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MONTHLY REVIEW OF B U S IN E S S C O N D IT IO N S ISAAC B. NEWTON, Chairman of the Board and Federal Reserve Agent Federal Reserve Bank of San Francisco San Francisco, California, December 20,1926 Vol. X No. 12 S U M M A R Y O F N A T IO N A L C O N D IT IO N S A ctivity in manufacturing industries de mill activity was maintained during November creased during November and December. Pro at approximately the October rate. The value duction of important minerals continued in of building contracts awarded showed less than large volume. Indexes of general wholesale the usual seasonal decline in November and prices declined to the lowest levels in more than was slightly larger than in November, 1925. two years. Firmer money conditions in D e Awards for the first half of December likewise cember reflected the usual seasonal require exceeded those reported in the corresponding ments in connection with holiday and year-end period of last year. Agriculture. On the basis of December 1st activity. Production. Factory employment and pay farm prices, the Department of Agriculture rolls declined during November, reflecting de estimates the value of 55 principal crops raised creased activity in many important industries. in 1926 at $7,802,000,000 compared with $8,950,O w ing to the large output of minerals, how 000,000 in 1925. The major part of the decrease ever, the Federal Reserve Board’s index of pro is accounted for by declines of $580,000,000 and duction in basic industries advanced somewhat $260,000,000, respectively, in value of the cot during the month. Production of bituminous ton and corn crops. Total value of the wheat coal and petroleum in recent weeks has ex crop increased by nearly $40,000,000. Trade. In November, distribution of mer ceeded all previous records, and output of copper and zinc during the month of Novem chandise at wholesale and retail showed the ber was in unusually large volume. Pig iron usual decline from the activity of early autumn. production also increased slightly in N ovem Compared with a year ago, wholesale trade was ber, but steel mill operations in that month and in about the same volume and retail trade in in early December were considerably reduced. creased. Sales of department stores were about Autom obile production, which is not included seven per cent larger than last year and those in the index of production in basic industries, of leading mail order houses were six per cent declined sharply during November for the larger. Stocks of merchandise carried by whole second consecutive month and was smaller sale firms declined further in November and than in any month since August, 1925. Textile were smaller at the end of the month than a PER CENT PER CENT 200 150 r% PPM ROLILS 150 / 100 E:m p l o y m e k T * 100 50 50 1922 1923 1924 1925 1926 FACTO R Y EM PLO YM EN T A N D PAYROLLS Federal Reserve Board’ s indexes of factory employment and payrolls (1919 = 100). Latest figures, November, employment, 95.2; payrolls, 108.8. 19 22 19 23 1924 1925 1926 W H O L E S A L E PR IC E S Index of U . S. Bureau of Labor Statistics (1913=100, base adopted by Bureau). Latest figure, November, 148.1. 90 December, 1926 MONTHLY REVIEW OF BUSINESS CONDITIONS year ago. Inventories of department stores, however, increased slightly more than is usual in November. Freight car loadings declined during November and December from the record high levels of October, although the movement of coal continued heavy. Prices. The general level of wholesale prices declined in Novem ber and prices of many im portant basic commodities decreased further in the first half of December. The Bureau of PER CENT house furnishings groups have declined steadily during recent months to the lowest levels of the post-war period. Bank Credit. Loans and investments of member banks in leading cities increased by over $100,000,000 during the four weeks end ing December 15th, reflecting in part the growth in the demand for credit and currency that usually occurs in December. The increase was in loans on securities, while commercial BILLIONS OF DOLLARS TOTAL RE 1SERVE BAHJ 1 C R E D IT È L L J a 1 o is c o u r I T S FOR M EM BE R BANKVV [ U.S.SECUR IT IE S S " 1922 V * H / / A <¡ 19 24 i 1925 £ m Nov1e9rJ6ber* ° f g°^er- No^ ber« ° c1t9°2ber’ Bank, Debits—21 cities* ........................................ $2,843,766 $3,127,210 $2,825,317 $3,072,578 Bank Debits— Index Numberst—20 cities.......... 153 162 1510 151 Building Permits— 20 cities...................................$24,289,678 $27,650,152 $27,884,388 $32,335,188 Retail Sales— 32 stores— Index Numberst.......... 169 158 161 158 Savings Deposits—68 banks*!............................... $1,215,481 $1,209,664 $1,133,7000 $1,128,3260 Lumber Production— 4 associations— board feet* 678,939 790,376 683,770 726,098 Petroleum Productionî— California—b a rre ls.... 639,104 611,808 636,530 645,648 Flour Production— 14 companies— barrels.......... 495,531 512,685 510,946 512,120 Reporting Member Bank Loans and Discountsll* $1,298,726 $1,295,015 $1,202,161 $1,188,910 Reporting Member Bank DepositsII*................... $1,712,483 $1,684,618 $1,640,433 $1,629,595 Federal Reserve Bank Discountsll*....................... $38,249 $50,890 $50,368 $50,308 Federal Reserve Bank Reserve Ratioll............... 75.0 71.5 71.6 70.5 *In thousands. tAdjusted for seasonal variations— 1919 monthly average=100. figures published in previous Reviews. ||December 15 and November 17, centage increase or decrease (— ). 0Revised. ¿3 /f loans declined somewhat from their seasonal high point in November. The volume of re serve bank credit showed the usual seasonal in crease after the middle of November, but was lower than in the corresponding period of 1925, partly because there was a smaller in crease this year in the amount of money in circulation. M oney market conditions became slightly firmer in December than at the end of N ovem ber. Commercial paper rates were unchanged, but open market rates on bankers’ acceptances advanced by one-eighth of one per cent and call rates on security loans averaged higher for the month. 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 Statistical Sum m ary— 1926 R E SE R V E B A N K C R E D IT Monthly averages of daily figures for 12 Federal Reserve Banks. Latest figures are averages of first 21 days in Wuvemtier. B U IL D IN G C O N T R A C T S A W A R D E D Index of value of building contracts awarded as reported by the F .W .D od ge Corporation, (1919— 100). Latest figure, November, 188. Labor Statistics index of wholesale commodity prices for N ovem ber was 148, the lowest figure since July, 1924. Bituminous coal prices in creased sharply during O ctober and the early part of November, but in recent wreeks have declined by about two-thirds of the previous rise. Petroleum prices have been reduced since early in November, and there have also been declines in pig iron, copper, zinc, lead, and silver. The fall in prices of agricultural com modities which has persisted with few inter ruptions for over a year, continued during N o vember. Prices of the grains, however, have risen somewhat since the latter part of that month. Prices in the clothing materials and A J \ 1923 i! ^ X ✓ November. 1926 H compared with N ov.. Oct., 0.7 1.3 — 12.9 5.0 7.2 — 0.7 0.4 — 3.0 8.0 4.4 — 24.1 4.7 — 9.1 — 5.6 — 12.2 7.0 0.5 — 14.1 4.4 — 3.3 0.3 1.7 — 24.8 4.9 JDaily average production. §Not comparable with all and December 16 and November 18, 1925. flPer- 1926, D ecem ber, 1926 91 FEDERAL RESERVE AGENT AT SAN FRANCISCO Agricultural Activities The United States Department of Agricul ture’s final estimates of production and value of the principal crops of the Twelfth Federal Reserve District, together with comparative figures for the United States, are given in Table “ A .” Publication of these figures has not served to alter materially conclusions based on earlier forecasts, namely, that the district’s agricul tural output this year was slightly in excess of both the 1925 output and the average output for the five years 1919-1923. During the period when the bulk of this year’s crops was m oving to market, the gen eral agricultural price level was approximately 9 per cent lower than in the 1925 crop moving season.* In the absence of an equally large downward movement of prices of non-agricultural products, this decline represented a de crease in unit purchasing power of farm prod ucts. Because of abundant yields, however, it is estimated that aggregate financial returns to farmers during 1926 will not be much below those of 1925. The California grape shipping season ended with the rains of late November. Shipments to December 4, 1926, had totaled 62,727 carloads, a decrease of 17 per cent from the 75,535 car loads shipped during the 1925 season to D e cember 5th. A t least part of the decrease rep resented a decline in shipments of fresh raisin grapes, and is reflected in the large 1926 pro duction of raisins which is estimated at 270,000 tons. In 1925 there were 182,500 tons of raisins produced in California and during the past seven years, production has averaged 197,357 tons. Carlot shipments of California oranges and lemons during the 1925-1926 shipping season *The U nited States Departm ent of A griculture’s farm price in dex stood at 130 (A u gust, 1909-July, 1 9 1 4 = 1 0 0 ) in October, 1926, compared with 143 in O ctober, 1925. The United States Bureau of Labor Statistics’ index number of prices of non-agricultural products moved from 164 ( 1 9 1 0 -1 9 1 4 = 100) to 160 during the same period. _ (A ) P rod u ction and Value o f Farm Crops- to October 31 (as shown in Table “ B ” ), were 17.9 per cent and 29.3 per cent larger, respec tively, than the five-year (1919-1923) average shipments of these fruits. Estimated produc tion of navel oranges of the 1926-1927 crop remains unchanged at 11,800,000 boxes, com pared with a crop of 10,100,000 boxes in 19251926. Growing conditions thus far in the sea son have been favorable. Cotton ginned in Arizona and California prior to December 1, 1926, totaled 168,857 bales, com pared with 140,409 bales ginned to the same date in 1925. Estimated production of cotton in these states and in the United States is shown in the follow ing table : C O T T O N P R O D U C T IO N — A R IZ O N A , C A L IF O R N IA , A N D U N IT E D STATES* Ginnings§ December 1,19261 1925 1924 Average! 79,157 Arizona ................ 115,000 118,588 107,606 63,269 C a lifo r n ia ............ 128,000 121,795 77,823 243,000 240,383 185,429 T otal ...................... 142,426 U nited S t a t e s ... 18,618,000 16,103,679 11,517,399 13,627,936 * In 500-pound bales. fE stim ated production. $Five-year (19211 925). \ Census figures. Shipments of apples from Idaho, W ashing ton, and Oregon totaled 32,410 carloads for the season to December 4, 1926, compared with 33,281 carloads for the corresponding period in 1925. Financial returns to growers have been below those of recent years. Heavy seasonal rains fell throughout the Twelfth District in late November, benefiting fall-sown grain crops and livestock ranges. Livestock generally are entering the winter sea son in good condition and feed is plentiful. D e mand for feeder cattle and lambs has exceeded the supply. Industrial Activity Seasonal decreases in industrial activity and volume of employment were reported through out the district during November, 1926, and in dustrial activity generally was slightly below the levels of a year ago. Number of workers on payrolls of important industries in California -\— - - / ----- Production * ■United States-----------\ ----------- Twelfth District-----------n 5 -Year 5 -Year Averagef 1925 1926 A veragef 1925 1926 Unit 856,178 669,361 832,305 115,641 100,328 103,368 . bu. W h ea t ( a ll) . 174,329 218,002 191,182 45,816 40,338 . bu. 42,933 33,959 41,357 41,006 4,738$ 7,645$ 7,986$ Rice .bu. 12,096 19,100 17,139 5,147|| 5,704|| 6,45911 .bu. 10,543 15,603 18,618 220 116 243 .bales 83,334 86,474 86,377 15,799 13,738 .tons 14,454 H a y ( t a m e ). 391,465 323,243 357,800 35,611 36,584 .bu . 41,726 Potatoes 6,932 6,986 7,537 2,229° .tons 1,932° Sugar Beets 913° 95,727 89,700 37,379 117,285 35,454 .boxes 40,182 Applesli . — 46,527 46,565 16,251$ 68,425 21,252$ 15,644$ .bu. Peaches ......... 19,820 16,351 25,644 .bu. Pears ............ 14,3200 10,5570 7,6900 27,846§ 34,500§ 33,900§ .boxes 20,400$ Oranges 18,946$ 4,527 L e m o n s! . . . .boxes 7,200 6,000 —Twelfth District1921 Indexes# (Production) 1926 1925 1924 1923 1922 1920 1919 121.1 88.9 Grains 1 ...................... 92.7 94.5 59.3 106.6 93.5 90.0 Field C r o p s 2 ........... 117.0 110.3 91.3 100.4 96.2 109.3 100.6 93.5 Fruits 3 ....................... 120.9 109.4 99.2 127.0 108.0 82.4 89.8 92.7 r ^ f ------------- V a l u e* ------------- -----------------(— Twelfth District— x < United States------\ 1926 $119,498 25,709 10,462 18,959|| 1 6 1 ,3 4 2 44,768 27,989 19,977$ 11,9210 14,400 1925 $132,756 33,235 8,055 21,173|| 20,790 189,257 57,227 47,194 14,626$ 14,8230 67,320$ 18,000 1926 $997,589 109,677 44,988 50,232 1,016,346 1,216,678 506,721 59,706 85,618 67,079 22,742 1925 $947,993 127,653 52,246 62,388 1,419,873 1,209,496 605,327 117,284 65,086 27,944 107,505 § *000 omitted. 11919-1923. JCalifornia. IfCommercial crop. §California and Florida. #1919-1923 average=100. 1Wheat, oats, barley. 2Beans, cotton, potatoes, rice, sugar beets. 3Apples, peaches, pears, prunes, raisins, oranges, grapes. ||California and Idaho. 0California, Idaho, and Utah. ^California, Oregon, and Washington. 92 December, 1926 MONTHLY REVIEW OF BUSINESS CONDITIONS and Oregon, for which figures are available, was smaller during November, 1926, than dur ing November, 1925. Figures are presented in Table “ C ” Further evidence of contraction in volume of residential and industrial building construction is contained in figures showing the number and value of building permits issued in 20 principal cities of the district during November, 1926. The figures of value were between 12 and 13 per cent below similar figures for both the pre vious month and the same month a year ago. During past years the average decline in value of building permits issued in these cities dur ing Novem ber as compared with October has been approximately 11 per cent. B U I L D I N G P E R M IT S I N 20 C IT IE S Per Cent Increase or Decrease (— ) Months in 1926 compared with same Months in Month in 1926 compared with preceding Monthly Year-to-date Month |No. Value N o. Value N o. Value N ovem ber ......... — 13.8 — 12.9 — 12.2 — 13.9 — 17.7 — 12.2 O ctober .............. — 12.8 — 14.5 — 12.1 — 13.9 — 0.2 5.1 September ......... — 10.9 — 17.3 — 12.0 — 13.9 7.0 — 9.3 August ...............— 12.3 — 18.2 — 12.1 — 13.5 8.5 — 8.4 July ..................... — 12.6 — 4.5 — 12.1 — 12.9 — 2.6 — 12.6 1.7 25.6 Tune ..................... — 12.0 — 7.3 — 12.0 — 14.1 M ay ..................... — 15.3 — 25.8 — 12.0 — 15.5 — 11.3 — 17.8 April ................... — 12.7 — 15.7 — 11.2 — 12.8 — 13.5 — 3.4 M arch ................. — 7.8 — 9.8 — 10.7 — 11.6 37.1 35.7 February ........... — 11.2 — 18.1 — 12.6 — 12.8 — 4.4 — 8.3 January .............. — 13.8 — 7.3 .... .... 3.5 — 21.3 f----------------------1925---------------------- ^ The United States Bureau of Labor Statis tics’ index number of building materials prices rose 1.1 per cent during November, and, at 174 (1913 prices=100) for that month, was 1.1 per cent below the figure reported a year ago. The Aberthaw index of the total cost of construct ing a reinforced concrete factory building con tinued at 197 (1914=100), the level maintained since September. Lum ber production, as reported by 179 mills of four associations in this district, decreased seasonally during November, 1926, but ex ceeded shipments and new orders received by 7 per cent and 17 per cent, respectively. U n filled orders on the mills’ books were smaller in volume and stocks of unsold lumber larger at the close of Novem ber than at the close of O c tober. The cut of lumber was slightly smaller during November, 1926, than during N ovem ber, 1925. LU M B ER A C T IV IT Y * N ov., 1926 (board feet) Production 678,939 Shipments . 634,949 Orders 580,325 Unfilled O rderst 444,868 N o . of M ills R eportingî . . 179 O ct., N ov., r 1926 1925 (board feet) (board feet) 790,376 683,770 722,749 602,164 709,414 661,081 486,604 386,268 181 -First Eleven M on th s1926 1925 (board feet) (board feet) 8,100,258 7,324,630 7,212,871 7,957,081 7,763,569 7,158,585 176 192 181 * A s reported by four associations, 000 omitted except in case of number of mills reporting. tReported by three associations. T h e figures are not strictly comparable with other figures ap pearing in the table. JAverage. S o u rce: National Lum ber M anufacturers Association. Reported daily average production of petro leum in California during Novem ber was 4.5 per cent larger than during October, 1926, and slightly larger than during November, 1925. Indicated consumption increased 5.1 per cent during November, 1926, and was larger than production. Stored stocks declined during N o vember, 1926, to 118,830,709 barrels at the end of the month, the lowest level since August, 1925, when they stood at 117,570,336 barrels. The general trend of stored stocks of petroleum has been downward in California since March, *926. N o v ., O ct., N ov., Sept., P E T R O L E U M — California 1926. 1926. 1925. 1923* Indicated Stored Average N ew W e l l s t Average Daily Stocks at Daily Consumption Daily End of Number Produc Production (Shipments) Month Opened tion (barrels) (barrels) (barrels) (barrels) . 639,104 641,805 118,830,709 91 62,588 . 611,808 610,795 118,911,731 73 50,986 . 636,530 585,949 126,206,832 85 28,404 . 858,750 93 139,960 t t *Peak of production. fCom parable figures not available. Source : Am erican Petroleum Institute. Figures of national non-ferrous metal pro duction, together with a guide to the propor tionate importance of this district in such pro duction, follow : N O N -F E R R O U S M E T A L S National Production Per Cent of Total Produced in N ov., 12th Dist. 1925 in 1925* N ov., O ct., 1926 1926 Copper (short tons) (mine production) ........................ 75,240 75,643 67,897 Lead (short tons) (crude) 53,809 52,722 49,230 Zinc (short tons) ( s l a b ) .. 55,062 54,979 46,485 Silver (o z .) (commercial bars) .4,92 0,0 00 5,011,000 4,777,000 64.5 47.7 69.0 *Includ ing all of Arizona, the five southeastern counties of which are in the Eleventh Federal Reserve D istrict. (B ) A gricultural M arketing A ctivity— t---------Exports---------- \ /--------- Carlot Shipments--------- \ Livestock Receipts Wheat* Barley* Apples* at Eight Markets in 12th District Portland and San 12th Oranges! Lemonsf Cattle Puget Sound Francisco Dist. Calif. Calif. and Monthly (1000 bu.) (1000 bu.) (cars) (cars) (cars) Calves Hogs Sheep N ovem ber, 1926......................................... 4,626 884 7,561 3,085 617 132,941H 203,70711 238,5811! October, 1926......................................... 6,041 482 18,186 2,868 8010 135,913 195,782 328,662 N ovem ber, 5-year average.................... 2,461 808 10,185 2,190 395 126,670§ 185,703§ 220,839§ (1919-1923) Cumulative f ------------------------------- Crop Year--------------------------------- f Calendar Y ear ■ T o N ovem ber 30, 1926........................... 24,818 5,525 35,875 3,085 617 1 , 194,305 tT 1,872,36311 3,205,67511 (24 .3 ) (1 3 .9 ) (63.2) 2,051,514 3,122,231 T o N ovem ber 30, 1925........................... 7,003 8,792 34,977 7,571 1,071 1, 208,321 (7 .0 ) (19 .2 ) (64.3) Five-year average to N ovem ber 30th 13,495 7,784 30,597 6,136 831 1,050,001§ 1,784,703§ 2,893,335§ ____ 0 9 1 9 -1 9 2 3 ) (11 .7 ) (19 .3 ) (60.4) ColdStorage Holdings! 12th District Butter Eggs (1000 (1000 lbs.) 3,895 5,259 2 ,652|| cases) 179 292 15311 Figures in parentheses indicate percentage of new crop only. *Season begins July 1st. fSeason begins November 1st. $At end of month. §1921-1925. ||1922-1926. ORevised. jfPreliminary. D ecem ber, 1926 FEDERAL RESERVE AGENT AT SAN FRANCISCO Recent acceleration of the decline in silver prices, which has been in progress since N o vember, 1925 (see page 95 of this R eview ), has been of concern to the entire commercial metals mining industry of the district. Silver, in addi tion to being mined alone, is an important by product of the copper and lead mining indus tries, and a large part of the district’s total silver output comes from copper-silver and lead-silver ores. Some mines producing silver only are reported to have found production un profitable at the present price level. Lower silver prices have also tended to reduce profits of those copper and lead producers whose ores carry silver in appreciable quantities. Output of flour, as reported by 14 milling companies in this district, declined by less than the usual seasonal amount during November, 1926, as compared with October, 1926, but was 3 per cent less than in November, 1925, and 17 per cent smaller than the five-year (1921-1925) average output for that month. Contrary to the experience of past years, stocks of flour in millers’ hands increased (by nearly 10 per cent) during November, and on November 30th, were over 16 per cent larger than one year ago. R e ported holdings were, however, nearly 5 per cent smaller than five-year (1921-1925) average holdings at the close of November. N ov., 1926 495,531 O ct., 1926 512,685 N ov., 1925 510,946 F ive-Year Average N ov., 1921-1925 594,663 444,207 3,136,369 404,657 4,157,397 381,467 4,479,321 465,724 3,667,416 F L O U R M IL L IN G * O utput ( b b l s .) . . S tockst Flour ( b b ls .).. W h eat ( b u .).. * Consolidations have reduced the number of reporting companies but have not seriously affected the comparability of the figures. f A t end of month. Erratum—The table on the canned salmon pack appearing on page 85 of the November, 1926, Review was given with complete figures and not, as errone ously indicated, in thousands. (O Employment— - —v t------- -----Oregon N o . of N o. of N o. /— Employees —> N o. Employees —> of N o v ., of N ov., N ov., N ov., Firms 1926 1925 Firms 1926 1925 647 147,105 147,220 106 17.946 19,136 ( -6 .2 ) 1 ( -o .i ) t 41 8,293 7,902 6 137 156 (4 .9 ) (— 1 2 .2 )t 100 26,483 27,273 45 13,354 14,603 (— 2.9) f (— 8 .6 ) f 13 2,359 5 2,449 928 1,024 (— 3.7) f (— 9.4) t 58 6,225 6,065 8 549 553 (2.6) (— 0.7) f 136 26,908 27,406 33 2,364 2,240 (5 .5 ) (— 1.8) t 4 7,532 8,682 • •• (— 1 3 .2 )t 283 66,833 65,527 (2.0) 12 2,472 1,916 9 614 560 (29.0) (9.6) t-------- -Californiia--------- \ Industries A ll Industries........... Stone, Clay and Glass P roducts. Lum ber and W o o d Manufactures . . T e x t i l e s .................... Clothing, M illinery and Laundering. Foods, Beverages and T o b a c c o ... W ater, Ligh t and Power ................. O ther Industries*. M iscellaneous ___ ^Includes the following industries: metals, machinery and con veyances ; leather and rubber g o o d s ; chemicals, oils and p a in ts; printing and paper goods. tD ecrease. Figures in parentheses indicate percentage changes from No vember, 1925. 93 General Business and Trade Business activity in the Twelfth Federal R e serve District declined during November, 1926. Total volume of trade transacted continued large, however, and was greater than in N o vember, 1925, even if allowance be made for the extra business day during November of the present year. Daily average debits to individual accounts (bank debits), as reported by banks in 20 prin cipal cities of the district, were 1.4 per cent less in November than in October, 1926, whereas INDEX NUMBERS B A N K D E B I T S - T W E L F T H D IS T R I C T Index for 20 principal cities, Phoenix, Arizona, not included,(daily averages, 1919 average = 1 0 0 ). Latest figures, November, with ______ adjustment, 153; without adjustment, 159. *B ased upon average month to m onth increase during: the years 1919 to 1925 inclusive. ordinarily there is a seasonal increase from O c tober to November of 4.1 per cent. This bank’s index of bank debits, which is corrected for usual seasonal movements, declined during N o vember, 1926, for the fourth consecutive month, standing at 153, compared with 162 in October, 1926, and 151 in November, 1925. B A N K D E B IT S —Twelfth District Index for 20 Principal Cities* N ov., O ct., 1926 1926 W ith out Seasonal A d ju s tm e n t.. . 159 161 W ith Seasonal A d ju stm en t........... 153 162 *D aily averages, 1919 a v e ra g e = 1 0 0 . Berkeley . _______ Boise ..................... Fresno ............ L o n g Beach . . . . L os A n g e l e s ............... Oakland ............ Ogden ............ Pasadena . . . . . . Phoenix .............. Portland .............. Reno ............ Sacramento . . . . Salt Lake C ity. . San D iego . . . . . . San Francisco . . San Jose . . . . . . . . Seattle . . . . . . . . . Spokane .............. Stockton . . . . . . Tacom a ................ N ov., 1925 158 151 ^Revised. November, 1926 N o. Value 212 $ 552,585 57 62,353 110 93,768 338 513,905 2,943 8,688,255 791 1,809,968 20 44,650 234 579,213 100 194,155 908 2,099,925 21 37,850 182 369,378 91 389,880 745 2,001,466 765 3,293,891 97 500,490 800 2,280,840 160 219,415 235,711 79 179 321,980 8,832 Sept., 1926 1600 164 $24,289,678 November, 1925 N o. Value 405 $ 871,828 57 52,754 138 122,479 378 1,751,700 3,409 8,412,440 1,016 2,271,056 33 619,385 259 952,643 93 227,867 1,038 3,121,195 16 22,200 254 1,551,360 88 259,510 741 1,329,801 863 3,478,843 103 222,210 844 1,452,840 170 271,070 96 163,347 247 729,860 10,248 $27,884,388 94 MONTHLY REVIEW OF BUSINESS CONDITIONS D ecem ber, 1926 Value of district sales at wholesale, reported to this bank by 171 firms in eleven lines of trade, declined 7.6 per cent during November, 1926, as compared with October, 1926. The re ported decline was smaller than that which usually occurs at this season of the year (esti mated at 12 per cent), but in interpreting the figures account must be taken of the occur rence of five Sundays in October, 1926, which reduced the number of trading days. Com pared with November, 1925, reported value of trade at wholesale during November, 1926, declined 0.8 per cent, a decrease accentuated by the fact that there was one more business day in N ovem ber of this year than in November of last year. It is doubtful if the difference in trade value amounted to more than 5 per cent on a daily average basis, however, and it should be remembered that the general level of whole sale prices during the past month was 7 per cent lower than a year ago. It should also be remembered that trade at wholesale was more active during the fourth quarter of 1925 than at any time since 1920. partially to the larger number of business days in November, 1926. This bank’s index of sales for 32 department stores (doing approximately 85 per cent of reported retail business) which is corrected for seasonal fluctuations, stood at 169 (1919 monthly average sales=100) during November, 1926, compared with 161 in N o vember, 1925, and 158 in October, 1926. The advance in the index from October to Novem ber was due to the fact that actual sales de creased by less than the usual seasonal amount, again the result partly of changes in the num ber of business days referred to above. W H OLESALE TRADE Percentage increase or decrease (— ) , ( ------------inValue of Sales------------ > N ov., 1926 N o v .,1926 O ct., 1926 compared compared compared wîfh wîtk N o. of with with with Firms N ov., 1925 O ct.. 1926 O ct., 1925 Agricultural Im plem en ts. 7.2 8.5 — 26.5 15 2.2 13 A utom obile Supplies . . . . 1.9 — 6.5 16 — 7.6 16.9* — 8.1 A utom obile T i r e s ............... 7 4.7 — 13.8 D rugs ....................................... 9.1 D ry G o o d s ............................. — 10.9 — 13.4 23 — 9.7 9 — 2.1 12.7 14.9 Electrical Supplies .......... — 15.6 15 9.8 10.1 F u r n it u r e ................................ 22 — 6.5 — 10.4 — 7.9 Groceries ................................ — 9.7 — 3.2 16 H ardw are ............................... 1.5 11 5.8 — 14.3 5.1 Shoes ....................................... 2.2 Stationery ............................. 24 8.7 — 3.3 *Figures in parentheses indicate number of stores. One store in cluded in district figures not included in cities shown above. ORevised. *P art of this increase due to the resumption in N ovem ber by certain of the larger companies of “ spring dating’ ’ sales, or the practice of allow ing credit on sales made in autumn m onths until M arch, A p ril, and M ay of the following year. This practice was not followed by these companies during the autumn of 1925. Reports of 69 retail stores in this district indi cate that value of sales at retail was nearly 5 per cent larger during November, 1926, than during November, 1925, an increase due only (E ) B ank D ebits*— November, November, t--------Eleven Months---------\ 1926 1926 1925 1925 19,510 $ 16,809 $ 211,373 $ 198,716 B e r k e l e y ............ .$ 13,422 14,213 147,301 135,373 B oise ................. 411,187 51,465 433,131 50,850 Fresno ............... L o n g Beach . . 514,712 41,816 45,055 540,207 831,027 781,740 8,577,537 L o s Angeles . . 9,527,163 149,807 1,543,780 Oakland ............ 142,335 1,831,093 O g d e n ................. 20,769 38,641 223,273 281,836 32,767 403,867 379,379 Pasadena .......... 34,767 Phoenix ............ 28,126 28,362 280,324 255,937 190,052 165,274 1,819,240 Portland ............ 2,009,683 8,286 100,832 Reno ................... 8,733 94,383 Sacramento 30,081 37,215 354,990 400,495 Salt Lake C ity. 68,557 769,299 79,336 778,496 600,283 San D iego 60,699 701,298 55,846 11,495,661 946,872 10,374,837 935,605 San Francisco . , 30,347 281,979 San J o s e ............ 29,527 294,920 200,085 2,339,337 2,202,965 204,236 Seattle ................. 52,099 52,824 612,754 568,235 Spokane .............. 27,733 28,807 294,126 286,450 Stockton ........... .. 42,110 500,075 476,733 40,375 Tacom a ................ 148,588 144,998 15,043 17,860 Yakim a ................ $33,228,492 $30,318,354 D istrict ........... $2,843,766 $2,825,317 *000 omitted. O ct., 13 D E P A R T M E N T S T O R E S A L E S — Index Numbers (1919 Monthly Average = 100) San Salt Los Oak- Fran Lake Spo Angeles land cisco City Seattle kane (6)* (5)* (8)* (4)* (5)* (3)* nal Adjustment . 253 151 155 102 118 106 . 241 182 151 127 112 132 . 231 140 139 110 115 1140 . 230 145 153 122 102 98 Adjustment . 253 149 150 111 97 108 . 234 168 139 107 101 99 . 265 147 112 112 1500 1050 115 . 231 143 148 104 93 D is trict (32)” 167 170 157 159 169 158 171 161 AIvC Ö Further slight declines in com m odity prices occurred during November, 1926, and the United States Bureau of Labor Statistics’ wholesale price index stood at 148.1 (1913 prices=100) for that month, compared with 149.7 in October, 1926, and 157.6 in November, 1925. Group index numbers of prices for farm products, foods, cloths and clothing, metals, chemicals and drugs, house furnishings, and miscellaneous articles declined again during November, while similar index numbers for fuel and lighting and building materials ad vanced slightly. The United States Department of A gricul ture’s index number of farm prices for Novem ber, 1926, was unchanged from a month ago at 130 (1909-1914=100). The Bureau of Labor Statistics’ index number of non-agricultural commodities advanced from 160.0 in October to 161.0 (1914=100) in November. The ratio between these two indexes, an indication of the purchasing power of farm products, declined from 81.2 to 80.7. A year ago this ratio was 87 (pre-war purchasing power ratio=100). Prices for livestock at Chicago during N o vember, 1926, were generally below the levels of September and October, 1926, and, with the exception of hog prices, were lower than during November, 1925. During November, 1926, prices for sheep and lambs ranged from 14 to 49 per cent lower and cattle prices aver aged three per cent lower than in November, 1925, while prices for hogs averaged approxi- D ecem ber, 1926 FEDERAL RESERVE AGENT AT SAN FRANCISCO mately 6 per cent higher than a year ago. Rep resentative Chicago quotations are shown in Table “ F.” Prices paid for best grade livestock at six markets of the Tw elfth Federal Reserve District during November, 1926,compared favor ably with prices paid during November, 1925. W heat prices declined during November. Quotations for May contract wheat at Chicago during the week ending Decem ber 3, 1926, ranged from $1.39% to $1.41 % Per bushel, compared with prices of $1.43% to $1.44% Per bushel quoted a month ago, and a range of from $1.48% to $1.50% per bushel on O ctober 23rd, the 1926 high point for this contract. On D e cember 14, 1926, quotations ranged from $1.37% to $1.38% per bushel. The cotton market steadied during N ovem ber, follow ing the drastic price declines of September and October. Prices during N ovem ber fluctuated within narrow limits at levels slightly above the low point for the year, reached on October 21st. The average price for the month was approximately 37 per cent lower than in November, 1925. Early in December, quotations moved downward, spot prices of middling uplands cotton at New Orleans rang ing from 11.68 to 12.49 cents per pound for the week ending December 3, 1926. On December 9, 1926, the quotation was 11.90 cents per pound and one year ago this grade of cotton was quoted at 19.28 cents per pound. The gen eral trend of w ool prices, as indicated by an average of 98 quotations on the Boston market, has been downward since March, 1925. The decline from January to December, 1926, was 15.5 per cent. The average on December 3, 1926, at 67.15 cents per pound, was 0.7 per cent lower than a month ago and 17.4 per cent lower than on December 4, 1925. Prices for beet sugar, f. o. b. San Francisco, rose steadily throughout November, increasing sixty cents per 100 pounds during the month. The quotation advanced from $5.80 per 100 pounds on November 6, 1926, to $6.30 on D e cember 8, 1926. A year ago sugar was quoted at $5.35 per 100 pounds. Prices for non-ferrous metals have declined 95 steadily during 1926, and have generally been lower than prices during 1925. During N o vember, 1926, the monthly average price of silver at New York was 54.141 cents per ounce, the lowest price recorded since November, 1915, when the average stood at 51.714 cents per ounce. The trend of silver prices has been downward since November, 1925, the decline during the present year amounting to approxi mately 20 per cent. The follow ing table shows low and high monthly average silver prices dur ing the period 1915 to 1926: M O N T H L Y A V E R A G E P R IC E S O F S IL V E R , N E W Y O R K (Cents per ounce) Novem ber, 1926, lo w ............................................................................. 54.141 71.570 September, 1925, h ig h .......................................................................... March, 1921, lo w .................................................................................... 56.023 January, 1920, high (all-tim e p e a k ).............................................. 132.827 A ugust, 1915 (all-time lo w ) .............................................................. 47.163 The national lumber price index published by “ The Lumber Manufacturer and Dealer” stood at 29.80 for November, 1926, compared with 30.28 for October, 1926, and 30.42 for Novem ber, 1925. Banking and Credit Situation The banking and credit situation in the Twelfth Federal Reserve District during the year 1926 can best be reviewed in the light of credit movements during immediately preced ing years., In 1924 a downward movement of business activity coincident with a large increase in funds available for credit extension resulted in a rising ratio of deposits to loans at member banks, greatly reduced borrowings at the Fed eral Reserve Bank, and a low level of interest rates. The deposit loan ratio advanced to a peak of 144.6 on October 15, 1924; discounts at the Federal Reserve Bank of San Francisco reached the lowest point since June, 1917; the rediscount rate of the Reserve Bank was lowered from 4y> to 4 per cent on June 10th and from 4 to Zy> per cent on August 25th. During^ 1925, business activity expanded rapidly and total loans and discounts of report ing member banks increased throughout the year. Increase in deposits did not keep pace (F) Com m odity P rices — Commodity W holesale Prices, U . S. Bureau of Labor (1913— 1 0 0 )...................................... Purchasing Power of Farm Products (U . S. Dept, of A g ric u ltu re )*.......... Cattle (N ative B e e f ) . .W eekly average price at C hicago.................................... L a m b s................................W eek ly average price at C hicago..................................... H o g s ..................................W eekly average price at Chicago...................................... W h e a t............................... Chicago contract price for M ay w heat............................ W o o l ..................................Average of 98 quotations at B o sto n ................................. A p p le s............................... Extra Fancy W m esap s, f. o. b. Pacific N orthw est. O ranges.............................Navels, Fancy, wholesale at San Francisco............... P runes............................... Size 4 0 /5 0 in 25-lb. boxes, f. o. b. California............. R aisin s............................. .Thompson Seedless, Bulk in 25-lb boxes, f. o. b. C a lifo r n ia ................................................ ................................. Canned Peaches............ Cling, Choice, 2 ^ s , f. o. b. California........................... B u tter............................... 92 score at San Fran cisco..................................................... C opper............................... Electrolytic, m onthly average at N ew Y o r k ............... L e a d .................................... Monthly average at N ew Y o r k ............................................ Silver. . . . ; ......................M onthly average at N ew Y o r k ............................................ Lum ber (S o ftw o o d ). .W e e k ly Index, United S ta te s f........................................... Unit 100 lbs. 100 lbs. 100 lbs. bu. lb. box box lb. lb. doz. lb. lb. lb. oz. December 3,1926 148.1 80.7 $10.60 12.60 11.90 1 .3 9 3 4 -1 .4 1 # 67.15 1.30-1.3 5 4 .25-5.7 5 .0 6 H - 0 7 ' A .0 7 y 2 2.20 .46 13.5760 8.005^ 54.1410 29.80$ One Month Ago 149.7 81.2 $9.90 13.50 12.55 1 .4 3 ^ -1 .4 4 3 4 67.590 1.25-1.4 0 N ot Quoted .0624-.07J4 One Year A 157.6 87.0 $9.95 16.10 11.15 1.67-1.7 2 81.330 2.0 0 -2 .1 5 5.75-6.0 0 .0 8 ^ -.0 9 .07^2 2.20 .46 13.8620 8.4020 54.5050 30.28 *Ratio of farm prices (August, 1909-July, 1914=100) to wholesale prices of non-agricultural commodities (1910-1914=:100). tAs published by “ The Lumber Manufacturer and Dealer.” JDec ember 10, 1926. .0 7 U 2.20 .5 0 # 14.3530 9.7390 69.2230 30.42 96 December, 1926 MONTHLY REVIEW OF BUSINESS CONDITIONS with expansion in loans, the ratio of total de posits to total loans declined (from 144.0 to 134.0), and borrowings from the Federal Re serve Bank of San Francisco increased. On N ovem ber 23, 1925, the rediscount rate at the Reserve Bank was raised to 4 per cent where it now stands. REPORTING MEMBER BANKS*— Twelfth District (In Millions of Dollars) /■■ Total Loans ............................................ Commercial Loans ............................. L oans on Securities ........................... Investm ents ............................................. Total Loans and I n v e s t m e n t s .... N et Dem and Deposits ...................... T im e D e p o s i t s .................................. Borrow ings from Federal Reserve B a n k ..................................... ..........Condition- — ■ -s Dec. 15,Dec. 16, Dec. 17, 1926 1925 1924 1,299 972 327 475 1,774 818 878 33 1,202 923 279 480 1,682 829 778 1,048 829 220 426 1,474 804 666 44 4 *T o ta l resources of reporting banks are approximately 50 per cent of total resources of all banks, and 71 per cent of total resources of all m em ber banks in the Tw elfth Federal R e serve D istrict. Reporting banks embrace member banks in L o s A n geles, San Francisco, O akland, Portland, Tacom a, Seattle, Spokane, O gden, and Salt Lake City. Federal Reserve Bank of San Francisco again increased. There have been signs of recession in busi ness activity during the fourth quarter of 1926, but seasonal influences have served to maintain trade volume. Total loans and dis counts at reporting member banks have con tinued to increase, as have total deposits in lesser degree. The ratio of deposits to total loans continued to decline, and on November 24th, at 129.6, reached the lowest level since 1921. On December 15, 1926, it stood at 131.9. The continued expansion in loans, coincident with sharply increased deposits and also with a reduction in discounts at the Federal Reserve Bank of San Francisco, indicates that the re cession in business noted during recent months has not been of sufficient magnitude nor suffi ciently prolonged to result in liquidation of bank credit in this district. FEDERAL RESERVE BANK OF SAN FRANCISCO (In Millions of Dollars) MILLIONS OF D O L LA R S Total Bills and Securities................... Bills D iscounted .................................... United States S e c u r it ie s ................... B ills Bought ............................................ T otal Reserves ....................................... Total D e p o s i t s ......................................... Federal Reserve N ote Circulation. D ec. 15, 1926 106 38 37 31 274 178 188 ■Condition — D ec. 16, D ec. 17, 1925 1924 122 109 50 9 39 54 32 45 274 288 166 176 208 216 MILLIONS OF DOLLARS 300 • A TOTAL RESER VE S/^ ■y r W 200 FEDERAL RlESERVE MOTE* CIRCUL ATI ON / /A ? BILLS DISCOUNTEC1 100 ^ 11 MEMBER BANK CREDIT-TW ELFTH DISTRICT Figures for about 65 member banks in leading cities, as of last Wednesday of each month. Latest figures, November 24. Business activity was at high levels during the first weeks of 1926, but a downward m ove ment soon set in which continued into the sec ond quarter of the year. Commercial loans of the reporting member banks declined during this period, but their total loan account held steady. A decrease in total deposits accom panied the business recession and the ratio of deposits to loans declined. There was a re newal of business activity during the summer of 1926, and while bank loans increased slightly deposits increased by larger amounts so that the ratio of deposits to loans moved upward. Discounts at the Federal Reserve Bank of San Francisco were reduced. Business activity at tained record proportions during the third quarter of 1926. Loans and discounts at report ing member banks increased more rapidly than did deposits and the ratio of deposits to total loans again declined, while discounts at the ^ 1922 W ' l INVESTMENITS 19 23 1924 1925 1926 RESERVE BANK CREDIT-TW ELFTH DISTRICT Figures for Federal Reserve Bank of San Francisco, as of last Wednes day of each month. Latest figures, November 24. On December 8, 1926, the Treasury Depart ment announced an issue of Treasury certifi cates of indebtedness of Series TS-1927, dated and bearing interest from December 15, 1926, payable September 15,1927, with interest at the rate of 3% per cent per annum, payable March 15 and September 15, 1927, subscriptions to be paid for in cash or by exchange of specified Government securities. Books for the issue were closed on December 9th, total subscriptions amounting to $992,168,500 and total allotments to $229,264,500. In this district allotments amounted to $13,425,000 of a subscription total of $95,422,000. The allotment to the Twelfth Federal Reserve District was exceeded only by allotments made to the Second (N ew Y ork ), Third (Philadelphia), and Seventh (Chicago) Federal Reserve Districts. FEDERAL RESERVE AGENT AT SAN FRANCISCO D ecem ber, 1926 97 S e a s o n a l V a r ia tio n in B u s in e s s A c tiv it y Introduction In a general statement concerning the M onthly Review, published in the April, 1926, issue, the follow ing observation was m ade: “While it has not been considered wise to attempt any forecast of business conditions, it has seemed proper to interpret the meaning of current events as fully as can be done with assurance. To this end, statistical methods are used in an attempt to reduce the mass of figures which are currently available in business and finance to comprehensible form. The meaning of the data reflecting general business condi tions becomes clear only when we have considered similar figures of previous years, and at the same time have made allowance for usual seasonal changes and for the usual growth that takes place from year to year, in keeping with the growth of population. For these reasons figures of bank debits, for example, published currently have little meaning for the average man be cause he has not the detailed knowledge to enable him to judge current figures in the light of all the neces sary qualifications. It is possible, however, by recog nized statistical processes to make some allowances before figures are presented in the Review.” From time to time inquiries have been re ceived by the Division of Analysis and R e search of the Federal Reserve Bank of San Francisco regarding methods of adjustment for seasonal variation and the significance of figures so adjusted. For use in answering such inquiries a brief explanatory statement has been prepared, and it now seems desirable to anticipate future inquiries by giving that state ment general distribution. What Seasonal Variation Is T o illustrate both the nature of seasonal variation and methods of allowing for its in fluence, it has been found convenient to use this bank’s index of department store sales in the Twelfth Federal Reserve District. Sales of department stores, like sales in most other lines of business, are not distributed evenly throughout the twelve months of the year. From experience we know that December sales are usually greater in value than those of any other month in the year, that value of sales is usually smaller in January than in December, smaller in February than in January, larger in March than in February, and so on from month to month. These monthly variations tend to occur year after year regardless of the relative degree of prosperity of general business, and regardless of the growth or decline of activity in particular lines of business. The causes of such variation are numerous, including changes in needs and interests of consumers at various seasons of the year, differences in the number of working days per month, and sales policies or buying habits. It is this characteristic dis tribution of business throughout the year, re curring year after year, which is called the seasonal distribution of business. Those fluctu ations in volume of sales and production, in volume of employment, and in practically all types of business activity, which are the result of this seasonal distribution of business, are known as seasonal fluctuations or seasonal variations. Adjustment for Seasonal Variation Various methods have been developed for measuring seasonal variation in business activ ity and for adjusting sales or production figures for such variation. The purpose of this article, however, is to present briefly the principle in volved in measuring seasonal variation, not to outline statistical methods of making such measurement.*)* Here it is sufficient to say that there is no single best method. The method to be used should be the one found best adapted to the data being studied. Measures of seasonal movement are merely measures of the average movement from month to month which occur year after year. Numeri cal measures of seasonal variation are obtained by determining what the average^ variation has been for a period of years. In its simplest terms this consists of finding out what per cent of the year’s business is, on the average, done in each month of the year. For conveni ence in handling the figures the total of the average year’s business is assumed to equal 1200 (the monthly average then being 100), and the amount of business transacted in each month is expressed in per cent of the monthly average. These latter figures constitute the indexes of seasonal variation, or, more briefly, the seasonal indexes. For example, average monthly department store sales in the Twelfth Federal Reserve Dis trict are assumed to equal 100. It is found that over a period of years only 89 per cent of the average monthly sales are made in January, and only 77.1 per cent in February. The sea sonal indexes for January and February, there fore, are 89.0 and 77.1, respectively. The fol lowing table gives the seasonal indexes used in adjusting department store sales in the Twelfth Federal Reserve District for seasonal variation. D E P A R T M E N T S T O R E S A L E S - T W E L F T H D IS T R IC T Indexes of Seasonal Variation* Per Cent of Average September . . . 93.0 O ctober .......... 108.9 N ovem ber ,. .100.1 Decem ber ...1 5 7 .7 Total . . . .1200.0 Average ,. 100.0 *T h e indexes of seasonal variation given in this table apply to the D istrict as a whole and cannot be applied to a city or to an individual store. Per Cent of Average January ........... 89.0 F e b r u a r y ......... 77.1 M a r c h ............... 98.6 April ................. 97.8 Per Cent of Average M a y ....................104.3 June ................... 93.3 J u l y .................... 88.3 A u g u s t .............. 96.9 fRecent textbooks on statistics describe these methods. Later developments in method or technique mav be found in Journals of the American Statistical Association. Jin obtaining this average, allowance is made for the growth (usually upward) of business, which would naturally tend to increase sales as the year progressed. 98 MONTHLY REVIEW OF BUSINESS CONDITIONS The adjusted figures in index number form are presented in the accompanying chart and in the table on page 94 of this Review. In making the adjustment for seasonal varia tion, actual sales figures for a particular month are divided by the seasonal index for that month. Thus, sales for the month of January (perhaps $18,724,000) are divided by the Janu ary seasonal index (89.0) and the resulting figure ($21,038,202) represents January sales adjusted for seasonal variation. Construction o f Indexes D ecem ber, 1926 seasonal variation, i. e., it shows fluctuations other than those due to seasonal influences. If both the heavy and the light curves move up ward it indicates that sales have either in creased by more than the usual seasonal amount or increased when ordinarily in the past they have decreased. If the heavy curve moves up ward and the light curve downward, it indi cates that sales during that period declined by less than the usual seasonal amount. If the IND&X NUMBERS A n index number merely expresses in an other way the actual data to be presented. The use of an index number promotes ease of inter pretation of unfamiliar figures. In this case, the index number expresses sales figures in terms of percentages. The year 1919 has been taken as the base period, that is, average monthly sales during 1919 equal 100 per cent. T o obtain the index number of sales for any particular month, sales during that month are divided by average monthly sales during 1919 and the result multiplied by 100. For exam ple: 1919 annual sales 1919 m onthly average 1923 N ovem ber sales — $1,800,000 = $1,800,000 -4— 210,000 Index for N ovem ber, 1923 = 12 = 210,000 ^ 100 = 150,000 $150,000 140 In constructingtheindexadjusted for seasonal variation, the same procedure is followed, except that sales figures adjusted for seasonal varia tion by the method given in the preceding sec tion are substituted for the actual sales figures. Significance of Seasonally Adjusted Indexes Month to month comparisons of sales at re tail usually do not give accurate information regarding the state of trade except to those accustomed to making mental allowance for the large seasonal variations which distort such comparisons. T o illustrate: an increase of 27.9 per cent in value of department store sales dur ing March, 1927, as compared with February, 1927, would not of itself indicate an unusually high level of activity in trade at retail because, ordinarily, there is an increase of 27.9 per cent in sales during March, as compared with Febru ary, a fact indicated by the indexes of seasonal variation given above. Obviously, the condition (as contrasted with the volum e) of trade at re tail would have shown no improvement during March, 1927, and this fact would be reflected by the seasonally adjusted index, which would remain, during March, at the February level. The accom panying chart shows indexes of department store sales in the Tw elfth Federal Reserve District. The light line shows the index based upon actual sales. The heavy line shows the index based upon sales adjusted for D E P A R T M E N T S T O R E S A L E S - T W E L F T H D IS T R I C T Index of 32 Stores in 7 cities (1919 monthly average=100). Latest figures, November, with adjustment, 169; without adjustment, 167. heavy curve moves downward and the light curve upward, it indicates that sales have failed to increase by the usual seasonal amount. If both curves move downward, it indicates that sales have either declined by more than the usual seasonal amount or declined when ordi narily in the past they have increased. It is much easier to observe the ebb and flow of business activity as represented by the heavy curve than it is to deduce the facts of business activity from the record of business volume given by the light curve. Changes in Seasonal Variation Seasonal variations may be relatively con stant year after year, as in the case of a well established business selling seasonal goods. Recent investigations, however, have shown that seasonal variations may tend to shift from year to year in some lines of business, building construction being a typical example. W here there is such a tendency, measures of seasonal variations are obtained by determining what the average movement is and then ascertaining to what extent this movement shifts each year.* *D uring the past three years, m ethods of determining to what extent seasonal variations change from year to year have been pre sented in the Journal of the Am erican Statistical Association. I ndex Vol. X January— December, 1926 Page Page Agricultural Activities: ............................................ 3, 11 19, 27, 35, 43, 51, 59, 67, 75, 83, 91 Almonds: (See Nuts) Charts: Continued Ratio of Invested Capital to Individual Deposits (Supplement to January Number) Rediscount Operations, Comparative 1921-1926 (Supplement to April Number) Wholesale Prices — United States Bureau of Labor Statistics’ Index, 1922-1926................... 1, 9 17, 25, 33, 41, 49, 57, 65, 73, 81, 89 A p p le s :..................... 27, 35, 43, 51, 59, 67, 75, 83, 87, 91 See also Tables: Commodity Prices) Citrus Fruits (Oranges and Lemons): (See Fruits— Marketing, Production, and Prices) Bank Debits: .. .6, 13, 21, 29, 37, 45, 53, 62, 69, 77, 86, 93 (See also Charts: Bank Debits, and Tables: Bank Debits) Cotton: ........................... 7, 15, 22, 30, 39, 44, 47, 51, 55 60, 63, 67, 71, 79, 83, 87, 91, 95 (See also Tables: Grain and Field Crops, Production, and Tables: Commodity Prices) Agricultural Marketing: Trends, Activity (See Agricultural Activities; see also Tables: Agri cultural Marketing Activity) Bank Credit: (See National Conditions, Summary of) Dairy and Poultry Products: (See Butter and Eggs) Banking and Credit Situation:.................................8, 15 23, 31, 40, 47, 56, 64, 72, 80, 88, 95 Deciduous Fruits: (See Fruits: Deciduous) Barley: ............................ ............... 19, 59, 67, 75, 83, 91 (See also Tables: Agricultural Marketing Activity) Department Store Sales—Twelfth District: (See Re tail Trade and Charts: Department Store Sales— Twelfth District) Beans: ............................................................................. 51 (See also Tables: Grain and Field Crops, Pro duction) District Conditions: (Statistical Summary): .. .. 2 , 10 18, 26, 34, 43, 50, 58, 66, 74, 82, 90 Beet Sugar: (See Sugar, Beet) Dried Fruit: (See also Tables: Commodity Prices) Building A c tiv ity :......................................................4, 11 20, 27, 36, 44, 52, 60, 68, 76, 84, 92 (See also Tables: Building Permits) .8, 40, 64, 69 E ggs: (See Tables: Agricultural Marketing Activity) Butter: (See Tables: Agricultural Marketing Activity) Employment: ............................................................. 3, 11 19, 27, 36, 44, 52, 60, 68, 76, 84, 91 (See also Tables: Employment) Canned F r u its :.........................5, 8, 39, 40, 53, 55, 62, 69 (See also Tables: Commodity Prices) Federal Reserve Bank of San Francisco: (See Banking and Credit: Situation) Canned V egetables:...................................................... Field Crops:: .... ............................................35, 44, 51, 67 (See also specific crops, such as Cotton, etc., and Tables: Grain and Field Crops, Production) 5 Cattle: (See Livestock) Calves: (See Livestock) Charts : Bank Credit: All Federal Reserve Banks.............................2, 26 34, Member Banks in Leading Cities of the United States.................................10, 18, 42, 50, 58, 74, 82 Member Bank Credit—Twelfth D istrict.. . . 15, 23 31, 40, 48, 56, 64, 72, 80, 88, 96 Reserve Bank Credit— Twelfth D istrict.. . . 15, 23 40, 48, 56, 96 Bank Debits— Twelfth District........................... 6, 13 21, 29, 38, 45, 53, 62, 69, 77, 86, 93 Building Contracts Awarded— United States.26, 90 Building Permits—Twenty Cities......................... 60 Currency and Reserve Bank Credit..................... 2 Department Store Sales— United States........... 2, 34 Twelfth District. .6, 13, 21, 29, 38, 46, 54, 70, 78, 98 Factory Employment and Payrolls in the United States .............................................. 18, 25, 41, 66, 89 Money rates......................................................10, 42, 58 Production in Basic Industries of the United States, Index o f ..........1, 9, 17, 33, 49, 57, 65, 73, 81 Financial Conditions in Twelfth District: (Supplement to April Number) (See also Banking and Credit Situation) Flour: (Production, Millers’ Holdings, M arket..5, 12 50, 66, 74, 82, 90 37, 45, 53, 62, 69, 77, 85, 93 20, 28, Foreign Commerce: .................................................... 79 Fruits— Marketing Production, and Prices: Canned and Dried (See Canned Fruits and Dried Fruits) Citrus (Oranges and L em ons).............................3, 11 35, Deciduous... .35, 43, 51, 55, 59, 67, 71, 75, 83, 87, 91 (See also Tables: Horticultural or Orchard Crops, and Tables: Agricultural Marketing Activity) Gasolene: (See Petroleum) General Business and T r a d e :.................................. 5, 13 21, 29, 37, 45, 53, 62, 69, 77, 85, 93 (See also Bank Debits, Foreign Commerce, Retail Trade, Savings Deposits, and Wholesale Trade) 43, 51, 59, 83, 87 IN D E X Page Page Grain Crops: Conditions, Marketing, P rices.. . . 11, 19 51, 67 (See also specific crops such as Barley, etc., and Tables: Grain and Field Crops, Production) Salmon: ..................................................................... 85, 91 Savings Deposits: 7, 14, 22, 30, 39, 46, 54, 63, 70, 78, 86 Sheep: (See Livestock) Grapes: ............................................ 59, 71, 75, 83, 87, 91 H ogs: (See Livestock) Special Articles: The Monthly Review .............................................. 31 Seasonal Variation in Business A ctivity............... 97 Industrial Activity: .................................................. 3, 11 19, 27, 36, 44, 52, Statistical 60, 68, 76, 84, 91 (See Tables) Tables: (See also Canned Fruit, Building Activity, Dried Fruit, Employment, Flour, Lumber, Milling, Sugar, B e e t :...............................15, 23, 30, 40, 63, 71, 95 Mining, Petroleum, Salmon) Sugar Beets: .........................................11, 44, 51, 60, 67 Interest Rates: (See Banking and Credit Situation) (See also Tables: Grain and Field Crops, Pro duction) Labor: (See Employment) Supplements: L iv e s to c k :........3, 7, 11, 14, 19, 22, 27, 30, 35, 39, 44, 47 Financial Conditions in Twelfth District 51, 55, 59, 63, 68, 71, 76, 79, 84, 87, 91, 94 (Supplement to April Number) (See also Tables: Agricultural Marketing Activ Earnings and Expenses of Member Banks in the ity, Tables: Livestock on Farms and Ranges, Twelfth Federal Reserve District and United and Tables: Commodity Prices) States (Supplement to June Number) L u m b e r :........................... 4, 12, 20, 23, 28, 37, 40, 45, 47 Tables: 52, 55, 61, 64, 68, 72, 76, 84, 92, 95 (See also Prices and Tables: Commodity Prices) Agricultural Marketing A ctivity......................... 3, 11 19, 27, 35, 43, 51, 59, 67, 75, 83, 92 Maps: Apple Prices .............................................................. 35 Bank Debits. .6, 13, 20, 29, 38, 46, 53, 61, 69, 77, 85, 94 Financial Conditions in the Twelfth District Building Permits .................................................. 4, 12 (Supplement to April Number) 20, 28, 36, 44, 52, 60, 68, 76, 84, 93 Member Banks: Building Permits, V a lu e ........................................... 4 Earnings and Expenses of Member Banks in the Canned Fruits and Vegetables............................... 5 Twelfth Federal Reserve District and United Commodity Prices ................................................ 7, 14 States (Supplement to June Number) 22, 30, 39, 47, 55, 63, 71, 79, 87, 95 Deciduous and Citrus Fruits and Nuts................. 43 (See also Banking and Credit Situation) Employment. .5, 12, 20, 28, 36, 44, 52, 60, 68, 76, 84, 93 Fruit, Canning .......................................................... 55 Milling: (See Flour) Grain and Field Crops, Production. .59, 67, 75, 83, 91 Mining: Copper, Lead. Silver, Z in c.........................5, 8 Grape Crop .......................................................... 75, 83 Horticultural Crops, Production of, California 12, 15, 20, 23, 28, 31, 37, 40, 45, 47 (See Tables: Production of California Horti 53, 55, 61, 64, 69, 72, 77, 80, 85, 88, 92 cultural Crops) Gold ............................................................................. 5 Livestock ...............................................................11, 19 National Conditions, Summary o f : ...........................1, 9 Metal Prices, 1924-1925 ........................................... 8 Nuts— Prices, California ......................................... 80 17, 25, 33, 41, 49, 57, 65, 73, 81, 89 Orchard Crops, P rod u ction ......................... 59, 67, 75 Non-ferrous Metals: (See Mining) Prices, Commodity (See Tables: Commodity Prices) Nuts: 43 Production of California Horticultural Crops (Except Apples) .................................51, 59, 67, 75 Petroleum: .. .5, 12, 20, 28, 37, 45, 53, 61, 69, 76, 85, 92 Rainfall— Twelfth District ...................................3, 11 Statistical S u m m ary.............................................. 2, 10 P o ta to e s :..............................................................44, 51, 87 18, 26, 34, 43, 50, 58, 66, 74, 82, 9 Stocks on Farms (Wheat and B arley)............... 19 (See also Tables: Grain and Field Crops, Pro duction) Trade: (See General Business and Trade and Na P r ic e s :............7, 14, 22, 30, 39, 47, 55, 63, 70, 79, 87, 94 tional Conditions, Summary of) (See also National Conditions, Summary of, and Tables: Commodity Prices) Walnuts: (See Nuts) Production: (See National Conditions, Summary of) Raisins: ................................................................51, 75, 83 (See also Tables: Orchard Fruits, Production, and Prices) Retail Trade: ..............................................................6, 13 21, 29, 38, 46, 54, 62, 70, 78, 86, 94 Rice: ..............................................................44, 51, 60, 83 (See also Tables: Grain and Field Crops, Pro duction) W heat: .............................3, 7, 14, 19, 22, 27, 30, 35, 39 43, 47, 51, 55, 59, 63, 71, 79, 84, 87 (See also Tables: Agricultural Marketing Activ ity, Tables: Grain and Field Crops, and Tables: Commodity Prices) Wholesale Trade: ...................................................... 6, 13 21, 29, 38, 46, 54, 62, 70, 78, 86, 94 W ool: .............................................7, 15, 19, 22 27, 30, 36, 39, 47, 55, 60, 63, 71, 80, 95
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