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MONTHLY REVIEW
OF
BUSINESS CONDITIONS
ISAAC B. NEWTON, Chairman of the Board and Federal Reserve Agent
Federal Reserve Bank of San Francisco
Vol. XIII
San Francisco, California, January 20,1929
No. 1
SU M M ARY OF N ATIO N AL CONDITIONS
Prepared by the Federal Reserve Board
Industry and trade continued active in De
cember, and the general level of prices re
mained unchanged. Banking and credit condi
tions at the turn of the year were influenced
chiefly by seasonal changes in the demand for
currency and by requirements for end-of-year
financial settlements.
Production. Output of manufacturers de
creased in December, but the decline was less
than is usual during the month. The Federal
Reserve Board's index was slightly higher than
in November and above the level of a year ago.
Smaller than usual seasonal reductions were
reported in the daily average output of steel,
pig iron, automobiles, copper, cement, silk, and
flour, while output of cotton and wool textiles
declined considerably. Meat packing increased
in December, reflecting a larger output of pork
products, as beef and mutton production de
clined. Volume of factory employment and
payrolls was larger than at this season of last
year.
Production of minerals was in somewhat
smaller volume in December than in Novem
ber, reflecting chiefly a large reduction in the
output of both bituminous and anthracite coal.
Production of copper and zinc ore, on a daily
average basis, was slightly smaller than in No
vember, while petroleum output increased.
Preliminary reports for the first half of Janu
PER C ENT
ary indicate a steady increase in output of
petroleum and greater activity in the steel,
automobile, coal, and lumber industries fol
lowing the temporary lull during the inventory
period at the end of the year.
Building contracts awarded in 37 eastern
states declined sharply during December, as
in the preceding month, and were smaller than
in any December since 1924. The decline from
November was attributable largely to de
creases in awards for residential building and
public works and utilities. By districts, the
largest declines over the preceding month were
in the Cleveland, Chicago, Boston, and Rich
mond Federal Reserve Districts, while in
creases were reported in the New York, Phila
delphia, and Atlanta Districts.
Trade. Department store trade showed
greater activity in December than in the pre
ceding month, even after allowance is made for
the customary holiday increase. Total sales for
the month were the largest on record, exceed
ing December, 1927, by one per cent, although
there was one less trading day this year. In
creases over a year ago were reported for the
New York and Philadelphia Districts while
substantial decreases occurred in Atlanta and
Minneapolis. Distribution at wholesale de
clined seasonally and was smaller than a year
ago. Freight carloadings in December and the
INDEX NUMBERS___________________________
-W IT H
S E A S O N A L
W IT H O U T
«
»
3
i
i
1!
. _____
j
-
f. •«
{»
-
r*
-
J t -
1
1
A
'
i «
y
\ /
^
IQ
j
/
.
\
/
ÏQ P * ;
N
i
;
V
\
i
\J
IQ 2 R
l<
1«
11
11
11
1
1
1
1
1
j
ii
it
ii
s
1
.. —
i
A D J U S T M IE N T
A D J U S jr M E N T
S E A S O N A L
**
it
_
.
n
*1
r
1
!
i
1
I
1
i
1
1
rJ
•
i
i
j
!
i „
L
».
A«J /
i T W
n *
h
1 i
i 1
it
'. /
\l
\
1 0 0 7
,,j
^
y
y
lO O Q
D EP AR TM EN T STORE SALES
Index number of production of manufactures and minerals com*
bined,adjusted for seasonal variations (1923-1925 average=100).
Latestjigure, December, 112.
Federal Reserve Board’ s index of department store sales (1923-1925
average = 100). Latest figures, December adjusted index 117,
unadjusted index 188.
2
M O N T H L Y REVIEW OF BUSINESS CONDITIONS
first half of January showed a seasonal reduc
tion which was slightly larger than usual, but
continued above those of a year ago.
Prices. The general level of wholesale prices,
as measured by the index of the United States
Bureau of Labor Statistics, remained approxi
mately the same during December as in the pre
ceding month. Average prices of iron and steel,
automobiles, copper, and building materials con
tinued to advance slowly. Prices of farm
M O N E Y RATES
January, 1929
sonal decline in the volume of money in circu
lation. At the Reserve banks the return flow of
currency from circulation resulted in a liquida
tion of member bank borrowing and small de
clines in Reserve bank holdings of acceptances
and of United States securities. Total bills and
securities showed a decline of about 450 million
dollars for the period from December 26 to
January 23 and were in about the same volume
as in mid-summer of last year. At member
RESERVE BANK CR ED IT A N D M O N E Y IN C IR C U L A T IO N
Monthly rates in the open market in NewYork: commercial paper rate
on 4- to 6-month paper and acceptance rate on 90-day bankers’ accept
ances. Latest figures are averages of first 23 days in January.
Monthly averages of daily figures. Latest figures are averages of first
23 days in January.
products, after declining during October and
November, also rose in December, reflecting
higher average prices for raw cotton, oats, rye,
and some grades of wheat, offset in part by
lower prices for corn and cattle. In the first three
weeks of January the price of rubber advanced
sharply and prices of wheat, corn, potatoes, and
flour also increased. Silk and sugar prices de
creased somewhat, and quotations on hides
reached the lowest level in more than a year.
Bank Credit. Banking and credit conditions
in January were influenced chiefly by the sea-
banks there was an increase in the total volume
of loans at the turn of the year due chiefly to
year-end financial settlements, and the tem
porary withdrawal of funds loaned by corpora
tions in the New York market. In January de
posits and loans of member banks declined to
approximately the level of the early part of
December.
In the money market, rates on call loans de
clined sharply in January, while rates on time
loans on securities remained firm and rates on
acceptances advanced.
T W E L F T H FE D E R A L RESERVE D IS T R IC T CONDITIONS
The year-end brought no fundamental change
in the generally satisfactory condition of busi
ness in this District. Seasonal declines in indus
trial activity and in employment during Decem
ber were smaller than in most previous years;
retail sales expanded by more than the usual
amount; wholesale trade was in moderately
large volume; the supply of credit was ample
for the needs of business, although at some
what higher rates than prevciiled earlier in 1928.
Developments in marketing of agricultural
products were seasonal in character during
December. A shortage of rainfall was reported
from all states of the District, with some dam
age to fall-sown grains and to livestock ranges.
The industrial situation was marked by un
usual activity at the copper mines of the Dis
trict and daily average production of copper
reached the highest rate ever reported, al
though the month’s total output was slightly
below the total for November. Increases in
production of the metal accompanied price ad
vances to the highest levels quoted since early
in 1923. Production of crude oil increased sub
stantially during December. Lumber output
was smaller than in proceding months, a usual
seasonal movement resulting largely from the
annual winter shut-down of logging camps and
lumber mills.
Retailers of the District reported larger sales
during December, 1928 than during December,
1927, despite the fact that there was one less
trading day in December of the later year.
Sales of reporting wholesalers were also larger
than a year ago although seasonally smaller
than in November, 1928.
An active demand for credit was experienced
during 1928, particularly during the closing
months of the year. Increased use of bank funds
was accompanied by advances in interest rates,
January, 1929
but at no time during the year was there a lack
of credit available to business at relatively
moderate costs. Changes in member bank and
reserve bank statements at the year-end were
largely seasonal.
Agricultural developments in the Twelfth
Federal Reserve District during December and
early January have been of a seasonal char
acter. Marketing of grains, citrus fruits, apples,
and livestock has continued and preparations
for the forthcoming season have made further
progress. Condition of fall-sown grains and of
forage on winter livestock ranges has suffered
further from lack of rain. Seasonal rainfall at
mid-January was below normal in all of the
states of the District.
Arizona:
R A IN F A L L (in inches)-—Twelfth District
/—July 1,1928—Jan. 15,1929-^
Normal
Actual
12.7
, ,
10.5
4.7
6.0
California:
6.0
3.2
8.6
20.0
4.6
7.4
11.5
7.8
4.2
9.9
3.3
5.9
16.9
3.1
4.6
Los Angeles .......................................
Red Bluff ............................................
Sacramento ........................................
San F rancisco.....................................
Idaho:
Nevada:
Oregon:
Baker City
4.3
..........................................
Utah:
Salt Lake C i t y ...................................
Washington:
Seattle ..................................................
. .
3.4
16.0
6.0
23.1
17.1
5.2
7.2
11.5
4.9
18.7
8.5
On December 1, 1928, the condition of fallsown wheat in the states of Idaho, Oregon, and
Washington was reported as 78.0 per cent of
normal. A year ago the condition figure stood
at 95.0. In the United States as a whole, the
condition of the fall-sown crop was reported to
be 84.4 per cent of normal on December 1, 1928,
as compared with 86.0 on December 1, 1927,
The acreage sown to winter wheat in Idaho,
Oregon, and Washington is estimated to be
2 per cent smaller than a year ago. In the
United States the area sown to winter Wheat
is estimated to be 8.6 per cent less than in 1927
and approximately the same as in 1926.
Volume of exports of wheat from Puget
Sound and Columbia River ports during the
current crop season has reflected the generally
slow movement to market of Pacific North
western wheat. Up to January 1, 1929, exports
from these ports had totaled 18,299,000 bushels
which may be compared with 37,800,000 bush
els exported during a corresponding period of
the 1927-1928 crop season.
On January 1, 1929, it was estimated that the
yield of the 1928-1929 crop of Navel oranges in
3
FEDERAL RESERVE AG ENT A T SAN FRANCISCO
California would approximate 16,700,000 boxes,
a figure 200,000 boxes above last month’s esti
mate and 5,050,000 boxes larger than last year’s
crop. Shipments of oranges from California
during the current crop season (from Novem
ber 1, 1928, to January 1, 1929) have totaled
9,569 carloads. During November and Decem
ber, 1927, it was estimated that 7,335 carloads
were shipped. Prices for oranges, f. o. b. Cali
fornia, declined during November and De
cember and on January 1, 1929, averaged ap
proximately 13.4 per cent less than a year ago.
Lemon shipments from California during De
cember totaled 1,102 carloads as compared with
518 carloads shipped during December, 1927.
Marketing of apples from the late apple ship
ping states of the District— Idaho, Oregon, and
Washington— as indicated by carlot shipments
during December was in slightly smaller vol
ume than during November but was in larger
volume than during December, a year ago.
Shipments from these states for the season
from June 1, 1928, to January 1, 1929, were
34.5 per cent larger than during the same
months of the 1927-1928 season, when the
smaller 1927 crop wras being marketed. Prices
for apples, f. o. b. Pacific Northwest in early
January, 1929, ranged from 75 cents to one
dollar per box or 38 per cent lower than during
January, 1928.
December snows covered much of the desert
areas of the District devoted to winter grazing
of livestock, and increased use has been made
of supplemental feed supplies for both sheep and
cattle. Livestock are generally in good condi
tion despite the scarcity of good range forage
during the autumn and early winter months.
The number of cattle on feed in the District
during the winter of 1928-1929 is estimated to
be 6 per cent less than a year ago. In the eleven
Corn Belt states of the Middle West, the num
ber of cattle on feed increased 3 per cent during
the same period. The number of sheep on
feed in the District on January 1, 1929, was 7
per cent smaller than a year ago.
CA T T LE A N D SHEEP ON F E E D —Twelfth District
Arizona ..........................
California ....................
Id a h o ..............................
Nevada ..........................
Oregon ..........................
Utah ...............................
Washington .................
Total ..........................
Cattle
Sheep
t-------- January 1----------,— — January 1------------- ^
1929
1928
1929
1928
30,000
25,000.
10,000
20,000
66,000
85,000
90,000
100,000
25,000
25,000
100,000
106,000
23,000
20,000
29,000
18,000
15,000
15,000
30,000
40,000
25,000
27,000
102,000
105,000
7,000
7,000
30,000
30,000
191,000
204,000
391,000
419,000
Source: United States Department of Agriculture.
Receipts of sheep and swine at eight princi
pal markets in the District during December,
1928, were approximately 1 per cent and 7
per cent larger, respectively, than during De
cember a year ago. Receipts of cattle and calves
at the same markets were 14.7 per cent smaller
4
M O N T H L Y REVIEW OF BUSINESS CONDITIONS
during December, 1928, than during December,
1927. Prices for livestock, particularly fed
lambs, increased at Pacific Coast markets dur
ing late December and early January.
Industry
Industrial activity in the Twelfth Federal
Reserve District increased gradually through
out the year 1928, and in the later months of the
year was well above the low levels of the last
quarter of 1927. The record of railway freight
carloadings of industrial products indicates that
production, for the year as a whole, was sub
stantially larger than in 1927. Output of the
District’s mines and factories is estimated to
have been in record volume from July to De
cember. Unemployment decreased substan
tially during this period and, as the winter
season advanced, was reported to be smaller in
volume than for several winters past.
January, 1929
sonal recession in employment was noted dur
ing November and December. In the remainder
of the District (California, Idaho, Nevada, and
Oregon) conditions were reported as better
than in 1927 but a surplus of labor, attributable
in considerable part to an influx of workers
from other regions, was available at all times.
Activity in mining, agriculture, lumbering, road
building, and hydro-electric construction work,
and unusually favorable autumn weather, were
important factors in the improved employment
situation during the later months of 1928.
INDEX NUMBERS
INDEX NUMBERS
130
120
r\ A v^
NO
100
90
80
w
1924
1925
1926
1927
1928
w
C A R L O A D IN G S OF “ O TH ER T H A N M E R C H A N D ISE A N D
M ISCEL L AN EO U S F R E IG H T ” —T W E L F T H DISTRICT
Index adjusted for seasonal variation; 1923-1925 daily average = 100.
Latest figure, December, 113.
A real surplus of labor existed in the District
during the spring months of 1928 but by July
there were evidences of considerable improve
ment in the employment situation. In Arizona,
Utah, and Washington it was reported that la
bor was fully employed during the summer
and autumn, and that less than the usual sea(A) Industry—
Indexes of daily average production, adjusted for
(1923-1925 daily average ~ 100)
— 19;2 8 -----Year’s
Dec. Nov.
Av.
Manufactures:
103
101
. 104
Flour ........................
Slaughter of Live
. 94
83
85
stock ....................
106* 109
107
Lumber ....................
176
161
Refined Mineral O ilsf. . 155
120
118
Cement ....................
. 115
81
. 76§
W ool Consumption
Minerals :
105
101
Petroleum (California) f . 96
t 115
133
133
114
. 105 §
91
Silver (United States)?... 88
103
General:
. 113
113
113
Carloadings§ .........
seasonal variation
Oct.
109
.-----1927 —
Year’s
Dec. Av.
100
99
92
111
162
103
88
92
108
145
115
74
97
105
148
114
89
95
128
109
81
93
105
109
95
96
105
112
93
112
101
110
ted for seasonal variation. ÎPrepared
*Preliminary. fN o t ;
by Federal Reserve Board, §Eleven months average, DeOther than Merchandise and
cember figures not available.
Miscellaneous.
LU M BER P R O D U CT IO N —T W E L F T H D ISTR ICT.
1923-1925 daily average = 100. Latest figures, December, adjusted, 109
(preliminary), unadjusted, 85 (preliminary).
Lumber production for the year 1928 was
somewhat greater than for 1927. In an effort
to adjust supply to demand and so to achieve
greater stability in the lumber market, output
was reduced during the early summer months,
but during the autumn a high rate of produc
tion was reported. Increased output from the
Douglas Fir and Western Pine regions in
Washington and Idaho, was chiefly responsible
for this fourth quarter activity. The lumber
mills of Southern Oregon and of California
were less active and smaller production was
(B) Employment—
t--------- California---------> r ~" — Oregon-- —>
No. of
No. of
No. r- Employees —\ No. <— Employees —\
of
Dec.,
Dec.,
of
Dec.,
Dec.,
Industries
Firms 1928
1927 Firms 1928
1927
All Industries.......... 749 153,877 144,080 150
24,262
23,033
Stone, Clay and
'
^.3.)
Glass Products. 42
6,273
6,473
4
188
157
Lumber and Wood
( ^.1)
(19.7)
Manufactures . . 118 23,904 25,147
53
14,012
12,980
(— 4.9)
(8.0)
T e x tile s .................
16
2,438
2,495
10
1,949
2,141
Clothing, Millinery
( 2.3)
( 9.0)
and Laundering. 59
7,651
7,693
9*
479
446
Foods, Beverages
( ^.5)
(7.4)
and Tobacco. . . 164 25,506 23,742
46
2,596
2,411
Water, Light and
(7.4)
(7.7)
Power ...............
4
6,930
7,976
(— 13.1)
Other Industries-}". 332 79,534 68,585
(16.0)
Miscellaneous . . .
14
1,641
1,969
28
5,038
4,898
________
(— 16.7)
(2.9)
*Laundering only, flncludes the following industries: metals,
machinery and conveyances; leather and rubber goods;
chemicals, oils and paints; printing and
paper goods.
Figures in parentheses indicate percentage changes from De
cember, 1927.
January, 1929
5
FEDERAL RESERVE AG E NT A T SAN FRANCISCO
reported for 1928 than for 1927. Orders re
ceived and shipments made by mills of the
District during 1928 were larger in volume
than the lumber cut, and mill stocks are esti
mated to have diminished during the year. The
end of December witnessed the usual winter
closing of mills and logging camps.
The total value of building permits issued in
93 cities of the District (as reported by S. W.
Straus and Company) was 13 per cent smaller
during 1928 than during 1927, the decrease
being the result, chiefly, of declines in a few of
the larger cities. In general, building in smaller
cities of the District was more active in 1928
than in the previous year. Total value of con
tracts awarded for engineering and heavy con
struction projects in the Twelfth District (as
reported by the Engineering News Record)
was 11 per cent less during 1928 than during
1927. This decline may be attributed chiefly to
decreased construction of large commercial and
industrial buildings.
Production of petroleum in California, after
a long period of approximate stability, rose
sharply during November and December,
chiefly as a result of increased drilling in the
new deep well zone at Santa Fe Springs. Wells
in this deep zone produce an oil of unusually
high gravity. The index of daily average petro
leum production rose to 105 (1923-1925 daily
average = 100) in December, the highest fig
ure since October, 1923. The index stood at 101
in November, 1928; 95 in October, 1928; and
93 in December, 1927. Oil refineries were also
unusually active during December, 1928. At
the year end stocks of gasoline and of light
crude oil were smaller and stocks of heavy
crude oil and the heavier refined oils were
larger than at the end of 1927.
Output of non-ferrous metal mines increased,
rapidly during the last half of 1928. Produc
tion of copper reached record levels during the
last quarter of the year, while lead, quicksilver
and, to some extent, silver were extracted in
increasing quantities as compared with pre
vious months. Total silver and lead production
for the year, however, was smaller than in
1927. Despite greatly increased production
stocks of copper at the end of 1928 were con
siderably smaller than those held at the end
of 1927. A number of leading producers were
reported to be approaching the limits of their
capacity for immediate and rapid expansion in
production of this metal.
Flour mills of the District produced more
flour during 1928 than during 1927. Not all of
the increased output was sold, however, and
millers' stocks of flour (and of wheat) were
larger at the end of the year than at its begin
ning. Domestic demand for flour was fairly
well maintained throughout 1928, but export
demand was light, particularly in the early
months of the year.
The pack of salmon on the Pacific Coast of
the United States was larger during the 1928
season than during the 1927 season. The carry
over from the 1927 pack was small, demand
was well maintained during 1928 and contrary
to the usual experience in seasons of large
production, prices remained steady. The num
ber of cases of canned salmon on hand was
lower at the close of the year than on Decem
ber 31, 1927.
Trade
Trade in the Twelfth District was more ac
tive during 1928 than during 1927. Railway
freight carloadings, sales at wholesale, and
sales of new automobiles were in moderate vol
ume during the first half of 1928, and compared
unfavorably with the previous year. Activ1NDEX NUMBERS
130
(C) Distribution and Trade—
/------------- 1928---------------\ ,-------1927------->
Year’s
Year’s
Av. Dec. Nov. Oct.
Dec. Av.
t---------------- Index Numbers*------------------ *
120 116
112
111
112
Carloadings, T o t a l t ............. 114
Carloadings, Merchandise
and Miscellaneous! . . . . 117
120 120
115
114
115
Sales at Wholesale* ...........
99
101 106
100
96
97
Sales at Retail! .................... 119
125 116
120
118
115
Stocks, Retail § ...................... 108 1060 HO
110
112
108
Sales of New Automobiles||
99
111 117
112
68
86
Passenger Cars ...............
Commercial Vehicles . . . .
96
78 113
126
73
95
t------------------ Actual Figures------------- ----Stock Turnover, R etail!!...
.25
.43
.24
.26
.41
.24
Collections, R etail#
R e g u la r................................ 46.1 45.6 46.2 48.3 44.2 44.8
Installment ........................ 15.6 13.6 14.7 17.3 15.0 16.0
* Adjusted for seasonal variations, 1923-1925 average=100. fDaily
average. ^Monthly totals of eleven lines combined. §At end
of month. ||For source of figures, see June, 1928, Review.
^Proportion of average stocks sold during month. # P e r
cent of collections during month to amount outstanding at
first of month. ^Preliminary.
110 n
/À
RETA1!
____
s
j w
SALE
/A
100
90
A *
A
120
VV
KA
/ V \
J
A
1
,'Z J
—
*
^
A
\ fd \
VWHOLESALE
SALES
m oc
i
A
v
\J
w
CAR
8 0 __ LOADINC; s
VN IO O yi
y
/'V
A
im c
1007
W v
1090
VW
D ISTRIBUTION A N D T R A D E -T W E L F T H DISTRICT
Indexes adjusted for seasonal variation. 1923-1925 average=100. Daily
average figures of department store sales and railway carloadings
of merchandise freight. Monthly figures of sales at wholesale.
ity expanded during the second half of the
year, however, and the figures for the year as
a whole averaged larger than in 1927. Depart
ment store sales declined slightly during the
first quarter of the year, but expanded there
6
M O N T H L Y REVIEW OF BUSINESS CONDITIONS
after and were generally above the levels of
1927. The export trade of Pacific Coast ports
is estimated to have been larger in 1928 than
in 1927, but import trade probably declined
slightly in the later year. Despite seasonal re
cession in some instances, a relatively high
level of activity continued into December and
trade generally was in greater volume than
during December, 1927.
Total value of sales at retail of 114 depart
ment, apparel, and furniture stores was 1.7
per cent greater during 1928 than during 1927.
Sales in the state of Arizona, and in Salt Lake
City and Seattle showed the largest increases
as compared with the previous year. Through
out the District, merchandise stocks carried
averaged lower and stock turnover higher than
in 1927. A decline in the proportion of cash
sales to total sales was reported during 1928,
the principal increase in credit transactions
being in installment sales. The rate of collec
tions on ordinary accounts improved during
the year, and that on installment accounts aver
aged practically the same as in 1927. Sales of
136 reporting stores increased more than sea
sonally during December, 1928, and were 1.4
per cent larger in value than sales reported for
December, 1927.
R E T A IL T R A D E —Twelfth District
,-------- NET SALES*--------->
Jan. 1 to
Dec., 1928,
Dec. 31.1928,
compared
compared with
with
Jan. 1 to
Dec., 1927
Dec. 31,1927
Department S to r e s f...
2.2 ( 66)
2.3 ( 61)
Apparel S to r e s .............
9.5 ( 21)
2.7 ( 13)
Furniture Stores ......... — 7.8 ( 49) — 2.7 ( 40)
All Stores ......................
1.4 (136)
1.7 (114)
STOCK*
Dec., 1928,
compared
with
Dec., 1927
— 4.6 (50)
— 1.5 (14)
— 5.3 (32)
— 4.5 (96)
* Percentage increase or decrease (— ). Figures in parentheses
indicate number of stores reporting, t Includes dry goods
stores.
Total sales at wholesale as reported to this
Bank by 169 firms in eleven lines of trade were
3 per cent larger during 1928 than during 1927,
the large volume of business done during the
last five months of 1928 being responsible for
the increase. Total sales in Southern Califor
nia for 1928 were about on a par with those of a
year ago, while sales in Northern California
exhibited moderate increases and those in the
rest of the District substantial increases as
compared with 1927. Agricultural implements,
drugs, electrical supplies, furniture, and gro
ceries were the individual lines in which sub
stantial increases over the year period were
reported. Sales of 214 firms were seasonally
smaller during December, but were 1.4 per
cent larger than in December, 1927.
_
Total carloadings were higher during the
latter part of 1928 than during the last half of
1927. Loadings of grain were lighter than in the
earlier year, while loadings of merchandise and
miscellaneous commodities, of livestock, and of
January, 1929
forest products showed substantial gains. Car
loadings receded seasonally during December,
1928, but were larger than in December, 1927.
Sales of new automobiles were in large vol
ume during 1928, due partly to improved condi
tions generally and partly to the active re-entry
of the Ford Motor Company into the selling
field. New car sales for the year were well
above those of 1927, but only in Arizona did
they surpass the high levels of 1926. The in
crease registered in the sale of commercial
vehicles during the year was sharper than that
for passenger cars.
Prices
Commodity price movements have been
slight during recent weeks with practically no
variation in average indexes and few, if any,
significant changes in prices of commodities
individually important in this District. There
have been wide fluctuations in quotations for
many items during the year just ended, but
these changes have tended to offset one another
with the result that the general level of com
modity prices is now practically the same as a
year ago.
In three non-agricultural industries of lead
ing importance in this District (copper, petro
leum, and lumber) favorable readjustments in
prices during 1928 accompanied concerted ef
forts toward adjustment of output to the
known consuming capacity of their markets.
Efforts to effect stabilization and improvement
in the copper industry were aided by a rapid
expansion in demand for the metal during
1928. Copper was selling slightly below 14
cents per pound a year ago, with production in
only moderate volume— the latter condition re
sulting from a close adjustment by producers
of output to consumption. Increases in demand
for the metal resulted in relatively sharp in
creases in output, and in November, 1928, the
daily rate of production was 29 per cent larger
than in January, 1928, and 25 per cent larger
than in November, 1927. Even this increased
activity failed to keep pace with rapidly mount
ing demand, and the price for copper advanced
practically continuously throughout the year,
reaching 17 cents per pound in January, 1929.
The oil industry experienced a distinctly un
satisfactory year during 1927, as a result of
severe overproduction of petroleum and conse
quent sharp declines in prices. During the first
half of 1928 production was kept more or less
in line with demand, and improvement in the
industry resulting from this partial control of
production was largely responsible for the sub
stantial upward revisions in prices for the
higher grades of crude oil during July and
August. Other advances in quotations have
been made since that time and California petro
January, 1929
FEDERAL RESERVE AGENT A T SAN FRANCISCO
leum in December, 1928, was selling at prices
approximately 40 per cent higher than in De
cember, 1927. Prices of lower grade or fuel
oils did not share in the advances during 1928,
and were reduced approximately 15% on Janu
ary 18, 1929. These grades of oil it is estimated,
constitute not more than 15% of production in
California at the present time.
Lumber producers in the Pacific Northwest
have for several years experienced unsatisfac
tory conditions because of overproduction and
wasteful competitive practices within the in
dustry. Restriction of production became ef
fective early in 1928 and prices for several
important lumber products of this region—
particularly Douglas Fir, and Spruce— started
to recover from the low levels reached in De
cember, 1927. These advances were continued
throughout 1928, and in December prices were
approximately 15 per cent higher than at the
beginning of the year.
The Credit Situation
During 1928, the demand for credit in the
Twelfth Federal Reserve District wras of rec
ord proportions. Requirements for funds were
heaviest during the later months of the year,
when the agricultural marketing movement
was in progress, industry and trade were at
their highest levels, and securities markets
were active with prices tending upward. In
terest rates hardened from July to December
but ranged only slightly above those of the
corresponding months of 1927.
General
7
changes in the banking situation of the District
during 1928 are shown in the accompanying
charts and are discussed in some detail below.
The volume of member bank credit in use
expanded almost continuously throughout the
year, reaching successive new record levels.
Demand for Reserve Bank credit averaged
higher than in any year since 1921. The dis
count rate of the Federal Reserve Bank of San
Francisco on all classes and maturities of eligi
ble paper was raised from 3% per cent, the rate
in effect since September, 1927, to 4 per cent on
February 4, 1928, and 4 % per cent on June 2.
Except for temporary lulls in March, July,
and early August, total loans and investments
of r e p o rtin g m e m b e r b a n k s in the District in
creased steadily during 1928. On December 19,
they stood at the 1928 record figure of 1,971
million dollars, an increase of 185 million dol
lars or 10 per cent as compared with the 1927
peak figure of 1,786 million dollars reached on
December 21, 1927. All important classes of
loans and of investments showed increases over
the year period. Investments were increased
by 99 million dollars, or 18 per cent; loans on
securities by 43 million dollars or 13 per cent;
and commercial loans by 43 million dollars or
MILLIONS or DOLLARS
(D ) Bank Debits
Dec.,
Dec., (-------- Twelve Months-------- ■
>
1928
1927
1928
1927
Bakersfield . . . . .$
16,946 $
18,230 $
164,401
173,978 $
Bellingham . . .
9,679
10,336
120,771
116,418
22,641
Berkeley...........
25,795
262,936
263,732
B o i s e .................
16,976
16,431
186,728
169,194
Eugene .............
9,092
8,420
93,425
91,111
Everett .............
15,014
12,817
164,881
152,544
Fresno .............
43,950
45,560
435,938
495,141
Long Beach . . .
65,475
53,428
674,411
580,188
Los Angeles . . . 1,170,195
1,035,884
12,912,344
11,198,618
Oakland ........... .
336,155
274,803
3,017,346
2,697,244
Ogden .............
23,941
22,349
233,931
226,087
45,382
Pasadena .........
42,351
486,775
481,068
Phoenix .............
51,542
35,185
437,768
334,493
Portland ..........
201,221f
171.483
2,201,755$
2,046,247
12,016
10,427
122,774
Reno .................
113,839
1,271
Ritzville ...........
1,094
12,841
11,881
Sacramento
53,124
52,991
604,698
479,753
Salt Lake City. .
100,071
95,803
927,404
861,866
San Bernardino
11,244
11,095
129,104
123,856
69,501
San Diego . . . .
68,365
752,846
743,279
San Francisco . . 1,679,536
1,498,791
18,384,203
15,051,180
San Jose ...........
29,865
30,211
359,611
320,184
173,052
Santa Barbara.
17,059
16,111
164,360
Seattle ............. .
241,460
2,958,306
2,615,827
267,778
Spokane ...........
62,954
57,696
686,240
668,485
31,609
34,356
352,319
Stockton ...........
342,612
Tacoma ...........
45,574
558,767
51,935
538,560
159,767
16,211
15,929
173,053
Yakima ...........
Total .............. $4,433,0401- $3,952,318
$47,598,205$ $41,211,935
*In thousands, t Includes $17,390,000 at four banks not reporting
prior to week ended May 2, 1928. ^Includes $139,369,000 at
four banks not reporting prior to week ended May 2, 1928.
M EM BER BANK CR ED IT—T W E L F T H DISTRICT
Monthly average of weekly figures. Latest figures are averages
for the month of December.
5 per cent. There was a relatively continuous
growth in the banks’ investment holdings
throughout 1928. Total loans increased during
the early months of the year, reflecting for the
most part growth in the volume of loans on
securities, and after some decline in late June
and July continued to advance until the end
of the year. The increase during the last half
of 1928 represented further growth in loans
on securities, and, particularly in December, an
increase in loans for commercial purposes.
8
M O N T H L Y REVIEW OF BUSINESS CONDITIONS
Loans reached the highest point for the year
on December 19 and 26, when the total volume
was 1,314 million dollars.
R EPORTING M EM B ER BANKS* — Twelfth District
(In millions of dollars)
Total Loans and Investments..
Total Loans ...................................
Commercial Loans ......................
Loans on Securities ....................
Investm ents......................................
Net Demand Deposits ...............
Time Deposits ...............................
Borrowings from Federal Re
serve Bank .................................
•Condition
Jan. 16, Dec. 19, Jan. 18, Dec.21,
1929
1928
1928
1927
1,975
1,971
1,802 1,786
1,316
1,314
1,221 1,228
918
933
889
890
398
381
331
338
659
657
581
558
825
805
814
810
995
960
915
867
44
59
48
33
*The figures for reporting member banks have been revised. A
description of this revision together w it h a tabulation of the
revised figures for 1927 and 1928 appear in the Federal Re
serve Bulletin for January, 1929.
At the Federal Reserve Bank of San Fran
cisco demand for credit during 1928 averaged
higher than in any year since 1921, a year
during which a large part of the borrowing
represented delayed liquidation of earlier loans
rather than demand for funds needed to finance
current business activity. City member banks
were responsible for this increased use of
credit. Country bank borrowings during 1928
averaged smaller than in any other year of the
post-war period. The factors directly reflected
in the discount record of the Reserve Bank dur
ing the year were member bank transfers of
funds to and from other parts of the United
States (chiefly New York), United States
Treasury receipts and disbursements within
MILLIONS OF DOLLARS
1
■ TOTAL RESERVES
A
V
>
__*
1
/ \
-......
\/YV
v —
FEDERAL RESERVE
~
NOTE C RCULATION
INVESTMENTS
^ v
/
BILLS DISCOUNTE:d
1
1.............
RESERVE BANK C R E D IT -T W E L F T H DISTRICT
Monthly average of daily figures. Latest figures are averages for
the month of December.
the District, and changes in District demand
for currency. The volume of currency in cir
culation, except for a temporary and unusual
expansion and contraction in June and July,
has responded quite faithfully to the needs of
the District's changing business situation. Dur
ing the first part of the year, when industry
and trade either were depressed or were oper
ating at moderate levels, the demand for cur
rency was relatively light. During the second
January, 1929
half of the year, increased activity in agricul
ture, industry, and trade resulted in larger pay
rolls and increased need for hand-to-hand
funds. There was a slight increase in the re
serve requirements of member banks of the
District during the year but its net effect upon
the demand for Reserve Bank credit was neg
ligible.
As is usual during the final month of the
year, the most striking feature of the credit
statistics for December, 1928, was the increase
in coin and currency in circulation. This year
the extra currency needs of the District, which
apparently approximated 20 million dollars
were indirectly met by transfers of funds into
the District rather than by borrowing at the
Federal Reserve Bank of San Francisco. The
total of these transfers was approximately 65
million dollars and, in addition to providing for
holiday currency needs, they served to offset a
Treasury withdrawal of 15 million dollars and
to enable member banks to reduce their bor
rowings at the Reserve Bank by 35 million dol
lars. This latter movement was facilitated by
Reserve Bank purchases of acceptances
amounting to 9 million dollars.
F E D E R AL RESERVE BAN K OF SAN FRA N C ISCO
(In millions o f dollars)
,-------------------- Condition-------------------->
Jan. 16,
Dec. 19,
Jan. 18,
Dec.21,
1929
1928
1928
1927
Total Bills and Securities... 128
136
111
94
Bills Discounted ....................
56
65
54
39!
Bills Bought ...........................
54
54
15
10
United States Securities . . . .
17
17
41
46
Total Reserves ........................ 247
245
254
278
Total Deposits ........................ 194
190
188
184
Federal Reserve Notes in
Circulation .......................... 163
172
159
176
Changes in demand for credit at the Federal
Reserve Bank of San Francisco during the first
half of January, 1929, were similar to those of
January, 1928, although the demand was
heavier this year than last. There was a slight
reduction in commercial demand for credit at
member banks during January, 1929, but all
other classes of loans and of investments in
creased. Total loans and investments of these
banks were considerably larger than at the be
ginning of 1928.
During the past year there has been a con
siderable expansion in activity in the security
markets of the Pacific Coast. Stocks with a
market value of 4,302 million dollars changed
hands on the principal exchanges (San Fran
cisco, Los Angeles, and Seattle), during 1928,
an increase of 3,465 million dollars, or 414 per
cent as compared with the figure (837 million
dollars) for 1927. Bond transactions at these
markets totaled 20 million dollars in 1928 com
pared with 18 million dollars in 1927. Security
prices generally tended upward during the
year.
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