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MONTHLY REVIEW OF B U S IN E S S C O N D IT IO N S ISAAC B. N EW TON, Chairman of the Board and Federal Reserve Agent Federal Reserve Bank of San Francisco Vol. X I San Francisco, California, August 20,1927 No. 8 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 declined in July to a level below that of a year ago, while the D e partment of Labor’s index of wholesale prices advanced for the first time since last autumn. Demand for bank credit showed a seasonal in crease, but easy conditions prevailed in the money market. Production. Output of manufactures declined in July and was in practically the same volume as a year ago. The production of minerals, which was further reduced during the month, was at the lowest level since early in 1926 when the anthracite strike was in progress. Iron and steel production in July was in the 'smallest volume since 1925, and continued at practically the same level during the first three weeks of August. Autom obile output for July and the early weeks of August was considerably below that of the corresponding period of last year. Production of rubber tires, non-ferrous metals and food products and activity of woolen mills were less in July than in preceding months. Cotton consumption was smaller than in June, but continued unusually large for this season of the year. Production of leather, shoes, and lum ber increased in July as compared with June. Factory employment and payrolls showed sea sonal decreases in July and were smaller than in any month since 1924. Employment in coal mining has been reduced in recent months and reports indicate some unemployment in certain of the building trades owing to the decline in construction of houses. Building contract awards in July and in the first three weeks of August continued larger than a year ago, the increase reflecting chiefly a growth in awards for engineering projects. The August 1st cotton report of the Depart ment of Agriculture indicated a production of 13,492,000 bales, or 25 per cent less than the record yield of last year. Indicated production of corn, though considerably larger than the expectation, was 262,000,000 bushels lower than the harvested crop of 1926. The August estimate of 851,000,000 bushels of wheat indi cated an increase of 18,000,000 bushels over the 1926 crop yield. Trade. Distribution of merchandise at whole sale and retail showed about the usual seasonal decline in July. Compared with a year ago, sales of wholesale firms and department stores were slightly smaller, ow ing largely to the fact P E R CENT 15 0 r P E R CENT I 5 Or PAY ROLLS A I 00 V 1 % ✓ 100 ' l ' \ MINEFRALS ElMPLOYMEN"r MAINUFACTURI Î S 50 50 1923 1924 1925 1926 1927 1923 1924 1925 1926 1927 P R O D U C T IO N O F M A N U F A C T U R E S A N D M IN E R A L S In d ex num bers o f production o f m anufactures and m inerals, a d justed for seasonal variations (1923-1925 average = 100). Latest figures, J u ly , m anufactures, 107; m inerals, 97. FA CTOR Y EM PLOYM ENT AN D PAYROLLS F ederal R eserve B o a rd ’ s indexes o f factory em ploym ent and payrolls (1919 m onthly a v erag e= 100). Latest figures, July, em ploym ent, 90.7; payrolls, 101.1. M O N T H L Y REVIEW OF BUSINESS CONDITIONS 58 that there was one less business day in July of this year than in July, 1926. Sales of mail order houses and chain stores were somewhat larger than a year ago. Inventories of department stores continued to decline in July, and at the end of the month were slightly smaller than a year ago. W holesale stocks also continued smaller than last year. Shipments of com m odi ties by freight decreased, contrary to the usual seasonal trend, and were smaller in July and in the first tw o weeks of August than in the same period of last year. PER CENT A u g u s t , 1927 Bank Credit. There was an increase in the volume of commercial loans at member banks in leading cities between July 20th and August 17th, as is usual at the beginning of the crop m oving season. Loans on securities as well as commercial loans increased, while investment holdings declined, and total loans and invest ments were about $60,000,000 larger than a month earlier. Total borrowings of member banks at the reserve banks increased slightly between July 20th and August 24th, a growth of discounts at P E R CENT Au----------- - , i , , r Vi I T W » I ' L / v t \ il / * r v ¡ V * W s 19 2 5 19 2 6 1927 W H O L E S A L E P R IC E S In d ex o f U nited States Bureau o f L a bor Statistics (1913 prices =100, base adopted by B u rea u ). Latest figure, July, 144.6. Prices. The Bureau of Labor Statistics’ in dex of wholesale prices advanced slightly in July, reflecting chiefly increases in the prices of corn, livestock, cotton, and leather, while prices of wheat, silk, metals, and building ma terials declined. Since the latter part of July prices of corn, cotton, and cattle have continued upward and those of wheat, non-ferrous metals, and rubber have also advanced, while prices of hogs, lumber, and hides have declined. 1923 1924 1925 1926 the Federal Reserve Bank of New Y ork being partly offset by declines in other districts. There was little change in the system’s hold ings of acceptances and a growth in the port folio of United States securities. M oney rates on all classes of paper in the open market de clined sharply in August, and were at a lower level than a year ago. Discount rates at eight Federal reserve banks were reduced from 4 to 3)/2 per cent. Curtailed operations in buildingand flour mill ing throughout the district, in lumbering in the Pacific Northwest, and in the food products in dustries in California contributed largely to the decline of industrial activity in the district. Sales both at wholesale and at retail declined by more than the usual seasonal amount during July, 1927, and were smaller in value than during July, 1926. If allowance be made for one less business day in July, 1927, than in July, 1926, and for relative price levels during the two months, the daily average sales figures w’ ere larger during the later than during the earlier month, however. Total freight carloadings were slightly larger in July, 1927, than in July, 1926. _______ "7 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 In the Twelfth Federal Reserve District, in dustry generally was less active during July, 1927, than during July, 1926, but the volume of distribution and trade, although declining more than seasonally during the month, was maintained at approximately the levels of a year ago. V olum e of employment and payroll disbursements were smaller than a year ago. Demand for credit, while greater than in 1926, has not shown the expansion during recent weeks which usually occurs at this season of the year. The agricultural season is later than last year but harvesting has been proceeding under favorable conditions and satisfactory yields of most of the district’s chief crops are generally predicted. 1927 M O N EY RATES W e e k ly rates in N e w Y o r k m on ey m arket: com m ercial pap er rate on 4- to 6-m onths paper and a ccep tan ce rate on 90-day p ap er. ............................................................................................................................ ..................... 1924 UJ I 923 RATE 1 1 " Y O R K RE SERVE BAN IK DISCOUI ------- ACC : e p t a n c e •" CON1MERCIAL I3AP ER _ ------- NEV oc 1____________________________________________________________________ — / The daily average volume of check payments (bank debits) continued large and this bank’s seasonally adjusted index advanced one point to 127 (1923-1925 daily average=100) in July, 1927. The increase was caused partly by a large volume of security speculation and partly by withdrawal of time deposits which showed a marked falling off at banks located in the prin cipal cities of the district. B A N K D E B I T S * — T w elfth D istrict July, June, M ay, 1927 1927 1927 W ith S e a s o n a l A d ju s t m e n t ... 127 1260 128 W ith o u t S e a s o n a l A d ju s t m e n t 121 120 122 * D a ily a v e r a g e , 1 9 2 3 -1 9 2 5 = 1 0 0 . IN D E X 59 FEDERAL RESERVE AG EN T AT SAN FRANCISCO A u g u s t , 1927 July, 1926 122 117 June, 1926 116 110 ^ R e v ise d . N U M B E R 140 indicated by condition reports on August 1st, while it is anticipated that production of hops and beans will be somewhat less. Condition of cotton, both in Arizona and California, is re ported to be less satisfactory than at this time last year. A national production of 13,492,000 bales of cotton is forecast on the basis of con dition reports as of August 1, 1927, compared with the 1926 record crop of 17,977,000 bales and the five-year average (1922-1926) of 13,649,000 bales. P R O D U C T I O N * — F ield C ro p s Prelim inary Estim ate A ctu a l 1926 B e a n s (b u s h e ls ) t A u g . 1,1927 6,500 6,015 T w e lfth D is tr ic t^ ...................... U n ite d S tates ............................. 18,735 17,138 H op s (p ou n d s) T w e lft h D is tr ic t§ ...................... 29,428 34,838 P o ta to e s (b u s h e ls ) T w e lfth District|[ ...................... LTnited S ta tes ............................. R ic e (b u s h e ls ) T w e lft h D is tr ic t!! ...................... U n ite d S tates ............................. S u g a r B eets (to n s ) T w e lfth D is t r ic t # U n ite d S ta tes . . . i3 0 120 MO 100 F iv e - Y e a r A ve rage (1922-1926) 5,593 16,140 26,237 52,094 410,714 41,506 356,123 36,661 394,182 9,104 39,336 7,986 41,006 6,084 36,387 892 7,223 1,642 6,942 1,3940 6,849 *000 - W IT H S E A S O N A L - W IT H O U T 70^ A D J U S T M E N T H------------- 1-------------b 80 A D J U S T M E N T -W 1923 1924 1925 1926 B A N K D E B IT S - T W E L F T H 1927 D IS T R IC T In d ex for 20 principal cities, Ph oenix, A r iz o n a , not includ ed (d aily averages, 1923-1925 average = 100). Latest figures, July,w ith _______ adjustm ent, 127; without adjustm ent, 121. *Based upon average month to month increase during the years 1919 to 1926 inclusive. Agriculture Harvest of early maturing crops of the dis trict has proceeded under favorable physical conditions. Yields, in general, have approxi mated forecasts made earlier in the season. Preliminary harvest returns indicate heavy yields of wheat in this district, and total pro duction will be approximately 20 per cent greater in 1927 than in 1926. The 1927 wheat crop will probably exceed the five-year (19221926) average production by about 5 per cent. Estimated production figures of wheat and barley follow : A r iz o n a .......... C a lifo rn ia . . . Id a h o .............. N e v a d a .......... O r e g o n .......... U ta h ................ W a s h in g t o n . P R O D U C T IO N — G R A IN CR O PS --------- B a rle y ----------^ ,------------------- A ll W h e a t- ----------------- ^ > F iv e -Y e a r Prelim inary Prelim inary A ctu al Estim ate A v era ge A ctu al Estim ate 1926 (1922-1926) A u g . 1,1927 1926 A u g . 1,1927 (bu )* (bu.)* (bu.)* (bu.)* (bu.)* 875 666 1,450 950 945 32,400 27,335 12,118 . 13,642 12,015 4,760 4,144 24,225 30,148 24,633 280 448 328 502 408 2,378 3,030 19,776 . 27,287 19,586 800 1,172 5,432 5,505 5,433 40,045 2,203 2,176 40,271 . 51,032 T w e lft h D is t r ic t 129,494 U n it e d S ta te s . . 851,145 103,368 832,809 102,989 807,731 39,494 248,736 43,053 188,340 *000 om itte d . S o u r c e : U n ite d S ta te s D e p a r tm e n t o f A g r ic u ltu r e . A m ong the important field crops grown m the district, potatoes, rice, and sugar beets show greater probable yields than last year, as o m itte d . t6 0 p o u n d s = l b u sh el. $ C a lifo rn ia a n d Id a h o . § C a liforn ia , O r e g o n , and W a s h in g to n . ||Does n o t in clu d e A r iz o n a . H C alifornia. # C a lifo r n ia , I d a h o , and U ta h . O ^oreca st as o f J u ly 1, 1927. S o u r c e : U n ite d S tates D e p a rtm e n t o f A g ric u ltu re . August 1st crop reports for California indi cate that the total 1927 yield of deciduous fruits and nuts will exceed production in 1926. The increase in total yield this year, as compared with last year, is due chiefly to large crops of apricots, grapes, and prunes, production of other deciduous fruit crops being smaller this year. The 1927 output exceeds the five-year (1922-1926) average production for all of the important deciduous fruits, a reflection, in part at least, of increases in bearing acreage during recent years. Carlot shipments of deciduous fruits, excluding apples, from California during the current season to August 12th totaled 12,600 cars, compared with 17,900 cars shipped by August 12, 1926. Smaller crops of some varieties and later maturity of all the chief varieties of deciduous fruits shipped fresh to eastern markets from California quite largely account for the reduction of shipments. Unit financial returns to growers are reported to be greater this year than last. F R U IT S A N D N U T S - C A L IF O R N IA - C o n d it io n ----Production (P e r cent of norm al) Estim ated A ctu al A u g . 1, A u g .l , A u g . 1,1927 1926 1927 1926 (tons) (tons) A lm o n d s ...................... 90 68 12,700 15,750 A p r ic o t s 176,000 187,000 F ig s . . . 90 G ra pes . 2,316,000 2,129,000 W in e 455,000 414,000 T a b le 488,000 398,000^ R a is in 1,373,000 1,317,000 ........................ 76 53 P e a ch e s 485,000 541,000 ........................ 67 82 191,000 207,000 P lu m s . 58,000 71,000 P ru n es . 83 62 204,000 150,000 W a ln u ts 41,000 15,000 .7.7.’. !!’.]! 88 *.7.7.7.7.7. *15,000 to n s n o t h a rv e ste d . S o u r c e : C a lifo rn ia C o o p e ra tiv e C ro p R e p o r t in g S e r v ic e . 60 M O N T H L Y REVIEW OF BUSINESS CONDITIONS A decline in the condition of California citrus fruit is reported, a result of the heavy drop of fruit during the past month. The 1927 Valencia orange crop is now estimated at 13,250,000 boxes, compared with 11,260,000 boxes pro duced in 1926. Shipments of oranges and lemons from California during July, 1927, totaled 4,547 and 1,664 carloads, respectively, as compared with 4,627 and 1,914 carloads dur ing July, 1926. The commercial crop of apples in California, Idaho, Oregon, and W ashington will be smaller this year than in 1926 according to the latest crop reports. Forecasts also indicate that 1927 commercial apple production will be smaller in the United States than was the 1926 crop. P R O D U C T IO N * — A P P L E S (C o m m e rcia l C ro p ) Indicated b y C o n d itio n A ctu a l A u g . 1, 1927 1926 C a lifo rn ia ....................................... 4,497 6,144 I d a h o ................................................. 4,170 2,775 O r e g o n ............................................. 3,162 5,100 W a s h in g t o n .................................. 2.1,360 25,650 T o t a l ............................................ U n ite d . S t a t e s ................................ 33,189 74,493 39,669 118,233 F iv e -Y e a r f A v era ge 4,881 3,615 4,503 24,261 37,260 111,130 *000 b u sh els o m itte d . t l9 2 2 -1 9 2 6 . S o u r c e : U n ite d S ta tes D e p a rtm e n t o f A g ric u ltu re . The United States Department of A gricul ture reports that livestock and livestock ranges and pastures in the district generally are in satisfactory condition. For most of the seven states in this district, the condition figures re ported for July, 1927, are higher for both cattle and sheep than those reported for July, 1926. The movement of livestock to market centers of the Pacific Coast during the present season to August 1,1927, has been greater than a year ago. L I V E S T O C K R E C E I P T S — T w elfth D istrict t-------------- January 1 to July 3 0 -------------- > F iv e -Y e a r 1927 1926 A v era ge (1922-1926) C a ttle a n d C a lv e s ......................... 701,415 693,592 650,504 S h eep ................................................. 2,001,150 1,799,906 1,722,503 H o g s .................................................. 1,280,109 1,176,680 1,280,355 (^4) Employment— — O re g o n -C alifornia---------- \ r \ N o . of N o . of r - E m ployees —> N o. N o . r~ E m ployees July, July, of July. July. of 1927 1926 1926 Firm s F irm s 1927 Industries 31,772 30,472 165 736 135,148 140,473 (—4.1) (-3 .8 ) S to n e , C la y and 346 285 6,580 5 7,127 45 G lass P r o d u c t s . (2 1 .4 ) ( 8 .3 ) L u m b e r an d W o o d 17,394 19,246 60 24,553 M a n u fa c tu r e s . . 118 24,877 ( — 9.6 ) (1 .3 ) 2,244 2,009 2,532 11 2,564 18 T e x t ile s ................... (1 1 .7 ) (1 .3 ) C lo th in g , M illin e ry 423 412 7* 6,660 7,013 58 an d L a u n d e r in g . (2 .7 ) (5 .3 ) F o o d s , B e v e ra g e s 4,085 3,843 34,140 46 31,289 a n d T o b a c c o . . . 163 (6 .3 ) ( — 8 .4 ) W a te r , L ig h t a n d 3,296 4 3,376 P o w e r ................. (2 .4 ) 56,856 60,616 O th e r I n d u s t r ie s ’}*. 318 ( — 6 .2 ) 5,977 5,980 2,096 36 2 ,046 12 M is c e lla n e o u s . . . . (0 .1 ) ( — 2 .4 ) ♦ L a u n d e r in g o n ly , f l n c l u d e s th e f o llo w in g in d u s t r ie s : m etals, m a c h in e r y a n d c o n v e y a n c e s ; leath er an d r u b b e r g o o d s ; c h e m ica ls , o ils and p a i n t s ; p r in tin g and pap er g o o d s . Figures in parentheses indicate percentage change from July, 1926. A u g u s t , 1927 Industry Industrial activity continued during July, 1927, at levels below those of a year ago. Volum e of employment and payroll expendi tures were reported to be smaller in July, 1927, than in July, 1926. Decreased em ploy ment in the district was caused chiefly by cur tailed activity in the metals and machinery in dustries, in the lumber industry of the Pacific Northwest, and in the food products and paint and chemical products industries of California. The smaller volume of employment in the food products industries of California was the re sult, in part no doubt, of the late agricultural season and of the small July peach pack, result ing from the failure of growers and canners to reach an agreement on prices until early in August. Evidences of a seasonal increase in volume of employment, particularly in agricul ture and in the food products industries, dur ing July and the first weeks of August as com pared with June, 1927, were apparent. Drastic curtailment in building activity in the larger metropolitan areas of the district and expansion in many of the smaller cities is indi cated by building permits issued in 88 cities of the district during July, 1927, according to data compiled by S. W . Straus and Company. The Los Angeles metropolitan area, embracing 14 municipalities, showed a decline of 33 per cent; the San Francisco Bay region, embracing 13 municipalities showedadecline of 7 per cent; Seattle, a decline of 46 per cent; and Portland, a decline of 67 per cent in value of permits is sued during July, 1927, as compared with July, 1926. Building permits issued in 20 principal cities of the district during July were 30 per cent smaller in value than during July a year ago. B U I L D I N G P E R M I T S I N 20 C I T I E S Per cent increase or decrease (— ) M o n th s in 1927 com pared M on th in 1927 with same m onths in com pared with t--------------------- 1926 ---------------------- ^ precedin g M o n th ly Y e a r-to -d a te m onth N o. V a lu e N o. V a lu e N o. V a lu e J u ly ...................... — 10.9 — 27.9 — 9.2 — -10.9 — 7.5 — 17.6 J u n e ..................... — 6.2 — 23.5 — 8.9 — ■ 8.1 — 3.3 — 21.2 M a y ..................... — 1.4 22.0 — 9.4 — ■ 4.6 — 6.3 5.0 (JB) Building Permits— July, 1927 V a lu e 325,902 81 160,000 63 116,267 336 1,019,150 3,088 9,286,200 550 1,968,271 23 61,600 247 872,777 86 271,027 800 1,053,455 10 22,450 155 751,792 87 451,490 525 633,044 723 3,560,314 67 167,455 746 1,308,130 175 364,626 69 204,345 212 246,080 N o. . . ,. .......... . . .......... . . .......... .......... .......... P a sa d e n a .......... .......... .......... .......... .......... S a c r a m e n to . . . .......... S alt L a k e C ity .......... S an D ie g o . . . . .......... S an F r a n c is c o .......... ......... ........... .......... . . .......... L o n g B e a ch L o s A n g e le s D is t r ic t .......... 8,257 $22,844,375 July, 1926 N o. V a lu e 272 $ 418,943 45 65,205 80 151,716 312 813,515 2,906 14,126,776 887 2,362,726 20 55,20C 217 630,342 68 125,161 1,039 3,257,40 = 19 48,55C 4 76 ,95] 185 95 3 1 2 ,00i 709 1,690,645 864 3,556,06S 101 2 5 1 ,2 7 ' 897 2,426,48! 349 ,62< 166 90 2 3 4 ,3 4 ' 296 3 1 8 ,2 3 ' 9,268 $31,671,181 A u g u s t , 1927 W holesale prices of building materials, as reflected by the United States Bureau of Labor Statistics’ index, continued to decline during July. The index for July stood at 162.4 (1913 costs= 1 0 0 ), compared with 164.3 for June and 171.5 for July, 1926. The Aberthaw index of cost of industrial building including both labor and materials, at 192 (1914 costs= 100) on August 1st, showed no change from July 1st. This index stood at 198 a year ago. Available statistical data for the lumber in dustry of this district for recent months are unsatisfactory for analysis and interpretation. Non-statistical evidence tends to indicate in creased activity in lumbering and logging in California, and continued curtailment of opera tions in the Pacific Northwest. LUMBER* Twelfth District P r o d u c t io n ............................................................ S h ip m en ts .............................................................. O rd e rs ..................................................................... U n fille d O r d e r s ! ............................................... N o . o f M ills R e p o r t i n g ^ ................................ July, 1927 July, 1926 (board feet) 740,674 697,018 703,253 515,568 182 (board feet) 756,966 741,408 772,849 586,442 177 * A s re p o rte d b y fo u r a s s o cia tio n s , 000 om itte d e x c e p t in ca se o f n u m b er o f m ills re p o rtin g . fR e p o r t e d b y th ree a sso cia tio n s. T h e fig u res are n o t str ic tly c o m p a r a b le w ith o th e r fig u res a p p e a rin g in the ta b le. J A v e ra g e . S o u r c e : N a tio n a l L u m b e r M a n u fa ctu re rs A s s o c ia t io n . Figures of national non-ferrous metals pro duction, together with a guide to the propor tionate importance of this district in such pro duction, are presented in the follow ing table : N O N -FERR OU S M ETALS National Production July, June, C o p p e r (s h o r t t o n s ) (m in e 1^7 1927 Produced in 12th Dist.* in 1926 July, 1926 p r o d u c t io n ) ................... 60,545 69,539 72,949 L e a d (s h o r t t o n s ) (c r u d e ) f ... 59,164 56,624 Z in c (s h o r t t o n s ) ( s l a b ) . 47,627 49,718 48,403 S ilv e r ( o z .) (c o m m e r c ia l b a r s ) ..................................................... 5,012,000 4,660,000 64.1 43.5 13.3 69.7 ♦ In c lu d in g all o f A r iz o n a , th e five so u th e a ste rn c o u n tie s o f w h ich are in the E le v e n th F e d e ra l R e s e r v e D is tr ic t, t ln c lu d e s fig u res f o r M e x ic o . Daily average flow of petroleum in California continued to decline during July. Indicated consumption exceeded production, and the downward trend of stored stocks which has been in evidence since March, 1926, continued. Stored stocks in the United States have been increasing in volume during the past eight months, a reflection of current record produc tion. On July 29th, the retail service station price of gasoline in California increased one cent per gallon, the equivalent of an additional state tax on gasoline for highway maintenance which became effective on that date. PETROLEUM —California Indicated Average Stored Average Daily Stocks at Daily Consumption End of Production (Shipments) Month J u ly , Ju n e, J u ly , (barrels) 1 9 2 7 .. .. 623 ,194 1 9 2 7 .. .. 639,381 1 9 2 6 .. .. 604,619 (barrels) 634,157 633,278 685,393 (barrels) 118,713,590 119,053,460 121,910,744 Source : American Petroleum Institute. 61 FEDERAL RESERVE AG EN T A T SAN FRANCISCO New Wells —> Daily Number ProducOpened tion 70 96 68 (barrels) 31,480 64,201 27,582 Flour production, as reported by 14 of the district’s principal milling companies, did not show the usual seasonal increase during July. During May and June, however, these com panies had increased their output by more than the usual seasonal amount. A t 387,884 barrels, output at mills during July was smaller in volume than during both June, 1927, and July, 1926, but exceeded by 8 per cent the five-year (1922-1926) average production for that month. Indicated consumption of flour was smaller than production and stocks of flour at the mills increased for the second consecutive month after having tended downward since February, 1927. Holdings of flour at mills were 5 per cent in excess of the five-year (1922-1926) aver age holdings for the end of July. Millers’ hold ings of wheat declined seasonally during July, but at the end of the month exceeded the fiveyear average figures by about 40 per cent. FLO U R M IL L IN G Twelfth District July,1927 O u tp u t ( b b l s . ) . . . 387,884 to c k s * F lo u r ( b b l s . ) . . . 401,507 W h e a t ( b u . ) . . . 1,867,480 June, 1927 July,1926 Five-Year Average July, 1922-1926 427,792 454,175 356,528 397,087 2,152,991 349,938 1,570,287 382,079 1,338,909 * A t e n d o f m o n th . Distribution and Trade The volume of distribution and trade, as in dicated by this bank’s indexes of sales at retail and wholesale, declined by more than the usual seasonal amount during July, 1927, and was slightly smaller than in July, 1926. Although sales at wholesale and at retail were smaller both in value and in estimated volume, carloadings were larger than in July, 1926, and, if allowance be made for one less business day in July, 1927, than in July, 1926, and for relative price levels during the two months, the daily average sales figures were also larger during the later than during the earlier month. It seems probable, therefore, that distribution and trade during July, 1927, were as active, if not slightly more active than in July, 1926. The increase from last year in freight carloadings was the result almost entirely of increased ship ments of perishable commodities, grain, and sand, stone and gravel in California. Carload ings figures are not strictly comparable be cause of a tendency to increase the size and load of freight cars in use and because of dif ferences in the dates of crop maturities in different seasons, and the presence of one more business day in July, 1926, than in July, 1927. Sales of 125 firms in seven lines of trade at retail declined by 12.1 per cent or more than the estimated seasonal amount during July, 1927, and were 3.7 per cent smaller in value than during July, 1926, a decline approxi mately equal to the proportional difference between the number of trading days of each M O N T H L Y R EVIEW OF BUSINESS CONDITIONS 62 of the two months. Sales of 42 department stores showed a decline in value of 12.7 per cent from last month and of 1.9 per cent from a year ago, and sales of 68 furniture stores were 10.8 per cent smaller in value than in July, 1926. If figured on a daily average basis, INDEX NUMBER A u g u s t , 1927 Sales at wholesale declined by more than the usual seasonal amount during July and were 7.9 per cent smaller than in July, 1926, accord ing to this bank’s index of sales of 168 dealers in eleven lines of trade. The wholesale price level was 4.1 per cent lower than last year however, so that it is estimated that the physi cal volume of goods moved through wholesale channels was but little smaller than in July, 1926. W ith one less business day in July oJ this year than in July, 1926, it is probable thal activity in wholesale trade was at least as great as last year. W H O L E S A L E T R A D E —Twelfth District Index Numbers of Sales (1923-1925 monthly avera?e= 100) No. of Firms A g r ic u ltu r a l Im p le m e n ts . . . . D ru g s D ry G oods T R A D E A C T IV IT Y —T W E L F T H DISTRICT Seasonally adjusted index numbers of sales of 28 department stores and about 170 wholesale firms, (1923-1925 average = 100). Latest figures, July, department stores, 111; wholesale firms, 91. department store sales were larger than in July, 1926. Stocks of 91 retail stores were slightly smaller at the close of July than at the close of June but were larger than on July 31, 1926, and the rate of stock turnover during July, 1927 (2.5) was below that of July, 1926 (2.7). ,--------- N E I ' SALES*---------, r-ST O C K S*^ January 1 to July,1927, July 31,1927, compared compared with same period with in 1926 July,1926 D e p a r tm e n t S to r e s . D r y G o o d s ................. F u rn itu r e ..................... M e n ’ s A p p a r e l .......... M e n ’ s and W o m e n ’ s A p p a r e l .................... S h o e s ............................. W o m e n ’ s A p p arel . . A ll R e p o r t in g S to r e s ....................... End of Month, July, 1927, compared with July,1926 1.9 (3 7 ) 1.0 ( 4 ) 2.1 (2 2 ) 2.5 ( 38) — 1.9 ( 4 2 ) 12.9 ( 5) 6.0 ( 6 ) — 10.8 ( 68) — 0.8 ( 3 2 ) — 0.3 ( 17) 1.8 ( 10) — — 9.5 ( 2 5 ) — 15.0 ( 11) 3.0 ( 10) 1.4 ( 6) 4.0 ( 11) 9.8 ( 3) 13.8 (1 0 ) — 2.3 (1 1 3 ) 2.3 (9 1 ) 3.7 (1 2 5 ) o r d e c r e a s e ( — ) . F ig u r e s in p a re n th e se s in d ica te n u m b e r o f s to r e s r e p o r tin g . F ig u r e s o f id e n tica l d ep a rtm e n ts o f d e p a rtm e n t s to r e s r e p o r t in g s u ch figu re s sep a r a te ly in c lu d e d in sales c o m p a r is o n s o f fu rn itu re , m e n ’ s ap p a re l, and s h o e sto r e s, J u ly , 1927, w ith J u ly , 1926. (C) Bank Debits* — 21,388 14,829 33,031 47,592 . . 875 ,850 Los Angeles . 216 ,787 O a k la n d .......... , 15,724 O g d e n ............... 38,381 P a sa d e n a 24,661 P h o e n ix .......... 163,776 Portland ......... 10,046 R e n o ................. 48,575 S a c r a m e n to . . Salt Lake City. . 69,559 60,236 S an D ie g o . . . San Francisco . . 1,191,464 27,454 S an J o s e 2 05 ,486 Seattle ........... , 53,940 Spokane ......... 31,161 S tock ton . . . . 44,739 T a c o m a .......... 10,700 Y a k im a .......... District ... *000 omitted. $ .$ 3 ,2 0 5 ,3 7 9 r-First Seven Months^ 1926 1927 July, 1926 July,1927 B e r k e l e y .......... B o is e ................ F r e s n o ............ L o n g B e a ch . $ 19,524 14,831 34,674 49,953 917,682 184,599 16,842 37,677 25,877 190,805 10,281 32,111 72,688 67,538 1,075,332 32,869 216,056 58,443 27,237 48,071 14,660 $3,147,750 $ 148,633 90,889 255,466 351,376 6,579,342 1,549,583 117,658 295,285 193,183 1,148,719 64,064 248,465 481,719 437,830 8,391,240 178,161 1,442,822 397,048 195,328 316,117 83,829 $22,946,767 $ 135,342 90,405 243,042 363,728 6,142,706 1,194,570 135,440 268,495 179,988 1,237,957 62,863 223,263 493,670 460,206 7,518,841 179,114 1,465,580 391,106 188,023 323,974 89,064 $21,387,377 15 13 16 6 24 10 16 18 20 H a r d w a re S hoes . .. A ll L in e s , A d ju s t e d * . . . . * F o r s e a so n a l v a r ia tio n . July 215 92 142 100 80 84 70 89 87 7 85 23 168 168 93 93 91 1927 - ----------\ June May 181 94 156 103 80 101 101 930 101 940 92 990 980 130 94 139 103 77 101 89 90 100 940 80 930 960 1926 July 193 103 148 108 90 84 84 102 94 91 98 101 99 Q R evised. Prices The general wholesale price level advanced slightly during July, 1927, according to the United States Bureau of Labor Statistics’ price index of 404 commodities at wholesale which stood at 143.7 (1913 prices=100) in June, 1927, compared with 144.6 in July, 1927, thus show ing the first upward movement since Septem ber, 1926. O f the group indexes composing the general index, farm products, cloths and clothing, house furnishings and miscellaneous articles advanced, while foods, fuel and light ing, metals, building materials, and chemicals and drugs declined slightly. The United States Department of A gricul ture’s index of prices paid for farm products a1 (D) D EPAR TM EN T STORE SA L ES*-Index Numbers ( 1923-1925 daily averase= 100) San Salt Oak Fran Lake Los Spo cisco City Angeles land Seattle kane (5) t (4) f (5) f (5)f (5)f (3)t Without Seasonal Adjustment J u ly , Ju n e, M ay, A p r il, M a r., F e b ., Jan ., Ju ly, 1 9 2 7 .. 1 9 2 7 .. 1 9 2 7 .. 1 9 2 7 .. 1 9 2 7 .. 1 9 2 7 .. 1 9 2 7 .. 1 9 2 6 .. . . . . . . . . 96 102 I ll 121 116 105 114 95 93 104 110 118 103 96 99 95 Dis trict (28)1 87 94 112 111 98 91 88 83 86 98 110 97 85 80 80 79 90 102 104 102 90 84 77 86 91 92 92 100 87 80 72 79 92 99 110 113 93 95 98 89 117 111 116 120 103 102 105 110 107 107 970 1020 98 960 1O10 104 104 107 105 105 100 108 104 100 114 107 102 103 100 95 105 99 111 112 113 120 111 109 111 108 With Seasonal Adjustment J u ly , Ju n e, M ay, A p r il, M a r., F e b ., Jan ., J u ly , 1 9 2 7 .. 1 9 2 7 .. 1 9 2 7 .. 1 9 2 7 .. 1 9 2 7 .. 1 9 2 7 .. 1 9 2 7 .. 1 9 2 6 .. . . . . . . . . 109 114 117 128 120 116 118 109 113 117 119 127 116 118 119 117 * D e s c r ip t io n o f th ese in d e x e s is g iv e n in M o n t h ly R e v ie w foi J u n e 20, 1927. f F ig u r e s in p a re n th e se s in d ica te n u m b e r o sto re s. O n e s to r e in c lu d e d in D is t r ic t fig u re s n o t in clu d ec in c itie s s h o w n a b o v e . Q R evised., A u g u s t , 1927 the farm remained unchanged at 130 (August, 1909-July, 1914 prices=100) during July. The Bureau of Labor Statistics’ wholesale price index of non-agricultural commodities ad vanced from 150.5 to 150.7 during the month, causing the ratio between these two indexes, an indication of the purchasing power of farm products, to decline fractionally to 86.3 in July, 1927. A year ago this ratio stood at 82.4. Cattle prices at Chicago during July con tinued the advance noted during June, quota tions for the month averaging approximately 5 per cent above those of a month ago and 23 per cent above the average for July, 1926. The decline in quotations for hogs was checked, temporarily at least, by price advances during July, 1927. The monthly average price for July was approximately 2 per cent above the June average, but was 29 per cent below the average price for July, 1926. Quotations for sheep and lambs were lower during July, 1927, than during June, 1927. The monthly averages declined 3 per cent and 10 per cent, respec tively, from last month, but were only 1 per cent and 0.5 per cent lower, respectively, than the July, 1926, average prices. C a ttle . H ogs . S h eep . Lam bs 63 FEDERAL RESERVE AG EN T A T SAN FRANCISCO L IV E S T O C K P R IC E S A T C H I C A G O (Weekly averages per 100 pounds) Percentage changes from June, July, O n e M on th O n e Y e a r July, 1927 1927 1926 Ago Ago $11.14 + 2 3 .0 $11.67 $ 9.49 + 4.8 9.04 8.90 12.80 + 1.6 — 29.4 5.86 6.04 5.93 — 3.0 — 1.2 15.79 14.34 — 9.6 — 0.5 14.27 The upward trend of wheat prices, evident in July, was checked slightly during the early part of August, but was resumed toward the middle of the month, quotations again reach ing levels considerably above those of midAugust, 1926. Prices for September contract wheat at Chicago ranged from $1.37 to $1.38j4 Per bushel for the week ending August 5, 1927, compared with quotations ranging from $1,425^ to $1.44^4 per bushel for the week ending July 1, 1927, and $1.38 to $1.39^4 Per bushel one year ago. On August 15, 1927, quotations for this contract ranged from $1.40^ to $1.43^ per bushel, compared with a range of from $1.35^4 to $1.37 on August 14, 1926. Cotton prices advanced steadily during July and early August, continuing the upward movement in progress during the past seven months. Spot quotations for middling uplands cotton at New Orleans ranged from 16.41 to 18.33 cents per pound during the week ending August 5, 1927, an advance of 5 per cent from the weekly range for the corresponding week a month ago— 16.49 to 16.70 cents per pound. A year ago quotations for this grade of cotton were from 18.10 to 18.67 cents per pound. (The sharp decline of cotton prices in 1926 com menced in September.) On August 11, 1927, the price had advanced to 19 cents per pound as compared with 17.36 cents per pound on August 11, 1926. Prices for wool, as indicated by an average of 98 quotations on the Boston market, advanced from 64.18 cents per pound in June, 1927, to 64.77 cents per pound in July, 1927. A year ago this average stood at 66.76 cents per pound. On July 29, 1927, refined beet sugar quota tions, f. o. b. San Francisco, were reduced 10 cents to $5.80 per 100 pounds, the price quoted one year ago. On August 19th a further reduc tion of 10 cents was announced. During 1927 refined beet sugar prices have ranged from $6.40 per 100 pounds, the high point reached early in January, to the present low point of $5.70. From April 15, 1927, to July 29, 1927, the price stood at $5.90 per 100 pounds. Peach growers and canners in California reached an agreement on August 3, 1927, re garding the prices at which cling peaches of the 1927 crop are to be sold to canners. The agreement specifies that only Number One fruit is to be bought and packed by the packers and sets up a sliding scale of prices which are considerably lower than the price ($40.00 per ton) paid for Number One cling peaches last year. The schedule of prices, which vary in versely with the size of the pack, was an nounced as fo llo w s : S IZ E O F P A C K (Number of cases) 11,000,000 o r m o r e ..................................................... 10,500,000 - 11,000,000 10,000,000 - 10,500,000 9.500.000 - 10,000,000 9,000.000 9,500,000 , 8.500.000 9,000,000 8 ,500,000 o r l e s s ......................................................... P R IC E (Per ton) $20.00 22.50 25.00 27.50 30.00 32.50 35.00 (E) Commodity Prices— C om m o d ity W h o le s a le P r ic e s ( U . S. B u re a u o f L a b o r — 1913 p r i c e s = 1 0 0 ) ................... P u r c h a sin g P o w e r o f F a rm P r o d u c t s ( U . S . D e p t , o f A g r i c u l t u r e ) * . . . . W h e a t ............................... C h ic a g o c o n t r a c t p r ice fo r S e p te m b e r w h e a t ............ W o o l ..................................A v e r a g e o f 98 q u o ta tio n s at B o s t o n ............................... A p p l e s ............................... C a lifo rn ia G ra v e n s te in , w h o le sa le at San F r a n cis c o . O r a n g e s .............................V a le n c ia s , F a n c y , w h o le s a le at S an F r a n c i s c o . . . . P r u n e s ............................... S iz e 4 0 /5 0 in 25-lb. b o x e s , f. o . b . C a l i f o r n i a . . . . . R a is in s ............................... T h o m p s o n S e e d le ss, b u lk , in 25-lb . b o x e s , f. o . b. C a lifo rn ia ................................................................................. B u tt e r ................................92 s c o r e at San F r a n c is c o .................................................... C o p p e r ................................E le c t r o ly t ic , m o n th ly a v e ra g e at N e w Y o r k ............. L e a d .................................... M o n th ly a v e r a g e at N e w Y o r k ......................................... S ilv e r .................................. M o n th ly a v e ra g e at N e w Y o r k ....................................... . L u m b e r ( S o f t w o o d ) . .W e e k ly In d e x , U n ite d S t a t e s f ......................................... U nit bu . lb . box. box lb. lb. lb. lb. lb. oz. A u g . 5,1927 144.6 86.3 $ 1 .3 7 ^ - 1 .3 8 # 64.770 $2 .1 0 -2 .7 5 6 .0 0 -7 .2 5 . 0 7 J 4 - .0 7 # ,0614 .42 12.5320 6.3440 56.3600 29.40 O n e M on th A g o 143.7 86.4 $ 1 .4 2 ^ - 1 .4 4 # 64.180 $ 2 .7 5 -3 .0 0 5 .5 0 -6 .0 0 .0 7 J 4 - .0 7 # .0 7 ^ .42 12.3700 6.4140 56.7690 30.65 One Y ear Ago 150.7 84.8 $ 1 .3 8 - 1 .3 9 # 66.760 $ 1 .0 0 -1 .3 5 4 .5 0 -5 .2 5 .0 8 -.0 8 Yz •0734 .42 13.9240 8.4990 64.7930 29.96 *Ratio of farm prices (August, 1909-July, 1914 prices— 100) to wholesale prices of non-agricultural commodities (1910-1914 p rices= 100). fA s published by “ The Lumber Manufacturer and Dealer.” 64 Opening prices for canned and dried fruits recently announced by packers are generally lower than a year ago. The tables below show opening prices, published by one large packer, for important canned fruits and spot quota tions at m id-August for dried fruits in Cali fornia during the last three years: Choice Grade No. 21/aCans A u g u s t , 1927 M O N T H L Y R EVIEW OF BUSINESS CONDITIONS $2.55 3.15 1.85 1.85 2.60 1.75 M IL L IO N S 1400 OF \ 1200 D O LLA RS - - ' I — -]■ ..1 r i A M C . A k .in m c r * r » i i m t c 1000 C A N N E D FR U IT— Opening Prices* (Per dozen cans) 1927 1926 A p r ic o t s .................................................. C h erries , R o y a l A n n e .................... P e a ch e s, Y e llo w C l i n g ................... P e a c h e s , Y e l l o w F r e e s t o n e .......... P ea rs , B a rtle tt ................................... P lu m s , E g g ........................................... estimated upward trend of past years, and an abundant supply of funds is available at rela tively low interest rates. 1925 $2.60 3.60 2.30 2.25 2.65 2.00 $2.40 3.45 2.20 2.15 3.30 1.90 8 0 0 -D E M A N D Df ! r* t* 700 60 0 W 500 f M E D E P O S IT S * f. o . b . c a n n e r y in C a lifo rn ia . DR IED FRUIT PRICES (Cents per pound) Choice Grade Bulk in 25 lb. boxes A p p le s * ............................................ A p r ic o t s , N o r t h e r n .................. F ig s , B la c k M is s io n ................ F ig s , W h it e A d r i a t i c s ............ P e a ch e s , U n p e e le d Y e l l o w .. P e a rs , N o r t h e r n ........................ P r u n e s, 4 0 /5 0 ............................. R a isin s, T h o m p s o n ................. R a is in s , 3 C r o w n M u s c a t e l.. * B u lk in 50-lb. b o x e s . A u g u s t 16, 192 6.- Aug. 13, 1927 lO M -lO tf —1 4 ^ 6 5 7 # - 8 9# 6J4~ 6 # 5 Y2 6 Y2 - 6 # . _ / lN v ESTM EN TS Aug. 14, 1926 9 21 Yt 14 tS e p te m b e r 12, Aug. 15, 1925 U Y2 1 9 # -2 0 1 2 # -1 3 lO tf 6 * 4 - 6 Y2 5 t f - 5$4 1 3 # -1 4 1 0 J 4 -1 0 # 8 y2% 1 3 -1411 7 ^ -1 8 9 - 9 K 6 Ya~ 6 Y2 7 1925. - 7]4 6 l/i 6 # - 6 Y2 J O p e n in g p r ice Prices for silver and lead declined during July, 1927, while copper and zinc prices ad vanced slightly. A national index of lumber prices published by “ The Lumber Manufac turer and Dealer” declined from 30.65 in June, 1927, to 29.40 in July, 1927. A year ago it stood at 29.96. Banking and Credit During recent weeks condition statements of 58 reporting member banks in the principal cities of the Tw elfth Federal Reserve District have failed to reflect the seasonal expansion in primary demands for credit accommodation which usually occurs at this time of the year. The retarded agricultural season this year and the lower level of activity in industry as com pared with last year account, in part, for the absence of the usual expansion in borrowings during recent weeks. Changes in demand for credit during 1927 have to some extent paralleled those which occurred in 1924. A s was the case in 1924, there has been marked reduction in time de posits, only slight increase in demand deposits, and decreased volum e of loans outstanding at member banks. The year 1924, particularly during the summer months, was one of relative slackening of industrial and trade activity, and some evidence of declining activity in industry has been recorded during recent months. Growth in the district's financial resources, as reflected in banking data during the past twelve months, has been well in excess of the W — — — --------- w w — 1927 M E M B E R B A N K C R E D IT -T W E L F T H D IS T R IC T Figures for about 65 m em ber ban ks in leading cities, as of last W edn esda y o f each m onth. Latest figures, A u gu st 17th. R E P O R T I N G M E M B E R B A N K S * — T w e lfth D istrict (In millions of dollars, percentage changes in parentheses) C o n d itio n A u g . 17, 1927 T o t a l L o a n s ..........................., . 1,267 942 C o m m e rcia l L o a n s ............. . 325 L o a n s o n S e c u r itie s .......... , . 492 In v e s tm e n ts .......................... . T o t a l L o a n s and I n v e s tm e n ts 1,760 792 N e t D e m a n d D e p o s its . . . . 906 T im e D e p o s it s ..................... . B o r r o w in g s fro m F e d e ra l 31 R e s e r v e B a n k ................. t---------- C h anges f r o m ---------O n e M on th Ago ( + = increase. — 11 ( 0 .8 ) — 6 ( 0 .7 ) — 4 ( 1.3) — 11 ( 2 .1 ) — 22 ( 1.2) + 8 ( 1.0) — 27 ( 2 .9 ) + 4 (1 6 .9 ) O ne Year Ago -— = decrease. + 58 (4 .8 ) + 33 (3 .6 ) + 26 (8 .6 ) + 2 9 ( 6 .3 ) + 8 8 (5 .2 ) + 13 ( 1 .6 ) + 64 ( 7 .6 ) + 2 ( 6 .8 ) * 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 r o x im a t e ly 50 pei c e n t o f to ta l r e s o u r c e s o f all b a n k s an d 70 p e r cen t o f to ta r e s o u r c e s o f all m e m b e r b a n k s in th e 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 it San F r a n c is c o , L o s A n g e le s , O a k la n d , P o r t la n d , S ea ttle T a c o m a , S p o k a n e , S a lt L a k e C it y , a n d O g d e n . Changes in weekly condition statements oi the Federal Reserve Bank of San Franciscc during the five-week period ended August 17tl have reflected the reduced primary demand foi credit. Total earning assets increased slightly a decrease in holdings of acceptances pur chased in the open market being more thar offset by increased holdings of United States government securities and of bills discounted Holdings of bills discounted, although largei on August 17, 1927, than on July 13, 1927, were smaller than on any other W ednesday since June 29, 1927. F E D E R A L R E SE R V E B A N K O F SA N F R A N C IS C O (In millions of dollars, percentage changes in parentheses) 180 t-------- C h anges from ■ — O n e M onth O n e Y ea r Ago Ago ( + = increase. — = decrease) — 17 (1 5 .1 ' + 1 ( 1 .3 ) + 4 (1 1 .4 ) ( . ; + + 4 (1 0 .4 ) — 4 ( 8.4; — 7 (3 9 .1 ) — 15 (57.4; — 5 ( 1.8) + 5 ( . ; 0 0 + 7 ( . ; 169 — 7 ( 4 .2 ) C o n d itio n A u g . 17, 1927 T o t a l B ills a n d S e c u r i t ie s .. . . B ills D is c o u n t e d ................. U n it e d S ta te s S e c u r i t ie s .. B ills B o u g h t ........................... T o t a l R e s e r v e s ...................... T o t a l D e p o s it s ...................... . . F e d e ra l R e s e r v e N o te C ir c u la tio n ........................... . . 97 41 44 11 2 47 17 40 — 2i ( 11. 3;
@FedFRASER