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ALASKA
FEDERAL RESERVE BANK OF SAN FRANCISCO
TWELFTH FEDERAL RESERVE DISTRICT
(/)JlCJll11.6JlJL
WASHINGTON
1959
Review of Business Conditions • • • page I 66
Vault Cash • • • • • •
•
•
UTAH
• page 111
ARIZONA
Review of Business Conditions
As 1959 came to a close, business activity in
ft both the
166
Twelfth District and the nation
was on the upswing as the consequence of the
resumption of steel production and as a result
of other changes which were primarily seasonal in character. The seasonally adjusted
national index of industrial production rose
slightly in November. Output of both durable
and nondurable goods remained unchanged
from October, but resumption of production
at coal and iron ore mines idled by the steel
strike boosted mineral output sharply. In the
durable goods category, the substantial increase in steel ingot production was offset by
reduced output of autos, trucks, farm machinery, and other producers' equipment necessitated by shortages of finished steel.
Nonfarm employment, on a seasonally adjusted basis, rose 125,000 to 52.1 million in
mid-November. Increased employment in the
steel and coal mining industries was largely
offset by further layoffs in the automobile and
other industries affected by steel shortages.
Unemployment among both farm and nonfarm workers totalled 3,670,000 in mid-November, a level for that month exceeded in the
postwar period only by last year's 3,833,000.
Nevertheless, the increase of 389,000 in unemployment from mid-October to mid-November of this year was less than seasonal,
and consequently the seasonally adjusted rate
of unemployment fell from 6 percent of the
labor force to 5.6 percent.
Seasonally adjusted retail sales throughout
the nation in November were slightly below
the record rate in October but exceeded the
year-ago level by 7 percent. Shortages of automobiles reduced their sales substantially, but
consumer purchases from department stores
and most other types of retail outlets increased
somewhat. Consumer buying was sustained
by a seasonally adjusted increase of $2.5 billion in personal income in November.
Although the outlook concerning the ultimate settlement of the steel dispute was still
clouded in late December, the underlying tone
of business sentiment is one of optimism.
Consumer buying has been well sustained
despite the restraining effect of the steel strike
upon personal income, and the demand for
new automobiles, in particular, appears to be
brisk. While business spending on plant and
equipment in the last half of 1959 was significantly reduced from earlier expectations as
a consequence of steel shortages, the anticipated trend in such expenditures is upward.
The latest Government survey indicates that
businessmen estimate their capital outlays in
the first quarter of 1960 at a seasonally adjusted annual rate of $34.4 billion, an increase of $500 million over the estimated
volume for the fourth quarter of this year.
Moreover, a survey by the National Industrial
Conference Board indicated that capital appropriations, as distinct from capital outlays,
by manufacturing corporations in the third
quarter of this year were up 53 percent from
the corresponding period of 1958. This was
the largest rise in the post-recession period to
date.
District metals output rises
During the month of November as a whole,
steel ingot production of the three major District firms amounted to about 62 percent of
rated capacity, compared with a national figure of 60 percent. The higher District rate was
attributable to the resumption of production
at one District plant prior to the general return
to work at other firms on November 7 and 8.
More recently, however, production limitations at one plant have kept the District rate
from climbing as much as in the rest of the
nation.
Although the now dormant steel strike has
commanded more attention, the three and
one-half month tie-up in the nonferrous met-
December 1959
MONTHLY REVIEW
als industry reached a point in mid-December
where shortages were beginning to threaten
metal fabricating operations on a r ather large
scale. From the standpoint of mining activity,
this tie-up was quite important in the Twelfth
District, since its mines produced threefourths of the nation's output of copper in
1958. In November it was reported that most
copper fabricators had supplies sufficient only
through the end of November, although some
had stocks sufficient for operations through
December.
The settlement of the strike in mid-December at a large District custom smelter should
alleviate the supply situation for refined copper somewhat, since ore may be obtained
from mines not affected by the strike. National
output of copper ore in October was at about
one-fifth of pre-strike levels.
The resumption of activity at the large District custom smelter was followed almost immediately by a reduction of one-half cent in
the price of lead from the 13 cents per pound
level which had prevailed since last August.
The smelter had large unsold stocks of lead
which became immediately available to the
market. Buying at the new price was reported
to be slow. In contrast, refined slab zinc stocks
held by United States producers dropped
sharply in November as shipments to industry, particularly the steel industry, rose, while
smelter production fell.
ber, following a decline of $13 since early
August. The export market for Douglas fir,
although accounting for perhaps onJy 5 percent of total sales in recent years, has shown
particular improvement. Order backlogs for
foreign shipment reached the highest level
since January 1955 at the end of November.
Some strengthening in plywood markets has
also occurred, as indicated by price increases
in the latter half of November of $4 per thousand squ::1re feet for both rough sheathing and
sanded grades. A number of small plywood
producers are reported to have curtailed output, probably for much of the winter, so the
industry is optimistic that present prices will
hold until Spring, if not increase moderately
further. In mid-December at least one mill
raised its price on the basic sanded grade
another $4 to $72 per thousand square feet.
Residential construction conticds
rise slightly
Twelfth District residential construction
contracts rose by 3 percent during the month
of October, following declines in the four previous months. It seems unlikely, however, that
this constitutes a reversal of the downward
CHART
1
CONSTRUCTION CONTRACTS AWARDED,
TWELFTH DISTRICT, 1958-1959
'IIILLIOU OF DOLLARS
400
Lumber markets have strengthened
Twelfth District sawn lumber production
continued through November at about the
October rate (seasonally adjusted) despite
further slight price declines. Weather conditions were generally favorable to logging activities, particularly for that time of year. Beginning in late November, new order receipts
picked up and prices of some fir and pine
items strengthened. The price of green fir twoby-fours, for example, increased about $3 per
thousand board feet in the first half of Decem
300
200
100
0
)
.J~~;-~-;~u-Q:·:~~;-·~;·r~l _ _
J
M
M
J
1958
S
N
M
t
(
Ill
J
1959
S
N
'Excludes public work s, public utility, and heavy engineering
constructi on contract s.
Source: F . W. Dodge Corporation.
167
FEDERAL RESERVE BANK OF SAN FRANCISCO
trend. There are still too many unfavorable
indications that portend further declines in
the immediate future. For example, applications for F HA-insured mortgages declined in
October for the fourth consecutive month and
were down 8 percent from September this year
and 26 percent below October of a year ago.
Furthermore, an October FHA survey, conducted on a national basis, revealed that western builders plan a fairly substantial reduction
in the level of home building in all price
classes. Undoubtedly a part of this decline is
to be explained in terms of the cost and uncertainty of current financing.
Current quotations for FHA mortgages in
the District suggest a continuation of this
tightness. In mid-December, western investors
were quoting FHA 53.4 percent, 30-year maturity, minimum downpayment loans at 94 112
to 9 5 Y2, depending upon the location of the
property. At the same time, eastern investors
were quoting a still lower price for the same
type of mortgage.
District farm price movements
exhibit mixed trends
168
Prices received by District farmers in midNovember were moderately higher than a
month earlier for most crops, while most livestock prices continued downward. Shipping
point or central market prices for the last two
weeks in November suggest that no substantial changes have occurred in prices at the
farm level since mid-month. The improvement in crop prices was most general for grain
crops. As a result, the increase in overall crop
prices was most pronounced in Pacific Northwest states. In Oregon, for example, the increase in grain prices along with sharply higher
prices for potatoes raised the mid-November
price index for crops 2 percent above the previous month and 11 percent higher than a
year earlier. In contrast, District hog prices
declined to the lowest level since January of
19 56, and beef cattle prices showed the sharp-
TABLE
1
ARM PRODUCTS
PRICES OF 5
Nov. 15
Nov. 15
1959
1958
Percent
Change
.32
3.23
22.80
14.10
.286
-6
-52
-3
-31
-27
Unit
CALIFORNIA
$
doz.
.34
6 .8 0
23.50
20.50
.394
cwt.
1.00
1.65
65
ton
ton
50.00
41 .90
53.60
45.60
7
9
WASHINGTON
Apples
bu.
Potatoes
c:wt.
1.60
.80
2.05
1.65
28
106
Cotton lint
Oranges
Beef cattle
Hogs
Eggs
box
cwt.
cwt.
$
IDAHO
Potatoes
OREGO'N
Corn
Oats
Source: United States Department of Agriculture, Agricultural
Prices.
est month-to-month decline in most District
states since the beginning of the price decline
in June.
Compared with a year ago, prices received
for crops contributing heavily to farm receipts
at this time of the year show a mixed trend.
Most livestock prices are lower than a year
ago. Prices received for the District's important cotton crop also are lower, along with
orange prices. On the other hand, apple and
potato prices have improved considerably. In
Washington, for example, potato prices in
mid-November were double the extremely low
prices received on the same date in 1958.
Department store sales rise
District department stores showed a seasonal upswing in November, although the District increase over year-ago sales was not as
great as the national increase. Sales for the
four weeks ending December 5 were 1 percent
above the year-ago volume in the District,
while national sales were 4 percent higher.
However, cumulative sales for the year to that
date were 9 percent above year-ago levels in
the District, whereas national sales were only
7 percent higher.
December 1959
MONTHLY REVIEW
District employment a dvances
to another record
Twelfth District nonfarm employment
reached another new record in November,
largely resulting from the settlement of several
labor disputes and the back-to-work order in
the steel industry on November 7. By midNovember, most steel workers in both the
primary and fabricating stages of the industry
had returned to payroll status, and other manufacturing industries such as glass and shipbuilding increased employment sharply after
new labor contracts were negotiated. Lumber
and wood products firms maintained their
work forces higher than usual for the season
despite severe storms in the Pacific Northwest, and food canning payrolls in California
declined less than seasonally. The ordnance
and electrical machinery industries also
boosted employment although a strike idled
about 1,000 workers in the latter industry.
These gains were partially offset by shutdowns
at automobile and truck assembly plants, principally those of General Motors, and scattered
layoffs occurred at metals fabricating and machinery plants, all as a result of dwindling
steel inventories. Major aircraft firms in California also reduced employment by more than
3,000 workers in November. Production
schedules for civilian jet aircraft have been
gradually reaching a more normal basis, and
as workers become better trained at their new
tasks, fewer are required on assembly lines.
Reduced military orders for jet aircraft continue to be reflected in declining employment,
and these arc only partly counterbalanced by
augmented technical staffs for the design and
production of more advanced weapons systems.
Despite evidence that steel shortages were
slowing work on some construction projects
and delaying commencement of work on
others, employment in contract construction
within the Twelfth District rose moderately
in November after seasonal adjustment. All
other nonmanufacturing industries except the
transportation and communications complex
reported job gains also, with sizable increases
being reported in services and government
employment.
From more recent developments, it appears
likely that the mid-December job total will
show a further increase. Idled automobile
workers were being recalled by the second
week in December as new steel flowed throuuh
0
production pipelines and additional workers
in machinery and metals industries returned to
their jobs.
Bank loans and investments up
In the four weeks ending December 2, total
loans at weekly reporting banks in the District
rose $77 million, the major factors being increases of $99 million in commercial and
industrial loans and of $18 million in real estate loans. Agricultural loans declined seasonally by $27 million. while other loans (mainly
consumer) fell $4 7 million. During the past
three months, the rate of increase in commercial and industrial loans at reporting bank
offices in the principal District cities-San
Francisco, Los Angeles, Portland, Seattle, and
Salt Lake City-lagged markedly behind the
rate of increase at the reporting banks and
branches out ide those cities.
Loans to classified borrowers reflected seasonal needs: loans to food, liquor, and tobacco
processors rose $26 million, while loans to
commodity dealers rose $33 million. Borrowing by the wholesale trade increased $13 million, although borrowing by the retail trade
increased only $1 million, as retail loan expansion during the first three weeks of the
period was almost cancelled by a loan contraction of $11 million during the final week.
Loans to metals and metal products producers
rose very slightly, reflecting the resumption of
steel production. Construction fim1s increased
their borrowings by $8 million, while public
utilities and transportation firms contracted
169
FEDERAL RESERVE BANK OF SAN FRANCISCO
TABLE2
their borrowings by $18
CHANGES
IN
SELECTED
EET ITEMS OF WEEKLY
million, of which $6 milREPORTING
MEMBER
BANKS
IN
LEADING CITIES
lion represented one large
Novembe
·2,1959
repayment.
(dollar amounts In millions)
Bank investment portfolio operations, conUnited States
Twelfth Distrlct
Dollars
Percent
Dollars
Percent
ducted in the milieu of rising loan demand coun- ASSETS:
Loans and investments adjusted
+170
+0.8
+374
+0.4
tered by new Treasury of77
Loans
adjusted
+445
+O.S
+0.7
+
ferings, resulted in a net
Commercial and industrial
increase of $82 million in
loans
+2.0
+328
+1.1
+ 99
holdings of United States
Real estate loans
18
68
+0.3
+O.S
+
+
-24
Government securities by
-27
-4.6
-2.6
Agricultural loans
Loans for purchasing or
weekly reporting banks.
-113
-3.1
carrying securities
+9.6
+ 13
Banks added $4 7 million
Loans to nonbank financial
in Treasury bills to their
3
institutions
+0.4
+1.4
+ 78
+
Loans
to
domestic
commercial
portfolios, while a shift in
-4.5
banks
9
+103
+7.6
the maturity of holdings
-47
-1.7
Other loans
+0.4
+ 51
of Treasury notes and
U. S. Government securities
+108
+0.4
+1.5
+ 82
United States bonds saw
-179
-1.8
Other securities
+0.5
+ 11
the "1 to 5 years" cate- LIABILITIES:
gory drop by $111 milDemand depos its adjusted
+1.0
+402
+116
+0.7
-126
-1.2
-436
Time deposits
-1.4
lion, but the "within 1
-1.0
N.A .
N.A.
Savings accounts
92
year" category rose $131
million. The Di•strict N.A. not a,·aibble.
Exclush·e of loans to domestic commercial banks and after deduction of valuation reserves;
movement in bank holdindividual loan items are shown gross.
Board of GO\·ernors of the Federal Reserve System, Federal Reserve Bank of San
ings of Treasury bills, Source:
Francisco.
notes, and bonds followed
still higher rate in the early part of December.
that of the rest of the nation. District bank
holdings of other securities also rose $11 milDemand was brisk, with resale of most of
lion.
the issues following rapidly upon acquisition
Demand deposits adjusted rose $116 milby underwriters. Bond prices showed little
lion, while time deposits fell $126 million,
change in late November and early December.
corresponding to the national pattern. Almost
An expected sale of $100 million of State
three-quarters of the decline in time deposits
of California bonds scheduled for December
was due to a drawing down of savings de9 was postponed at the last minute. The State
posits, principally reflecting the liquidation of
Treasurer stated that the bonds will be reChristmas Club savings accounts.
offered on January 13, 1960. The announced
reason for the withdrawal was that the interest
Yields stable, sales rapid in
cost anticipated from the one bid that would
municipal bond markets
have been submitted might have been about
The volume of municipal bonds in issues of
4 percent, which the Treasurer did not con$5 million and over was $37 million in Nosider fair and equitable. The State has not revember, somewhat above the $34 million sold
ceived more than one bid on its major sales
in October, which was the low month so far
since October 3, 1956. On the State's last trip
this year. Sales of new issues occurred at a
T
1
1
1
170
-
December 1959
MONTHLY REVIEW
to the market on September 10, it sold $50
million of school bonds at a net interest cost
of about 4.1 percent.
Savings and loan associations
ra ise rate to 4 V2 percent
Further evidence of the competition to
obtain funds in the present tight financial
/a
dt
HEN the national economy is in a strong,
expanding state, as is now the case, the
characteristic upswing in business credit needs
during the holiday season and the increase in
currency in circulation strain the resources of
the commercial banking system; hence it is
the practice of the Federal Reserve System
to make additional reserves available to the
banking system at this time of the year in
order to permit an expansion of bank credit
to meet the seasonal needs of the economy.
For the 1959 holiday season, part of the seasonal easing of the banks' reserve position has
come through a new ruling affecting the currency and coin, or vault cash, which banks
keep on hand for operating purposes.
Effective the beginning of December, the
Board of Governors of the Federal Reserve
System amended its regulations so that member banks having large holdings of vault cash
in relation to their deposits were permitted to
count a part of this cash in meeting their reserve requirements. This action was authorized by legislation passed by the Eighty-Sixth
Congress which amended Section 19 of the
Federal Reserve Act governing reserve requirements of member banks. The amending
legislation authorized the Board, among other
things, to permit member banks to include in
their required reserves all or part of their vault
W
markets was provided when various savings
and Joan associations in California announced
in early December that they would raise the
rate paid on savings accounts from 4 percent
to 4\12 percent, effective January 1, 1960.
Some associations in southern California had
already put into effect a 4% percent rate for
the fourth quarter of this year.
(nr;,h
cash holdings in addition to balances with
Federal Reserve banks.
The primary purpose of Federal Reserve
policy is to regulate the flow of money and
credit so as to contribute to sustainable economic growth; the principal function of reserve requirements is to serve as the basis for
regulating the ability of banks to expand credit
and add to the available money supply. Since
vault cash holdings and reserve balances at the
Reserve banks both have the same effect in
limiting the volume of credit a bank may
extend and are interchangeable, it appears
logical that both be counted as reserves.
The recent amendment of regulation D by
the Board of Governors provided that effective December 1, 1959, so-called "country
banks" (i.e., banks not classified as reserve
city or central reserve city banks) having vault
cash in excess of 4 percent of their net demand
deposits are permitted to count the excess as
part of their required reserves. The amendment also provided that effective December 3,
banks classified as reserve city and central
reserve city banks are similarly permitted to
count vault cash in excess of 2 percent of their
net demand deposits.
On the basis of average vault cash holdings
for the past twelve months, it appeared that
almost half of the 6,250 member banks in the
171
FEDERAL RESERVE BANK OF SAN FRANCISCO
United States would thus be in a position to
count a part of their vault cash in meeting
their required reserves. This would mean that
as a result, total member bank reserve balances at the Federal Reserve banks might be
lower than would otherwise be required by
about $230 million, of which $160 million
would be at country banks and $70 million at
reserve city ba s. Total vault cash held by
member banks has averaged about $2.2 bik
lion during 1959. Cash held at any particular
time is subject to marked seasonal fluctuation,
so that the effect o bank reserves of the
change in the vault cash regulation cannot be
exactly fmetold from past averages. Furthermore, the change in the regulation may also
have an effect on the average volume of currency held by member banks where they are
over the minimums, since there is no longer the
compelling reason to return cash to the Reserve bank for credit to the bank's reserve
account.
The Board, in its first exercise of the authority to permit member banks to count all
or part of their vault cash holdings as reserves, chose to permit only a partial use. of
vault cash as reserves. The Boru;d's decision to
permit the stated proportions of vault cash
holdings at country banks and at central reserve and reserve city banks to be counted as
reserves was based upon studies of the differential effects of alternative choices.
Variation among individual banks in vault
cash holdings is a factor that must be considered in the judicious freeing of vault cash
as reserves. The amount of vault cash held by
an individual bank will vary during the year,
although in the past banks generally have
followed the practice of keeping cash on hand
at a working minimum. They have to draw
dewn their reserve balances at the Federal Reserve banks in order to increase their cash
holdings and, conversely, excess cash may be
exchanged for reserve balances. The actors
which affect the ratio of vault cash to net demand deposits at individual banks-differences in operating needs and practices, and
also distance from Federal Reserve banks/ have. resulted in wide variation in vault cash
ratios among individual banks within a given
bank""class. However, taking all banks within
a class as a group, a cbaracteristic pattern has
emerged, with the vauLt cash ratio being lowes for central reserve city banks, higher for
reserve city banks, and highest for country
banks; this pattern is illustrated in Table 1
Column 1. The present. Leserve requirement
against net deman..d deposits, by bank classification, are shown in Co umrr 3. However,
both vqult cash and reserve balances lim't
lending, and the combination of the two :r;esults in ratios which modify the spread in
reserve requirements between bank classifica-
TABLE
1
RESERVES AND VAUI:r CASH HELD' BY MEMBER BANKS
(Average of daily figures, uly 16·31, 1959)
Amount o
Vault Cash
(in millions
of dollars)
Ratio of
Vault Cash
to Net Demand
Depos its (o/o)
Present Reserve
Requirem ents
Again st Net
Demand Deposits 1
(o/o)
Ratio of
Vault Cash Plus
Requ ired Reserves 2
to Net Demand
Deposits (o/o)
Central Reserve city banks
New York
Chicago
115
29
0.5
0.5
, 8.0
, 8.0
18.5
18.5
Reserve city banks
699
1.7
, 6.5
18.2
1,384
3.7
, 1.0
14.7
Country banks
1
172
2
Excluding cash items in process of collection and ba la nces subj ect to immediate withdrawal due from oth er ban ks.
Excluding requirements against time deposits, which are 5 percent for all member banks.
December 1959
MONTHLY REVIEW
TABLE
2
MEMBER BANKS HOLDING VAULT CASH IN EXCESS OF STATED PERCENTAGES OF
NET DEMAND DEPOSITS, BY FEDERAL RESERVE DISTRICTS, JULY 16-31, 1959
COUNTRY BANKS
FEDERAL RESERVE
DISTRICT
1-Boston
2-New York
3-Philadelphia
4-Cieve land
5-Richmond
6-Atlanta
7-Chicago
8 -St. Louis
9-Minneapolis
1 0-Kansas City
11-Dallas
12-San Francisco
Total
Average
)
Total
number of
banks
%of
banks
affected
177
309
406
399
331
211
374
152
166
107
174
59
275
493
498
561
432
64.4
62.7
81.5
71.1
76.6
56.0
40.0
32.4
35.5
15 .0
28.7
40.1
-2,865
....,
377
:~ I ~
~~ l r
936
469
467
714
607
147
5,976
~
\
..
tions, as shown in Column 4. While the ratio
of vault cash plus required reserves to net demand deposits varies during the year for each
class of banks, to count total vault cash as
reserves would significantly increase the margins between classes if present reserve ratios
were not changed.
The ruling which permits reserve city banks
to count vault cash in excess of 2 percent of
net demand deposits as reserves and country
banks to count vault cash in excess of 4 percent of net demand deposits as reserves has
differential results by Federal Reserve district.
Table 2 shows that the number of banks
affected, on the basis of July data on their
holdings of cash, varies widely from one Federal Reserve district to another. The volume
of reserves made available also differs from
district to district. This variation in the pattern of cash holdings is related to the size of
bank, its location, local payment habits, and
the quality of transportation or mail services
available for delivery and pickup of cash.
A more detailed picture of the impact of
vault cash eligibility upon the lending capacity
of Twelfth District banks is presented in T able
RESERVE CITY BANKS
Number of
banks
affected
Number of
banks
affected
Total
number of
banks
-
-
5
1
14
13
13
53
5
1
10
11
8
134
47.9
., p
_,
8
9
6
22
20
25
66
19
10
38
26
24
-273
%of
banks
affect ed
-
(
f
55.6
16.7
63.6
65.0
52.0
80.3
26.3
10.0
26.3
42.3
33 .3
49.1
3. This table, based on vault cash held during
the first half of November, shows that the dollar amount of reserves thus released would be
TABLE
3
ELIGIBLE VAULT CASH HOLDINGS OF
TWELFTH DISTRICT MEMBER BANKS,
November 1-15, 1959
{In thousands of dollars, based on daily averages)
RESERVE CITY BANKS, BY ZONE
Zone
Total Cash
San Francisco
Los Angeles
Portland
Salt Lake City
Seattle
102,120
42,011
13,056
6,346
19,550
El igible Cash
Eligible
(in excess of
Cash /
2% of net
Total Cash
demand deposits)
(%)
636
0
344
563
750
0 .62
2.63
8.87
3 .84
COUNTRY BANKS, BY ZONE
Zone
San Francisco
Los Angeles
Portland
Salt Lake City
Seattle
Total Cash
14,738
27,313
2,054
9,122
13,006
El igible Cash
(in excess of
4% of net
demand deposits)
165
622
38
211
1,356
Eligi ble
Cash/
Tota l Cash
(%)
1.12
2 .28
1.85
2.31
10.43
173
FEDERAL RESERVE BANK OF SAN FRANCISCO
greater for reserve city banks in the Seattle
zone than in the San Francisco zone, and
would be relatively high in the Salt Lake City
zone. For the same period, it is interesting to
note that country banks in the Seattle zone
had by far the greatest volume of cash released. Much of these funds are accounted for
by banks in Alaska, which had by far the
greatest dollar volume of eligible vault cash;
this reflects the distance and time factors
which govern their access to cash.
For the first week in which the new vault
cash ruling was in effect for reserve city banks,
December 3-9, the ratios of eligible cash to
total cash for Twelfth District zones were
similar to, but generally lower than, those for
the first half of November. The decrease in the
amount of vault cash relative to net demand
deposits seems primarily a reflection of the
customary rise in currency in circulation during the holiday season, rather than an adjustment to the change in reserve regulations.
The banking structure in the Twelfth Federal Reserve District is probably the most important reason why banks in this District did
not receive benefits from the vault cash change
proportional to their share of the nation's
banking assets. Branch banks, through cash
interchange among their offices, may reduce
their average cash holdings by more than
would be practical for the same size offices if
they were unit banks. Other reasons, however,
may also be very important. In this District,
there is an unusual concentration of the population in metropolitan areas, and a consequent
lack in the number of small rural communities
which exist elsewhere. This would tend to reduce difficulty of access to cash by banks and
banking offices in this District, as they are thus
disproportionately concentrated in and around
the metropolitan areas in response to the locational pattern of population and of commercial and industrial activity.
Subscriptions to the Monthly Review are available to the
public without charge. For information concerning bulk
mailings to banks, business organizations, and educational institutions, write: Research Department, Federal
Reserve Bank of San Francisco, San Francisco 20, Calif.
174
MONTHlY REVIEW
December 1959
BUSINESS INDEXES AND BANKING AND CREDIT STATISTICS-TWELFTH DISTRICT1
(Indexes: 1947-1949
= 100. Dollar amounts in mi1Hons of dollars)
Total
nonagri-
Industrial production (physical volume)'
Year
and
month
1()29
Hl33
11)39
1\J-19
19:;o
1%1
1952
1953
19!51
1955
1956
1!J57
1958
lumber
95
40
1959
January
February
March
April
May
June
July
August
September
October
87
52
67
99
Steel•
Cement
Copper•
...
...
5.')
27
78
50
63
103
103
112
103
17
80
93
115
116
115
113
c~ltural
Electric
power
120
131
130
116
29
26
40
108
120r
136
145r
162r
172
1!J2
209r
221
229
emnloyment
Total
mf'g
employmont
. ..
141
149
147
123
121
123
98
93
97
94
101
95
88
105
87
71
150
155
155
153
15-l
161
lot
162
lfi1
153
12,!
123
123
123
123
123
123
113
114
119
93
93
93
130
127
125
186
159
165
1.52
169
161
132
139
129
238
238
236
139
110
uo
156
158
160
121
118
92
92
92
92
92
93
92
92
92
91
125
126
128
130
128
128
136
136
132
132
Hll
142
171
178
188
186
192
191
176
186
168
187
192
213
216
205
75e
240
212
2:)0
.. .
136
138
140
114
148
138
118
76
...
38
141
141
142
142
143
J.l3
144
144
144
144
161
162
163
164
163
16l
165
163
162
161
114
114
119
Ill
1Hl
111
11 3
114
103
'16r
...
2-~0
254
269
267
256
...
...
Waterborne Foreign Trade Index
Exports
9-l
98
Dry Cargo
Tanker
Total
Dry Cargo
1929
Hl33
1939
1949
HlfiO
Hl51
19.52
19.">3
1954
19i'>5
1956
1957
1958
190
110
163
85
91
186
171
1-10
132
164
Hl9
229
174
150
2-17
124
128
...
72
95
121
137
157
199
308
260
308
449
575
537
97
118
141
136
137
157
163
183
107
213
213
199
88
660
1,836
4,224
2,803
3,f>!l4
7,029
10,008
8,986
.. .. . .
. 7'.8ci6
258
306
210
243
81
108
175
129
145
123
149
117
123
123
8,839
9,220
9,418
11,124
12,613
13,178
13,812
6,463
6,619
6,639
7,042
7,239
6,452
6,619
8,003
178
170
201
218
145
101
545
762
235
231
8,633
14,58()
13,591
13,812
8,026
8,003
237
153
209
168
161
167
163r
188
171
243
181
204
1()0
180
188
210r
2.56
217
228
144
217
130
133
139
96
02
504
6!)4
652
600
581
808
601r
647
263
210
378
273
277
302
6,799
13,375
7.810
9,101
8,516
13,990
9,168r
11,074
13,897
14,022
14,176
l-1,7G8
1-\000
1S,328
15.617
8,099
7,735
7,-136
7.739
107
.
1958
November
December
1959
January
February
March
April
May
June
July
Au~>;nst
SeptPmber
October
November
.. .
-
..
176
. ..
...
Imports
u.s.
Total
107
87
80
194
200
137
139
. ..
...
..
.. .
...
ll:l
1n
12:-l
123
Condition items of all member banks•
Year
and
Month
. ..
112
114
118
123
81
91
97
156
1-19
158
115
64
42
47
100
100
113
115
113
102
52
77
•• 4
100
100
100
!J(j
104
104
96
89
115
122
120
106
108
116
Retail
food
pri ces
57
97
105
121
130
137
134
113
152
157
154
122
119
121r
129
132
124
116
.56
100
112
128
124
131
133
Dep'l
store
sales
(value)•
60
!)9
103
112
118
121
120
127
134
1:18
137
. ..
106
107
109
106
106
105
101
94
98
Carloadings
(number)'
30
18
31
98
107
112
120
122
122
132
141
140
142
. ..
...
24
97
125
1-16
139
158
128
1f;4
163
172
142
71
100
114
113
115
1958
October
November
December
Petroleum'
Refined
Crude
...
27!ir
247
. ..
...
...
Tanker
7
. ..
!)7
loans
and
discounts
2,239
1,486
1,967
1.~.021
..
1S,078
. ..
16,252
.
. ..
Hi,OIO
Demand
deposits
adjusted7
Gov't
securities
495
720
1,450
1,234
951
1,983
..... .
... . . .
.. . .. .
•
0
9,937
10,520
10,515
11,106
11,864
12,169
11,870
12,729
7,.~11
7,329
7.096
6,932
6,717
6,702
6,651
••••
1,790
1,609
2,267
......
. 6',777
....
-···
....
....
....
3.66
3.95
4.14
4.09
4.10
4.50
4.97
4.88
....
....
4.95
....
....
4.97
....
. . ..
5.21
... .
....
5.54
....
Bank debit$
index
31 citiestl
(1947-49=
100)2
42
18
30
. ..
...
132
140
150
7,502
7,997
8,6()9
9,120
9,424
10,679
12,077
172
189
203
209
12,3(15
12,729
11,72!>
12,077
213
224
12,.508
12,210
12,228
12,87-t
12,520
12/i89
12.9-15
12,797
12,037
12,018
12,003
12.301
12,3!)9
12,517
12 ..1!10
12.378
12.365
12,316
12,138
218
235
244
241
231
235
212
241
238
232
251
12.8~>0
I
Total
time
deposita
Bank rates
on short-term
business loanss
12,963
13,133
154
t Aujusted for seasonal variation, except where indicated. Except for department store statisti~~. all index"s ar<:> ba~cd u pon data from ontsi de sources, as
follows: lumber, California ltedwood Associati on and U.S. Bureau of the Census; petroleum, cement, and copper, U.S. l3ureau of :\.fines; steel. U.S.
Department of Commerce and Arnerican Iron and Steel Institute; el<>ctric power. Federal Power Commission; nonap;rie;tltural and manufacturing
employment, U.S. l3t~rPau of Labor Stat i~tics and cooperating state a~encies ; rdail food pric,;s, U.:3. Bureau of Laboc Sta•istics; carloa.d ings, various
railroads and railroad a.'<llociat ions; and forei~>:n trade, U.S. Bureau of the Cens11S.
'Daily avP ra~e.
'Not a d jnsted for seasona l variat ion.
t Los Anfleles, San Fr ancisco. and Seattle indexes combined.
'Commercial cargo only, in physical volume, for Lns An~.;e!Ps, San Fran cisco, San
Ditgo, Ore!!:On, and W ashington CIJStoms d istricts; starting with .July 1().-,o, "sp,cial category" exports are excluded beca11se of security reaso ns.
a Annual figures are as of end of year, monthly figures ne of la~t WPrlnesrla:v in 1nontlL
' Demand d<eposits. f''<Cluding interbank anrl U.S. Gov' t
8 Average rates on loans made in five major cities, weighted by
deposits, less cash items in process of C'ollection. Monthly data partly estimated.
10 Minus sign indicates flow of funds out of the District in the case of
loan size category.
g Changes from end of previous month or year.
commercial operations, and excess of receipts over ciisbnrsements in the case of Treasury operations.
IJ End of year and end of month figures.
u Debits to total deposits except interbank prior to 1942. Debits to demand deposit~ except U.S. Government and interbank deoosits from 1942.
-Estimated.
r--Revised.
175
... f
I
'1.
\
\
\'
@FedFRASER