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MONTHLY REVIEW
OF
B U S I N E S S C O N D IT IO N S
ISAAC B. NEWTON, Chairman of the Board and Federal Reserve Agent
Federal Reserve Bank of San Francisco
Vol. X V I
San Francisco, California, February 20,1932
No. 2
T W E L F T H F E D E R A L R E S E R V E D IS T R IC T C O N D IT IO N S
Tw elfth District business was slightly less
active in January than in December. Industrial
operations expanded by about the seasonal
amount, but seasonally adjusted indexes of
trade declined. Credit extended in the Twelfth
District by the Federal Reserve Bank of San
Francisco rose to the highest levels in more
than ten years. Prices for commodities impor
tant in the District declined further during
January.
Rain and snowfall continued above normal
levels in January. Although the outlook for the
growth of most crops is satisfactory, cold
weather has slightly impaired the quality of
oranges. The condition of livestock is relatively
poor, due to the heavy snowfall on many winter
ranges and shortages of supplemental feed. The
marketing of crops was seasonally smaller in
volume than in December.
Production of lumber declined less than sea
sonally during January and was exceeded con
siderably by shipments and orders, contributing
to further reduction of inventories. Output of
crude oil as well as the amount run to refinery
stills averaged slightly higher than in Decem
ber, and gasoline stocks continued to increase.
A ctivity at flour mills remained unchanged,
after seasonal adjustment. The value of engi
neering contracts awarded decreased sharply,
and the value of building permits increased less
than is usual from Decem ber to January. Sub
stantial decreases were recorded in wage and
employment schedules.
The January declines in both retail and
wholesale trade were greater than usual for
that month. Neither freight carloadings nor au
tomobile registrations showed the customary
seasonal increases. A non-seasonal rise in w est
bound traffic through the Panama Canal was
more than offset by an extremely low volume of
eastbound shipments, principally because of re
duced cargoes of lumber and petroleum.
Tw elfth District demand for Federal reserve
credit expanded more rapidly from January 20
to February 17 than in the preceding four
weeks. The increase was almost entirely in the
form of discounts for member banks, which rose
sharply to the largest amount since August,
1921. Continued declines in deposits of report
ing member banks were the result of further
liquidation of loans and payments to other dis
tricts for the accounts of individuals as well as
non-seasonal increases in currency circulation.
Small purchases of locally produced gold by
the San Francisco Mint and expenditures of the
United States Treasury in excess of collections
in the Twelfth District, tended to increase de
posits during the month and thus retarded
somewhat the rate of deposit decline.
Additional shipments of gold from Japan
were received at San Francisco. As is usually
the case, however, the funds were transferred
to eastern money markets and did not affect the
District credit situation. Average money rates
have been steady to firm since early January.
A griculture
Further declines during January in prices of
many agricultural products sold in the Twelfth
District have continued to influence adversely
the economic aspects of the agricultural situa
tion, in contrast with the improved physical
conditions resulting from favorable weather
during the month. H eavy rains in the lower
altitudes and abnormal snowpacks in the moun
tain watersheds have assured sufficient irriga
tion water for the 1932 agricultural season.
Livestock on snow-covered ranges are in poor
condition, and inadequate forage has necessi
tated the use of large quantities of supplemental
feeds, the purchase of which has been an added
burden to stockmen in the District. Condition
of fall-sown wheat in the Pacific Northwest is
reported by trade factors to be satisfactory,
snow having amply covered most winter wheat
areas thus far during the winter. As in every
other month of the current marketing season,
the volume of agricultural products marketed
during January was smaller than in the corre
sponding month of the preceding year.
MONTHLY REVIEW of business conditions
10
Cold weather in the orange producing sec
tions of California during recent months did not
reduce the size of the crop materially, but it did
impair the quality of the fruit. A t least partly
in consequence of the poorer quality of the
fruit, orange prices, f.o.b. California, averaged
only $1.63 per box during January as compared
with averages of $2.00 per box in December and
$2.04 per box in January, 1931. Shipments of
oranges during January and for the season to
January 31 were smaller in volume than during
the same periods a year ago.
Prices for butter declined by the usual m od
erate seasonal amount during January and in
early February were about 10 per cent lower
than a year ago. Butter production during
1931, as measured by receipts at eight leading
District markets, was 6 per cent greater than
in 1930. Receipts during January, however,
were about the same as in December, 1931,
and storage holdings were 1,032,308 pounds
less on February 1 than at the beginning of
that month in 1931. This decrease in storage
holdings, coupled with increased receipts for
the year as a whole, indicates that consumption
of butter has been greater in the past year than
in other recent years, probably because of lower
prices. Although receipts and storage holdings
of eggs were less in January, 1932, than in Janu
ary, 1931, egg prices decreased by more than the
usual sharp decline at that time of year.
Little aggregate change in the number of
livestock on District farms was indicated dur
ing 1931 by figures recently released by the
United States Department of Agriculture. The
number of dairy cattle and swine increased 2 per
cent and 25 per cent, respectively, while the
numbers of other cattle (chiefly beef) showed
no change and sheep declined 3 per cent. The
aggregate value of livestock declined 35 per
cent during the year as compared with a decline
of 24 per cent during 1930.
A gricu ltu ral M arketing A ctivity —
f —— January------ >
C a rlo t S h ip m e n ts
A p p l e s ......................
O ra n g e s .................
L e m o n s .................
V e g e ta b le s (C a L ).
E g g s (C a l., O re .,
W a s h .) ...............
E x p o rts
W h e a t ( b u .) ____
B a rle y ( b u .) ____
R e c e ip ts
C a ttle* ...................
S h e e p * .....................
H o g s * .....................
E g g s ( c a s e s ) t •••
B u tte r ( l b s . ) t . . .
S to r a g e H o ld in g s
(e n d o f m o n th )
A p p le s (ca rs —
Cal. an d W a s h .)
W h e a t (b u .) ____
B ea n s ( b a g s ) . . . .
B u tte r ( lb s .) ____
E g g s (c a s e s ) . . . .
«32
3,806
3,969
884
6,407
323 359
1,528,166
98,148
t— Season to D a t e —
1931-1932
1930-1931
32,865
51,606
12,840
13,674
2,229
2,394
21,735
24,444
........................
710,734
557,153
16,390,100
2,819,929
..........
15,380,767
6,170,348
85,600
74,905
287,700 267,276
288,730 239,553
148,231 160,790
6,409,205 5,211,845
..................................................
..................................................
..................................................
..................................................
..................................................
13,947
14,508
2 ,880,000 6,921,000
2,074,353 1,853,009
873,959 1,906,267
2,132
12,006
...................................................
..................................................
..................................................
..................................................
...................................................
* Eight markets, t Three markets.
1931
4,370
4,913
1,065
7,751
February, 1932
L I V E S T O C K O N F A R M S A N D R A N G E S — T w elfth D istrict
( i n thousands)
D airy
January 1
C o w s*
1932
....1,923
1931
....1,892
1930
.... 1,850
1929 .................................... .... 1,804
1928 .................................... ....1,753
....1,719
1927
1926 . .................................. .... 1,699
O ther
Cattle
3,686
3,703
3,590
3,609
3,791
3,675
3,847
Sheep
14,244
14,598
14,109
14,335
13,673
13,217
12,545
H ogs
1,667
1,334
1,314
1,539
1,677
1,465
1,235
* C o w s and h eifers o n e y e a r o ld o r o v e r k e p t fo r m ilk .
Livestock on winter ranges in Nevada, Utah,
eastern Oregon and W ashington, and parts of
California and Idaho are suffering from scant
range feed. This shortage, combined with a
deficient local supply of hay and the inability
of stockmen to finance the purchase of “ con
centrates,” has resulted in a general decline in
the condition of livestock and considerable
losses in scattered areas. Even in Arizona,
where feed conditions have been more satisfac
tory than in other parts of the District during
the past year, livestock suffered from these un
favorable influences during January.
C O N D IT IO N O F L IV E S T O C K A N D R A N G E S
(P e r cent o f norm al)
t----- Ranges. ------>
F eb.
1932
. . 90
C a lifo rn ia . . . . 72
73
, . 71
, . 77
U t a h .............. . . 60
W a s h in g t o n . . 77
S ou rce:
Jan. F e b .
1932 1931
94
90
71
69
72
93
73
89
74
87
67
85
79
86
,------ C attle ------N
F e b . Jan. F e b .
1932 1932 1931
90
86
90
75
73
84
81
81
95
81
82
94
80
80
90
73
76
91
83
90
83
,-------
Sheep ------ %
F e b . Jan. F e b .
1932 1932 1931
80
90
87
87
78
78
82
83
95
75
82
96
80
83
93
70
72
90
83
84
92
U n ite d S tates D e p a r tm e n t o f A g r ic u ltu r e .
Approximately the seasonal increase was re
corded in Twelfth District industrial activity
during January. Output of petroleum changed
little and lumber production increased after
seasonal adjustment but the value of building
permits issued rose somewhat less than is
customary. Copper mines in the District ap
parently reduced operations further during
January, in accordance with the curtailment
agreement which was scheduled to become ef
fective January 1. Production of flour mills was
approximately the same in January as in D e
cember.
A ccording to the monthly report of the D e
partment of Industrial Relations in California,
the number of workers employed in that state
during January, 1932, was 18 per cent smaller
than in January, 1931, and 3 per cent smaller
than in December, 1931. The largest em ploy
ment declines over the year period were in the
metals, lumber, petroleum, and motion pic
ture industries ; while smaller declines were re
ported for the leather, publishing, paper, textile,
and food groups. Average weekly earnings de
clined 14 per cent as compared with last year
and were 3 per cent lower than in the preceding
month. Reports from firms in Oregon indicate
FEDERAL RESERVE AGENT AT SAN FRANCISCO
February, 1932
similar reductions in employment and payrolls
in that state during January. Non-statistical
information concerning employment conditions
in other states of the District generally gives
evidence of continued reductions in the number
of workers employed.
Production of lumber decreased by less than
the seasonal amount and this Bank’s adjusted
index rose moderately. As in other recent
months, shipments and orders were larger than
production, however, and inventories carried
by lumber companies were further reduced. At
the end of January both orders and shipments
were running about 50 per cent higher than
output.
The value of building permits issued in the
District during January was a little larger than
the amount recorded for each of the two pre
ceding months. As a result of unusually low
figures for three consecutive months, this
Bank’s m oving quarterly index of building per
mits issued in the District declined further in
January to 20 per cent of its 1923-1925 average.
The value of engineering contracts awarded
declined substantially from December to Jan
uary. Large decreases were recorded in con
tracts for streets and roads, public buildings,
Federal government, and unclassified projects.
Partly offsetting these declines was a consider
able increase in the volume of awards for com
mercial and industrial buildings from the rec
ord low value of that type of construction in
December.
Daily average production of crude oil in Cali
fornia increased slightly during the month. The
amount of crude oil run to stills was also larger
E m ploym ent—
t ----------California----------%
.------------- Oregon-------N o. of
N o. of
N o. '—Employees —% N o.
r ~ Employees —\
Jan.,
Jan.,
of
Jan.,
Jan.,
of
1932
1931
1931
Firms
Firms 1932
Industries
152,137
127
5,335
( — 2 0 .1 )
6,679
2
13,176
( — 2 1 .8 )
16
1,727
( — 11.1)
16,845
46
10,005
( — 13.4)
11,554
25,842
( — 8 .0 )
36 46,388
( — 13.8)
28,096
A ll Industries*____ 1,192
124,654
S ton e, C la y and
G lass P r o d u c t s .
^
61
L u m b e r and W o o d
M a n u fa c tu r e s . . 138
T e x tile s
...................
C lo th in g , M illin e ry
an d L a u n d e rin g . 145
F o o d , B e v e ra g e s ,
and T o b a c c o . . .
P u b lic U tilitie s . .
287
O th e r I n d u s tr ie s ’!". 489
M is cella n eou s
....
W h o le s a le and
R etail ..................
62,455
( — 2 0 .8 )
56
6,114
0— 2 4 .8 )
13,555
17,239
( -2 1 .4 )
1,942
96
( — 27.8)
133
6,440
( — 2 8 .3 )
1,100
9
( — 14.5)
8,978
280
( — 2 3 .3 )
365
1,304
( — 18.0)
1,591
4,335
(■— 11.3)
4,886
6$
36
1,286
53,838
78,896
8,125
28
34,654
32,526
( — 6 .1 )
* P u b lic utilities and w h o le sa le and retail figu res n o t in clu d e d in
this total, f I n c lu d e s th e fo llo w in g in d u s t r ie s : m etals, m a
ch in e r y an d c o n v e y a n c e s ; leath er and ru b b e r g o o d s ; o ils and
p a in t s ; p r in tin g and p a p e r g o o d s . {L a u n d e r in g on ly.
150
Figures in parentheses indicate percentage change fromJanuary,
1931.
11
than in December and stocks of gasoline in
creased.
Since the end of 1929 there has been little
change in the production of electric energy in
the Twelfth District. As shown in the chart
below, there had been a rapid expansion in the
use of electricity during the several preceding
years. An undetermined, though considerable,
proportion of the expansion of electric power
production during these years may be attrib
uted to the tendency to replace other types of
power with electricity. Although the evidence
is not conclusive, it appears probable that the
increase in the ratio of the production of elec
tric energy to other forms of power has con
tinued during the last two years.
PE R C E N T
E L E C T R IC P O W E R P R O D U C T I O N -T w e lfth District
(1923-1925 average=100)
Output of flour mills changed little between
December and January. As in the past several
months, there was practically no demand for
flour from the export market, except for that
created by the Farm Board in connection with
its sales to China. Domestic demand for flour
was of moderate proportions during the
month.
Industry—
Indexes of daily average production, adjusted for seasonal variations
(1923-1925 daily average™ 100)
1932
G eneral:
Jan.
C a rlo a d in g s — In d u s tr ia l ...........................
44
E le c t r ic P o w e r P r o d u c t i o n ...............................
----------- 1931------------ N
Dec. N ov.
Jan.
44
48
75
148
146
151
M anufactures:
L u m b e r ................... ..
R e fin e d M in e ra l O il s f .
F lo u r ....................................
S la u g h te r o f L iv e s t o c k
C em en t .................................
W o o l C o n s u m p tio n f . .
36
136
116
87
56
113
34
136
115
92
56
132
63
133
105
70
75
54
77
59
38
76
64
48
76
58
40
81
83
68
40
45
42
57
19
23
21
26
24
28
44
47
73
120
76
123
69
104
96
117
M inerals:
P e tro le u m ( C a lifo rn ia ) f
L e a d (U n ite d S ta te s ) $
S ilv er (U n ite d S ta te s) %
Building and Construction§
T o ta l ..................................................................
V a lu e o f B u ild in g P e rm its
T w e n t y L a r g e r C ities ...........................
S e v e n ty S m a lle r C ities ........................
V a lu e o f E n g in e e rin g C o n tra cts
A w arded
T o t a l ..........................................................
E x c lu d in g B u ild in g s ........................
39
111
37
fNot adjusted for seasonal variations. {Prepared by Federal
Reserve Board. §Indexes are for three months ending with
the month indicated.
MONTHLY REVIEW OF BUSINESS CONDITIONS
12
Trade
Distribution of commodities according to
value figures of retail and wholesale trade, ton
nage of intercoastal traffic, automobile registra
tions, and freight carloadings, was less active
in January, 1932, than in either December, or
January, 1931.
Sales of department stores were 22 per cent
lower during January, 1932, than in January,
1931, and were 3 per cent less than in December,
1931, after allowing for the usual decline from
Decem ber to January. Reports from stores in
Oakland, San Francisco, other central Califor
nia cities, and Spokane showed the smallest
declines over the year period, while reports
from Portland and Seattle stores showed the
greatest declines. The number of sales trans
actions, as indicated by reports from 24 depart
ment stores, was 10 per cent smaller in January,
1932, than in January, 1931.
R E T A I L T R A D E — T w elfth D istrict
*---------1932 com pared with 1931*STO C K S
N E T SALES
January
January
— 15.1 ( 4 9 )
•22.4 ( 6 7 )
D e p a r tm e n t S t o r e s ..............
.... ( ..)
- - - ('
3)
P h o e n ix ....................................... — 24.2
— 15.5 (
'■
L o s A n g e le s ............................. — 24.3 (
9)
O th e r S o u th e r n C a lifo r n ia . — 25.8 (
8)
O a k la n d ....................................... — 15.0 (
4)
4)
— 13.4 (
S a n F r a n c is c o ........................ — 14.2 (
7)
7)
O th e r N o rth e r n C a lifo rn ia . — 19.0 (
7)
7)
— 19.1 (
7)
P o r t l a n d ! .................................... — 34.2 (
7)
5)
S ea ttle ......................................... — 31.2 (
5)
— 15.4 (
S p o k a n e ....................................... — 19.8 ( 4 )
4)
— 14.5 (
S alt L a k e C ity ........................ — 26.1 ( 4 )
3)
— 29.2 ( 16)
A p p a r e l S to r e s ............................. — 23.6 ( 2 7 )
F u rn itu r e S t o r e s ...........................— 26.4 ( 37 )
-1 1 .3 ( 2 8 )
A ll S t o r e s ......................................... — 23.0 (1 3 1 )
— 15.6 ( 9 3 )
—10.1
—22.2
—11.0
—12.1
8)
( 6)
(
(
(
" P e r c e n t a g e ch a n g e , f l n c l u d e s five app arel sto re s w h ic h are n o t
in clu d e d in D is t r ic t d ep a rtm e n t s to re to ta l.
F ig u r e s in p a re n th e s e s in d ica te n u m b e r o f s to re s r e p o r tin g .
January sales of wholesalers were about 27
per cent less than during January, 1931, a
larger year-to-year decrease than was evident
during any month in 1931.
W H O L E S A L E T R A D E — T w elfth D istrict
P ercentage change in value o f sales
A g r ic u ltu r a l I m p le m e n ts
A u t o m o b ile S u p p lie s
D r u g s ......................................
D r y G o o d s .............................
G ro c e r ie s ........................
H a r d w a r e ......................
S h o e s ................................
P a p e r an d S ta tio n e r y
Jan., 1932 com pared with
D e c ., 1931 Jan., 1931
— 48.9
8.0
— 12.7
— 19.0
— 9.0
— 21.1
0.0
— 34.0
— 45.4
— 40.3
— 16.2
— 35.7
— 3.3
— 20.9
— 15.2
— 32.8
— 12.5
— 25.8
— 11.2
— 24.1
— 10.8
— 27.0
Intercoastal traffic through the Panama Ca
nal declined considerably more than is usual
between December and January. W estbound
cargo increased, contrary to seasonal ten
dencies, but this advance was more than offset
by a large decline in the more important eastbound shipments. Shipments of lumber amount
ing to 105,000 tons were but slightly larger than
the record low volume in November, 1931, and
may be compared with the 1931 monthly aver
age of 153,000 tons. Shipments of petroleum
February, 1932
products aggregated only 90,000 tons during
January and were smaller by a good margin
than in any other month since such data have
been available in recent years. During 1931
there was a steady decline in shipments of
petroleum products from California to the A t
lantic Coast, chiefly because of the abundant
supplies of crude oil obtainable at low prices
from mid-continent and foreign fields. Com
bined intercoastal and foreign shipments of
petroleum products are currently accounting
for a smaller proportion of California produc
tion than formerly.
During December, 1931, imports of com m odi
ties into this District, exclusive of silk, in
creased somewhat, contrary to the usual
movement at that season of the year. Imports*
of silk, however, valued at $1,653,000 in Decem
ber, were the smallest on record since 1922.
Total exports decreased substantially. The
value of all commodities entering into the for
eign trade of the Twelfth District was less than
half as large in December, 1931, as in Decem
ber, 1930.
Prices
The downward movement of com m odity
prices continued unabated during January and
the first half of February. Representative
weekly indexes, practically all of which were
lower than at any time during the period of
their compilation, declined about 2 per cent in
this six-week period.
Since early December wheat prices, ranging
from 5 3 ^ to 5 9 ^ cents per bushel (M arch con
tract at Chicago), have been more stable than
during any period of similar length in two years.
The quotation on February 20 was 58^ cents
per bushel, about 20 cents lower than quotaDistribution and Trade —
1932
Jan.
t—
D e c.
■- 1931 — - >
Jan.
N ov.
f------- In dex N um bers*-
C a rlo a d in g s î
M e r ch a n d is e and M is c e lla n e o u s
.. .
63
81
63
82
64
81
84
92
55
51
57
58
53
61
91
88
92
68
81
65
74
88
70
86
97
82
58
55
96
40
36
85
84
78
144
91
87
94
88
108
93
F o r e ig n Trade®
I n te r co a s ta l T r a d e 0
W e s t b o u n d ................................................
E a s tb o u n d ................................................
60
76
55
R eta il T r a d e
A u to m o b ile SalesJ
P a ss e n g e r C a rs ..................................
C o m m e rcia l V e h ic le s ...................
D e p a r tm e n t S to r e
S to c k s §
................................................... ,
88
79
A ctu a l F igu res -
C o lle c tio n s #
In s ta llm e n t
.............................................. .
43.4
14.8
41.8
13.5
41.8
14.4
44.9
15.8
* A d ju s t e d f o r se a so n a l v a r ia tio n s, 1923-1925 a v e r a g e = 1 0 0 . ° I n d e x e s are f o r th re e m o n th s e n d in g w ith m o n th in d ica te d .
t E x c lu d in g ra w silk. { D a i l y a v e ra g e . § A t en d o f m o n th .
# P e r c e n t o f c o lle c t io n s d u r in g m o n th to a m o u n t o u ts t a n d
in g at first o f m o n th .
F ebru ary , 1932
FEDERAL RESERVE AGENT AT SAN FRANCISCO
tions in February, 1931. California barley prices
fluctuated only slightly during January and
early February and currently are at levels ap
proximately 15 per cent higher than a year ago.
Other District grains and field crops such as
rice, cotton, hops, and hay, are selling at prices
well below those of early 1931. Citrus fruit
marketed in January brought lower returns
than in either Decem ber or January, 1931,
while apple prices were equal to or slightly
higher than those of a year earlier. Canned and
dried fruit prices advanced slightly during
January.
Lumber prices receded slightly during Janu
ary to levels somewhat lower than during last
August, the previous low point of recent years.
Crude oil prices in California have been un
changed since late in June, 1931. Since the be
ginning of this year gasoline of lower than
standard quality has been introduced at reduced
prices in a few Tw elfth District markets by
some of the larger oil companies.
On February 10 copper prices fell back to the
all-time low of 6 cents per pound which was
first established last autumn. Few sales were
reported at that price. Zinc prices reached an
all-time low of 2.80 cents per pound East St.
Louis during the week of February 1. There
was little change in quotations on lead. Silver
prices advanced moderately to 3 0 ^ cents per
ounce on February 15.
Credit Situation
Discounts at the Federal Reserve Bank of
San Francisco increased steadily and rapidly
during January and the first half of February.
On February 17 they were at the highest level
since August, 1921. M ost of the increased bor
row ing was by San Francisco banks, although
banks in other parts of the District expanded
their discounts proportionately. Total deposits
of reporting member banks continued to decline
during this period. Approxim ately one-third of
the 100 million dollar decline in deposits since
the beginning of the year may be accounted for
by an equivalent reduction in loans. The re
mainder of the decline reflects to some extent
withdrawals of currency by the public, but more
especially net payments of funds to other dis
tricts.
A s would be expected in view of the develop
ments outlined above, currency in the hands of
the public and commercial banks has increased
since the beginning of the year, a movement
contrary to the seasonal tendency, since a con
siderable amount of currency (20 to 30 million
dollars) is usually returned from circulation to
the Reserve Bank during the month following
the Christmas shopping period. Little net
change in currency circulation in the District
was shown during the first half of January,
13
1932, while an increase of 14 million dollars was
recorded during the four weeks ending Febru
ary 17.
F E D E R A L R E SE R V E B A N K O F S A N F R A N C IS C O
( i n m illion s of dollars)
t------------------- C on d ition ------------------- \
T o t a l B ills and S e cu ritie s ..........
B ills D is c o u n t e d ........................
B ills B o u g h t ..................................
U n ite d States S ecu rities . . . .
T o t a l R e se rv e s
.............................
T o t a l D e p o s its ..................................
F ed era l R e s e rv e N o te C ircu la tio n
R a tio T o ta l R eserv es to D e p o s it
and N o te L ia b ilitie s C o m b in e d
F e b . 17,
1932
204
135
19
48
217
162
246
53.4
F e b . 10,
1932
195
126
19
48
216
152
242
54.9
J a n .20, F e b . 18,
1932
1931
177
63
101
17
25
6
48
39
218
309
147
186
233
167
57.4
87.3
A reduction of bankers' as well as custom
ers' deposits has been experienced by San Fran
cisco banks during recent months. Amounts
due to other banks by San Francisco banks
reached a peak of about 175 million dollars in
September and October, 1930. They have de
creased steadily since that time, averaging only
83 million dollars in the first half of February,
1932. A similar withdrawal of bankers' deposits
from reporting member banks in the entire
Twelfth District has proceeded somewhat
faster than has the recalling of funds by those
banks, with the result that the net amount owed
to banks has decreased. Balances held in New
York by all Twelfth District member banks
have also been reduced, such balances declining
from 77 million dollars at the end of 1929 to 47
millions on September 29, 1931, the latest date
for which complete information is available.
Not only did country banks reduce outstand
ing balances in other cities during January and
Bank Debits*A riz o n a
P h o e n ix
January, 1932
$
.................
C a lifo rn ia
B a k e rsfie ld ............
B e r k e le y .................
F r e s n o ......................
L o n g B e a c h ..........
L o s A n g e l e s ..........
O a k la n d .................
P a s a d e n a .................
S a c r a m e n to ..........
S an B e r n a rd in o .
S an D i e g o ...............
San F r a n c i s c o ___
San J o s e .................
San ta B a rb a ra . . .
S t o c k t o n .................
27,297
January, 1931
$
36,522
8.778
19,474
19,486
34,577
692.777
203,346
29,991
48,206
8,482
45,212
764,507
21,048
12,341
16,110
14,526
19,122
26,629
55,457
1,003,465
225,700
37,310
51,424
10,205
62,831
1,148,630
30,131
16,204
21,085
Idaho
B o is e
........................
13,017
14,394
N e va d a
Reno
........................
8,212
10,216
O reg on
E u g e n e ....................
P o r tla n d .................
4,467
107,215
6,013
143,487
U ta h
O gden
...................
S alt L a k e C it y . .
10,906
60,384
15,861
72,245
W a s h in g t o n
B e l l i n g h a m ............
E v e r e tt ....................
S eattle ......................
S p o k a n e .................
T a com a
.................
Y a k im a ...................
5,111
6,864
146,470
32,010
25,941
8,755
7,525
10,591
211,668
52,287
37,357
14,675
$2,380,984
$3,355,560
T o ta l
...............
*In thousands of dollars.
.
14
MONTHLY REVIEWOF BUSINESS CONDITIONS
February, making it necessary for city banks
to increase borrowing at the Reserve Bank, but
they themselves required additional Reserve
Bank funds. The number of borrowing banks
REPORTING M EM B ER BANKS — Twelfth District
(I n m illion s o f dollars)
-Condition ——
Feb. 17. Feb. 10, Jan. 20, Feb. 18.
1932
1931
1932
1932
L o a n s an d I n v e s tm e n ts — T o t a l . .
L o a n s — T o t a l ................................
O n S ecu ritie s
A ll O th e r ..................................
In v e s tm e n ts — T o ta l ...................
U n ite d S ta te s S e cu ritie s . . .
O th e r S e c u r itie s ......................
R e s e r v e w ith R e s e rv e B a n k . . . .
N e t D e m a n d D e p o s i t s ...................
T im e D e p o s it s ..................................
D u e fro m B a n k s .............................
D u e to B a n k s ....................................
B o r r o w in g s at R e s e r v e B a n k . . .
1,812
1,077
288
789
735
400
335
87
609
884
91
150
109
1,813
1,079
297
782
734
401
333
89
597
880
95
143
115
1,826
1,098
299
799
728
391
337
83
614
907
107
160
86
1,943
1,277
375
902
666
330
336
107
738
1,019
215
281
SUPPLY OF A N D D E M A N D FOR B AN K IN G FUNDS
Twelfth District
Changes between January 20 and February 17, 1932
A
«
DEPOSITS
^FEDERAL RESERVE NOTEIS IN CIRCULATION I
1930
Supply
Demand
M o n e t a r y G o ld S t o c k . . — 34.3
R e s e r v e B a n k C r e d it. . .
35.5
D is c o u n t s ............ 33.7
A c c e p t a n c e s . . . — 1.2
O th e r C re d its . . . 3.0
T r e a s u r y O p e r a tio n s . .
27.9
D e m a n d fo r C u rr e n c y . .
13.9
M em ber B a n k R eserve
D e p o s it s ...........................
17.4
U n e x p e n d e d C a pital,
n o n -m e m b e r d e p o s its ,
e t c .......................................... — 2.2
T ota l
T o ta l
29.1
TOTAL RESERVES
AA
.......................................
L
TOTAL EARNINC ASSETS
( i n m illion s of dollars)
....................................
in deposits has been the banks' practice of pay
ing dividends in excess of current earnings,
thus reducing surplus and other accounts and
tending to increase deposits.
Savings deposits in city banks continued to
decline during January. During the past year,
the greatest declines in savings deposits of re
porting banks have been in those areas in which
increases in public demand for currency have
been most pronounced. Savings deposits in the
banks reporting from Los Angeles declined 21
per cent during the twelve months ended Janu
ary 30, and the largest increase in demand for
11
in this District rose to 224 during January com
pared with 171 for December and 118 in Janu
ary, 1931. The December-January increase in
the number of banks accommodated was
somewhat greater than the seasonal experience
of the five preceding years.
February, 1932
29.1
Several factors in addition to increased bor
rowing and liquidation of loans have supplied
banks with funds to offset those lost through
decreased deposits. The withdrawals them
selves liberated reserves that had been carried
against those deposits. Expenditures by the
Treasury in excess of collections and sales of
locally produced gold to the Mint created new
deposits offsetting in part the reductions. A n
other factor moderating somewhat the decrease
1931
1932
PRINCIPAL ITEM S OF C O N D IT IO N
Federal Reserve Bank of San Francisco (as of each Wednesday).
currency during the year centered in that city.
Declines in savings deposits in other Twelfth
District cities during the year amounted to 11
per cent in Seattle; 22 per cent in Portland;
3 per cent in San F rancisco; 6 per cent in Spo
kane, and 8 per cent in Salt Lake City.
The volume of trading upon Pacific Coast
stock exchanges was smaller in January than
in December. During the first half of February,
however, rising security prices on the New
Y ork Stock Exchange and action by Congress
upon banking and credit bills were accompanied
by substantial upturns in both volume and
value of sales upon District exchanges.
R e v is e d In d e x e s o f L u m b e r P r o d u c t i o n i n the
T w e lfth F e d e r a l R e s e r v e D is t r ic t
The production and manufacture of lumber
has been one of the most important industries
in the Tw elfth Federal Reserve District since
that area attained an appreciable degree of in
dustrial growth. In fact, available data indicate
that the value of lumber produced exceeded the
value of the products of any other industry
during each year o f the current century up to
and including 1929, the latest year for which
value data satisfactory for comparative pur
poses are available. In view of the prominent
position of lumbering in the econom ic life of
the Tw elfth District, this Bank has attempted
to secure a comprehensive, reliable measure of
the monthly production of that industry. Efforts
in this direction have produced a series of data
which may be described as “ estimated monthly
total lumber output.” These figures have been
used as a basis for the indexes of Tw elfth Fed
eral Reserve District lumber production, pre
sented in this article.
There are three general lumber producing
areas in the Twelfth District. The most im por
tant of these is the Douglas fir region of western
W ashington and western Oregon. Second in
importance is the pine area, which extends over
eastern W ashington, northern Idaho, southern
and eastern Oregon, and northeastern Califor-
February, 1932
FEDERAL RESERVE AGENT AT SAN FRANCISCO
nia. A small amount of pine is also produced in
Arizona and Utah. O f considerably less impor
tance than either the fir or pine areas is the
redwood region of coastal northern California.
In each of these areas, a large proportion of
lumber production is reported to associations
operating therein; the W est Coast Lumber
men's Association in the Douglas fir region;
W estern Pine Association throughout the pine
section; and California R edw ood Association
in the third region. Statistics prepared by these
associations furnish the basis for measuring
month-to-month or other short-time fluctua
tions in lumber output.* Prior to October, 1931,
two separate associations covered the area
throughout which the W estern Pine Associa
tion now operates— the California W hite and
Sugar Pine Manufacturers' Association in
northeastern California and southern Oregon,
and the W estern Pine Manufacturers' Associa
tion in other sections of the general area de
scribed above. A s a result of the combination
of these two associations last autumn, under
the name of the W estern Pine Association, it is
no longer possible on the basis of published re
ports to show separate data for the two pine
producing regions. The present reports of the
new organization are comparable with the com
bined reports of the two former associations,
however, and the Twelfth District totals have
not been affected by the consolidation of the
two sets of figures.
* T h e W e s t C o a s t L u m b e r m e n ’ s A s s o c ia t io n r e c e iv e s re p o r ts fro m
m ills in B ritis h C o lu m b ia as w ell as fro m th o s e in W a s h in g
t o n and O re g o n , an d r e p o r ts o f th e W e s t e r n P in e A s s o c ia t io n
in c lu d e a sm all v o lu m e o f lu m b e r c u t o u ts id e th e T w e lfth D is
tr ic t in M o n ta n a . S in c e th e a m o u n ts in v o lv e d are sm all in
r e la tio n t o T w e lft h D is t r ic t lu m b e r p r o d u c t io n an d th e sea
son al m o v e m e n ts are sim ila r t o th o s e o f D is t r ic t p r o d u c tio n ,
n o a d ju s tm e n t has b e e n m a d e fo r th em .
15
The fact that the regions discussed above
have been identified with reference to particu
lar types of lumber means only that those
species are of chief importance in the areas, not
that other species are of little significance. Such
woods as cedar, hemlock, spruce, white fir and
larch, are produced in sizeable quantities in the
Twelfth District. In dealing with the general
regions, it should also be realized that the pro
duction of any given kind of lumber is not re
stricted to a single association area. For ex
ample, an appreciable amount of Douglas fir is
cut in the California redwood region.
The total output of and annual changes in
the lumber industry in this District are prob
ably best shown in the tables prepared yearly
by the United States Forest Service for the
Bureau of the Census. In preparing the revised
indexes, therefore, the Bureau of the Census
figures were relied upon as measuring yearly
changes in lumber output most accurately. The
only data on short-term changes in production
are the weekly or monthly figures reported by
the lumber associations, referred to above, and
those figures have therefore furnished the meas
ures of month-to-month changes in lumber pro
duction within each calendar year. Since the
annual movements in production were to be
measured by the Bureau of the Census figures,
representing all lumber produced in the D is
trict, and since month-to-month changes were
shown only by the association reports repre
senting less than 100 per cent of total District
lumber cut*, it became desirable to adjust
the monthly association figures so that for each
* T h e p e r c e n ta g e s v a r ie d s o m e fr o m o n e ye a r t o a n oth er, b u t d id
n o t c h a n g e a p p re c ia b ly w ith in a n y sin g le y ear.
MILLIONS OF BOARD FEET
L U M B E R P R O D U C T IO N
Total monthly output in the Twelfth District and in each association area.
16
MONTHLY REVIEWOF BUSINESS CONDITIONS
calendar year they would total to the annual
Census figures, preserving, of course, the
m onth-to-month fluctuations as shown by the
association data. This procedure was for the
purpose of securing a continuous monthly series
of data over the entire period covered which
would permit direct comparisons of production
in any month of any year with production in
any month of the same or any other year.
Some difficulty was experienced in making
these conversions, since the Bureau of the
Census annual figures are not directly com
parable with those of the individual associa
tions, principally because the tw o sets of figures
cover different areas, but also because the asso
ciation reports are less inclusive than are the
Census figures. Reports of the Bureau of the
Census show the various species of lumber cut
by states, while the association figures are for
regions which are predominantly forested with
certain types of timber, and which do not in any
way correspond with state boundaries. In order
to obtain the desired continuous series showing
total monthly production of lumber in the Dis
trict, it was necessary first to secure an adequate
measure of total annual production in each as
sociation area. The m ethod'used in preparing
these figures was devised by the Federal R e
serve Board, which organization computed the
annual totals for the years 1919-1928, inclusive.
In general, this method involved the use of the
Bureau of the Census annual figures, apportion
ing to each association area the equivalent of
each species cut therein annually. The deter
mination of these equivalents was facilitated
by the fairly distinct boundaries of the impor
tant stands of the several species of timber,
which coincide closely with the different asso
ciation boundaries. These amounts, which have
been checked in various ways and are believed
to represent quite accurately total annual lum
ber cut in each association area, are shown in
the follow ing ta b le:
L U M B E R P R O D U C T I O N — Twelfth District
(M illio n ft. b. m .)
1919
1920
1921
1922
1923
1924
1925
1926
1927
1928
1929
1930
1931
.....................
Total
9,933
11,702
7,989
11,748
14,191
13,270
14,843
15,640
14,803
15,165
15,506
11,769
7,413
T o t a l ......................... 163,972
California
Redwood
Area
482
558
530
657
705
716
614
595
685
578
580
467
188
7,355
Western
Pine
A reaf
2,806
3,431
2,260
3,277
4,177
3,929
4,632
4,720
4,207
4,426
4,651
3,637
2,210
48,363
Douglas
Fir
Area
6,645
7,713
5,199
7,814
9,309
8,625
9,597
10,325
9,911
10,161
10,275
7,665
5,015
108,254
t Combined figures of California W h ite and Sugar Pine M anu
facturers’ A ssociation and W estern Pine Manufacturers* A s
sociation.
February, 1932
H aving obtained annual estimates of total
lumber production by association areas, the
next step was to prorate those figures on the
basis of monthly figures of the associations.
(M onthly association data were secured from
several sources, all of them having their origin,
however, in the weekly or monthly reports of
mills to the associations.) This proration re
sulted in the series designated as “ estimated
monthly total lumber output,” a series which
represents satisfactorily both month-to-month
and year-to-year changes in lumber production
of the District. From the series thus obtained,
indexes were constructed for each association
area and for the Tw elfth District as a whole,
both with and without adjustment for seasonal
variations.
I N D E X E S O F L U M B E R P R O D U C T I O N -T w e lfth District
(1923-1925 average=100)
Without adjustment for seasonal variations
Tan.
Feb.
M ar.
A p r.
M ay
June
July
Aug.
Sept.
O ct.
N ov.
D ec.
Avg.
*19
*20 ’21
43
47
60
71
81
81
80
86
84
88
74
51
70
66
73
88
93
101
101
85
93
91
86
73
46
83
27
31
42
50
67
69
62
72
70
72
65
54
57
*22
*23
*24
’25
*26
*27
*28
’29
58
57
67
71
94
100
92
104
102
101
91
64
83
71
63
95
104
118
121
103
121
109
113
108
83
101
75
88
95
102
108
97
85
104
98
108
91
79
94
83
81
97
104
110
119
108
118
117
124
107
97
105
85
99
124
120
122
123
114
120
117
119
104
85
111
75
86
100
99
117
118
110
127
120
114
106
89
105
76
91
113
114
120
119
105
124
107
120
108
93
108
90
79
111
122
127
123
117
130
110
120
108
85
110
*19
*20
*21
*22
*23
*24
57
64
65
72
68
67
74
74
74
78
76
72
87
98
96
93
86
85
79
79
81
76
75
63
36
42
45
49
57
58
58
61
63
64
66
71
78
76
72
70
82
84
86
88
92
91
93
81
95
82
101
101
104
102
97
104
100
101
110
104
101
108
98
100
96
84
83
91
91
96
93
98
*30 *31
72
80
101
107
110
97
82
85
77
76
62
54
84
46
47
57
65
68
67
57
60
52
49
34
29
53
*29
*30
*31
123
95
109
113
112
111
114
113
107
110
109
103
99
96
99
99
97
87
80
74
76
70
62
65
64
56
56
59
60
61
56
52
51
45
34
36
W ith adjustment for seasonal variations
Jan.
Feb.
M ar.
A p r.
M ay
June
July
A ug.
Sept.
O ct.
N ov.
D ec.
*25 *26
111
98
98
99
99
106
105
104
110
111
108
119
114
119
125
113
110
110
111
105
110
107
105
103
*27 *28
101
103
100
93
105
106
107
111
114
104
107
108
103
110
113
106
106
107
102
109
103
110
109
113
In order to carry the indexes forward cur
rently, it is necessary to depend entirely upon
the reports of the lumber associations, checking
and, if necessary, revising them when the an
nual figures of the Bureau of the Census becom e
available, several months after the close of each
year to which the figures refer. The monthly
figures obtained from association reports are
adjusted by appropriate conversion factors to
give current estimates of total monthly lumber
cut in each association area and in the Twelfth
District as a whole. Inasmuch as most mills,
or at least most of the larger mills accounting
for the bulk of the lumber output, furnish re
ports regularly, it is believed that the current
monthly series closely approximates aggregate
production, and that month-to-month changes
are accurately measured.
M O N T H L Y
R E V IE W
OF
BUSINESS CONDITIONS
ISAAC B. NEWTON, Chairman of the Board and Federal Reserve Agent
Federal Reserve Bank o f San Francisco
San Francisco, California, February 20, 1932
Supplement
Vol. XVI No. 2
S U M M A R Y O F N A T IO N A L C O N D IT IO N S
Prepared by the Federal Reserve Board
In January production of manufactures in
creased by about the usual seasonal amount,
while output of minerals and value of building
contracts awarded continued to decline. W h ole
sale prices declined further during January and
early February, but more recently prices of cer
tain leading commodities showed an advance.
Production and Employment. Volum e of in
dustrial production, which includes both manu
factures and minerals, increased from Decem
ber to January by an amount somewhat smaller
than is usual at this time of year, and the
Board’s seasonally adjusted index declined
from 71 per cent of the 1923-1925 average to 70
per cent. In the steel industry there was a sea
sonal increase in activity during January, fol
lowed by a slight decline during the first three
weeks of February. Production of automobiles,
which usually increases considerably at this
season, showed little change in January, fol
lowing an increase in December. A ctivity at
textile mills increased by more than the usual
seasonal amount and at shoe factories there was
a seasonal increase in production. Output of
coal and petroleum was substantially reduced.
Volum e of factory employment declined by
more than the usual seasonal amount between
the middle of December and the middle of Janu
ary. Number employed at foundries, carbuilding
shops, clothing factories, and establishments
producing building materials declined substan
tially, while employment in the tobacco indus
try decreased less than is usual at this season,
and employment in the woolen goods industry
increased, contrary to seasonal tendency.
Total value of building contracts awarded in
37 eastern states, as reported by the F. W .
D odge Corporation, declined sharply in Janu
ary, and for the three months period ending in
that month was about one-half of the amount
awarded in the corresponding period a year
ago. Approximately one-fourth of the decrease
was in residential building, and three-fourths
in other types of construction.
Distribution. Total freight carloadings de
creased in January, contrary to seasonal tend
ency, reflecting chiefly smaller shipments of
merchandise, miscellaneous freight, and coal.
Department store sales declined by about the
usual seasonal amount.
W holesale Prices. The general level of
wholesale com m odity prices, as measured by
the index of the Bureau of Labor Statistics, de
clined 2 per cent further from December to Jan
uary, although prices of some important com
modities, such as wheat, showed little change
and the price of cotton advanced. During early
February prices of certain leading commodities
PER CENT
16Ol
âA
120
A
S
*
80
^
^ T O I rA L
S
w
40
J
>
\
^
R E S I D E N T IA L
1927
1928
1929
1930
1931
1932
INDUSTRIAL PRODUCTION
Indexnumbers of industrial productionadjustedforseasonal varia
tions (1923-1925average»100).
1927
1928
J ............1
1930
1929
..........
>»
.......
1931
1932
V A L U E OF B U ILD IN G CO N TR A CTS A W A R D E D
Indexes based on three-month moving averages of F. W . Dodge data
for 37 Eastern states, adjusted for seasonal variations.
(1923-1925 average=100).
including grains and cotton declined, but later
in the month there was some advance in the
prices of these commodities.
Bank Credit. Volum e of reserve bank credit
outstanding declined in January and the first
half of February. This decrease has reflected a
return flow of currency from circulation, which
PER C E N T
rency accompanying a decrease in bank failures.
A t member banks in leading cities volume of
credit continued to decline during January and
the first half of February. Between January 13
and February 17 total loans and investments
decreased by $550,000,000 representing declines
in loans on securities, in other loans, and in
BILLIONS or DOLLARS
D EPAR T M EN T STORE SALES
M EM B ER BANK CR ED IT
Indexes of daily average value of sales with adjustment for seasonal
variations and without adjustment for seasonal
variations.
Monthly averages of weekly figures for reporting member banks in
leading cities. Latest figures are averages of first three
weeks of February.
has been smaller than usual this year, together
with a continued reduction in member bank re
serve balances, offset in part by a demand for
reserve bank credit caused by an outward
movement o f gold amounting to $100,000,000
since the turn of the year. A decline in money
in circulation after the first few days in Feb
ruary reflected some return of hoarded cur
investments. Deposits of these banks also de
clined substantially during this period.
M oney rates in the open market showed little
change. On February 26 the discount rate of
the Federal Reserve Bank of New Y ork was re
duced from 3y2 to 3 per cent, and buying rates
on bankers’ acceptances of short maturities
were reduced from 2% to
per cent.
@FedFRASER