Full text of Economic Review (Federal Reserve Bank of San Francisco) : February 1950

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MONTHLY REVIEW
TW E L F T H F E D E R A L

R E SERVE

DISTRICT

Fe d e r a l R e s e r v e B a n k

Febru ary 1950

S a n Fr a n c i s c o

INDUSTRY AN D TRADE IN 1949
h e decline in economic activity of late 1948 and early
1949 resulted in reduced output in most Twelfth Dis
trict industries. Starting in early spring there were in
dications of improvement in the business situation but
despite some small gains over winter months, the volume
of output remained below 1948. Only in the second half
of the year was there a marked recovery. In most cases
the recovery was still not sufficient to repeat the high
levels of the third quarter of 1948. Nevertheless, the
fourth quarter of 1949 showed considerable improvement
over the same period a year earlier. The improvement in
Twelfth District output is apparent from the statistics,
but what is probably of equal importance was the ab
sence in the latter part of the year of the uncertainty and
to some degree the pessimism of a year earlier. Though
seasonal declines did occur in the period from October
through December, they were at a much slower rate than
was true in the last part of 1948. In some instances—
lumber is a good example— the seasonal decline repre
sented a measure of the inability of the industry to coun
ter adverse weather conditions rather than a measure of
the decline in demand.
For the year as a whole output remained below 1948,
however, because of the weak start early in the year and
the failure of the expansion in the third quarter to push
activity to the peak in 1948. Aircraft, automobile, can
and fiber container, and aluminum production all sur-

I n d e x e s 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=
C o p p e r ...........................
L ea d ................................
Z in c ..................................
S i l v e r ................................
G o l d ..................................
I r o n o re ........................
Steel in g o ts .................
A lu m in u m 2 ...................
P e t r o l e u m ......................
R e fin e d oils .................
N a tu ra l gas .................
C em ent ...........................
L u m b e r ...........................
W o o d pulp ....................
P a p e r ................................
D o u g la s fir p l y w o o d .
C anned f r u i t s ...............
C anned vegeta b les . .
M ea t ................................
S u g a r .............................
F lo u r ................................
B u tte r .............................
C h e e s e .............................
I c e cream ......................

1941 1942
154
133
116
168
159

121
102 88

103
145
134
43
103
107
109
144
129
143
127
174
117
165

121
87
96

101
115
122

75
148
156

100
111

113
115
170
128
141
127
188
116
176
132
94
97

123
163

1943
157
107
171

35
599
205
197
127
132
127
140
124

110

118
151
91
198
126
84
107
78
119
161

D is t r ic t

100)
1944
140
96
191
56
29
839
301
216
139
147
134

112

124
118
123
152

121

215
149
84

111

70
131
176

1945

112

84
185
46
25
765
295
130
146
156
155
115
99
116

122

124
106
213
163
84
123
51
140
194

1946
89
73
170
39
30
569
247
94
140
144
140
144
118
124
135
146
167
278
161
92
119
39
140
281

1947
133

101

207
60
43
1158
391
165
148
155
155
169
128
144
134
168
136
251
163

122

124
59
159
250

1948
127
113

19491
115

63
43
1173
442
187
151
159
164
185
130
154
135
197
134
228
150
91
109
49
138
209

57
42
1059
401
197
148
163
159
177
125
150
130
196
134
237
159
91
97
59
132

210

111
212

202

1 Preliminary.
2 1942 = 1 0 0 .

N o te : Data given above supersede previously published annual indexes.

passed 1948. Zinc mining was up slightly in this District
because mines producing other metals recovered a higher
percentage of zinc as a by-product in 1949. Lumber and
plywood production almost reached the 1948 level. In
dustries which fell behind 1948 include iron and steel,
machinery, electrical equipment, copper, lead, gold, sil
ver, crude oil, paper, apparel, and motion pictures. The
volume of construction in this District was also below
1948.
The reduced level of industrial production, a reduc
tion in the number of workers in retail trade, and the
drop in construction were principally responsible for a
lower level of nonagricultural employment in the Twelfth
District. Nonagricultural employment in 1949 averaged
2 percent less than in 1948. Unemployment was up
sharply because of the lower level of activity in many in
dustries. Insured unemployment averaged 48 percent
more than in the preceding year. In part, this was due
to the increase in the labor force. Adequate labor-force
data for the District are not available. Estimates available
for the three Pacific Coast states indicate a probable 1
percent increase in the labor force. This development
alone would have required about 80,000 new jobs in
those states. The growing labor force added to the prob
lems of a year in which many lines of business experi
enced lower levels of activity.
Of interest in connection with labor-force growth is
the increase in population during the past year. District
population was greater by 600,000 persons than a year
earlier. This gain of 3 percent over 1948 continued to re
flect a fair amount of inmigration. Obviously, only a
small part of the increase in population found its way
into the labor force because much of the increase repre
sents the excess of births over deaths or inmigrants of
non-working age. This growth in population does indi
cate, however, that the base for the labor force is still
growing substantially.

Annual Review, 1949

Industry and Trade
Banking and Credit
Agriculture

February 1950

FEDERAL RESERVE B A N K OF SA N FRAN CISCO

Retail trade lagged behind 1948 in dollar volume. Not
all lines of trade were similarly affected, however. Dis
trict department stores experienced a 6 percent decline
in sales, and other general merchandise outlets appear to
have had similar experiences. Automobile dealers, how
ever, reported greater sales. Sales of food and gasoline
also compared quite favorably with 1948. The decline in
dollar sales of general merchandise should be considered
along with the fact that prices for most items in this cate
gory declined. On the average it appears that the physi
cal volume of general merchandise sales was not far be
low 1948. Automobile sales increased in units as well as
dollars, and the physical volume of food sold was at least
as high as in 1948.
Employment down from high 1948 level

District nonagricultural employment was below 1948
in every month of 1949. The impact of declining business
activity caused a drop in employment late in 1948 which
continued into early 1949. In January and February
1949, unusually severe weather conditions along with
the decline in business and normal seasonal forces caused
a sharp cut in nonagricultural employment. After a fair
recovery in March and April, there was a slight down
ward trend through August which in part was due to
seasonal influences. Because of the usual increases in
canning along with some nonseasonal improvement, em
ployment increased substantially in September to a peak
for the year, but the dispute in steel combined with nor
mal declines in canning employment pulled the October
and November levels down. In December, however,
nonagricultural employment moved up as steel and re
lated industries approached their pre-strike output and
seasonal gains in trade and government more than offset
losses in other segments of the economy. Compared with
a year earlier, the December level of nonagricultural em
ployment was off less than \ y 2 percent; in July and
August the gap was almost 3 percent.
The lower level of nonagricultural employment during
1949 resulted principally from substantially fewer jobs
in trade, manufacturing, and construction. Trade em
ployment remained well below its year-ago level in every
month of 1949. Manufacturing employment after Janu
ary also lagged behind 1948 with weakness more proN O N A G R IG U L T U R A L
TW ELFTH

E M PL O Y M E N T -

D I S T R I C T , 1 9 4 8 -4 9

IN S U R E D
Thousands of
unemployed
¿00
1 1

U N E M P L O Y M E N T —T W E L FT H

1
A

1
M

1948
1 I

I
S

I
O

I
N

1
F

1
M

D I S T R I C T , 1 9 4 8 -4 9

i .... i......f

1949
L .1
I

1
A

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nounced in durable than in nondurable goods. Lumber,
machinery, electrical equipment, shipbuilding, and steel
employment were well below 1948. Construction em
ployment was below its year-ago level because of the re
duced rate of construction expenditures in the District,
but considerable strength was apparent during the last
quarter when the decline in jobs was less than might be
expected from normal seasonal pressures.
Because of the reduction in employment and some
growth in the labor force, the number of jobless was sub
stantially higher in 1949 than in 1948. By the end of the
year, however, the gap between the two periods had nar
rowed considerably. In July, for example, insured un
employment was 65 percent greater than a year earlier,
but in December the difference was about 32 percent.
The increase in unemployment after September could be
attributed mainly to normal seasonal behavior and to
idleness resulting from labor-management disputes.
District construction was off in 1949

For the first time since before the war, the dollar vol
ume of District construction declined from the previous
year. During the first nine months of 1949, construction
put in place was down 9 percent from a year earlier.
Private residential construction led the decline with a 24
percent drop from 1948. Private nonresidential construc
tion was down 10 percent, but public construction in
creased by 26 percent. The decline in District construc
tion first became evident in the latter part of 1948, when
construction put in place and building authorized in ur
ban areas dropped sharply from the rapid pace evident
during most of that year.
As 1949 progressed the picture tended to improve, but
the third quarter dollar volume of construction was
further behind 1948 than either of the two preceding
quarters. This was due in part to the unusually high level
of construction in July, August, and September 1948.
Preliminary fourth quarter data, however, indicate that
the last three months of the year were well ahead of 1948
volume.
The level of District construction for the year as a
whole not only was behind 1948, but declined relative

District urban nonresidential authorizations also were
lower than in 1948. After being relatively strong during
the first six months of the year, nonresidential permits
dropped sharply in July and continued at a level well
below the first half of the year. Starting with October
the dollar volume rose slightly. In considering urban per
mits for nonresidential construction, it might be well to
remember that many of these projects are outside urban
areas. Nevertheless, the changes for various subgroups
reveal the nature of nonresidential construction during
1949. Leading the decline in nonresidential construction

The effects of declining residential construction, a
drop in industrial demand, and extreme weather cut
District lumber production in January and February
1949 far below the corresponding months a year earlier.
New orders were also considerably lower than in the cor
responding months of 1948. This drop in demand was a
continuation of the weakness in lumber markets which
became evident during the third quarter of 1948. The
exceptionally low level of production was not destined to
continue, however, even on the basis of the lower level
of orders. As soon as weather permitted, production in
creased and was in a closer relationship to orders than
the January-February level.
New orders also gained starting with March, but re
mained below 1948 levels until September. In some in
dustry circles it was felt that the increase in new orders
achieved during the spring months was unrealistic. This
attitude reflected the pessimism that had been induced
by the comparatively low level of housing construction in
late 1948 and early 1949 and the general decline in busi
ness conditions. Actually it appears in retrospect that the
level of orders was probably too low in view of the rapid
expansion in housing construction that was taking place
in the spring and which continued through most of the
year. Production, though behind 1948, outdistanced or
ders during the second quarter, but the additions to the
moderate stocks on hand were small and the ratio of in
ventories to new orders did not exceed 2 to 1 at any time
during the year.
L U M B E R P R O D U C T IO N —T W E L F T H
Millions of
board feet
..”r — i— i
r - ' T — i— r— i— «— i— T " i — i...' i

D I S T R I C T . 1 9 4 8 -4 9

1“

/
«•

•

\
%

/
o**

r -| ..i ... ï -i ”n — i—

•

:
•
•
•
•
•
«

•
ft

•
*

••
•

*%
•

In this District, the behavior of residential construc
tion was somewhat similar to that in the country as a
whole, but the level relative to the previous 12 months
was lower. Housing-start data are not available, but the
number of dwelling units authorized in urban areas is a
fair approximation. The number of such units was about
17 percent less for the year than in 1948 and as a per
centage of the comparable national total dropped from
22 to 17 percent. Nevertheless, the situation improved in
the latter part of the year. Starting with October the au
thorizations exceeded the corresponding months of 1948.
This reversed the behavior earlier in the year and gave
some indication that the level of residential building in
the District would not decline further, except for sea
sonal conditions, during the early part of 1950.

Lumber industry gains after weak start

Over a millon new dwelling units were started in the
nation in 1949, the largest number on record. The num
ber of units started exceeded 1925, the previous record
year, by 9 percent. This record was established in the
face of a weak start early in the year. The rate of housing
starts improved in the spring and by mid-year was ap
proaching 1948 levels. The increase in the number of
starts continued through October, and the total for the
first 10 months of 1949 exceeded the same period of
1948. Even winter weather failed to have any sharp ef
fect. Though the number of starts declined slightly from
earlier months during November and December, it re
mained well ahead of the same months a year earlier.

was a drop in building of factories and industrial plants.
Important reductions also occurred in stores and com
mercial buildings, amusement places, garages, and pub
lic utilities. It is interesting that construction-put-inplace estimates, which include non-urban as well as ur
ban construction, show no decline for public utilities,
leading to the conclusion that a higher proportion of pub
lic utility construction occurred outside urban areas. In
contrast to the categories already mentioned, quite sub
stantial increases were reported for public buildings and
schools. The role of public construction gained in impor
tance through most of the year, and the dollar volume
near the end of the year rose sharply.

••••

to the national total. In contrast to the behavior of con
struction in the District, total construction volume in the
United States increased slightly over 1948 during the
first three quarters, and like the District showed addi
tional strength relative to a year earlier in the fourth
quarter. The dollar volume of residential construction in
the United States during the first nine months of the year
was down 9 percent, but the cumulative year-period gap
was reduced to less than 5 percent by the end of the year.
The lower dollar volume expressed some decline in build
ing costs, but principally the difference was due to the
construction of less expensive houses. The dollar volume
of private nonresidential construction in the nation also
declined. For the first nine months of the year, it was 9
percent below the same period of 1948, and for the year
as a whole it was 11 percent below. The slight increase
in total United States construction activity resulted from
a sharp rise— 25 percent— in public construction over
1948.

M O N T H L Y REVIEW

......................................................................................................................

February 1950

••

• /

1948
1949
. « J — J___ I ___!___ 1__ J___!___1___1___1___ L. -J___!___L, L .1___I___1___1___1__ J---J F M A M
J
J A S O N
D J
F M A M J J A S O N D

FEDERAL RESERVE B A N K OF SA N FRANCISCO

By late summer the pressure of a record rate of hous
ing construction had forced lumber demand up signifi
cantly. The restrictive buying policies of lumber dealers
combined with good demand at retail had cut retail
stocks, and new orders forced larger purchases from
mills. In September new orders exceeded the volume of
the same month of 1948 and production caught up with
its year-ago level. Reversing the experience of late 1948,
new lumber orders through the end of the year remained
reasonably close to the peak level reached in September
and production declined slightly because of seasonal in
fluences. Because the drop in production was somewhat
earlier and greater than the reduction in orders, mill in
ventories were reduced about 10 percent during the latter
part of the year. By the end of the year they had dropped
below the corresponding period in 1948, when involun
tary inventory accumulation had occurred at District
mills.
Though lumber demand improved substantially during
the latter part of the year, the gain in production for the
District as a whole was not sufficient to erase the deficit
during the first half. District production was about 5 per
cent below 1948. This drop from 1948 was due mainly to
the failure of production in the Western Pine region to
recover as markedly as that in the Douglas Fir region.
The latter area reported production slightly in excess of
1948. Redwood production also was slightly below 1948,
but production in that area was fairly even in volume
during 1949 and did not vary much from the correspond
ing quantity in any month in 1948.
Lumber prices followed roughly the same pattern as
orders. Douglas fir prices, according to the Bureau of
Labor Statistics price series, reached a peak in the sum
mer of 1948 and then declined. The 1949 spring recovery
in demand was not sufficient to prevent their further de
cline. A low point was reached during the summer about
25 percent below the 1948 peak. The pressure of demand
turned prices upward during the last three months of the
year but the gain was slight. According to the West Coast
Lumberman’s Association, average realizations in SepT W E L F T H D IS T R I C T L U M B E R P R O D U C T I O N
B Y R E G I O N S , 1949
M illio n s o f

February 1950

tember 1949 were $58 per thousand board feet compared
with $80 a year earlier. By December, prices had in
creased to roughly $60 per thousand. The price for sugar
pine and ponderosa pine remained considerably steadier
than that for Douglas fir, but the timing of changes was
roughly about the same. Prices for better grades of red
wood changed little during the year, but the lower grades
declined moderately and showed little recovery by the
end of 1949.
Plywood production had strong recovery in second half

Through July, production of Douglas fir plywood was
9 percent below the first seven months of 1948. In Aug
ust, however, production moved up to a level almost
equal to the level of the same month in 1948, and for the
year as a whole the output was almost equal to 1948.
Plywood markets were weak in the first half of the year.
Even though consumption of plywood had not dropped
off significantly, the pessimism concerning the future of
construction and the possibility of lower prices induced
substantial inventory liquidation. The reversal after mid
year, like that for lumber, reflected the strong demand
for plywood in construction. Though output responded
rapidly to the change in demand, mill supplies of ply
wood continued the decline which started in February.
Shipments continued to be greater than output through
the end of the year.
Production facilities for softwood plywood in this Dis
trict continued to increase in 1949. Four plants were
added in Oregon. In Idaho one plant was opened which
produces ponderosa pine and white pine veneer.
District paper industry had fair record

The District paper industry was confronted by sharply
reduced demand in early 1949 for all products except
newsprint. Inventory accumulation had terminated in
late 1948, and most wholesalers and paper users sought
to reduce their inventories during early 1949. Since the
demand for paper products in many instances is derived
from the demand for other products using paper as con
tainers or components, the general business decline re
inforced the desire to liquidate paper inventories.
The District producers were not so severely affected,
however, as the national industry as a whole. In the Dis
trict the product most severely affected by the drop in
business in the first half of 1949 was shipping sacks.
This item, however, accounts for a small proportion of
District output. Production of other items, excepting
newsprint, declined more moderately. Newsprint con
tinued to gain as supply approached a more reasonable
balance with demand.
Demand and output recovered markedly in July and
gained in each month except September. By October the
output of many products had reached record levels and
output during the remainder of the year was above cor
responding totals in 1948.
The price for wood pulp declined about 25 percent be
tween March and June and remained steady until Oc

February 1950

M O N T H L Y REVIEW

tober. November prices increased about 5 percent and
the increase carried into December. The price of kraft
paper declined moderately starting in April but was stable
from June to the end of the year. Prices for other Dis
trict papers were also weak during the second and third
quarters but improved toward the end of the year.
Petroleum

Like most other industries in 1949, the American pe
troleum industry experienced a downturn from the ex
tremely high levels of demand and output that marked
the preceding year. In contrast with 1947 and much of
1948, when the industry was hard pressed to keep up
with the demand for its products, the year 1949 was
marked by a surplus of supply. Under the pressure of
redundant stocks, a legacy from the closing months of
1948, prices weakened, profits declined, and overall pro
duction was reduced.
The recession in the industry’s activity was sharper in
crude oil production than in refinery operations and was
due in part to shrinking exports which have declined con
tinuously since 1947. Total domestic consumption of pe
troleum products, however, taken as an aggregate, scored
a small increase in 1949, and reached a record figure of
slightly over 2.1 billion barrels, equivalent to nearly 5.8
million barrels a day. The gain over 1948 was accounted
for almost wholly by a 5 percent increase in consump
tion of motor fuels. The demand for fuel oil and for heat
ing oils fell slightly below the 1948 volumes. Unseason
ably warm weather over much of the country reduced
the consumption of heating oils. The railroads used con
siderably less heavy fuel oil than in 1948 but stepped up
their use of Diesel engine fuel as steam locomotives were
increasingly replaced by Diesel units. Although the in
dustrial demand for all fuels was adversely affected in
1949 by the business recession and by the steel and coal
strikes, this was apparently more than offset in the case
of oil by the progressive conversion of industrial plants
and public utilities from coal to oil fuel.
In consequence of huge additional capital investment
in recent years, the American petroleum industry has
been geared up to a productive capacity which was con
siderably in excess of the total demand for its products
in 1949. Aggregate capital outlays by the industry in the
three years 1947-49 are estimated at well over $6 billion.
Much of this investment was for exploring, developing,
and equipping additional crude oil properties. Nearly
63,000 new producing oil wells were completed during
that period. The supply situation was further aggravated
in 1949 by rapidly growing imports of crude and heavy
fuel oil. Net imports increased from about 144,000 bar
rels per day in 1948 to over 300,000 barrels per day in
1949. This latter quantity was roughly equal to about
one-third of the daily average output of crude oil in Cali
fornia in that year and represented slightly over 5 per
cent of the total United States domestic consumption of
petroleum products.
The impact of increased supplies of domestic and for
eign oil on the petroleum price structure was already ap

parent late in 1948, when stocks of fuel oil became ex
cessive and prices eased for the first time in two years.
By mid-summer of 1949, price weakness had extended
to practically all major products except gasoline and also
affected the heavier grades of crude oil which yield little
motor fuel. Any serious threat to the general level of
crude prices was forestalled by prompt steps to curtail
output. Not less than seven successive cuts in allowable
oilfield operations were ordered by the Texas Railroad
Commission between January and August. With similar
action in other states, crude oil production was substan
tially curbed— with resulting moderate improvement in
product prices. Following a three-month relaxation of
controls, however, another sharp reduction in Texas
operations was ordered for December, as the industry
ended the year with generally heavy inventories and an
uncertain price outlook.
Although protected by its remoteness from the direct
impact of oil imports, the Pacific Coast petroleum indus
try experienced much the same general trend in 1949 as
did the industry nationally. Expanding consumption of
motor fuel was more than counterbalanced by sluggish
demand for fuel oils and by reduced export and military
requirements. Curtailment of crude oil output began
much later, however, in California and was much less
drastic than in other producing areas, in spite of per
sistent weakness in fuel oil prices and considerable down
ward adjustment in prices of low gravity crudes.
Successive cuts in fuel oil brought its price down from
a postwar high of $2.20 per barrel, San Pedro basis, in
January to $1.25 per barrel in September. Posted prices
paid for crude oils were also adjusted by marking down
those grades which yield relatively little gasoline and
light distillates and marking up the grades whose yield
is higher. The net effect of these revisions was to reduce
the average over-all price realized by oilfield operators by
probably a substantial amount.
California crude oil production in 1949 reached its
peak in March at 949,000 barrels per day, compared with
the all-time high of 953,000 in November of 1948, fol
lowing the refinery strike. Gradual cutbacks brought the
rate down to 872,000 barrels per day by November. The
number of active producing wells was reduced by nearly
2,100 in the seven months between March, when it
reached an all-time high of 26,500, and November, after
allowing for the net addition of some 900 newly drilled
wells less abandonment of old wells. In other words,
nearly 3,000 producing wells, or more than 10 percent
of the entire number in the state, were completely shut in.
In spite of curtailed production, however, the excess
of supply over demand, particularly of fuel oils, continued
to increase. Fuel oil consumption was affected by the
smaller volume of railroad traffic in 1949 and the increas
ing dieselization of railway motive power, as well as by
reduced marine bunkering resulting from strike-de
pressed Pacific Coast shipping. Increased availability of
natural gas at lower prices to industrial users also cut
into the consumption of fuel oil.

FEDERAL RESERVE B A N K OF S A N FRANCISCO

Inventories, already rising in 1948, continued to in
crease through the first three quarters of 1949 and were
only slightly eased in the final quarter by large shipments
of heavy fuel and distillate oils to the Atlantic Coast, the
first such shipments of any considerable size since pre
war days. Total petroleum stocks in producers’ hands at
the year’s end were approximately 128 million barrels,
as compared with about 109 million a year earlier, and
reached the highest year-end figure since 1942. Crude
petroleum and heavy fuel oil made up about two-thirds
of the total inventory. The pressure on the market of
relatively large stocks of gasoline probably contributed
to sporadic outbreaks of price cutting at the retail level
and stimulated the growth of self-service stations.
Despite declining current demand, the search for new
oil supplies continued in 1949 with only slightly less vigor
than in 1948, both in the nation at large and in the west
ern states. Total oil and gas-well completions in the
United States numbered about 39,000 in 1949, as com
pared with 39,800 in 1948 and 33,100 in 1947. The num
ber of wildcat or exploratory wells drilled in 1949 actu
ally exceeded the 1948 figure— 7,250 as against 6,728
and was the highest ever recorded.
Approximately 2,400 new wells were started in Cali
fornia in 1949; 1,777 oil wells were completed, as com
pared with 2,150 in 1948. Because of shut-ins, however,
the number of active producing oil wells in the state at
the end of December, 24,345, was about 2,100 less than
at the beginning of the year. Estimated proved reserves
in California increased by about 350 million barrels in
1949, after allowing for the year’s production of some
330 million barrels. New discoveries were credited with
nearly one-third of the gross addition to reserves. The
new Cuyama Valley field, first actively drilled in 1948,
was rapidly developed in 1949, and promises to add sub
stantially to the petroleum resources of the state.
District steel production down

The steel industry in the District, as well as in the
country as a whole, experienced a period of readjustment
during 1949. After a high rate of output in the first quar
ter, District steel mills dropped below capacity rates.
The general abatement of the strong demand of 1948 and
the disappearance in early 1949 of demand for steel in
gots for conversion outside the District reduced opera
tions all around. Most strongly affected were small mills
without much finishing capacity. Several of these pro
ducers, particularly in the Pacific Northwest, were al
most at a standstill during the second and third quarters
and their operations in the latter part of the year were
intermittent.
The fall in steel demand caused District operations to
drop through the summer. The steel strike cut District
output to about 30 percent of capacity in October. Since
some District producers had reached agreements with
the union, the District rate of capacity compared favor
ably with that of 11 percent for the United States. Piece
meal settlement of the strike restored District operations
to over 50 percent in November, and December produc

February 1950

tion was above pre-strike levels. Fourth quarter demand
was good and expectations for the first quarter of 1950
were also satisfactory. The inability of the smaller mills
to achieve a high rate of output, however, kept the Dis
trict industry below capacity levels. For the year as a
whole District ingot production was off 8 percent from
1948, compared with a 12 percent decline in the nation.
The expectation of a reduction in steel prices was up
set by increases announced in mid-December. Base prices
for most products were increased slightly, about $2 per
ton, but the extra schedule was also increased bringing
the average increase on finished items to an estimated
$4 per ton. This estimate must be regarded as subject to
revision since revenues based on the extra schedule are
closely related to the items which may be sold. Since this
can fluctuate substantially from time to time, revenues
realized on the new schedule could vary significantly
from an estimate based on an average product mix. The
price increase was attributed to increased costs— prin
cipally expenses of the new pension and insurance pro
grams set up in the new contracts. Because experience
with the new social insurance program and the new price
schedule was lacking, it was difficult to state the extent
of relationship between the two events.
Two items entering into steel costs declined in 1949.
The price of scrap, which plays an important part in
Twelfth District steel mills, was substantially below 1948
during most of the year. The Ir o n A g e composite
price for heavy-mill steel scrap dropped from about $43
a ton in late 1948 to a little more than $19 a ton in July
1949. Reflecting a change in steel-mill buying policies
and a general improvement in the underlying tone of
steel markets, the price moved up to over $27.50 a ton
in December. This price, however, was still 35 percent
below the year-ago level. The price of tin also declined,
and this was substantial enough to allow a reduction of
3 percent in tin plate prices.
Aluminum shortage ended in 7949

During all of 1948, primary aluminum supplies were
informally rationed by producers. The result was marked
competition for secondary ingot produced by small in
dependents. The competition was so intense that by the
end of 1948 secondary ingot sold for 26.5 cents a pound
while primary aluminum was quoted at 17 cents. The
drop in business cut the demand for aluminum during
early 1949, but in the first quarter this was reflected by
reductions in the premium on secondary ingots. Produc
tion and shipments of primary aluminum during the first
three months continued at record levels; in the second
quarter shipments dropped sharply as processors tried
to reduce their inventories. Primary aluminum produc
tion, however, remained above 1948 levels because of
the exceedingly low level of inventories at reduction
plants. Secondary ingot prices fell below the primary
aluminum price in May and reached a low for the year
in August. The severe drop in aluminum purchases by
processors during the second quarter was apparently
greater than was justified by the use of aluminum prod-

ebruary 1950

M O N T H L Y REVIEW

cts. Demand rebounded sharply from the June low and
uctuated around a fairly high level during the remainder
f the year. Evidence of the somewhat tighter supply in
le last quarter was apparent from the increase in price
}r secondary ingot which was only one-half cent a pound
elow the primary price of 17 cents in December.
United States production for the year as a whole, 608
lousand tons, was off about 2.5 percent from 1948. This
ras due almost entirely to a drop in production outside
lis District starting in August. An Arkansas mill was
truck early in August and did not resume operation unil October. In the latter month two larger mills, one in
"ennessee and one in North Carolina, were also shut
own by a strike which continued well into December,
n this District, which accounts for almost half the naional production, output remained at a high level through
11 of 1949 until November and was slightly ahead of
948 for the year as a whole. Aluminum producers in the
’acific Northwest cut out one power line in November
i accordance with an agreement with the power pool.
Though demand during the latter part of the year was
trong and production was held back by labor-managelent disputes and power shortages, there was little evi:ence of any shortage of aluminum. Stocks at reduction
ilants were increased from one week’s supply to a
íonth’s supply between May and July and remained
ear that level for the remainder of the year. Though
ot excessive, this larger inventory tends to assure a
lore rapid delivery rate. Stocks at foundries and other
•rocessors are not published, but trade reports indicate
hey are fairly adequate though not too large. In this
)istrict producers of primary aluminum have expanded
he variety of products manufactured. Foreseeable sup>lies appear to be sufficient to permit manufacture of
able, wire, rods, and aluminum foil, all of which were
,dded in 1949.

SPOT PRICES1 OF BASE M E T A L S —U N IT E D STATES, A N D M IN E
P R O D U C T IO N -T W E L F T H D ISTR ICT. 1949
Cents per

1 Copper prices, Connecticut Valley basis; lead prices, St. Louis basis; and
zinc prices, East St. Louis basis. Prices recorded are lowest market quo
tations applying- at each date.
Source: for production, United States Bureau of M in es; for prices, I r o n
A ge.

15 cents in September, but then dropped back to 12 cents
in late November. The combined effect of these devel
opments caused a drop in lead production of 5 percent.
One factor that could be considered favorable to the lead
outlook at the end of the year was the absence of a large
inventory overhang, and the deliberate restraint on the
part of lead-users on purchases indicated that inventories
would remain steady or decline slightly. If demand for
lead-using products should continue at December levels,
it could be assumed that lead production would not de
cline any further and might very well increase.
Copper prices fluctuated considerably less than lead
or zinc prices, but District production declined more, 9
percent for the year, than in either of the other metals.
After settlement of the Utah strike, District production
rose sharply and reached a peak in March, but dropped
to two-thirds of the March rate in September and recov
ered somewhat by December. Demand dropped sharply
after January; there was a marked recovery in July that
tose and precious metal mining declined slightly
carried through November, but December orders were
Early in 1949, several forces combined to erase the off slightly. The large stocks held by metal processors in
ight market for base metals. The demand for many early 1949, however, prevented any increase in produc
ietal-using products slackened; inventories in the hands tion during the latter part of the year.
f metal fabricators turned out to be much larger than
The drop in steel production after the first quarter of
iad been anticipated; a mild winter in the East cut the' the year and sizeable inventories cut the demand for zinc
eplacement demand for batteries; and the strike in Utah very sharply. District production of mined metal con
t the largest copper mine in the country ended in Feb- tinued at a high rate because smelters’ supplies were low
uary.
and recovery of zinc as a by-product in other metal min
Market behavior varied among the base metals. Lead ing was at a higher rate than in the preceding twelve
howed the earliest weakness in terms of price. The re- months. There was a slight recovery in demand in early
summer, but it was not sufficient to raise prices, espe
uced output of replacement batteries during 1949—
bout 17 million compared to almost 24 million in 1948—
cially since production continued at a fairly high rate. In
vas one of the principal factors cutting into demand. October prices reached their lowest level of the year, 10
The price dropped from 21.5 cents in January to 12 cents cents a pound, compared with more than 18 cents in Feb
n June. Increased foreign output of lead along with the ruary. The steel strike reduced zinc demand in October
hortage of dollars abroad and the devaluation of many and November, but December orders picked up, though
□reign currencies resulted in sales of a fair quantity of prices failed to make any notable advance. Because of
oreign lead in American markets. The sharp slump in well sustained zinc production in the first half of the year
lemand, particularly during the second quarter, was fol- and because of a high rate of zinc recovery as a by-prod
Dwed by substantial recovery in the third quarter and uct of other metal mining, mine production of zinc was
he price increased from 12 cents a pound in June to over 1 percent above 1948.

FEDERAL RESERVE B A N K OF S A N FRANCISCO

Since a large part of the District’s output of gold and
silver is obtained as a by-product from base-metal min
ing, output of these metals for the year was also reduced.
District silver was affected more severely than gold,
dropping behind 1948 by 10 percent, while gold was off
3 percent. Placer and lode mining of gold held up much
better than the output of by-product gold, resulting in
production for the District near the 1948 level.
Aircraft industry at higher level of operation

Though the peak of activity in District aircraft pro
duction was reached during the summer months and ac
tivity declined thereafter, the level of output in 1949 was
greater than in 1948. Most of the expansion in activity
occurred in Washington, but California airframe output
also increased by a sizeable amount. Washington em
ployment of aircraft workers was double the 1948 level.
California plants added enough workers in 1949 to raise
their average about 9 percent over 1948. In 1948, how
ever, California plants had employed about 7 to 8 times
as many workers as the aircraft industry in Washington.
The principal factor in the demand for District air
craft production was the program of the defense estab
lishment. The increase in activity reflected the policy of
Congress and the Administration to expand the Air
Force and Naval Air over a period of years. Offsetting
the longer-term policy were two factors. After the mid
year the Administration, acting on its analysis of the
budget situation, decided to maintain a more moderate
rate of expansion. Contracts for B-50 bombers and other
types of planes to be produced on the West Coast were
cancelled and production was concentrated on planes be
ing produced at plants in the Middle West.
This development led to a widespread belief that the
defense establishment had decided to shift production in
land for strategic reasons. This position was disavowed
by the Secretary for Air and other defense-establishment
spokesmen. Nevertheless, employment in Washington
declined from over 26,000 workers in July to about 20,000 in December. In California the decline was smaller;
employment dropped 3,000 from the September peak of
almost 100,000. It should be noted that these declines
were the result of contract completions as well as can
cellations. Late in the year, however, both the Air Force
and the Navy contracted for small quantities of new types
of fighter and attack planes to be produced on the West
Coast. Presumably if these types are produced in quan
tity in the near future, West Coast plants may receive
contracts for a substantial proportion of these require
ments. No indication was available at the end of the year
that further requirements for planes other than those
now being produced in Pacific Coast plants will not be
allocated to the West Coast, or that those plants will be
excluded from any new models.
Shipyard activity continued to decline

The movements of the economy as a whole were not
apparent in the District shipbuilding industry. The forces
making for a continued downtrend in shipyard activity

February 1950

were sufficiently strong to obscure any effects of a falling
off or improvement in general business activity. In Cali
fornia, shipyard employment dropped from 14,000 in De
cember 1948 to under 7,000 a year later. In Washington
it declined in the same period from about 4,000 to 2,200
workers.
By the end of 1948, Pacific Coast repair yards had
gradually worked off peacetime conversions and new
construction. The volume of repair work also declined
and in 1949 hit a new low. The District shipbuilding in
dustry suffers from several factors beyond its control.
Little new ship construction is under way, and all the
contracts awarded in the past two years have been con
centrated on the East Coast because of cost advantages
and larger ways. The cost advantages are largely the re
sult of the proximity of Eastern yards to marine equip
ment supplies; the size of West Coast ways could be in
creased if the yards had sufficient business to warrant
the large outlays. The allowance of a 6 percent differen
tial in bids in favor of West Coast yards has not been
sufficient to induce West Coast yards to engage in bids
on new construction.
The reconversion business has declined because of ter
mination of contracts for returning military or wartime
vessels to private owners and the cessation of foreign
purchases of American surplus vessels. The decline in
trade with China, the dock strike in Hawaii, the failure
of intercoastal and coastal shipping to regain its prewar
position, technological improvements in hulls and other
ship structures, and the dollar shortage have cut into
ship repair work in 1949. Though foreign maritime na
tions have a cost advantage over American yards, some
voyage repairs have been made on the Pacific Coast, but
this was reduced considerably in 1949. A t the end of
1949, Pacific Coast yards had some small amount of re
pair work, a few minor reconversion jobs, and some work
preparing navy tankers for moth-balling. Shipyard dif
ficulties are not entirely restricted to the District. East
Coast shipyard owners also complained of a dearth of re
pair work in a hearing before the Maritime Commission
in late 1949.
Fruit and vegetable canning

The year 1949 proved to be a rather trying one for the
District canning industry, particularly the fruit packers.
The large carryover of unsold fruit stocks from the pre
vious season’s pack, together with the pressure of large
orchard crops in 1949, depressed prices and discouraged
distributors from making commitments for forward buy
ing. A six-month strike of Hawaiian dock-workers inter
fered with the normal shipment of pineapple and ham
pered the California canners in putting up mixed fruit
packs. Rail freight rates were again increased, while ex
port business remained at a relatively low level. Reflect
ing the unbalanced demand-supply situation within the
industry, the market for many canned foods became in
creasingly competitive and sharp price reductions on cer
tain fruit packs at the end of the year threatened to cut
into many canners’ profit margins.

February 1950

Total District packs in 1949, taking fruits and vege
tables together, were roughly equal to those of the pre
vious season, and about 10 percent below the packs of
1947. Because of the very large carryover at the begin
ning of the year, especially of fruit, total supplies han
dled by canners during the calendar year 1949 were
greater than in either 1947 or 1948 and probably not
much below the record volume handled in 1946.
Fruit packs

Fruit supplies were particularly large in the calendar
year 1949. Inventories of fruit in canners’ hands at Janu
ary 1, 1949, taking California and the Pacific Northwest
together, exceeded 22 million cases, as compared with 13
million cases a year earlier. In spite of abundant orchard
crops, it was widely predicted in the trade that fruit packs
in 1949 would be sharply reduced below those of the
previous year. Some curtailment was made, notably in
apricots and fruit cocktail, but these cuts were almost
fully offset by larger packs of peaches, pears, plums, and
cherries. The difficult problem of dealing with the huge
California cling peach crop was met in part by raising
the minimum size of fruit acceptable for canning and in
part by the enforcement of stricter grading standards.
Even so, the total pack proved to be one of the largest on
record. The generally high quality of District orchard
crops in 1949 resulted in fruit packs of notably better
quality than in some recent seasons.
P
W

r in c ip a l

r u it

a sh in g t o n

a c k s

a n d

a n n e r s

a t

ecem ber

' S

a l if o r n ia
to c k s,

regon

old a n d

a n d

n so l d

31, 1947-49

(thousands of cases, basis 24 N o. 2 ^ 4 cans)
,---------- 1¡947---------- V /-----------19 48-----------V ,--------- 194'9----------,
Pack
Pack
Stocks
Pack
Stocks
Stocks
Peaches, all packs. 18,099
9,320
17,165
19,238
11,445
5,604
Pears ........................
5,622
2,217
3,830
2,352
5,353
2,556
Apricots ....................
3,204
1,653
1,359
4,735
2,904
2,356
Mixed fruit (cock
tail, salad, e tc .). 10,189
10,999
6,545
7,636
6,324
2,560
Plums ........................
1,919
894
1,669
854
1,317
693
565
702
Cherries ....................
815
1,583
98
200
Other fruits and
2,715
161
2,013
398
berries .................
24
1,798
Total fruits and
39,848
23,933
berries ................. 41,511
40,237
22,175
13,179
California
Northwest

M O N T H L Y REVIEW

.......... 33,424
8,087
..........

9,565
3,614

34,478
5,759

18,955
3,220

32,580
7,268

20,174
3,759

Sources: Canners League of California, Northwest Canners Association.

Drastically lower prices for most of the canning fruit
crops in 1949 permitted pricing the finished product on
a lower basis. Canners’ opening prices for the principal
fruit packs in 1949 ranged from about 5 percent to 33
percent below those of 1948. While probably confirming
distributors in their cautious buying policies, these lower
prices stimulated consumption and the movement of fruit
to market. District canners shipped a total of some 38
million cases of fruit in the calendar year 1949 as com
pared with about 31 million in 1948, but had nearly 24
million cases left on hand at the end of the year, about 8
percent more than the year before. Of this quantity,
roughly 60 percent was still unsold as against about 50
percent a year earlier. Further sharp price cuts by lead
ing packers in December on peaches and fruit cocktail

were reported to have stimulated sales to a considerable
extent.
Vegetable packs

California’s vegetable packs increased slightly in 1949
over 1948 but were well below the 1947 output, chiefly
because of smaller packs of tomatoes and tomato products
other than juice. Crop damage to tomatoes in eastern
canning areas kept down the total United States pack of
tomatoes and tomato products and strengthened the mar
ket. Although California canners’ opening prices on to
matoes were approximately 10 to 20 percent below those
of 1948, these prices were generally well maintained, in
contrast to those of the important fruit packs. Tomato
juice advanced in price, reflecting in part the strength in
citrus juice prices. California asparagus and spinach
packs in 1949 were the largest since 1946 and moved into
distribution promptly. Total 1949 shipments of all vege
table packs for which sales and stocks are reported were
somewhat larger than in 1948 and year-end stocks were
reduced by some 2 million cases, with the bulk of the re
duction coming in tomato sauces and catsup.
P

r in c ip a l
a n d

eg etable

a sh in g t o n

a c k s

a n d
a t

a n n e r s

ecem ber

a l if o r n ia

' S

to ck s

, S

d a h o

old a n d

n so l d

regon

31, 1947-49

(actual cases, thousands)
Pack
Asparagus .................... 2,500
1,380
Spinach ........................
Tomatoes ......................
5,895
Tomato juice ............
5,753
Other tomato products 19,738
Peas ...............................
7,314
String beans ...............
2,894
Corn ...............................
1,722
Other vegetables . . .
2,076

1947---------,
Stocks
445
518
3,497
5,371
11,279
1
1
i
1

,--------- 1948--------- „-----,-------- 1949-------N
Pack
Stocks
Pack
Stocks
2,262
1,454
4,713
5,867
13,359
5,953
2,901
2,735
2,693

306
141
3,666
4,446
11,159
1
1
1

2,625
1,960
3,978
6,341
13,102
5,097
4,507
2,455
1,807

49,272

41,936

41,871

California ............... 36,228
Northwest ............... 13,044

29,294
12,642

30,529
11,342

Total vegetables

...

549
323
3,150
4,705
8,572
1
1
»
1

1 N ot available.
Sources : Canners League of California, Northwest Canners Association.

Complete reports on Northwestern vegetable packs for
1949 are not yet available. The important pea pack, be
cause of unfavorable weather which cut down the supply
of raw material, was the smallest in the past ten years.
The string bean pack, on the other hand, was one of the
largest on record. The pack of corn was above average,
although somewhat under that of 1948. Statistics on can
ners’ sales and stocks are not available for Northwestern
vegetable packs. According to trade reports, however,
1949 shipments of peas and string beans were reason
ably satisfactory. The market for canned corn has been
depressed and the movement of that pack was retarded.
Container industry steadier

The increasing production of cans in this District evi
dent in 1948 carried through 1949. The District can in
dustry produced a slightly larger volume of containers
in 1949 than in the preceding twelve months. Supplies of
tin plate improved, making expanded production pos
sible. Adequate supplies of cans were obtainable for prod
ucts such as paints and chemicals which were still being

February 1950

FEDERAL RESERVE BANK OF SAN FRANCISCO

packaged in substitute containers in 1948. Can prices for
the 1950 season, despite the decline in tin plate prices,
were not expected to decline in all cases. In computing
1950 prices, allowance will probably be made for in
creased labor costs in the can industry. If a particular
item has a relatively high proportion of labor costs, its
price may increase. Fiber containers also appear to have
been produced in near-record quantities in the District.
Production of this type of container, however, was re
tarded slightly by some stringency in the supply of clos
ing equipment.

credit which induced large producers to concentrate on
the less expensive films, and small producers were in
many cases forced to cut back operations to minor pro
ductions. For the year as a whole, the number of fulllength feature productions was smaller than in 1948, but
plans at the end of the year indicate a possible increase
in 1950. Concentration on less expensive films may make
it possible to spread the market risks over a larger num
ber of features. The role of television still remains un
certain with regard to the movie industry’s place in en
tertainment.

Glass container production continued to decrease dur
ing most of the year and it appears likely that production
was down about 5 percent from 1948. There was a strong
recovery in demand during the latter part of the year,
and the seasonal decline in the last quarter was moder
ate. Compared with 1948, fourth quarter production was
larger. The industry now feels that its postwar adjust
ment is complete and that some growth may be expected
in the future because of a continuously expanding popu
lation and the trend toward greater use of packaged
goods.

Apparel industry activity declined slightly in 1949

Box shook production declined 10 percent from 1948.
The demand for wooden boxes was depressed by several
factors, including a reduced citrus pack in the District,
a decline in demand for other District fruit crops, and
weak export markets.

Movie industry problems unsolved
The problems which have arisen to confront the movie
industry during the postwar period continued in 1949,
and new developments which did not brighten industry
prospects also came to the fore. A drop in movie attend
ance was again recorded in 1949. This continued the
trend started in 1947. Unusually warm spring weather
in many areas contributed to the unfavorable showing
early in the year.
Stringency in foreign markets continued with some
greater restraints added by some of the Latin American
nations. These new restrictions on movie imports, how
ever, did not detract too severely from the foreign mar
ket, but did prevent possible improvements. In Great
Britain, one of the principal foreign markets, results were
somewhat better than expected. American film companies
were able to earn sufficient revenues to withdraw the full
amount allowed by agreement, $17 million. In addition,
about $25 million in receipts were utilized within the
British Isles for production of films and other allowable
purposes. A balance of $7 million remained unutilized
and not subject to withdrawal. The devaluation of for
eign currencies, however, added a considerable amount
of uncertainty to the prospects for any improvement in
the near future.
A problem which became increasingly prominent in
1949 was the cost of productions. A large sum was writ
ten off for the high-cost films produced in the early post
war period. The revenue expectations for these films
were not realized. Added to this was considerably tighter

Total production of District apparel in 1949 was off
slightly from 1948. A substantial decline in the output of
men’s and boys’ tailored clothing and women’s and chil
dren’s clothing along with a continued drop in output of
military clothing contributed to the lower production.
Offsetting these developments to some extent was a
sharp gain during the last four months of the year in the
production of men’s and boys’ work and sport garments.
The production of work clothes was more strongly sus
tained than any of the other items referred to.
The seasonal drop in the spring of 1949 was consider
ably sharper than in 1948 for women’s and children’s
clothing and in men’s and boys’ tailored clothing. The
work and sport-clothes group in the industry experi
enced the first marked seasonal decline since the war. All
lines, except military clothing, recorded a fair amount
of recovery after June, but the sport and work-clothes
group exceeded 1948 average monthly output by a wide
margin in every month starting with September. The re
covery in the latter part of the year weakened in Novem
ber and December. The decline in activity for the more
expensive grades of clothing was greater than in the
same period of 1948.

Retail Trade
Sales at most retail outlets in the Twelfth District in
1949 were below 1948 levels. Sales remained, however,
considerably higher than the prewar average. The deDEPARTM ENT

STO R E SA L E S IN D E X E S —

TW ELFTH

D I S T R I C T , 1 9 4 8 -4 9

(adjusted for seasonal variation, 1935-39=100)
P e rce n t

February 1950

cline from 1948 resulted from the slower pace of business
activity and the slight decrease in prices.
The signs of weakness seen in 1948 in sales of hardgoods items materialized in 1949. In the United States,
sales in both the furniture-household appliance-radio and
the lumber-building hardware groups were down. Auto
mobiles were an exception; in the United States, motor
vehicle sales increased 16 percent. The sales experience
in the Twelfth District was similar. District hardgoods
sales were considerably below the 1948 volume. At Dis
trict furniture stores, for instance, the decrease amounted
to 15 percent. District automobile sales were u p ; in Cali
fornia possibly by 15 percent. Total taxable sales in Cali
fornia— including motor vehicle sales— for the year were
estimated to be about 5 percent below those of 1948.
Total dollar sales at District department stores were 6
percent below 1948 sales. This was the same as the aver
age decline for all department stores in the country. Ta
coma and Sacramento were the only Twelfth District
cities to record increases for the year as a whole. Depart
ment store sales— on a seasonally adjusted basis— de
creased in January and February from the high Decem
ber 1948 level and at no time during the year approached
the figure for the comparable period in 1948. Store-wide
and department-wide sales were common and newspaper
advertising became more extensive and competitive in an
effort to maintain high retail sales.
Though price decreases were experienced in most re
tail areas in 1949, they were not large enough to account
for all of the dollar sales decrease. Average consumer
prices in the United States for the year were only about
1 percent below those of 1948. Prices of housefurnishings and apparel dropped further than other consumer
prices. It is estimated that while dollar sales decreased
6 percent, physical volume sales at department stores de
clined only 2 or 3 percent.
Twelfth District department store sales by departments

Sales in most departments were well below those of
1948. The dollar volume of housefurnishings sold was
off more than 10 percent. Major household appliances
dropped sharply, though the increased sales of television
sets brought dollar sales of the radio, phonograph, and
television department considerably above that of 1948.
Sales in the men’s and boys’ clothing department were
only slightly below those of 1948 although sales of
women’s clothing and accessories were down consider
ably. Customers were, perhaps, more selective than in
1948. Inexpensive, high quality merchandise sold well.
D e p a r t m e n t S t o r e 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 1—
T w e l f t h D is t r ic t
(percent change, 1948-49)
Main store

................................................................................................................... ... —

Housefurnishings .................................................................................. ...— 11
M en ’s and boys’ w e a r ......................................................................................... ... — 1
Miscellaneous merchandise departments ...................................................... — 6
Piece goods .................................................................................................................. — 3
Small wares .................................................................................................................. — 11
W om en 's and misses' ready-to-wear accessories.................................... ... — 5
W om en 's and misses' ready-to-wear apparel..................................................— 8
Basement ........................ ............................................................................................... ... — 4
1 Preliminary figures.

MONTHLY REVIEW

Sales of expensive dresses were down more than sales
of the less expensive ones. Basement store sales de
creased less than sales in the store as a whole. Custom
ers were, however, willing to buy luxury items at what
they considered to be good prices. Owing principally to
price decreases, sales of fine jewelry and watches showed
little change for the year as a whole.
Credit sales increase

In the United States, credit sales, both in dollar terms
and as a percent of total sales, were more important in
1949 than during any preceding year. The amount of
total consumer credit outstanding in the United States
at the end of the year was 15 percent higher than at the
end of 1948. Instalment credit outstanding increased 27
percent. Similar increases were also indicated for the
Twelfth District. Credit sales as a percent of total sales
increased moderately in District department and furni
ture stores. Collections of receivables at both furniture
and department stores slowed down.
At commercial banks in the United States, the amount
of all consumer instalment loans outstanding increased
almost 25 percent from the end of December 1948 to De
cember 1949. This compares with a 30 percent increase
in consumer instalment loans outstanding reported by
Twelfth District banks.
Inventories and orders outstanding

During 1949, inventories at District retail stores were
geared to the lower sales level. Inventories of nearly all
items were down. Hardgoods inventories decreased the
most. At District department stores a large cut was made
in major household appliance stocks, and furniture in
ventories at department stores and furniture stores were
down considerably. The dollar volume of inventories of
women’s and men’s clothing at both department stores
and apparel stores, however, was only moderately below
that of 1948.
Department stores permitted their stocks to become
depleted during the first of the year by sharply reducing
SALES, STOCKS, AND ORDERS OUTSTANDING—
(37 Twelfth District Department Stores, 1947-49)
Millions of
dollars

February 1950

FEDERAL RESERVE BANK OF SAN FRANCISCO

their orders. During the first eight months of the year
orders outstanding at department stores were about 30
percent lower than those of the comparable period in
1948. Inventories — on a seasonally adjusted basis —
reached their lowest point for the year in July and Aug
ust. During the following months inventories were built

up at a rapid rate, though they remained below those of
1948 throughout the year. In December heavy Christmas
shopping depleted the built-up inventories, leaving less
than the usual amount for clearance sales. For the year
as a whole orders were about 20 percent smaller than in
1948 and inventories were down about 5 percent.

BAN K IN G AN D CREDIT IN 1949
year, for the first time in the postwar period, the
j demand for bank credit on the part of business firms
was insufficient to produce a substantial growth in bank
loans. The volume of commercial and industrial loans out
standing registered a net decline over the year period in
both the Twelfth District and the nation. This decline was
largely offset, however, by a slow but continued growth
in other major types of loans. In the country as a whole,
the amount of total loans outstanding was somewhat
higher at the end of 1949 than a year earlier, while in the
Twelfth District the volume declined slightly. This was
the first year since the war in which the Twelfth District
fared less well than the country as a whole with respect
to growth in total bank loans.
As in previous postwar years, the demand for business
loans was much stronger in the second than in the first
half of the year. In fact, the fore part of the year brought
the longest and most substantial decline in commercial
and industrial loans that has yet occurred since the end
of the war— a decline that ran almost without interrup
tion for the first seven months of the year in the United
States as a whole, and for the first eight months in the
Twelfth District.
This marked lessening in demand for business loans
was both a part of and a reflection of the slower tempo of
business activity in the first part of the year. In view of
this decline, the monetary authorities took steps to pro
vide easier credit and to increase the available supply of
loanable funds. The controls over consumer credit exer
cised by the Board of Governors of the Federal Reserve
System were relaxed in March and again in April, and
Congress allowed the temporary authority for such con
trols to expire as of June 30. The Board of Governors
reduced stock margin requirements at the end of March.
Member bank reserve requirements were reduced by the
Board of Governors early in May, and except for New
York and Chicago banks, were again reduced at the
end of June as a consequence of the decision of Congress
not to extend beyond June 30 the temporary authority
to maintain higher requirements. Reserve requirements
were further reduced by the Board of Governors during
August. At the end of June the Federal Open Market
Committee announced the adoption of a more flexible
support policy for Government securities than it had fol
lowed in the past, a policy better adapted to dealing with
changing economic conditions. The adoption of this new
open-market policy was the most fundamental of these
various changes.
a st

The lessened demand for bank loans, coupled with the
reductions in member bank reserve requirements, led
banks to expand their holdings of Government and other
securities, with the result that total loans and investments
rose during the year in both the District and the nation.
This contrasts with the decline in total loans and invest
ments that occurred in 1948 both nationally and in the
District, the only such decline in more than a decade.
Bank deposits and currency

Combined demand and time deposits in the hands of the
public experienced little net change in either the Twelfth
District or the nation during 1949, registering a slight loss
in the District and a slight gain in the country as a whole.
Time deposits rose slightly in both areas. Demand de
posits of individuals, partnerships, and corporations also
increased in the United States, but experienced about a
2 percent decline in the Twelfth District. The amount of
currency in circulation declined somewhat in both areas.
Throughout the postwar period, privately-held demand
deposits have declined rather sharply in the first quarter
of each year, primarily as a result of income tax pay
ments. Due to the extensive tax refunds on 1948 income,
the net drain of tax payments upon deposits in the first
quarter of 1949 was substantially less than in the corre
sponding periods of 1947 and 1948. Nevertheless, in both
the District and the nation, the first-quarter decline in
privately-held demand deposits was about as large in
1949 as in 1948 because of the additional drain upon
deposits caused by the substantial repayment of business
loans during that period in 1949.
As in 1948, most of the growth in time deposits
occurred in the first half of the year. Government de
posits increased for the second consecutive year and at
year-end were more than twice as large as at the end of
1947, both in the District and in the country as a whole.
Liquid assets held by individuals and businesses in the
form of shares in savings and loan associations also rose
M e m b e r 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
(in millions, as of December 31)
Demand deposits of individuals
partnerships, and corporations . . . . .
..
U . S. Government d e p o s it s ...............
U . S. Government se c u ritie s............ , . .
Other securities .................................... .

1941

1947

1948

19491

$2,778
2,390
144

$8,616
5,986
127
5,358
7,247
875

$8,320
6,060
217
6,032
6,366
867

$8,127
6,172
289
5,926
7,014
1,098

1,738

1 Partly estimated.
2 Excluding interbank and U . S. Government deposits.

February 1950

M O N T H L Y R EVIEW

substantially during the year. The amount of Series E
savings bonds outstanding continued to grow in the
country as a whole. Short of an actual census, it is
not possible to make an accurate accounting of the total
amount of savings bonds held within the Twelfth Dis
trict at any given time, owing primarily to the lack of
information concerning the inflow and outflow of savings
bonds over state or District boundaries. The data on sales
and redemptions of Series E bonds within the District
do furnish clues, however, as to probable trends in total
holdings. In both the District and the country as a whole,
the ratio between redemptions and sales of Series E
bonds was somewhat more favorable in 1949 than in 1948.
Redemptions tended to rise somewhat, relative to sales,
in the closing months of the year, however. Sales of Series
E bonds in the country as a whole have exceeded redemp
tions in each of the postwar years except 1946, while in
the District redemptions have exceeded sales throughout
the postwar period. This higher level of District redemp
tions is probably related to the substantial movement of
population to the Pacific Coast and the financial demands
upon a family resulting from such a move.
Member bank reserves
Member bank reserves in the Twelfth District amounted
to $1,924 million on December 31, 1949— $496 million
less than the high level reached on the corresponding date
of 1948. It was the first year since 1932 that reserves have
been at a lower level at the end of the year than at the
beginning. The substantial decline in the reserves which
member banks hold with the Federal Reserve Bank of
San Francisco started at the beginning of the year and
S o u r c e s a n d U ses of T w e l f t h D is t r ic t M e m b e r B a n k
R eserves
(in millions of dollars)
Sources of member bank reserves
(factors which when positive
1936-40
increase reserves)
(average)
1946
Reserve bank c r e d i t ................... +
1
+
9
Change in credit extended to
member banks in the District
by the Federal Reserve Bank
of San Francisco.
Commercial op era tio n s...............— 180
— 1607
Net payments from other
Districts to banks and the
public in the Twelfth D is
trict (net Twelfth District
payments
to
other
D is
tricts— ).
United States Treasury
o p e ra tio n s.................................... + 3 1 1
+1329
N et
payments
from
the
Treasurer’s account at the
Federal Reserve Bank of
San Francisco to banks and
the public (net payments to
the Treasurer’s account— ).
Total

.........................................

1948
+ 17

1949
+ 13

— 510

+472

— 930

+698

— 482

+378

— 539

—

269

— 114

—

326

— 206

— 209

+132

Uses of member bank reserves
(factors which when positive
reduce reserves)
Demand for currency ............... +
Change in holdings of coin
and currency by banks and
the public.
Change in non-member de
posits and other Federal Re
serve Accounts ........................ +

1947
—-302

—

__ 2

+22

Total .........................................

—

329

— 222

— 211

—

Change in member bank
reserves .........................................

+ 108

+218

— 496

continued through August, reflecting a decline in deposits
and three successive reductions in the rate of reserve
requirements. In the last third of the year reserve require
ments remained unchanged, and both deposits and re
serves increased but at the end of the year reserves still
fell far short of the levels reached at the beginning of the
year.
In general the reserve position of member banks was
considerably easier than it has been. In contrast to 1948
when member banks were forced to sell large amounts of
securities to meet the drain on reserves brought about by
retirement of public debt, income tax collections, and
increased reserve requirements, member banks in 1949
did not even experience the usual depletion of reserves
around income tax time since many taxpayers were en
titled to refunds.
Characteristically, reserves have been built up in the
District by an excess of Federal Government expendi
tures over collections which have exceeded in amount the
drain on reserves produced by adverse settlements against
the District on commercial accounts. The unusual reduc
tion in reserves in 1949 was brought about by adverse
settlements against the District on commercial accounts
which were larger in amount than the net gain in reserves
from Treasury operations. To a large extent the adverse
settlements were due to purchases of Government securi
ties in the Eastern markets by Twelfth District member
banks with the excess reserves created by reductions in
reserve requirements.
In 1949 a moderate decline in currency in circulation
contributed to member bank reserve accounts. Reserve
bank credit, non-member deposits, and other Federal Re
serve accounts were all relatively unimportant in their in
fluence on reserve accounts. The accompanying table
shows changes in member bank reserves and in factors
affecting member bank reserve balances over the past
few years.
Loans and investments of member banks

The unprecedented expansion of bank loans in the
postwar years prior to 1949 involved the banks in a fairly
continuous process of shifting from Government securi
ties to loans. This process was reversed in 1949 as a re
sult of (1 ) a sharply decreased demand for business loans
in the first seven or eight months of the year, (2 ) a series
of reductions in reserve requirements, and (3 ) a sharp
reduction, compared with previous postwar years, in the
amount of marketable public debt, including bank-held
debt, retired by the Treasury. Government security hold
ings of member banks increased about 10 percent during
1949 in both the Twelfth District and the country as a
whole. This contrasts with a decline in such holdings
during 1948 of approximately 10 percent in both areas.
Member bank holdings of other securities rose by 23 per
cent in the District and 14 percent in the nation during
1949 in comparison with only minor gains in 1948.
The increase in Government security holdings of mem
ber banks was concentrated in short-term issues, with
little change occurring in the amount of their bond port-

FEDERAL RESERVE B A N K OF SA N FRAN CISCO

D E P O S IT S , U . S. G O V E R N M E N T S E C U R IT IE S , A N D L O A N S T W E L F T H D IS T R I C T M E M B E R B A N K S , 1948-49
Billions of
dollars

February 1950

amounted to an estimated $320 million, or 14 percent,
at District member banks. These loans declined almost
continuously for the first eight months of the year. The
percentage increase that occurred in the final four months
was only about half as large as that of the corresponding
period in 1948.
Consumer loans were the only major category of loans
to record as large an increase at Twelfth District mem
ber banks in 1949 as in 1948, with a 24 percent increase
in each year. About two-thirds of the dollar increase in
1949 occurred in the last six months, while in 1948 the
increase was more evenly distributed through the year.
Member bank loans secured by real estate grew slowly
but continuously during 1949, registering a 4 percent in
crease in the Twelfth District compared with a 14 per
cent increase in 1948. The growth was confined almost
solely to loans on residential properties.
Yields on securities decline during 1949

folios. In December, the Treasury offered an issue of
Treasury notes with a maturity of four years and three
months in exchange for three series of Treasury bonds
called for redemption on December 15, 1949 and an issue
of certificates of indebtedness maturing on the same date.
The combined total of these maturing issues was $4.9
billion. As a result of this exchange, member bank hold
ings of Treasury notes rose relatively more in 1949
than did their holdings of bills and certificates of indebt
edness, but the increase in the note portfolio was confined
to the final month of the year. Member bank holdings of
Treasury bills increased about 40 percent in both the Dis
trict and the nation during 1949. Certificate holdings ex
perienced a similarly large increase on a national basis,
but only about a 20 percent increase among Twelfth Dis
trict member banks.
Total loans of member banks declined about 2 percent
during 1949 in the District and rose somewhat in the
country as a whole. Idaho and Utah were the only states
in the District that experienced a rise in total loans. Ne
vada had no change, and the remaining states had minor
declines.
Commercial and industrial loans declined substantially
in both the District and the nation. The decrease

Yields on United States Government and other securi
ties were somewhat lower at the end of 1949 than they
had been a year previous. Generally speaking, security
yields reached a postwar peak in the latter part of 1948.
They changed relatively little during the first half of
1949, although the drift was downward. In July, how
ever, yields fell (security prices rose) sharply. The im
mediate cause of the decline was the adoption of a more
flexible support policy for Government securities by the
Federal Reserve System. The Federal Open Market
Committee announced this new policy late in June.
The strong underlying demand for Government se
curities, coupled with the more flexible support policy,
resulted in a sharp rise in their prices and a decline in
their yields in July. Yields on corporate securities also
fell, but the decline was relatively less than for Govern
ment issues. Bank demand for Government and other se
curities was strong because of a reduction in member
bank reserve requirements in May and again at the end
of June, and also because of a substantial reduction in
the outstanding volume of commercial and industrial
loans in the first seven months of the year. Banks in
vested the greater part of the funds thus freed in Gov
ernment and other securities.
Yields rose somewhat above their July and August
levels during the last four months of the year, but by the
end of 1949 were still substantially below their year-ago
levels. The relative decline in long-term rates during
1949 was much larger than for short-term rates. This re
flects the fact that the initial impact of the new support
policy was felt more in the long-term than in the short
term side of the market.
Average rates charged by banks on short-term business
loans also declined during 1949, in both the District and
the country as a whole. The quarterly reports obtained
from banks in selected cities throughout the nation indi
cate that the decline occurred primarily in the third quar
ter of the year, with little change occurring in average
rates between the third and fourth quarters.

February 1950

M O N T H L Y RE V IEW

AGRICULTURE BN 19 4 9
u r in g

1949, agriculture in the United States was

Dcharacterized by continuing high production accom
panied by a general decline in the prices of agricultural
commodities and lower net farm income. Production of
principal crops was only slightly smaller than the 1948
record. Average yields per acre for most crops were like
wise near the high levels attained in 1948; and total
acres planted to the principal crops were larger than a
year earlier and exceeded by 4 million the 1944 wartime
peak. Most of the acreage increase was the result of an
expansion in wheat and cotton plantings, but adverse
weather conditions in some areas forced the average
wheat yield below 1948 and somewhat offset the sharply
increased cotton yields of the west and southwest.
The output of feed grains was the second largest on
record, owing primarily to bountiful crops of corn, oats,
and grain sorghums. Together with carryover stocks
and a large 1949 production of feed concentrates, the na
tion’s farmers concluded the year with an assurance of
ample feed resources. United States farmers also har
vested a record crop of nuts and a near-record amount of
deciduous fruits. Output of oil-seeds approached the rec
ord volume of 1948. The citrus crop, however, was much
below the previous year as a result of severe winter con
ditions.
Taken as a whole, 1949 was a successful year for agri
culture. An ample labor supply, the availability of power
machinery and fertilizer, and favorable harvest weather
added up to a wealth of production. The abundant out
put of food crops— wheat, rice, peanuts, potatoes, fruits,
nuts, and oil-seeds— and large supplies of meat and dairy
products provided the nation with a bountiful diet. To
the farmer who produced this food, however, the finan
cial return was not so favorable as that of the year be
fore. Prices of most agricultural commodities continued
downward through 1949 at a faster rate than farm oper
ating costs, so that the nation’s producers realized a
smaller net income. Government price support opera
tions, however, played an important part in cushioning
what otherwise could have been a much sharper decline
in farm income.
District crop production

In the Twelfth District, weather and growing condi
tions were more varied than usual during 1949. Exces
sive cold during the early months of the year caused se
vere livestock losses in some intermountain areas, while
killing frosts drastically reduced citrus production in
California and Arizona. In the northwest, shortage of
spring and early summer rains and late frosts reduced
yields of some crops— notably wheat, potatoes, peas, and
hay. As the year progressed, however, good summer
growing conditions developed in Oregon, Washington,
California, and Utah which favored production of fruit
and nuts so that good harvests were realized. Blossom
set was heavy, except for apricots, and trees escaped in
jury from late frosts. In many localities, dry spring

weather reduced yields and total production of feed
crops. Late summer, nevertheless, was generally condu
cive to early maturity and to more successful harvests
than first appraisals had anticipated. The year came to
an end with the cotton crop— the final important crop of
the District— moving rapidly to an exceptionally favor
able conclusion.
Deciduous fruit crops were heavy and production
much larger during 1949 than in 1948, except for apri
cots, figs, and grapes. The greatest percentage increase
was in the cherry crop with production up 92 percent
over the previous year and 46 percent over the 1938-47
P r o d u c t io n a n d V a l u e o f P r i n c i p a l C r o p s—
T w elfth

D is t r ic t ,

1949

Gross
/------farm value------ \
Percent
/'-Percent change-^
change
1949
19481938-47
1949
1948avg.-1949
(in
millions)
1949
(in
thousands)
1949
Field and Seed Crops
$89.3
—
21
Barley (bu.) ................. .
82,415
— 10
+ 19
56.9
— 16
7,984
— 3
D ry beans (100# bags),
+ 21
7,363
+ 15
—
6
Corn (bu.) ......................
11.7
+ 6
+ 39
+ 109
264.6
1,800
+ 31
Cotton, lint (bales) . . .
— 11
+ 182
32.8
716
+ 40
Cottonseed (tons) . . .
19.2
— 49
— 20
4,890
Flaxseed (bu.) ............
+ 61
8.6
— 18
Grain sorghum (bu.) .
6,180
— 15
+
2
— 1
311.7
— 18
14,010
0
H ay, all (tons) ............
21.5
— 22
. 49,340
— 1
+ 12
32,984
+ 17
26.3
Oats (bu.) ......................
+ 2
+
5
— 34
— 11
— 44
9.5
Peas, dry (100# bags) .
2,815
— 16
+ 25
107,373
— 13
149.6
Potatoes (bu.) ...............
+ 69
33.3
+ 41
Rice (bu.) ...................... , 21,462
+ 11
l
l
— 9
4,089
Sugar beets (tons) . . .
+ H
268.5
—
17
— 15
W heat, all (bu.) .......... , 141,168
+ H

r ---------------- Production-

Fruit and N ut Crops
Apples (bu.) ................. .
Apricots (tons) ............
Cherries (tons) ............
Grapes (tons) .................
Lemons2 (boxes)
Grapefruit2 (boxes) . . .
.
Oranges2 (boxes)
Peaches (bu.) .................
Pears (bu.) ................... ..,
Plums (tons) ................
Prunes, dried (tons) .
Prunes, fresh (tons) ..
Figs, dried (tons) ..........
Figs, fresh (tons) ..........
Olives (tons) .................
Avocados (tons) ............
Almonds ( t o n s ) ............ .
Filberts (tons) ..............
W alnuts (tons) ............ ..
Dates (tons) ................. .

46,521
200
129
2,549
9,930
4,020
37,620
39,294
29,988
90
166
156
28
7
39
13
39
11
86
13

+ 29
— 19
+67
— 12
— 23
— 26
— 19
+ 15
+ 41
+ 34
— 9
+ 77
— 6
— 42
— 33
— 4
+ 15
+ 75
+ 20
— 21

+ 14
— 12
+ 46
—
1
— 25
— 35
— 24
+ 22
+ 28
+ 19
— 17
+ 21
— 14
— 57
— 16
— 13
+ 82
+ 102
+ 33
+ 53

62.1
13.9
18.9
80.9
33.6
6.9
73.2
39.0
32.9
8.0
25.9
4.9
5.2
.7
6.4
5.1
12.3
2.5
27.5
1.4

— 29
— 8
— 9
— 22
— 19
+68
+ 7
— 30
— 43
— 21
— 3
0
+22
— 40
— 24
— 8
— 14
+ 56
— 7
— 23

Vegetables for Market
Artichokes (40# box) . .
Asparagus (30# cr.) . . .
Beans, snap (30# bu.) .
Cabbage (tons) ..............
Cantaloups (70# cr.)
Carrots (50# bu.) ..........
Cauliflower (37# cr.) . .
Celery (65# cr.) ............
Honeydew melons
(35# cr.) ......................
Lettuce (70# cr.) ..........
Onions (50# sacks) . . .
Peas, green (30# b u .). .
Peppermint (lbs.)
Strawberries (36# cr.) .
Tomatoes (53# bu.) . .
W atermelons (no.) . . .

654
1,835
1,415
121
8,904
13,610
7,913
13,500

— 19
— 8
+ 9
— 17
0
— 16
— 6
+ 14

—
—
—
—
+
+
+
+

20
25
4
13
26
4
31
76

2.6
6.5
3.4
3.3
26.8
25.1
9.4
24.2

— 6
+ 5
+ 2
— 38
— 6
— 38
— 6
+ 10

2,522
29,733
11,725
1,971
609
3,329
6,985
13,908

—
—
+
—
+
—
—
+

—
+
+
—
+
+
+
+

13
26
10
49
165
64
14
IB

4.6
110.7
16.9
4.9
3.9
21.3
18.6
4.3

— 18
+ 15
+23
— 2
— 25
— 27
— 30
— 13

Vegetables for Processing
Asparagus (tons) ..........
Beans, green lima
(tons) .............................
Beans, snap (tons) . . .
Peas, green (tons)
Tomatoes (tons) ..........

+ 34

13.0

+41

28
78
115
1,119

— 5
+ 50
— 4
+ 9

+ 398
+ 114
+
5
+ 27

4.2
9.5
10.1
25.4

— 23
+ 53
— 4
— 4

18
3
11
14
7
12
10
2

1 N ot available.
2 Figures are for crop year beginning in October of the previous year.
Source : United States Department of Agriculture, Bureau of Agricultural
Economics, 1949 annual summaries of production and value of pro
duction.

average. The District pear crop, representing four-fifths
of the national production, was a record 30,000 bushels
and 28 percent larger than the average. The output from
Bartlett orchards was especially heavy and of good qual
ity. As with some other tree fruits— namely, apples, apri
cots, cherries, and plums— pear growers were forced to
leave considerable fruit unharvested because prices in
many instances were not sufficient to warrant picking
and handling charges. In California, where most of the
District’s and 45 percent of the nation’s peaches are
grown, production was 13 percent above the previous
season’s yield and 18 percent above the 1938-47 average.
Clingstone peaches, used primarily for canning, produced
a record tonnage. In view of the large fruit set in this
variety, the industry cooperated with growers and ex
periment station specialists on a thinning program to im
prove quality of fruit and increase the minimum fruit
size acceptable for canning. Quality was thereby im
proved and prices bolstered, but a large amount of fruit
was necessarily dumped or left unharvested in the or
chards. The 1949 grape harvest was considerably short
of the previous year’s production but about equal to av
erage, and output of olives and dates was substantially
below 1948. The quantity of fruit from avocado groves
was below average as a result of losses occasioned by se
vere freezes early in the year.
Production reverses in citrus orchards were severe.
Continuing low temperatures through January caused
heavy frost damage and required large expenditures for
orchard heating. The efforts expended by growers to
protect orchards helped keep damage to trees at a mini
mum. Nevertheless, much of the crop was of sub-stand
ard quality and not able to meet requirements of the fresh
fruit trade. Fruit from some groves was a total loss. Out
put of oranges was 19 percent below the previous year’s
production and grapefruit 26 percent below. In Califor
nia, where all the nation’s lemons are grown, the crop
was 23 percent below 1948 production. However, as
climatic conditions also reduced yields in citrus areas
outside the Twelfth District, prices for citrus fruits on
the average were higher in 1949 than in 1948, and total
value of production only slightly less.
Twelfth District states set new production records for
almonds, filberts, and walnuts. In 1949, California and
Oregon walnut groves yielded 20 percent more than in
1948. California almond orchards produced nearly 40,000 tons which was 82 percent above average, while
Washington and Oregon growers more than doubled the
1938-47 filbert crop average.
Total production of fresh vegetables for market in the
Twelfth District was less in 1949 than in 1948, but there
was a sharp increase in the output of asparagus and snap
beans for processing. In California, acreage planted to
vegetables and melons declined for the third consecutive
year. Though acreage was reduced and prices consider
ably lower, gross value of vegetables and melons in Cali
fornia was only 6 percent below 1948 levels. This was
due to record prices received for winter and fall lettuce
crops.

February 1950

FEDERAL RESERVE B A N K OF SA N FRANCISCO

Rice— flax— cotton

Though District farmers harvested 15 percent less
wheat in 1949 than in 1948, 13 percent less potatoes, and
9 percent less sugar beets, they increased rice production
to a new high. Though at planting time the price of rice
had dropped 35 percent below the level existing the year
before, California growers, in anticipation of continued
high support and CCC purchases for foreign feeding,
planted a record rice acreage. The exceptionally favor
able growing season which followed resulted in a 41 per
cent crop increase over 1948, and was also 69 percent
above the 10-year average.
Arizona and California cotton farmers, also because
of a high price support rate (90 percent of parity) and
in anticipation of the imposition of marketing quotas in
1950, greatly increased areas planted to cotton. This ex
pansion in acreage, in conjunction with high yields and
good growing and picking weather in 1949, resulted in
the most bountiful cotton harvest in the history of Dis
trict cotton growing. The estimated 1.8 million bales
(500 pounds each) will be 39 percent more than the rec
ord of the previous season and 109 percent above the
1938-47 average. The per acre cotton-lint yield of 651
and 641 pounds in California and Arizona, respectively,
is nearly double the yield of any other cotton state and
two and a third times the national average.
Though in 1949, District flax acreage was increased
in spite of a sharp reduction in the level of price support
(from $6.00 a bushel in 1947-48 to $3.66 in 1949), total
yield was 20 percent below the record output of 1948 as
a result of unfavorable January weather conditions. In
Oregon, which produces all the nation’s flax used for
fibre, production was up 20 percent. As the Oregon fibre
flax is sown in the spring, the crop escaped the freeze
which reduced output of flaxseed in California and Ari
zona. Fibre flax, however, accounts for only slightly
over 1 percent of District flax production.
Livestock and meat production

The number of all cattle (beef and dairy) on United
States farms increased 3 percent during 1949, indicating
that inventories are once again on the increase. Favor
able grass conditions in many sections of the western
range prompted producers to hold more cows over for
another breeding season and to retain a larger number
of heifer calves for replacement purposes. The number
of cattle on feed at the end of the year in the country as
a whole slightly exceeded the number of the previous
year. This increase was primarily the result of more
L iv e s t o c k o n

F arm s

Ja n u a r y

1— T w e l f t h

(in thousands)
1939-48
average
7,404
A ll cattle and c a l v e s .................
H ogs, including pigs ...............
1,947
All sheep and l a m b s .................
9,523
Chickens ......................................... 34,295
Turkeys ............................................
2,105

1949
7,601
1,568
6,436
35,303
1,719

1950
7,600
1,554
5,993
39,196
1,752

D is t r ic t
Per
cent
change
1949-50
0
— 1
— 7
+10
+ 2

Source: United States Department of Agriculture, Bureau of Agricultural
Economics, “ Livestock on Farms on January 1.”

February 1950

M O N T H L Y REVIEW

cattle being fed for market in Texas and corn-belt states.
In the Twelfth District, the reduction in the number of
cattle in California and Oregon more than offset the
gains registered in Utah, Nevada, and Washington so
that little change occurred in total District inventory dur
ing 1949. At the end of the year, the number of cattle
on feed in District states for early 1950 marketing was
21 percent below the previous year. Favorable prices dur
ing the early fall and winter months brought many cattle
out of feed lots and into slaughter hands. As replace
ment cattle were scarce and high priced, and losses sus
tained on feeding operations in the 1948-49 winter sea
son well remembered, operators were slow in replacing
cattle for the 1949-50 feeding season. In contrast to se
vere winter cold in some areas and drought conditions in
others during the 1948-49 winter season, the winter of
1949-50 found District ranges mostly open to grazing,
rains timely, and livestock generally in a thrifty condi
tion. Ample feed and concentrates were available where
needed.
Sheep and lambs were again scarce in the nation’s mar
kets during 1949, reflecting the heavy reductions in
sheep numbers which have taken place since 1942. Fewer
lambs were on feed at the end of the year in the United
States as a whole, though in Texas, Oklahoma, and some
north central states the number on feed at the end of the
year was above the previous winter season. All District
states were feeding fewer sheep and lambs than a year
earlier.
The record corn crop of 1948 and prospects of lower
feed prices encouraged American farmers in the 1948-49
season to expand production of pigs by 13 percent. The
96 million pigs from out of the 1949 spring and fall crops
were the largest number saved since 1943. As much of
the spring crop was farrowed earlier than usual, move
ment to market was likewise able to start sooner. Mid
western farmers, apprehensive of the depressing effects
which the large hog inventories would have later in the
year, started marketing pigs as soon as they reached
minimum slaughter weights. This had the effect of
lengthening the marketing season and served to cushion
price declines until the larger than usual fourth quarter
seasonal marketing increase developed.
Total production of meat in the United States during
1949 was slightly above the previous year as a result of
increased output of beef and pork. Fewer breeding cows,
7 percent fewer calves, and one-fifth fewer sheep and
lambs were butchered for commercial meat channels in
1949. The total number of cattle killed in the United
States during the year for commercial distribution was
less than in 1948, but the total number of pounds of
meat produced was greater. This was due to the heavier
average weight of cattle marketed. Production of beef
was also greater in the Twelfth District in 1949, and out
put of veal was slightly increased owing to greater calf
slaughter in Washington and Utah. The 11 percent in
crease in District pork production was double the rate
for the country as a whole, and the percentage reduc

tion in the slaughter of sheep and lambs was only half
the national decrease. In Utah, however, contrary to both
the national and District trends, the mutton and lamb
output was 38 percent higher in 1949 than in 1948. This
was the result of an expansion in meat packing within
the state.
Poultry and eggs

Turkey farmers raised nearly 4 1 million birds in
1949, a 23 percent increase over the previous year.
Twelfth District producers accounted for one quarter
and California growers 15 percent of total output. Lower
feed costs partly offset lower prices received by turkey
raisers during the latter half of the year. New marketing
methods, such as cut-up birds, are creating outlets for
turkey sales throughout the year and will perhaps en
courage continued high production for some time to
come.
Production of both chickens and eggs continued plenti
ful during 1949. There was an increase in the number of
chicks hatched both in the District and in the nation as
a whole. However, an increased national output of eggs
was partly the result of a higher rate of lay— 165 eggs
per hen in 1949 as compared to 162 in 1948. Monthly
records for egg production in the United States were
established during the last four months of the year.
Dairy production

The decrease in the number of the nation’s dairy cows
was apparently arrested during 1949. With the generally
lower price levels prevailing for slaughter cattle during
the first half of the year, marketing of dairy cows, par
ticularly in the coastal areas, was not so heavy as had
occurred during the past few years. Milk output from the
country’s dairy herds was slightly higher than the pre
vious year. This was the result of both the continued
upward trend in the milk yield per cow and an interrup
tion in the downward trend in the number of dairy cows.
As consumption of fluid milk during the year about
equalled that of 1948, most of the 1949 increase was
channeled into the manufacture of butter and non-fat
powder. Much of the increase in these products was ab
sorbed by Government purchases under the price-support program. Though a considerable portion of the drymilk purchases by the Department of Agriculture during
the year were disposed of through the school lunch and
foreign supply programs, the larger portion of butter and
cheese purchases by the Department was still in Govern
ment hands at the year end.
Agricultural prices

During 1949, the farm prices of most agricultural com
modities continued the downward trend initiated in mid1948. In December, the all-farm products index of prices
received was 12 percent below the January level. Prices
paid by farmers in the meantime dropped only 3 percent.
At year end, the parity ratio— ratio of prices received
by farmers to prices farmers pay for production and liv
ing expenses, including interest and taxes, but excluding

February 1950

FEDERAL RESERVE B A N K OF SA N FRAN CISCO

I N D E X E S O F P R IC E S P A ID A N D R E C E I V E D B Y F A R M E R S U N I T E D S T A T E S , 1939-49

Cash

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 —
T w e l f t h D is t r ic t ,

(1 9 1 0 -1 4 = 100)

1949

(in thousands)

Arizona .........................................
California .....................................
Idaho ..............................................
Nevada ............................................
Oregon .........................................
U tah ................................................
W ashington ..................................

Crops
$
164,909
1,309,227
189,068
7,942
182,466
42,901
324,361

Livestock
and
products
$
71,395
717,588
128,931
32,877
151,954
97,331
181,506

Total
236,304
2,026,815
317,999
40,819
334,420
140,232
505,867

.................

$ 2,220,874

$ 1,381,582

$ 3,602,456

United States ........................

$12,566,225

$14,951,440

$27,517,665

Twelfth

District

So u rce: United States Department of Agriculture, Bureau of Agricultural
Economics, Farm Income Situation.

M id-monthly data. So u rce: United States Department of Agriculture, B u
reau of Agricultural Economics, Agricultural Prices.

wages— fell to 98. This was the first time since Novem
ber 1941 that it stood below 100. Beef cattle, veal, lambs,
turkeys, milk, tobacco, and wool were the only major
agricultural commodities above 100 percent of parity.
The decline in the indexes of agricultural prices during
1949 was greater for fruit and truck crops than for feed
and food grains or for livestock and livestock products.
Food grain prices declined 6 percent during the year, and
feed grains and hay were off 9 percent. Government price
support programs were an important factor in limiting
the decline in prices of these products. Fruit prices, how
ever, declined 30 percent during the latter half of the year
under the pressure of record supplies, and between Jan
uary and December truck prices dropped 28 percent.
Livestock prices in general were at lower levels in
1949 than during the previous year. After sharp declines
in late 1948 and early 1949, however, the price of beef
steers, starting in early February, worked upward and
by the end of the year was higher than the December
1948 level. Hog prices, on the other hand, partly as a
result of increased numbers marketed and record outputs
of edible fats and oils, were lower throughout the year.
By December, prices were hovering around the Govern
ment support level. The shortage of sheep numbers helped
maintain relatively high lamb prices during 1949. Gov
ernment purchases of approximately 4 percent of 1949
egg output, in dry or powdered form, bolstered prices so
that they averaged only 5 percent below 1948 despite in
creased production, though they dropped sharply in the
last two months of the year. The price of chickens, unsup
ported, averaged 27 percent below 1948.

tial element in reducing cash income, and declines in re
ceipts for oil-bearing crops and vegetables also contrib
uted. The reduction in cash farm receipts, in conjunction
with relatively high production costs, resulted in smaller
net farm income in 1949. Wage levels were lower, but
the costs of seed, equipment, and fertilizer increased.
In the Twelfth District, total cash receipts from farm
marketings during 1949 amounted to $3.6 billion, 8 per
cent less than in the previous year. In 1948, income from
livestock and livestock products in the District was the
essential factor in promoting an increase in gross cash
income over the previous year, while in 1949, cash re
ceipts from livestock and livestock products dropped 14
percent compared to a 4 percent reduction in cash income
from crops. For livestock and livestock products the de
cline was greater in the Twelfth District than for the na
tion as a whole. A decrease of 22 percent in total cash
receipts for Nevada, the greatest decline in the District,
was primarily the result of the smaller returns from live
stock. Gross returns from livestock and livestock prod
ucts were 20 percent less in Idaho, and 11 percent or over
in Arizona, California, Oregon, and Utah. Arizona, how
ever, owing primarily to an expansion in cotton produc
tion, was the only District state in which cash farm re
ceipts increased over 1948.
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 —
T W E L F T H D IS T R I C T
Percent change, 1 9 4 8 -4 9

Farmers' cash receipts

Though a slightly greater volume of agricultural prod
ucts was marketed in the nation in 1949 than during the
previous year, total cash receipts were 10 percent
smaller than in 1948 as a result of lower farm commodity
prices. Smaller dollar returns were particularly notice
able in cash receipts from livestock and livestock prod
ucts. Lower returns from wheat were another substan-

Source: United States Department of Agriculture, Bureau of Agricultural
Economics, Farm Income Situation.

February 1950

M O N T H L Y REVIEW

Farm real estate

Farmland values follow the trend of gross farm in
come, though the response is not automatic and may be
at a greater or lesser rate in different regions and within
areas. During the 1940-48 period of inflated farm com
modity prices, the percentage increase in farmland prices
for the United States as a whole rose more than half as
much as gross farm income. During the following twelve
months, however, the first significant drop occurred when
the price of land on a national average dropped 6 percent.
A considerably greater decline in farmland values was
registered in the three Pacific Coast states of the Twelfth
District.
I n d e x N u m b e r s o f A v e r a g e V a l u e P ejr A c r e o f F a r m
E state— T w e lfth

R eal

D is t r ic t S t a t e s

(1912-14=100)

Arizona .......................................
California ..................................
I d a h o ............................................
Nevada .......................................
Oregon .......................................
Washington .............................
Utah ............................................
United S t a t e s ......................

1940
average
95
121
86
70
84
84
89
84

1948
November
186
228
178
119
168
181
154
177

1949
November
177
199
162
111
145
161
143
167

Percent
change
November,
1948-49
— 5
— 13
— 9
— 7
— 14
— 11
— 7
—

Source : United States Department of Agriculture, Bureau of Agricultural
Economics, The F a r m Real Estate Market.

It is probable that the price declines of perishable and
non-supported crops of the Pacific area during the last
18 months were influential in the greater decline of land
prices within the states of California, Oregon, and Wash
ington. The stronger recovery of beef-cattle and lamb
prices after the early 1949 price break tended to infuse
greater confidence in the long-term earning capacity of
livestock-producing lands as against the immediate pros
pects of the more highly productive crop farms of the
Pacific valley areas.
Though further extensive declines in farm commodity
prices would no doubt effect a continuation of the down
ward trend in the price of farm land within the District
as well as within the United States in general, there are
a number of factors which may serve to lengthen the lag
which usually exists between gross farm income and
farmland values. Farm operators in general accumulated
substantial savings during the eight years following 1940.

Even in the face of generally lower agricultural prices,
farm owners are not apt to be stampeded into liquidating
farms in the immediate future, in view of prospects for
continued Federal price support operations. Liquidation
of farms at present high levels of land values would in
most cases incur heavy capital gains taxes and pose a
problem of reinvestment. In addition, fewer prospective
farm purchasers today are in a position to pay cash, and
lending institutions would view more cautionsly the long
term earning outlook for farmland before extending farm
mortgage credit.
Farm employment

Total farm employment in 1949 for the country as a
whole averaged 3 percent below 1948. Wages paid to the
nation’s farm workers were also lower than the previous
year, reflecting lower cash farm receipts. Seasonal rises
in average wages were smaller in 1949 than in 1948 and
seasonal declines sharper. The labor supply was plenti
ful throughout the year, and no District crops suffered
for a lack of harvest hands. Periodic lulls between the
harvest of different crops within the Twelfth District
caused some unemployment, besides considerable mov
ing between areas and over-concentration of workers in
some localities. The shortage of housing continued to
create a problem for both workers and farmers. An abun
dant fruit crop and an expansion of cotton acreages in
1949 were major factors in attracting the large number
of workers to agricultural fields. Some harvest hands
came from out of the urban areas when employment op
portunities for unskilled workers were reduced. Picking
cotton was the primary source of employment during the
final three months of the year. The large supply of hand
labor, an increase in the number of cotton-picking ma
chines, and favorable weather brought completion of the
major share of the cotton harvest earlier than usual.
Though this tended toward producing good quality cot
ton lint, it worked to the disadvantage of the cotton
picker. When harvest extends into February, or as late
as March, rains adversely affect the quality of the crop,
but cotton pickers find longer employment. The early
conclusion of the 1949-50 season caused serious unem
ployment conditions among migrant farm workers in the
District which will continue until 1950 harvests are well
under way.

FE D E R A L RESERVE B A N K

OF S A N

February 1950

F R A N C IS C O

BUSINESS INDEXES— TW ELFTH DISTRICT1
(1935-39 average = 100)
Industrial production
(physical volume)1

Year
and
Month

Petroleum*
Lumber Crude Refined Cement

1929.................
1931.................
1932.................
1933.................
1934.................

Lead1

Total
CarCali
Dep’ t
Dep’ t
m f’g
fornia ioadings store
store
Retail
stocks
Wheat Electric employ factory (num
sales
food
power ment4** payrolls4 ber)* (value) * (value)5 prices1
Copper« flour»

1936..................
1937..................
1938.................
1939.................
1940.................
1941..................
1942.................
1943.................
1944.................
1945.................
1946.................
1947_________
1948.................
1949_________

148
77
46
62
67
83
106
113
88
110
120
142
141
137
136
109
130
141
144
138

129
83
78
76
77
92
94
105
110
99
98
102
110
125
137
144
139
147
149
147

127
90
84
81
81
91
98
105
103
103
103
110
116
135
151
160
148
159
162
167

110
74
48
54
70
68
117
112
92
114
124
164
194
160
128
131
165
193
211
202

171
104
75
75
79
89
100
118
96
97
112
113
118
104
93
81
73
98
107
103

160
75
33
26
36
57
98
135
88
122
144
163
188
192
171
137
109
163
153
140

106
101
89
88
95
94
96
99
96
107
103
103
104
115
119
132
128
133
116
104

83
82
73
73
79
85
96
105
102
112
122
136
167
214
231
219
219
256
284
303

1948
November___________
December___________

138
134

153
153

173
171

217
196

115
111

109
104

126
122

1949
January_____________
February____________
M arch ______________
April________________
M a y _________________
June_________________
Ju ly................................
August______________
September__________
October_____________
November___________
Decem ber___________

115
115
131
141
143
146
136
135
140
139
147
150p

151
152
153
152
149
148
146
144
144
141
140
140

174
170
176
169
170
174
162
165
166
158
161
156

176
173
195
212
215
219
217
209
208
200
200
196

112
107
120
124
126
118
98
93
84
77
89r
105

108
129
169
167
159
138
131
121
136
136
145r
140

128
118
102
82
100
104
108
109
108
104
101
89

' *88
100
112
96
104
118
155
230
306
295
229
175
184
189
186

111
73
54
53
64
78
96
115
101
110
134
224
460
705
694
497
344
401
430
425

135
91
70
70
81
88
103
109
96
104
110
128
137
133
141
134
136
142
134
126

112
92
69
66
74
86
99
106
101
109
119
139
171
203
223
247
305
330
353r
332

134
110
86
78
83
88
96
108
101
107
114
137
190
174
179
183
238
300
346r
323

1 3 2 .0
1 0 4 .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
10 7 .9
1 3 0 .9
1 43.4
142.1
1 46.3
1 6 7 .4
2 0 0 .3
216.1
2 0 9 .6

296r
298

194
190

449
444

132
131

349
358

340
320

2 1 5 .6
2 1 6 .5

300
297
295
303
304
315
299
310
308
306
299
306

185
185
187
189
189
188
186
186
185
185
183
182

430
423
412
412
415
419
423
429
437
435
421
446

105
103
118
126
134
139
120
138
138
124
129
128

342
314
329
335
340
335
329
333
32G
337
319
339

321
327
342
331
320
313
302
309
333
330
331
315

2 1 7 .9
2 1 4 .1
2 1 3 .3
2 1 5 .6
2 1 1 .0
2 0 9 .9
2 0 6 .3
2 0 5 .7
2 0 7 .3
2 0 5 .5
2 0 5 .7
2 0 2 .4

BANKING AND CREDIT STATISTICS— TW ELFTH DISTRICT
(amounts in millions of dollars)
Year
and
month
1929
1931
1932
1933
1934
1935
1936
1937
1938
1939
1940
1941
1942
1943
1944
1945
1946
1947
1948
1949

Condition items of all member banks7
Loans
U .S .
Total
Demand
and
Gov’ t
time
deposits
discounts securities adjusted8 deposits

Bank
rates on
short- ter m
business
loans*

Member bank reserves and related items1®
Reserve
bank
credit1»

2,239
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
5,358
6.032
5,926

495
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
7,247
6,366
7,014

1,234
984
840
951
1,201
1,389
1,791
1,740
1,781
1,983
2,390
2,893
4,356
5,998
6,950
8,203
8,821
8,922
8,655
8,596

1,790
1,727
1,618
1,609
1,875
2,064
2,101
2,187
2,221
2,267
2,360
2,425
2,609
3,226
4,144
5,211
5,797
6,006
6,087
6,221

3.20

—
3
2
+
2
+
4
+
107
+
+ 214
98
+
76
9
+
302
17
+
13
+

1948
December

6,032

6,366

8,655

6,087

3.16

1949
January
February
March
April
M ay
June
July
August
September
October
November
December

6,009
5,910
5,899
5,811
5,738
5,762
5,707
5,729
5,853
5,860
5,919
5,926

6,382
6,306
6,208
6,230
6,357
6,330
6,548
6,846
6,863
6,933
6,944
7,014

8,664
8,330
8,147
8,157
8,154
8,006
8,139
8,221
8,273
8,353
8,511
8,596

6,082
6,097
6,102
6,109
6,112
6,179
6,179
6,170
6,186
6,186
6,157
6,221

.......

3.27

—
+

2
4
15
6
8
0
20
30
13
2
12r
40

1950
January

5,901

7,123

8,620

6,244

+
—
—
+
+

3.24
+
—

3.14
3.16

+
+
—
+

34
21
42
2
7
2
6

Coin and
Commercial Treasury currency in
operations1* operations11 circulation11

Reserves

Bank debits
index
31 cities«.1*
(1935-39 100)«

0
— 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
+ 472
931

-f
23
+
154
+ 234
+
150
+ 257
+ 219
+ 454
+
157
+ 276
+ 245
+ 420
+ 1 ,0 0 0
+ 2 ,8 2 6
+ 4 ,4 8 6
+ 4 ,4 8 3
+ 4 ,6 8 2
+ 1 ,3 2 9
+ 630
482
+ 378

6
48
+
30
+
18
4
+
14
+
38
+
3
20
+
31
+
96
+
+ 227
+ 643
+ 708
+ 789
+ 545
326
— 206
— 209
—
65

175
147
142
185
242
287
479
549
565
584
754
930
1,232
1,462
1,706
2,033
2,094
2,202
2.420
1,924

146
97
68
63
72
87
102
111
98
102
110
134
165
211
237
260
298
326
355
350

—

2,420

376

101
7
34
127
202
53
—
213
— 194
41
+
—
95
21r
+
32
+

+
+
+
+
+
+
+

58
19
6
109
94
5
130
40
37
92
2r
30

—
—

—

54
4
31
11
37
0
16

+
+
+
—
—

9
7
16r
8

2,329
2,308
2,299
2,264
2,128
2,063
1,997
1,832
1,837
1,831
1,854
1,924

356
344
364
354
345
351
344
332
336
351
349
376

—

1,892

354

—

—
—
—
—
—

—

+
+

* All monthly indexes but wheat flour, petroleum, copper, lead, and retail food prices are adjusted for seasonal variation. Excepting for department store sta
tistics, all indexes are based upon data from outside sources, as follows: Lumber, various lumber trade associations; Petroleum, Cement, Copper, and Lead,
U .S. Bureau of M ines; W heat flour, U .S. Bureau of the Census; Electric power, Federal Power Commission; Manufacturing employment, U.S. Bureau of
Labor Statistics and cooperating state agencies; Factory payrolls, California State Division of Labor Statistics and Research; Retail food prices, U .S. Bureau
of Labor Statistics; and Carloadings, various railroads and railroad associations.
* D aily average.
1 N ot adjusted for seasonal variation.
4 Excludes fish, fruit, and vegetable canning. Factory payrolls index covers wage earners only.
1 A t retail, end of month or year.
* Los Angeles, San
Francisco, and Seattle indexes combined.
7 Annual figures are as of end of year; monthly figures as of last Wednesday in month or, where applicable,
as of call report date.
• Demand deposits, excluding interbank and U .S. G ov’t deposits, less cash items in process of collection. M onthly data partly
estimated.
• New quarterly series beginning June 1948. Average rates on loans made in five major cities during the first 15 days of the month.
»• End of
year and end of month figures.
11 Changes from end of previous month or year.
l* Minus sign indicates flow of funds out of the District in the case of
commercial operations, and excess of receipts over disbursements in the case of Treasury operations.
** Debits to total deposit accounts, excluding inter*
bank deposits.
p — preliminary.
r— revised.
*— Revised because of newly revised figures for Oregon.

Full text of Economic Review (Federal Reserve Bank of San Francisco) : February 1950

FRASER