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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 of San Francisco San Francisco, California, January 20,1927 Vol. XI No. 1 S U M M A R Y O F N A T IO N A L C O N D IT IO N S Volum e of output of industry decreased fur ther in December to the lowest level in more than one year, and wholesale prices continued to decline. Easier conditions in the money mar ket in January reflected the usual seasonal liquidation after the turn of the year. Production. In December, for the third con secutive month, there was a decrease in indus trial production. The Federal Reserve Board’s new index, on the basis of the average for 1923, 1924 and 1925 as 100, stood at 105, when ad justed for seasonal variations. This compares with 113 in September, the high point of the year 1926 and with 108 in December, 1925. The decline since the recent high point has been entirely in the manufacturing industries, as the output of minerals was at a record high level in November and showed only a slight decline in December. By far the greatest recession of recent months has been in the automobile in dustry, output of passenger cars and trucks in the United States decreasing from 425,000 in August to 165,000 in December. Reduction in the manufacture of automobiles is usual at the end of the year, when plants close for inven tory taking and repairs, but in December, 1926, PERCEKT the decline was considerably larger than usual. Production of iron and steel has also been sharply reduced since the middle of August and activity in the woolen and worsted and silk industries has been somewhat curtailed. Pro duction of lumber, cement and other building material has reflected the usual winter decrease in demand. Cotton consumption, on the other hand, was larger than in any previous Decem ber. Factory employment and payrolls de clined further in December, reflecting decreases in nearly all industries except cotton goods, clothing, foundries, machine shops, and print ing and publishing. The value of building contracts awarded in December, as in November, was larger than in the corresponding period a year earlier, but for the first three weeks of January, 1927, contracts were in smaller volume than during the same weeks of 1926. Trade. Retail sales during the holiday trade in December exceeded all previous records. Sales of department stores were approximately four per cent larger than in December, 1925, and sales of mail order houses, while slightly smaller than in 1925, were larger than in the PERCENT 150 r Minerais < 100 \ iv r r v ' " t .......... ....... ' * Manuf'actures 50 1923 1924- 1925 1926 1927 P R O D U C T IO N O F M A N U F A C T U R E S A N D M I N E R A L S Index numbers of physical volume of production of manufactures and minerals, adjusted for seasonal variations (1923*1925 average = 100). Latest figures, December, manufactures, 104; minerals, 117. W H O L E S A L E PR IC E S Indexes of United States Bureau of Labor Statistics, (1913 prices = 100). Latest figures, December, all commodities, 147.2; non'agricultural commodities, 151.5; agricultural commodities, 142.2. Those desiring this review sent them regularly will receive it without charge upon application. 2 MONTHLY REVIEW OF BUSINESS CONDITIONS corresponding month of any other year. Sales at wholesale, on the other hand, declined in Decem ber and were smaller than a year ago in practically all leading lines, except shoes. Merchandise stocks carried by department stores were reduced slightly more than is usual in Decem ber and w^ere somewhat smaller at the end of the month than at the close of Decem ber, 1925. W holesale stocks were also slightly smaller than a year ago. Prices. W holesale prices declined further in December. The Bureau of Labor Statistics’ January, 1927 turn flow of Federal Reserve notes and other cash from circulation amounting in the aggre gate to about $400,000,000. This return flow of currency was in about the same volume as a year ago and, together with substantial gold imports, was reflected in January 19th state ments by a reduction of the volume of reserve bank credit in use to a level lower than at any time since the summer of 1925. Loans and in vestments of member banks in leading cities, after increasing to a record level at the end of the year, declined sharply in January. Com- PER CENT 1923 D E P A R T M E N T STO R E SALES Index of sales of 359 stores, (1919 sales=100). Latest figures, Decem ber, with adjustment 146, without adjustment 233. index, at 147 for that month, was at the lowest level since the middle of 1924. Prices of agri cultural products, which declined considerably in October and November, increased slightly in December, ow ing to advances in prices of grain and cattle. In January, iron and steel prices were slightly reduced and there were further declines in bituminous coal and non-ferrous metals, while prices of cotton goods and coke advanced. Bank Credit. A t the reserve banks, during the four weeks follow ing the Christmas peak of seasonal currency demand, there was a re 1924- 1925 1926 1927 R ESE R 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 January. mercial loans which had reached their seasonal peak in November were, at mid-January, about $200,000,000 below the maximum figure but still more than $300,000,000 above the level of a year ago. Loans on securities of the report ing banks also declined after the turn of the year, follow ing a large increase in December, and were slightly smaller than in January of last year. Easier money conditions prevailed in the money market in January and rates on prime commercial paper declined from Ay2 to 4^4 per cent and those on bankers accept ances from 3 to a range of 3^6 to 3 }i per cent. 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 December, November, December, November, Statistical s w t , Sum m ary--j 1926 1Q26 1925 1925 K j w v M Bank Debits—21 cities*........................................ $3,300,384 $2,843,766 $3,230,574 $2,825,317 Bank Debits— Index Numberst—20 cities.......... 158 153 154 151 Building Permits—20 citie s.................................. $30,136,065 $24,289,678 $37,071,485 $27,884,388 Retail Sales— 32 stores— Index Numberst.......... 180 1710 164 161 Savings Deposits—68 banks*§ ............................. $1,243,499 $1,215,481 $1,158,6270 $1,133,700 Lumber Production—4 associations— board feet* 539,776 678,939 576,995 683,770 Petroleum Productiont— California— b a rre ls.... 654.095 639,104 620,958 636,530 Flour Production— 14 companies—barrels.......... 455,003 495,531 483,092 519,946 Reporting Member Bank Loans and Discounts!!* $1,290,460 $1,292,173 $1,180,733 $1,207,741 Reporting Member Bank DepositsII*................... $1,740,723 $1,683,809 $1,639,094 $1,625,234 Federal Reserve Bank Discountsll*..................... $40,735 $47,132 $25,227 $68,168 Federal Reserve Bank Reserve RatioII............... 73.3 72.7 75.6 65.7 D e c e m b e r .^ compared with D1925 ec., N ov., 1926 2.2 2.6 — 18.7 9.8 7.3 — 6.4 5.3 — 5.8 9.3 6.2 61.4 — 3.0 16.1 3.3 24.1 5.3 2.3 —20.4 2.3 — 8.2 — 0.1 3.4 — 13.6 0.8 *In thousands, fAdjusted for seasonal variations— 1919 monthly average=100. JDaily average production. §Not comparable with figures published in previous Reviews. HJanuary 12, 1927, December 1, 1926, and January 13, 1926, and December 2, 1925. ifPercentage increase or decrease (— ). ORevised. FEDERAL RESERVE AGENT AT SAN FRANCISCO January, 1927 Agricultural Activities Favorable weather, including a generous sea sonal rainfall, has marked the beginning of the 1927 agricultural season over most of the Twelfth Federal Reserve District. A moderately heavy snowfall in mountain areas of the terri tory gives promise of an adequate supply of water for agricultural purposes later in the season. RAINFALL—Twelfth District Arizona: Flagstaff .................... Phoenix ...................... California: Eureka ........................ Fresno ........................ Los Angeles .............. Red Bluff .................. Sacramento .............. San Diego ................ San Francisco .......... San Jose .......... ......... San Luis Obispo........ Idaho: Boise .......................... Nevada: Reno ............................ Oregon: Baker City ................ Portland .................... Roseburg .................... Utah : Salt Lake City.......... Washington: Seattle ........................ Spokane ..................... July 1,1926 to Jan. 12,1927 (Actual) (inches)* 8.7 7.6 July 1,1925 to Jan. 12,1926 (Actual) (inches) 13.5 4.0 July 1 to Jan.12 (Normal) (inches) 12.8 5.7 26.7 4.7 5.0 14.3 8.2 4.8 12.0 5.6 11.8 14.0 3.4 3.9 5.1 2.7 6.3 4.2 2.8 3.5 19.4 4.2 6.1 11.4 8.2 3.9 9.6 6.2 7.7 5.7 6.0 5.4 3.7 3.6 4.5 6.6 27.9 20.0 4.4 13.4 10.9 5.8 23.5 17.1 8.3 7.8 6.7 15.8 8.2 11.4 5.4 20.1 9.7 ^Preliminary computations. Citrus fruit crops in California were slightly damaged by frost during late December and early January but losses, on the whole, were not serious. The 1926-1927 yield of navel oranges for California is at present estimated at approximately 12,300,000 boxes, compared with a crop of 10,100,000 boxes in 1925-1926. Preliminary estimates by the United States Department of Agriculture indicate that the acreage of winter wheat planted in this district during the autumn of 1926 was approximately 13 per cent larger than the acreage planted in the autumn of 1925. Moisture and soil condi tions during the fall grow ing period favored the new crop and, in those areas where low win ter temperatures are experienced, an ample snow cover now protects the grain. Acreage and con dition figures of winter wheat for the states of this district and for the United States follow : W I N T E R W H E A T — Twelfth District ,------- Condition------- \ Tent----- Acreage*------ \ Autumn Autumn D e c.l, D e c.l, Y earf 1926 1925 1926 1925 Average 39 ......... 41 98 94 93 California ........................ .......... 772 90 702 96 90 92 88 .......... 533 476 91 5 97 91 .......... 7 93 907 97 82 90 .......... 907 88 ......... 152 152 85 96 68 82 W ashington .................... .......... 1,235 882 93 Tw elfth D istrict .......... .......... 3,647 United States ............... .......... 41,807 *In thousands of acres. 3,163 39,799 82 83 84 fD ecem ber 1st average, 1916-1925. The United States Department of Agricul ture estimates that shipments of apples from Oregon, Idaho, and W ashington will total 45,250 carloads during the 1926-1927 season, compared with 47,233 carloads shipped during the 1925-1926 season. Shipments to January 1, 1927, totaled 35,253 carloads, leaving approxi mately 10,000 carloads to be marketed subse quent to that date. Agricultural marketing trends, as indicated by comparative figures of the carlot movement of fruit, receipts of livestock at principal mar kets of the district, wheat exports from Port land and Puget Sound, and cold storage hold ings of butter and eggs are shown in Table “ A .” Increased production of the principal agricul tural products of the district during 1926 is re flected in these figures. W eather conditions, which have benefited agriculture generally during recent weeks, have also favored the district’s livestock in dustry. In some sections of Utah, Idaho, and Nevada, however, lack of moisture during the past autumn has resulted in decreased supplies of winter forage on desert ranges. Compara tive condition figures for ranges, cattle, and sheep are shown below : . . .. . . . Utah .............. . W ashington . . California Ranges-------- ■\ ,-------- Cattle------- \ /--------Sheep---------> Jan. 1, D e c .l, Jan. 1, D e c .l, Jan. 1, D e c .l, 1927 1926 1926 1927 1926 1926 1927 1926 1926 89 84 85 78 88 88 87 95 87 93 84 88 90 91 90 90 93 92 74 98 73 84 98 86 87 97 84 80 100 83 76 105 84 83 105 84 87 92 89 98 92 89 92 100 92 80 97 72 85 104 86 83 102 85 86 86 92 92 91 90 93 96 94 (A ) A gricultural M arketing A ctivity— <---------Exports---------- ■ n <--------- Carlot Shipments--------- * Livestock Receipts Wheat* Barley* Apples* at Eight Markets in 12th District Portland and San 12th Orangest Lemonsf Cattle Puget Sound Francisco Dist. Calif. Calif. and Monthly (1000 bu.) (1000 bu.) (cars) (cars) (cars) Calves Hogs Sheep Decem ber, 1926......................................... 2,770 1,018 4,428 4,842 765 114,870|| 218,712|| 202,3271! November, 1926......................................... 4,6580 884 7,561 3,085 617 132,9411 203,707| 238,5811 December, 5-year average................. 2,334 569 4,044 3,946 645 1 0 3 ,7 7 3 # 2 3 0 ,0 0 4 # 1 9 5 ,6 4 1 # (1919-1923) Cumulative r--------------------------------Crop Year---------------------------------% ,--------------- Calendar Y e a r ---------------\ T o D ecember 31, 1926........................... 27,622 6,543 40,303 7,927 1,382 1,309,1751| 2,091,07511 3,408,002» (26 .7 ) (1 5 .3 ) (70.2) T o D ecember 31, 1925........................... 8,106 9,4640 38,428 7,571 1,071 1,328,256 2,286,434 3,294,603 (8 .1 ) (2 0 .7 ) (72.0) Five-year average to December 31st 15,828 8,354 34,644 9,425 831 1 ,1 5 3 ,7 7 4 # 2 ,0 1 4 ,7 0 8 # 3 ,0 9 0 ,7 7 6 # _____(1919-1923) (13.7) (20.7) (97.7) Figures in parentheses indicate percentage of new crop only. *Season begins July 1st. month. §1923-1927. ||Partly estimated. #1921-1925. ORevised. ColdStorage Holdings^ 12th District Butter Eggs (1000 (1000 lbs.) cases) 1,956 43 3,895 179 1,4115 40§ fSeason begins November 1st. $At end of 4 January, 1927 MONTHLY REVIEW OF BUSINESS CONDITIONS Industrial Activity The general level of industrial activity in this district during 1926 was above that of 1925 and total industrial output is estimated to have been in large volume. Some curtailment of pro duction was noted during the closing months of the year, although available figures for D e cember indicate smaller than seasonal declines in activity during that month. Employment figures for California and Oregon, given in Table “ C,” tend to corroborate more general non-statistical reports of industrial activity. Building construction again contributed largely to prevailing industrial activity during 1926, although figures of number and value of building permits issued in 20 principal cities of the district, were smaller than in any year since 1922. Total value of permits issued in these cities during 1926 was approximately 60 million dollars (14 per cent) less than value of permits issued in 1925, a record year. The gen eral downward trend of building permit figures, which persisted throughout most of 1926, was interrupted during December, when there was an increase of 25 per cent in value of permits issued as compared with the previous month. Usually the Novem ber to December increase is less than 9 per cent. B U I L D I N G P E R M IT S I N 20 C IT IE S Per Cent Increase or Decrease (— ) Months in 1926 compared with same Months in Month in 1926 compared with preceding Monthly Year-to-date Month N o. Value N o. Value N o. Value D e c e m b e r ..........— 15.6 — 18.7 — 12.4 — 14.3 — 14.0 24.7 N ovem ber ......... — 13.8 — 12.9 — 12.2 — 13.9 — 17.7 — 12.2 O ctober ............ — 12.8 — 14.5 — 12.1 — 13.9 — 0.2 5.1 September ......... — 10.9 — 17.3 — 12.0 — 13.9 7.0 — 9.3 A u gu st ............... — 12.3 — 18.2 — 12.1 — 13.5 8.5 — 8.4 July ...................... — 12.6 — 4.5 — 12.1 — 12.9 — 2.6 — 12.6 June ..................... — 12.0 — 7.3 — 12.0 — 14.1 1.7 25.6 M a y ..................... — 15.3 — 25.8 — 12.0 — 15.5 — 11.3 — 17.8 April .................... — 12.7 — 15.7 — 11.2 — 12.8 — 13.5 — 3.4 37.1 35.7 M arch ................. — 7.8 — 9.8 — 10.7 — 11.6 February ........... — 11.2 — 18.1 — 12.6 — 12.8 — 4.4 — 8.3 January .............. — 13.8 — 7.3 .... .... 3.5 — 21.3 t ----------------------1925---------------------- ^ Production of petroleum in California during 1926 totaled 224,117,000 barrels. This is 6,030,000 barrels, or 2.6 per cent, below 1925 output B erkeley .............. Boise ..................... Fresno ................. L o n g Beach . . . . L os A n geles . . . . Oakland ............... O gden .................... Pasadena ............ Phoenix ............... Portland ............... Reno ...................... Sacramento . . . . Salt Lake C ity. . San D iego .......... San Francisco . San Jose ............... Seattle ................. Spokane ............... Stockton ............ Tacom a ................ District P E T R O L E U M --California Year 1926 1925 1924 1923 1922 1921 1920 1919 1918 .. . . .. . . . , .. .. ... .. . . .. . .. .. .... . . Total Daily Average (barrels) 224,117,000 230,147,000 230,064,000 263,729,000 139,671,000 114,709,000 105,668,000 101,564,000 97,532,000 Stored Stock at End of Year (barrels) 614,019 630,541 628,590 722,545 382,660 314,271 288,710 278,258 267,211 (barrels) 119,542,556 127,194,894 97,829,374 89,274,244 t t t t t 173 34 87 362 2,678 660 24 218 82 744 15 183 36 626 756 72 570 80 45 148 $ 314,239 19,636 316,339 1,157,265 10,089,871 1,846,999 130,350 458,194 146,598 1,562,705 674,126 339,131 249,575 2,339,828 5,066,659 131,605 4,065,095 455,015 240,185 532,650 254 37 106 419 3,159 919 20 232 102 849 11 198 74 678 761 84 690 122 93 184 $ 7,593 $30,136,065 8,992 $37,071,485 568,402 43,324 229,394 1,143,550 16,810,677 3,881,109 578,750 454,387 147,104 1,801,410 82,600 929,595 271,741 3,176,108 3,243,915 1,464,330 1,164,590 126,900 215,489 738,110 913 948 1,238 980 837 704 572 559 586 11,288 11,393 10,903 8,928 9,410 9,425 9,299 National and Twelfth District production of non-ferrous metals, except for copper and lead, was smaller during 1926 than during 1925. Figures follow : N O N -F E R R O U S M E T A L S — P R O D U C T IO N * f— Twelfth Districtf —% Unit 1926 1925 Copper.. . l b ............... . 1,117,931 1,092,434 L e a d . . , . .lb ............... . 616,376 620,586 Zinc . . . .lb .............. . 170,370$ 97,087$ Silver. . .o z .............. 42,488 46,338 Silver. . .dollars . 26,511 31,974 G old. . . .dollars . 24,814 25,803 <------ United States— > 1926 1925 1,742,702 1,693,000 1,302,000 1,277,066 1,102,000 62,029§ 65,723 38,706§ 45,612 47,299§ 49,127 *000 omitted, nitted. fln clu d in g all of Arizona. $N ot including A rizona, a, O regon and W ashin gton. §Prelim inary. Source : Bureau of M ines, United States Departm ent of C om merce. (O Em ploym ent— N o. N o. r ~ Employees —> of D ec., of D ec., Firms 1926 1925 Firms 682 December, 1925 N o. Value Average Pro Active ducing Pro Oil Wells ducing Completed W ells f Comparable figures not available. Source : Am erican Petroleum Institute. Industries (B ) Building P erm its— December, 1926 Value N o. and 39,612,000 barrels, or 15 per cent, below the record output (263,729,000 barrels) of the year 1923. Total stocks (including heavy and refinable crude oil, gasolene, naphtha distillates, and all other) stood at 145,612,176 barrels on December 31, 1926, compared with 157,316,309 barrels on December 31, 1925. This decline of 11,204,000 barrels included 8,215,000 barrels lost through tank farm fires during April, 1926. Average daily production of petroleum during December, 1926, was larger than during November, 1926, or December, 1925. A slight increase in stocks was reported during D e cember, 1926. Stone, Clay and Glass Products. Lum ber and W o o d Manufactures . . Textiles .................. Clothing, M illinery and Laundering. Foods, Beverages and T o b a c c o ... W ater, Ligh t and Power ................. Other Industries*. M iscellaneous . . . . 50 136,851 137,983 (—0.6 )f 7,077 7,464 (— 7 .7 ) t 107 22,050 23,663 (— 5.7)f 13 2,305 2,432 (— 4.0) t 7,156 6,936 53 (2.6) 148 22,991 22,922 (1.1) 8,119 9,247 5 ( 16.4)t 293 64,686 63,330 (2.1) 2,467 1,989 13 (19.0) 96 4 45 3 8 28 8 - Oregon * N o . of *— Employees D ec., D ec., 1926 16,102 (—8.0)f 109 (:— i7.4)t 12,641 (— 9.6) t 877 (4.0) 539 (— 2.7) t 1,450 (— 5.3) t 486 (7.5) 1925 17,500 132 13,988 843 554 1,531 452 *Includes the following industries: m etals, machinery and con veyances ; leather and rubber g o o d s ; chemicals, oils and p a in ts; printing and paper goods. tD ecrease. Figures in parentheses indicate percentage changes from D e cember, 1925. 5 FEDERAL RESERVE AGENT AT SAN FRANCISCO January, 1927 A record volume of lumber was produced in this district during 1926. The cut reported by mills of four associations exceeded that of 1925 (the previous record year) by 262 million board feet or three per cent, and was 1,832 million board feet or 26 per cent larger than the fiveyear (1921-1925) average output of these mills. The amount of lumber sold by the mills during 1926, as reflected by volume of shipments, was one per cent smaller than the amount pro duced, and stocks are estimated to have in creased slightly during the year. A number of mills suspended or curtailed operations during the latter half of 1926 and the industry has re ported greater than seasonal decreases in ac tivity during recent months. LU M B ER A C T IV IT Y * Production Shipments Ordersf (board feet) (board feet) (board feet) 1926 .............................................................. 9,014 1925 ...... 8,7520 1924 ...... 8,016 1923 ...... 8,672 Five-year average, 1 9 2 1 -1 9 2 5 .. 7,182 8,928 8,6050 7,738 8,068 6,926 7,572 7,3060 6,865 7,150 6,516 *A s reported by four associations, 000,000 omitted. tFigures of California W h ite and Sugar Pine Association not included. ORevised. Sou rce: National Lum ber M anufacturers Association. creased output of tomatoes, tomato products, and asparagus was largely responsible for the heavier vegetable pack. C A N N E D F R U IT S A N D V E G E T A B L E S Pack in California FruitsVegetables Totals (cases) (c a ses) 1926 1925 1924 1923 1922 1922-1926 average............... 20,974,700 15,631,852 10,362,998 11,351,536 15,477,865 14,759,790 (cases) 9,547,275 8,527,891 7,138,759 7,800,835 6,913,371 7,985,626 30,521,975 24,159,743 17,501,757 19,152,371 22,391,236 22,745,416 The large pack is reported to be m oving to market in an orderly manner, although present prices are generally slightly below those named at the opening of the season. General Business and Trade In the Twelfth Federal Reserve District the year 1926 was characterized by a high level of general business activity, a record volume of trade at retail, and a substantial volume of trade at wholesale. A moderate decline in trade volume was reported during the final quarter of the year but this movement was checked, at least temporarily, by an active holiday season. An increase in daily average debits to indi vidual accounts (bank debits) was reported for December by clearing houses in 20 principal cities of the district, whereas usually, in the Flour mills of the district were more active during 1926 than during 1925 but, excepting that year, production was smaller in volume than in any year since 1920. Reported 1926 out INDEX NUMBERS put of 14 large milling factors was 4,961,319 barrels, exceeding by 287,000 barrels (6 per cent) reported output of these mills during 1925. Production in 1926 was 790,000 barrels (14 per cent) smaller than the five-year (19211925) average volume of production. During December, 1926, reporting mills produced 8.2 per cent less flour than during November, 1926. For the five-year period, 1921-1925, the average decline in production from November to December has been 5.6 per cent. Stocks of flour and of unmilled wheat in millers’ hands on January 1, 1927, were smaller than on January 1, 1926, and were well below the aver age holdings on that date in recent years. B A N K D E B I T S — T W E L F T H D IS T R IC T F L O U R P R O D U C T IO N (1 4 com panies*) Total Year 1926 1925 1924 1923 1922 1921 1921-1925 (barrels) average 4,961,319 4,674,316 5,907,329 6,779,155 5,944,977 5,652,981 5,751,752 Monthly Average Stocks <— atClose of Year— \ Flour Wheat (b a rr els) (b arrels) (b u sh els) 413,443 389,526 492,277 564,930 495,415 471,082 479,313 396,431 412,192 548,550 569,430 521,501 472,693 504,873 2,955,219 4,022,593 2,927,762 3,901,986 4,337,362 2,129,600 3,463,861 C o n so lid a tio n s have reduced the number of reporting companies but have not seriously affected the comparability of the figures. The canned fruit and vegetable packs in Cali fornia during 1926 exceeded the previous record packs of these commodities, reported in 1925, by 34 per cent and 12 per cent, respectively. The increased fruit pack was the result, chiefly, of a record pack of cling peaches, while in Index for 20 principal cities, Phoenix, Arizona, not included, (daily averages, 1919 average = 100). Latest figures, December, ______ with adjustment 158, without adjustment, 163. *Based upon average m onth to m onth increase during: the years 1919 to 1925 inclusive. past, the December figures have been slightly smaller than those for November. This bank’s index, which makes allowance for usual sea sonal fluctuations, advanced from 153 in N o vember, 1926, to 158 in December, 1926, the first such advance recorded since last July. The December, 1926, figure was 2.6 per cent higher than the December, 1925, figure. B A N K D E B IT S —Twelfth District Index for 20 Principal Cities* D ec., N ov., 1926 1926 W ith out Seasonal Adjustm ent. . . 163 159 W ith Seasonal A d ju stm en t............ 158 153 *D aily averages, 1919 a v e ra g e = 1 0 0 . O ct., 1926 161 162 Dec. 1925, 160 154 MONTHLY REVIEW OF BUSINESS CONDITIONS 6 The record of business movements during 1926 contained in the charted figures of bank debits is supported by available data concern ing wholesale and retail trade. General trade activity decreased during the early months of 1926, rose to relatively high levels in mid summer, and then entered upon a decline which was only checked by an active holiday season in December. Total dollar value of sales at wholesale re ported to this bank by a district-wide group of firms operating in eleven lines of trade was 4.1 per cent larger during December, 1926, than during December, 1925. This increase, how ever, was due chiefly to an abnormal gain in sales of automobile tires which in turn was partly the result of a change in the sales policy of reporting firms. If sales of the ten reporting lines other than automobile tires are compared, dollar values were 0.6 per cent smaller during December, 1926, than during December, 1925. In making comparison of dollar sales over the year period, however, it should be remem bered that the general wholesale price level was approximately 6 per cent lower during Decem ber, 1926, than during December, 1925. Total sales for the eleven lines in December, 1926, were 3.8 per cent less than in November, 1926, a seasonal movement of smaller than usual proW H OLESALE TRADE Agricultural Im plem ents. Autom obile Supplies Autom obile T i r e s ............... D rugs ....................................... D ry G o o d s ............................. Electrical Supplies .......... Furniture ................................ Groceries ................................ H ardw are .............................. Shoes ....................................... Stationery ............................. A ll L i n e s ................................ N o. of Firms 14 14 18 7 24 9 16 23 19 12 24 180 Percentage increase or decrease(— ) /------------in Value of Sal les----------- > D ec., 1926 D ec., 1926 N ov., 1926 compared compared compared with with with D ec., 1925 N ov., 1926 N ov., 1925 8.5 — 9.5 — 1.7 3.5 — 6.2 2.2 129.1* 16.9* 50.8 0.9 4.7 — 11.4 — 9.7 — 1.8 — 20.3 6.1 14.9 4.5 — 4.9 — 8.6 9.8 0.4 — 7.9 — 10.4 1.5 — 3.2 — 3.1 5.8 25.6 — 18.4 8.7 — 2.4 8.2 — 0.8 4.1 — 3.8 *Part of this increase due to the resumption in Novem ber, by certain of the larger companies, of “ spring dating” sales, namely the practice of extending credit on sales made in autumn months until M arch, April, and M ay of the following year. This practice was not followed by these companies during the autumn of 1925. H oliday trade at retail, according to reports received by this bank, was in larger volume during December, 1926, than during any pre vious December of record. Value of sales of 63 leading department and apparel stores was 7.9 per cent greater than in December, 1925, and 64.1 per cent greater than in November, 1926. The increase for the year was larger than the annual average growth of recent years in trade volume and the increase for the month was in excess of the usual seasonal increase at this period. Retailers’ stocks on hand at the end of December, 1926, were 3.3 per cent larger than at the same time a year ago, cur rent inventories, excepting those of Novem January, 1927 ber, being the largest held since the spring of 1924. The rate of stock turnover during 1926, computed upon the basis of reports from 31 department stores, was 3.23 times per year compared with 3.18 times per year in 1925. Turnover during December, 1926, was at the rate of 5.40 times per year, or slightly greater than the rate of 5.28 times per year, computed for December, 1925. 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 land Angeles cisco City Seattle kane (5)* (6)* (8)* (4)* (5)* (3)* Without Seasonal Adjustment D ec., 1 9 2 6 .. . 411 286 247 198 193 165 N ov.,, 1 9 2 6 .. . 253 151 155 118 1120 102 O ct., 1 9 2 6 .. . 241 182 151 127 112 132 Sept. , 1 9 2 6 .. . 231 140 139 110 114 115 D ec., 1 9 2 5 .. . 361 268 235 191 177 157 With Seasonal Adjustment D ec., 1 9 2 6 .. . 272 171 154 127 122 109 Nov.,, 1 9 2 6 .. . 253 149 150 111 97 1140 O ct., 1 9 2 6 .. . 234 168 139 107 101 99 Sept. , 1 9 2 6 .. . 265 147 150 112 105 112 D ec., 1 9 2 5 .. . 239 160 146 112 123 104 D is trict (32)* 281 1690 170 157 255 180 1710 158 171 164 *Figures in parentheses indicate number of stores. One store included in district figures not included in cities shown above. ORevised. Prices The general price level declined during D e cember, 1926, continuing a movement which has been in progress throughout the past year. The United States Bureau of Labor Statistics’ monthly index number of prices of 404 com modities at wholesale stood at 147.2 for Decem ber, 1926, compared with 156.3 for December, 1925, a decline of 5.6 per cent over the year period. Prices of both agricultural and non-agricultural commodities tended downward during 1926. The decline in prices of agricultural com modities was greater than the decline in prices of non-agricultural commodities, however, and the ratio between these two indexes, an indica tion of the purchasing power of farm products, declined to 80.2 (pre-war purchasing p o w e r = 100) in December, 1926, the lowest figure since May, 1924, when it was 79.7. A year ago, the (D) B ank Debits*— December,December, 1926 Berkeley ..............$ 2 2 ,0 2 5 Boise .................. 1 5 ,2 7 2 Fresno ............... 5 1 ,7 9 0 L o n g Beach . . . 5 0 ,7 0 4 Los Angeles . . . 9 4 8 ,3 3 3 2 3 4 ,1 6 3 O a k l a n d . ............ O gden ................. 2 5 ,9 7 6 Pasadena ........... 4 0 ,6 3 4 Phoenix ............. 2 9 ,2 6 0 Portland ............. 1 8 4 ,9 4 5 Reno .................... 1 0 ,2 4 2 Sacramento . . . . 3 9 ,1 3 5 Salt Lake C ity. . 8 6 ,5 2 0 San D i e g o ......... 6 9 ,5 2 1 San Francisco . . 1 , 1 0 2 , 8 2 5 San Jose ........... 2 8 ,2 6 7 Seattle ............... 2 1 1 ,6 4 9 Spokane ............. 5 7 ,2 4 9 Stockton ........... 3 0 ,8 0 7 Tacom a ............. 4 7 ,5 8 3 Yakim a .............. 1 3 ,4 8 4 D i s t r i c t ............ $3,300,384 *000 omitted. f -----------Tw elveM onths-------- 1925 $ 2 0 ,2 2 0 1 5 ,5 1 6 5 7 ,4 9 3 5 7 ,4 2 1 8 8 0 ,6 2 0 1 7 6 ,2 1 1 3 8 ,3 0 8 3 7 ,3 0 8 3 0 ,6 1 0 1 7 9 ,5 5 2 9 ,5 4 4 3 7 ,9 0 0 9 5 ,9 9 5 6 8 ,7 0 4 1 ,1 2 1 ,6 1 0 2 9 ,2 0 0 2 2 1 ,9 3 7 5 8 ,7 5 1 3 0 ,9 8 2 4 7 ,7 0 3 1 4 ,9 8 9 $3,230,574 1926 2 3 3 ,3 9 8 1 6 2 ,5 7 3 4 8 4 ,9 2 1 5 9 0 ,9 1 1 1 0 ,4 7 5 ,4 9 6 2 ,0 6 5 ,2 5 6 2 4 9 ,2 4 9 4 4 4 ,5 0 1 3 0 9 ,5 8 4 2 ,1 9 4 ,6 2 8 1 1 1 ,0 7 4 3 9 4 ,1 2 5 8 6 5 ,0 1 6 7 7 0 ,8 1 9 1 2 ,5 9 8 ,4 8 6 3 2 3 ,1 8 7 2 ,5 5 0 ,9 8 6 6 7 0 ,0 0 3 3 2 4 ,9 3 3 5 4 7 ,6 5 8 1 6 2 ,0 7 2 $ $36,528,876 $ \ 1925 2 1 8 ,9 3 6 1 5 0 ,8 8 9 4 6 7 ,6 8 0 5 7 2 ,1 3 3 9 ,4 5 8 ,1 5 7 1 ,7 1 9 ,9 9 1 3 2 0 ,1 4 4 4 1 6 ,6 8 7 2 8 6 ,5 4 7 1 ,9 9 8 ,7 9 2 1 0 3 ,9 2 7 4 3 8 ,3 9 5 8 6 5 ,2 9 4 6 6 8 ,9 8 7 1 1 ,4 9 6 ,4 4 7 3 1 1 ,1 7 9 2 ,4 2 4 ,9 0 2 6 2 6 ,9 8 6 3 1 7 ,4 3 2 5 2 4 ,4 3 6 1 5 9 ,9 8 7 $33,547,928 January, 1927 FEDERAL RESERVE AGENT AT SAN FRANCISCO ratio was 87.0. Movements of the United States Department of Agriculture’s index num ber of farm prices, of the United States Bureau of Labor Statistics’ index number of whole sale prices of non-agricultural commodities, and of the ratio between these two are pre sented in the accompanying chart. IN D E X NU M BERS R A T IO P R IC E T R E N D S Prices, Non-agricultural Commodities— Index of United States Bureau of Labor Statistics(1913 prices=100). Farm Prices— Index of prices of 30 farm products prepared by United States Department of Agriculture (1909-1914 prices—100). Ratio— Ratio between the above two index num bers, indicating general trends in purchasing power of farm products. Livestock prices on the Chicago market de clined during December, and, with the excep tion of prices for cattle, averaged lower than in November. During a considerable part of the year 1926 prices of sheep and hogs in the Chicago market were higher than in 1925. This is also true of cattle prices if the figures of the Department of Agriculture for all classes of cattle slaughtered be used, although prices for those grades of cattle usually quoted showed a slight decline in 1926 as compared with the earlier year. Prices for lambs were generally lower than in 1925. Quotations for May and Decem ber confract wheat at Chicago during 1926 were generally below 1925 levels, although in April and O c tober, 1926, quoted prices equaled or exceeded those of corresponding days in 1925. Quota tions for May wheat on January 7, 1927, ranged from $1.37^ to $1.39% per bushel, compared with a range of $1.39% to $1.41% Per bushel a month ago, and of $1.76 to $1.79% per bushel a year ago. The cotton market was relatively stable at low levels in December. Prevailing quotations are far below prices in 1925, but slightly above the lowest point reached during the autumn of 1926. An average of spot quotations for mid dling uplands cotton at New Orleans during December, 1926, was approximately 37 per cent lower than in December, 1925, and 3 per cent lower than the average for November, 1926. The quoted price of this grade of cotton on January 7, 1927, was 12.77 cents per pound. The trend of w ool prices during December, as indi cated by an average of 98 quotations on the Boston market, was downward, continuing a decline which has been in progress since Janu ary, 1925. On January 7, 1927, at 67.34 cents per pound, the average price was approxi mately 3 per cent lower than a month ago, and 16 per cent lower than a year ago. A revision of canned fruit prices was an nounced by an important factor in the trade on January 3, 1927. The new quotations, which are guaranteed against decline until June 1, 1927, and which contain other concessions to buyers, are generally lower than the opening prices named in July, 1926. Dried fruit prices have changed little during recent months. Prices for prunes have tended to decline, how ever, and trade factors report that prune mar kets are relatively inactive. C A N N E D F R U IT PR ICE S* (per dozen) -------Spot------! Jan. 15, r ~ Opening —\ Choice Grade Dec. 18, Jan. 30, 1925 N o. 2 \ Cans 1926 1927 1926 1926 Apricots ............ $2.60 $2.40 $ 2 .40-2.60 $ 2.40-2.45 $2.65-2.75 Cherries, R. A .. . 3.60 3.45 3.00-3.2 5 3 .35-3.4 0 3 .25-3.3 5 Plums, E g g . . . , 2.00 1.90 1.90 2.2 5 -2 .5 0 1.90 Peaches, Y . C .. 2.30 2.20 1.95-2.15 2 .00-2.1 5 2.20-2.3 5 2.00 Peaches, Y . F .. 2.15 2.00-2.1 5 2.25 1.95-2.1 0 2.85 2.65 3.30 2 .2 5 -2 .5 0 2 .4 0 -2 .5 0 Pears, B artlett. *f.o .b. cannery in California. Quotations for oranges and lemons at San Francisco declined slightly during December. Throughout the year 1926 citrus fruit prices were at levels below those of 1925. (E) Com m odity P rices— Commodity W holesale Prices (U . S. Bureau of Labor— 19 1 3 = 1 0 0 ) .................................... Purchasing Power of Farm Products (U . S. Dept, of A g ric u ltu re )*.......... Cattle (N ative B eef) . .W eekly average price at C hicago.................................... 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 9 8 quotations at B o s t o n ............................... A p p les............................... Extra Fancy W inesaps, f. o. b. Pacific N orthw est. O ran ges.............................Navels, Fancy, wholesale at San Francisco............... Prunes............................... Size 4 0 /5 0 in 25-lb. boxes, f. o. b. California........ .. R aisin s...............................Thompson Seedless, Bulk, in 25-lb. boxes, f. o. b. California .................................................................................. Canned Peaches............ Cling, Choice, 2 ^ s , f. o. b. California........................... B u tter............................... 92 score at San Francisco.................................................... C opper................................Electrolytic, m onthly average at New Y o r k ............... L e a d .................................... M onthly average at N ew Y o r k ......................................... S ilver..................................Monthly average at New Y o r k ..................................... Lum ber (S o ftw o o d ). .W e e k ly Index United S ta te s f........................................... Unit 100 lbs. 100 lbs. 100 lbs. bu. lb. box box lb. lb. doz. lb. lb. lb. oz. January 7,1927 147.2 80.2 $9.85 12.40 11.75 1.37 $ 4 - 1 . 3 9 * 4 65.340 $1.45-1.75 3 .2 5 -5 .0 0 .0 7 -.0 7 y 2 .0 7 y 2 2.20 .46 13.3020 7.8550 53.4660 29.75 One Month Ago 148.1 80.7 $10.60 12.60 11.90 1.3924-1.41 Î4 67.150 $1.30-1.35 4 .25-5.7 5 .0 6 M -0 7 Î 4 .0 7 ^ 2.20 .46 13.5760 8.0050 54.1410 29.80 One Year Ago 156.3 87.0 $9.40 16.00 11.40 1 .7 6 -1 .7 9 ^ 77.570 $ 1 .75-2.00 4 .25-4.7 5 .09—.09 3^2 .0734 2.20 .44 13.86-60 9.3100 68.8890 30.26 *Ratio of farm prices (August, 1909-July, 1914^=100) to wholesale prices of non-agricultural commodities (1910-1914=100). f As published by “ The Lumber Manufacturer and Dealer.” 8 MONTHLY REVIEW OF BUSINESS CONDITIONS December monthly average prices of nonferrous metals were below the average prices of November, continuing a decline which began in late 1925. T he national lumber price index, published by “ The Lumber Manufacturer and Dealer,” declined from 29.80 for November, 1926, to 29.75 for December, 1926. In Decem ber, 1925, it stood at 30.26. Banking and Credit Situation During recent weeks condition statements of 65 reporting member banks in the principal cities of the Tw elfth Federal Reserve District have reflected the usual holiday and year-end changes in demand for credit accommodation. Prior to the Christmas holidays, demand for credit and currency increased, and interest rates advanced slightly. W ith the passing of the year-end this seasonal demand ceased, and MILLIONS OF D O L LA R S January, 1927 1, 1926, and 102 million dollars (6 per cent) larger than a year ago. Member bank demands for funds at the Fed eral Reserve Bank of San Francisco increased temporarily during December, but neither be fore Christmas nor at the year-end were de mands so great as those experienced during the autumn harvest season. On January 12, 1927, total bills and securities held by the R e serve Bank were 5 million dollars larger in amount than one year ago. The usual increase in hand to hand currency requirements during the month preceding Christmas resulted in a temporary expansion of 4 million dollars in Federal reserve note circulation of this bank and a decline of approximately 25 million dol lars in its cash reserves. Subsequent contrac tion in currency demands exceeded the pre vious expansion, and the volume of Federal reserve notes in circulation declined to the lowest level since September, 1918, while re serves again increased. F E D E R A L RESER VE B A N K O F SA N F R A N C IS C O (in millions of dollars, percentage changes in parentheses.) Condition t — Changes from--------- s Jan. 12, D ec. 1, One Y ear 1927 1926 A go Total Bills and S ecurities... . . 110 — 5 ( 4.1) + 5 ( 4.6) B ills D is c o u n t e d ...................... — 6 (1 3 .6 ) + 16 (61 .5 ) U nited States Securities. . . . 39 0 — 11 (22.2) Bills Bought ............................. 30 + 2 ( 5.7) + 1 ( 2.8) T otal Reserves ......................... . . 264 0 — 18 ( 6.3) T otal D eposits ......................... . . 182 + 3 ( 1.8) + 4 ( 2.5) Federal Reserve N ote Circulation .............................. . . 179 — 7 ( 3.6) — 17 ( 8.9) Figures for about 65 member banks in leading cities, as of last W e d nesday of each month. Latest figures, December 29. by mid-January the volume of total loans and discounts of these banks had declined to De cember 1st levels. The most recent figures of total loans were 110 million dollars or 9.3 per cent above those of a year ago, 57 per cent of the increase being in loans on securities and 43 per cent in commercial loans ( “ all other loans, largely com m ercial” ). Total deposits, at mem ber banks, chiefly as a result of increases in volume of time deposits, have risen to a new high point. A t 1,741 million dollars on Janu ary 12, 1927, they were 57 million dollars (3 per cent) larger in volum e than on December 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 /---------- Changes f r o m ---------- * Jan. 12, Dec. 1, One Year 1927, 1926 Ago Total Loans ................................ 1,290 — 2 ( 0.1) + 110 ( 9.3) Commercial Loans ................. 961 — 5 ( 0.5) + 47 ( 5.1) Loans on Securities................. 330 + 3 ( 0.9) + 63 (23.6) Investm ents ................................ 482 + 19 ( 4.1) + 19 ( 4.0) T otal Loans and Investm ents 1,773 + 17 ( 1.0) + 128 ( 7.8) N et Dem and D ep osits............ 807 + 12 ( 1.5) — 3 ( 0.4) Tim e Deposits ........................... 921 + 4 0 ( 4.5) + 119 (14.8) Borrowings from Federal Reserve B ank ...................... 33 — 8 (19.8) + 15 (86.7) Available figures of intermediate and long term credits extended to agriculture (as differ entiated from short term credits extended by the Reserve Bank) show that during the year 1926 there was a substantial increase in such borrowing in the district as a whole and a mod erate increase in each of its constituent states. The accompanying table shows, by states, the total volume of loans outstanding at Federal land banks, joint stock land banks, and Fed eral intermediate credit banks in this district at the close of the years 1926 and 1925. LO A N S O U T S T A N D IN G A T C LO SE O F Y E A R Joint r - Federal Land Banks* —* r ~ Stock Land Banksf — 1926 1925 1926 1925 Arizona ............ $ 5,519,592 $ 5,035,099 $ 2,465,289 $ 1,766,406 California ......... 25,065,750 22,196,892 25,043,842 20,723,890 Idaho ................. 22,490,662 23,009,605 3,548,900 2,660,500 Nevada ............... 1,278,453 839,199 523,629 406,406 O regon ............... 20,069,397 20,188,463 11,314,679 9,707,000 U tah ................... 14,294,794 13,932,739 787,300 705,000 W ashin gton .. 30,589,731 30,106,202 2,014,525 1,789,872 D istrict ...............$119,308,379 $115,308,199 $45,698,164 $37,759,074 Federal Intermediate t------- Credit Banks*--------- > A rizona ...................................................................... $ 1,929,237 $ 351,448 California ................................................................. 11,164,671 6,647,590 775,013 492,298 Idaho ........................................................................ Nevada ...................................................................... 60,850 52,000 Oregon ...................................................................... 1,435,366 1,059,355 U tah ........................................................................... 431,134 169,063 W ashington ........................................................... 755,962 425,298 District ..................................................................... $16,552,233 $9,197,052 *Federal Land Banks and Federal Intermediate Credit Banks are located in Berkeley, California, and Spokane, W a sh in g ton. fjo in t Stock Land Banks are located in L o s Angeles and San Francisco, California, Portland, Oregon, and Salt Lake City, Utah.
@FedFRASER