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MONTHLY REVIEW OF B U S IN E S S C O N D IT IO N S ISAAC B. NEWTON, Chairman of the Board and Federal Reserve Agent Federal Reserve Bank o f San Francisco Vol. XI San Francisco, California, February 21,1927 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. Industrial activity has been slightly greater since the turn of the year than at the close of 1926. Seasonal liquidation of reserve bank credit has been in unusually large volume, ow ing chiefly to the inflow of gold from abroad, and condi tions in the money market have been easy. W holesale prices have continued to decline. Production. Output of factories was larger in January than in December, but smaller than in January, 1926, or 1925. Mineral production, though somewhat below the December level, continued in unusually large volume, reflecting the maintenance of production of bituminous coal, crude petroleum, and copper. Manufac ture of iron and steel, which was sharply cur tailed in December, increased in January and February. Autom obile output was increased considerably from the unusually low level of production reached in December, but the num ber of passenger cars produced since the be ginning of the year has been smaller than for the corresponding period of the past four years. The textile industries have continued active since December without, however, showing the usual seasonal increase. Building contracts PER CENT Index number of production of manufactures and minerals combined, adjusted for seasonal variations (1923-1925 average = 100). Latest figures, January, 106. awarded in 37 states during the first seven weeks of the year were smaller in value than those for the same period of 1926. Decreases have been largest in New York and the New England, Southwestern and Northwestern States, while increases occurred in the Middle Atlantic and Central W estern States. By types of building, contracts awarded for residential and industrial building in January showed large reductions as compared with December and with January, 1926, while contracts for com mercial buildings were larger than a month or a year ago. Trade. Retail trade showed more than the usual seasonal decline between December and January. Sales of department stores were in about the same volume as a year ago, while those of mail order houses were 7 per cent smaller. W holesale trade declined in nearly all leading lines in January and was considerably smaller in volume than one year ago. Inven tories of department stores were reduced less than is customary, and at the end of the month were in about the same volume as in January, 1926. Stocks of merchandise carried by wholePER CENT W H O L E S A L E PR ICE S Indexes of United States Bureau of Labor Statistics, (1913 prices=100). Latest figures, January, all commodities, 146.9; non>agricuItural commodities, 149.6; agricultural commodities, 143.4. Those desiring this review sent them regularly will receive it without charge upon application. 10 MONTHLY REVIEW OF b u s i n e s s c o n d i t i o n s sale firms increased slightly, but continued in smaller volume than in the corresponding month of the previous year. Freight car load ings declined by somewhat more than the usual seasonal amount from December to January, but, ow ing chiefly to heavier shipments of coal this year, weekly loadings since the beginning of the year were larger than for the same period of 1926. Shipments of merchandise in less than carload lots were also slightly larger than last year; but loadings of most basic commodities were smaller. M E M B E R B A N K C R E D IT Monthly averages of weekly figures for banks in 101 leading cities. Latest figures are averages for first 3 weekly report dates in February. Prices. The general level of wholesale prices declined fractionally in January, according to the index of the Bureau of Labor Statistics, a considerable advance in prices of livestock be ing more than offset in the total by decreases in nearly all other com m odity groups included in the index. Prices of non-agricultural prod ucts, as a group, declined to the lowest level since early in 1922. In February there were decreases in the price of iron and steel, nonferrous metals, bituminous coal, grains and hides, while prices of cattle, sheep, cotton and gasoline increased. February, 1927 Bank Credit. Commercial loans of member banks in leading cities, continued to decline during the four weeks ending February 16th, although at a less rapid rate than in earlier weeks. In mid-February the volume of these loans was about $270,000,000 below the sea sonal peak reached in the middle of November, though about $200,000,000 above last year’s level. Loans on securities also declined dur ing the period, while the banks’ investment holdings increased somewhat. During the four weeks ending February 23rd, the volume of R ESER VE B A N K C R E D IT Monthly averages of daily figures for 12 Federal Reserve Banks. Latest figures are averages of first 23 days in February. reserve bank credit remained near the low level reached at the end of January. Liquidation of reserve bank credit since the high point of last December has been in excess of $500,000,000, the unusual extent of this reduction being due chiefly to the large inflow of gold from abroad. Total bills and securities of the reserve banks on February 23rd were about $200,000,000 smaller than on the corresponding date of last year. Easier money conditions in February were reflected in a decline in the rate on prime com mercial paper from 4% to 4 per cent after the first week of the month. T W E L F T H F E D E R A L R E S E R V E D IS T R IC T C O N D IT IO N S Available evidence, both statistical and nonstatistical, indicates that general business ac tivity in the Tw elfth Federal Reserve District declined by more than the usual seasonal amount during January, 1927, but continued at levels approximating those of a year ago. This bank’s index of bank debits, which is adjusted for seasonal variations, declined from 158 (daily average 1919=100) in December, 1926, to 155 in January, 1927. It stood at 154 in Janu ary, 1926. The index records movements in total volume of check payments (bank debits) reported by banks in principal clearing house centers of the district, figures quite generally used as a measure of business activity. M ost agricultural areas of the district have been favored by a moderate winter season with ample rain and snowfall. Livestock are gener ally reported to be in good condition. Industrial activity decreased during January. As compared with a year ago, declines were reported in lumbering, building construction, 11 FEDERAL RESERVE AGENT AT SAN FRANCISCO February, 1927 and general manufacturing, while output of flour mills and other food manufacturing indus tries, metal mines, and petroleum producers in creased. Total volume of employment was slightly above the levels of January, 1926. Figures of trade at wholesale and at retail during January showed declines, not all of which could be ascribed to seasonal causes. Trade activity generally was maintained at slightly higher levels than in January, 1926. Prices of many of the district’s important products, including livestock, w ool, wheat and other grains, advanced during the first weeks of 1927, while prices of copper, lead, silver, and lumber declined. The price level of most groups of commodities was lower than one year ago. Seasonal and non-seasonal declines in busi ness activity have been reflected in decreased loan accounts at member banks and in reduced discounts at the Federal Reserve Bank. Com mercial loans of reporting member banks in principal cities of the district were smaller by 11 million dollars, or 1.2 per cent, on February 16th than on January 12th. Discounts of the Reserve Bank declined by 8 million dollars, or 19.4 per cent, during the same period. Interest rates have remained steady at moderate levels. Agricultural Activities The agricultural year has begun favorably in this district. Normal or greater than normal seasonal rainfall has been recorded in most farming areas ; the snowfall on mountain water sheds, which are sources of water for irrigation later in the season, has been heavy and is generally well packed; and in those sections where cold weather prevails during the winter, fall sown grain and other crops have had the protection of an ample covering of snow. Abnormally cold weather and some snowfall in the Pacific Northwestern and Intermountain States during the last two weeks of January was followed by milder weather in February. California and Arizona experienced moderate temperatures and frequent rains. Citrus fruit crops in California are in excel lent condition. The present estimated 19261927 yield of Navel oranges is 13,178,000 boxes, compared with 10,100,000 boxes pro duced in 1925-1926. Increased production of oranges is reflected in shipments, which totaled 4,357 carloads during January, 1927, as com pared with 3,473 carloads shipped during January, 1926. Lem on shipments during Janu ary, 1927, were 1,030 carloads, as compared with 682 carloads in January, 1926. Sugar beet production in the Twelfth Fed eral Reserve District declined sharply during 1926, as a consequence of the reduced acreage planted to this crop and of the small yield per acre secured by growers. Acreage and produc tion figures are shown in the following table: S U G A R B E E T S* f---------Acreage--------- n 1926 1925 California ............................ 48 76 Idaho .................................... 16 36 Utah .......................................54 69 181 Tw elfth District ............ 118 U nited States .................... 685 647 1924 84 40 80 204 815 /—Production (tons) 1926 1925 1924 395 488 785 109 456 275 409 1,064 560 913 2,008 1,620 7,537 7,366 7,489 *000 omitted. Source: United States Departm ent of Agriculture. United States Department of Agriculture estimates of the number of cattle, sheep and swine on farms and ranges of the Twelfth District on January 1, 1927, show an increase since January 1, 1926, of 6.4 per cent in number of sheep and 14.8 per cent in number of swine, a decrease of 5.3, per cent in number of other (beef) cattle, and no change in number of milch cows (dairy cattle). LI VESTOC K O N FA R M S A N D R A N G E S* (¿4.) R A I N F A L L — Twelfth District July 1,1926 July 1,1925 to to Feb. 16,1926 Feb. 16,1927 (Actual) (Actual) Arizona : (inches) * (inches) 14.7 Flagstaff ................... 4.1 Phoenix ...................... 9.3 California : 22.6 34.5 Eurêka ........................ .. 8.0 5.3 Fresno .......................... 9.6 12.8 Los Angeles .............. 21.2 16.2 Red Bluff ................... 10.6 13.3 Sacramento ................. 9.4 10.3 San D iego ................... 14.7 18.7 San Francisco .......... 19.0 13.9 San Luis O bispo. . .. 11.0 Idaho : 8.2 N evad a: Reno ............................. O regon : Baker City ................. Portland ....................... R oseburg .................... U ta h : Salt Lake C ity .......... W ashin gton : Seattle .......................... Spokane ........................ *Preliminary computations. 7.5 t— July 1 to Feb. 16 (Normal) (inches) 16.2 6.6 28.6 6.0 9.9 16.0 12.7 6.4 14.9 12.6 7.6 5.4 5.0 6.7 7.7 36.5 25.0 5.4 21.4 25.7 7.3 30.8 23.5 10.9 10.1 8.5 21.3 10.9 16.4 8.1 24.6 12.2 M ilch Other Sheep Swine Twelfth District— \ January 1st, 1926 1925 1,388 1,390 4,158 4,551 12,545 12,179 1,235 1,386 1927 Cows . . . 1,388 Cattle . . 3,947 ............ 13,406 ................. 1,452 (------- United States — - \ January 1st, 1926 1925 22,148 22,481 37,000 39,515 39,864 38,112 52,005 55,568 1927 21,824 35,697 41,909 52,536 *000 omitted. The decrease during recent years in number of “ other cattle” (chiefly beef cattle) on farms and ranges has been accompanied by heavy receipts of cattle and calves at markets in this district, as shown in the table below. A slight decrease in volume of marketing during 1926 as compared with 1925 tends to confirm more general evidence that liquidation in the cattle industry was checked during the past year. R E C E IP T S O F C A T T L E A N D C A L V E S A T E I G H T M A R K E T S (Twelfth District) 1926........................... 1,304,517* 192 5 .............. 1,328,256 1 9 2 4 ......................... 1,301,527 *Prelim inary estimate. 1 9 2 3 ........................... 1,137,240 1922........................... 1,226,024 1921........................... 1,076,617 12 Livestock ranges in this district, excepting those in certain sections of Utah, Nevada and Idaho where dry weather during the autumn retarded grow th of winter feed, have provided sufficient forage for animals on winter feeding grounds, and only ordinary supplementary feeding has been necessary. Lambing and w ool shearing are now in progress in the southern states of the district, and sheep are generally reported to be in good condition. Industrial Activity Industrial activity in the Tw elfth Federal Reserve District declined by more than the usual seasonal amount during January, 1927, and is estimated to have been at, or slightly below, the level of January, 1926. Available employment data indicate that declines in pro duction have been confined largely to the basic extractive industries of the district, some in creases in manufacturing output having been reported. Data showing the number of work ers on payrolls in principal industries of Cali fornia and Oregon are presented in Table “ C.” Value of building permits issued in 20 prin cipal cities of this district during January, 1927, was approximately 19 per cent smaller than in December, 1926, and was less than in any January since 1922. The decrease as com pared with Decem ber was in excess of the average December to January decline of recent years. It was the result chiefly of decreases re ported for Fresno, L ong Beach, Los Angeles, San D iego, and San Francisco, California, Port land, Oregon, Salt Lake City, Utah, and Seattle, W ashington. B U I L D I N G P E R M IT S IN 20 C IT IE S Per Cent Increase or Decrease ( — ) January, 1927, compared with Jan., 1926 D ec., 1926 — 15.4 3.6 N um ber of B uilding Perm its Issu ed ............ V alue of B uilding Perm its Issu ed ................. — 16.5 — 19.2 A ccordin g to the United States Bureau of Labor Statistics’ index, wholesale prices of building materials are now lower than at any (B) B uilding P erm its— Berkeley ............ B oise ................... Fresno ............... L o n g Beach . . . Los Angeles . . . Oakland ............ O gden ................. Pasadena .......... Phoenix .............. Portland ............ Reno .................... Sacramento . . . Salt Lake C ity. San D iego San Francisco San Jose .......... Seattle ............... Spokane ............ Stockton ............ Tacom a .............. February, 1927 MONTHLY REVIEW OF BUSINESS CONDITIONS N o. 195 22 84 308 2,844 704 8 168 102 690 16 182 29 657 692 97 741 91 68 171 7,869 Value 419,719 16,000 72,519 432,850 8,129,749 2,052,475 33,000 483,671 241,278 3,502,610 47,400 546,958 185,910 1,122,800 3,528,955 301,290 2,312,325 148,904 186,959 581,818 N o. 299 28 85 430 3,236 914 9 241 111 944 21 195 48 626 786 134 834 92 82 192 $24,347,190 9,307 $ $ Value 943,339 22,458 75,176 814,450 6,973,252 2,895,253 15,800 1,295,207 397,980 1,985,660 43,700 457,312 137,346 1,252,953 5,153,504 391,445 5,003,660 163,381 156,190 987,675 $29,165,741 time since the summer of 1924. The index stood at 169.7 (1913 prices=100) for January, 1927, at 172.7 for December, 1926, and at 178.0 for January, 1926. The Aberthaw index of total building costs, including labor and materials (1914 costs= 100), stood at 194 for February 1, 1927, a decline of two points from the January 1st figure, and a decline of three points from the average index figure, 197, for the final quar ter of 1926. The tendency toward greater than seasonal curtailment in lumber production, noted during the closing months of 1926, apparently per sisted during the first month of 1927. Output of lumber, as reported by mills in four associa tions in the district, declined to the lowest levels since February, 1923, and was less than in any other January since January, 1922. Orders received during January, 1927, exceeded shipments, which in turn exceeded output, so that stocks of lumber held by mills decreased and unfilled orders increased. LU M B ER A C T IV IT Y * Production ...................... Shipments ....................... Orders .............................. Unfilled O r d e r s t .......... N o. of M ills Reporting$ Jan., 1927 D ec., 1926 Jan., 1926 D ec., 1925 (board feet) (board feet) (board feet) (board feet) 460,184 528,296 585,005 375,877 168 539,776 558,442 565,488 318,040 172179 491,625 604,924 635,691 476,856 175 576,995 643,419 654,124 404,969 *A s reported by four associations, 000 omitted except in case of number of mills reporting. fR eported by three associations. The figures are not strictly comparable with other figures appearing in the table. JAverage. S o u rce: N ational Lum ber Manufacturers Association. Average daily production of petroleum was slightly smaller during January, 1927, than dur ing December, 1926, but was nearly 6 per cent larger than during January, 1926. Consump tion of petroleum declined by approximately 2.5 per cent during the month and was about 5 per cent less than production. Stored stocks increased during January, 1927, for the second (C) E m ploym ent-Californi a —^ ----------- \ N o . of N o . of N o. r ~ Employees —\ N o. r - Employees —s of Jan., Jan., of Jan., Jan., Industries ]Firms 1927 1926 Firms 1927 1926 794 143,317 141,338 128 18,191 19,046 (1.4) ( -4 .5 ) f Stone, Clay and Glass Products. 52 7,383 7,395 3 170 180 Lum ber and wood ( — 0.2) t C— 5 .6 ) t M anufactures . . 128 23,485 24,583 13,737 53 14,555 (— 6 .3 ) f (— 4.5) t 2,549 2,629 18 3 527 379 (— 3.0) t (3 9 .0 ) Clothing, M illinery and Laundering. 62 7,779 7,638 537 535 8 (1 .8 ) (0 .4 ) Foods, Beverages and T o b a c c o ... 168 24,088 22,849 38 1,534 1,635 (5.4) W ater, Ligh t and (— 6.2) t 7,891 8,947 Power ................. 5 (— 11.8)1* 65,210 Other Industries*. 349 67,960 (4 .2 ) 1,762 1,686 2,182 2,087 23 Miscellaneous . . . . 12 (4 .6 ) (— 4.3) t r * Includes the following indu stries: M etals, m achinery and con veyances ; leather and rubber g o o d s ; chemicals, oils and p a in ts; printing and paper goods. fD ecrease. Figures in parentheses indicate percentage changes from Janu ary, 1926. consecutive month, but at 120,566,572 barrels were still 6,808,412 barrels or 5.3 per cent smaller than a year ago. P E T R O L E U M — California Indicated Average Stored Daily Stocks at Average Consumption End of Daily Month Production (Shipments) (barrels) (barrels) (barrels) 618,092 120,566,572 Jan., 1927____ 651,125 631,132 119,542,556 D ec., 1 926____ 654,095 609,338 127,374,984 Jan., 1 9 2 6 . . . . 615,147 Sou rce: New W ells —> Daily Produc tion (barrels) 46,370 103 51,034 72 33,548 73 Number Opened Am erican Petroleum Institute. Figures of national production of non-ferrous metals, together with a guide to the proportion ate importance of this district in such produc tion, follow : N O N -F E R R O U S M E T A L S National Production Per Cent of Total Produced in Jan., 12th Dist.* 1926 il9 26 Jan., D ec., 1927 1926 Copper (short tons) (m ine production) ..................... 76,684 72,205 71,314 Lead (short tons) (crude) 52,697 54,981 50,796 Zinc (short tons) ( s la b ). 56,898 56,884 56,389 Silver (o z.) (commercial bars) ................................... 5,841,000 5,091,000 5,401,000 64.1 51.6 13.3 69.7 "In clu d in g all of Arizona, the five southeastern counties of which are in the Eleventh Federal Reserve District. Decreased activity in flour milling was re ported during January. Output of principal milling factors submitting their figures to this bank, at 409,439 barrels, was more than 10 per cent below the output of December, 1926, and was nearly 32 per cent below the January fiveyear (1922-1926) average output. Figures of stocks of flour and wheat on hand at reporting mills were larger at the close of January, 1927, than at the close of December, 1926, but were smaller than the average of the January figures reported during the five years 1922-1926. F L O U R M I L L IN G * Output ( b b ls .). . . Stockst Flour ( b b l s .) ... W hea t ( b u . ) .. . 13 FEDERAL RESERVE AGENT AT SAN FRANCISCO February, 1927 Jan., 1927 409,439 449,512 2,964,471 D ec., 1926 455,003 396,431 2,955,219 Jan., 1926 396,709 446,027 3,169,868 Five-Year Average Jan., 1922-1926 600,857 Final estimates of the 1926 canned salmon pack are presented in the accompanying table. The world pack of 10,516,814 cases in 1926 has been exceeded only by the 1917 pack, which totaled 10,692,047 cases. Record packs were reported from Central Alaskan, Canadian and Siberian waters. Unusually large catches of red salmon entered into the pack during the 1926 canning season. Salmon markets have been active during recent months, although prices have generally tended to decline, the de crease being greatest for red salmon. C A N N E D SA L M O N PACK* Five-Year Average 1921-1925 (cases) 4,385,312 1926 (cases) Alaska .............................................. 6,633,278 U nited States (excluding Alask a) ........................................ 858,406 1925 (cases) 4,450,898 1,583,423 1,123,825 T otal United S ta tes.............. British Columbia ........................ Siberia and Japan........................ 7,491,684 2,052,442 972,688 6,034,321 1,697,298 676,663 5,509,137 1,340,280 722,626 ............................. 10,516,814 8,408,282 7,572,043 T o tal W o rld A case contains 48 one-pound cans or their equivalent. estimate,, S o u rce: Pacific Fisherman. *Final General Business and Trade A ctivity in general business and trade was maintained at moderately high levels during January, 1927. Daily average debits to individual accounts (bank debits) in a representative group of cities declined during January, 1927, as comIN D E X 18 0 r NUM BERS 160 '\ \ W A / J - A 140 lA ' " 539,190 3,966,28 7 "Consolidations have reduced the number of reporting com panies but have not seriously affected the comparability of the figures. f A t end of month. 120 — Wl TH S E A S O N IAL A D J U S T M E N T ------- Wl TH O U T A D J U S T M E N T 1 (D) Bank Debits* — Berkeley ....................................... Boise .............................................. Fresno .......................................... L o n g B e a c h ............................... L os Angeles ............................. Oakland ....................................... O gden ........................................... Pasadena ...................................... Phoenix ........................................ Portland ....................................... Reno .............................................. Sacramento ............................... Salt Lake City ........................ San D iego .................................. San Francisco ........................... San Jose ....................................... Seattle .......................................... Spokane ....................................... Stockton ...................................... T a c o m a ......................................... Y akima ......................................... January, 1927 $ 22,144 14,884 41,173 48,004 968,340 213,189 24,209 45,361 30,604 162,397 9,286 27,362 77,544 78,135 1,100,398 29,564 189,151 60,877 31,096 44,852 12,476 District ............................... $ 3 ,2 3 1 ,0 4 6 *000 omitted. January, 1926 $ 21,714 15,534 39,469 55,779 884,893 167,449 32,921 41,205 27,590 167,646 9,379 35,320 79,848 65,892 1,053,360 28,115 206,479 56,466 30,753 46,881 13,049 $3,079,742 1924 1925 1926 1 ----------------WV 1927 B A N K D E B I T S — T W E L F T H D IS T R IC T Index for 20 principal cities, Phoenix, Arizona, not included, (daily averages, 1919 average = 100). Latest figures, January, with --------adjustment, 155, without adjustment, 160. *Based upon average month to month increase during the years 1919 to 1925 inclusive. pared with December, 1926, but were slightly larger than a year ago. This bank’s index of bank debits, which is adjusted for seasonal variations, declined from 158 (daily average 1919=100) in December, 1926, to 155 in Janu ary, 1927. A year ago the index stood at 154. B A N K D E B IT S —Twelfth District Index for 20 Principal Cities* Jan., D ec., 1927 1926 W ith out Seasonal Adjustm ent. . . 160 163 W ith Seasonal A d ju stm en t............ 155 158 *Daily average, 1919 average=100. N ov., 1926 159 153 Jan., 1926 158 154 14 Retail stores, in general, reported larger sales during January, 1927, than during January, 1926. The average increase in value of sales for 90 reporting stores was 4.4 per cent. As com pared with December, the most active month of the year for nearly all retail lines, sales de clined 48.9 per cent, a greater than seasonal de crease. Retail stocks at the close of January, 1927, were 2.1 per cent larger than at the close IN D E X February, 1927 MONTHLY REVIEW OF BUSINESS CONDITIONS NUM BERS of prices prevailing this year. The United States Bureau of Labor Statistics’ index of wholesale prices averaged 5.8 per cent lower in January, 1927, than in January, 1926. Declines in wholesale trade over the year period were reported for six lines of business, the other five reporting increases. A ll of the increases were moderate in amount except that reported for automobile tires, sales of which were 65.5 per cent greater than a year ago. As has been pointed out before, increases in current sales of tires are partly the result of the resumption of “ spring dating” sales, a practice which was re established last autumn by the larger com panies, and the effects of which are still ap parent. Sales of the 191 firms were 8.6 per cent smaller in January, 1927, than in December, 1926. Ordinarily, sales are larger during Janu ary than during December. W H OLESALE TRADE D E P A R T M E N T S T O R E S A L E S — T W E L F T H D IS T R I C T Index of 32 Stores in 7 cities (1919 monthly average— 100). Latest figures, January, with adjustment, 157; without --------adjustment, 138. *Based upon average month to month increase during the years 1919 to 1925 inclusive. of January, 1926, the chief increases being re ported by wearing apparel and furniture stores. Stock turnover during January, computed on the basis of figures of 62 firms, was 2.7 times per year compared with 2.8 times per year in January, 1926. For 34 department stores, stock turnover during January, 1927, was 2.65 times per year, compared with 2.76 times per year in January* 1926. O ct., Sept., O ct., D E P A R T M E N T S T O R E S A L E S — Index Numbers (1919 Monthly Average = 100) San Salt Los O ak Fran Lake Spo Angeles land cisco City Seattle kane (6)* (5)* (8)* (4)* (5)* (3)* nal Adjustment 87 81 69 . 230 130 115 . 411 247 198 286 193 165 151 102 . 253 155 118 1120 182 112 132 . 241 151 127 . 231 140 139 110 114 115 . 210 124 113 86 75 70 Adjustment . 243 152 . 272 171 . 253 149 . 234 168 . 265 147 . 221 145 130 154 150 139 150 128 105 127 111 107 112 104 107 122 1140 101 105 99 96 109 97 99 112 97 D is trict (32)* 138 281 1690 170 157 130 157 180 1710 158 171 148 "F ig u re s in parentheses indicate number of stores. _ One store included in district figures not included in cities shown above. ^Revised. Sales of 191 wholesale firms operating in eleven lines of trade in this district were 1.3 per cent smaller in value during January, 1927, than during January, 1926. A t least part of the decline in dollar value of sales, as compared with a year ago, may be ascribed to the lower level Agricultural Im plem ents. Autom obile Supplies . . . . Autom obile T i r e s ............... D rugs ....................................... D ry Goods ........................... Electrical Supplies .......... N o. of Firms 15 23 16 7 27 8 17 21 22 13 22 191 Percentage increase or decrease (— ) t------------ in Value of Sales--------------\ Jan., 1927 Jan., 1927 D ec., 1926 compared compared compared with with with Jan., 1926 D ec., 1926 D ec., 1925 — 9.5 9.5 34.6 3.5 7.3 — 6.0 129.1* 65.5* — 48.1 0.9 0.5 — 5.4 — 1.8 — 6.1 — 15.8 5.2 6.1 — 35.0 — 4.9 — 7.0 — 20.9 0.4 — 2.7 — 3.8 — 3.1 — 5.8 — 4.7 25.6 • 11.2 — 9.8 — 2.4 — 15.2 — 3.0 4.1 — 1.3 — 8.6 *Part of this increase due to the resumption by certain of the larger companies, of “ spring dating” sales, namely the prac tice of extending credit on sales made in autumn and w in ter months until M arch, April and M ay of the following year. This practice was not followed by these companies during the autumn and winter of 1925. Prices Price movements during January were note worthy in that the general level of wholesale prices of agricultural commodities continued the advance of the preceding month, while the general level of wholesale prices of non-agricultural commodities again declined. This is a re versal of the tendency in evidence since June, 1926. The United States Bureau of Labor Sta tistics’ index number of all commodities at wholesale declined from 147.2 for December, 1926, to 146.9 for January, 1927 (1913 p rice s = 100). A year ago it stood at 156.0. Group in dex numbers of prices for foods, cloths and clothing, fuel and lighting, metals, chemicals and drugs, and house furnishings declined dur ing the month. The United States Department of A gricul ture’s index of prices paid at the farm declined during January as did the Bureau of Labor Statistics’ index of non-agricultural com m odi ties. The decline in the latter index was greater than that of the farm price index, however, so that the ratio between these tw o indexes, a gen eral indication of the purchasing power of farm February, 1927 products, increased. For January,, the farm price ratio was 81.3 (pre-war purchasing power = 1 0 0 ) compared with 80.2 for December, 1926, and 87 for January, 1926. Livestock prices at Chicago advanced steadily during January, weekly average prices for lambs, sheep, and hogs increasing approxi mately \y2 per cent, 9 per cent, and 2 per cent, respectively, during the month. Although cattle prices strengthened during the later weeks of January, the average for the month was ap proximately 3 per cent below that of Decem ber. January prices for cattle and for hogs were slightly above those of a year ago, but prices for lambs and sheep ranged from 18 to 23 per cent below those of January, 1926. Com parisons of weekly average prices are shown in the follow ing table: L IV E S T O C K P R IC E S A T C H I C A G O (Weekly average per 100 pounds) W eek Ending Beef Cattle $10.50 February 4, 1927.......... January 7, 192 7.......... 9.85 9.65 February 5, 1926.......... 15 FEDERAL RESERVE AGENT AT SAN FRANCISCO Lambs $12.80 12.40 14.50 Hogs $12.05 11.75 12.80 Sheep $7.50 6.15 9.00 An upward movement of wheat prices, begun during January, was checked early in February, and subsequent sluggishness in the wheat market influenced price movements of other cereals and grains. Quotations for May con tract wheat at Chicago during the week ending February 4, 1927, ranged from $1.42% to $1.43^2 per bushel, compared with a range of $1,375^ to $1.39j4 fc>r the corresponding period a month ago, and $1.73^ to $1.76 a year ago. On February 15, 1927, comparable quotations ranged from $1.39^4 to $1.40^ per bushel. The cotton market tended slowly upward during January, but early February prices were still at levels approximately 33 per cent below those of a year ago. Quotations for spot mid dling uplands cotton at New Orleans, during the week ending February 4, 1927, ranged from 13.32 to 13.65 cents per pound, an advance of 6.6 per cent compared with quotations of a month ago, which ranged from 12.53 to 12.77 cents per pound. A year ago this grade of cotton was quoted at 20.02 to 20.34 cents per pound. An average of 98 w ool quotations on the Boston market changed little during the month, continuing about 16 per cent below the figure of January, 1926. On November 26, 1926, this average stood at 67.40 cents per pound. By December 10th it had declined to 65.16 cents per pound, the lowest point reached since May, 1922. On January 7th, the average was 65.34 cents, and on February 4, 1927, it reached 65.42 cents per pound. One year ago it stood at 77.87 cents and two years ago at 102.04 cents per pound. The advance in sugar prices, which has been progressing steadily during the past five months, was halted, at least temporarily, by price reductions during the first weeks of 1927. Quotations on refined beet sugar, f.o.b. San Francisco, declined rapidly during January and early February. On February 14, 1927, at $5.95 per 100 pounds, the price was 45 cents below the high point of the recent advance reached January 4, 1927, when refined beet sugar was quoted at $6.40 per 100 pounds. A price of 60 cents per ounce for silver at New York on February 3rd climaxed a January recovery in silver prices. The advance to the 60-cent level was not held, but a quotation of 59 cents per ounce was maintained for several days. The price of silver declined to 57 cents per ounce on February 9, 1927. Prices for copper, lead, and zinc continued in January, 1927, the decline which was in progress during most of 1926. A national index of lumber prices published by “ The Lumber Manufacturer and Dealer” stood at 29.73 for January, 1927, com pared with 29.75 for December, 1926, and 31.32 for January, 1926. Banking and Credit Situation Seasonal slackening in business activity in the Twelfth Federal Reserve District was re flected in reports of condition of 62 city member banks during the later weeks of January and the first weeks of February. Commercial loans of these banks declined by approximately one per cent between January 12th and February (E) Com m odity P rices— Commodity W holesale Prices (U . S. Bureau of Labor— 1913— 1 0 0 ) ........................ Purchasing Power of Farm Products ( U . S. Dept, of A gricu ltu re)*. L a m b s ............................... W eek ly average price at C hicago..................................... H o g s ..................................W eek ly average price at Chicago...................................... W h e a t............................... Chicago contract price for M ay w heat.......................... W o o l ..................................Average of 98 quotations at B o sto n ................ ................ A p p le s ............................... Extra Fancy W inesaps, f. o. b. Pacific Northw est. P runes............................... Size 4 0 /5 0 in 25-lb. boxes, f. o. b. California............. R aisin s............................... Thom pson Seedless, Bulk, in 25-lb. boxes, f. o. b. B u tter................................92 score at San Francisco........................................ C opper............................... Electrolytic, m onthly average at New Y o rk . . . L e a d .................................... M onthly average at N ew Y o r k ................................ . Lum ber (S o ftw o o d ). . W eek ly Index United S t a t e s !.................................... Unit 100 lbs. 100 lbs. 100 lbs. bu. lb. box box lb. lb. doz. lb. lb. lb. oz. February 4,1927 146.9 81.3 $10.50 12.80 12.05 1.4254-1.43 65.420 $1.6 5 -1 .8 0 4 .25-4.8 5 .07-.0754 .07J4 2.20 .4 7 ^ 12.9900 7.5770 55.7950 29.73 One Month Ago 147.2 80.2 $9.85 12.40 11.75 1 .3 7 ^ -1 .3 9 5 4 65.340 $1.45-1.75 3 .25-5.0 0 .07-.0754 .0754 2.20 .46 13.3020 7.8550 53.4660 29.75 One Year Ago 156.0 87.0 $9.65 14.50 12.80 1 .7 3 ^ -1 .7 6 77.870 $1.75 4.2 5 -4 .7 5 .0 9 -0 9 5 4 •07 H 2.20 .4554 13.8220 9.2550 67.7950 31.32 *Ratio of farm prices (August, 1909-July, 1914=100) to wholesale prices of non-agricultural commodities (1910-1914=100). fAs published by “ The Lumber Manufacturer and Dealer.” 16 MONTHLY REVIEW OF BUSINESS CONDITIONS 16th and, largely as a result of this decrease, their total loans were approximately one per cent smaller at mid-February than a month earlier. The current volume of loans was 8 per cent larger than a year ago. Total loans and investments of reporting banks declined from the record level of 1,791 million dollars reached on January 5, 1927, to 1,748 million dollars on February 2nd. A n upward movement of both M IL L IO N S OF D O L L A R S February, 1927 Changes in total earning assets of the Fed eral Reserve Bank of San Francisco during re cent weeks have been due more to seasonal fluctuations in borrowings of member banks than to changes in its holdings of investments. The general trend of both borrowings of mem ber banks and of holdings of investments, how ever, has been downward since January 5, 1927. Continued curtailment in hand to hand curM IL L 1 0 N S O F D O L L A R S Figures for Federal Reserve Bank of San Francisco, as of last W ednes day of each month. Latest figures, January 26. Figures for about 65 member banks in leading cities, as of last W e d nesday of each month. Latest figures, January 26. loans and investments began on the latter date and by mid-February, total loans and invest ments had recovered 30 per cent of the decline reported during January and stood at over 1,760 million dollars. Demand deposits at re porting banks have tended to decline in volume during recent weeks, and on February 16th were approximately 2 per cent below one month ago and one year ago. The upward movement of time deposits, which has been a significant fea ture of the past year’s banking statistics, was checked, at least temporarily, early in Febru ary and on February 16th they were 27 million dollars or 3 per cent smaller than one month ago. Borrowings of these banks from the Fed eral Reserve Bank of San Francisco fluctuated seasonally during January and February, de clining more than 55 per cent during the period from January 5, 1927, to February 16, 1927. R E P O R T IN G M E M B E R B A N K S * — Twelfth District (In Millions of Dollars, percentage changes in parentheses) Condition One Year One Month Feb. 16, 1927, Ago Ago ( + = increase ) (—- = decrease ) T otal Loans ........................... . . 1,279 — 12 ( 0.9) -1 0 0 ( 8.4) 950 Commercial Loans ............ ... . b 42 ( 4.6) — 11 ( 1.2) Loans on Securities............ , . 329 0 - 58 (21.3) 481 - 12 ( 2.6) Investm ents ............................ , — 1 ( 0.2) -112 ( 6.8) — 12 ( 0.7) Total Loans and Investm ents 1,760 — 17 ( 2.1) - 14 ( 1.7) N et Dem and D e p o s i t s .... . . 790 894 Tim e Deposits ...................... . . — 27 ( 2.9) + 87 (10.8) Borrowings from Federal — 8 (25.3) + 9 (58.5) *Total resources of reporting banks are approximately 50 per cent of total resources of all banks, and 71 per cent of total re sources of all member banks in the Tw elfth Federal R e serve D istrict. R eporting banks embrace member banks in L o s An geles, San Francisco, Oakland, Portland, Tacom a, Seattle, Spokane, O gden, and Salt Lake City. rency requirements of the district, a reflection, in part, of seasonal slackening in trade activity, has reduced the volume of Federal reserve notes in circulation to the lowest levels since September, 1918. The figures for recent weeks, together with similar figures for past years are presented in the follow ing ta b le: February i anuary anuary 16, 1927.......................................................$172,287,000 26, 1927....................................................... 171,127,000 5, 1927...................................................... 186,308,000 >ecember 22, 1926...................................................... Decem ber 1, 1926...................................................... February 17, 1 9 2 6 ...................................................... Decem ber 23, 1920 (h i g h ) ......................................... September 13, 1918...................................................... 192,315,000 185,558,000 188,564,000 272,548,000 170,738,000 A part of the decline in Federal reserve note circulation since the peak of December, 1920, may be accounted for by the decline in the gen eral level of prices during the same period, a smaller amount of money now being needed to transact a given physical volume of business than was then necessary. In recent years, how ever, declining Federal reserve note circulation has accompanied relative stability in the gen eral price level and increasing business activity. It seems probable that these later declines in Federal reserve note circulation have been off set, at least in part, by increased circulation of other forms of money, although no figures of such circulation within the district are avail able. F E D E R A L R ESE R VE B A N K O F S A N F R A N C IS C O (in millions of dollars, percentage changes in parentheses.) Condition ?--------Changes from-----------* Feb. One Ago Month One Year 192716, Ago ( -f* = increase) (— = : decrease) 96 14 (12.4) Total Bills and S e cu ritie s.. . . + 5 ( 6.0) + 10 (45.4) 8 (19.4) 33 Bills D is c o u n t e d ........................... — 6 (13.9) 39 United States Securities............ 24 (19 .0 ) Bills B ought .................................. 267 — 27 ( 9.2) T otal Reserves ............................. — 5 ( 2.9) Total Deposits ............................. 177 — 4 ( 2.4) Federal Reserve N ote 172 7 ( 3.7) — 16 ( 8.6) Circulation .................................. 0 —6 + 2 ( 0.8) + 2 ( 8.6)
@FedFRASER