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A N N U AL KB V I C W IMUIY1DCK R eview M wdkly FEDERAL RESERVE BANK OF FEBRUARY SAN F R A N C IS C O 1948 PRODUCTION AN D PRICE DEVELOPMENTS— 1947 h e c e n tr a l developments in the economic situation Tin 1947 were the widespread improvement in employ ment and industrial production in most countries and the practically world-wide rise in the general price level. In dustrial output in 1946 had already increased greatly over 1945 in most European countries, and in 1947 these gains continued and were generally accelerated. In the United States, Canada, and Japan, industrial output declined in 1946 from the high wartime levels, but a substantial ex pansion of production in 1947 reversed this downward trend. The decline in employment and production had already been checked in the United States in 1946 and more people had jobs in this country in 1947 than ever before, while industrial production rose to new peacetime levels. Increased output in 1947 failed, however, to keep pace with the demand for goods, and prices rose in nearly all countries. In a number of countries, including France, Japan, and particularly China, where unsettled political conditions and unbalanced budgets led to excessive cur rency inflation, prices advanced to extreme levels in 1947, continuing the trends already in existence. In at least a dozen other countries, price increases in 1947 were held to relatively moderate proportions; in several of these, however, inflation had reached fairly high levels before 1947. In the United States and Great Britain the official indexes of wholesale prices rose in 1947 by about 15 per cent and in Canada by more than 25 percent. In such important areas as the United States, Great Britain, and Canada, inflationary potentials had already been created by national policies of war finance during the years before 1946. Pent-up purchasing power became effective on a large scale in the United States with the re moval of most of the wartime restrictions on materials and production following the end of the war, and more especially after the abandonment of all attempts at ration ing and price control in 1946. In that year the average monthly wholesale price index rose by more than 31 per cent. Canada continued most of its war controls through 1946 and in that country the wholesale price index ad vanced only about 7 percent. In 1947 when controls were largely abolished, the trend of Canadian prices roughly paralleled that of 1946 in the United States. British price levels were especially influenced by American and Can adian prices in 1947, both because of the heavy volume of British purchasing in North American markets in that year and also because of the great weight of American buying in determining prices for many raw materials moving in international trade. W h o l e s a l e a n d R e t a i l P r ic e I n d e x e s — U n i t e d S t a t e s (A u g u st 1 9 4 5 = 1 0 0 ) * A group of 2 7 products traded on organized primary markets or commodity exchanges whose prices are especially sensitive to changes in market con ditions. 2 Based on prices of some 900 commodities. 3 Based on a list of commodities and services, including rents, purchased by moderate income groups in large cities. Source: United States Bureau of Labor Statistics. Specific inflationary factors in the United States Over and above such underlying basic conditions, price movements in 1947 were influenced by a number of spe cific factors peculiar to that year. Perhaps the most sig nificant of these were world crop shortages, including serious deficiencies in European wheat harvests and in the American corn crop. The resulting pressure on the grain markets exerted marked influence on food prices in general, which led the advance, both in wholesale price levels and in the cost of living. The progress of industrial recovery in western Europe also caused heavy demands for raw materials and semi-manufactured products, much of which was concentrated on American markets. High rates of industrial activity and employment, of govern ment expenditures, and of investment in industrial facili ties and in building construction, all contributed impor tantly to maintaining a high level of consumer purchasing power in the United States, and both directly and in directly exerted upward price pressures. General ad vances in wage rates in response to higher living costs at a time of full employment tended to increase operating costs and provided a ready opportunity for many indus tries to raise their selling prices. February 1948 FEDERAL RESERVE B A N K OF S A N FR A N C ISCO 10 The marked expansion of bank loans since the middle of 1946 also contributed to the upward pressure upon prices for both consumer and producer goods. In 1947 the volume of bank loans in the United States expanded by approximately 21 percent. This loan increase more than offset the reduction in bank holdings of Govern ment securities. As a consequence personal and business deposits increased by $6 billion. The funds thus ob tained were used by businessmen and consumers to bid against each other for plant and equipment and for con sumer goods, the supplies of which could not be increased correspondingly. The degree of price inflation that occurred in the United States in 1947 is indicated in the chart on page 1, which is based upon official index numbers compiled by the Bureau of Labor Statistics. Increased expenditure for either consumption or plant and equipment must be re flected in higher prices unless the production of goods and services can be increased without significant in creases in unit costs. The principal impediments to in creased production continue to be (1 ) practically full employment of labor; (2 ) the scarcity of certain basic industrial materials, such as steel and lumber; (3 ) short supplies of energy fuels— coal and petroleum; and (4 ) the shortage of transportation equipment. The serious nature of these obstacles, although considerable plant ex pansion is taking place, makes it appear that large in creases in the production of most goods cannot occur in the near future. However, a substantial increase in world grain production is in prospect for 1948. If this occurs it would lessen somewhat the pressure on commodity prices. INDUSTRY AND TRADE IN 1947 n d u s t r ia l production and employment in the Twelfth I District were characterized by much greater continuity in 1947 than in 1946, when wage disputes and material shortages impeded operations over a wide range of ex tractive and manufacturing industries, and when, in many cases, management was faced with the task of converting war plants to peacetime use. Many materials were in somewhat easier supply in 1947, and most industries operated at a much higher pitch of efficiency. Electric power production rose to new high levels during the year, exceeding even the wartime peaks. Carloadings of manu factured products in 1947 also exceeded all previous rec ords. Manufacturing employment held the gains made during the second half of 1946 and established a new high for the postwar period. Employment in public utili ties, construction, and the distributive and service trades also made notable gains. Total payroll disbursements in creased fairly steadily, and the volume of consumer in comes rose to new postwar levels in practically all parts of the District, although price inflation probably pre vented any general expansion in the purchasing power of incomes. I ndexes of I n d u s t r ia l P r o d u c t io n — T w e l f t h (1939=100) D is t r ic t 1938 1940 1941 1942 1943 1944 1945 1946 19471 C o p p e r .................................. Lead .................................... Z i n c ....................................... Silver .................................. G o l d ....................................... Coal .................................... Iron ore ............................. Steel ingots ...................... Aluminum2 ........................ P e tr o le u m ........................... Refined oils ...................... Natural gas ...................... Cement ................................ L u m b e r ................................ W ood p u l p ........................ Paper .................................. W ooden boxes2 ............... Douglas fir p ly w o o d ... Fish m e a l ........................... Fish o i l ................................ Canned f r u i t s .................... Canned vegetables ____ Canned fish ...................... Meat .................................... Sugar .................................. F l o u r .................................... Butter .................................. C h e e s e .................................. Ice c r e a m ........................... W o o l co n su m p tio n -----M otion pictures (c o s t). 72 100 99 101 88 91 69 74 0 I ll 99 90 80 81 77 86 — 68 94 76 74 94 97 97 92 90 101 96 87 89 95 118 116 146 104 105 105 115 118 0 100 97 101 109 110 130 112 — 126 73 61 91 131 105 117 100 96 104 100 106 105 91 133 116 159 102 103 118 145 134 43 103 108 109 144 128 143 127 — 174 94 86 117 165 123 121 87 96 101 115 122 114 112 154 121 168 88 75 153 148 156 100 111 110 115 170 128 141 127 100 188 65 56 116 176 93 132 94 97 88 123 163 139 112 157 107 171 68 35 161 599 205 197 127 121 127 140 121 110 118 120 151 72 53 91 198 89 126 84 107 78 119 161 168 121 140 96 191 56 29 163 839 301 216 139 141 134 112 126 118 123 145 152 82 79 121 215 98 149 84 111 70 131 176 162 164 112 84 185 46 25 160 765 295 130 146 152 155 115 98 116 122 132 125 67 60 106 213 99 163 84 123 51 140 194 178 242 89 73 170 39 30 140 569 247 94 140 137 148 144 106 124 135 132 147 54 37 167 278 88 161 92 119 39 140 281 223 248 133 98 200 58 78 164 1112 386 165 148 150 158 169 126 144 135 122 168 42 31 135 249 88 166 120 124 64 159 250 191 248 1 Preliminary. 2 1 9 4 2 = 1 0 0 . Adequate data on wooden boxes not available prior to 1942. N o t e : Data given above supersede previously published annual indexes. Population growth and labor supply Population continued to grow fairly rapidly in most parts of the District in 1947, though not at so high a rate as in 1946 and some of the war years. Total civilian pop ulation of the Twelfth District states at mid-1947 was es timated by the Bureau of the Census at 15,375,000, or ap proximately one-ninth of the national tota^ About onethird of the population growth of the entire country since 1940 has occurred in this District. Over four-fifths of the District increase was represented by net inmigration. Mi gration of war veterans is still continuing, especially into California, and is contributing to the steady enlargement of the labor force, mainly among the relatively unskilled. It is also helping to sustain the pressure on housing facili ties and on the demand for many other goods and services. There are indications that the labor supply is becoming redundant in some areas, at least for certain types of labor. In spite of an active demand for labor in most indus- tries of the District, unemployment has for the past two years remained higher than in the country at large. Con tinued claims filed for unemployment compensation in the Twelfth District were about one-seventh of the total for the United States in October, about one-sixth in Novem ber, and nearly one-fifth in December. These ratios were consistently higher in 1947 than in the corresponding months of 1946. While there is no lack of job oppor tunities for well-qualified workers, reports of state em ployment services repeatedly emphasize the difficulty of placing many types of job applicants, particularly un skilled workers, non-whites, and women. Capital formation Capital investment in new productive facilities and in public works reached very high levels in 1947 in many parts of the District. Enlargement of existing plants and February 1948 establishment of new enterprises occurred in all the major industrial centers, and a considerable expansion of manu facturing facilities is under way in a number of smaller cities. Plans were announced during the year for notable additions to the iron and steel, lumber, oil refining, paper, and plywood manufacturing capacity of the District, as well as numerous expansions in a wide variety of mis cellaneous industries. The public utilities, particularly the telephone and power companies, as well as publicly owned units, have embarked upon large programs of expansion, some of which will require a period of years for comple tion. Outlays on reclamation and other development proj ects, while cut back from the levels of recent years, were still substantial. A large volume of highway and other public works construction, state and municipal, was in augurated. Wholesale and retail establishments also un dertook much replacement and expansion work. Construction and the housing situation Building construction in 1947 proceeded much more smoothly and efficiently than in 1946, when progress was held up by frequent bottlenecks in the supply of materials and trained building mechanics. The total volume of new construction, as well as of additions, alterations and re pairs, was apparently considerably larger than in 1946, both in the District and in the country as a whole, al though exact comparisons cannot be made because of the lack of data for non-urban areas and for work actually put in place. With these reservations, it may be estimated that the total value of building construction authorized in the Twelfth District in 1947 was roughly one-eighth above the 1946 total. The dollar value of building permits issued in the urban areas of the eleven Western states during 1947 was about $1,260 million as against about $1,120 million for the year 1946. Comparisons with other recent years are shown in the accompanying table. Except for a brief period of hesitation in the second quarter, western building activity in 1947 increased month by month until October. Total permits issued in urban areas in the eleven Western states during the first five months of the year ran about 22 percent below the corresponding period of 1946 when applications for per mits had been stimulated by the announcement of a policy of stricter limitation on non-residential construction. Dur ing the seven months from June to December, however, 1947 permits regularly exceeded those of 1946, with an aggregate value about 47 percent higher. The lumber market With the rise of material prices and building labor costs to record levels, lumber prices have experienced a spec tacular increase compared with other commodity prices. While the general average of wholesale commodity prices has slightly more than doubled since 1939, the composite lumber price index, as computed by the Bureau of Labor Statistics, has more than trebled. Over the 13 months from October 1946 to November 1947 the lumber index advanced 54 percent, much the greater part of the in crease occurring in the four months between October and 11 M O N T H L Y R E V IE W W estern B uilding C onstruction — 1943-1947 Estimated value of building- permits in urban areas of the western states1 (millions of dollars) 1943 A ll building construction2............... Non-federal ....................................... N ew non-residential construction. Non-federal ....................................... 337 158 179 184 88 96 103 66 37 1944 324 122 203 124 21 103 137 96 41 1945 513 92 420 221 21 200 191 62 128 1946 1,118 58 1,060 617 41 576 338 7 331 1947 1,259 25 1,234 710 2 708 358 19 339 JArea includes Colorado, M ontana, New M exico, and W yom ing in addition to Twelfth District states. 2 Including additions, alterations, and repairs. Figures will not necessarily add to totals because of rounding. Source: United States Bureau of Labor Statistics. February. There was some slowing down in March and April, followed by a slight recession in May and June, but in the last half of the year lumber prices resumed their upward course and mounted to steadily higher levels. Prices of western lumber of standard grades and di mensions appear to have been affected very slightly by the temporary decline in the market last spring. It was chiefly the weakness in Southern pine, which declined about 10 percent between February and June, that caused the recession in the composite lumber price index in May and June. Standard grades of Douglas Fir held at firm prices through the year; minor reductions occurred in some grades of Ponderosa pine in June— followed by speedy recovery, however; white pine maintained a steady advance throughout. Prices of substandard grades and of rough unfinished lumber weakened somewhat in April and May, reflecting primarily the improved supply of finished lumber. Rough lumber is produced by small mills which lack facilities for planing and finishing. Dur ing the chaotic markets of last winter and early spring these small operators could dispose of their product, often uncured, at good prices on the open market or sell their rough lumber to the larger mills which finished it into usable types. As the labor and equipment supply im proved and more logs became available, the position of the large mills improved correspondingly. Faced with greater difficulty in selling their rough lumber, the small mills were forced to cut prices and in some cases to quit business. In the aggregate, however, and aside from type of product, the small mills appear to have made in 1947, as in 1946, a very substantial contribution to the total lumber supply of the District, although their logging and milling practices have in many cases been uneconomic. Lumber production Production conditions were much easier in 1947 in most of the logging and lumbering areas of the District than in 1946, and a considerably greater output of finished lumber was obtained. Industrial relations improved and labor supply increased substantially; more logging and mill equipment became available; weather conditions were exceptionally favorable through most of the year. Ship ping difficulties were not so acute as in 1946, when mari time strikes occurred, although freight car shortages were still a limiting factor on production in many instances, especially in the summer months when box cars were di verted to move the bumper wheat crop of the Southwest. 12 FEDERAL RESERVE B A N K OF S A N F R A N C ISCO Total estimated District lumber production, based on trade association reports, was about 14.6 billion board feet in 1947— an increase of roughly one-sixth over re ported production for 1946. This output was slightly above the average of the three years 1942-44; production in the last half of 1947, in fact, exceeded that of the cor responding period of any year since 1941. Actual lumber output in the past two years has been substantially greater than the above estimates because of a large unreported production by small sawmills whose output is extremely difficult to estimate. The most recent Census count of lumber production in twelve western states indicates that previously published estimates for 1946 output should be increased by about 12 percent. Possibly some such ratio may also apply to the 1947 estimates, although there are some indications of a considerable mortality rate among the small mills in 1947. The major part of the increased District lumber output in 1947, compared with 1946, occurred in the Douglas Fir area, where reported production rose from 6.5 to 7.6 billion board feet. In combination, the Western Pine and Redwood areas produced nearly a billion more board feet in 1947 than in 1946. Increased output was particularly striking, proportionately, in the Redwood area where some of the largest mills had been strikebound for a sub stantial part of 1946. Marked expansion also occurred in 1947 in District pulp and paper production, in the operations of plywood and millwork plants, and in furni ture and other wood-working establishments. Lumber exports Construction lumber was in heavy demand in 1947, not only for domestic use, but also for export. Water borne export shipments from the North Pacific coast (Oregon and Washington ports) aggregated nearly 750 million board feet in 1947, more than double the 1946 volume and equivalent to the best month’s total output of the Douglas fir area in any year since 1944. Heaviest for eign shipments were made in the second and third quar ters of the year. Over half the total export of lumber from this area in 1947 was to Great Britain, with sub stantial quantities going also to China, Africa, South America and Australia, and lesser quantities to the Neth erlands, Belgium and France. The total water-borne movement, foreign and domestic, from the North Pacific ports was over 1.5 billion board feet, up 90 percent from 1946, reflecting in part the greater availability of ocean shipping and generally easier freight rates. Petroleum In 1947 the rapidly increasing demand for petroleum products outran the ability of the industry, in many parts of the country, to supply its customers’ needs. Many of the industry’s problems, however, resulted from shortages of transportation facilities of one kind or another, rather than from inadequate production, although efforts to in crease output were hampered in many cases by lack of equipment and manpower. As compared with the situa tion in many parts of the country, particularly towards the end of the year, conditions were relatively favorable February 1948 in the Twelfth District and a much better balance was achieved between supply and demand than in the country as a whole. This area was not without its problems, however. Shortages of fuel oil, in particular, threatened to develop at various points in the District, largely in consequence of reduced output of hydro-electric energy caused by low stream flow and the necessity to supplement water power by steam generated current. This extra demand on steam plant facilities came at a time of rapidly mounting power requirements and of limited supplies of natural gas— the alternative fuel. The use of fuel oil by the electric power utilities of the Pacific Coast states averaged about 4.5 million barrels per year during the years 1942 to 1945; it rose to nearly 11 million barrels in 1946 and almost 17 million barrels in 1947. The rapid growth of heating re quirements incident to increased population and building activity was an important factor in the fuel oil situation in 1947. The demand for Diesel oil for rail and motor transportation also established a new high level, as more and more Diesel-type locomotives and trucks were put into use. With more cars and trucks in operation than ever before, the demands of motorists and other users of gasoline attained levels in 1947 well above previous rec ords. District gasoline output was for several months near the rate of the top months of 1945 when the war effort was at its peak. Offshore demand for District petroleum products also increased substantially. Faced with this combination of demands for its major products, the District petroleum industry steadily stepped up its output in 1947. Average daily output of crude oil in 1947 exceeded 912,000 barrels, as compared with 894,000 in 1945, the previous high year, and production of refined oils was within about 1 percent of the1945 rec ord. Drilling, both exploratory and developmental, was exceedingly active in many areas, and was limited only by the availability of equipment. About 1600 new wells were completed in California in 1947, as compared with 1375 in 1946 and 1690 in 1945. Prices of crude oil and of all major petroleum products were sharply advanced during 1947. The largest increase came at the end of the year, when crude oil prices were raised 50 cents per barrel and gasoline prices 1.8 cents per gallon, with corresponding advances for other prod ucts. The succession of increases in 1947 brought the price of crude oil to its highest level in more than twenty years. Additional gasoline and use taxes were imposed in California, effective July 1, 1947, in order to help finance highway construction. Plans were announced during the year by one of the leading petroleum producers of the District for the early construction of a 200-mile pipe line to bring crude oil from the Rangeley oil field district in northwestern Colo rado to a new refinery to be built in the Salt Lake City area. It is expected that this operation will in time serve a considerable part of the Intermountain and Northwest ern markets and thus relieve the pressure on California oil resources which promise to be completely absorbed February 1948 at an early date by the growth of local population and industry. The 1,200-mile natural gas pipe line from West Texas to Southern California was opened in November and the first deliveries of natural gas from this new source of supply became available to the industries of the District. Shipbuilding and aircraft industries District shipbuilding output and employment continued to shrink in 1947, and new ship construction has practi cally reached the vanishing point. Four merchant vessels were delivered during the year under the Maritime Com mission building program— three cargo carriers at Port land in March and April, and a large combination passenger-cargo liner at San Francisco in December. One additional vessel of the latter type— the last of ten ships originally designed as troop transports and built at the same yard since 1942— remains to be delivered. This will complete the Maritime Commission’s contracts on the Pacific Coast. Aside from a few small naval vessels and some fishing boats, no other ship construction of ocean going types was under way in 1947. A fair amount of reconditioning and reconversion work was carried out, chiefly of laid-up naval tankers, in order to augment the commercial tanker tonnage of the east coast. The aircraft industry also experienced a generally un satisfactory year in 1947. Gross revenues for the industry as a wThole were about equal to those of 1946, but costs increased and the industry net loss was expected to be about double that of 1946 after tax adjustments. Com mercial business in 1947 proved very disappointing and was responsible for most of the losses sustained. Some airplane producers were severely affected by cancellations of orders from commercial airlines and others were forced to absorb large additional costs in modifying planes which had previously been accepted for commercial flying. Mili tary orders, while sufficient to keep the industry function ing, were still far below the volume required to encourage the maintenance of adequate engineering staffs or to se cure production on a really economic basis. The backlog of orders held by District aircraft producers at the end of 1947 was approximately $1 billion, nine-tenths of which was government business. A considerable part of this is represented by development work in rockets, guided missiles and other research in non-aircraft products. Em ployment in District airframe and aircraft parts plants in 1947 averaged slightly below that of 1946. Base metals Production of copper, lead, and zinc by District mines and smelters recovered sharply in 1947 from the low levels of 1946, when operations were drastically reduced by long continuous strikes and labor shortages. In addi tion to improved industrial relations and better labor supply, steady demand and high prices contributed to the better showing in 1947. Prices of most non-ferrous metals remained at high levels practically without change throughout the year. 13 M O N T H L Y R E V IE W The lapse after June 30, 1947 of premium price pay ments as subsidies to high-cost metal producers ap parently had little effect on total output of copper or lead in the Twelfth District, as the labor released by the marginal mines quickly shifted to the lower-cost pro ducers. In spite of a decline after June, Twelfth District zinc production in 1947 was the highest on record. As in other recent years, Arizona, Utah, and Nevada continued to produce the great bulk of the copper output of the District, although production in Nevada has de clined steadily since 1942, the year of highest output in that state. Idaho held its position as the leading producer of lead and zinc in the District, followed by Utah, Ari zona, and California in lead, and by Arizona, Utah, Ne vada, and Washington in zinc. Total District output of copper, lead, and zinc for the three years 1945 to 1947 and the weighted average price paid for each metal, f.o.b. refinery, including premium payments, as estimated by the Bureau of Mines, were as follows: f --------Production (thousand short tons)--------- > 1945 1946 1947 Copper Lead Zinc 580 462 684 149 135 174 200 179 211 r-----------Price per pound*“ " ^ Copper Lead Zinc $0,135 0.162 0.209 $0,086 0.109 0.146 $0,115 0.122 0.117 Precious metals The large increases in the District’s production of base metals in 1947 was paralleled by similar gains in output of precious metals. To an important extent gold and silver production in this region reflects the activity of base metal mining of which they are by-products. Gold ouput in creased in five of the seven District states in 1947, and silver production gained in every state. Utah was ap parently the largest gold producer in 1947 with an output of around 413,000 fine ounces, the highest in the state’s history. Practically continuous operation in 1947 of the leading copper mine in the Bingham district, which pro duces gold as a by-product, was largely responsible for this showing. California output increased moderately over that of 1946, and was very close to the Utah total. The major part of California’s production comes from dredg ing operations; the lode mines have experienced increas ing difficulties with rising costs and many of them remain inoperative. Total District gold output in 1947 gained about 42 percent over 1946 and 71 percent over 1945. District silver production in 1947 reversed the sixyear downward trend from 1940 to 1946, with an output nearly 50 percent greater than in 1946. The largest pro portional increase occurred in Utah, where the bulk of silver production is a by-product of other mineral ores. Idaho remained, however, the nation’s leading silver state in 1947 as in every year since 1933, with more than onethird of the total District output. Roughly half the silver production of Idaho is recovered from silver ore, the re mainder chiefly from lead and zinc ores. Silver production was stimulated in 1947 by the advance in the Treasury’s buying price after June 30,1946 to $0,905 per fine ounce. 14 FEDERAL RESERVE B A N K OF S A N FRA N C ISCO This compares with the average price of $0,808 for 1946 as a whole and $0,711 for the period from July 1, 1939 to June 30, 1946. Total District output of gold and silver for the three years 1945 to 1947, in fine ounces, was as follows: Gold 1945 1946 1947 655,016 787,979 1,122,433 Silver 20,290,283 16,743,004 24,910,700 Steel and aluminum industries The steel and metal working industries of the District made notable progress in 1947. Pig iron and steel ingot production rose to levels approximately one-third higher than at the peak of war production in 1944. Operations at the two large integrated steel plants at Geneva, Utah, and Fontana, California, set new records, and the output of finished steel products for the District as a whole was well above that of any previous year. The new pipe mill at Fontana, the first tubular mill in the District, was com pleted and put into operation early in 1948. Miscellaneous expansions were also effected during the year in both open-hearth and finishing capacity at various other plants in the District. Primary aluminum production in the Twelfth District in 1947 was about 260,000 tons, over half the national total and about 70 percent more than in 1946, when a number of war plants were still out of production for several months. The 1947 District output was about 25 percent under that of the peak year 1944. For the country as a whole, aluminum production also attained a new peacetime record in 1947, with a total output of about 570,000 tons, nearly 40 percent above the 1946 figure. Contrary to the situation in most metal markets, basic aluminum prices were reduced in 1947, with the result that extensive new uses and outlets were developed. Util ization of aluminum was particularly noteworthy in the building and construction industry, which became the leading user of that metal in 1947. The shortages of steel sheet and galvanized iron in particular led to the wide substitution of aluminum in sheet metal work. The manu facture of transportation equipment also took large quan tities of aluminum in 1947. The aluminum reduction plants in the Columbia River basin had a somewhat mixed experience in 1947. Pig aluminum became relatively abundant early in the year, and with the easing of prices an important reduction plant at Longview, Washington was shut down in June. On the other hand, a renovated surplus war plant at Tacoma was put in operation by private interests late in the year. Shortages of electric power have prevented the reopening of the Longview plant and it is probable that 1948 opera tions will be on a generally curtailed basis. Aluminum reduction by the electro-metallurgical process requires huge amounts of cheap electric energy, and the growth of population and industry in the Northwest, together with the release of some of the Grand Coulee generators to the Shasta plant in California, has created a very tight power situation in the Columbia basin area and its inter connected grid system in Oregon and Washington. February 1948 Retail Trade Twelfth District retail trade as a whole established a new high for dollar sales in 1947, with almost all areas of the District reporting increases. After closing their books for 1946, the best year then on record, Twelfth District retail establishments faced several problems. For some lines inventories were at an all-time high, though still out of balance. Most prices also surpassed any previous level. Predictions in some quarters called for a business decline ranging from a minor recession to a resounding crash. Yet, in the consumer durable goods area, the flow of goods at the end of 1946 was still small relative to demand. The decline did not materialize either for retail trade or for the economy as a whole. Nevertheless, the year was one of change and adjustment. Instead of falling, prices rose. Even so, consumer spending continued at a high level. As a consequence, the more conservative buy ing policies of retailers evident early in the year were reversed after mid-year. Because of higher prices and the larger volume of durable goods available, consumers bought more on credit and probably dipped into accumu lated savings to a greater extent than in 1946. Luxury and many soft goods lines met with increased buyer resistance. More extensive advertising, the reappearance of sales promotions such as give-away contests, and occa sional price reduction sales indicated that the sellers’ market was abating. Gains varied am ong retail lines The greatest gains during 1947 were registered by re tail establishments selling durable consumer goods. Auto mobile dealers, appliance dealers, and furniture stores reported the most outstanding sales increases in the major metropolitan areas of the District, according to the Bureau of the Census. The increased flow of these goods was readily absorbed. As the year proceeded, ex panded production permitted inventory accumulation for some consumer durable goods, but in general there was still a gap between demand and the available supply. In contrast to the ready market for durable goods, eat ing and drinking establishments and furriers experienced a reduction in dollar volume during 1947 compared with that in 1946. Despite the “ new look,” declines were re ported in this bank’s department store series for most women’s accessories and ready-to-wear items. Also fail ing to achieve 1946 sales levels were drug sundries, silverware, and jewelry, a few piece goods items, and men’s furnishings. Even those soft goods lines for which increases in dollar volume were reported met some con sumer resistance. Evidence for these declines was also shown in the California sales tax collections, which for D e p a r t m e n t S tore S a l e s b y M a j o r D e p a r t m e n t a l G r o u p s — T w elfth D is t r ic t ( P ercent change, 1947 compared with 1946) Main Store .......................................................................................................... Housefurnishings ......................................................................................... Miscellaneous merchandise departments ......................................... Piece goods ..................................................................................................... M en ’s and boys’ wear ............................................................................. W om en’s and misses’ ready-to-wear accessories........................... Small wares ..................................................................................................... W om en ’s and misses’ ready-to-wear apparel.................................... Basement .......................................................................................................... 2 +21 3 1 1 0 4 5 + 1 15 M O N T H L Y R E V IE W February 1948 the first time since prewar years failed to increase in the third quarter of the year. In more than half the total classifications in which sales are reported, including such soft goods as mentioned above, sales tax receipts were actually less than in the second quarter. This reflected the competition of hard goods for the consumer’s dollar, and the fact that food prices were increasing more rapidly than incomes, which reduced funds available for other expenditures. The 1946-47 percentage increases in dollar sales of soft goods were usually not greater, and fre quently less, than the increases in their prices. Sales in rural centers, chain stores, and basement departments rose more rapidly The increase in sales of general merchandise in 1947 over 1946 was approximately half again as much in rural areas as in the country as a whole. In the Twelfth District, department store sales increased 6 percent, but most lo calities outside the larger metropolitan areas reported increases above this figure. Consumers spent an increasing portion of their dollar with mass distributors. Among Twelfth District depart ment stores, independent stores had a smaller percentage increase in sales from 1946 to 1947 than did chain stores. In retail food distribution, chain food stores appear to have had greater sales increases than independents. During 1947 consumers reacted to high prices by buy ing a somewhat greater portion of their goods in basement stores or inexpensive departments. Although this was not as marked in the Twelfth District as in the rest of the country, most soft goods items carried in the basements of Twelfth District stores fared better than their main store counterparts. percent. In 1947 the rate of repayment on accounts receiv able also declined slightly. Department store inventories and orders outstanding were reduced Twelfth District department store stocks were larger in January than in any other corresponding month on record. Inventories continued to grow through April and then declined, reaching their low point for the year in August. This movement was in part an attempt to ad just inventories which were high and out of balance, but also reflected the belief of a good many retailers that prices might decline and that the predicted break in busi ness levels might materialize. When the anticipated de clines in business and prices failed to appear, inventory accumulation was resumed. By the end of the year, stocks had been increased to a level only 2 percent below the record high level at the end of 1946. As early as August 1946 orders outstanding had started to decline. This de cline continued through May 1947, reaching a level 65 percent below the 1946 peak. A sharp increase in orders outstanding followed, and they were double the May level in September. The last three months of the year witnessed some decline, however, and the year-end level of orders was slightly below that of December 1946. 37 T w e l f t h D i s t r i c t 1946— D e c e m b e r 19471 S a le s , S to c k s, an d O rd ers O u ts ta n d in g , D e p a rtm e n t Millions of Dollars S to re s, J a n u a r y Millions of Dollars Consumers used more credit during 1947 In addition to the increase in consumer credit granted by financial institutions, more credit was also granted by retailers. Cash sales of department stores declined from 57 percent of total sales in 1946 to 52 percent in 1947. Charge account sales increased from 40 to 43 percent, and instalment sales from 3 to 5 percent. Furniture stores reported an increase in their credit sales from 73 to 78 BAN KIN G AN D CREDIT IN 1947 o n t in u e d expansion of bank loans during 1947 both Ccontributed significantly to and resulted from the up ward push upon prices during that year. Since both the rise in prices and the growth in bank loans were most pro nounced in the second half of the year, increasing atten tion was centered upon the problem of controlling further credit expansion as the year progressed. Both the Fed eral Reserve System and the United States Treasury took action designed to increase short-term and long-term interest rates. Although short-term rates in particular rose substantially in the last six months of 1947, credit expansion continued at an apparently unchecked pace. The already high rate of expansion of consumer instal ment credit has been encouraged by the more lenient terms which have been available since November 1, 1947, when the remaining controls over such credit were ter minated by Congressional action. The economy operated close to its current capacity throughout 1947. Although industrial production had slight ups and downs, there was no significant change in its general level from the first to the second half of the year, such as occurred a year earlier. Nevertheless, the increase in bank loans during 1947 was larger both in dollar amount and in percent than in 1946. Higher prices required businessmen and consumers to increase their borrowings, but in turn the proceeds of the loans obtained 16 FEDERAL RESERVE B A N K OF S A N F R A N C ISCO by businessmen and consumers were used by them to bid against each other for plant and equipment and for con sumer goods, the supplies of which could not be signifi cantly increased within the limits of our current pro ductive capacity. Total loans outstanding at all banks in the United States aggregated $43 billion at the end of 1947. They increased during the year approximately 21 percent, or by about $7.4 billion, of which $4.6 billion occurred in the last half of the year. Security holdings continued to decline, largely because of Treasury debt retirement. At the end of the year, all banks held some $92 billion in securities, about $4 billion less than a year earlier. De posits in the hands of the public rose by about $6 billion, or 5 percent, during the year, a decline of $1 billion in the first half of the year being more than offset by an in crease of $7 billion in the last half. Member bank reserves in the entire country increased $1.8 billion during 1947 and reached a total of $18 billion by the end of the year. A sharp increase in excess reserves in the last half of December raised the average excess reserves for that month to about $1 billion, or $100 million above the average for December 1946. Among the factors augmenting reserves was an increase of $2.2 billion in the monetary gold stock, most of which was received from other countries, while a contraction of nearly $1 billion in Reserve Bank credit was a factor reducing reserves. The net decline in Reserve Bank credit was largely the result of the retirement of public debt held by the Federal Reserve System, partially offset by System purchases of Government securities from banks and others. Measures to Restrict Credit Expansion Several steps were taken during 1947 by the Federal Reserve System and the United States Treasury either to discourage the continued expansion of bank loans or to counteract the growth of privately-held bank deposits resulting from that expansion. These include the retire ment of bank-held public debt, the sale of Government securities outside the banking system, increased yields on short-term and longer-term Government securities, and an appeal for voluntary restraint in the granting of un productive bank loans. These were followed early in 1948 by a rise in the discount rate of Federal Reserve Banks from 1 percent to 1 percent, and by an increase in the reserve requirements for demand deposits at central re serve city banks from 20 percent to 22 percent. Retirement of public debt During 1947 the Treasury redeemed $10.9 billion of marketable public debt. Because of an increase of $8.6 billion in nonmarketable issues, the total public debt de clined only $2.3 billion. The funds for the retirement of marketable public debt were provided by an excess of Treasury tax receipts over expenditures and by the net increase in nonmarketable public debt. Included in the latter was a net increase of $2.3 billion in United States savings bonds outstanding and an increase of $4.4 billion February 1948 in special issues held by Government trust accounts, espe cially those associated with the social security program. Most of the funds derived from these various sources came directly or indirectly from individuals and busi nesses during the course of the year, and consequently reduced privately-held bank deposits. To the extent that these funds were used by the Treasury to retire bank-held public debt, bank deposits were not restored. The retire ment of debt held by the Federal Reserve Banks also reduced bank reserves.1Of the $10.9 billion of marketable public debt retired during 1947, Federal Reserve Banks held approximately 27 percent and commercial banks about 36 percent. The net effect, therefore, of public debt retirement during 1947 was to reduce privately-held bank deposits by a substantial amount. This decrease was more than offset, however, by the increase in deposits resulting from the loan expansion during the year, with the result that total deposits of individuals, partnerships, and cor porations increased about $6 billion during 1947. Sale of Government securities outside the banking system The sale of new issues of Government securities out side the banking system serves initially to reduce pri vately-held bank deposits. When these funds are used to retire bank-held public debt, bank deposits are not re stored and bank reserves are reduced to the extent that the securities redeemed are held by Federal Reserve Banks. In line with such a program, the sale of savings bonds was pushed with renewed vigor during 1947. Also in late September the Treasury offered to long-term in vestors a new nonmarketable, redeemable security, desig nated as Series A investment bonds. Commercial banks were permitted to buy these bonds only on a limited basis, with the result that they subscribed for only about onefourth of the total issue of $970 million. Increased yields on Government securities To facilitate war financing, interest rates were held at low levels during the war and early postwar periods. As a move to check credit expansion in 1947 and thereafter, interest rates were allowed to rise. Effective in July the Federal Reserve System discontinued its fixed buying rate of ^ of 1 percent for Treasury bills and terminated the repurchase option privilege pertaining to them. Im mediately the yield on new Treasury bills increased to about ¿4 of 1 percent, and by early 1948 it was virtually 1 percent. Beginning in October the coupon rate on new issues of certificates of indebtedness was raised from % of 1 percent to 1 percent, and in January 1948 the coupon rate was again increased to 1 percent. The rise in short-term interest rates for Government securities, particularly for Treasury bills, made more costly the acquisition of bank reserves through sale to the Federal Reserve System of Treasury bills and certificates of indebtedness. Short-term rates for other types of credit also increased. The extent to which the increase in short term rates has exercised a restrictive influence upon 1For a detailed discussion of the process by which the retirement of public debt affects bank reserves, see the M o n t h l y R e v i e w for M arch 1947, page 28. February 1948 17 M O N T H L Y R E V IE W further credit expansion is indeterminate, but the results are likely to be cumulative in character. On December 24, the Federal Reserve System took another step in the direction of making the acquisition of additional bank reserves more costly by lowering its sup port price for longer-term, fully-taxable Treasury bonds. The yields on such bonds were permitted to rise signifi cantly, but not above 2^4 percent, which, with minor ex ceptions, is the maximum coupon rate on outstanding long-term Government bonds. Voluntary restraint in granting unproductive bank loans On November 24, 1947 the Federal and State super visory banking authorities issued a statement urging that each bank exercise extreme caution in its lending policies. Banks were advised to curtail all loans for speculation in real estate, commodities, or securities, and were asked to guard against the over-extension of consumer credit. The American Bankers Association also undertook to pro mote a program of voluntary restraint on the part of banks in the granting of loans. Banking and Credit in the Twelfth District Developments in the Twelfth District during 1947 were similar to those in the United States except that the percentage expansion in bank loans was considerably greater in the District than in the country as a whole. However, due to a relatively greater decline in District member bank holdings of United States Government se curities, the percentage increases in total loans and in vestments and in total deposits of these banks were some what less than for all member banks in the United States. Bank deposits and currency During 1947 the creation of new deposits through the expansion of bank loans more than offset the reduction in deposits arising from the retirement of bank-held public debt from Treasury surplus. In the year-period, total de posits of member banks increased 1 percent in the Twelfth District compared with an increase of about 3 percent in the country as a whole. Deposits of individuals, partnerships, and corporations experienced slightly larger percentage gains than total deposits in both the District and the United States. For the fourth suc cessive year, time deposits increased more rapidly than demand deposits in both areas. M em ber B a n k D e p o s it s a n d E a r n i n g A s s e t s — T w e l f t h D is t r ic t (millions of dollars,as of December 3 1941 1945 1946 1947 Demand deposits of individuals, partnerships, and corp oration s... Time deposits2 ........................................... U . S. Government deposits................. 2,778 2,390 144 7,958 5,187 2,049 8,554 5,776 303 8,622* 5 ,9 8 4 ! 1481 Loans ............................................................ U . S. Government securities............... Other securities ....................................... 2,451 1,738 542 2,663 10,450 795 4,068 8,426 908 5,363 7,243 872 Member bank reserves Member bank reserves in the Twelfth District expe rienced a net increase of $108 million during 1947. This is almost twice the increase for 1946, but is still far less than the yearly increase during the war period. Although excess reserves in the District at the end of 1947 were nearly double the amount at the end of 1946, this was due almost entirely to a sharp increase in such reserves in the latter part of December. F a c t o r s A f f e c t in g T w e l f t h D is t r ic t M e m b e r B a n k R ese r v e B a l a n c e s (millions of dollars) 1936-40 f a c t o r s w h ic h in c r e a s e d r e s e r v e s average United States Treasury O peration s.. 311 The amount by which Federal Gov ernment disbursements in the D is trict exceeded collections. 1944 1945 1946 1947 4,482 4,682 1,331 631 324 206 361 7881 5451 Other Federal Reserve A c c o u n ts .. . . 31 The amount of the decrease in non member bank accounts and other miscellaneous accounts at the R e serve Bank. -------Total of factors increasing member bank reserves ............ 272 141 9 4 16 3,680 4,146 1,659 853 3,534 3,743 1,607 443 Demand for Currency ........................... The amount by which holdings of cash by banks and the public de creased. facto rs w h ic h redu ced reserves Interdistrict Payments and Transfers of Funds ....................................... . 180 The net amount paid to other dis tricts in settlement of commercial and financial transactions (exclu sive of Treasury operations). Reserve Bank Credit ................. ............ I1 The amount by which credit ex tended directly in the Twelfth D is trict decreased. Total of factors decreasing --------member bank reserves ............ 179 Member bank reserve balances at the Federal Reserve Bank of San Fran cisco increased ........................................... 93 981 76 91 302 3,436 3,819 1,598 745 244 327 61 108 1 Increase. 1 Partly estimated. 2 Excluding interbank and U . S. Government deposits. Government deposits continued the decline which started in 1946, and by the end of 1947 were down to approximately the prewar level in both the District and the country as a whole. Throughout most of 1947 the amount of money in cir culation in the United States was at a slightly higher level, on a seasonally adjusted basis, than in the corres ponding months of 1946. Flowever, since the expansion of currency in circulation was less in November and December 1947 than in the corresponding months of 1946, the amount of currency in circulation at the end of 1947 was slightly less than that at the end of 1946. De mand for currency in the Twelfth District declined for the second successive year. A primary cause of this decline was the further curtailment during 1947 of activi ties of the armed services in the West and in the Pacific area. In the aggregate, the magnitude of the factors affecting District member bank reserves has been declining sharply since 1945. Net Treasury disbursements have been the principal source of increases in District member bank reserves in recent years. The volume of these net dis 18 FEDERAL RESERVE B A N K OF S A N FR A N C ISCO bursements in 1947 was only about one-half as large as in 1946 and one-seventh as large as in 1945. A return of currency from circulation was the next most important source of District member bank reserves in 1947. The major factor which operated to reduce reserves was the excess of interdistrict payments over receipts, other than on Treasury account. Payments and transfers to other areas for goods, services, and securities have de creased along with diminished Treasury disbursements in the District. In 1947 this net outflow was only about one-fourth as large as in 1946 but was still substantially above the prewar level. The net outward movement of these funds reduces reserves correspondingly, and, to the extent that payments or transfers are made with depos itors’ rather than with bank funds, results in a loss of deposits as well. February 1948 increase in consumer loans. In relative terms, consumer loans lead the list with an increase of 52 percent, com pared with 50 percent for real estate loans and 26 percent for commercial and industrial loans. Non-real estate agri cultural loans increased 11 percent in the year-period. Loans for purchasing and carrying securities continued the decline which started in 1946. Fifty-four percent of the dollar increase in total loans of District member banks during 1947 occurred in the last half of the year. The behavior for individual types of L o a n s o f M e m b e r B a n k s — T w e l f t h D is t r ic t (as of December 31) Millions of Dollars Millions of Dollars A substantial contraction in Reserve Bank credit was another factor tending to reduce District member bank reserves during 1947. Virtually all of the reduction in 1947 consisted of a decline in the Federal Reserve Bank’s holdings of Treasury bills purchased within the Twelfth District. Loans and investments of member banks The Treasury’s program of debt retirement was the primary cause of a 14 percent decline in Twelfth District member bank holdings of United States Government securities during 1947, compared with a decrease of about 8 percent in the country as a whole. The decline in mem ber bank holdings of Government securities was more than offset by an expansion in bank loans, with the result that total loans and investments of member banks in creased slightly during 1947 in both the Twelfth District and the nation. Total loans of Twelfth District member banks in creased $1.3 billion during 1947 and reached an all-time high of $5.4 billion at the end of the year. In both the District and the nation, the increase in total loans was greater in the second than in the first half of the year. P ercentage I nc rease in L o a n s of T w e l f t h D is t r ic t M em ber B a n k s , by S tates (Decem ber 31, 1946 to December 31, 1947) Commercial and industrial Agricultural (except real estate) Real estate Consumer loans to individuals Total A r iz o n a ............................... California ........................... Idaho .................................. Nevada ................................ Oregon ................................ Utah .................................... W ashington ...................... 19 31 28 56 13 37 5 38 16 9 9 18 14 — 31 91 54 55 48 43 23 22 70 41 55 11 111 91 92 44 36 32 36 17 31 10 Twelfth District ............ 26 11 50 52 32 Fifty-six percent of the dollar increase in total loans in the Twelfth District occurred in real estate loans, pri marily on residential property. Commercial and indus trial loans stood second in the amount of dollar increase, followed by consumer loans. Retail automobile instalment paper accounted for nearly two-fifths of the total dollar loans differed significantly from this pattern, however. The increase in total real estate loans was somewhat greater in the first than in the second half of the year. This condition applied to all types of real estate loans but was especially pronounced in the case of farm real estate loans. The smaller increase in the second half of the year in the dollar volume of residential mortgages probably reflects primarily the development of a more conservative lending policy on the part of banks. Commercial and industrial loans, on the other hand, experienced a much larger in crease in the second than in the first six months of 1947. This was no doubt the result of the change in business sentiment from one of caution and hesitancy in the first half of the year to one of optimism in the second half. Consumer loans also had a larger dollar increase in the second half of the year, while the dollar increases in nonreal estate agricultural loans were about equal in the two periods. The expansion in member bank loans during 1947 was not at all uniform among the states in the Twelfth Dis trict. Arizona led the list with an increase of 44 percent in total loans compared with 32 percent for the District. Washington, with an increase of only 10 percent in total loans, stood at the bottom of the list, and Oregon was next in line with an increase of 17 percent. This was due largely to the small increase in commercial and industrial loans in these two states. The accompanying table shows, by states, the percentage changes during 1947 in certain major classifications of loans. 19 M O N T H L Y R E V IE W February 1948 AGRICULTURE IN 1947 n s p it e of less favorable weather than in 1946, total United States agricultural output in 1947 fell only Islightly below previous record years. The total produc tion of 52 principal crops, including grain, cotton, hay, fruits, and vegetables, was the fourth largest on record, exceeded only by the exceptionally favorable production of 1942, 1944, and 1946. For the first time, winter wheat production surpassed one billion bushels. Rice and sugar beets also exceeded previous production records. Cotton production was 35 percent greater than in 1946, but 6 percent below the 1936-45 average. The output of some major crops de clined, however, particularly the corn crop, which, due to unfavorable weather, was the smallest since the drought of 1936. The 1947 fruit and vegetable crops were large, but below the 1946 level. Meat, milk, and egg production changed little in 1947 from the peak of 1946. Agricultural prices, led by grains, beef, and hogs, gen erally moved upward during 1947, averaging about 19 percent higher than in 1946. Gross and cash income of farmers increased 19 percent, while net income gained 21 percent over 1946. F arm I ncome and P ro d u c tio n U n it e d of S elected C o m m o d it ie s — S t a t e s , 1947 1947 1947 34.6 30.3 18.0 Gross farm income ($ b i l .) ............ Cash farm income ($ b il.)1 .......... N et farm income ($ bil.) ............... Percentage change 1947 -compared withi1946 r 1936-45 + 116 + 19 +126 +19 + 21 + 136 Agricultural production (1935-39 = 1 00 )2 ^ .................................. W heat (million bushels) ............... Barley (million bushels) ............... Corn (million bushels) ................. Oats (million bushels) ................... Cotton (thousand bales) ............... M ilk (billion lbs.) .......................... E ggs (billions) .................................. 137 1,365 279 2,401 1,216 11,694 121 55 + + + — — + + — + + — — + — + + 1 18 6 26 19 35 1 1 16 53 3 9 5 6 8 22 1 Government payments included in cash farm income amounted to $340 million, 60 percent less than for 1946. 2 For sale and home consumption. Attractive agricultural prices and prospective higher incomes have brought more and more acres under harvest in the Twelfth District. In addition to increased acreage, total production has been furthered in recent years by greater yields due to favorable weather, improved techni cal knowledge, and the financial means to adopt improved cultural practices. arvested A creage of 52 P r i n c i p a l C rops — T D is tr ic t, 1947 acreage (000) 857 6,757 3,484 484 2,903 1,163 4,220 w elfth 1947 Percentage change f-----------1947 compared with ----------1946 + 5 .9 4 -3 .4 + 1.1 — 1.0 0.0 + 0.4 + 1.0 1941 b 9.5 -1 5 .5 -1 5 .6 - 5,2 -1 2 .8 - 4.4 -1 4 .6 19,868 + 1.8 + 13.7 + 11.3 United States .......... . . . 348,355 + 1.0 + + Arizona .......................... California ........................ Idaho ............................... Nevada .......................... Oregon ............................. Utah .................................. Washington ................... Twelfth District . . . 4.3 1936-45 A v . -1 9 .9 -1 3 .0 -1 1 .6 - 8.5 - 7.3 - 5.3 -1 1 .6 3.5 Source : United States Department of Agriculture, Agricultural Statistics, 1943 ; Annual S u m m a r y of Crop Production, 1947. The acreage of field crops harvested in the Twelfth District in 1 9 4 7 was only slightly greater than in 1 9 4 6 . The greatest increase was in cotton harvested acreage, which was about 5 0 percent greater than in 1 9 4 6 , followed by flaxseed and sugar beets, around 3 0 percent greater. The harvested acreage of grain sorghums declined about 4 0 percent, potatoes, 2 4 percent, and rice, 7 percent. As shown in the accompanying table, the 1 9 4 7 total produc tion of field crops in the District showed almost no change from that of 1 9 4 6 . Its composition changed somewhat, however, with increases of nearly 6 0 percent in cotton and cottonseed, large increases in the production of flax seed and sugar beets, and considerable declines in grain P r o d u c t io n , P r ic e s , and G ross F a r m V and L iv e s t o c k — T w elfth a l u e of M a jo r C rops D is t r ic t , 1947 Percentage change t -------------- 1947 compared with-------------- > 1947 Produc- ,----- Production— N tion 1936-45 (000) 1946 average Field and Seed Crops Alfalfa seed (bu.) 494 + 2 6 . 0 + 55.8 Barley (bu.) . . 79,336 + 3.4 + 26.7 Beans, dry (c w t.)1 .......... 6,179 + 1 4 .6 + .6 Corn (bu.) -----6,377 + 1.8 — 23.2 Cotton, lint (bales) .......... 980 + 5 9 .1 + 56.1 Cottonseed (tons) 398 + 5 9 . 2 + 51.3 Flaxseed ( b u .) . 3,333 + 4 6 .6 + 22.9 Grain sorghums (bu.) ............... 4,792 — 36.0 — 17.7 H ay, all (tons) 14,380 — 2.5 + 5.8 H ops (lbs.) . . . 50,098 — 5.8 + 23.0 Oats (bu.) -----32,148 + 2.9 + 3.9 Peas, dry (c w t.)1 5,352 — 2.2 2 Potatoes (b u .) . 89,561 — 26.1 + 16.9 Sweet Potatoes (bu.) ............... 1,200 — 2.0 — 2.6 Rice (bu.) -----17,860 + 1.6 + 62.6 Sugar beets 5,290 + 3 4 . 9 + 5 8 .5 (tons) ............ W heat (bu.) . . 145,610 — 8.2 + 20.3 Total, 12th District (tons) ------ 1946 Season average price 1946 Gross farm value 1947 Gross farm value ($000) — 38.6 + 1 4 .6 — + 22.9 18.8 7,038 124,703 + 1 0 .8 + 5 2 .4 + + 26.9 55.2 79,429 16,487 + 1.6 + 1 3 .3 + 7 9 .3 + 61.7 + 80.4 + 1 6 2 .9 153,210 37,854 22,766 + 4 7 .3 — 10.7 + 8.5 + 1 8 .5 + 1 7 .7 4*35.9 — 5.7 — 13.0 + 2.1 + 22.6 + 14.2 + 0.1 10,584 264,324 34,075 35,122 30,245 142,409 — 5.8 — 7.6 + 2 5 .0 + 27.0 4,320 48,222 2 + 3 6 .0 + 2 24.8 2 351,814 1,362,602 34,934 + 0.1 + 20.7 + 1 4 .2 3 + 15.3 Total, United States (tons) 293,393 — 7.8 + 6.6 + 3 0 .9 3 + 20.0 16,455,723 49,134 + 9.4 199 — 41.3 0.0 83 — 28.4 10 — 41.2 33 ■— 10.8 + — + + + + 20.8 14.2 7.7 2.5 66.7 10.0 — 16.5 — 18.1 — 21.1 — 8.5 + 1 6 .7 — 50.7 — — — — — -— 8.9 52.1 23.3 35.0 31.3 55.6 106,559 17,265 4,200 20,367 2,870 4,521 14 — 22.2 — 6.7 — 12.1 — 31.6 1,736 1,602 — 27.5 325 + 7 7 .6 + + 16.0 27.5 — 59.6 — — 58.0 — 70.7 25.4 61,405 42,575 7,270 + 0.7 + 28.9 — 4.2 — 4.1 5,001 14,100 + 2.5 + 15.7 — 10.8 — 8.6 33,840 + — + + + 9.4 7.0 30.8 30.8 1.4 — 24.2 — 57.0 — 24.6 — 15.6 + 1 1 .7 — — — — — 28.6 64.1 30.4 14.3 18.5 71,254 6,440 50,575 61,690 11,169 9.1 — 1.0 — 28.5 — 23.7 + 1 2 .5 — 9.7 4- Fruit and N ut Crops Farm Production H Field crops Apples (b u .)4 . . Apricots (tons) Avocados (tons) 14 Cherries (tons) Dates (tons) . . Figs, dried (tons) Figs, not dried (tons) ............ Grapes and fresh raisins (tons) Raisins (tons) . Grapefruit (65-68 lb. b x .) Lemons (79 lb. box) ............... Oranges (77 lb. box) ............... Olives (tons) . Peaches ( b u . ) .. Pears (bu.) . . . Plums ( t o n s ) .. Prunes, dried (tons) .......... Prunes, not dried (tons) . Almonds (tons) Filberts (to n s ). W alnuts (tons) 51,660 40 38,364 28,562 73 — 5.9 — 16.7 — 7.8 + 1.6 — 27.0 201 — 88 29 9 65 — 37.5 — 43.2 32,198 1.1 70.6 + 1 2 5 .0 + 6.6 — 6.9 + 1 3 .2 — 23.8 — 23.2 — — — — 33.4 12.6 19.7 30.8 6,619 16,060 2,603 27,582 Total, 12th District (tons) ____ 8,375 — 9.0 + 16.3 — 31.53 — 36.3 586,529 Total, United States (tons) 16,595 — 4.0 + 20.3 — 27.43 — 31.7 995,406 ( Continued on P a ge 20) 20 FEDERAL RESERVE B A N K OF S A N FRA NC ISCO P r o d u c tio n , P r ic e s , a n d G r o s s F a r m a n d L iv e sto c k — T w e l f t h V a l u e o f M a j o r C rops 1947— (C ontinued) D is tr ic t, Percentage change ---------1947 compared with1947 Produc- < tion (000) Vegetables for Market Artichokes 761 (40 lb. b o x ) . Asparagus 3,150 (24 lb. cr.) . . Beans, snap 1,530 (30 lb. b u .). 117 Cabbage (tons) Cantaloups 10,673 (60 lb. cr.) . . Carrots 15,083 (50 lb. b u .) . . Cauliflower 8,002 (37 lb. c r . ) . . 10,152 Celery (65 lb. cr.) Cucumbers 624 (48 lb. bu.) . . Garlic 167 (100 lb. sks.) Honeyball melons (70 lb. c r . ) . . 70 Honeydew melons 3,216 (35 lb. c r . ) . . Lettuce (70 lb. 31,561 cr.) ................. Onions 11,434 (50 lb. sacks) Peas, green 2,905 (3 0 lb. bu.) . . 759 Peppermint (lbs.) Peppers 940 (25 lb. b u .) . . Spinach 2,238 (18 lb. b u . ) . . Strawberries 2,472 (36 lb. c r . ) . . Tomatoes 6,922 (53 lb. b u .) . . W aterm elons 13,392 (n o.) ............... 1946 Gross farm value 1946 Production----- N Season 1936-45 average 1946 average price + 8.7 8.9 - 2 0 .0 — 13.0 2,283 + 0.1 - 1.0 + 18.6 9,421 + 0.1 + 8.3 — 9.3 + — 27.2 13.9 3,995 4,927 + 8.8 — 6.4 + 67.6 + + 5.5 + 24.7 + 1 5 .2 — + ($000) — + 1 9 .5 + 1 7 .4 — 21.0 1947 Gross farm value 3.4 2.2 32,144 21.7 30,994 11.3 51.8 10,550 28,000 + 21.6 1,248 — 36.3 1,603 4.3 4.4 + + 46.7 51.3 + 1 5 .6 + 28.9 + 5.3 — 9.7 + 18.4 — 29.4 — 63.7 — 76.4 + 3 1 .4 — 52.3 357 — 16.3 6,535 — 26.9 — 7.0 + 4 5 .3 — + + 20.1 + 1 4 .0 — + 2.8 + 48.6 + 2 5 . 6 + 29.3 100,699 — 24.8 + 19.6 + 7 2 .0 + 28.9 16,150 — 14.7 + 2 2 .8 — 38.6 + 1 0 .3 + 1 8 5 .3 + 1 0 . 4 — + 6.0 35.5 6,842 5,260 + + + 9.0 1,410 + 1.7 — 13.2 + + 5 0 .7 + 49.0 + 7.1 1.7 + 3.3 — 10.4 1,413 19.2 — 24.2 + 14.2 19,645 + 25.2 + 1 0 .7 — 2.0 25,849 — 5.9 + 15.2 + + 2.0 4,900 — 11.7 8.8 grapes, raisins, olives, and dried figs were more than SO percent lower. Only dates, almonds, and plums increased in price. Vegetables for market and processing The total District production of vegetables for market and for processing increased slightly in 1947. Particularly large percentage gains in production were shown for lima beans and strawberries, and the greatest declines for honeyball melons, and cucumbers and spinach for proc essing. The 1947 value of production of vegetables for market was 15 percent above 1946, principally because of the 16 percent increase in prices. Although the produc tion of vegetables for processing reached a somewhat higher total than in 1946, the value of production was about 2 percent lower, due to a 3 percent decline in prices. Livestock The number of livestock on United States farms de clined during 1947. District livestock numbers likewise declined except in the case of chickens and hogs which showed an increase. Turkeys showed a substantial reduc tion both in numbers and in total dollar value. The decline in the number of livestock was attributed to high market prices for meat animals, leading to heavy slaughter, and the reduced feed supplies resulting in high feed prices, which occurred in the second half of the year. N u m b e r a n d V a l u e of L iv e s t o c k o n T w e l f t h D is t r ic t Total, 12th District (tons) ____ 3,145 — 3.8 + 33.3 + 1 6 .5 3 + 15.1 314,225 Total, United States (tons) 7,918 — 11.5 + 14.7 + 14.03 + 3.8 659,739 — 22.1 + 7.1 — 22.5 — 39.4 8,489 + 8 8 .9 + 4 6 6 .7 + 1 8 .4 + 1 3 7 .6 2,948 + 2 3 .1 — 38.1 — 1.9 — 35.3 + 6.2 + 50.0 + 23.8 + 73.6 — 8.3 + 1 1 4 .5 — 3.8 — 3.9 + 5.8 + 3.0 + 0.1 Vegetables for Processing 60 Asparagus (tons) Lim a beans, 17 green (t o n s ) . Snap beans, 48 green (tons) . . 26 Cucumbers (tons) 158 Peas, green (tons) 33 Spinach (tons) . 1,484 Tomatoes (tons) Total, 12th District (tons) . . . . Total, United States (tons) February 1948 + — + — + 18.3 40.5 3.9 33.9 6.3 5,469 1,327 14,237 887 42,773 1,826 + 2.8 + 96.1 — 3.03 — 1.6 76,130 4,268 — 7.8 + 30.3 — 6.53 — 15.4 183,850 1 Production figures are on a cleaned basis. 2 N ot available. 3 Comparison of average prices weighted by 1946 production. 4 For commercial apple areas only. Source: United States Department of Agriculture, 1947 annual summaries of crop production, and Agricultural Prices. sorghums and potatoes. The value of production of Dis trict field crops in 1947 exceeded that of 1946 by more than 15 percent, largely because of increased season aver age prices. Fruits and nuts Fruit and nut production in the District for 1947 fell 9 percent below the 1946 level. Apricots, dates, prunes, and cherries accounted for the greatest reduction. Raisin production, however, rose about 78 percent, and filberts, apples, and lemons also showed increases over 1946. With season average prices some 30 percent lower than in 1946, the value of production of fruit and nut crops in 1947 was 36 percent below the 1946 peak. Prices of F arm s1 ,------------]L948 comp>ared with > Number Number Value Total 1948 Number 1936-45 per head value 1947 (000) average 1947 1947 All cattle & calves. Milk cows & heifers ............... Sheep and lambs. . H ogs, including pigs Total, Twelfth District ................. Total value 1948 ($000) 7,542 — 2.6 + 7.2 + 2 6 .5 + 2 3 .3 956,060 1,898 7,039 1,411 — — + 1.7 1.1 2.5 + 6.1 + 17.0 327,172 — 36.4 — 28.8 + 2 4 .2 + 2 6 .7 + 7.2 + 15.0 + 2 2 .8 + 3 0 .0 + 8.7 ------ __ ----- 120,835 63,837 56,282 34,335 14,211 17,179 1,114 + 1.5 — 0.9 + 7.0 — 34.4 — 43.1 + 8.6 — 28.7 8,673 51,441 — 0.6 — 7.3 + 25.1 + 2 2 .2 1,205,687 636,417 — 3.1 — 2.2 + 1 8 .0 + 1 4 .2 12.746,529 + 2.6 --------- ----- Total, United 1 Figures for all years are as of January 1. Source : United States Department of Agriculture, Livestock on Farms, January 1, 1948. Meat Total United States meat production under Federal inspection1 was estimated at 23 million pounds in 1947. This was slightly greater than in 1946, more than 30 per cent above the 1937-45 average, and only about 8 percent below the record production of 1944. The production of lamb and mutton and pork, however, fell considerably below that of 1946. For the Twelfth District, total 1947 meat production changed little from the 1946 level. Federal inspection data show a greater number of cattle and calves slaugh tered, about the same number of hogs, and a considerably smaller number of sheep than in 1946. The unusually 1 Slaughter of cattle, calves, sheep, and swine. February 1948 M O N T H L Y R E V IE W large marketings of hogs since October 1947 can be at tributed to the combined effects of the short corn supply and high pork prices. Americans continued to consume large quantities of meat in 1947— about 157 pounds per capita. Per capita meat consumption has risen considerably since the begin ning of World War II, in spite of a 9.4 percent increase in population. I n d e x e s of C i v il i a n P er C a p i t a C o n s u m p t i o n of S elec ted F ood C o m m o d i t i e s — U n i t e d S t a t e s (1939=100) Percent Percent 21 S e l e c t e d A g r i c u l t u r a l P r i c e I n d e x e s — U n i t e d S t a t e s , 19471 (1935-39 100) Percentage change 1947 compared with / 1947 1946 1945 1939 + 192.1 Prices received by farmers. . . . . 260 + 19.3 + 37.6 = ----- -----v 269 288 259 314 234 244 250 286 226 203 + 15.5 + 3 4 .6 + 26.3 + 14.2 — 14.0 + 22.0 + 22.0 + 33.0 + 11.3 + 11.5 + 30.0 + 5 7 .4 + 53.3 + 52.4 — 11.7 + 10.9 + 43.7 + 62.5 + 36.1 + 12.8 + 228.0 + 2 7 4 .0 + 254.8 + 273.8 + 185.4 + 174.2 + 171.7 + 204.3 + 145.7 + 133.3 Prices paid by farmers2.......... 181 + 2 0 .0 + 3 3 .1 + Family maintenance .......... Farm production ................. 207 183 234 + 21.1 + 2 1 .2 + 20.6 + 38.0 + 3 3 .6 + 43.6 + 111.2 90.6 + 175.3 A ll c r o p s .................................. . . Food grains ........................... Feed grains and h a y.......... . Fruit ......................................... Truck crops ........................... Livestock and products . . M eat animals ........................ Dairy products ................... Poultry and eggs ............... . . , . 86.6 4- 1Annual averages of monthly indexes. 2 Including interest and taxes. Source: United States Department of Agriculture, Agricultural Prices, D e cember 29, 1947. Data from United States Department of Agriculture, Agricultural Outlook Charts, 1948. Poultry and eggs Production of eggs in the United States for 1947 was estimated at 4,608 million dozen, slightly less than for 1946. Egg production in the District was 371 million dozen, 2.6 percent above 1946. The uncertainty of turkey prices because of an unusually large carryover of cold storage stocks, and high feed costs during 1947 caused a reduction of about 18 percent in the number of turkeys raised for market in the United States in 1947. The greatest reduction in turkey numbers in the District occurred in California, which raised 15 percent fewer turkeys than during 1946. 274 percent above 1939. The prices they received for live stock and livestock products increased more in 1947 than prices received for all crops, although livestock prices have increased less than prices for all crops since 1939. Farmers paid 20 percent more for all lines of goods in 1947 than in 1946, and 87 percent more than in 1939, while they received 19 percent more for their products than in 1946, and 192 percent more than in 1939. The greatest increase in prices paid was for feed.1 Continued heavy domestic and foreign demand during the past year held prices of principal food items above parity. Consequently, the program to maintain prices of certain commodities at not less than 90 percent of parity had little effect in 1947 on the general level of farm prices. Some support was given, however, to a number of com modities whose prices were close to 90 percent of parity, including potatoes and tobacco (below 90 percent), and eggs and wool (90-99 percent of parity).2 S e l e c t e d C o m m o d i t ie s C l a s s i f i e d A c c o r d i n g t o R a t i o o f P r i c e to P a r ity — Below 90% of parity H ay Potatoes1 Grapefruit Lemons Oranges Tobacco1 90-99% of parity Grain sorghums E g g s2 W o o l3 W ool W ool production in the Twelfth District and the United States continued its downward trend in 1947 and was about 30 percent below the 1936-45 average. Since 1942 District wool production has decreased by about 33 million pounds, or by more than one-third. District wool production, accounting for about one-fifth of the United States total, was about 6 percent below 1946. Agricultural Prices As shown in the accompanying table, the index of prices received by United States farmers broke all records in 1947. Among crop groups, the only decline occurred in prices received for fruit which averaged 14 percent below 1946, but still 185 percent above the 1939 level. Of all crops, food grain prices received by farmers exhibited the greatest increase, averaging 35 percent above 1946 and 1947 100-124% of parity W heat1 Barley Oats Cotton1 Sweet potatoes2 Apples Butterfat2 M ilk2 Chickens2 Turkeys2 A verage 125-134% of parity Corn1 Rice1 Veal 135% of parity or over Rye Flaxseed2 Cottonseed D ry beans2 H ogs Cattle Lambs 1 Basic commodity. 2 Steagall commodity. 3 W o o l price legislation 1947. Farmers’ Cash Receipts United States farmers received about $30 billion in cash receipts from farm marketings in 1947, 25 percent more than the 1946 record of $24 billion. Record cash receipts are attributed largely to higher prices, since the volume of farm marketings exceeded 1946 by only about 3 percent, while prices for all farm products averaged 19 percent higher in 1947. The increase for the country as a whole was considerably larger than for the Twelfth Dis1 “ Prices paid” includes interest and taxes. 2 In order to hold prices up to 90 percent of parity, as required by law, sup port may be given when the price is slightly above 90 percent of the parity level. 22 February 1948 FEDERAL RESERVE B A N K OF S A N F R A N C ISCO trict. While cash receipts for the country as a whole in creased by more than 23 percent, District cash receipts ($3.9 billion) were only 9 percent above the 1946 figure. Cash R e c e ip t s f r o m F a r m M a r k e t in g s — T w e l f t h D is t r ic t , 1947 Percentage increase 1947 with----------\ 1935-39 1946 1945 Average t--------- compared 1947 (in thousands) Arizona ....................................... California .................................. I d a h o ............................................ Nevada ....................................... O r e g o n .......................................... U t a h .............................................. W ashington ............................. 182,574 2,144,538 359,880 40,944 376,350 151,949 611,455 7.7 3.3 26.4 26.5 10.4 17.2 19.4 31.4 20.0 45.4 47.5 30.5 25.6 29.9 242.3 273.4 306.3 230.4 271.1 258.0 323.2 ............... 3,867,690 9.1 25.5 280.3 United S t a t e s ...................... 30,174,744 23.1 45.2 278.4 Twelfth District $ Source: United States Department of Agriculture, F arm Income Situation, January 1948. The smaller increase in cash receipts in 1947 for the Dis trict than for the United States reflects the lower prices for a number of crops grown mostly within the District, principally fruits and nuts, although some increase in cash receipts was recorded for every state in the District. C a s h R e c e ip t s f r o m F a r m M a r k e t i n g s of C rops a n d L iv e s t o c k — T w e l f t h D is t r ic t , 1947 Percentage change 1947 compared with 1947 /-------- (in thousands)---------v Livestock Crops Arizona ........................... California ........................ Idaho ................................ N e v a d a ............................. .. Oregon ............................. Utah .................................. W a s h in g to n ................... . $ 1,411,503 213,659 5,216 195,102 411,329 75,443 733,035 146,221 35,728 181,248 106,846 200,126 Twelfth District . . . 2,389,043 1,478,647 United States .......... 13,125,236 17,049,508 t--------- 1946- --------N Crops Live stock — 3.9 — 3.7 + 3 0 .2 — 5.6 + 2.2 + 2 5 .9 4 -1 9 .1 -29.8 -20.3 -2 1 .2 -3 3 .2 -20.7 -1 3 .9 -19.9 3.0 + 2 0 .6 + 2 1 .0 + 2 4 .7 + Source : United States Department of Agriculture, F arm Income Situation, January 1948. amount of all loans made by insured Twelfth District banks, loans to agriculture have declined every year since 1939, the earliest date for which comparable figures are available. Total agricultural loans December 31, 1947 accounted for only 5.4 percent of the total dollar amount of all loans made as compared to 7 percent for 1946 and 10.6 percent for 1939-42. A similar pattern was shown for the United States. I n d e x N u m b e r s o f E s t i m a t e d V a l u e p e r A cr e o f F a r m R e a l E state a s of Agricultural loans Total agricultural loans of District insured banks out standing December 31, 1947 amounted to $311 million as compared to $274 million at the end of 1946. Bank credit extended for other activities has increased con siderably more, however. As a proportion of the dollar D is t r ic t (193 5-3 9 = 1 0 0 ) Percentage change 1947 with---- » 1946 1945 , ---- compared 1947 A r iz o n a ................................................................. .... 194 California ............................................................ .... 199 I d a h o .......................................................................... 199 Nevada ................................................................. .... 166 Oregon ................................................................. .... 197 Utah .......................................................................... 167 W ashington ....................................................... .....220 + 8 .4 — 1.5 + 4 .7 + 5 .7 + 2 .6 + 7 .7 + 4 .3 + 2 0 .5 4-13.1 + 1 5 .0 + 1 7 .7 + 1 6 .6 + 1 8 .4 + 2 5 .7 Twelfth District ......................................... .... 198 + 1 .5 + 1 5 .8 United States + 7 .7 + 2 3 .1 .............................................. .... 197 Source : United States Department of Agriculture, Current Developments in the Farm Real Estate Market, December 15, 1947. Outstanding farm mortgage debt experienced in 1946 the first increase since 1927. Farm mortgage loans of District member banks and the Federal Land Bank com bined were slightly higher at the end of 1947 than a year earlier. Although information on holdings of other types of lenders is not yet available, it is believed that total farm mortgage debt in the District also increased somewhat in 1947. However, total mortgage debt for 1947 will still be from 50 to 55 percent smaller in the District and the United States than the record peak set in 1923. A g r ic u l t u r a l L o a n s a s a P e r c e n t a g e o f D o l l a r V o l u m e of T o t a l L o a n s of I n s u r e d B a n k s — T w e l f t h f—19471—^ June Dec. 30 31 ,— 1946— x June Dec. 30 31 . .................... . . . . Utah ............................... , W a s h in g t o n ................. . 13.5 5.3 28.1 15.2 9.6 15.7 7.4 17.0 4.1 24.0 12.3 8.1 15.1 6.1 18.8 7.2 35.6 17.0 9.9 23.5 8.9 D istrict.. . 6.7 United States . . . . . 7.0 5.4 2 Farm Real Estate The estimated value per acre of District farm real estate in November 1947 was 1.5 percent higher than a year earlier, as compared to an advance of nearly 8 per cent in the country as a whole. In general the increases reflect the higher prices received by farmers for most of their products. The smaller average increment in the District may be ascribed to the fact that prices of fruits and nuts, approximately half of which are grown in the District, had fallen considerably from their 1946 level. Farm real estate values for both the District and the United States were nearly twice the 1935-39 average. In the District they were about 27 percent higher than the previous record peak of 1920, but inasmuch as farm real estate values rose to a higher peak in 1920 in the country as a whole than in the District, the United States figure is still 4 percent below that of 1920. The increases in farm land value in the different states of the District were materially less during 1947 than in 1946. N o v e m b e r 1— T w e l f t h California Twelfth D is t r ic t f — 1939— > . June Dec. 30 31 1939-42 r'-average-'v June Dec. 30 31 17.4 5.5 29.1 14.9 8.0 16.9 8.1 32.0 10.7 37.7 16.1 14.9 20.4 11.4 30.5 10.2 39.9 14.7 14.3 19.7 12.4 28.4 9.2 35.9 13.7 12.6 18.6 10.3 28.9 8.6 40.1 14.0 16.1 1*.9 14.1 8.9 7.0 11.9 11.6 10.4 10.6 7.4 6.6 10.7 9.7 9.4 10.0 1 December 1947 based on estimated figures. 2 N ot available. Farm Employment Slightly more than one million workers were employed in the Mountain and Pacific states1 during 1947, some what more than in 1946, and about 5 percent more than the 1935-39 average. In 1947,1.3 million family and hired workers were employed at the peak on September 1, and .8 million at the low on January 1. Of the average num ber of foreign workers employed during 1947 in United States agriculture, 15,180 or 56 percent were employed in the Twelfth District. California alone employed 42 percent of all foreign agricultural workers in the country. The highest agricultural wage rates in the country have been paid by the Pacific states since the beginning of World War II, and they rose further in 1947. 1 Includes Montana, W yom ing, Colorado, and N ew M exico, which are out side the Twelfth District. February 1948 M O N T H L Y R E V IE W 23 BUSINESS INDEXES—TWELFTH DISTRICT 1935-39 Average = 1001 I n d u s tr ia l p r o d u c tio n (p h y s ic a l v o lu m e )* Y ear and m o n th P e tr o le u m * L um ber Ad ju ste d U nad ju ste d C rude R e fin e d U nad ju ste d U nad ju ste d 112 1930. 1931. 1932. 1933. 1934. 1935. 1936. 1937. 1938. 1939. 1940. 1941. 1942. 1943. 1944. 1945. 1946. 1947. 95 78 74 72 73 77 46 62 67 83 106 113 88 110 120 86 140 140 133 138 108 118 139 104 93 93 96 103 118 129 135 131 138 W h eat flo u r C em en t Adju ste d 168 140 134 127 123 140 154 163 159 160 158 172 175 194 226 243 219 239 U nad ju ste d U nad ju ste d E le c t r ic p o w e r Ad ju ste d 100 101 89 88 96 74 48 54 70 92 114 124 164 194 160 128 131 165 193 95 94 96 99 96 107 103 103 104 115 119 132 128 133 68 112 117 U nad ju ste d C a lifo r n ia Adju ste d 100 112 136 167 214 231 219 219 256 96 104 118 155 230 306 295 229 175r 184 102 112 122 128 133 122 100 132 133 227 221 182 182 176 170 127 145 237 243 232 240 183 183 1947 J an u ary__ February M arch _____ A p r il______ M a y ______ J u n e ______ Ju ly_______ A u g u s t ____ September . October____ November.. December _. 154r 172 142r 132 129r 131 125r 130 130r 139r 153r 178 106 120r 123r 134r 150r 150r 139r 157r 153r 151r 146r 133 134 136 137 137 138 139 139 139 139 140 141 140 219 227 231r 234r 243r 240r 236r 254r 254r 247r 246r 241 191 182 207 193 193 186 184 185 193 187 205 215 164 166 190 196 195 152 147 141 133 129 138 126 125 123 133 133 116 250 249 252 254 251 251 252 252 259 260 263 275 246 244 248 252 253 257 262 263 259 253 258 271 182 183 183 184 183 182 181 183 184r 187 188p 187p 202 195 201 207 203 199 200 M e r c h a n d is e and m is c e lla n e o u s Ad ju ste d U nad ju ste d O th er Ad ju ste d 105 89 74 70 81 85 97 102 90 96 99 116 121 119 130 131 132 132 96 75 57 58 66 72 85 90 79 85 90 105 113 109 115 110 111 117 U nad ju ste d 93 73 54 53 64 78 96 115 101 110 134 224 460 705 694 497 339 401 183 183 372 387 373 182 182 182 184 183 182 181r 183r 185 187 187p 187p 387 390 392 392 394 392 408 411 418 419 423 379 384 389 392 394 396 392 410 412 423 420 423 D is tr ic t U nad ju ste d Ad ju s te d 84 57 37 43 48 56 70 75 65 72 79 91 103 97 97 83 86 98 U nad ju ste d D e p t, sto r e s to c k s (v a lu e )5 C a li fo r n ia P a c if ic N o r th w est U ta h & So. Id ah o Ad ju ste d Ad ju ste d ju ste d i 1 9 3 0 ._____ _______ 1931______________ 1 9 3 2 ......................... 1933______________ 1934______________ 1935______________ 1936______________ 1937______________ 1938______________ 1939______________ 1940______________ 1941______________ 1942______________ 1943______________ 1944. .............. ......... 1945................. ......... 1946______________ 1947_____ ________ U nad ju ste d D e p a r tm e n t s to r e s a le s (v a lu e )* » 7 < Ad ju ste d Ad ju ste d PP« C a r lo a d in g s (n u m b e r )* T o ta l U nad ju ste d 84 82 73 73 79 85 9© 105 1946 November . December _. Y ear and m o n th F a cto ry p a y r o lls 4 T o ta l m a n u f a c t u r in g e m p lo y m e n t4 104 92 69 66 74 86 99 106 101 109 119 139 171 203 223 247 305 330 99 91 70 67 73 86 98 105 101 110 120 138 164 196 221 225 307 329 123 101 72 68 77 86 100 105 100 109 118 147 189 219 232 252 312 336 89 83 61 64 77 89 100 106 99 106 115 135 177 232 250 280 348 351 R e ta il fo o d p r ic e s ' D is tr ic t Ad ju ste d U nad ju ste d U nad ju ste d 125 110 89 80 85 89 97 108 101 106 113 137 187 172 177 182 238 293 12 4 .8 104.0 8 9 .8 8 6 .8 9 3 .2 9 9 .6 1 0 0 .3 1 0 4 .5 9 9 .0 9 6 .9 9 7 .6 107.9 130.9 1 43.4 142.1 14 6 .3 1 67.4 2 0 0 .3 1946 N o v e m b e r_________ December___________ 111 121 112 107 134 145 134 129 83 91 84 79 311 321 376 506 310 318 313 324 347 366 296 334 313 273 19 9 .9 1 9 8 .4 1947 January ____________ February ___________ M arch ______________ A p r il________________ M a y ________________ J u n e ________________ Ju ly_________________ A u g u s t_____________ S eptem ber_________ October_____________ November__________ December__________ 136 134 117 120 112 115 122 108r 108 109 113r 120 108 111 109 117 112 124 124 125 124 128 114 106 146 150 129 130 131 134 133 129 121 122 129 134 122 125 120 122 123 142 142 145 142 147 129 119 124 113 103 108 88 91 107 82 91 92 94 103 89 93 96 111 98 101 102 100 101 103 95 90 313 311 319 320 325 330 327 348 336 333 339 352 253 281 300 302 302 299 278 308 336 343 410 554 310 308 316 320 325 332 328 355 338 331 339 357 320 320 325 321 332 333 332 345 340 348 344 353 356 343 366 355 340 343 350 361 341 343 360 358 315 330 331 308 287 280 267 248 253 288 315 325 277 290 308 304 298 285 283 272 285 319 333 266 1 9 5 .7 1 9 3 .5 1 9 6 .6 1 9 7 .8 1 9 7 .3 19 4 .8 1 9 6 .5 19 7 .9 2 0 6 .6 2 0 4 .8 2 0 9 .4 2 1 3 .0 1 The terms “ adjusted” and “ unadjusted” refer to adjustment of monthly figures for seasonal variation. Excepting department store statistics, all indexes are based upon data from outside sources, as follows: Lumber, various lumber trade associations; Petroleum and Cement, U.S. Bureau of Mines; W heat flour, U .S. Bureau of the Census; Electric power, Federal Power Commission; Manufacturing employment, Factory payrolls, and Retail food prices, U.S. Bureau of Labor Statistics and cooperating state agencies; and Carloadings, various railroads and railroad associations. * Daily average. 1 1923-25 daily average = 100. 4 Excludes fish, fruit and vegetable canning. Factory payrolls index covers wage earners only. 6 A t retail, end of month or end of year. 6 Los Angeles, San Francisco, and Seattle indexes combined. p— preliminary. r— revised. 7 Revised series. Data for earlier periods, by months, sub-areas and cities, available on request. Explanation of revision will appear in the March 1948 Monthly Review. 24 February 1948 FEDERAL RESERVE B A N K OF S A N FR A N C ISCO BANKING AND CREDIT STATISTICS—TWELFTH DISTRICT (amounts in millions of dollars) C o n d it io n it e m s o f a ll m e m b e r b a n k s 1 Year and m onth L o a n s a n d d is c o u n ts C o m l., in d . & agrie. T o ta l 1929 1930 1931 1932 1933 1934 1935 1936 1937 1938 1939 1940 1941 1942 1943 1944 1945 1946 1947 2,239 2,218 1,898 1,570 1,486 1,469 1,537 1,682 1,871 1,869 1,967 2,130 2,451 2,170 2,106 2,254 2,663 4,068 5,363 1947 January February March April M ay June July August September October November December 4,140 4,254 4,364 4,479 4,558 4,658 4,755 4,879 4,997 5,158 5,240 5,363 1948 January 5,413 F o r p u r c h ., c a r r y ’g s e c s . In v e stm e n t s s R eal esta te A ll o t h e r U . S . G o v ’t s e c u r it ie s 647 721 711 635 668 670 662 686 730 798 864 931 82 76 65 59 51 62 184 343 195 663 664 735 933 870 934 956 1,103 1,882 2,338 327 362 399 460 275 1,000 974 899 885 908 1,431 2,153 121 211 228 309 560 750 2,047 134 1,828 649 2,338 121 2,153 750 A ll o t h e r s e c u r it ie s 495 467 547 601 720 1,064 1,275 1,334 1,270 1,323 1,450 1,482 1,738 3,630 6,235 8,263 10,450 8,426 7,243 458 561 560 528 510 575 587 614 498 486 524 590 541 538 557 698 795 908 872 8,303 8,058 7,909 7,677 7,662 7,370 7,375 7,353 7,364 7.361 7.361 7,243 911 893 894 876 862 871 874 871 7,264 D em and d e p o s it s a d j u s t e d * •4 1,234 1,158 984 840 951 1,201 T im e d e p o s it s ( e x c e p t U .S . G o v ’t ) 4 1,776 1,915 1,667 1,515 1,453 1,759 2,006 2,078 2,164 U . S . G o v ’t d e p o s it s 4 36 49 99 148 233 228 167 96 90 127 118 1.389 1,791 1,740 1,781 1,983 2.390 2,893 4,356 5,998 6,950 8,203 8,821 8,928 2,263 2,351 2,417 2,603 3,197 4,127 5,194 5,781 5,988 144 307 842 1,442 2,050 303 148 884 872 8,704 8,367 8,327 8,334 8,260 8,297 8,366 8,462 8,600 8,722 8,797 8,928r 5,761 5,804 5,820 5,837 5,851 5.908 5,888 5,887 5.909 5,949 5,907 5,988 308 370 396 286 235 103 148 208 216 192 205 148 848 8,854 6,006 159 2,212 68 M e m b e r b a n k re se r v e s a n d r e la te d it e m s 6 Y ear and m o n th R eserv e b a n k c r e d it6 C o m m e r c ia l o p e r a t io n s 6 T reasu ry o p e r a t io n s 0 C o in a n d c u r r e n c y in c ir c u la t io n F .R . n o t e s o f F .R .B . o f S .F . T o ta l 6 16 48 30 18 4 14 38 3 20 + 31 + 96 + + 227 643 + + 708 + 789 + 545 — 326 — 206 189 186 231 227 213 211 280 335 343 361 388 493 700 1,279 1,937 2,699 3,219 2,871 2,639 175 183 147 142 185 242 287 479 549 565 584 754 930 1,232 1,462 1,706 2,033 2,094 2,202 171 180 154 135 142 172 201 351 470 418 459 515 720 1,025 1,343 1,598 1,878 2,051 2,085 4 5 4 8 37 84 100 119 70 142 138 257 245 262 103 104 136 59 70 146 126 97 68 63 72 87 102 111 98 102 110 134 165 211 237 260 298 326 81 32 30 18 10 13 23 23 10 16 3 18 2,800 2,765 2,735 2,716 2,714 2,695 2,669 2,685 2,675 2,656 2,653 2,639 2,081 1,981 2,003 1,997 1,993 1,992 1,963 2,078 2,095 2,137 2,130 2,202 2,043 1,982 1,940 1,934 1,934 1,944 1,956 1,985 2,028 2,046 2,059 2,085 60 51 61 63 59 51 60 62 80 77 65 70 321 325 332 309 297 322 305 322 325 346 344 365 113 2,541 2,113 2,086 83 352 T o ta l* 1929 1930 1931 1932 1933 1934 1935 1936 1937 1938 1939 1940 1941 1942 1943 1944 1945 1946 1947 1947 January February March April M ay June July August September October November December 1948 January 0 53 154 175 110 198 163 227 90 240 192 148 596 - 1 ,9 8 0 - 3 ,7 5 1 - 3 ,5 3 4 - 3 ,7 4 3 - 1 ,6 0 7 443 23 + 89 + 154 + + 234 + 150 + 257 + 219 + 454 + 157 + 276 + 245 + 420 + 1 ,000 + 2 ,826 + 4 ,486 + 4 ,483 + 4 ,682 + 1 ,329 + 630 _ + + + — + + + + + - 35 25 3 69 14 41 213 78 85 39 0 5 168 133 50 47 + 49 + — 7 + 381 + 124 + 172 35 + 33 + 49 + — — — — - 109 14 62 2 34 21 234 48 87 23 4 25 + 14 + 48 253 _ — + 34 16 21 42 — 2 — 7 2 + 6 + 1 _ 3 2 + 2 + 4 + + 107 + 214 98 + 76 9 + 302 + + — + — — — + — — B a n k d e b it s in d e x 31 c itie s * R eserves7 + — — — — — + — R e q u ir e d E xcess U n a d ju sted 1 Annual figures are as of end of year; monthly figures are as of last Wednesday in month or, where applicable, as of call report date. * M onthly data for 1947 partly estimated. * Demand deposits, excluding interbank and U .S. G ov’t deposits, less cash items in process of collection. 4 M onthly data partly estimated. 6 End of year and end of month figures. « Changes only. 7 Total reserves are as of end of year or month. Required and excess: monthly figures are daily averages, annual figures are December daily averages. 8 Debits to total deposit accounts, excluding interbank deposits. 1935-39 daily average = 1 0 0 . p— preliminary. r— revised.
@FedFRASER