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MONTHLY REVIEW
OF
B U S I N E S S C O N D IT IO N S
ISA A C B. NEW TON, Chairman of the Board and Federal Reserve Agent
Federal Reserve Bank of San Francisco
Vol. XVI
San Francisco, California, August 20,1932
No. 8
T W E L F T H FED ER AL RESERVE DISTRICT CONDITIONS
Twelfth District business activity was about
the same in July as in the preceding two
months. Seasonal changes were recorded in
measures of industrial production, while
slightly more than the usual decline in trade
activity was indicated. Credit demands were
met without difficulty and credit extended by
the Federal Reserve Bank of San Francisco de
clined moderately. Wholesale prices for a
number of commodities important in the
Twelfth District increased further between the
middle of July and August 20.
Farming activities were favored by excellent
weather conditions during July, except in the
wheat growing areas of eastern Oregon where
some damage was caused by strong winds.
August 1 estimates indicated that production
of grains and deciduous fruits would be larger
than in 1931 and that field crops, with the ex
ception of hay, would be smaller. The 1932
barley harvest was exceptionally large. It was
predicted that the Valencia orange crop would
slightly exceed 1931 production, while a reduc
tion in the lemon crop continued to be ex
pected.
Volume of agricultural products
marketed continued to be smaller than in the
preceding year, despite generally large storage
stocks and prospects of larger than average
yields. The condition of livestock improved
considerably, reflecting an abundance of range
forage. Advances in prices during July were
larger on the average for farm products than
for other commodities.
Production of petroleum in California, which
continued under voluntary restriction, averaged
slightly lower in July than in June, but in
creased in the first half of August. A sub
stantial reduction in stocks of gasoline
accompanied a small decrease in refinery
operations. After adjustment for seasonal fac
tors, production of lumber changed little, but
output of cement increased sharply. Although
the value of engineering contracts awarded in
July moved upward as a result of Federal
Government projects, building permits were
smaller in value than in June. Flour milling
declined, after seasonal adjustment. Canning
factories operated on schedules substantially
lower than in 1931. Employment increased sea
sonally and wage reductions apparently were
less numerous than in earlier months of the
year.
The value of retail sales remained practically
unchanged during July, after allowance for
seasonal factors, while sales at wholesale and
registrations of new automobiles declined. De
creases in freight carloadings were somewhat
smaller than is customary during July. Inter
coastal traffic increased less than is usual from
June to July.
A larger volume of funds was supplied to the
Twelfth District commercial banking structure
during the four weeks ending August 17 than
in the preceding month. Gains through the
gold settlement fund and expenditures of the
United States Treasury in excess of collec
tions in the District more than offset declines
in reserve bank credit. The increased supply of
funds was used in part to meet demands by the
public for additional currency, the remainder
accumulating as increased member bank re
serves. Total deposits of reporting member
banks moved upward from late July levels,
reflecting chiefly increased Government de
posits. Time and net demand deposits of banks
did not change appreciably, while loans de
clined moderately.
Agriculture
Weather conditions continued generally fa
vorable for the development of crops in the
Twelfth District during July, although strong
drying winds during the early part of the month
reduced grain yields in the wheat growing re
gions of eastern Oregon. Livestock ranges
have been furnishing more feed than in the
summer of the two preceding years and cattle
and sheep are making better gains than is
usual. The volume of crop production during
1932 is expected to be greater than in 1931,
principally as a result of increased production
58
of grains and fruits. The volume of crops mar
keted thus far this year has been less than in
1931 and the carryover of crops from last year,
as well as stocks of some of the current year’s
crops, continues to be a burdensome market fac
tor. Market prospects for some of the chief
crops and livestock products of the District
improved during July, however, as prices of a
number of those commodities advanced.
On August 1 the United States Department
of Agriculture estimated that production of
wheat in the Twelfth District this year would
total 114,309,000 bushels, a figure slightly larger
than the estimate of a month ago and 27 per
cent above the harvest of 1931. An increase
from July 1 to August 1 in the estimated pro
duction of both the winter and spring wheat
crops in Washington offset decreases in the
estimated production of these two types of
wheat in Oregon. The movement of wheat to
domestic and foreign markets has been small in
volume this year as compared with last, reflect
ing somewhat more than the usual tendency
on the part of growers to hold for higher prices
later in the season.
W H E A T P R O D U C T IO N
(in thousands of bushels)
F o re ca st
A u g 1,1932
A r iz o n a ..............................................
C a lifo rn ia
.........................................
I d 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 ......................................
T w e lft h D is t r ic t ...........................
U n ite d S ta te s ..................................
S ou rce:
August, 1932
MONTHLY REVIEWOF BUSINESS CONDITIONS
483
11,780
30,146
444
19,700
4,741
47,015
114,309
722,687
F o re ca st
July 1,1932
506
11,780
29,460
445
21,592
4,962
4 4 ,694
113,439
736,971
1931
672
6,475
19,641
319
17,662
4,679
40,843
90,291
894,204
U n it e d S tates D e p a r tm e n t o f A g r ic u ltu r e .
Harvesting of the 1932 barley crop in Cali
fornia has been completed. This year’s pro
duction of 39,498,000 bushels was nearly three
times as large as the small crop of 1931, and
33 per cent larger than the 1926-1930 average
production of this grain.
In contrast with the increase in production
of grains and fruits in the District, field crops
are generally estimated to be smaller in volume
this year than in 1931. A notable exception is
hay, production of which is expected to be 24
per cent larger than a year ago.
Production estimates of citrus fruits in Cali
fornia remained unchanged from June to July.
The current Valencia orange crop will be
slightly larger than a year ago, while lemon
production is expected to be somewhat smaller.
Market shipments of both oranges and lemons
were less in July, 1932, than in July, 1931. Im
provement in orange prices during July was
accompanied by a seasonal increase in lemon
prices.
The late maturing deciduous fruit crops in
California and the Pacific Northwest developed
satisfactorily during July. The volume of fruit
production in California will be larger in 1932
than in 1931. In the Pacific Northwest, how
ever, the deciduous fruit output will be smaller
this year than last. The decline is due to re
ductions in the apple and pear crops which com
prise the bulk of deciduous fruits grown in that
region. Prices for most deciduous fruits are at
extremely low levels. Considerable quantities
of peaches are not being harvested.
Receipts of eggs at the major Pacific Coast
markets declined seasonally to 112,388 cases,
and were less than reported for any other month
of this year. On August 1, stocks of eggs on the
Pacific Coast were 2 per cent larger than a year
ago in contrast with a decrease of 32 per cent
in holdings in the United States over the year
period. Receipts of butter also declined during
July. Storage stocks accumulated faster during
that month than in July, 1931, however, and
on August 1, at approximately 7,300,000 pounds,
were about 24 per cent larger than a year ago.
In the United States, storage holdings of butter
were 4 per cent smaller on August 1 than a
year earlier.
Feed on livestock ranges in the District was
plentiful during July, and cattle and lambs im
proved considerably during the month. Con
trary to the conditions of a year ago, the
outlook for feed on fall ranges is excellent and
at present it is expected that supplemental
feeds will be ample during the coming winter.
The 1932 calf crop has developed satisfac
torily and, although the number of animals
raised this year is smaller than a year ago, the
average weight of calves available for market
ing in the remaining months of the year is
likely to be greater than in 1931. Predictions
that the District’s lamb crop would be smaller
in 1932 than in 1931 were substantiated during
July by estimates of the United States De
partment of Agriculture which indicate that
the number of lambs docked was 18 per cent
less this year than in 1931. For the United
L A M B A N D W O O L P R O D U C T IO N
Lam bs D o c k e d
(in thousands)
1932
1931
536
569
A r iz o n a ...............................
C a lifo rn ia ...........................
2,260
2,578
I d a h o ..................................
1,484
1,848
N e v a d a ...............................
410
713
O r e g o n ...............................
1,648
1,877
U ta h ....................................
1,141
1,654
W a s h in g t o n ......................
608
605
T w e lfth D is tr ic t ............
8,087
9 ,844
32,373
U n ite d S t a t e s ................... 29,717
S ou rce:
W o o l P rodu ction
(in thousands of pounds)
1932
1931
5,928
5,760
25,820
28,004
15,936
19,419
6,705
8,720
18,400
22,000
17,706
23,056
5,915
6,336
96,410
113,295
3 43 ,386
369,315
U n ite d S tates D e p a rtm e n t o f A g ric u ltu re .
States as a whole the lamb crop was 8 per cent
smaller in number this year than last. In this
District, the 1932 wool clip of 96,410,000 pounds
was 15 per cent smaller than the 1931 clip, while
in the United States the decline was 7 per
FEDERAL RESERVE AGENT AT SAN FRANCISCO
August, 1932
cent. The decrease in production may be at
tributed to lighter fleeces during 1932 as well
as to a slightly smaller number of sheep shorn.
The quality of cattle and sheep now being
shipped to market is better than a year ago,
reflecting improved range conditions. Very few
future delivery contracts for feeder lambs or
cattle have been reported in the western states.
Industry
Activity of major industries of the Twelfth
District changed little during July. Production
of crude oil in California decreased slightly and
was exceeded by the amount run to refinery
stills, thereby reducing petroleum inventories.
After allowance for seasonal factors, output
of lumber remained practically unchanged,
while cement production advanced substan
tially. Construction contract awards increased
somewhat. Canning of fruits and vegetables
was seasonally active, but at a level lower than
in 1931.
Some improvement in the unemployment
situation was reported during July as a result
of seasonal increases in canning and agricul
tural activities. In California, the decrease
(18 per cent) in employment from the same
month in the preceding year was practically
the same as the year-to-year decline in June.
Reports from other states of the District indi
cate little change in employment conditions as
compared with a month ago. Fewer wage re
ductions were reported in July than in other
recent months.
Output of crude oil averaged slightly less
during July than in June and was at the lowest
level in ten years. Production during the later
E m p lo y m e n t —
Industries
-C alifornia---------- r
N o . of
N o . ^—E m p loy ees —>
N o.
of
of
July,
July,
Firm s
Firm s 1932
1931
A ll Industries*
S ton e, C la y and
G lass P r o d u c t s .
L u m b e r and W o o d
M a n u fa c tu r e s . .
T e x t i l e s ...................
1,186 133,691
( - 1 7 .9 )
60
4,752
— 2 5 .9 )
6,414
12,159
— 3 2 .3 )
1,415
16
— 18.9)
17,955
10,413
— 14.7)
12,206
281
37,593
— 16.1)
44,786
41
48,565
— 11.7)
62,007
— 15.2)
135
C lo th in g , M illin e ry
and L a u n d e r in g . 160
F o o d , B ev era g e s
and T o b a c c o . . .
P u b lic U tilitie s . . .
O th e r I n d u s t r i e s ! . 482
M is c e lla n e o u s . . . .
W h o le s a le and
R e t a i l ...................
162,934
52
5,352
— 19.9)
1,745
-O r e g o n N o. of
r~ E m ployees —>
July,
July,
1932
1931
14,963
(-- 1 9 .3 )
18,542
7,625
( - -2 5 .3 )
860
7
(- —3.7 )
10,202
286
( - -1 4 .4 )
334
36
2,036
(-- 9 . 5 )
2,249
29
4,156
( - -1 4 .6 )
4,864
123
44
7Î
893
54,970
73,147
6,681
163 28,943
32,423
— 10.7)
* P u b lic u tilities and w h o le sa le and retail fig u re s n o t in clu d e d i
this tota l, t ln c lu d e s th e f o llo w in g in d u s t r ie s : M eta ls, m a
ch in e ry and c o n v e y a n c e s ; lea th er and r u b b e r g o o d s ; oils and
p a in t s ; p rin tin g an d p a p er g o o d s . J L a u n d e rin g on ly .
Figures inparentheses indicate percentage change fromJuly, 1931.
59
month was well under the proration allowable
of 476,700 barrels daily. Increases during the
first two weeks of August, however, brought
output approximately to that figure. Refining
activity decreased slightly, accompanied by a
substantial reduction in gasoline stocks.
Although lumber output decreased during
July, the change in that month, as in earlier
months of the year, was almost entirely sea
sonal in character. Shipments and orders of
lumber were unchanged and their margin over
production was increased, thereby bringing
about another reduction in inventories. The
stability in the industry thus far during 1932
has followed continuous declines during the
preceding two and one-half years in the volume
of lumber cut. This Bank’s seasonally adjusted
index of lumber production was 35 per cent of
the 1923-1925 average during July, compared
with 61 per cent for July, 1931.
A rise in the value of engineering contract
awards during July was entirely responsible for
an improvement in the District’s construction
industry. Federal Government projects, which
comprised about three-fourths of the total of
$16,649,000 of these awards, were the largest
since March, 1931, when Boulder Dam con
tracts amounting to nearly 50 million dollars
were let. Practically no permits were issued
for commercial and industrial building in July,
and permits for residential construction were
lower in value than the extremely small June
total. The sharp decline in construction costs
which has taken place during the past three
years was at least temporarily checked during
July, when a slight rise was recorded, chiefly as
a result of increases in prices for building
materials.
Operations in the canning industry expanded
during July, although activity was substantially
In d u s t r y —
In dexes o f daily average produ ction , adjusted fo r seasonal variations
(1923-1925 daily average—100)
,------------ 1932 ------------x --------- 1931---------G en eral
July June M a y A p r . July June M ay
34
41
56
56
59
159
137
145
154
153
M a n u fa c tu r e s
L u m ber . . .
32
61
64
62
35
137
145
137
137
145
124
94
101
98
100
S la u g h te r o f L iv e s t o c k . .
90
98
91
88
83
C e m e n t .................................. 51
54
60
71
74
72
W o o l C o n s u m p t io n f .................
111
87
55
67
59
M in era ls
79
81
76
78
79
59
64
60
45
78
49
42
43
52
47
B u ild in g an d C o n s tr u c tio n §
T o t a l ^ .......................................
33
57
34
71
75
B u ild in g P e r m its — V a lu e
L a r g e r C i t i e s .................
17
19
29
33
31
S m a ller C ities ...............
15
16
41
40
43
E n g in e e rin g C o n tra cts
A w a r d e d — V a lu e
53
58
123
89
144
111
114
210
159 273
{P r e p a r e d b y F e d e ra l R e s e rv e B o a rd . § I n d e x e s are fo r three m o n th s e n d in g w ith th e
m o n th in d ica te d ,
P re lim in a ry .
MONTHLY REVIEW OF BUSINESS CONDITIONS
60
lower than in other recent years. Tentative
appraisals indicate a canned peach pack in Cali
fornia approximately 20 per cent less than the
unusually small 1931 pack of 8,421,000 cases.
The 1932 Hawaiian canned pineapple pack is
expected to be reduced to less than half of the
1931 pack of 12,800,000 cases. Heavy carry
over stocks of canned pineapple and peaches
are reported.
Output of electric power on the Pacific Coast
increased seasonally during July. Kilowatthours produced declined about 15 per cent as
compared with a year ago, partly because de
mands for electric energy to pump irrigation
water were considerably greater last year. This
decrease was greater than any year-to-year de
crease reported during the present depression.
Flour milling was less active in July than in
June, although a slight increase is usual be
tween those months. Some improvement in do
mestic demand contributed to small reductions
in inventories of most reporting mills. Stocks
of wheat held by mills increased somewhat.
Trade
Trade was somewhat less active during July
than in June.
Value of department store sales decreased
seasonally during July. Stores in San Fran
cisco and Los Angeles reported small increases
in sales, after seasonal adjustment, as compared
with the previous month. These increases, how
ever, were slightly more than offset by declines
at Seattle and Salt Lake City. Inventories of
department stores as measured on a retail sell
ing price basis, were reduced more than
D is tr ib u t io n a n d T ra d e
C a r lo a d in g s î
T o t a l ...........................
M e r ch a n d is e ............
—
,---------------1932---------------- s ,-----------1931----------- >
July June M a y A p r.
July June
M ay
In dexes adjusted fo r seasonal variations
average—
100)
-(1923--1925
t----------78
78
81
60
55
57
55
94
101
97
77
75
74
74
F o r e ig n T r a d e 0
T o t a l f ........................
I m p o r t s ! ....................
E x p o r t s ......................
45
42
47
46
41
49
50
46
52
78
64
83
72
54
76
78
67
82
45
72
39
51
57
50
54
66
50
47
54
45
59
85
53
73
83
69
76
86
74
P a ss e n g e r ............
C o m m e r c ia l
31
29
50
47
45
71
32
30
59
31
29
54
67
62
110
75
69
124
76
71
117
D e p a r tm e n t S to r e
S a le s î ....................
S t o c k s § .................
72
67
74
70
70
72
74
73
100
87
102
89
102
89
40.1
13.8
40.4
13.7
I n te r co a s ta l T r a d e
T otal ...........................
W e s tb o u n d ...............
E a s tb o u n d ...............
R eta il T r a d e
A u t o m o b ile S alesJ
C o lle c tio n s #
R e g u la r ............
In s ta llm e n t . . .
A
rt -c iu m
f~ "
39.2
13.4
i ig u ic s
41.3
14.1
42.3
15.3
42.7
15.3
44.
15.
$ D a ily average?. 0I n d e x e s are f o r th re e m o n th s e n d in g w ith m o n th
in d ica te d .
t E x c l u d i n g ra w silk.
§ A t end o f m o n th .
# P e r c e n t o f c o lle c t io n s d u r in g m o n th t o a m o u n t o u ts ta n d
in g at first o f m o n th .
August, 1932
seasonally to the lowest level for any month
since January, 1919. The number of net sales
transactions of 26 reporting stores was 14
per cent lower in July, 1932, than in July, 1931.
The Fairchild retail price index decreased 1.5
per cent from July 1 to August 1 and was 18.1
per cent lower than on August 1, 1931.
R E T A I L T R A D E — T w elfth D istrict
Percentage changes in value of sales and sto ck s
w ith no adjustm ent fo r p rice changes
■ 1932 com pared w ith 1931 N E T SALES STOCKS
January 1 to end
July
o f July
July
D e p a r tm e n t S to re s . . .
L o s A n g e le s ..............
O th e r S o u th e r n Calif.
O a k la n d ........................
S an F r a n c i s c o ............
O th e r N o rth e r n Calif.
P o r t l a n d f ......................
S eattle ...........................
S p o k a n e ........................
Salt L a k e C i t y ..........
A p p a r e l S to r e s ...............
F u rn itu r e S to r e s ..........
A ll S to r e s ........................
—
—
—
—
—
—
—
—
—
—
—
—
—
29.7
26.8
31.8
2 9.6
26.6
28.3
34.6
38.8
34.8
32.3
31.1
39.3
31.0
( 67)
( 1 0)
(
(
(
(
(
(
(
(
( 25)
( 37)
(1 2 9 )
— 24.8
— 24.9
— 26.0
( 66)
( 10)
(
—22.0 (
—
—
—
—
—
—
—
—
—
8)
4)
19.9 (
7)
21.5 (
32.2 (
31.4 (
5)
22.3 (
4)
23.8 (
4)
24.3 ( 2 3 )
29.7 ( 3 5 )
25.3 ( 1 2 4 )
—
—
—
—
—
2 3.6
2 3.4
22.8
35.9
19.2
(5 2 )
(1 0 )
( 5)
( 4)
( 7)
—
—
—
—
—
—
21.5
17.8
14.4
23.3
21.5
23.3
( 5)
( 4)
( 3)
(1 4 )
(2 8 )
(9 4 )
8) —21.2 ( 8)
6) — 36.4 ( 7 )
f I n c l u d e s fiv e app arel s tores w h ic h are n o t in c lu d e d in D is t r ic t
d e p a rtm e n t s to r e total.
F ig u r e s in pa 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 .
N o t e : T h e s e figu res ta k e n o a c c o u n t o f o p e r a tin g c o s ts.
Wholesale sales were 12 per cent smaller in
value in July, 1932, than in the preceding
month, whereas little or no change has been
recorded from June to July of most recent
years. The year-to-year decrease in the later
month was larger in most lines of trade than
in June, probably because there was one less
trading day in July this year than last.
W H O L E S A L E T R A D E - T w e l f t h D istrict
Percentage changes in value o f sales w ith
n o adjustm ent fo r p rice changes
A g r ic u ltu r a l Im p le m e n ts
A u to m o b ile S u p p lie s ..........
D r u g s .........................................
D r y G o o d s .............................
E le c tr ic a l S u p p lies ............
F u rn itu r e .................................
G ro c e r ie s ..................................
H a r d w a r e ...............................
S h o e s ...........................................
P a p e r an d S ta tio n e ry . . . .
A ll L in e s ..................................
N o te :
July, 1932
t ------- com pared w ith ---------v
June, 1932
July, 1931
. . — 17.0
— 30.7
. . — 20.9
— 27.3
— 28.8
— 39.0
. . — 15.4
— 50.2
— 54.0
— 18.4
— 33.2
— 38.9
— 26.6
— 29.5
Cum u lative
1932
com pared
w ith 1931
— 39.9
— 19.7
— 20.4
— 36.8
— 45.6
— 39.0
— 18.0
— 31.1
— 32.6
— 21.5
— 27.3
T h e s e fig u re s take n o a c c o u n t o f o p e r a tin g c o s t s .
New automobile registrations decreased dur
ing July, although increases have been usual
during that month. Both commercial vehicles
and passenger cars were registered in smaller
numbers. This bank’s adjusted index at 31
(1923-1925=100) was approximately the same
as in the four months preceding June, when
it had been at the lowest level since its com
pilation was begun in 1922.
Intercoastal traffic increased less than sea
sonally. Westbound shipments through the
Panama Canal were the largest since Decem
ber, 1931, but shipments from Pacific to Atlantic
seaboards decreased contrary to seasonal ten-
August, 1932
dency, reflecting principally extremely light
cargoes of lumber and petroleum products.
Total freight loaded on District railroads de
creased somewhat less than seasonally from
June to July because shipments of industrial
PER
CENT
C A R L O A D I N G S — T w e lfth D istrict
In dexes adjusted for seasonal variation (1923-1925 daily average = 100)
commodities held up better than has been usual
between those months. Merchandise loadings
increased by only part of the seasonal amount.
Prices
The strength apparent in commodity prices
during June became more evident in July, in
dexes of prices advancing in nearly every week
of that month and early August. The current
improvement in prices has been concentrated
chiefly in raw materials, although prices for
finished goods have also increased slightly.
Semi-manufactured goods have continued to
decline in price as shown by the July index of
the Bureau of Labor Statistics. The increase
from June to mid-August is the first substantial
advance in commodity prices since July, 1929.
From January to July of this year prices
declined considerably less than during corre
sponding periods in either 1931 or 1930. Ac
cording to the Bureau of Labor Statistics'
index of wholesale commodity prices the de
cline during the first 7 months of the year was
4.2 per cent in 1932, 8.0 per cent in 1931, and 8.8
per cent in 1930. During the three years ending
with July, 1932, commodity prices declined 33
per cent, compared with a decline of 45 per
cent from May, 1920, to January, 1922, the last
preceding period of sharp price declines.
Many of the commodities showing price ad
vances in the past two months have been farm
products, several of which are important in the
Twelfth District. Wheat prices, after reaching
an all-time low record in mid-July, advanced
sharply in the latter part of that month. The
September contract at Chicago in mid-July
ranged from 46% to 48% cents per bushel. At
the month-end this contract was quoted at 51j4
cents per bushel, fluctuating in early August
from 48% to 54% cents per bushel, and declin
ing to 49^2 cents per bushel on August 20.
61
FEDERAL RESERVE AGENT AT SAN FRANCISCO
Changes in prices for corn, oats, and barley
were similar to those for wheat. Field crops—
hay, potatoes, rice, beans, and hops— declined
in price during the month under review. Cot
ton reached a new high price for the year on
August 10, however, as represented by the spot
quotation for the middling upland grade at New
Orleans. Citrus fruit prices improved from June
to July, but most quotations on fresh, dried,
and canned deciduous fruits were somewhat
lower than in the preceding month. Dairy and
poultry products prices increased seasonally
during July as did hog prices. Cattle and lamb
prices at Pacific Coast markets were generally
higher in late July than in the earlier part of
that month. Wool and sugar prices were stable
throughout July.
Although quotations for copper showed prac
tically no change during July and early August,
lead, zinc, and silver prices increased to the
levels of early April. On August 20, copper was
quoted at 5% to 5*4 cents per pound, lead at
3% 0 cents per pound, zinc at 2 % cents per
pound, and silver at 27% cents per ounce.
Petroleum prices have been maintained at the
levels established in late June. Available in
formation indicates that lumber prices were
relatively stable during July as compared with
the earlier months of 1932. The significance of
many quotations is indeterminate, however,
because of the poor demand for forest products.
Miscellaneous commodities important in the
B a n k D e b i t s *—
A r iz o n a
P h o e n ix
July
1932
.............. $
C a lifo rn ia
B a k e rsfie ld
....
B e r k e le y ..............
F r e s n o .................
L o n g B e a ch . . . .
L o s A n g e le s . . . .
O a k la n d ...............
P a sa d e n a ............
S a cra m e n to . . . .
S an B e r n a r d in o .
San D i e g o ..........
San F r a n c is c o . . .
S an J o s e ...............
San ta B a rb a ra .
S t o c k t o n ...............
Idah o
17,555
July
1931
$
29,236
r “ First seven m onths—\
1931
1932
$
153,830
$
22 4 ,36 2
7,112
13,275
13,392
24,999
528,140
161,971
17,884
38,374
4,346
33,186
662,814
15,817
8,548
13,325
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
53,271
105,039
109,087
194,905
4,055,111
1,185,521
160,483
277,788
44,526
250,290
4,696,527
114,684
67,662
93,563
7 6 , 3 38
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
10,569
14,915
7 2,26 5
90,948
8,551
11,641
54 ,2 56
7 0,562
3,396
92,012
5,447
146,990
28 ,1 12
...............
709,768
39,128
1,022,841
Salt L a k e C ity . .
9,432
39,912
13,811
58,460
61,607
306,133
98,623
424,404
4,649
5,357
122,438
25,679
19,161
7,571
6,947
10,120
202,558
43,628
33,292
10,756
33,361
39,828
929,641
200,212
154,677
54,913
48,137
66,337
1,409,976
295,454
240,251
84,807
N eva d a
O reg on
P o rtla n d
U ta h
W a s h in g to n
B e llin g h a m . . . .
E v e re tt .................
Spokane
...............
Y a k im a
...............
T o t a l ...............$1,909,465
* I n th o u sa n d s o f d o lla rs.
$2,726,938 $14,207,060 $20,267 ,60 4
62
MONTHLY REVIEWOF BUSINESS CONDITIONS
manufacturing or commercial activities of the
District— coffee, rubber, hides, silk, and tin—
increased in price during July.
Credit Situation
Declines in loans of reporting member banks
moderated during July and the first half of
August. Member banks generally reduced their
borrowings from the Federal Reserve Bank of
San Francisco, built up their reserve deposits,
and increased deposits with banks outside the
District. Interest rates advanced slightly. Se
curities markets were active with advancing
prices.
S U P P L Y O F A N D D E M A N D F O R B A N K IN G F U N D S
T w elfth D istrict
Ch anges betw een July 20 and A u gust 17, 1932
(in millions of dollars)
Supply
M o n e t a r y g o ld s t o c k . . .
9.7
T r e a s u r y o p e r a tio n s . . .
17.2
R e s e r v e b a n k c r e d it . . . . — 19.8
D is c o u n t s . . . . — 17.7
A c c e p t a n c e s .. — 1.8
O t h e r ................. —
.3
T o t a l ......................
7.1
D em and
D e m a n d f o r c u r r e n c y .........
3.0
M e m b e r b a n k r e se rv e dep o s i t s ....................................
3.1
U n e x p e n d e d ca p ita l fu n ds,
n o n -m e m b e r d e p o s its ,
e t c ............................................. .... -9
T o t a l .................................
7.0
Total deposits of member banks declined
sharply during the first seven months of 1932.
The bulk of this decrease was confined, how
ever, to the first two months of the year.
Neither time nor net demand deposits of report
ing member banks have shown any appreciable
net change since early March, and similar data
for all member banks decreased but slightly.
The total of these two classes of deposits for all
member banks declined only 84 million dollars
August, 1932
This more recent stability of deposits re
flects some moderation in the rate of decline in
loans and investments, together with a net
inflow of funds to this District as a result of
Treasury operations and a cessation of losses
through the gold settlement fund due to trans
actions of individuals and corporations with
other sections of the country. Decreases in cur
rency circulation during March and April also
contributed to the bolstering of deposits. An
increased demand for currency during June and
early July, however, more than cancelled the
earlier decreases. The effect of these factors on
deposits is shown in the preceding table.
Money in circulation in the District was but
little lower in mid-August than at the begin
ning of July, at which time holiday demands
always cause a sharp increase in demand for
currency. Approximately the usual seasonal
return of currency from the hands of the public
was recorded during the three weeks ending
July 27. In the following week, however, an
abrupt rise in demand for currency was re
corded, nearly half of the increase coming from
the Los Angeles area, and little change in
circulation was recorded during the following
two weeks. In addition to the seasonal ten
dency, the large withdrawal of currency at the
end of July probably reflects the influence of
an unusually large number of travelers coming
to California to attend conventions and the
Olympic Games.
MILLIONS OF DOLLARS
MILLIONS OF DOLLARS
S O M E F A C T O R S A F F E C T I N G D E P O S IT S O F 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 - J a n u a r y 1 to June 30, 1932
(in millions of dollars)
P r in c ip a l F a c t o r s T e n d in g to R e d u c e D e p o s its
I n c r e a s e in c u r r e n c y in han ds o f p u b li c ...................
R e d u c tio n in vault ca s h o f m e m b e r b a n k s . . . .
7
D e m a n d fo r c u r r e n c y at F e d e ra l R e s e r v e B a n k
and M i n t ........................................................................
7
D e cr e a s e in lo ca l l o a n s .....................................................
D e cr e a s e in loa n s o n s e c u r itie s ................................
59
D e cr e a s e in loa n s o n real e s t a t e .............................
73
D e cr e a s e in all o th e r lo ca l lo a n s ...........................
68
N e t p a y m en ts to o th e r d is tricts fo r a c c o u n t o f
in d ivid u a ls .....................................................................
P a y m e n ts to oth er d is t r ic t s ....................................... 229
G ain s d u e to o u tsid e sales o f b a n k in v estm en ts 26
G ain s d u e to r e d u c tio n o f o p e n m a rk et l o a n s . .
17
G ain s du e to sh iftin g o f b a n k e r s ’ b a la n c e s . . . .
20
R e d u c tio n in u n c o lle c te d c h e c k s and ca sh ite m s .
T o ta l
200
292
28
.............................................................................................777
P rin cip a l F a c to r s T e n d in g to In c r e a s e D e p o s its
T r e a s u r y e x p en d itu res in e x c e s s o f c o lle c t io n s ............
M in t p u rch a s e s o f lo ca l an d im p o rte d g o ld plus d e
p o s its o f im p o rte d U . S. g o ld c o in w ith th e F e d e ra l
R e s e r v e B a n k ...........................................................................
R e d u c tio n in c a p ita l fu n d s o f m e m b e r b a n k s ..............
T ota l
14
534
123
77
18
.............................................................................................7 7 7
D iffe r e n c e (in d ic a t e d d e c r e a s e in d e p o s i t s ) ....................................
D e p o s its a c tu a lly d e c r e a s e d ...................... ...............................................
D e m a n d d e p o sits ........................................................................
169
T im e d e p o s its ................................................................................
119
G o v e rn m e n t d ep osits .................................................................
9
M in o r item s n o t in clu d e d a b o v e ..........................................................
218
316
297
19
(monthly averages of daily figures) between
March and July as compared with a decline of
628 million dollars (20 per cent) from May,
1931, to March, 1932.
C U R R E N C Y C I R C U L A T I O N — T w elfth D istrict
C hanges cum ulated from January 2, 1929
M on th ly averages of w eek ly figures
As a rule travelers coming to the Pacific
Coast start with a considerable amount of cur
rency to pay expenses en route, arriving with
a somewhat limited amount of funds. This
small supply of currency is replenished at the
traveler’s destination through the cashing of
checks, drafts, or other credit instruments, to
provide cash for current expenses. Upon leav
ing the District, an additional supply of cash
sufficient to pay expenses on the return trip is
secured from banks. A large amount of Twelfth
FEDERAL RESERVE AGENT AT SAN FRANCISCO
August, 1932
District currency is thus carried out of the Dis
trict, while relatively little currency is carried
into this region from other parts of the United
States. These amounts appear as increases in
the demand for currency in the Twelfth Dis
trict and are reported by districts en route as
decreases in circulation when the money even
tually returns to the banks in those districts.
Evidence on this point is furnished by the note
settlement operations of the Federal Reserve
System. Since the law prohibits a Federal Re
serve Bank from paying out any Federal re
serve notes but its own, each reserve bank ships
the notes of other reserve banks which it re
ceives to the issuing bank if fit for further cir
culation, or to the Treasury Department in
Washington for redemption and destruction if
unfit for circulation. During a period of more
than six years the amount of this Bank’s notes
returned to it or shipped to the Treasury De
partment has constantly exceeded the aggre
gate amount of Federal reserve notes of all
other reserve banks shipped by the Federal Re
serve Bank of San Francisco.
F E D E R A L R E S E R V E B A N K O F S A N F R A N C IS C O
(in millions of dollars)
/------------------ C on d ition « ---------------- >
A u g. 17, A u g . 10, July 20, A u g . 19,
1932
1932
1932
1931
T o t a l B ills a n d S e c u r i t i e s ..........
B ills D is c o u n t e d ........................
B ills B o u g h t ..................................
U n ite d S ta te s S e cu ritie s . . . .
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 ed era l R e s e rv e N o te s in
C ircu la tio n ....................................
R a tio o f T o t a l R e s e r v e s t o D e
p o s it
and N o t e
L ia b ilitie s
C o m b in e d .......................................
206
79
3
123
207
144
207
81
3
123
210
146
225
97
6
122
185
140
98
34
12
52
318
199
250
253
251
198
52.7
47.2
80.1
52.4
Following the numerous suspensions of
banks during May and June, few failures were
reported during July and early August. This
improvement probably indicates that the sta
bility of deposits and the strengthening of the
financial situation generally are becoming in
creasingly effective. It is probable that the
greater than seasonal increase in demand for
currency late in June was related to the nu
merous bank suspensions at that time. The
cessation of currency withdrawals for hoarding
since early July has been distinctly favorable
to the position of banks, as has the renewed
public confidence which has corresponded
chronologically with the reduction in bank
failures.
On August 1, the United States Treasury
allotted 47 million dollars of United States
Government securities to purchasers in the
Twelfth District. Of this total, 37 million dol
lars was paid for by deposit credit. City banks
reported an increase of 22 million dollars in
Government deposits between July 27 and
August 3, whereas United States securities held
increased only 9 million dollars. As a result of
63
these transactions city banks gained 13 million
dollars in funds through the sale of securities
which had been paid for by deposit credit.
Sales of securities by these banks to their local
customers who pay for them by drawing on
their deposits or supplies of cash result in a
cancellation of net demand or time deposits or
in a reduction of currency circulation. Since
deposits remained unchanged and the demand
for currency increased slightly, it is unlikely
that the securities were sold locally. It appears
rather that these sales were made outside the
District, for gains through the gold settlement
fund during the week ended August 3 were 20
million dollars, in contrast with continuous
losses during most of July. The fact that dur
ing the past few weeks practically the entire
net gains or losses to the Twelfth District
through the gold settlement fund have resulted
from transactions with the New York Federal
Reserve District which is the premier national
market for Government securities tends to con
firm this conclusion. The outside funds thus
gained have been important in contributing to
an easier money situation within the District.
R E P O R T I N G M E M B E R B A N K S —T w elfth D istrict
(In millions of dollars)
t—
L o a n s and In v e s tm e n ts — T o t a l . .
L o a n s — T o t a l ..................................
O n S e c u r i t i e s .............................
A ll O t h e r ....................................
In v e s tm e n ts — T o t a l ...................
U n ite d States S e cu ritie s . . .
O th e r S e cu ritie s ......................
R e se rv e w ith R e s e rv e B a n k . . . .
N e t D e m a n d D e p o s i t s ....................
T im e D e p o s i t s ....................................
D u e fro m B a n k s ................................
D u e to B a n k s ....................................
B o r r o w in g s at R e se rv e B a n k . . .
C o n d it io n ----------------
A u g. 17,A u g. 10, July 20,
1932
1932
1932
1,728
1,723
1,722
1,000
1,008
1,014
248
248
252
752
760
762
728
715
708
397
386
378
331
329
330
85
84
82
559
552
550
879
884
882
139
130
120
164
157
155
61
61
76
- ■
A u g . 19,
1931
1,923
1,196
312
884
727
371
356
108
729
1,017
192
233
27
Federal Reserve System holdings of bankers’
acceptances purchased in the Twelfth District
were reduced to but little more than a million
dollars during August. This almost negligible
quantity of holdings reflects the extremely
small amount of acceptances being created by
District banks, which in turn is an outgrowth
of the small volume of foreign trade and other
activity necessitating such paper. At the same
time the difference of 2 y 2 per cent between this
Bank’s discount rate (3 y 2 per cent) and its buy
ing rate on 90-day bills (1 per cent) is larger
than it has been at any time since the establish
ment of the Federal Reserve Bank of San
Francisco.
The number of shares traded at District
securities markets was substantially greater in
July than in June. As at national markets,
prices advanced sharply. The increased volume
of trading, accompanied by higher stock quo
tations, continued during the first three weeks
of August.
64
MONTHLY REVIEWOF BUSINESS CONDITIONS
August, 1932
A Q uarterly In d e x o f the V alue o f A g r ic u lt u r a l P ro d u cts M a rk e te d
in the T w elfth F e d e ra l R eserve D istrict
For several years this Bank has published
annual indexes of the value and volume of crop
production in the Twelfth Federal Reserve
District. These indexes have not become avail
able until after the close of each calendar year
and have therefore been of no use as indicators
of income during the period in which most
products are sold by growers. In an effort to
obtain a reasonably accurate indication of agri
cultural income prior to the close of the year, an
index has been constructed which shows by
quarterly periods changes in the value of crops
and animal products marketed. This index be
comes available within six weeks after the close
of the period covered. No attempt has been
made to measure income being received by the
producers during the particular quarter cov
ered. Rather, the index shows the value of
marketings during a given quarter in relation
to marketings during other periods. Since those
marketings sooner or later are translated into
income for growers, an indication is given by
the index of how farm income derived from
sales during a given quarter is likely to com
pare with income from sales during other
periods.
V A L U E O F A G R IC U L T U R A L PR O D U C TS M A R K E TE D
T w e lfth D istrict
(1925-1927 average = 100)
During the past seven years, about 20 per
cent of the District’s agricultural output has
moved to market in the second quarter of the
year. In the three months ending with June,
1932, the index of the value of products mar
keted stood at 49 per cent of the 1925-1927 aver
age, compared with 64, 83, and 81 in the
corresponding periods of 1931, 1930, and 1929,
respectively. In the first half of 1932, the value
of marketings indicated by the index was 18 per
cent lower than in the first half of 1931, 40 per
cent lower than in the first half of 1930, and 39
per cent below marketings during the first six
months of 1929. Inasmuch as less than 40 per
cent of the year’s production is ordinarily sold
during the first half of the year, the market
movements and prices received during the next
few months — particularly during August,
September, and October — will be of major
importance in determining the District’s total
agricultural income from crops and livestock
produced during 1932.
jj ijJiijcjjcjJijJejJijje
In constructing the index, the years 1925-1927
were taken as the base period. Data covering
19 crops and animal products were used, those
19 products having accounted for about 65 per
cent of the total cash income from agriculture
in the Twelfth District during recent years. The
proportion of each of these 19 products repre
sented in the quarterly data ranges for the most
part from 60 to 85 per cent of its total produc
tion, although a few samples are more inclusive
and one (rice) represents only 25 per cent of
the total output of that crop. Several important
products have not been included in the index
because either volume or price data, or both,
were lacking currently. Notwithstanding these
omissions, and despite the somewhat irregular
representation of certain individual items, it is
believed that the several general groups of prod
ucts— grains, field crops, fruits, vegetables,
livestock, and livestock products — are ade
quately represented in the index. That the
index does furnish a reasonably accurate com
parison of changes in the value of agricultural
products marketed, is demonstrated by the fact
that since 1925 changes in the quarterly index,
converted to an annual basis, correspond satis
factorily with changes in the annual index of
cash income which includes nearly all crops and
animal products marketed in the District.
The quarterly indexes are shown in the fol
lowing table since the beginning of 1925. Since
the figures are not adjusted for seasonal varia
tion it is to be expected that the indexes for
the last two quarters of each year will be larger
than those for the first two quarters.
IN D E X O F T H E V A L U E O F A G R IC U L T U R A L M A R K E T IN G S
T w elfth D istrict
(1925-1927=100)
Q uarter ending
M a r c h ............
Ju n e .................
S e p te m b e r . . .
D ecem b er . ..
A v era g e .
1925
71
77
119
133
100
1926
70
81
126
114
98
1927
68
76
134
131
102
1928
79
86
135
138
109
1929 1930 1931 1932
74 74
52
45
81 83
64
48
136 109
79
131105
71
105 93
66
MONTHLY REVIEW
OF
B U S IN E S S
C O N D IT IO N S
I S A A C B . N E W T O N , C h a irm an o f th e B o a r d an d F e d e ra l R e s e r v e A g e n t
F e d e r a l R e se r v e B a n k o f S a n F ra n cisco
Supplement
San Francisco, California, August 20, 1932
Vol. XVI
No. 8
SU M M A R Y OF N A T IO N A L CONDITIONS
Prepared by the Federal Reserve Board
Volume of industrial output declined season
ally from June to July, while factory employ
ment and payrolls decreased by more than the
usual seasonal amount. In July, the general
level of wholesale prices was about 1 per cent
higher than in June, and in the first half of
August prices of many leading commodi
ties advanced considerably. Reserve bank
credit declined somewhat in the four weeks
ending August 17, reflecting chiefly a substan
tial growth in the country’s stock of monetary
gold.
Production and Employment. Industrial pro
duction declined by about the usual seasonal
amount in July, and the Board’s index, which
is adjusted to allow for the usual seasonal
variations, remained unchanged at 59 per cent
of the 1923-1925 average. Activity decreased
seasonally in the steel industry; by slightly
more than the usual seasonal amount in the
lumber, cement, newsprint, and meatpacking
industries ; and by substantially more than the
seasonal amount in the automobile and lead in
dustries. Output of shoes, which ordinarily in
creases in July, declined. At woolen mills ac
tivity increased by a substantial amount and at
silk mills there was a seasonal increase in pro
duction. Activity at cotton mills decreased, as
PER C E N T
is usual in July, while sales of cotton cloth by
manufacturers increased considerably. Output
of coal increased from the low level prevailing
in June.
Reports on the volume of factory employ
ment and payrolls showed substantial declines
from the middle of June to the middle of July.
In the machinery, women’s clothing and hosiery
industries and at railroad repair shops, the num
ber employed decreased by considerably more
than the usual seasonal amount and at shoe fac
tories the increase reported was smaller than
usual. In the woolen goods industry a sub
stantial increase in employment was reported.
Value of building contracts awarded, as re
ported by the F. W . Dodge Corporation, con
tinued at a low level during July and the first
half of August.
Prospects for many leading crops, including
corn, spring wheat, potatoes, and tobacco, were
reduced somewhat during July, according to
the Department of Agriculture. The estimated
total wheat crop, based on August 1 conditions,
is 723,000,000 bushels, a decrease of about 175,000,000 bushels from last year’s large crop,
reflecting a reduction of 350,000,000 bushels in
the winter wheat crop, offset in part by an esti
mated increase of 175,000,000 bushels in the
PER
CENT
1927
1928
1929
FACTORY
Index numbers of industrial production adjusted for seasonal varia
tions (1923-1925 average=100).
1930
1931
1932
EM PLOYM EN T
F ederal R eserve B oa rd’ s index o f factory em ploym ent, w ith adjust
m ent fo r seasonal variations (1923-1925 average = 100).
spring wheat crop. The first official cotton esti
mate, as of August 1, was 11,300,000 bales, as
compared with crops of 17,100,000 last season
and 13,900,000 the year before. The indicated
production of corn is 2,820,000,000 bushels, sub
stantially larger than the crops of the last two
seasons and slightly larger than the five-year
average.
Bank Credit. The total volume of reserve
bank credit outstanding, which had increased
by $850,000,000 between the end of March and
the third week of July, declined by $95,000,000
in the four weeks to August 17, and in the same
period member banks increased their reserve
balances by $45,000,000. These changes re
flected chiefly the addition of $95,000,000 to the
. ONS OF DOLLARS
MONEY IN Clf*CULATION
5000
'A
1
'
V
CO LD STOCK
___________ 1U _____—
MEMBER 13ANk " ~ ^ \
ESERVE BALANCES K
____
------ ’
1500
v
j
/
SERVE BANK CREDIT
500
)9 2 8
1___________
1929
^
---------- 1
1930
w
1931
1932
W H O L E S A L E P R IC E S
F E D E R A L R E S E R V E B A N K C R E D IT A N D P R IN C IP A L
F A C T O R S IN C H A N G E S
In d e x o f U n ited States Bureau o f L a bor Statistics
(1 9 2 6 -1 0 0 ).
M o n th ly averages o f daily figures. Latest figures are averages
o f first 21 days in A u g u st.
Distribution. Volume of freight traffic de
creased somewhat from June to July, and value
of department store sales was substantially
reduced.
Wholesale Prices. The general level of whole
sale prices, as measured by the monthly index
of the Bureau of Labor Statistics, advanced
from 63.9 per cent of the 1926 average in June
to 64.5 per cent in July.
Between the middle of July and the third
week of August, prices of livestock and meats,
which had previously advanced considerably,
declined somewhat, while price increases were
reported for many other leading commodities,
including wheat, textile raw materials and fin
ished products, non-ferrous metals, hides, sugar,
coffee, and rubber.
1927
1
country’s stock of monetary gold and an inflow
to the banks of $30,000,000 in currency.
Total loans and investments of reporting
member banks in leading cities were $250,000,000 larger on August 17 than four weeks earlier.
Total loans of these banks continued to decline
throughout the period, while their investments
increased substantially, reflecting an increase
in holdings of United States Government se
curities in connection with Treasury financing
operations. Time deposits increased by $95,000,000 and net demand deposits by $85,000,000.
Money rates in the open market remained at
low levels. Successive reductions brought the
prevailing rates on prime commercial paper to
a range of 2-2*4 Per cent in the first part of
August.
@FedFRASER