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MONTHLY REVIEW OF BUSINESS CONDITIONS ISAAC B. NEWTON, Chairman of the Board and Federal Reserve Agent Federal Reserve Bank of San Francisco Vol. X V San Francisco, California, August 20,1931 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 and factory employ ment declined by somewhat more than the usual seasonal amount in July, while the gen eral level of com m odity prices remained un changed. Conditions in the money market con tinued easy. Production and Employment. Industrial pro duction, as measured by the Board’s index, which is adjusted to allow for the usual sea sonal variations, declined one per cent further in July to 83 per cent of the 1923-1925 average, compared with the low point of 82 for last D e cember and the year’s high point of 90 in April. Output of iron and steel, automobiles, lumber, and copper decreased further, while activity at textile mills and shoe factories was maintained at a high level. Factory employment and payrolls declined by somewhat more than the seasonal amount from the middle of June to the middle of July. Large decreases in employment were reported at carbuilding shops, machinery and automo bile factories, and lumber mills. In the textile industries as a whole, employment decreased somewhat less than is usual in July, and there were increases in employment in the woolen goods and men’s clothing industries. Figures on the value of building contracts awarded during July and the first half of August, as reported by the F. W . D odge Cor INDUSTRIAL PRODUCTION Index numbers of industrial production adjusted for seasonal varia tions (1923-1925 average=100). poration, show a continuation of the downward movement of recent months. Department of Agriculture estimates based on August 1 con ditions indicated an unusually large crop of winter wheat, an exceptionally small yield of spring wheat, and a total wheat crop of 894,000,000 bushels, 72,000,000 bushels larger than the five-year average. The corn crop was esti mated at 2,775,000,000 bushels, about the usual size and 700,000,000 bushels larger than last year’s small crop. In spite of a 10 per cent re duction in acreage, the cotton crop was esti mated by the Department of Agriculture to be about 15,584,000 bales, an increase of 1,600,000 bales over last year. Distribution. Freight carloadings increased by slightly less than the usual seasonal amount in July and department store sales, which ordi narily decline sharply at this season, appar ently decreased somewhat more than usual. W holesale Prices. The general level of wholesale prices in July continued at 70 per cent of the 1926 average, according to the index of the Bureau of Labor Statistics. Increases were reported in the prices of livestock and meats, while prices of building materials and of grains, particularly wheat, declined. During July and the first half of August prices o f cot ton and cotton textiles declined sharply, while prices of dairy products increased. WHOLESALE PRICES Index of United States Bureau of Labor Statistics (1926=100). 58 MONTHLY REVIEW OF BUSINESS CONDITIONS Bank Credit. Loans and investments of re porting member banks in leading cities declined by about $340,000,000 between July 15 and August 15, reflecting chiefly further liquidation of loans on securities and a decrease in all other B IL L IO N S 10 O r August, 1931 serve bank credit during this period increased as a result of an outflow of $144,000,000 of cur rency, which was larger than is usual at this season, and further transfers of foreign funds from the open market into balances at the re- D O L L A R S " m J ¡" 5000 4500 4000 25001 40NEY INCIRCULATION‘S COLD *1 STOCK r MEMBER BANK RESERVEi BALANCE!5 i w / i BANK CREDIT V^ VVä - / . 500 1 9 2 7 1 9 2 8 1 9 2 9 1 9 3 0 1931 MEMBER BANK CREDIT Monthly averages of weekly figures for reporting member banks in leading cities. Latest figures are averages of first two weeks in August. loans, which was partly a consequence of sales o f acceptances to the reserve banks. The volume of the member banks’ investments also showed a slight decline for the period. A t the reserve banks there was an increase in the total volum e of credit of $190,000,000 be tween July 15 and August 19. Demand for re FEDERAL RESERVE BANK CREDIT AND PRINCIPAL FACTORS IN CHANGES Monthly averages of daily figures for twelve Federal Reserve Banks. Latest figures are averages of first twenty days in August. serve banks. This demand for reserve bank credit was met by the reserve banks for the most part through the purchase of bills and United States Government securities in the open market, but also’ through increased dis counts for member banks. M oney rates remained at low levels. 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 A further decline in the volume of business transacted in the Tw elfth District was recorded during July. Adjusted indexes of production declined, while trade activity remained at the low June levels. Commodity price averages were fairly steady during July and the first half of A ugust although some products important in this area sold at new low levels. Reserve Bank credit in use in the District averaged lower dur ing the four weeks ending August 19, than in the tw o preceding months. Interest rates ad vanced slightly, continuing an upward ten dency evident since the middle of May. Unusually hot weather was reported from most sections of the District during July. A s a result production estimates for nearly every deciduous fruit crop in California were reduced during the month. Damage to field and grain crops, however, was not extensive and ill effects of the heat wave were not apparent in the Pa cific Northwest where production of fruits and grains was generally expected to be greater than had been estimated a month earlier. Quo^tations for wheat, cotton, and livestock declined further, while deciduous fruit prices advanced follow ing publication of the reduced production estimates. Because of excessive temperatures, resulting in a decrease in the supply of range forage, the need of supplemental feeding of livestock was even greater during July than in June, except in Arizona where ranges con tinued to supply adequate forage. M ining and manufacturing declined som e what from June to July, continuing the trend of the past two years. Output of crude oil decreased, but activity at petroleum refineries expanded, contributing to a small increase of gasoline supplies. Despite a decline in the amount of copper produced, total inventories continued to rise sharply. Output of lumber and of flour declined after allowance for sea sonal variations. The total value of building permits and engineering contracts awarded in creased between June and July contrary to the usual tendency, principally as a result of the optional award of the large Golden Gate bridge contracts. There was little net change in em ployment during the month, although substan tial reductions from July, 1930, were recorded. Sales at retail showed a decline of about sea sonal proportions from June, while wholesale trade declined contrary to the usual movement in July. The volume of intercoastal traffic con tinued to decline during the month, reflecting principally the extremely small eastbound shipments of petroleum and its products. Freight carloadings decreased but little al though a sharp decline is usually recorded dur ing July. New automobile registrations de clined seasonally. August, 1931 FEDERAL RESERVE AGENT AT SAN FRANCISCO Since July 22, on which day borrowings from the Federal Reserve Bank of San Francisco ($39,873,000) were greater' than at any other time since early in 1931, discounts have aver aged lower than in June or the first three weeks of July. A declining volume of bills accepted by District banks during recent months has been accompanied by increased purchases of bills by those banks for investment purposes, and as a result the Federal Reserve Bank holdings of locally purchased acceptances have declined, notwithstanding the prevailing low acceptance buying rates. Participation by that Bank in Reserve System purchases of bills in national markets, however, has increased recently. Member bank balances at the Reserve Bank in creased slightly late in July and in August, although the volume of time and demand de posits against which a reserve is required de creased somewhat. Security loans of reporting member banks continued to decrease during the month and practically no change was shown in “ all other” (com m ercial) loans. Agriculture Abnormally high temperatures which pre vailed in the Twelfth District during much of July accentuated the relative scantiness of ir rigation water in California, caused consider able damage to deciduous fruit crops in that state, and contributed to' further deterioration of livestock ranges in most of the western states. The beneficial effects of rain which fell late in June in the Pacific Northwest became more evident during the heat of July and a sat isfactory development of crops in that region during the later month was reported. In addi tion to unfavorable physical conditions in Cali fornia, agriculture generally was confronted with unsatisfactory prices for crops now being marketed. In nearly all cases quotations were well below those of 1930 and in some instances they stood at record low levels. The August 1 estimate o f wheat production in the District was 3 per cent greater than the estimate of July 1, but 19 per cent smaller than the final estimate of the 1930 harvest. The July to August increase is accounted for by an im provement in production prospects for winter wheat in W ashington, where the progress of harvesting has demonstrated that yields are likely to be greater than was expected earlier. Shipments of wheat to seaboard terminals were seasonally heavy during July. Receipts at Port land, Tacoma, and Seattle totaled 4,196 car loads, compared with 4,079 cars received in July, 1930. Exports of wheat from Puget Sound and Columbia River ports were also heavy, amounting to 2,195,589 bushels. In July, 1930, exports amounted to 1,715,379 bushels, and shipments to foreign destinations during July have averaged 1,417,752 bushels during the 59 past five years. Storage of wheat at interior mills and elevators in Idaho, Oregon, and W ashington amounted to 11,150,000 bushels on July 1, compared with 18,000,000 bushels re ported on July 1, 1930. WHEAT PRODUCTION (in thousands of bushels) Forecast Forecast Aug. 1,1931 July 1,1931 1930 A r iz o n a .................................................. 672 624 616 California ............................................ 5,467 5,582 12,432 Idaho .................................................... 21,797 23,982 33,787 N ev ad a.................................................. 315 339 334 Oregon .................................................. 16,186 15,950 23,621 Utah ...................................................... 4,120 4,376 6,989 Washington .......................................... 46,747 41,504 39,493 Twelfth D is tr ic t.................................. 95,304 92,357 117,272 United States ...................................... 893,582 869,013 850,965 Source: United States Department of Agriculture. Production of barley in California, in which state considerably more than half of the Dis trict’s barley crop has been grown in recent years, was estimated to be 13,054,000 bushels on August 1. The 1931 barley crop in that state is the smallest of record since 1898, when 9,164,750 bushels were produced. Barley ex ports from San Francisco during July were 654,114 bushels as compared with 558,021 bushels exported in July, 1930. W ith the exception of the 1931 rice crop, which is estimated to be slightly larger than in 1930, production of the principal field crops— cotton, beans, tame hay, hops, potatoes, rice, and sugar beets— will be smaller than a year ago according to August 1 estimates. These declines resulted from decreases both in acre age planted and in yields per acre. FIELD CROPS-PRODUCTION (in thousands) Forecast Forecast July 1,1931 Aug. 1,1931 Cotton (bales) * 325 Arizona, California ........ * 15,584 United States .................. Beans (bu.) California, I d a h o ............ 7,751 7,918 20,659 United States .................. 22,695 Tame Hay (tons) Twelfth D is t r ic t .............. 12,435 13,244 United States .................. 77,587 79,107 Hops (lb s.)f California, Oregon, W ashin gton...................... 22,170 23,495 Potatoes (bu.) Twelfth D is t r ic t .............. 44,697 43,660 United S ta te s .................. . 370,580 396,451 Rice (bu.) C alifornia.......................... 7,500 7,250 United States .................. 40,199 40,711 Sugar Beets (tons) California, Idaho, U tah.. 1,622 1,637 United S ta te s.................. 7,202 7,566 * Federal legislation does not allow a production forecast time. fCalifornia, Oregon, and Washington produce hops grown in the United States. Source: United States Department of Agriculture. 1930 419 13,932 9,464 22,137 15,011 77,850 23,447 50,210 343,236 7,271 41,322 1,767 9,201 at this all the Decreases in the estimates of deciduous fruit production during July were confined entirely to California, slight increases being general in the Pacific Northwest. Abnormal temperatures in the former state resulted not only in a de crease in the estimated volume of production, but also in a decline in the proportion of high quality fruit. Follow ing the decrease in pro- 60 MONTHLY REVIEW OF BUSINESS CONDITIONS duction estimates, prices for fresh fruit at east ern auction markets and prices paid growers for dried fruits in California advanced. DECIDUOUS FRUITS A N D NUTS — PRODUCTION (In thousands) Forecast Forecast 1930 Unit August 1,1931 July 1,1931 California 6,522 5,406 5,940 A p p le s * .................. 200 245 257 Apricots ................ 24 24 18 Cherries ................ 2,182 1,486 l,522t G ra p e s.................... 872 1,308 Raisin ................ 887t 388 231 T a b l e .................. 240t 383 486 3951 W i n e .................. 727 638 796 P e a ch e s.................. 542 438 516 Clingstone ........ 211 200 254 Freestone .......... 208 227 272 P e a r s ...................... 70 73 82 Plums .................... 179 208 267 P ru n es.................... 15 15 14 Almonds ................ 35 36 30 Oregon 4,800 3,684 3,627 A p p le s * .................. 3,200 2,205 2,170 Pears .................... 23 26 Prunes (dried) . . . Washington 26,280 25,560 34,065 A p p le s * .................. 3,650 3,600 4,500 Pears .................... 5 4 Prunes (dried) . . . Idaho 4,440 4,560 4,500 A p p le s * .................. United States 115,089 101,169 A p p le s * .................. 116,349 27,577 24,143 24,406 P e a r s ...................... 77,963 77,074 53,286 Peaches ................ ^Commercial crop. fEstimated as of July 13, 1931. Source : United States Department of Agriculture. In late July it was estimated that packed box shipments of Valencia oranges for the 1931 sea son in California would be 17,317,150 boxes, compared with 10,930,000 boxes in 1930. O f the 1931 crop, 7,190 carloads were shipped during July— substantially more than the 5,484 carlots shipped in the preceding month or the 3,799 carlots shipped in July, 1930. The 1931 lemon crop, as measured by packed box ship ments, was estimated to be 5,933,000 boxes on A ugust 1, compared with 5,150,000 boxes for the 1930 season. Shipments of lemons declined from the record volume of 2,905 carlots in June to 2,419 carlots in July, but were larger than the 2,004 carlots shipped during July, 1930. Both lemon and orange prices averaged slightly higher in July than in June. Receipts of butter and eggs at Pacific Coast markets declined slightly from June to July and were smaller than a year ago, but storage holdings increased seasonally during the later month. Although there was some increase in butter and egg prices, the consumption of these products apparently was well maintained. Excessive heat during July and the lack of the usual summer rains in the higher mountain areas has resulted in further deterioration of livestock ranges in all states of the District ex cept Arizona. In Arizona, the supply of feed continues to be more nearly adequate than in other states west of the Continental Divide, and livestock in that state are in excellent flesh. Livestock in the District generally, however, failed to make the gains ordinarily expected during July and on August 1 were in poorer August, 1931 condition than either a month or a year earlier. In some areas it has been necessary to provide supplemental feed for stock on summer ranges. Reflecting unsatisfactory feeding conditions, receipts of livestock at Pacific Coast markets during July included a larger proportion of thin stock than has been received in any July dur ing recent years. The 1931 lamb crop in the District was esti mated to be 9,917,000 head on August 1, com pared with 9,543,000 head in 1930. This increase in the number of lambs is the result of a larger number of ewes on farms this year than last and lighter losses of lambs during the spring lambing season. The United States Department of Agriculture estimates this District’s 1931 w ool clip at 116,810,000 pounds, an 8 per cent increase over the 107,939,000 pounds shorn in 1930. Industry Industrial production declined in the Twelfth District during July. The output of lumber, copper, flour, and crude oil decreased, but production of refined oils increased slightly during the month. The value of building per mits issued increased by a small amount during July as compared with June, but was less than in July, 1930. Engineering contracts awarded were substantially larger in value during the month than in June and slightly larger than in July, 1930. Available evidence indicates that the volume of employment changed little in July except in Arizona, where the estimated number of w ork ers employed declined 20 per cent. A ll reports show large decreases in comparison with July, 1930. One hundred and thirty-six firms in Ore- Employment— -Californi a-------- \ f -Oregon— \ No. of No. of No. <—Employees — v Employees —* No. of July, July. July, of July, Industries 1930 Firms 1931 1930 Firms 1931 24,352 All Industries4 1,113 156,020 191,712 136 19,501 (-18.6) -19.9) <Stone, Clay and Glass Products. 57 5,592 7,395 4 124 140 —24.4) ( - -11.4) ( Lumber and W ood 13,322 47 10,628 Manufactures .. 135 16,833 21,576 ( - -20.2) (-—22.0) 1,319 1,307 2,053 9 17 2,086 (0.9) (— 1.6) Clothing, Millinery and Laundering. 144 11,607 11,931 363 397 8$ (— 2.7) ( — 8.6) Food, Beverages, 3,502 2,257 38 and T o b a c c o ... 265 42,282 50,574 ( - -35.6) (-—16.4) Public Utilities .. 40 52,529 59,942 —12.4) (Other Industriesf. 466 70,377 88,807 ( —20.8) 4,810 5,684 7,276 9,343 30 Miscellaneous .. . 49 ( - -15.4) ( —22.1) Wholesale and 141 32,232 35,039 (— 8.0) r *Public utilities and wholesale and retail figures not included in this total. JLaundering only, fIncludes the following indus tries : metals, machinery and conveyances; leather and rubber g ood s; oils and paints; printing and paper goods. Figures in parentheses indicate percentage change from July, 1930. FEDERAL RESERVE AGENT AT SAN FRANCISCO August, 1931 gon whose figures are received by this Bank re ported an 11 per cent decrease in the number of industrial employees as compared with June and a decrease of 20 per cent as compared with July, 1930. Fourteen of these firms reported de creases in wage rates during the month averag ing 9 per cent. In California 1,133 firms reported a decrease of 19 per cent in the number of industrial employees as compared with July a year ago. This figure is the same as the average decrease during the first seven months of 1931 compared with 1930. Production of crude oil in California during July averaged about 518,000 barrels per day, a slight decrease as compared with the June aver age of approximately 521,000 barrels. Daily average production in July, 1930, was 607,000 barrels. Refineries operated at a slightly higher rate in July than in June and stocks of both fuel oil and gasoline increased somewhat. Eastbound shipments of petroleum and its products through the Panama Canal totaled only 124,182 tons in July, a much smaller monthly total than any reported to this Bank since these data first became available in November, 1925. Mining was less active in July than in June, 1931, or July, 1930. The American Bureau of Metal Statistics reports that stocks of refined copper in North and South America on A u gust 1 were 440,000 tons, compared with 413,000 tons on July 1 and 322,000 on August 1, 1930. On August 1 stocks of refined and blister cop per combined were 619,000 tons, compared with 564,000 tons on August 1, 1930. The value of building permits issued and con struction contracts awarded in the Twelfth D is trict was approximately 46 million dollars in July, compared with 44 million dollars in June and 41 million dollars in July, 1930. The value of building permits issued during the month Industry— Indexes of daily average production, adjusted for seasonal variations (1923-1925 daily average=100) General : Carloadings— Industrial ............ Electric Power Production........ Manufactures : Lumber .......................................... Refined Mineral O i l s f ................ Flour .............................................. Cement .......................................... W ool Consumptionf .................... Minerals: Petroleum (California) f .............. Copper (United States) $ .......... Lead (United States) Î ............ Silver (United States) t ............ Building and Construction§ Total .............................................. Value of Building Permits Twenty Larger C ities.............. Seventy Smaller C itie s ............ Value of Engineering Contracts Awarded T o t a l........................................ Excluding B u ild in g s............ July ........ 59 - 1931June May 61 68 158 153 1930 July 78 166 101 . . 71 61 137 124 74 87 65 145 98 72 59 81 175 114 94 68 78 . , , . 59 , . 64 .............43 79 67 60 52 81 68 78 47 92 83 103 71 57 75 71 33 41 29 40 31 43 50 70 ........ 210 89 159 144 273 142 138 ........ . ........ 58 fN ot adjusted for seasonal variations. iPrepared by Federal Reserve Board. §Indexes are for three months ending with the month indicated. 61 decreased by slightly less than the usual amount in 70 of the smaller cities, while con trary to the usual movement, there was an increase in 20 of the larger cities. This nonseasonal rise was influenced chiefly by the fig ures for Seattle which increased abruptly from $556,000 in June to $2,183,000 in July. Figures for Portland also recorded a substantial in crease. In Los Angeles, Pasadena, San Diego, and San Francisco the value of building permits issued was considerably smaller in July than in June, and there were appreciable declines in several other cities of the District. A compari son of July, 1931, with July, 1930, shows de creases in Long Beach and Los Angeles and increases in Portland, San Francisco, and Seattle. The value of all engineering contracts awarded in the Far W est, as reported by Engi neering News-Record, was considerably larger than in June and was slightly greater than in July, 1930. The principal items causing this in crease, however, were optional awards aggre gating $21,862,000 for the Golden Gate bridge in San Francisco. These contracts provide for definite awards under certain conditions at a later date. Contract awards for industrial and commercial buildings increased during the month, but awards for construction of water works, sewers, streets and roads, public and Federal Government buildings, and unclassified projects were smaller in value than in the pre vious month. Output of lumber by mills in this District de clined somewhat more than seasonally during July. Shipments and orders decreased also, but by a smaller amount than production, and stocks were reduced. Shipments of lumber through the Panama Canal from the W est Coast totaled 162,420 tons during the month, an amount which compares favorably with average monthly shipments during most of 1930 and 1931. Output of flour declined substantially during July, contrary to the usual movement during that month. Stocks of flour held by millers were slightly smaller at the end of the month than at the end of June and were 40 per cent smaller than a year ago. Stocks of milling wheat increased 15 per cent during July, but were 55 per cent smaller than on August 1, 1930. Shipments of flour from Puget Sound and Columbia River ports were large during July, reflecting chiefly greater activity in the Oriental trade to which 306,000 barrels were shipped compared with the shipment of 190,000 barrels in July, 1930. Trade Trade activity in the Twelfth District did not change appreciably during July. Sales of department stores declined by about the sea sonal amount, as did registrations of new auto- 62 August, 1931 MONTHLY REVIEW OF BUSINESS CONDITIONS mobiles. W holesale sales and the total volume of intercoastal shipments decreased contrary to seasonal expectations, in the latter instance, chiefly because of an exceptionally small move ment of petroleum and its products from this District. Carloadings decreased by less than the seasonal amount between June and July. Foreign trade during June decreased more than is usual during that month. RETAIL TRAD E—Twelfth District (--------------- 1931 compared with 1930*--------------- ^ NET SALES STOCKS July Jan. 1—July 31 July Department S tores..— 7.8 ( 66) — 8.9 ( 64) — 12.5 ( 52) Apparel Stores ........ — 12.3 ( 28) — 12.3 ( 27) — 23.6 ( 18) Furniture Stores . . . — 10.0 ( 42) — 13.5 ( 40) — 13.7 ( 30) All Stores ................ — 8.4 (136) — 9.7 (131) — 13.5 (100) ^Percentage change. Figures in parentheses indicate number of stores reporting. Department store sales were approximately the same in value during July as in June, after allowance for seasonal variations, but were 8 per cent smaller than in July, 1930. This de crease is slightly smaller than the decline of 9 per cent recorded for the first seven months of this year as compared with a similar period in 1930. There was some increase over June in sales reported by Oakland and San Francisco stores. Sales in Los Angeles were practically the same in July as in June, but appreciable declines were reported from the Pacific North west. Value of sales at wholesale declined by a small amount during July and was approxi mately 19 per cent less than in July, 1930. Sales during the first seven months of this year were 18 per cent lower in value than in the corre sponding period of 1930. In making compari sons with dollar figures, however, it must be remembered that prices this year are substan- Distribution and Trade — - 1931 - — --------- ^ June May July ,-------Index Numbers*Carloadingsî 80 , 83 80 93 98 Merchandise and Miscellaneous.. . 103 Foreign Trade® 72 78 Totalt .............................................. 67 54 76 82 Intercoastal Trade® 68 87 Eastbound ...................................... . 62 Retail Trade Automobile Salest 73 Total .......................................... 68 Passenger Cars ........................ Commercial Vehicles .............. 118 Department Store . 105 92 Stocks§ ........................................ r Collections# Regular .................................. , Installment ............................ 42.7 15.5 70 89 64 68 86 63 1930 July 94 105 109 97 113 85 107 78 Bank Debits Arizona Phoenix ............$ California B akersfield........ B erk eley ............ Long Beach . . . . Los Angeles........ Oakland ............ Pasadena .......... Sacramento . . . . San Bernardino. San Diego ........ San Francisco. .. San J o s e ............ Santa Barbara.. . S to c k to n ............ Idaho July, 1931 29,236 $ July, 1930 33,472 r- First Seven Months 1930 1931 $ 224,362 $ 273,944 9,633 17,599 20,344 39,728 756,266 196,702 27,442 51,313 9,463 47,588 899,813 31,156 12,973 19,117 12,450 20,411 25,179 51,488 1,010,333 192,560 33,423 53,663 10,657 57,005 1,233,277 29,227 17,235 28,913 76,338 117,848 151,256 298,900 5,810,807 1,339,538 221,286 327,743 62,792 344,817 7,010,647 172,414 92,656 124,732 93,020 140,540 247,221 347,948 7,373,902 1,364,720 255,081 343,174 76,062 405,522 9,063,131 191,422 110,895 180,734 14,915 16,212 90,948 99,554 11,641 12,513 70,562 79,672 5,447 146,990 7,188 169,291 39,128 1,022,841 49,271 1,235,151 13,811 58,460 18,140 69,996 98,623 424,404 119,478 523,143 6,947 10,120 202,558 43,628 33,292 10,756 9,851 12,611 220,277 50,679 44,006 12,843 48,137 66,337 1,409,976 295,454 240,251 84,807 66,175 92,257 1,688,313 373,008 321,435 97,183 Nevada 72 68 117 76 72 113 101 96 159 105 94 106 114 93 104 * 1Figures• -Actual 42.9 15.8 44.0 15.7 43.1 15.0 *Adjusted for seasonal variations, 1923-1925^ average=100. ‘’ In dexes are for three months ending with month indicated. tExcluding raw silk. JDaily average. §At end of month. # P e r cent of collections during month to amount outstand ing at first of month. tially below those of a year ago. The greatest declines in dollar value of sales over the year period were registered in sales of agricultural implements, electrical supplies, and hardware, while the smallest decreases were in sales of dry goods, groceries, and paper and stationery. Daily average registrations of new auto mobiles in the District remained unchanged during July, after allowance for seasonal m ove ments. Sales of new automobiles, which are currently at low levels, are subject to unusually wide fluctuations during the various phases of the business cycle, declines during the reces sions of 1924 and 1927 having been almost as pronounced as in the present instance. The volume of intercoastal shipments through the Panama Canal, which is indicative of the volume of waterborne commerce of this District with the eastern and southern sections of the United States, decreased during July as compared with June, although the usual sea sonal movement is slightly upward. Shipments from the Atlantic to the Pacific Coast (usually from 25 to 30 per cent of the total) increased somewhat but the volume of goods consigned to the Atlantic Coast declined substantially as compared with the previous month. O f the two principal commodities, lumber and petroleum, which make up the eastbound traffic, the volume of the former compared favorably with ship ments during preceding months, but there was a sharp reduction in the movement of petro leum and its products. Relatively high prices for crude oil in California as compared with the mid-continent fields have doubtless reduced Oregon Portland ............ Utah Salt Lake C ity.. Washington B ellingham ........ Spokane ............ T otal............ $2,726,938 *In thousands of dollars. $3,452,900 $20,267,604 $25,211,956 August, 1931 FEDERAL RESERVE AGENT AT SAN FRANCISCO the competitive sales of California petroleum products on the Atlantic seaboard. Foreign trade of the Tw elfth District ports declined during June, the latest month for which data are available, and was far below the levels of June a year ago. Imports of silk were smaller both in value and in quantity than in May, a substantial decline in imports of that com m odity through Seattle being only partially offset by an increase at San Francisco. Im ports of rubber into Los Angeles declined slightly. The total value of the foreign trade of this District has declined more than 50 per cent during the past two years, but during the same period there has been a sharp decline in the wholesale price level. In view of the declines in prices of particular commodities enter ing into the D istrict’s foreign trade it seems probable that considerably more than half of the contraction in dollar amounts since 1929 can be accounted for by price decreases. The greatest decrease has been recorded in the value of imports, of which silk and rubber are two of the most important items. As compared with the first six months of 1930, imports dur ing the first half of 1931 were 40 per cent smaller, exports 34 per cent smaller, and total foreign trade 36 per cent less in value. Prices During the second half of July and the first two weeks in August, com m odity prices fluctu ated around the levels of mid-June. The Bu reau of Labor Statistics’ index of wholesale prices remained at 70.0 (1926 = 100) in July, the first month in almost a year in which that index has not declined from the preceding month. On August 6 the September contract for wheat at Chicago reached the lowest level ever recorded at that market, 475^ cents per bushel, since when there has been a slight increase in quotations. Livestock sold at prices slightly below those of June, lamb quotations reaching a new low level for the year during the first week of August. Pacific Coast prices for dairy and poultry products advanced seasonally dur ing July and early August. Opening prices for California canned fruits, announced during the last week of July, were the lowest in any year since 1916. CANNED FRUIT— Opening Prices (One dozen No. 2Vi size cans—choice jjrade fruit) 1931 Apricots................ $1.65—$1.75 C herries..................2.35- 2.45 Peaches (clingstone) . . . 1.55- 1.65 P e a r s .................... .1.85- 1.95 Plums .................. .1.40- 1.50 Pineapples .......... 1.75 (Hawaiian-Fancy Sliced) 1930 1929 1928 $1.90-$2.00 $2.55-$2.65 $2.30-$2.45 2.75- 2.85 3.50- 3.65 3.00- 3.15 1.702.051.502.10- 1.80 2.15 1.60 2.20 2.453.152.002.35- 2.60 3.25 2.10 2.60 1.752.401.652.20- 1.90 2.50 1.75 2.30 Petroleum prices in California have not changed since the sharp advance on June 19. As a result of state restrictive measures on 63 production, however, prices have recently been increased in mid-continent fields from the ex tremely low levels established in those fields during June. Prices of silver, copper, zinc, and tin were lower at the end of July than at the beginning of that month. On August 6 sales of copper were reported at 7y2 cents per pound delivered Connecticut Valley, a new record low price. Lead quotations have not changed dur ing the past six weeks. Pacific Coast lumber prices continued to decline during July. Prices for flour, barley, coffee, cotton, and rubber— miscellaneous commodities of considerable im portance in the District’s commercial activity— declined during the month, while quotations on sugar, cement, and hides increased. Credit Situation Little change occurred in the credit situation during July and early August. Demand and time deposits of reporting member banks de clined slightly and security loans continued their decrease, while all other loans changed little and security portfolios were reduced somewhat. A moderate reduction in holdings of government securities followed upon the call by the Treasurer of the United States for pay ment on recent subscriptions to those obliga tions. These slight fluctuations in condition reflect small net changes in factors which add to or subtract from the supply of banking funds available to this area and afford some evidence that there was an approximate bal ance of payments between this District and other sections of the country during the month. FEDERAL RESERVE BANK OF SAN FRANCISCO (in millions of dollars) t---------- ---- Cond ition----------------v Aug. 19. Aug. 12, July 15, Aug.20, 1930 1931 1931 1931 72 Total Bills and Securities ........ 98 82 64 24 8 Bills Discounted .................... 34 11 9 6 17 Bills B o u g h t ............................ 12 39 52 52 52 United States Securities . . . . 199 Total Reserves ............................ 197 193 186 326 Total Deposits ............................ 318 299 304 Federal Reserve Note Circulation 198 183 176 158 Ratio Total Reserves to Deposit and Note Liabilities Combined. 80.1 85.7 82.5 87.1 The return flow of currency from circulation which usually follows the July 4 holiday has been retarded this year. In fact there has been a slight non-seasonal increase in the amount of currency in circulation during recent weeks. This condition appears to reflect withdrawals of cash by depositors follow ing upon recent bank failures and some growth among banks of their holdings of vault cash. Some changes in the form, but relatively lit tle variation in the amount, of Reserve Bank credit extended in the Twelfth District have been recorded during the past ten weeks. Dur ing June, July, and the first weeks of August the bulk of credit granted has been extended in the form of discounts, whereas during 1930 64 MONTHLY REVIEW OF BUSINESS CONDITIONS and the first five months of this year an aver age o f about 60 per cent of Reserve Bank credit extended to the Tw elfth District was obtained by member banks through the sale of acceptances to this Bank. On July 22 borPER CENT PER CENT August, 1931 or storage of goods in foreign countries and (2) increased demand for acceptances by com m er cial banks for investment purposes. The aver age acceptance holdings of banks reporting such figures during 1931 have been more than twice as large during the year to date as they have been at any previous time during the ten years for which figures have been collected. REPORTING MEMBER BANKS — Twelfth District (In millions of dollars) ACCEPTANCES Locally purchased acceptance holdings of the Federal Reserve Bank of San Francisco shown as a percentage of Reserve System credit employed in the Twelfth District (weekly figures). rowings from the Reserve Bank, at 40 mil lion dollars, reached the highest figure since the first few days of this year. During the past three months when only 5 to 10 per cent of the volum e of Reserve Bank credit extended to the Tw elfth District has been extended through the purchase of acceptances by the Reserve Bank, acceptance buying rates have been at the lowest levels on record and have also been rela tively low er than the discount rate just as was the case during most of 1930 and during the earlier months of this year. The decline in the Reserve Bank's holdings of locally purchased acceptances since the end of 1930 may therefore be attributed to (1) a considerable reduction in the amount of paper accepted by banks, reflect ing a smaller need for financing foreign trade Loans and Investments— T o ta l.,. Loans— Total ........................ . On Securities .................... . All O t h e r .............................. Investments— Total .............. United States Securities . . , Other Securities .............. Reserve with Reserve Bank Net Demand Deposits................ Time Deposits ............................ , Due from Banks ........................ Due to B a n k s .............................. Borrowings at Reserve B an k ... ---- Cond ition----t— Aug. 19. Aug. 12. July 15, Aug.20, 1931 1931 1931 1930 1,923 1,927 1,948 1,980 1,196 1,197 1,201 1,356 312 310 317 461 884 887 884 895 727 730 747 624 371 371 392 331 356 359 355 293 108 106 107 110 729 732 741 750 1,017 1,028 1,050 1,019 192 185 203 229 233 236 251 293 27 4 18 1 The volume of savings deposits in principal Twelfth District banks, although tending downward slightly since January, 1931, ap proximates the level at the beginning of 1929. These deposits were reduced sharply in the autumn of 1929, but by June, 1930, had been built up to their former levels and during most of that year registered a steady though slow increase. The long term rate of growth has been retarded during the current business de pression, however, and the average of reported monthly figures was but little higher during the first half of 1931 than it was in the first six months of 1929. This period of relative sta bility represents the most protracted interrup tion of the steady growth of savings deposits since such figures were first collected in 1919. SAVINGS DEPOSITS — Twelfth District Principal banks in seven larger cities (monthly figures).
@FedFRASER