dividends on securities was smaller, how
ever, than in any year since 1941, because of the reduc
tion throughout 1946 in Government security holdings
of member banks. In contrast, the increase in bank loans
raised earnings on loans bv a record 39 per cent.
Increased expenses led by increased wages and salaries
The increase in total expenses of member banks from
1945 to 1946 was also larger than in other previous
years. Especially pronounced was the 30 percent in
crease in total salary and wage payments. The largest
previous increase in salaries and wages occurred in 1945
when such payments increased 13 percent. Larger time
deposits resulted in some further increase in interest paid
on such accounts, and other expenses also increased.
Since total expenses increased by a smaller dollar
amount, but by almost exactly the same proportion as
total earnings, net current earnings increased by a simi
lar percent.
(millions of dollars)
Item
1940
Earnings on loans.................................. $104 .01
44.5
Interest and dividends on securities
Service charges on deposit accounts
8.5
Trust department earnings.................
6.8
15.81
Other e a r n in g s .......................................
Total earnings .............................
Salaries and w ages...............................
Interest on time deposits.................
Other expenses ....................................
Total expenses
.............................
N et current earnings
........................
1944
$ 94.7
111.8
14.2
8.9
19.2
1945
$ 99.6
138.4
14.8
10.2
22.7
1946
$138.6
153.9
17.5
12.3
25.7
179.6
54.5
31.4
43.42 3
248.8
74.6
29.7
51.3
285.7
84.4
39.3
56.6
348.0
109.3
44.9
65.2
129.32 3
155.6
93.2
180.3
219.4
105.4
128.6
+ 7.0
7.1
+ 0 .4
+ 9 .8
6.4
+ 0 .1
+ 5.1
4-3 .3
13.5
+ 0.3
+ 3.4
5.0
93.5
19.9
108.9
27.9
123.7
32.2
50.32 3
N et losses and charge-offs (recover
ies and profits + )
On securities .................................... + 11.1
8.53
On loans ..............................................
9.4
Other .....................................................
Total net charge-offs.................
N et profits before income t a x e s ...
Taxes on net incom e.............................
6.8
2
In 1946, net recoveries on loans succeeded the net
losses of previous years. Net recoveries and profits on
securities were somewhat smaller than in 1945, and
other net losses and chargeoifs were much larger. As a
consequence, the increase last year in profits before in
come taxes was smaller than the increase in net current
earnings.
Taxes, profits, and dividends increase
N et profits after taxes........................
43.5
73.6
80.9
91.5
Cash dividends .......................................
Undistributed profits ...........................
24.2
19.3
25.8
47.8
29.9
51.0
35.1
56.4
1 Service charges and fees on loans included in Other earnings.
2 Taxes on net income included in Other expenses.
3 Recurring depreciation on bank building and furniture and fixtures in
cluded in Other net charge-offs.
Losses on non-current account
Unlike concerns in other lines, District banks were
little affected by the repeal of the excess profits tax. In
1946, both taxes on net income and net profits after
taxes continued to rise.
District member banks paid out about 40 percent of
their profits in dividends. Although dividend payments
were larger in 1946 than in 1945, not all of the increase
in profits was distributed. Undistributed profits totaled
57 million dollars, compared with 50 million in 1945.
34
FEDERAL RESERVE BANK
Earnings, expenses, and profits by areas
Member banks in the various areas of the District had
somewhat differing experiences, as indicated in the ac
companying table. Compared with 1945 experience, Ore
gon and Washington banks were well ahead of those in
P ercentage
I ncreases
in
S elected
E a r n in g s
I t e m s of T w e l f t h D i s t r i c t M e m b e r B a n k s ,
Item
Calif.
35
Earnings on l o a n s ................................
Interest and dividends on securities 13
22
Total earnings .............................
Salaries and wages
Total expenses
.............................
.............................
N et current earnings
........................
N et profits before income taxes. . . .
Income taxes .........................................
N et profits after t a x e s ......................
Dividends .................................................
and
1945-46,
Oregon
and
W ash.
57
5
20
A reas
Arizona, Idaho All
Nevada, Utah areas
43
39
12
11
24
22
31
22
27
21
25
20
23
13
15
12
18
15
21
14
16
14
30
19
7
24
10
30
22
22
14
15
13
17
Over the period from 1943 through 1946, and particu
larly last year, the small District member banks increased
O ver
P r e c e d in g
Y ear
S elec ted E a r n in g s a n d E x p e n s e I t e m s of
33
15
or
Y ears
in
L arge1 a n d
S m a l l 2 T w e l f t h D is t r ic t M e m b e r B a n k s ,
Item
Total earnings
Large banks ...............
Small banks ..............
Total expenses
Large banks ...............
Small banks ...............
N et current earnings
Large banks ...............
Small banks ...............
N et profits after taxes
Large banks ..............
Small banks ..............
P ercentage
I ncreases
in
S elected
E a r n in g s
and
I t e m s of T w e l f t h D is t r ic t M e m b e r B a n k s ,
Small bank profits exceed those of large banks
I ncreases
their net earnings and net profits far more, relatively,
than did the largest banks. For both groups, expenses
have risen at an increasing rate since 1943.
Last year, profits of the smallest bank group were up
60 percent over 1945, but the 15 largest banks achieved
only an 8 percent increase.
E xpense
by
other areas in earnings on loans. This greater gain was
not reflected in total earnings, however; Northwest banks
realized only slightly more for their security holdings
in 1946 than in 1945. Increases in salary and wage pay
ments were smaller in the banks in the four inland states
than on the Pacific Coast.
With the largest increases in total earnings and the
smallest increases in total expenses, Arizona, Idaho, Ne
vada, and Utah banks as a group realized net profits
which, in the aggregate, were up 24 percent from 1945.
The relative increase in net profits of California, Oregon
and Washington banks was only about half as large.
P ercentage
April 1947
OF SAN FRANCISCO
1944-46
............ ! . . .
......................
1944
over
1943
13
21
1945
over
1944
14
19
......................
......................
8
13
15
16
23
17
52
54
......................
......................
22
47
11
25
18
64
60
202
......................
......................
32
22
10
19
8
60
57
133
1946
over
1945
21
31
1946
over
1943
55
88
JA11 District banks with deposits over $100 million in 1943.
2 A ll District banks with deposits under $1 million in 1943.
by
E xpense
1945-1946,
S iz e G roup
15 large
Item
banks 1
Earnings on loans ............ .................
37
Interest and dividends on securities 11
Total earnings .......... .................
21
Salaries and wages .......... .................
Total e x p e n s e s............ .................
. . . .................
N et current earnings
Net profits before income taxes. . .
Income taxes ...................... .................
N et profits after taxes . . .................
.................
31
23
33 small
banks 3
43
18
31
18
9
12
20
17
64
55
36
8
17
60
10
221 other
banks 3
47
13
24
24
18
36
31
27
33
14
All
banks
39
11
22
30
22
22
14
15
13
17
*A11 District banks with deposits over $100 million in 1943.
2A ll District banks with deposits under $1 million in 1943.
3 A ll District banks with deposits between $1 million and $100 million in
1943.
Loan earnings increased a little more in the small
banks than in large ones. Government security holdings
and total deposits were less affected by the drain from
Treasury war loan account and by public debt retire
ment, so that the percentage increase in interest and
dividends on securities was considerably larger in the
small banks.
Small banks also kept expenses down more success
fully than large banks, especially salaries and wages, the
major item of current expense. Income taxes increased
more sharply for the small and medium-sized banks than
for the larger institutions.
Despite the much greater increase in small bank profits,
those banks were less inclined than the large banks to
increase dividends, probably because ownership of the
small banks is held much more closely.
Prospects for 1947 earnings
Preliminary figures for the first months of 1947 indicate
that earnings on loans will be higher than in 1946, interest
and dividends on securities lower, and salary and wage
payments higher. Any conclusion, however, as to the net
effect of changes in these major earnings and expense
items on the behavior of so-called non-current earnings
and profits would be highly tentative.
REVIEW OF BUSINESS C O N D IT IO N S— TWELFTH DISTRICT
The price situation
Commodity prices were again in the forefront of dis
cussion during April. This was not because of any gen
eral tendency to further price increases, as in M arch; in
deed in a number of conspicuous cases the drift of prices
in April was sharply downward and most of the whole
sale indexes have receded definitely from the peak levels
of the previous month. The discussion has rather empha
sized the consideration that current prices are too high
in relation to consumer purchasing power and to the
efficient functioning of the economic system. Increasing
anxiety has been expressed that without early and sub
stantial price reductions consumers would be unable or
unwilling to buy, the demand for many kinds of goods
would dry up, and the deflationary spiral might be set
in motion.
April 1947
The rate of increase in the general level of commodity
prices over the past year has been without precedent in
this country. Wholesale prices as a group were in midApril nearly 40 percent above the level of a year pre
vious, and retail prices of goods important in the cost of
living advanced almost 20 percent within the same pe
riod. Most of the increase in both cases had occurred
since June 1946. The ability of the country to absorb such
large and rapid price advances without too serious a
strain on the basic economic relationships of employer
and wage earner, debtor and creditor, seller and buyer,
has been a remarkable demonstration of the flexibility
and essential soundness of the nation’s economy. Never
theless, the cumulative pressure of steadily rising costs
of living has put a severe burden on those whose incomes
have not kept pace with the rise in prices.
Price changes have varied as between different indus
tries and economic areas. Prices of foodstuffs and farm
products, of hides and leather, and of building materials,
increased during the past year much more than those of
most other important groups of commodities. Part of
this unevenness in the price structure is of course tempo
rary and arises chiefly from extraordinary conditions of
demand.
Widespread publicity was given in April to appeals by
the President and others in authority asking for volun
tary price reductions. These appeals were particularly
directed to manufacturing industry. They were seconded
by associations among wholesale and retail distributors
which emphasized the need for lower prices at the manu
facturing level and which called on their own members
to cut selling prices wherever possible. A considerable
measure of temporary response by individual retail con
cerns in scattered areas over the country followed these
appeals. Really significant price adjustments, however,
are unlikely to result from such episodes. Possibly more
indicative are certain recent cuts in producers’ prices of
a few major commodities. A few leading concerns in the
automobile and agricultural implement industries have
announced definite price reductions on some of their
lines. During April the composite price of a group of
basic agricultural commodities declined by about five per
cent. Prices of important fats and oils used in soapmaking and other industrial applications have recently fallen
from 15 to 30 percent. The last two weeks in April saw
announcements of corresponding cuts in soap prices at
both the wholesale and retail level. Similar reductions
are announced for kraft corrugated paper containers and
liner board.
Whether or not such scattered reductions become gen
eral depends upon a variety of factors. These include,
among others, the extent of foreign demands for goods,
the speed with which war-depleted inventories are replen
ished and war-deferred consumer demands are filled, the
size and extent of the current round of wage increases,
and government decisions as to changes in expenditures,
taxes and debt retirement.
35
M O N T H L Y REVIEW
Prospective plantings of chief crops
Data on prospective plantings for 1947 as of March 1,
1947 published by the Department of Agriculture give
the first opportunity for a tentative comparison of ac
tual 1946 acreages, 1947 goals, and indicated 1947 acre
ages for a number of important crops in the Twelfth Dis
trict. These data are presented in the following table :
t------------------------- Thousands of acres------------------------Crop
1946 actual
1947 goal
W inter wheat (April 1) . . .
4,994 1
f
1- 6,240
Spring wheat (M arch 1 ) . .
Barley .......................................
Beans, dry edible.................
Peas, dry e d i b le ....................
Flaxseed ..................................
Potatoes ....................................
1,246 J
2,853
436
459
120
418
[
1
i 6,200 \
J
2,813
556
409
177
378
Indicated 1947
4,936 ]
}- 6,354
1,418 J
2,873
471
481
160
329
The wheat and barley plantings in the Twelfth Dis
trict are slightly larger than either the 1946 actual or
1947 goal acreage. Dry edible beans plantings are higher
than 1946 plantings, but considerably short of the 1947
goal. A smaller goal for dry edible peas was not ob
served, but on the contrary, similar to past years, largely
overplanted. The goal acreage for flaxseed has not been
reached in the District. A new factor in the flaxseed pic
ture is greatly increased planting of flaxseed in Idaho
(5,000 acres), Oregon (8,000 acres), and Washington
(4,000 acres), which is probably a result of the increased
support price for this commodity.
Sugar-beet planting in the Twelfth District states is
close to the 1947 goal of 364,000 acres.
A welcome development in acreage refers to pota
toes, which were overplanted in 1946. The 1947 pro
spective plantings of 329,000 acres in the Twelfth Dis
trict are 21.3 percent smaller than the 1946 actual plant
ings and 13 percent smaller than the goal of 378,000
acres established for 1947. In California, early potatoes
acreage was 25 percent lower than in 1946.
Wheat
The 1947 production of winter wheat as indicated on
April 1, 1947 will amount to 973 million bushels,'or 99
million bushels more than the record crop of 1946 and
319 million bushels more than the 1936-45 average. In
the Twelfth District, however, indicated production will
be 117.5 million bushels as against 126 million bushels
in 1946, and 81.4 million bushels 1936-45 average. The
reason for this expected decline lies partly in somewhat
smaller acreage and partly in the lower yield expected as
a result of unfavorable weather conditions. The prospec
tive acreage under spring wheat in Idaho, Oregon and
Washington is, however, 1,331,000 acres compared with
1,155,000 acres in 1946. Considering the increased area
under spring wheat, the 1947 District wheat production
will probably be close to that in 1946.
The Kansas City spot price of wheat rose from $2.04
per bushel on January 2, 1947 to $2.92 on March 17.
Wheat prices in the country during the second half of
March 1947 were the highest on record, except for short
periods in 1917 and after W orld War I. Actual and pro
36
FEDERAL RESERVE BANK
spective exports of wheat for commercial and relief pur
poses, contributing also to large speculative buying, was
one of the chief reasons for this rise in price. By April
11, the Kansas City spot price was $2.74 per bushel.
Cifrus fruits
The April 1 forecast for the 1946-47 orange crop in
California predicts a huge total of 53,700,000 boxes
compared with 44,180,000 boxes in the 1945-46 crop
year. The forecast for Valencias is 34,000,000 boxes as
against 26,500,000 last year, and for Navels 19,700,000
boxes compared with 17,680,000. The picking of Navels
has been completed in most sections of Southern Cali
fornia and Arizona and the movement of Valencias be
gan in mid-April.
Total citrus fruit production for 1946-47 in the United
States is estimated, as of April 1, at 197,320,000 boxes
(oranges 119,960,000 boxes, grapefruit 62,490,000, lem
ons 14,700,000, and limes 170,OCX)). California and Ari
zona are expected to produce an estimated 45.8 percent
of the oranges and 12 percent of the grapefruit, while
California alone will produce the entire lemon crop.
The orange and lemon markets took a sharp turn down
ward at the end of 1946— a 55 percent drop in the price
April 1947
OF SAN FRANCISCO
of oranges and a 36 percent drop in lemons, between
December 7, 1946 and January 11, 1947. The trade ex
planation for this severe break in the market was large
shipments of oranges and lemons in the middle of Decem
ber, at a time when the market could not absorb large
quantities at the existing prices. While the price of lem
ons continued to decline until the first week of February,
oranges began to climb in mid-January and by the first
week of April had regained most of the earlier loss. One
factor in this recovery was a Florida freeze early in Feb
ruary, which destroyed an estimated eight million boxes
of fruit. In addition, weekly shipments of both oranges
and lemons were reduced during the period of unfavor
able prices. Orange shipments from California and Ari
zona, which had been 7,400 cars in December, were only
6,640 cars in January and 6,340 cars in February. With
the strong price recovery in March, shipments rose to
7,550 cars, but the price fell off again in April and the
Orange Administrative Committee again recommended
reduced shipments. Lemon prices recuperated between
February 8 and March 8 about two-thirds of their pre
vious loss, but experienced a considerable decline during
March. Lemon shipments were reduced during January,
but increased in February and March.
CO M M ERCIA L A N D IN DU STRIAL LO AN SURVEY— TWELFTH DISTRICT
o m m e r c ia l
and industrial loans of member banks in
Cthe Twelfth District amounted to an estimated $1,710
million on November 20, 1946. California banks account
ed for 67 percent of this total, Pacific Northwest banks
22 percent, and Intermountain banks 11 percent. Nearly
half of the loan volume was concentrated in the 21 larg
est banking offices of the District. Large manufacturing
concerns as a group were the heaviest borrowers, while
small retail establishments accounted for the greatest
number of loans. Over half of the dollar total represented
loans unsecured by the borrower, and one-third of the
loans were of more than a year’s duration. Commercial
and industrial loans, excluding real estate loans, were
$1,560 million on November 20, an increase of 44 per
cent over June 29, 1946.1
These estimates are drawn from tabulations of the
Commercial and Industrial Loan Survey which was con
ducted among member banks by the Federal Reserve
System on November 20, 1946.
Loan distribution among banks
The 21 banking offices in the District with deposits
ever $100 million held 45 percent of total commercial
and industrial loans on November 20, 1946, but only 17
percent of the number of loans. Banking offices included
in the next size group ($10-100 million) held 41 percent
JData on commercial and industrial loans secured by real estate are not
available for June 29, 1946.
of the dollar total and 50 percent of the total number of
loans. It was of course true in general that the larger the
banking office, the greater the number and amount of its
business loans outstanding; there were, however, a num
ber of interesting exceptions to this rule.
T a b le
1— E s t i m a t e d V o l u m e o f M e m b e r B a n k
C o m m e r c ia l
a n d I n d u s tr ia l L o a n s O u ts ta n d in g
N ovem ber
20
and June
29, 19461
(thousands o f dollars)
,-------- No>member 20,3L946-------- N
Bank
Branch
Unit
size group
Total
banks
banks
Total ............ 1,558,319
1,293,595
264,724
Under
$2 million. .
5,333
3,075
2,258
$2-10 million.
188,638
175,264
13,374
$10-100 million 630,792
509,080
121,712
Over
$100 million 733,556
606,176
127,380
,---------- Jijne 29.1946— ----- - N
Total
Branch
banks
Unit
banks
1,083,549
911,608
171,941
5,038
147,569
405,118
2,978
128,186
344,029
2,060
19,383
61,089
525,824
436,415
89,409
1 Excluding loans secured by real estate; data regarding such loans are not
available for June 29, 1946. Size determined by total deposits on June 29,
1946. For classification by size, each banking office of a branch bank was
considered as a separate unit.
Data not presented in these tables show that California
banks had two-thirds of the $1.7 billion District loan
total. Over one-half of their loans were concentrated in
banking offices with deposits in excess of $100 million.
Pacific Northwest banks accounted for 22 percent of
the loan volume, and Intermountain banks 11 percent.
In states other than California, two-thirds of the loans
were made by banking offices with deposits under $100
million.
A pril 1947
37
M O N T H L Y REVIEW
T a b l e 2 — E s t im a t e d A m o u n t a n d
N u m b e r of M e m b e r
N ovem ber
Business of borrower
20, 1946,
by
Bank
C o m m e r c ia l a n d I n d u s t r ia l L o a n s O u t s t a n d in g
B u s in e s s a n d S iz e of B orrower
(----------------------------------------------------------------- Total assets of borrower-
711,070
377,980
245,890
84,650
80,230
Under $50
thousand
$211,900
29,500
30,490
79,740
14,320
23,730
98,730
11,420
B. Number of loans
Total ......................................................................................
124,100
Manufacturing and mining...........................................
Wholesale trade ..............................................................
Retail trade ........................................................................
Public utilities, including transportation..............
S e rv ic e s .................................................................................
Building and road construction..................................
A ll o t h e r ...............................................................................
22,980
16,220
47,110
7,130
14,310
9,490
6,860
77,760
10,260
7,200
34,600
5,160
11,080
6,120
3,340
A . Amount of loans (thousands of dollars)
T o t a l ....................................................................................... ____
Manufacturing and m ining...........................................
Wholesale trade ............................................................... , .
Retail t r a d e ........................................................................
Public utilities, including transportation...............
S e rv ice s..................................................................................
Building and road construction................... ..............
All o t h e r ...............................................................................
Total 1
$1,710,840
112,290
22,700
$50-250
thousand
$411,880
105,410
116,820
82,360
16,040
28,690
33,600
28,960
$250-750
thousand
$227,050
103,290
39,920
36,430
9,940
10,160
14,410
12,900
34,050
6,570
2,090
1,090
1,560
200
470
660
500
7,950
6,900
10,460
1,420
2,590
2,340
2,390
228,730
103,600
27,040
9,730
9,940
30,700
15,460
Over $5000
thousand
$429,310
243,930
86,960
18,680
32,190
7,150
10,860
29,540
3,960
1,760
820
330
150
120
310
470
1,530
900
200
70
190
10
40
120
$750-5000
thousand
$425,200
1 Includes loans not classified by size of borrower.
T a b l e 3— E s t i m a t e d A m o u n t a n d N u m b e r o f M e m b e r
N ovem ber
20, 1946,
by
Business of borrower
A . Amount of loans (thousands of dollars)
T o t a l ...............................................................................
Total
Manufacturing and mining....................................
W holesale t r a d e ..........................................................
Retail trade .................................................................
Public utilities, including transportation
Services..........................................................................
Building and road construction...........................
A ll o t h e r ........................................................................
711,070
377.980
245,890
84,650
80,230
112,290
98,730
U nsecured
$903,340
405,290
191,340
135,670
23,380
25,090
67,150
55,420
B. Number of loans
Total ..................................................................................
Manufacturing and m ining......................................
Wholesale t r a d e ............................................................
Retail trade ...................................................................
Public utilities, including transportation..........
S e rv ices.............................................................................
Building and road construction.............................
All o t h e r ..........................................................................
124,100
22,980
16,220
47,110
7,130
14,310
9,490
6,860
55,790
10,940
8,050
23,400
1,270
5,360
4,620
2,150
Distribution by types of borrowers
Manufacturing and mining borrowers accounted for
42 percent of the loan volume, and wholesale and retail
trade together 36 percent. Retail trade alone accounted
for 38 percent of the number of loans in the District,
and nearly three-quarters of these loans were to small
retail establishments with total assets under $50 thou
sand. Loans to large concerns were more common and in
greater volume among manufacturing and mining bor
rowers than in other fields. Although loans to borrowers
with assets over $750 thousand were 50 percent of the
loan volume, they were only 4 percent of the number of
loans. At the other extreme, borrowers with assets of
less than $50 thousand accounted for only 12 percent
of the loan volume, but 63 percent of the number of
loans.
Over half of the dollar amount of all commercial and
industrial loans were unsecured. Public utilities and
services, on the other hand, had only 30 percent of
their loans unsecured. Among secured loans, those se
cured by equipment and inventory and those secured by
real estate were most important. Real estate loans were
Bank
C o m m e r c ia l a n d I n d u s t r ia l L o a n s O u t s t a n d in g
B u s in e s s of B o rr o w er a n d T y p e of S e c u r it y
Endorsed
comaker,
guaranteed
$68,710
Type o f security
Equipment
Real
and
inventory
estate
$152,520
$427,690
Stocks
and
bonds
$85,600
' Assign
ment of
claims
$48,100
$24,880
All
other
28,870
12,700
13,620
3,450
2,190
5,880
2,000
189,690
142,430
32,740
41,420
7,370
10,640
3,400
30,370
12,240
34,910
4,420
32,410
18,040
20,130
34,190
8,820
9,590
8,780
10,290
4,040
9,890
12,740
8,020
11,450
2,490
1,760
5,840
5,800
9,920
2,430
7,910
710
1,120
700
2,090
6,720
1,450
730
2,500
340
860
550
290
33,310
6,460
4,330
11,760
4,050
3,570
2,600
540
14,490
1,790
920
5,290
630
2,430
850
2,580
5,600
870
650
1,780
270
1,090
300
640
4,330
1,090
1,010
780
130
420
380
520
3,860
380
530
1,600
440
580
190
140
relatively more important to borrowers engaged in the
services field, constituting about 40 percent of all loans
to such borrowers. The predominance of secured loans,
particularly those secured by real estate, in the public
utilities and services areas, is probably due to the longer
maturities in these two fields, and in the services field to
the frequent lack of other acceptable security.
T able
4— P ercentage
mated
D is t r ib u t io n
M em ber B a n k
by
M a t u r it y
C o m m e r c ia l a n d
L o a n s O u t s t a n d in g N ovem ber
by
Business of borrower
of
E s t i
I n d u s t r ia l
20,1946,
B u s in e s s of B orrower1
t— Amount of loans— \ ^-Number of loans~>
One year
Over
One year
Over
or less
one year
or less
one year
T o t a l ..........................................................
Manufacturing and m in in g ............
Wholesale trade ..................................
Retail trade ..... ......................................
Public utilities, including
transportation ..................................
Services ...................................................
Building & road c o n str u c tio n ....
All o t h e r ...................................................
72
69
91
70
28
31
9
30
67
74
83
67
33
26
17
33
30
39
81
73
70
61
19
27
40
50
71
62
60
50
29
38
E x c lu d in g loans for which maturity was not determinable.
About one-third of the loans, both in terms of dollar
amounts and number of loans, had maturities of more
than a year. In the case of public utilities and services,
38
A pril 1947
FEDERAL RESERVE BANK OF SAN FRANCISCO
approximately two-thirds of the number and amount of
loans were for terms longer than a year. Wholesale trade
apparently relies most heavily on shorter-term credit.
T a b l e 5— E s t i m a t e d A m o u n t a n d N u m b e r o f M e m b e r B a n k
C o m m e r c ia l a n d I n d u s t r ia l L o a n s O u t s t a n d in g
N ovem ber
20,1946,
and
by
Bank
B u s in e s s of B orr ow er
S iz e G r o u p
Business of borrower
A . Amount of loans
(thousands of dollars)
f ----------------------- Bank size group1 ----------------------- ^
T o t a l ............................................
Manufacturing and mining
Wholesale t r a d e ....................
Retail trade ...........................
Public utilities, including
transportation ....................
Services ....................................
Building and road
construction ......................
A ll other ..................................
1,710,840 771,090
711,070 391,540
377,980 166,820
245,890 56,040
B. Number of loans
Total .........................................
Manufacturing and mining
Wholesale t r a d e ....................
Retail trade ...........................
Public utilities, including
transportation ....................
Services ....................................
Building and road
construction ......................
A ll other ..................................
Over $100
Total million
$10-100
million
$2-10 Under $2
million million
702,140
273,550
146,800
128,590
231,320
44,450
63,280
59,240
6,290
1,530
1,080
2,020
84,650
80,230
46,430
28,280
26,790
29,520
10,930
21,990
500
440
112,290
98,730
37,420
44,560
50,790
46,100
23,480
7,950
600
120
20,760
62,110
39,600
6,310
10,520
5,960
4,230 8,500
3,350
4,080
24,530
17,740
1,630
190
140
760
124,100
22,980
16,220
47,110
7,130
14,310
1,240
1,910
3,720
7,040
1,990
5,180
180
180
9,490
6,860
1,210
1,780
4,020
3,780
4,110
1,270
150
30
1A s determined by total deposits on June 29, 1946. For classification by
size, each banking office of a branch bank was considered as a unit.
M ethods used by the Survey
In preparing for the Commercial and Industrial Loan
Survey, each Reserve Bank asked certain member banks
in its District, selected so that the group would be as
representative as possible of the banking community in
that District, to report their commercial and industrial
loans outstanding on November 20, 1946. In the Twelfth
District all banking offices were divided into size groups
based on their total deposits on June 29, 1946. A sample
of 161 banking offices was drawn; this included all of
the 21 banking offices with deposits over $100 million,
the others being distributed among the other size groups,
branch or unit groups, and geographic areas.
Banks having deposits of more than $10 million re
ported on only a part of their loans; banks with deposits
under $10 million reported on all loans.
Based on these loan data from a sample of Twelfth
District banks, estimates were made of the total number
and total amount of all commercial and industrial loans
outstanding in the Twelfth District. The tabulations
presented in this article were prepared from these esti
mates.
T able
6— N u m b e r
Jun e
of
29, 1946,
Bank size group1
by
Total
A . Branch banking offices
T o t a l ............................... 1,083
Under $2 million . . .
87
$ 2 -10 m illio n ...............
720
$ 10 -10 0 m illio n ..........
260
Over $100 million. . .
16
B. Unit banks
Total .............................
Under $2 million. . .
$ 2 -10 million ............
$ 10 -10 0 million . . . .
Over $100 m illion..
B a n k in g
O f f ic e s
M em ber
of
B anks
B a n k S iz e G r o u p a n d L o c a t io n
Calif.
Pacific
Northwest
Ore. W ash.
- Intermountain A riz. Idaho N ev. Utah
805
44
552
198
72
7
45
18
Ill
27
41
15
64
30
8
15
3
7
28
10
2
1
—
3
2
6
11
96
9
57
25
5
31
7
47
3
21
26
1
2
7
21
11
3
—
10
3
__
3
—
—
233
43
139
46
5
—
—
—
11
3
—
17
4
10
2
6
2
32
8
19
5
—
1A s determined by total deposits on June 29, 1946. For classification by
size, each banking office of a branch bank was considered as a unit.
DEPARTMENT STORE STOCKS A N D O RDERS O U T STA N D IN G — TWELFTH DISTRIC T1
the past year the composition of total commit
ments2 of Twelfth District department stores has
changed markedly in response to sharp changes in both
inventories and orders outstanding. Between March
1946 and March 1947 orders outstanding decreased 46
percent. Inventories, however, began to rise sharply in
July 1946; by March 1947 they were up 66 percent
over March 1946, and were at their third highest point
since January 1941. This accumulation of stocks offset
the drop in orders outstanding, so that there was a de
cline of only 9 percent in total commitments of District
stores for the twelve-month period ending March 1947.
u r in g
D
The contrasting movement of stocks and orders pro
duced a radical change in the composition of total com
mitments, i.e., in the relation between the two items. At
the end of December 1946 inventories exceeded orders
for the first time since December 1942, and they con
tinued to do so for the first three months of this year.
1 Based on data from 37 Twelfth District department stores.
2 The term “ total commitments” is used throughout this article to designate
inventories plus orders outstanding.
Changes in department store commitments
Average monthly commitments of the department
stores included in the survey were three times as large
in 1946 as they were in 1941. Orders outstanding were
the dominant factor in this growth; average outstandings
Y e a r - P e r io d P e r c e n t C h a n g e s i n S a l e s , S t o c k s ,
a n d O rders O u t s t a n d i n g
(37 Twelfth District department stores)
1946
Sales
July ......................................... ....+ 2 2
August ......................................+ 3 2
September .............................. 4~26
O c t o b e r ..................................... + 2 6
N ovember .............................. 4 -1 5
December ............................. ... + 1 8
Stocks
+20
+25
4~34
+47
-j-60
4 -8 2
Orders
outstanding
+44
+51
-j-64
+31
+ 7
— 25
Total
commitments
+34
+39
+50
+39
+28
4-10
1947
January ...................... .............+ 1 3
F e b r u a r y ............................... ...+ - 4
M arch .................................... ...+ 1
+74
+77
+66
— 32
— 41
— 46
+ 2
— 6
— 9
in 1946 were five times as great as in 1941, in spite of a
shrinkage of almost 50 percent in the second half of
1946. Before the war, inventories usually exceeded or
ders outstanding. From January 1943 through Novem-
April 1947
39
M O N T H L Y REVIEW
ber 1946, however, that relationship was reversed. This
change in the composition of total commitments reflected
the intense rivalry, among department stores and other
retail establishments, for a limited supply of consumer
goods to meet a continuous expansion in demand.
In December 1946, inventories once again exceeded
orders outstanding, and this gap has widened to some
extent each month through March 1947. This return to a
prewar relationship resulted both from a sharp reduction
in orders outstanding and from a marked rise in inven
tories. By the end of March 1947, orders outstanding
were less than half of what they had been in June 1946
(their highest figure of the five-year period), but inven
tories increased by more than 25 percent during the same
nine months.
No marked reduction in total commitments occurred
during the second half of 1946; decline in orders out
standing was partly offset by increasing inventories. By
the end of November 1946 total commitments had de
creased less than seven percent from the August 1946
high. The usual Christmas buying, combined with some
special pre-holiday sales, resulted in record December
sales volume, and total commitments were reduced an
additional 20 percent from the August level. Inventories
increased again in the first quarter of this year, however,
and total commitments rose slightly.
SA LE S, STO C K S, A N D O RD ER S O U T S T A N D IN G
37 Twelfth District department stores
January 1941 - March 19471
THOUSANDS
THOUSANDS
OF D O L L A R S
OF D O L L A R S
R A T IO O F T O T A L C O M M I T M E N T S T O
S A L E S ,i A N D O F S T O C K S T O S A L E S
37 Twelfth District department stores
r a t io
January 1941 - M arch 194 72
r a t io
1N ot adjusted for seasonal variation.
Ratio of commitments to sales
1 “ Total commitments” equals inventories plus orders outstanding.
2 N ot adjusted for seasonal variation.
Despite the large increase in the dollar volume of to
tal commitments, the ratio of total commitments to sales
increased less than one-third during the period from 1941
to 1946, because of the concurrent expansion in sales.
In 1941 the ratio of commitments to sales accounted for
slightly more than a four-month supply of goods. In
1943, after heavy accumulation of stocks during 1942
and a rapid expansion in orders outstanding during 1943,
the ratio reached a peak of more than five and one-half
months’ supply. Rising sales during 1944 were not ac
companied by corresponding changes in commitments;
as a consequence, total commitments were reduced to a
five-month supply in terms of sales. Repeated increases
in orders outstanding during 1945 and the first half of
1946, followed by a marked rise in inventories during
the second half of 1946, caused the ratio of commitments
to sales to go above the 1944 level; but the ratio did not
again approach the 1943 level until 1946. In the first
three months of 1947, the ratio of commitments to sales
showed a year-period decline of ten percent. March
1947 commitments amounted to a five-month supply of
merchandise.
FEDERAL RESERVE BANK
40
Current and prospective problems
The high dollar volume of inventories and orders out
standing still exceeds previous peacetime levels. The ratio
of total commitments to sales at the end of March 1947
was higher by 25 percent than in March 1941, but lower
than at the same date in most years since 1942. Further
more, inventories exceeded orders outstanding, which
was not the case from January 1943 through Novem
ber 1946.
The sharp reduction of orders outstanding since June
of last year will probably go on. The rate of reduction
may continue fairly large, as deliveries— which have al
ready improved considerably in recent months — be
come more current for all types of merchandise and par
ticularly for popular items. In itself the cancellation of
past-due orders has been a factor in speeding up deliv
eries. Cancellation, the elimination of duplicate orders,
and increased caution in placing new orders, have had
a dampening effect on total commitments in terms of
April 1947
OF SAN FRANCISCO
sales and in dollar volume, and may continue to do so. A
return to a ratio between orders outstanding and sales
comparable to that existing in 1941, however, does not
appear to be imminent in the next several months.
In contrast to orders outstanding, inventories have
been accumulating rapidly in recent months. For the
first three months of 1947 combined, the ratio of stocks
to sales exceeded that for any first-quarter period in
cluded in this survey except in 1942. Furthermore, in
ventories appear likely to rise again at the end of March.
At a time when consumer prices are at almost an alltime high, sales are at record levels, and inventories are
still out of balance, the combination of a large supply of
goods on hand with substantial orders outstanding is be
ing carefully watched by foresighted merchants. A re
duction of orders outstanding, in the face of stabilized
or declining demand, could be achieved without much
difficulty. To reduce inventories, however, would require
more drastic action by the stores.
C H A N G ES IN BANKS A N D BRANCHES, 1945-46— TWELFTH DISTRICT
u r in g
1946 there was little net change in the total
number of banks in the Twelfth District, or in the
D
number of banks operating branches. The number of
member bank branches increased substantially, however,
and total banking offices, excluding military facilities,
were 1,674 at the end of 1946 compared with 1,642 a year
earlier. A further decline in military activities reduced by
about half the number of banking facilities operated at
military establishments. Member banks, numbering
slightly more than half of all banks in the District, held
about 90 percent of total bank assets. Less than 10 per
cent of all District banks were branch banks, but their
combined assets represented 80 percent of all bank assets.
Six member banks and eight nonmember banks dis
continued business in 1946. All were absorbed by exist
ing banking systems. Thirteen banks, three member and
ten nonmember, began operations during the year. Most
of these changes occurred in two Pacific Northwest
states, where six of the new banks and eight of those
absorbed were located.
T o ta l A ssets of M e m b e r a n d
by
N onmember
States— T w e lfth
D ecem ber
31, 1946
B ranch
14,765,328
N u m b e r of M e m b e r a n d N o n m e m b e r B a n k s O p e r a t in g
B r a n c h e s , a n d N u m b e r of B r a n c h e s O p e r a t e d —
T w e l f t h D is t r i c t
D ecem ber
Banks,
and
1945
State
% branch
Nonmember
bk. assets
branch
to all bk.
Member branch banks
banks
assets
State
1946
1945
1946
1945
1946 1945
Arizona ...............$
293,964 $
279,379
$ 16,546 $ 15,665 94.1 92.9
California .......... 10,957,000
11,017,172
757,208 714,230
84.6 84.1
Idaho ....................
315,746
301,747 19,132
17,972 73.4
74.2
Nevada ...............
142,230
137,321
9,874
8,068
88.3 88.8
Oregon .................
1,117,534
1,203,294 28,123
22,910 80.4 82.5
U tah ....................
137,256
151,413 7,299
13,042 24.8 28.1
W ashington . . .
1,524,027
1,675,002
196,635
180,105
75.9 76.1
14,487,757
From the end of 1940 to the the end of 1946, the
number of Twelfth District banks decreased from 567 to
523, but there was a net loss of only two banks in the
last two years. On the other hand, four more banks were
operating branches in 1946 than in 1940, and 65 more
branches were in existence. Most of the increase in branch
offices since 1940 took place in 1945 and 1946, when 25
and 33 branches were added to the total in operation.
The increase was greatest in the state of Washington,
where 28 branches were added between 1940 and 1946.
D is t r ic t
(in thousands of dollars)
Twelfth District.
Forty-two branch banks, 39 of which were branches
of member banks, were added to banking systems. Six
branches of member banks and three branches of non
member banks were discontinued. Of the 42 new
branches, 22 were established by California banks and
nine by Washington banks.
1,034,817
971,992
81.3
81.2
.
..
..
U tah ........................... ,
Washington ............
Twelfth District . . .
31, 1946
and
Number of banks operating
(---------------brainches--------------^
Member
Nonmember
banks
banks
1946 1945
1946 1945
17
.
5
. 3
. 2
, 2
. 8
. 39
2
1
1
17
15
15
6
1
1
1
1
5
4
3
4
29
3
2
2
8
40
2
4
29
1945
Number of branches
{------------ operated------------
Member
Nonmember
banks
banks
1946
1946 1945
1945
32
42
281
241
8243
8073
39
37
2
2
40
38
1
1
15
14
68
5
4
70
9
9
2
4
105
98
8
8
1,091
1,058
60
60
1 Includes 7 branches of Twelfth District banks operating in Eleventh D is
trict.
2 Excludes 1 branch of Eleventh District bank operating in Twelfth D is
trict.
3 Includes 3 out-of-state branches of one bank.
A pril 1947
41
M O N T H L Y REVIEW
N u m b e r a n d T o t a l A s s e t s of M e m b e r a n d N o n m e m b e r B a n k s — T w e l f t h D is t r ic t
D ecember
31, 1946
and
1945
(assets in thousands of dollars)
—A ll banks---------------------- N
r ■
Number
Assets
1945
1946 1945
1946
State
Arizona...........................
California......................
7
8
207
$
330,112
$
317,564
4
5
113
25
113
26
6
6
33
Idah o...............................
N evada..........................
O regon..........................
47
8
71
8
73
1,425,861
163,741
1,485,692
U ta h ...............................
59
57
583,980
585,477
W ashin gton.................
,
172,319
33
34
34
No nmember baiik s------------v
t-----Number
Assets
1946 1945
1946
1945
288,253
3
3
94
22
95
20
1,223,351
394,657
12,813,071
374,331
158,706
152,439
2
2
1,311,590
489,489
1,381,386
493,785
38
25
$ 299,084
12,630,059!
$
$
31,028
% member
bank assets
to all bank
assets
1946
1945
29,311
90.6
90.8
91.2
91.8
61,701
1,138,358
56,486
86.5
86.9
11,303
104,306
92.1
93.1
40
13,613
114,271
91.9
23
94,491
83.8
93.0
84.3
84.1
86.4
90.1
90.9
$
124
124
2,268,037
2,434,662
54
55
1,908,392
2,104,743
70
69
359,644
91,692
329,920
523
524
19,090,076
19,369,383
269
272
17,191,977
17,608,008
254
252
1,898,099
1,761,376
1 Includes assets of 3 out-of-state branches of one bank.
■Member banks-------------------N
Number
Assets
1946 1945
1946
1945
13,853,4101 13,951,429
453,718
428,381
208
46
Twelfth District
t--------
42
FEDERAL RESERVE BANK
OF SAN FRANCISCO
April 1947
BUSINESS INDEXES—TWELFTH DISTRICT
1935-39 Average = 1001
In d u stria l pro du ction
(ph ysical vo lu m e ) 2
F a ctory
e m p lo y m e n t 4
F a ctory
p a y ro lls 4
P e tr o le u m 3
Year
and
m o n th
L u m ber
Ad
ju s te d
1929
1930
1931
1932
1933
1934
1935
1936
1937
1938
1939
1940
1941
1942
1943
1944
1945
1946
U nad
ju s te d
C rude
Refined
U nad
ju s te d
U nad
ju s te d
148
112
77
46
62
67
83
106
113
88
110
120
140
140
133
138
108
118
121
95
78
74
72
73
86
89
99
104
93
93
96
103
118
129
135
131
193
168
140
134
127
123
140
154
163
159
160
158
172
175
194
226
243
219
C em en t8
Ad
ju s te d
W h e a t flou r 3
U nad
ju sted
Ad
ju s te d
107
93
71
46
53
67
64
114
109
88
110
121
159
189
154
124
127
160
Unad
ju s te d
E lectric pow er
Ad
ju s te d
115
107
110
98
97
106
113
109
114
111
123
118
120
120
132
136
152
147
U nad
ju s te d
C aliforn ia
Ad
ju s te d
83
84
82
73
73
79
85
96
105
102
112
122
136
167
214
231
219
219
U nad
ju s te d
C a lifo rn ia
Ad
ju s te d
100
86
73
61
66
79
87
99
112
98
104
122
173
270
363
335
246
177
Unad
ju ste d
111
93
73
54
53
64
78
96
115
101
110
134
224
460
705
694
497
339
1946
March
April
M ay
June
July
August
September
October
November
December
109
111
111
132
107
113
120
122
128
133
97
114
129
152
120
139
139
133
122
100
129
131
ir:i
132
132
131
131
131
132
133
210
210
222
219
228
234
222
229
227
221
148
160
158
149
155
158
167
146
171
223
149
168
165
169
169
176
177
169
171
165
143
153
150
167
124
136
129
130
133
166
140
135
132
147
109
136
154
154
146
166
209
211
210
212
213
222
227
236
237
243
206
209
212
216
222
231
227
229
232
240
165r
170
176
179
180
184
184
187
192
192
165r
170
176
179
180
185
185
188
193
193
305r
321
333
341
345
362
360
372
372
387
304r
321
335
342
345
364
361
375
373
388
1947
January
February
March
April
155
170p
140p
129p
106
118 p
121p
132 p
134
136
137
219
227
255
229
183
185
161
163
186
174
162
165
173
174
162
162
153
250
249
252
246
244
248
194
192
193
191
191
192
386
387
390
379
384
389
C arload in g s
(num ber)®
Year
an d
m o n th
Ad
ju ste d
1929
1930
1931
1932
1933
1934
1935
1936
1937
1938
1939
1910
1941
1942
1943
1944
1945
1946
1946
March
April
M ay
June
July
August
September
October
November
December
1947
January
February
March
April
M erch a n d ise
an d
m iscella n eo u s
T o ta l
U nad
ju s te d
Ad
ju s te d
121
10 2
109
109
124
118
126
128
111
121
107
136
134
117
120
12 2
112
108
111
109
117
Ad
ju s te d
12 1
123
129
128
137
138
125
125
125
134
145
114
121
146
150
129
130
12 2
120
145
147
140
148
151
134
129
125
120
12 2
D istrict
U nad
ju s te d
Ad
ju ste d
109
84
57
37
43
48
56
70
75
65
72
79
91
103
97
97
83
86
119
130
131
132
110
111
96
103
108
O th e r
114
105
89
74
70
81
85
97
102
90
96
99
116
112
96
75
57
58
66
72
85
90
79
85
90
105
113
109
115
104:
106
108
113
U nad
ju s te d
D e p a r tm e n t store sales
(value ) 2
80
79
83
84
10 1
74
90
89
83
91
124
113
103
108
74
80
93
93
96
90
100
99
84
79
89
93
96
111
U nad
ju s te d
112
104
94
71
68
77
86
100
105
100
109
116
139
169
201
221
244
306
296r
292r
305
315
322
324
313
319
319
317
257r
287
284
288
266
291
326
330
376
503
313
330
325
315
249
278
295
297
D e p t, store
sto ck s (value ) 8
C a li
fo rn ia
Pacific
N o r th
w est
U ta h
& So .
Id a h o
Ad
ju s te d
Ad
ju sted
Ad
ju s te d
109
103
94
72
68
75
86
99
106
100
109
117
136
160
192
217
242
304
115
106
91
68
66
78
85
100
105
100
D istrict
Ad
ju s te d
117
146
189
219
232
252
310
124
111
97
69
72
82
89
99
104
98
110
116
138
174
212
217
237
304
315
316
311
308
320
325
310
310
2S3r
317
310
327
333
312
313
307
329
oOOr
286
278
300
331
364
319
301
2S9
305
190
202r
217
217
250
240
249
270
296
334
307
317
318
314
318
352
336
312
326
335
314
313
315
330
336
312
287r
294 r
300
110
U nad
ju s te d
132
125
110
89
80
85
89
97
108
101
106
113
137
187
172
177
182
238
177
212
225
221
265
263
281
299
313
273
277
290
312
309
C onsum ers*
p rices 6
A ll
it e m s
Food
U nad
ju s te d
U nad
ju ste d
1 2 1 .8
118* 1
1 32.0
124 8
108.2
104.0
98^8
93’6
9 5 .3
9 7 ’o
97 9
102 2
102 0
101 0
101 1
106.3
119 4
126! 1
128 3
131 7
142.1
8 9 .8
86 8
93 2
99*6
1 0 0 .3
104*5
99 0
96 9
9 7 .6
107 9
130! 9
1 43.4
142 1
146 3
167^4
13 3 .4
1 3 3 .8
13 4 .6
13 6 .8
143.1
14 5 .7
1 4 7 .7
150 6
156 2
1 5 6 .9
1 4 8 .2
1 48.7
1 5 0 .0
15 4 .5
1 7 0 .8
176.1
17 9 .7
1 86.2
1 99.9
19 8 .4
1 5 6 .7 r
1 5 6 .7 r
1 5 8 .2
1 9 5 .7
1 9 3 .5
1 9 6 .6
1 The terms “ adjusted” and “ unadjusted" refer to adjustment of monthly figures for seasonal variation. Excepting department store statistics, all indexes
are based upon data from outside sources, as follows: Lumber, various lumber trade associations; Petroleum and Cement, U .S. Bureau of Mines; W heat flour,
U .S . Bureau of the Census; Electric power, Federal Power Commission; Factory employment, Factory payrolls, and Consumers’ prices, U .S . Bureau of Labor
Statistics and cooperating state agencies; and Carloadings, various railroads and railroad associations.
2 Daily average.
3 1923-25 daily average— 100.
4 W age earners only. Excludes fish, fruit and vegetable canning.
6 At retail, end of month or end of year.
8 Los Angeles, San Francisco, and Seattle indexes combined,
p-preliminary.
r-revised.
43
M O N T H L Y REVIEW
April 1947
BANKING AND CREDIT STATISTICS—TWELFTH DISTRICT
(amounts in millions of dollars)
C o n d itio n ite m s o f all m e m b e r b a n k s 1
In v e s tm e n ts 2
L o a n s an d d iscou n ts
Year
an d
m o n th
T o ta l2
1929
1930
1931
1932
1933
1934
1935
1936
1937
1938
1939
1940
1941
1942
1943
1944
1945
1946
2,239
2,218
1,898
1,570
1,486
1,469
1,537
1,682
1,871
1,869
1,967
2,130
2,451
2,170
2,106
2,254
2,663
4,068
1946
March
April
M ay
June
July
August
September
October
November
December
2,720
2.794
2,909
3,030
3,184
3,334
3,601
3.794
3,954
4,068
1947
January
February
March
April
4,140
4,254
4,364
4,479
C o m l., in d . For p u r c h .,
carry’ g secs. R eal estate
& agric.
A ll oth e r
647
721
711
635
668
670
662
686
730
798
864
931
82
76
65
59
51
62
184
343
195
663
664
735
933
870
934
956
1,103
1,882
974
899
885
908
1,431
246
1,283
327
362
399
460
275
1,000
211
228
309
560
411
1,090
1,431
195
A ll oth e r
secu rities
U .S . G o v ’ t
secu rities
560
495
467
547
601
720
1,064
1,275
1,334
1,270
1,323
1,450
1,482
1,738
3,630
6,235
8,263
10,450
8,426
458
561
560
528
510
575
587
614
498
486
524
590
541
538
557
698
795
908
10,451
10,377
10,090
9,673
9,651
9,624
9,171
9,157
8,815
8,426
844
850
867
861
882
8,303
8,058
7,909
7,677
D em and
d eposits
a d ju s te d 3-4
T im e
d e p o s its 4
1,234
1,158
984
840
951
1,776
1,915
1,667
1,515
1,453
1,759
2,006
2,078
2,164
1,201
2,263
2,351
2,417
2,603
3,197
4,127
5,194
5,781
5,332
5,354
5,404
5,494
5,521
5,570
5,609
5,669
5,696
5,781
1,122
900
891
889
908
8,158
8,236
8,339
8,328
8,488
8,566
8,630
8,757
8,801
8,821
911
893
894
876
8,760
8,366
8.314
8.315
5,761
5,804
5,820
5,837
308
370
396
286
888
C oin an d cu rrency
in circu lation
Reserve
b an k cred it 6
C o m m e rc ia l
o p era tio n s 6
T reasu ry
op era tio n s 6
— 34
— 16
+ 21
— 42
—
2
—
7
+
2
+
6
—
1
—
3
+
2
-1- 2
+
4
+107
+214
+ 98
— 76
+
9
0
—
53
— 154
— 175
— 110
— 198
— 163
— 227
—
90
— 240
— 192
— 148
— 596
— 1,980
— 3,751
— 3,534
— 3,743
— 1,607
23
+
89
+
154
+
+ 234
150
+
+ 257
+ 219
+ 454
157
+
+ 276
+ 245
+ 420
+ 1 ,000
+ 2 ,826
+ 4 ,486
+ 4 ,483
+ 4 ,682
+ 1 ,329
__
+
+
+
1946
March
April
M ay
June
July
August
September
October
November
December
—
+
—
+
+
+
—
—
+
+
17
2
34
35
11
28
26
162
74
37
—
—
—
—
—
—
—
—
—
+
36
231
177
2
272
73
15
29
136
37
+
+
+
+
+
+
—
+
4-
10
192
220
55
128
95
20
223
111
62
—
—
—
—
—-
1947
January
February
March
April
+109
+ 14
— 62
—
2
—
—
—
—
35
25
3
69
—
—
+
+
168
133
50
47
—
—
—
1929
1930
1931
1932
1933
1934
1935
1936
1937
1938
1939
1940
1941
1942
1943
1944
1945
1946
2,212
+
+
+
+
+
+
+
+
—
—
—
+
68
144
307
842
1,442
2,050
303
1,969
1,865
1,635
1,213
1,125
853
808
610
303
B an k debits
index
31 citie s 8
Reserves*
F .R . n o te s o f
F .R .B . o f S .F .
T o ta l
6
16
48
30
18
4
14
38
3
20
31
96
227
643
708
789
545
326
189
186
231
227
213
211
280
335
343
361
388
493
700
1,279
1,937
2,699
3,219
2,871
175
183
147
142
185
242
287
479
549
565
584
754
930
1,232
1,462
1,706
2,033
2,094
1,025
1,343
1,598
1,878
2,051
245
262
103
104
136
59
146
126
97
68
63
72
87
102
111
98
102
110
134
165
211
237
260
298
63
39
11
52
42
0
9
2
2
7
3,040
2,996
2,984
2,931
2,894
2,890
2,878
2,875
2,866
2,871
1,937
1,938
1,955
2,038
2,000
2,045
2,005
2,040
2,092
2,094
1,876
1,877
1,900
1,929
1,936
1,958
1,987
2,002
2,030
2,051
68
64
77
84
66
54
55
56
54
59
302
286
281
307
291
292
306
310
313
339
81
32
30
18
2,800
2,765
2,735
2,716
2,081
1,981
2,003
1,997
2,043
1,982
1,940
1,934
60
51
61
63
322
325
332
309
T o ta l 6
+
+
+
36
49
99
148
233
228
167
96
90
127
118
1.389
1,791
1,740
1,781
1,983
2.390
2,893
4,356
5,998
6,950
8,203
8,821
M e m b e r b a n k reserves an d related it e m s 5
Y e ar
an d
m o n th
U .S . G o v ’ t
d e p o sits 4
R equired
Excess
171
180
154
135
142
4
5
— 4
8
37
201
351
470
418
459
70
142
138
172
515
720
84
100
119
257
U n ad ju ste d
~
1 Annual figures are as of end of year; monthly figures are as of last Wednesday in month or, where applicable, as of call report date.
2 M onthly data for 1946 partly estimated.
8 Demand deposits, excluding interbank and U .S. G ov’t deposits, less cash items in process of collection.
4 M onthly data partly estimated.
6 End of year and end of month figures.
6 Changes only.
7 Total reserves are as of end of year or month. Required and excess: monthly figures are daily averages, annual figures are December daily averages.
8 Debits to demand deposit accounts, excluding interbank and U .S. G ov’t deposits. 1935-39 daily average— 100.
p-preliminary.
r-revised.
44
FEDERAL RESERVE BANK
OF SAN FRANCISCO
A pril 1947
Notional Sum mary of Business Conditions
INDUSTRIAL PRODUCTION
Released April 29, 1947— Board of Governors of the Federal Reserve System
output and factory employment were unchanged in March. Value of retail
trade continued to show little change, after allowing for holiday buying. The general
level of wholesale commodity prices declined slightly in the first three weeks of April,
following increases in February and the early part of March.
I
n d u str ia l
I n d u s t r i a l P r o d u c t io n
Federal Reserve indexes. Monthly figures, latest
shown are for April 1947.
DEPARTMENT STORE SALES AND STOCKS
The Board’s seasonally adjusted index of industrial production in March was at a
level of 189 percent of the 1935-39 average for the third consecutive month.
Output of durable manufactures continued to show a very slight gain in March,
reaching a level of 223 percent of the 1935-39 average. Activity in the iron and steel
industries advanced in March after a slight decline in February. Steel mill operations
averaged 94 percent of capacity in March and they have been maintained at about this
rate during most of April. Activity in the machinery and transportation equipment
industries also showed a slight gain in March. Output of passenger cars totalled 303,000,
and of trucks, 117,000. Lumber production continued to advance and, in March, was
at the highest level for this season in almost 20 years. Output of most nonferrous metals
at smelters and refineries continued to expand, following increases earlier in domestic
mine production.
The Board’s seasonally adjusted index of output of nondurable manufactures again
declined by one point in March to a level of 175 percent of the 1935-39 average. Produc
tion in most lines was at the February rate or declined very slightly. Output of textilemill and leather products in February and March remained somewhat below last year’s
peak rates.
Minerals production increased slightly in March to a level of 147 percent of the
1935-39 average, reflecting a continued advance in output of crude petroleum, and a
slight increase in coal production. Bituminous coal output dropped sharply during the
first two weeks of April, as work was curtailed at mines in a dispute over safety conditio n s , b u t su b s e q u e n tly in c r e a s e d .
E m ploym ent
The number of employees in most lines of nonagricultural activity in March remained
at about the level of other recent months, after allowance for usual seasonal changes.
Total nonagricultural employment of about 42,500,000 persons was 7 percent higher
than the level a year ago. The number of persons unemployed showed a slight seasonal
decline in March to 2 ,3 3 0 ,0 0 0 .
C o n s t r u c t io n
Federal Reserve indexes. Monthly figures, latest
shown are for March 1947.
LOANS AT MEMBER BANKS IN LEADING CITIES
Total value of construction contracts awarded, as reported by the F. W . Dodge Cor
poration, was about one-third larger in March than in February, reflecting chiefly sea
sonal influences, but one-sixth smaller than in March 1946. The reduction from a year
ago was in awards for private nonresidential construction, which were exceptionally large
at that time. Value of residential awards increased by about one-third from February to
March and was slightly larger than in the same period last year. Since a year ago building
costs have increased considerably and the number of dwelling units contracted for in
March was somewhat less than the March 1946 volume. Construction activity continued
to decline after allowance for seasonal variation.
D is t r ib u t io n
Value of department store sales during the six weeks preceding the Easter holiday was
three percent larger than during the corresponding number of weeks before Easter last
year, reflecting chiefly a sharply higher level of sales of household appliances and men’s
clothing. Value of sales of most other goods sold at department stores was about the
same as a year ago, although prices were generally higher than at that time. Retail sales
of automobiles, radios, and office and farm equipment both in unit and dollar volume
continued far in excess of last year’s levels. Freight carloadings rose in March owing
mainly to increased shipments of grain and miscellaneous freight.
C o m m o d i t y P r ic e s
Excludes loans to banks. Wednesday figures,
latest shown are for April 30, 1947.
MEMBER BANK RESERVES AND RELATED ITEMS
Wholesale prices of basic commodities generally declined from the middle of March
to the latter part of April, with the largest decreases shown for hogs, fats and oils, coffee,
print cloths, and steel scrap. Prices of corn, cotton, and copper, on the other hand, were
at about the same level on April 24 as in the middle of March.
The consumers’ price index of the Bureau of Labor Statistics advanced two percent
from February 15 to March 15, reflecting chiefly increases in food prices. Since that time
prices of foods have declined somewhat and price reductions have been announced for
certain other products by manufacturers and distributors.
T r e a s u r y F i n a n c e a n d B a n k C r e d it
Wednesday figures, latest shown are for
April 30, 1947.
During March and April the Treasury continued its program of debt retirement, using
an excess of tax receipts over budget expenditures and drawing upon balances at com
mercial banks and Federal Reserve Banks. Retirements, which aggregated about 4.8
billion dollars, included notes maturing on March 15, a portion of certificates maturing
March 1 and April 1, and 200 million of Treasury bills each on April 17 and 24. A
further reduction of 200 million was announced for the bill issue to mature May 1.
Federal Reserve holdings of Government securities declined by more than 2.2 billion
dollars in the eight weeks ending April 23, while holdings of member banks in leading
cities showed little change. The reserve position of member banks was maintained in
this period by the reduction in Treasury balances at Federal Reserve Banks.
Bank deposits and currency in circulation, which had declined considerably in January
and February, showed some net increase in March and the first half of April. Com
mercial loans increased further in March but declined in April. Real estate and consumer
loans increased moderately.
@FedFRASER