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MONTHLY REVIEW TWELFTH FED ERAL RESERVE DISTRICT F ed e r a l R e se r v e Ba n k o f S a n F r a n c is c o JULY 1950 REVIEW OF BUSINESS CONDITIONS developments in Korea and the resulting reaction of consumers, business, and government have ob scured the changes in the economic position of the nation and the District which were realized in June. In June, before the Korean conflict broke, employment and pro duction in this District and nationally surged upward. It might be well to emphasize that this swing, which started late last year, was not based on any enlarged military expenditure, even admitting the still large military and foreign aid budgets then contemplated. h e T The position of the economy in June reflected confi dence in the economic position and action based on that attitude by consumers and business. Sales of durable goods including automobiles remained high, and the heretofore weak soft goods began to move quite well. No significant slackening in construction, one of the strong elements of the first half of 1950, could be detected. The national increase in unemployment in June, resulting from a seasonal increase in the labor force, was smaller than even most optimists had expected. In brief, the econ omy was moving along near peak levels, and there existed substantial likelihood of further expansion in those lines not yet at maximum operations. grew steadily larger in July; for the weeks ending July 1, 8, 15, and 22, District increases over a year ago were 10, 19, 36, and 64 percent, respectively. Flow of goods now at high rate, but little excess capacity exists Though reports of empty or rapidly emptying auto mobile show rooms are widespread, and some tire sizes hard to find, no intense shortages have resulted. The high level of production reached in the first half of the year is reflecting itself in a continuing large flow of goods, but in the hard goods field many dealers feel that they will soon be on an allotment basis if the buying pressure does not ease somewhat. At the same time, it must be remem bered that the nation’s larder is exceptionally well stocked today. Government acquisition of farm products under the support program has resulted in large stocks on hand of wheat, corn, cotton, butter, and dried eggs. Yet in con trast with 1940 and 1941, the persons now actively in the labor force are almost fully employed; our factories do not have wide margins of inactive capacity, though room exists for some expansion through increased hours and multiple shifts; and supplies of internationally traded raw materials were fairly tight before the Korean outbreak. Korean conflict occurs at high level of activity It is against this background that effects of the invasion of South Korea were introduced. The immediate impact created considerable uncertainty, but within a few days strong inflationary developments began to appear. Con sumers rushed to buy automobiles, tires, nylons, appli ances, sugar, canned goods, and other items. Many busi ness firms which had been building up inventories at a strong but not unreasonable rate sharply increased their purchases. The fear of shortages and rationing produced an approach to panic buying. Department store sales surge upward Evidence of the wave of buying is apparent from the record of weekly department store sales. Sales for the first six months were slightly below the first half of 1949 in this District and the nation. June sales were just barely ahead of last year in this District and little more than that nationally. For the four weeks ending July 22, sales were up 32 percent over a year ago in the District and 22 percent in the nation. By weeks, the year-period increases Inflationary pressures appear One result of the upswing in buying and the expecta tions of at least partial mobilization has been a sharp up swing in prices. One may deprecate, with some justice, this course of developments, but it would be self deception to assume that a wave of buying of the type that has been experienced would not result in price increases in a sub stantially free market economy. The possibilities of infla tion are exceptionally strong. Attempts to enlarge busi ness and consumer inventories while defense production is being expanded can only result in sharply rising prices in the absence of offsetting forces. Also in This Issue Fruit and Vegetable Canning, Twelfth District—Review and Outlook Census of Business—-Twelfth District, 1948 88 FEDERAL RESERVE B A N K OF S A N FR A N C ISCO The price situation changes rapidly In the first half of the year, the rise in wholesale prices totaled 3 percent. The increase prior to May was moder ate, but during May and the first week of June two-thirds of the 3 percent increase occurred. Prices levelled off dur ing the remainder of June, and then started abruptly up ward with the advent of the Korean conflict. Price developments, so far this year, represent two dif ferent phases. The first period, encompassing the first half of the year, reflected the stepped-up economic activ ity in this country and the recovery of internationally traded raw materials. The second phase represents the sharp increase in future and spot prices arising from the expectations of sharply increased defense production. In the period prior to the Korean situation, farm prod ucts and raw materials, particularly imported items, led the price rise. Manufactured goods remained fairly steady until May, rose sharply for five weeks, and then levelled off during the latter part of June. Paced by large increases for items such as carpeting, lumber, plywood, and metal products, manufactured goods gained 3 percent between January and late June. Consumer prices behaved even more moderately. Through April 15 only a slight gain had been recorded, but May 15 prices were 0.8 percent higher than those a month earlier. On the next survey date, June 15, the Bureau of Labor Statistics reported prices up an additional 0.9 percent. Korean developments force prices up The immediate effect of the Korean situation was to force prices upward. Futures particularly have been markedly affected in anticipation of much more concerted buying, but wholesale cash prices and consumer prices also rose sharply. The Bureau of Labor Statistics daily index of spot prices jumped 8 percent between June 23 and July 14. The leader again was the imported group of raw materials. The weekly index of wholesale prices gen erally gained at a rate of better than 1 percent a week during July. Consumer prices, which had not reflected fully the upswing in prices in the first half of the year, also rose rapidly. The wave of buying referred to earlier and the expec tation of greater defense needs resulted in price increases over a wider range of commodities. Items which were short and hard to acquire during World War II showed the greatest increases. Copra, supplies of which were sharply reduced in the last conflict, jumped $35 to $210 a ton between June 23 and July 24. Coffee, hogs, and sugar gained. Spot wholesale prices for sugar moved up only moderately because of the large off-shore stocks in Cuba. Steers gained $.75 per hundred pounds by July 15, but heavy marketings dropped the price $1.50 by July 24. Grains and feeds generally showed increases. Textile fibres, particularly cotton, moved up sharply. Cotton gained $22 a bale between June 23 and July 24. Except for tin, platinum, and quicksilver, metal prices remained quiet, though lead gained one cent a pound. Tin jumped July 1950 20 cents a pound, more than 25 percent of the June 23 price, and platinum was up $8 an ounce, about 12}4 per cent. Rubber prices pushed upward almost 50 percent, gaining about 14 cents a pound. These increases have shown little sign of moderating. Yet these higher prices seem somewhat unrealistic in terms of orders placed through late July or immediately in prospect for defense purposes. For the most part, it must be concluded, inventory buying has been the prime cause of the increases. Government acts to reduce inflationary pressures Taking cognizance of these factors, the President of the United States has not only urged moderation in con sumer and business spending, but has acted to restrict Government guarantees of mortgage credit and to limit construction of public housing. The restraints on con struction thus far are moderate, but additional steps are quite likely to be taken. In addition, the President in his message of July 19 asked for restriction of consumer, real estate, and commodity market credit, and for enabling legislation to establish priorities and allocations, to insti tute inventory controls, and to requisition supplies. This was supplemented by a statement of principles pointing toward maximum financing on a current basis through higher taxes. Other actions also indicated included re views of Government programs to conserve and reduce manpower and material use. Subsequently the President recommended $10 billion in military appropriations, and as an interim measure an increase in tax rates to yield $5 billion. Although these steps and proposals include a substan tial part of the measures employed in World War II, it is of considerable significance that they have been set forth simultaneously and before any substantial increase in de fense expenditures has been made. What is more, they have apparently met with markedly widespread approval. This offers a distinct contrast to the period 1940-42. Those years were marked by groping for solutions, and only after considerable experimentation were positive measures adopted. Even these steps and proposals may not prove sufficient, however, to hold inflationary pres sures in check if the expansion of military efforts as sumes major proportions. The immediate impact of Korean developments on District employment In June, employment in this District, despite the rail road strike and the dispute involving a major Pacific Northwest lumber producer, approached record levels. Manufacturing employment in California was at a peace time high. Coal mining in Utah was sharply curtailed by the railroad strike, but early July witnessed a resumption of both activities. Copper, lumber, and plywood produc tion were all at or near record levels. The result of the Korean situation was to intensify the demand for labor, and aircraft hiring removed San Diego from the list of July 1950 89 M O N T H L Y R E V IE W areas of critical unemployment. Shipyard activity increased in the San Francisco Bay Area, at Bremerton, and in Portland. Should these developments continue, the labor force, instead of having some margin of slack in it, will tighten considerably. By late July, however, no major contracts had been let for aircraft construction, and the gain in shipbuilding stands out because of the very low level of activity in that industry. FRUIT AND VEGETABLE CANNING, TWELFTH DISTRICT—REVIEW AND OUTLOOK District canning industry experienced marked vicissitudes in 1949-50. The season began on an anxious note, caused by heavy unsold stocks, the uncer tain general business outlook, hesitant buying by distrib utors, and falling prices, which in the case of fruit packs continued weak until after the turn of the year. These unsatisfactory conditions during the first half of the sea son resulted in part from the unbalanced supply and demand position within the industry, which led to much price cutting and some distress sales. In part, they re flected the general business situation in the country at large, with consumer income and purchasing power in the industrial areas adversely affected by strikes and reduced volume of employment. h e T Probably the outstanding feature of the season ending June 1 was the marked improvement in sales volume and general market conditions toward the end of the season, stimulated both by bargain prices and by the rapid im provement in basic economic conditions in the first half of 1950. Increased distributor and consumer purchasing caused a rapid reduction in canners’ stocks after the turn of the year and prices of the principal fruit packs recov ered much of their earlier losses. The season ended with inventories in most packs substantially below the levels of last year and with the industry in a generally optimistic temper. Weather damage to both fruit and vegetable crops in many parts of the country in 1950 have led to the expec tation of considerably higher prices by District growers for material to be delivered to processors for the new packs. While not welcoming higher prices, which might tend to provoke consumer resistance, canners generally are in a much sounder position than a year ago. Probably not many District canners made substantial profits in 1949-50, but some undoubtedly consider themselves lucky to have broken even and to remain in the game. District and national packs P r in c ip a l F r u it a n d V egetable P a c k s in C a l if o r n ia , O regon, W a s h in g t o n , Id a h o , a n d U t a h , 1946-49 (thousands of cases) Fruit packs1 19,243 10,595 7,752 5,256 3,548 1,885 3,441 1946 1947 18,142 3,259 9,386 5,508 1,919 620 2,717 1948 17,203 4,766 9,902 3,830 894 884 2,894 1949 19,242 2,376 6,269 5,472 1,669 1,729 3,849 and b e r r ie s ... . 51,721 41,551 40,375 40,605 Tomatoes ......................................... Tom ato juice ............................... Other tomato products .......... , 4,805 9,268 20,471 9,680 2,990 3,151 2,737 1,211 5,630 59,943 6,772 5,753 20,754 9,787 2,502 1,293 2,962 1,722 2,166 5,344 5,867 14,001 7,395 2,262 1,454 3,101 1,677 2,754 4,748 6,341 13,316 6,690 2,939 1,960 4,602 2,194 3,775 53,711 43,855 46,565 Peaches, all packs ...................... Apricots ........................................... Fruit cocktail ................................ Prunes and plums ...................... Cherries ........................................... Other fruits and berries.......... Total fruits Vegetable packs2 Asparagus ....................................... String beans .................................. Other v e g eta b les........................... Total v e g e ta b le s ...................... 1 Basis 24 N o. 2 x/i cans (except Utah production, actual cases). 8 Actual cases, all grades and sizes. Source: Canners League of California, Northwest Canners Association, W e s te r n C a n n er and P a ck er. and 6 percent, respectively, but in both cases were only slightly above the 1947 packs. Canned juice packs fell about 10 percent between 1948 and 1949 to around the 1947 level; this reduction was substantially offset by the phenomenal increase in the pack of frozen juices and concentrates, chiefly of citrus juices, which is the most recent newcomer to the processed food industry. The total output in pounds of these several products over the past three years has varied, however, less than 3 percent. The volume of frozen fruits and vegetables, on the other hand, has grown quite rapidly, since the set-back of 1947, and in 1949 represented about 1/9 and 1/8, respectively, of the poundage of canned fruits and vegetables. Fruit packs in 1949 The long dormant season, caused by the severe winter of 1948-49, stimulated the setting of very large deciduous fruit crops in California, with a resultant depressing influence rn prices, both for fresh fruit and for the large stocks of canned fruit products remaining in packers' hands from the previous season. In view of this unfavor able price outlook, it was generally expected in the trade that the new season's packs would be sharply reduced. Some curtailment did, in fact, occur, especially in apricots and fruit cocktail, but these cuts were offset by increased packs of peaches, pears, cherries, and plums. The average quality of fruit packs in 1949 was notably improved. Total District packs of fruits and vegetables in 1949 exceeded those of the previous season, due chiefly to very large peach and pear packs and larger packs of most vege tables except peas and tomato products. Because of the large carryover of fruit stocks from 1948, total supplies handled by District canners in 1949-50 were greater than in either of the two preceding seasons and were not much below the record volume handled in 1946-47, when de pleted trade channels were being refilled. The cling peach situation Nationally, the aggregate pack of fruits, vegetables, and canned juices, in terms of pounds, has been fairly constant over the past three years. The fruit and vegetable packs of 1949 exceeded those of 1948 by about 9 percent The major problem in 1949 in the District fruit can ning industry was to prevent a runaway pack of peaches. California canners' stocks of cling peaches at the begin ning of the season totaled over 3 million cases— 20 per 90 FEDERAL RESERVE B A N K OF S A N FRA N C ISCO cent of the previous season's pack, of which nearly twothirds was still unsold. Hence strenuous efforts were directed to keeping down the size of the new pack, a difficult undertaking in view of the large impending crop. The principal means relied on to accomplish curtailment was the issuance of a marketing order by the California State Director of Agriculture, raising the minimum size of fruit acceptable for processing and establishing higher grading standards, which limited acceptance of canning peaches to fruit of No. 1 grade. In spite of drastic thin ning by orchardists to produce fruit of the larger sizes, the total out-turn of California cling peaches in 1949 was the largest on record— 578,000 tons, of which approxi mately 480,000 tons were delivered to canners. Part of this was used in mixed fruit and other products, but the season’s pack of cling peaches reached a total of 16.5 mil lion cases, or within 5 percent of the record pack of 1946. The marketing of this large pack, swollen by the carry over of 3 million cases from 1948, dominated the indus try’s sales activity through most of the season. Timely support was given by Commodity Credit Corporation purchases of nearly 1.2 million cases of cling peaches to be applied on the school lunch program. As in the two preceding seasons, an extensive advertising and sales pro motion campaign was put on, financed by assessments levied upon cooperating canners and growers. The market remained highly competitive, however, and it proved im possible to maintain the season’s opening prices, which were themselves some 15 to 20 percent below those of 1948. Prices were cut sharply in December by leading canners in an effort to move their stocks into distribution. The response from distributors became really significant in February, when wide publicity was given to a formal proposal from a major association of orchardists calling for a new and more drastic curtailment of cling peach production as a means of stabilizing the market both for their crop and for the canners’ pack. Shipping orders increased rapidly and by April conditions had improved sufficiently to permit a moderate price increase. The mar ket became steadily firmer and by the end of the season prices had regained the ground previously lost. Mean while profit margins had taken severe punishment. Pineapple supplies and mixed fruit packs Another troublesome problem faced by California can ners in 1949 was the interruption in pineapple supplies for the fruit cocktail and mixed fruit packs caused by a six-month strike of Hawaiian longshoremen at the height of the canning season. Some canners packed a fruit mix without pineapple and held it until pineapple became available; this necessitated repacking with resulting in creased production costs. Others curtailed their packs. The smaller pack of fruit cocktail was not an unmixed evil, however, as this product was also in relative over supply with a heavy carryover from the record pack of 1948. Prices of fruit cocktail had fallen nearly 25 percent during the previous season, and the market remained depressed until the second quarter of 1950. July 1950 Vegetable packs District vegetable packs in 1949 were somewhat larger than those of the previous season, but considerably below the packs of 1947 and 1946 when very large quantities of tomato products were put up. Tomato processing is by far the largest branch of the canning industry in this area, where the large California packs of tomato products dominate the total vegetable packs. Output of canned to matoes reached a peak during the war, both in the West and nationally, and has since dropped back to approxi mately prewar levels. The District tomato pack in 1949 was the smallest since 1945; the pack of tomato juice was somewhat larger than in the two preceding seasons, but much smaller than the packs of 1945 and 1946. Over production of certain tomato products, such as catsup, sauce, puree, and paste, was evident in the early postwar years and burdensome inventories accumulated. Drastic reductions in some of these packs during the past two seasons have brought supplies into better balance; the total District pack of all tomato products in 1949 was the smallest since 1945. Crop damage to tomatoes in eastern canning areas reduced the total United States pack of tomato products in 1949, and strengthened the market. While District opening prices on tomatoes were consider ably below those of 1948, these prices were generally well maintained; tomato juice tended to advance in price through much of the season, reflecting in part the strength in citrus fruit juices. California asparagus and spinach packs in 1949 were the largest since 1946, but moved into distribution promptly with relatively small stocks remaining unsold at the end of the season. Adverse weather conditions in the Pacific Northwest reduced the pea pack to the small est volume in the past ten years. Packs of both canned and frozen peas have been sharply cut back since 1946, and the previous burden of excessive stocks was reduced. Hence, the smaller pack of 1949 found a good market. The District string bean pack, produced chiefly in Oregon, is becoming of steadily increasing importance and the 1949 pack was much the largest yet recorded. Corn is another item of growing importance in the Pacific Northwest and the pack has increased markedly over prewar levels. The national corn packs were very large in both 1948 and 1949, however, and prices were depressed during the past season. Increased volume of sales in last half of the season Bargain prices for some of the District’s leading packs in 1949, together with increased employment and higher earnings resulting from the widespread improvement in general business activity which made rapid headway in 1950, caused a large increase in sales volume as com pared with the previous season. Aggregate shipments of fruits and vegetables by California canners in the period June 1, 1949 to May 31, 1950 were about 15 percent greater than in the preceding 12 months, although total seasonal supplies were up only about 4 percent. July 1950 A substantial part of the gain was due to the acceler ated rate of distribution and consumer buying during the second half of the season. Shipments of eight principal fruit products by California canners in the five months January-May 1950 averaged over 3 million cases per month and accounted for 44 percent of their total sea sonal movement as compared with a ratio of 38 percent in the corresponding months of 1949 and 23 percent in 1948. Unshipped fruit stocks had been reduced by June 1, 1950 to about 14 percent of the total seasonal supply as against 23 percent for the same date last year; the ratio of unsold to total stocks was also greatly reduced. The movement of California vegetable packs in the past season tells much the same story, although the im provement in sales started earlier. The packing seasons for spinach and asparagus begin in March and April and these packs are usually well sold out before the end of the year. This was the case in 1949. Tomato processing, on the other hand, is one of the last packs of the year in Cali fornia and the shipping season extends to the following fall. Although progressively reducing their total season’s supplies of tomato products over the past three years by curtailing their packs, California canners have consist ently increased their season’s shipments. As a result canners’ stocks of tomato products at June 1 were reduced from 10.3 million cases in 1948 to 9.2 million in 1949, and 5.8 million in 1950. The proportion of unsold stocks at June 1 fell from 81 percent in 1949 to 64 percent this year. Outlook for 1950-57 The outlook for the new packing season is affected by a number of cross currents. Adverse weather and crop conditions have severely reduced fruit supplies in many parts of the country, including the Pacific Northwest, where some fruit crops were near failures and others, Iincluding pears, cherries, plums, and strawberries, were greatly reduced. The supply of California tomatoes ap pears likely to be affected by the prevalence of a virus dis ease in the important San Joaquin Valley producing area. Until recent weeks many canners were reported to be taking a conservative attitude in planning for the new season’s packs, but the marked improvement in the gen eral tone of the market and the rapid reduction in unsold stocks in the past few months have probably brought some change in canners’ intentions. The outbreak of consumer buying induced by the Korean crisis has extended to canned foods as well as other products. The net effect of these several influences will probably make for increasing price firmness and tend to induce larger packs. The early seasonal packs have already been made. Cali fornia asparagus packing got a late start because of cool weather and active competition from the fresh market and frozen food packers. However, about 2.5 million cases were packed— only slightly less than a year ago. Prices have been firm, with good demand, and the pack is re ported well sold out. The spinach pack is said to be slightly larger than last year’s pack and has also moved well. The Northwestern pea pack is reported to be well 91 M O N T H L Y R E V IE W C a n n e r s " S e a s o n a l S u p p l ie s a n d S h i p m e n t s of L e a d in g C a l if o r n ia F r u it P a c k s , 1946-47 to 1948-49 (thousands of cases, basis 24 N o. 2J4 cans) Unsold stocks; percent of total 57.0 63.4 64.2 51.9 JuneDee. 14,005 11,170 7,905 9,471 -ShipmentsJan.M ay 3,041 3,348 4,931 8,057 Total 17,046 14,518 12,836 17,528 10,267 3,342 5,290 3,816 9,380 2,058 2,427 2,192 608 644 1,355 1,092 9,988 2,702 3,782 3,284 279 639 1,508 532 63.8 75.0 79.1 67.7 7,859 9,512 10,139 9,285 6,460 7,227 4,121 4,058 1,336 1,985 3,001 3,433 7,797 9,212 7,122 7,491 62 299 3,016 2,104 18.6 11.1 81.0 64.3 1,361 1,531 1,318 2,304 4,556 6,220 674 959 691 1,343 2,204 3,665 615 438 392 824 1,591 2,107 1,289 1,397 1,084 2,167 3,795 5,772 72 134 234 137 761 448 48.1 64.9 74.7 40.9 66.4 33.0 r Seasonal Cling Peaches supply1 17,502 1946 -47____ 1947 -48____ 15,765 1 9 4 8 - 4 9 .... 15,897 1 9 4 9 - 5 0 .... 19,586 Stocks at end of season2 456 1,247 3,061 2,058 Apricots 1946-47____ 1 9 4 7 - 4 8 .... 1948 -49____ 1949 -50____ Fruit cocktail 1946 -47____ 1947 -48____ 1 9 4 8 - 4 9 .. .. 1 9 4 9 -5 0 ... . Pears 1 9 4 6 -4 7 ... . 1947 -48____ 1 9 4 8 -4 9 ... . 1949 -50____ 1948-493 . . . 1949-503 . . . 1 Canners’ stocks at beginning of season, sold and unsold, plus pack. 2 Sold and unsold, June 1. * California, Oregon, and W ashington. (Northwest data on stocks not avail able for earlier years.) Source: Canners League of California, Northwest Canners Association. along. It is expected to be considerably larger than a year ago and about up to the average of recent years. Packs of pears, cherries, and plums will be below last year’s output, while the apricot pack will probably be larger. Cling peach curtailment program As in 1949, the outstanding problem facing the Cali fornia canning industry this season is the question of con trolling the size of the cling peach pack. Another large crop was forecast early in the season, and with the ex ample of last year’s experience of depressed prices to growers and price cutting by packers to move redundant stocks, it was widely felt that there should be a more effective limitation of output. In order to secure this result, steps were taken early in the crop year to obtain a drastic revision of the California state marketing order regulating the marketing of cling peaches, a crop produced almost entirely in this state. By the terms of the revised order, issued in May, large pow ers of control were lodged in a joint board or committee representing growers and canners. The really vital fea ture of the order authorized this joint board to require the elimination by all growers of a portion of their crop before harvest if it found this to be necessary in order to prevent a burdensome surplus. To make this regulation effective, the board was given power to inspect every grower’s orchard and to police the actual removal of what ever fraction of the total indicated crop it should find necessary. A “certificate of elimination” was to be issued to each grower complying with the orders of the board, and packers were prohibited from accepting fruit from growers who failed to qualify for such certificates. The revised marketing order also authorizes the setting up of arrangements by the board for the purchase and removal 92 July 1950 FEDERAL RESERVE B A N K OF S A N FRANC ISCO from the market of any possible excess production of fruit remaining after the elimination program and the applica tion of strict size and grading requirements. In pursuance of the restriction program, the California State Director of Agriculture late in May approved rec ommendations of the joint board of growers and canners establishing an elimination percentage for cling peaches of 15 percent. Prompt action was taken by the board to secure compliance by growers, who were required to per form the necessary removal of immature fruit by dates ranging from June 25 to July 20 for the several different varieties involved. The procedure prescribed was the complete stripping of fruit from about every sixth row of trees in each individual orchard. This was expected to result in the removal of a potential volume of about 85,000 tons from a total indicated crop of around 570,000 tons. What the actual out-turn of fruit delivered to canners will be remains, of course, to be seen. CENSUS OF BUSINESS—TWELFTH DISTRICT, 19 4 8 many changes can, and usually do, take place within a period of nine years. As years are usually more noticeable in their effect upon younger persons, so are they in their effect upon younger nations, or younger sections of nations. A recent reminder of the development of the seven western states has appeared in the 1948 census of business.1 Preliminary figures, just released, show huge increases in trade and service activity in the United States over the last census year, 1939. And in the two most important segments— retail and wholesale trade — the Twelfth District scored considerably larger gains than the nation as a whole, both dollarwise and in terms of employment. With a little over 11 percent of the nation’s population, the District accounts for 12.9 percent of United States retail trade, but only 10.4 percent of the nation’s wholesale trade. A C E N S U S O F B U S IN E S S — T W E L F T H D IS T R I C T Percent increases in major categories, 1939-48 great T otal R e c e ip t s and E C a teg o r ies — T mployees w elfth by M a jo r B u s in e s s D i s t r ic t , 1948 —Total sales and receipts— District , ----- Total employees1-----t— 12th District—v U . S. as °/o of ,—12th D istrict-^ U . S. Total, 1948 % inc. °fe inc. U .S . total Number % inc. % inc. (in m illio n s ) 1 9 3 9 -4 8 1 93 9 -4 8 1948 1948 1939-48 1939-48 Retail trade ...$ 1 6 ,7 8 9 245 210 12.9 808,861 57 44 W holesale trade 19,286 253 238 10.4 313,360 56 46 Selected service t r a d e s .......... 1,164 209 41 188 13.6 152,212 42 H o t e l s ............... 295 149 140 48,098 14.2 19 14 Tourist courts and cam ps. . 64 377 438 32.4 4,373 93 149 Amusements* . 335 150 121 39,899 39 48 15.2 1 Total#number of paid employees, workweek nearest November 15, 1948. * N o t including- N evad a; comparable 1939 figures for that state are not available. The only category in which this District did not fare better than the nation as a whole is tourist courts and camps. This it not at all surprising, since the District by 1939 already had more than its share of such accommo dations, and in fact, took in 36.5 percent of all tourist court receipts in the nation. It has been since then that many sections of the country have introduced tourist courts. As it is, the dollar volume of business done by tourist courts and camps increased 377 percent in the District. The national increase, however, was 438 per cent, and the District’s share fell to slightly less than a third. Both District and national increases in hotel re*T h e 1948 census of business covers all retail trade, all wholesale trade, selected service trades (personal services, business services, automobile re pairs and services, and miscellaneous repair services), hotels, tourist courts and camps, and amusements (including: motion picture theaters). A s indi cated by the limited coverage of services, many important ones have not been covered, such as radio broadcasting and television, medical and health, legal, educational, nonprofit, accounting, and domestic services. *Comparable 1939 figures for Nevada not available. ceipts were much smaller, 149 and 140 percent, respec tively, indicating the increasing preference of many travelers for tourist courts over hotels. Retail Trade Comparisons of dollar figures from one time-period to another are not of much value unless the accompanying changes in the price levels are taken into consideration. Thus a 210 percent increase in the dollar volume of retail sales in the United States from 1939 to 1948 and a 245 percent increase in the Twelfth District must be tempered some by the 70 percent increase in the consumer price index. Even so, the increases are impressive. Greatest increases related to building boom The postwar boom in residential building and automo biles is clearly reflected in retail sales. In the District, the greatest increase in the retail group— 361 percent— was R e t a il and W h olesale T r ade — T w elfth —Retail trader-Sales and Percent increase 1939-48 303 231 W a s h in g t o n ................. Twelfth District . . . . .... 260 238 230 245 receipts-^ Percent of District total 1948 3.9 65.4 3.5 1.2 9.5 3.4 13.1 100.0 D is t r ic t , 193 9 -48 Wholesale trade Full-time Sales and employment receipts Percent Percent increase increase 1939-48 1939-48 95 329 64 243 58 300 61 243 76 328 56 382 60 236 65 253 93 M O N T H L Y R E VIEW July 1950 R e t a il T r ad e , T w e l f t h D is t k ic t , R E T A I L S A L E S B Y G R O U P S , 1948 Percent of District total 1939-48 ------------Twelfth D istrictU . S. Full-time inc. Sales and receipts— employmentin sales f of % of % of and re inc. District ceipts % inc. District U . S. total total 1939-48 total 1939-48 1939-48 30 23.4 12.7 11.5 Food g r o u p ................................ 205 239 8.7 21.3 13.6 74 Eating and drinking places. 204 234 General mdse, group, 12.7 12.5 66 17.7 general s t o r e s ...................... 164 207 63 7.2 10.8 6.3 Apparel g r o u p ........................... 201 234 Furniture, home furnish 6.8 119 5.9 14.3 ings, appliance g r o u p .. . . 299 362 11.9 70 13.3 15.9 Automotive g r o u p ................. 263 279 4.6 35 14.4 5.6 Gasoline service stations . . . 130 142 Lumber, building, 7.4 13.1 92 8.7 hardware group ................. 307 328 Drug and proprietary 3.7 78 13.4 3.2 stores ...................................... 157 212 7.9 61 1 2.2 9.6 A ll other retail stores.......... 215 271 Total retail trade ............ 210 245 100.0 12.9 75 100.0 made in dollar sales of furniture, home furnishings, and appliances. In terms of employment this group also led the rest, with an increase of 119 percent. The lumberbuilding-hardware group ranked second in both dollar sales and employment gains. In the nation, these two groups also increased the most, but in reverse order. The third greatest gain in dollar sales in both the District and the nation was in the automotive group. In every group the District increase was larger than the national increase. Arizona leads District states In every District state, retail sales increased more than in the nation from 1939 to 1948. In Arizona, gains in both total dollar retail sales and employment were greater than in any of the other District states. This state, how ever, accounted for only 4 percent of total District retail sales. Oregon, with slightly less than 10 percent of the District total, came in second, and California, in which more than 65 percent of the District’s retail business is carried on, took third place. One-eighth of national total in District With an estimated 12.4 percent of the nation’s con sumer income, the District conducted some 13 percent of the nation’s retail trade in 1948. Greater increases in the number of new homes, and greater distances to travel in the West may account for the somewhat larger share of the nation’s trade in furniture, home furnishings, and appliances, and in sales of gasoline service stations. The District’s share was least in the nation’s apparel trade. R e t a il S a l e s — T w e l f t h Food group ............... Eating and drinking p la c e s ........................ General merchandise group, general stores ........................ Apparel g r o u p .......... Furniture-home furnishings-appliance g r o u p ........................ A u to m o tiv e ................. Gasoline service stations .................... Lum ber-buildinghardware group . . D rug and proprietary stores ........................ A ll other retail stores 315 Gal. 236 Idaho 209 D is t r ic t , b y S t a t e s N ev. 201 Ore. 254 Utah 255 W a. 234 Twelfth District 238 281 232 265 173 234 296 222 234 213 467 151 231 166 236 140 350 202 231 180 222 191 211 207 234 6 02 354 279 378 247 463 290 413 305 263 270 346 266 361 279 314 163 145 119 128 161 148 117 142 370 298 412 265 540 346 307 327 250 343 219 269 165 201 303 332 176 285 185 258 194 265 212 271 Total retail trade. 303 244 230 223 260 238 230 245 The decentralization so dear to the hearts of city plan ners appears to have been taking place, to a certain extent at least, over the last decade. In the Twelfth District, for example, the smallest increases in the dollar volume of retail sales from 1939 to 1948 took place in the largest cities. Indications of the decentralization process may be found in the following comparisons. Los Angeles found its retail sales up 199 percent over 1939, but the other large cities in Los Angeles County— Pasadena, Glendale, Santa Monica, and Beverly Hills— had much greater increases. Retail sales in the county itself, excluding Los Angeles, increased 303 percent, and, excluding these five cities, 372 percent. Sales in Alameda County rose 221 percent, but when Oakland and Berkeley are excluded the increase amounts to 333 percent. Such a comparison cannot be made for San Francisco since the city makes up the entire county, but its smaller neighbors to the north and south— Marin and San Mateo Counties— had much larger increases than San Francisco. In the other District states as wrell, and doubtless in the nation as a whole, the areas surrounding the cities made more impressive gains than the cities themselves. Las Vegas was an exception in the Twelfth District, but a glance at its own vast expan sion provides a reasonable explanation for that. R e t a i l T r a d e — T w e l f t h D i s t r i c t C i t i e s ,1 Sales 1948 Percent increase (in millions) 1939-48 Percent increase, 1939-48 A riz. Smaller areas gain the most Arizona P h o e n ix ................. $ Tucson ................. 1948 Sales 1948 Percent (in increase millions) 1939-48 Idaho 206 107 331 353 California B ak ersfield .......... 112 B e r k e le y ............... 103 Beverly Hills . . . 104 Fresno ................. 186 141 Glendale ............... Los Angeles 2,340 Oakland ............... 545 Pasadena ............ 192 Sacramento 236 San Diego .......... 367 San Francisco . . 1,032 San Jose ............... 147 Santa Monica . . . 108 130 Stockton ............... 222 200 225 249 216 199 201 247 198 284 169 219 254 251 1 Including the two cities in each all other cities with total retail tr Idaho Falls . . . Nevada Las Vegas . . . . 66 41 197 274 45 71 495 212 79 572 336 212 69 218 253 187 610 197 171 192 201 210 Oregon Utah Salt Lake City Washington 94 July 1950 FEDERAL RESERVE B A N K OF S A N FRANC ISCO B U S I N E S S I N D E X E S — T W E L F T H D IS T R I C T 1 (1935-39 average = 100) Year an d m o n th In d u stria l p ro d u c tio n (ph ysical v o lu m e )2 Lum ber Petro le u m 3 C rude R efined C e m e n t W heat flour* T o ta l C a li C a r m f’g fo rn ia loadin gs E le c tr ic e m p lo y fa c to ry (n u m pow er m e n t 4 payrolls4 b er)2 L e ad 3 Copper* 1 9 2 9 ................ 1931................. 1932................. 1933................. 1934............... .. 1935................. 1936................. 1937................. 1938................. 1939............... 1940................ 1941.......... .. 1942................. 1943................. 1944................. 1945................. 1946............. 1947............... .. 1 9 4 8 ................ 1949_________ 148 77 46 62 67 83 106 113 88 110 120 142 14J 137 136 109 130 141 144 136 129 83 78 76 77 92 94 105 110 99 98 102 110 125 137 144 139 147 149 147 127 90 84 81 81 91 98 105 103 103 103 110 116 135 151 160 148 159 162 167 110 74 48 54 70 68 117 112 92 114 124 164 194 160 128 131 165 193 211 202 171 104 75 75 79 89 100 118 96 97 112 113 118 104 93 81 73 98 107 103 160 75 33 26 36 57 98 135 88 122 144 163 188 162 171 137 109 163 153 140 106 101 89 88 95 94 96 99 96 107 103 103 104 115 119 132 128 133 116 104 83 82 73 73 79 85 96 105 102 112 122 136 167 214 231 219 219 256 1949 A p ril________________ M a y _________________ June_________________ J u ly_________________ August______________ Sep tem b er_________ October_____________ November___________ D ecem b er__________ 141 143 146 136 135 140 139 147 149 152 149 148 146 144 144 141 140 140 169 170 174 162 165 166 158 161 156 212 215 219 217 209 208 200 200 196 124 126 118 98 93 84 77 89 105 167 159 138 131 121 136 136 145 140 1950 January_____________ February____________ M a rch ______________ April________________ M a y _________________ 121 131 148 156 184 140 139 138 138 140 161 157 151 159 162 178 179 201 217 240 123 118 122 125r 131 168 164 169 172r 181 D ep ’ t D ep’ t store R etail store stock s food sales (valu e)2 (value)8 prices3’ 1 303 * 88 100 112 96 104 118 155 230 306 295 229 175 184 189 186 111 73 54 53 64 78 96 115 101 110 134 224 460 705 694 497 344 401 430 423 135 91 70 70 81 88 103 109 96 104 110 128 137 133 141 131 136 142 131 126 112 92 69 66 74 86 99 106 101 109 119 139 171 203 223 247 305 330 353 331 134 110 86 78 83 88 96 108 101 107 114 137 190 174 179 183 238 300 346 323 132 0 1 0 4 .0 8 9 .8 8 6 .8 9 3 .2 9 9 .6 10 0 .3 1 0 4 .5 9 9 .0 9 6 .9 9 7 .6 1 0 7 .9 1 3 0 .9 14 3 .4 142.1 1 4 6 .3 1 67.4 2 0 0 .3 216.1 2 0 9 .6 82 100 104 108 109 108 104 101 189 303 304 315 299 310 308 306 299 306 189 189 188 186 186 185 185 183 182 412 415 419 423 429 437 435 421 424 126 134 139 120 138 138 124 129 128 335 340 335 329 333 326 337 319 339 331 320 313 302 309 333 330 331 315 2 1 5 .6 2 1 1 .0 2 0 9 .9 2 0 6 .3 2 0 5 .7 2 0 7 .3 2 0 5 .5 2 0 5 .7 2 0 2 .5 104 91 91 87 95 322 313 299 325 341 179 182 186 189 194 417 421 427 432 445 96 108 125 135 141 316 322r 321 333 336 323 337r 349 342 335 2 0 6 .4 20 4 .1 2 0 3 .4 205 4 2 0 5 .4 B A N K I N G A N D C R E D IT S T A T IS T IC S — T W E L F T H D IS T R I C T (amounts in millions of dollars) Year an d m o n th 1929 1931 1932 1933 1934 1935 1936 1937 1938 1939 1940 1941 1942 1943 1944 1945 1946 1947 1948 1949 1949 M ay June July August September October November December 1950 January February March April M ay June C o n d itio n ite m s o f all m e m b e r b a n k s 7 Loans and d isco u n ts U .S . D em and deposits G ov’t secu rities adjusted® T o ta l tim e d eposits 2,239 1,898 1,570 1,486 1,469 1,537 1,682 1,871 1,869 1,967 2,130 2,451 2,170 2,106 2,254 2,603 4,068 5,358 6,032 5,925 495 547 601 720 1,064 1,275 1,334 1,270 1,323 1,450 1,482 1,738 3,630 6,235 8,263 10,450 8,426 7,247 6,366 7,016 1,234 984 840 951 1,201 1,389 1,791 1,740 1,781 1,983 2,390 2,893 4,35« 5,998 6,950 8,203 8,821 8,922 8,655 8,536 1,790 1,727 1,618 1,609 1,875 2,064 2,101 2,187 2,221 2,267 2,360 2,425 2,609 3,226 4,144 5,21! 5,797 6,00« 6,087 6,255 5,738 5,762 5,707 5,729 5,853 5,873 5,919 5,925 6,357 6,330 6,548 6,846 6,863 6,909 6,944 7.01G 8,154 8,006 8,139 8,221 8,273 8,317 8,511 8,536 6,112 6,179 6,179 6,170 6,186 6,196 6,157 6,255 5,901 5,893 5,946 5,914r 6,005 6,034 7,123 6,999 6,923 6,896r 6,932 6,905 8,620 8,311 8,167 8,307r 8,354 8,289 6,244 6,262 6,303 6,282r 6,275 6,315 Bank rates o n sh o rt-term b u sin ess lo a n s9 M e m b e r b a n k reserves a n d related it e m s 10 Reserve b an k cred it11 _ + — — — + + — + + + + + + — + 3.20 + + — 3.24 + 3.14 + + 3.16 + — 3.36 + + •— 3.37 ” 34 21 42 2 7 2 6 1 3 2 2 4 107 214 98 76 9 302 17 13 8 0 20 30 13 2 12 40 48 5 2 28 14 10 C o in an d C o m m e rcia l T reasu ry cu rren cy in o p era tio n s1* o p e ra tio n s12 c irc u la tio n 11 0 — 154 — 175 — 110 — 198 — 163 — 227 — 90 — 240 — 192 — 148 — 596 - 1 ,9 8 0 -3 ,7 5 1 - 3 ,5 3 4 - 3 ,7 4 3 -1 .6 0 7 — 443 + 472 931 + 23 + 154 + 234 + 150 4- 257 + 219 + 454 + 157 + 276 + 245 + 420 + 1 ,0 0 0 + 2 ,8 2 6 + 4 ,4 8 6 + 4 ,4 8 3 + 4 ,6 8 2 + 1 ,3 2 9 + 630 482 + 378 — 202 53 213 194 41 95 21 32 + + + + + 94 5 130 40 37 92 2 30 92 34 223 126 199 23 + + + + + 5 7 204 106 170 32 — — — + + + — — — — — + _ + + + + + 6 48 30 18 4 14 38 20 31 96 227 643 708 789 545 326 206 209 65 175 147 142 185 242 287 479 549 565 584 754 930 1,232 1,462 1,706 2,033 2,094 2,202 2,420 1,924 146 97 68 63 72 87 102 111 98 102 110 134 165 211 237 260 298 326 355 350 37 0 16 ] 9 7 16 8 2,128 2,063 1,997 1,832 1,837 1,831 1,854 1,924 345 351 344 332 336 351 349 376 62 10 16 4 8 5 1.892 1,848 1,842 1,821 1,802 1,836 354 360 373 360 371 389 a + + + + + + + + — __ + _ + + + - + + + + R eserves B an k debits index 31 cities*»11 (1 9 3 5 -3 9 100)* 1 All monthly indexes but wheat flour, petroleum, copper, lead, and retail food prices are adjusted for seasonal variation. Excepting for department store sta tistics, all indexes are based upon data from outside sources, as follows: Lumber, various lumber trade associations; Petroleum, Cement, Copper, and Lead, U .S. Bureau of Mines; W heat flour, U .S. Bureau of the Census; Electric power, Federal Power Commission; Manufacturing employment, U.S. Bureau of Labor Statistics and cooperating state agencies; Factory payrolls, California State Division of Labor Statistics and Research; Retail food prices, U .S. Bureau of Labor Statistics; and Carloadings, various railroads and railroad associations. * Daily average. * N ot adjusted for seasonal variation. 4 Excludes fish, fruit, and vegetable canning. Factory payrolls index covers wage earners only. 1 A t retail, end of month or year. 8 Los Angeles, San Francisco, and Seattle indexes combined. 7 Annual figures are as of end of year: monthly figures as of last Wednesday in month or, where applicable, as of call report date. * Demand deposits, excluding interbank and U .S. G ov't deposits, less cash items in process of collection. M onthly data partly estimated. 9 New quarterly series beginning June 1948. Average rates on loans made in five major cities during the first 15 days of the month. 10 End of year and end of month figures. 11 Changes from end of previous month or year. «M in u s sign indicates flow of funds out of the District in the case of commercial operations, and excess of receipts over disbursements in the case of Treasury operations. w Debits to total deposit accounts, excluding inter bank deposits. p— preliminary. r— revised.
@FedFRASER