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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 o f San Francisco Vol. X IV San Francisco, California, December 20,1930 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 Prepared by the Federal Reserve Board V olum e of industrial production and factory employment decreased further in Novem ber and wholesale com m odity prices continued to decline. Distribution of commodities by de partment stores increased less than is usual for November. Production and Employment. Industrial production declined about 4 per cent in N o vember according to the Federal Reserve Board’s seasonally adjusted index. Output of iron and steel decreased further, while the num ber of automobiles produced per working day continued at a low level. Daily average cotton consumption increased further by somewhat more than the usual seasonal amount and ac tivity at silk mills continued to increase, while w ool consumption decreased by an amount substantially larger than is usual in November. Production at cement mills was reduced consid erably, daily output at meat packing establish ments increased less than the usual seasonal amount, and output of minerals declined. Fac tory employmentandpayrolls showed decreases in November, reflecting in part changes of a seasonal character. The number employed in the clothing and shoe industries decreased by more than the usual amount, while employment at silk mills showed an increase contrary to the ordinary seasonal movement. In the industries producing building materials, including lum ber, cement, and brick, declines in employment exceeded the usual seasonal proportions. In Jndex number of production of manufactures and minerals combined, adjusted for seasonal variations (1923-1925 average = 100). Latest figure, November, 84. the automobile industry, employment declined further, but by an amount considerably smaller than is usual in November. Value of contracts awarded for residential building and for public works and utilities, as reported by the F. W . D odge Corporation, de clined in November, and contracts for com mercial and industrial building continued at the low levels of other recent months. In the first two weeks of December the daily average of total contracts awarded was somewhat smaller than in November. A ccording to the December crop report of the Department of Agriculture, output of corn in 1930 was 2,081 million bushels, about 500 million less than last year, and 600 million less than the five-year average, while the total wheat crop of 851 million bushels was about equal to the 1924-1928 average. The cotton crop of 14,243,000 bales was slightly smaller than in the two previous seasons. Total crop production was about 5 per cent smaller than a year ago. Distribution. Freight carloadings decreased further in November by more than the ordi nary seasonal amount. Expansion of depart ment store sales from O ctober to November was smaller than usual, follow ing a growth in O c tober that was larger than usual. W holesale Prices. The general level of wholesale com m odity prices declined further in November according to the Bureau of Labor Statistics and there were additional price de- Index numbers of factory employment and payrolls, without adjust ment for seasonal variations (1923-1925 average = 100). Latest figures, November, employment 81.1, payrolls 75.1. 90 M O N TH LY REVIEW OF BUSINESS CONDITIONS clines in the first half of December, when sev eral commodities, including silver and cotton, reached new low levels. From the end of O c tober to the middle of Decem ber there were substantial decreases in prices of many other commodities, including corn, hogs, pork, hides, tin, and coffee, while prices of copper and rub ber fluctuated widely, declining at the end of the period. PER ending December 17, and there was also an addition of $30,000,000 to the country’s stock of gold. Discounts for member banks increased by $126,000,000, acceptance holdings of the re serve banks by $74,000,000 and their holdings of United States securities, including one day Treasury certificates issued in connection with the December 15 fiscal operations, by $96,000,000. The increase in reserve bank credit outPER CENT D ecem b er, 1930 CEN T M IS C E L L . A N E O U S T O ’F A L V \ - \ \ \ \ ------W H O L E S A L E P R IC E S In d exes o f U n ited States Bureau o f L a b o r Statistics (1926s» 100, base adopted b y Bureau). Latest figure, N o v e m b e r, 80.4. Bank Credit. Loans and investments of re porting member banks in leading cities de clined by about $250,000,000 during the threeweek period ending December 10, reflecting a further reduction of $69,000,000 in loans on securities and a decline of $196,000,000 in all other loans, offset in part by a further small in crease in investments. There was also a decline in time deposits, reflecting in large part with drawal of Christmas funds. In the follow ing week, Decem ber 10 to December 17, changes in the figures for reporting banks reflected in part th eclosin gof a large reporting bank in New Y ork City. This resulted in a decline in the reported assets and liabilities of New York City banks. Reserve bank credit outstanding increased by about $294,000,000 during the four weeks R A IL R O A D F R E IG H T — C A R L O A D IN G S C a rs o f revenue freight loaded as reported by the A m erican R ailw ay A s s o cia tio n . In dex num bers adjusted for seasonal variations, (1923-1925 average = 100). Latest figures, N o v e m b e r, total 82, m iscella n eou s 88. standing reflected a large growth in the de mand for currency by the public and by banks, resulting in part from the currency require ments for the holiday trade, and in part from demand for cash from banks and from the public in regions where important bank fail ures occurred during the period. During N o vember and the first two weeks of Decem ber money rates continued fairly steady at ex tremely low levels, with prime commercial paper at a range of 2^4 to 3 per cent and bank ers’ acceptances at 1% per cent. In the third week of December there was a slight increase in rates for call and time loans on the New Y ork Stock Exchange. The yields on highgrade bonds increased during the latter part of the period. 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 Business activity in the Tw elfth District con tinued to decline in its most important phases during November, even after allowance for the usual slow ing down at this time of year. There was more or less slackening in nearly all in stances in the selling and transporting of com modities ; industrial operations were further curtailed; and prices for many of the District’s products moved to still lower levels. No significant changes took place in the agricultural situation during November, and it is now practically certain that production of farm products has been greater, but that aggre gate returns will be substantially less this year than in 1929. The marketing of many crops has been completed and the movement of those crops which are still being distributed was somewhat smaller in N ovem ber than in O cto ber. W heat and barley shipments from ports of the District were less than in October. In the case of wheat this was partly because for eign prices were several cents per bushel below domestic quotations. The low barley prices have tended to increase the use of that grain for the feeding of livestock on farms. Unfa vorable conditions prevailed in the marketing of dairy and poultry products during N ovem ber, particularly in the case of the poultry in dustry, which was confronted with sharp de clines in egg prices in late N ovem ber and early December. Industrial activity declined more than sea sonally during November. Reductions in output were shown in all of the important industries D ece m b e r, 1930 FEDERAL RESERVE AGENT A T SAN FRANCISCO for which data are available, except petroleum. In that industry there were slight increases in output of both crude and refined oils. Stocks of both refined petroleum products and crude oil also increased somewhat during the month. Lumber production was sharply reduced and moderately less copper was mined. Inventories of these products, however, have not declined commensurately with output. There was a greater than usual decline in building and con struction during November. The value of engi neering contracts awarded was less than in O c tober and there was a marked falling off in the value of building permits issued, due to declines in California cities. Accom panying the decline in industrial pro duction, unemployment increased substantially during November. Reports of the number of workers employed in California and Oregon show greater declines as compared with the previous year than in any other month during the seven years that such data have been collected. Department store sales fell one per cent short of the normal O ctober-N ovem ber increase. W holesale trade for the month was 22 per cent below its value in November, 1929, while cumu lative sales at wholesale for 1930 were at the lowest level since 1921. New automobile regis trations were less than in any Novem ber in the past nine years and considerably below those of October, 1930, or November, 1929. In tercoastal shipments decreased more than usual between October and November. Excepting one week late in November, w hole sale com m odity prices have generally moved to lower levels during the past six weeks. Since mid-November wheat prices have advanced, but prices of copper, silver, cotton, and of many other commodities have declined. There was a substantial reduction in retail prices of food during the month. Loans, investments, and deposits of report ing member banks varied little during the four weeks ending December 17. Interest rates re mained unchanged at the low figures of preced ing weeks. Currency circulation expanded sea sonally. Additional funds for the District were provided by the allotment of 35 million dollars of Treasury certificates to member banks on Decem ber 10. The volume of credit extended by the Federal Reserve Bank of San Francisco has increased sharply during recent weeks and that Bank’s current holdings of locally purchased ac ceptances and of rediscounts for member banks are higher than at any time since the spring of this year. Agriculture Aside from some marketing of farm products and the feeding of livestock there was little agricultural activity in the Tw elfth District 91 during November. No changes of any impor tance were made in the estimates of the 1930 crop output which was larger than that of 1929. Livestock on winter ranges were in satisfactory condition and sufficient supplies of range feed and supplemental forage for their sustenance during forthcom ing months were available. Marketing of wheat in the Pacific Northwest continued slowly during November, and ex ports from Puget Sound and Columbia River ports were 26 per cent smaller in volume than in November, 1929. From July 1 to December 1, 1930, shipments from these ports were 11 per cent smaller than during a similar period in 1929. Barley exports from San Francisco during the past five months have been 25 per cent lower than exports during the corresponding months of 1929. Low barley prices and reduced market ings have resulted in the use of more than the usual amount of that grain for feeding pur poses in California. Carlot shipments of grapes from California declined seasonally during late November, and on December 7 totaled 63,561 carloads for the 1930 marketing season, an increase of 7 per cent over the 59,156 carloads shipped during the 1929 season to December 8. The actual vol ume of fruit shipped, however, was probably no greater this year than last, since the minimum weight of a carload of grapes was 26,000 pounds in 1930 and 30,000 pounds in 1929. Grape prices declined throughout the 1930 marketing season. Price reductions were especially sharp in the later part of the season when prices were well below the levels of 1929. The heavy movement of grapes during October, a month in which the carlot shipments were 40 per cent greater than in October, 1929, contributed materially to the market reaction at the end of the shipping season. Apple shipments from the principal apple producing states of the Twelfth District— California, Idaho, Oregon, and W ashington— were in large volume during November, and the season’s shipments to December 7 were 35 per cent larger than in the corresponding period in 1929. These increased market movements as well as storage holdings of apples in the Yakima and W enatchee Valleys in W ashington, which were 32 per cent greater on December 1 than on the same date a year earlier, reflected the large 1930 apple crop in this area. The 1930-1931 Navel orange crop in Califor nia was estimated to be 16,750,000 boxes on December 1, a 76 per cent increase over the 1929-1930 crop of 9,500,000 boxes. Shipments of 3,831 carloads during November were chiefly from central California and were slightly larger than the movement during November, 1929, (3,747 carloads). The price of oranges, f.o.b. California, declined during November, but at the end of that month prices were still approxi mately 35 per cent higher than a year earlier. The 1930-1931 lemon crop is estimated to be 92 M O N TH LY REVIEW OF BUSINESS CONDITIONS D ecem b er, 1930 5.626.000 boxes, compared with the crop of 4.908.000 boxes produced during the 1929-1930 season. Production estimates for the principal field crops — hay, sugar beets, rice, cotton, hops, potatoes, and beans— were not changed during November. Production of each of these crops, excepting hops and sugar beets, is as great as or greater than it was in 1929. The poultry and dairy industries of the D is trict continued to be adversely affected during N ovem ber by low market prices for their prod ucts. A ccom panying a decline of 36 per cent in the price of Pacific Coast extras at New York City, egg prices at Pacific Coast markets de clined sharply during late November and early Decem ber to levels which were 40 per cent be low quotations of early December, 1929. On Decem ber 1, cold storage holdings of eggs at Pacific Coast markets were nearly twice as large as at the end of November, 1929. The price of butter did not change greatly during November, although it was well below the price a year ago. Storage holdings of butter at Pacific Coast centers continued large, however, and tended to prevent any improvement in but ter prices. The usable range area in the higher altitudes of the District was somewhat reduced by the snows of late November and early December. Livestock remain in relatively good condition, however, and the supply of feed, including range forage, hay and grains is ample for the winter months. Both ranges and livestock are in much better condition in California than they were last year at this time. Early estimates in dicate that approximately the same number of cattle are being prepared for market in Twelfth District feedlots this winter as in the winter of Industrial activity in the Tw elfth District continued to decline during November. Reduc tions in lumber output and in building activity were more marked than were declines in most other lines, but there were also decreases in flour milling and in meat packing, and fruit can ning and packing declined seasonally. The only major field of productive activity to show an in crease was the petroleum industry in California. Output of both crude and refined oils was slightly larger than in October. The already large number of unemployed was substantially increased by the seasonal slowing down of such industries as the canning and pre serving of fruits and vegetables and salmon packing, and the greater than seasonal declines in other forms of production. In the lumber in dustry most firms reported a decrease in the number of men employed or in the number of hours worked per week. A greater than sea sonal decline during the month in building in California, in road construction (because of cold weather in the interior parts of the D istrict), and in construction activity generally contrib uted to the seriousness of the unemployment situation. Petroleum production and refining was al most the only industrial activity to increase Ind u stry— E m ploym ent - Indexes of daily average production, adjusted for seasonal variations (1923-1925 daily average = 100) ,--------- 1930----------* 1929. G e n e r a l: N ovC a rlo a d in g s — I n d u s t r i a l ............................. 70 E le c t r ic P o w e r P r o d u c t i o n ............................... M a n u fa c t u r e s : ^ L u m b e r ............................................................... 63 R e fin e d M in e ra l O i l s t ......................................... F lo u r .................................................................... 96 S la u g h te r o f L i v e s t o c k .......................... 78 C em en t ................................................................ 99 W o o l C o n s u m p t io n ! ............................................ ° c t72 162 67 170 106 86 95 89 M in e r a ls : P e tr o le u m ( C a l i f o r n i a ) f ........................... 92 89 C o p p e r (U n it e d S ta te s ) $ ........................... 83 83 L e a d (U n it e d S ta te s ) $ ................................................ . . S ilv e r (U n it e d S ta te s ) $ ............................. 76 71 S ept74 163 _ 70 112 87 83 84 91 89 .. 72 N ov 106 159 103 196 104 86 107 83 107 117 113 110 B u ild in g a n d C o n s tr u c tio n § T o t a l .................................................................... V a lu e o f B u ild in g P e rm its T w e n t y L a r g e r C i t i e s ........................... S e v e n ty S m a lle r C i t i e s .......................... 63 69 78 70 47 54 49 58 51 61 59 71 V a lu e o f E n g in e e r in g C o n tr a c ts A w ard ed T o t a l .......................................................... E x c lu d in g B u i l d i n g s .......................... 117 115 124 140 144 183 120 98 tN ot adjusted for seasonal variations. ^Prepared by Federal Re serve Board. § Indexes are for three months ending with the month indicated. 1929-1930, while the number of lambs being fed is somewhat greater. Receipts of sheep at the eight principal markets of the District for the year to December 1 were 5 per cent greater than in the same period in 1929. Cattle and hog re ceipts at these markets for the same period were 3 per cent and 9 per cent less, respectively, than in 1929. Industry -California— No. of No. r—Employees Nov., Nov., of 1929 1930 Firms Industries All Industries* . . . . 854 144,812 187,130 (-22.6) S to n e , C la y and G lass P r o d u c t s . 47 L u m b e r and W o o d M a n u fa c tu r e s . . 118 T e x tile s . . . . . . . . . C lo th in g , M illin e ry and L a u n d e r in g . F o o d , B e v e ra g e s , and T o b a c c o . . . P u b lic U tilitie s .. 5,453 ( — 2 8 .7 ) 7,649 18,668 2 3,820 2,246 ( — 7 .2 ) 2,419 7,963 ( — 11.4) 185 29,301 8,995 (—21.6) 18 80 (—12.6) 33,507 O th e r I n d u s tr ie s -}- . 379 99,224 M is c e lla n e o u s 75,510 ( — 2 3 .9 ) 27 5,671 ( — 5 0 .8 ) 11,516 111 32,296 (—6.2) 47 8t 40 10,651 ( — 2 6 .0 ) 14,392 1,257 ( — 3 5 .6 ) 1,951 381 415 3,255 3,311 (—8.2) (— 1.7) 60,435 . .. -Oregon— No. of - Employees Nov., Nov., 1930 1929 20,727 25,621 (-1 9 .1 ) 190 118 (1 6 .1 ) 56,495 ( — 6 .5 ) W h o le s a le and R e ta il ............ 22 No. of Firms 135 28 5,003 —8.8) 5,488 34,428 * P u b lic u tilities and w h olesa le an d retail fig u re s n o t in clu d e d in th is total, t L a u n d e r in g o n ly , t I n c lu d e s th e f o llo w in g in d u s tries : m etals, m a ch in e ry an d c o n v e y a n c e s ; lea th er and r u b b e r g o o d s ; ch e m ica ls, o ils an d p a in t s ; p rin tin g a n d p a p e r g o o d s . Figures in parentheses indicate percentage changes from N o vember, 1929. D ece m b e r, 1930 during the month, and the added production in this instance did not improve the position of producers. Output of crude oil increased slightly, fluctuating around 600,000 barrels a day throughout the month. A larger quantity of petroleum was run to stills than in October, and the output of refined oils, particularly of gasoline, increased. The relatively large pro duction of gasoline during the past year has been partly a result of the high proportion of gasoline obtained in the refining of exception ally high gravity crude oil produced at certain California fields. Stocks of crude oil increased slightly, and stocks of California gasoline in creased sharply during the last tw o weeks of November. Lum ber producers of the District continued to curtail output more than seasonally during November, and daily average production dur ing that month, after due allowance for sea sonal variations, was smaller than in any month since 1921. A number of firms have discontin ued operations entirely or have reduced their working time substantially. The output of lumber was slightly larger during the month than were shipments and orders, but the dif ference was so small that stocks held by the W est Coast Lumbermen’s Association and the W estern Pine Manufacturers’ Association were practically unchanged. Building and construction declined more than seasonally during November. The value of building permits issued in Seattle and Port land was substantially larger than in either October, 1930, or November, 1929, but these increases were more than offset by marked de clines in California cities. Engineering con tracts awarded during the three months ending with November were about the same in value as in the corresponding months of 1929, al though construction in the last month was less active than in either October, 1930, or N ovem ber, 1929. The value of awards for industrial buildings fell off during the month, and road building in the outlying sections has necessarily been reduced by the com ing of severe winter weather. The value of contracts awarded for water works, drainage projects, and Federal government buildings remained at levels ap proximating those of October. Further curtailment of copper production during N ovember was of approximately sea sonal proportions. The unsatisfactory condi tions in the industry also discouraged new development work. Stocks of refined copper in North and South America continued to in crease slightly during the month, but stocks of blister copper declined, showing that, as in the past several months, restriction has been rela tively greater in copper mining than in refinery operations. Reflecting some anticipation of production declines and price increases, sales of copper during the first week or ten days of N o 93 FEDERAL RESERVE AGENT A T SAN FRANCISCO vember were in substantial volume. After the price advance materialized, however, buying practically ceased and apparently had not been resumed, even on a moderate scale, up to midDecember. Stimulated by the declining level of com m odity prices, gold mining and prospecting in Arizona, California, and Nevada continued to become more active during November. Trade The decline in trade activity, evident during most of the past year, continued during N ovem ber. A fter allowance for seasonal movements, declines were recorded in sales of department stores and wholesale houses and in registra tions of new automobiles. Shipments of com modities on the District’s railroads and in the intercoastal trade through the Panama Canal were at relatively low levels. R E T A I L T R A D E — T w e lfth D istrict ,------------N E T S A L E S * ------------ * Nov., 1930 compared with Nov.. 1929 D e p a r tm e n t S t o r e s t . . — 13.2 A p p a r e l S to re s ............ — 16.0 F u rn itu r e S t o r e s ..........— 23.1 A ll S t o r e s ...................... — 14.7 ( 67) ( 28) ( 41) (1 3 6 ) Jan.1 to Nov. 30.1930 compared with Jan. 1 to Nov. 30.1929 — 5.6 — 9.5 — 15.4 — 7.2 ( 64) ( 28) ( 37) (1 2 9 ) STO C K * Nov.. 1930 compared with Nov.. 1929 — 11.5 ( 5 2 ) — 10.0 ( 1 7 ) — 9.6 ( 2 9 ) — 11.1 (9 8 ) ^ P e r c e n ta g e in cre a s e o r d e c r e a s e ( — ) . F ig u r e s in p a ren th eses in d ica te n u m b e r o f sto re s r e p o r tin g , f In c lu d e s d r y g o o d s sto re s. A further decline in retail trade, as indicated by reports from most of the department stores in the District, resulted in the smallest daily average value of sales for any November since 1925. The decline in sales as compared with November last year was accentuated by the fact that retail prices are now somewhat lower than a year ago. Decreases in sales over the year period were general throughout the District. The proportion of sales made on credit was practically the same in November as in O ctober although the ratio of credit sales to total sales was 2 per cent above that ratio for November, 1929. Notwithstanding substantially smaller aggregate sales, the amounts receivable on reg ular charge and installment accounts increased during the first ten months of 1930 as compared with the same period in 1929. During recent months, however, the increases have not been so large as those prevailing during the first part of this year, and at the end of November regu lar accounts receivable were for the first time in 1930 slightly smaller in volume than a year earlier. The increases in installment accounts have been relatively larger during most months of the year than have increases in regular ac counts. During November, for the thirteenth consecu tive month, value of wholesale trade was lower than in the corresponding month a year earlier. The November decline in sales (22 per cent), as recorded in the figures of wholesale trade re 94 M O N TH LY REVIEW OF BUSINESS CONDITIONS ported to this Bank, was the largest year-toyear decline in the past nine years. The drop of 15 per cent in average wholesale com m odity prices since November, 1929, accounted for a portion of the decline in value of sales of re porting firms. D ecem b er, 1930 merchandise and miscellaneous articles were substantially less than were similar loadings during October, and shipments of forest prod ucts from the Pacific Northwest continued ex tremely low. Movement of goods in the intercoastal trade during N ovem ber declined both in relation to October, 1930, and November, 1929. Shipments from the Pacific Coast were not greatly reduced, due to moderately large loadings of lumber and petroleum, although the tonnage of general cargo decreased sharply to levels well below the N ovem ber average of recent years. W estbound shipments declined more than seasonally, and tonnage was the smallest for any month since January, 1928. Prices R EG ISTR ATIO N OF N E W AU TO M O B ILES Indexes of daily average registrations of new passenger and commer cial motor vehicles in the Twelfth District,adjusted for seasonal variations (1923-1925 daily average=100). Registrations of new passenger automobiles were smaller in number during November (usually a dull month for sales of new cars) than in any month since early in 1922, excepting only December, 1927. The number of new pas senger vehicles registered was 30 per cent less than in October, 1930, and 47 per cent below registrations during November, 1929, while sales of new trucks declined by a greater amount than is usual from October to N ovem ber and were 22 per cent below the November, 1929, level. Throughout the greater part of 1930 sales of higher priced cars have been ex ceptionally small. PER CENT Excepting a slight rise during the week of November 28, wholesale prices have, during the past six weeks, continued to show the marked weakness that has been generally characteristic of this phase of business for more than a year. The Bureau of Labor Statistics’ index declined sharply from the preceding month in November. A t 80.4 for November (1926 = 100) that index was 2.7 per cent under the October figure, 14.8 per cent lower than in November, 1929, and but 15 per cent above its 1913 average. Raw ma terials and finished goods prices declined sub stantially, but prices of those commodities in the intermediate stages of production increased fractionally for the first time since October, 1929. The retail food price index of the Bureau of Labor Statistics and indexes of the cost of living declined during November, indicating that commodity prices at retail also declined during that month. D istribution and Trade — -1 9 3 0 1929 Sept. N ov. O ct. N ov. f - ' -----In d e x N um bers* 126 122 141 109 1ÒÌ F o r e ig n Trade® I n t e r c o a s ta l Trade® . . 109 85 113 77 85 109 78 108 146 97 91 C a r lo a d in g s t 101 107 91 105 109 118 60 P a ss e n g e r C ars ............................. . . C o m m e r c ia l V e h i c l e s ................. . . 148 77 70 156 97 89 182 119 113 1900 112 1060 115 103 1220 1150 M e r ch a n d is e and M is c e lla n e o u s . . . R e ta il T r a d e A u to m o b ile Sales$ R AIL R O AD F R E IG H T —C A R L O A D IN G S Cars of revenue freight loaded in the Twelfth District as reported by the American Railway Association. Index numbers adjusted for seasonal variations, (1923-1925 daily average =100). The number of cars of freight loaded on D is trict railroads declined by a somewhat greater amount than has been usual between O ctober and November. Distribution of commodities by rail during the first eleven months of this year was 16 per cent lower than in the same period in 1929 and was smaller in volum e than in any year since 1924. Novem ber loadings of D e p a rtm e n t S t o r e S a le s î ................................................ S to ck sff .............................................. , , 103 r ~ ------ -A ctual F ig u r e s S to c k T u rn ov erjl ........................... C o lle c tio n s # R e g u l a r ......................................... In s ta llm e n t ................................ . . .24 15.4 .27 46.1 16.7 .26 42.8 15.7 -------\ .25 45.2 14.6 * A d ju s t e d fo r s e a so n a l v a r ia tio n s, 1923-1925 a v e r a g e = 1 0 0 . 0 I n d e x e s are fo r th re e m o n th s e n d in g w ith th e m o n th in d ica te d , f E x c l u d i n g raw silk . $ D a ily a v e ra g e . flA t en d o f m o n th . II P r o p o r t io n o f a v e r a g e s to c k s s o ld d u r in g m o n th . # P e r c e n t o f c o lle c tio n s d u r in g m o n th t o a m o u n t o u ts ta n d in g at first o f m o n th . O R evised. D ecem b er, 1930 W heat prices fluctuated considerably in N o vember. The price for December wheat at Chi cago, after declining irregularly for several months, reached the record low of 69J4 cents per bushel on Novem ber 10. A t this level the Federal Farm Board entered the market on a large scale and domestic quotations rose not withstanding continued price declines at mar kets in other parts of the world. The resulting disparity between foreign and domestic wheat quotations has tended to restrict exports, a con dition exemplified by the small shipments of this com m odity from Pacific Coast ports since mid-November. Cattle prices at District markets have ad vanced moderately since early November. Q uo tations for lambs, although averaging higher during Novem ber than in October, have tended slightly downward since mid-November. H og prices continued the irregular down-trend be gun in late September, but the decline from the corresponding period of 1929 has not been nearly so great as in quotations for other live stock. Follow ing the advances recorded late in the past summer, quotations for agricultural products generally have declined rather sharply. Alternate periods of strength and weakness characterized the copper market during Novem ber and early December. A fter announce ment of plans for world-wide curtailment of production, copper prices rose from 9^2 to 12 cents per pound (Connecticut V alley) during the second week in November, from which level they have since declined irregularly. On D e cember 20 the delivered price was 10 cents per pound. During* the first half of November sales Bank Debits* — A r iz o n a P h o e n ix N o vem ber, N o v e m b e r, r—F irst E leven M o n th s—^ ¡930 1929 1930 1929 31,984 $ 45,225 $ 398,745 $ 475,059 ...............$ C a liforn ia B a k ersfield ____ B e r k e le y ............ F r e s n o ................. L o n g B e a ch . . . L o s A n g e le s . . . O a k la n d .............. P a sa d en a ............ S a c r a m e n to ____ San B e r n a rd in o .. San D ie g o .......... San F r a n c is c o . . . San J o s e ............ S an ta B a r b a r a .. S t o c k t o n .............. 95 FEDERAL RESERVE AGENT A T SAN FRANCISCO were relatively large, but since the 12 cent price was established marketing of the metal has been negligible. A fter several months of rela tive stability, quotations for silver resumed in early November, the decline of the autumn of 1929 and the spring of 1930, bringing the price to 31 ¿4 cents per fine ounce on December 18, the lowest yet recorded. Credit Situation The changes of chief importance in the Twelfth District credit situation during the past four weeks include an increase in the volume of credit extended by the Federal Reserve Bank, the allotment to Twelfth District banks of 35 million dollars of Treasury certificates from an issue by the United States Treasurer, a sharp seasonal increase in money in circulation, and some decline in demand and time deposits of reporting member banks. Credit extended by the Federal Reserve Bank of San Francisco increased by 46 million dollars during the four weeks ended December 17, a growth of 42 million dollars in discounts, 3 mil lion dollars in locally purchased acceptances, and some slight expansion in holdings of ac ceptances and securities purchased outside the Twelfth District being the chief items entering into the increase. F E D E R A L R E SE R V E B A N K O F SA N F R A N C IS C O ( i n m illio n s of d o lla rs) f------------- — Condution ------T o t a l B ills an d S e c u r it ie s ............ B ills D is c o u n t e d ........................ B ills B o u g h t ...... ........................... U n ite d S ta tes S e c u r itie s ............ T o ta l R e s e r v e s .................................. T o t a l D e p o s its ............ ..................... F e d e ra l R e s e r v e N o te s in C ircu - D e c. 17, 1930 121 48 33 40 266 194 D e c. 10, 1930 79 6 33 40 295 196 175 157 Idaho B o i s e ...................... N evada R e n o ...................... O reg on E u g e n e ................. P o r tla n d ............... U ta h O g d e n ................... Salt L a k e C i t y . . W a s h in g t o n B e llin g h a m . . . . E v e r e t t ................. S eattle ................. S p o k a n e ............... T a c o m a ............... Y a k i m a ................. 14,268 18,288 158,689 173,242 9,976 14,022 122,866 143,166 6,202 172,936 8,390 220,493 23,047 70,659 28,447 91,343 7,285 9,486 204,221 41,244 39,175 17,258 9,903 13,078 289,412 59,976 50,588 20,937 T o t a l .................$3,014,879 *In thousands of dollars. 17,425 143,092 159,046 23,018 212,945 235,257 48,826 364,975 375,666 59,195 528,339 692,214 1,236,628 11,039,276 13,520,375 226 ,337 2,094,683 2,608,736 41,055 371,168 451,221 53,632 535,026 571,854 11,492 112,043 125,525 64,618 599,509 709,914 1,453,056 13,842,364 * 15,685,332 42,308 304,947 353,754 17,941 170,283 189,864 28,683 264 ,140 316,370 75,432 1,939,736 203 ,337 799,455 100,571 135,896 2 ,582,319 562 ,684 486,867 162,530 87,841 2,182,996 222,233 913,168 116,709 155,197 3 ,0 47,268 678,614 560,153 169,994 $4,194,316 $38 ,311 ,91 7 $44,920 ,76 8 152 190 R a tio o f T o t a l R e s e r v e s to D e p o s it and N o te L ia b ilitie s 72.2 14,499 15,201 34,120 40,928 800,662 176,709 28,632 43,373 8,549 45,300 1,098,177 26,225 13,792 18,971 1 N o v . 19, D e c . 18, 1930 1929 75 109 6 64 31 28 41 14 299 283 202 183 83.7 84.4 75.9 The volume of discounts averaged 17 million dollars during the first half of December, nine million dollars during November, and seven million dollars during October. Discounts were small in amount from the fifteenth to the twenty-fifth of November, but increased sub stantially at the month-end when day-to-day transfers of “ Federal funds” from eastern markets to Twelfth District banks were greatly restricted in volume. In mid-December, after a few days of relatively little borrowing, rather large transfers of funds to the New York mar ket were made by member banks and discounts again increased substantially. This enlarged volume of discounts was not accompanied by a corresponding increase in the number of bor rowing banks— in fact fewer banks were accom modated during November and early December than in October. Reserve Bank holdings of locally purchased acceptances, the other item entering into the amount of credit advanced 96 M O N TH LY REVIEW OF BUSINESS CONDITIONS directly by this Bank to the Twelfth District, have averaged 23 million dollars thus far during Decem ber, compared with an average of 20 million dollars for N ovem ber and 14.5 million dollars for October. The volume of funds made available by the Federal Reserve Bank of San Francisco directly to money markets outside the Tw elfth District as represented by that Bank’s holdings of acceptances and securities purchased outside the District, changed little during the past month. The allotment of approximately 35 million dollars of United States Treasury certificates of indebtedness to banks in this District on Decem ber 10 furnished additional funds to local money markets. Subscribing banks, as is usual, paid for most of these certificates by credit entries in their government deposits accounts, hence the purchase involved a relatively small immediate cash outlay by those banks. Since the banks sold a considerable part of the securi ties to eastern markets for cash, they were able to maintain their reserve accounts at the R e serve Bank and to conduct their other business transactions with a smaller volume of borrow ing than would otherwise have been necessary. Since m id-November this Bank’s share of D ecem b er, 1930 heavy outward movement at the middle of that month. Less than seasonal expansion in the amount of currency in circulation in the District was noted between mid-N ovem ber and D ecem ber 10, after which date the seasonal movement was accelerated considerably. Several factors have combined to make possible the increase of circulation during recent weeks. O f these the more important are: (1) increased borrowing at the Reserve Bank, (2) an excess of govern ment expenditures over collections in the D is trict amounting to 4y2 million dollars for the four weeks ended Decem ber 17, and (3) pur chases by the San Francisco Mint of local y produced gold amounting to three million d o l lars. Prior to the recent increase, currency in circulation (the amount of currency outside the vaults of the Reserve Bank and United States Treasury) h^ad declined steadily in the Twelfth District during most of 1930. Interest rates in the District have remained unchanged during the past month, notwith standing generally lower rates in New York. A t the middle of December, the m ajority of banks in San Francisco reported that they were charging 5 per cent on the best classes of loans. R E P O R T I N G M E M B E R B A N K S — Tvvel|th D istrict (In millions of dollars) t— L o a n s and In v e s tm e n ts — T o t a l .. L o a n s — T o t a l ...................................... O n S e c u r i t i e s .................................. A ll O t h e r ......................................... In v e s tm e n ts — T o t a l ........................ U n ite d States S e c u r it ie s ............ O th e r S e c u r itie s ........................ R e s e r v e w ith R e s e r v e B a n k .......... N e t D e m a n d D e p o s i t s .................... T im e D e p o s its .................................. D u e fro m B a n k s ................................ D u e t o B a n k s .................................... B o r r o w in g s at R e s e r v e B a n k .. . . D E M A N D F O R C U R R E N C Y — T w e lfth D istrict W e e k ly changes cum ulated from January 1, 1929. the gold settlement fund has decreased 42 mil lion dollars. This loss has, for the most part, been the result of a shifting of bankers’ balances and the transfer to New York of credits arising from the deposit in the Federal Reserve Bank of San Francisco of 7y2 million dollars of im ported gold coin. The latter transaction in volved no direct loss of banking funds to this District, however, since an additional amount of gold equal to that transferred remained with this Bank. A fairly large outflow of funds oc curred at the end of November, followed by a small inflow early in Decem ber and a further ■ ......... C o n d itio n ---------------— i D e c . 17, D e c . 10, N o v . 19, D ec.1 8 , 1929 1930 1930 1930 1,989 2,001 1,978 2,011 1,430 1,339 1,336 1,340 457 437 436 436 903 899 973 904 662 548 671 653 338 338 315 347 324 315 233 324 110 112 110 106 775 752 765 759 1,030 1,032 947 1,015 206 200 213 163 264 269 277 202 2 1 44 58 A t reporting member banks, loans on securi ties declined by a small amount during the pe riod from N ovem ber 19 to Decem ber 17, while all other (largely commercial) loans showed a slight increase. The volum e of security loans has tended upward slightly during the past two years. During the four weeks ended December 17 there was a slight increase in total loans and investments of reporting member banks, most of which reflected increased holdings of govern ment securities. Net demand deposits declined slightly during that period, the decline being most noticeable during the week of Decem ber 17, while time deposits increased slightly. During N ovem ber the volume of trading on the stock exchanges of the District was only 66 per cent of the turnover during October. The total value of securities sold was but 64 per cent of that in the preceding month, showing that securities prices declined slightly during the month. Trading became more active during the first half of December, but prices continued to decline.
@FedFRASER