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MONTHLY REVIEW TWELFTH FEDERAL RESERVE DISTRICT JUNE 1951 Fe d e r a l R e s e r v e B a n k S a n Fr a n c i s c o of CONSTRUCTION ACTIVITY— A STUDY IN CHANGE a c tiv ity o n s t r u c t io n C T w e lfth in th e U n ite d S ta te s and th e D is t r ic t h a s b e e n a t a r e c o r d le v e l s o fa r in b u ild in g s , a n d p r o je c ts r e q u ir in g m ore th a n 1 9 5 1 , d e s p ite r e s tr ic tio n s o n b u ild in g a n d o n c r e d it. T h i s ap paren t r e c o r d is t h e r e s u lt o f a b a c k l o g o f h o u s i n g a u t h o r i z a t i o n s p r e a d o v e r th e p e r io d fr o m e x e m p t fr o m c r e d it r e s t r ic t io n s a n d a s p u r t in in d u s t r ia l, y e a r . I n th e e a r ly s ta g e s o f th e p r o g r a m c o m m e r c ia l, and w as m ilita r y c o n s tr u c tio n . M ark ed s h ifts 25 to n s of s te e l. T h e e ffe c t s o f th e b r o a d e r r e s tr ic tio n s a r e n o t fu lly as m ade y e t. In tr o d u c tio n of th e se r e s tr ic tio n s w as S e p te m b e r 1 9 5 0 to M a y th is fo r c o m m itm e n ts m a d e s o m e a llo w a n c e p r io r to th e e ffe c tiv e of d a te o f th e r e g u la t io n , a n d th e r e s tr ic tio n s w e r e a p p lie d u s u r p in g l e n i e n t ly a t fir s t. R e c e n t l y it a p p e a r s t h a t r e s t r i c t i o n s a t th e d o m in a t in g p o s it io n h e ld b y h o u s in g c o n s t r u c t io n in le a s t o n c o m m e r c ia l c o n s t r u c t io n a r e b e in g a p p lie d m o r e have occu rred , c o n s tr u c tio n , h ow ever, w ith am ong th e n o n r e s id e n tia l d iffe r e n t c o n s tr u c tio n ty p e s r ig id ly , a n d o th e r t y p e s o f p r iv a te a n d p u b lic p r o je c t s a r e la s t y e a r ’s b o o m . C o n tr o ls on n o n r e s id e n tia l c o n s tr u c tio n have becom e s u ffic ie n tly r e s tr ic tiv e to p r e v e n t th is s e g m e n t o f b u ild in g a c tiv ity fro m r e s id e n tia l a c tin g as a c o n s tr u c tio n . c o n tin u in g It ap pears o ffse t very to d e c lin in g lik e ly , th ere fo r e , th a t th e to ta l v o lu m e o f b u ild in g w ill r e c e d e d u r in g a ls o r e c e iv in g c lo s e r s c r u tin y lim its im p o s e d b y R e g u la t io n X b e fo r e a p p r o v a l. C r e d it o n c e r ta in ty p e s o f n o n r e s id e n tia l c o n s tr u c tio n — p a y m en t— a ls o h a v e a v e r y s t r o n g r e s tr a in in g e ffe c t. r e q u ir in g a 50 percent dow n C r e d i t for residential b u i l d i n g t h e n e x t s e v e r a l m o n t h s . E v e n in t h e e v e n t t h a t c o n t r o ls a re r e la x e d , n e w sta rts o f v a r io u s k in d s h a v e b e e n s lo w e d u p s u ffic ie n tly s o th a t s e v e r a l m o n t h s w o u ld b e r e q u ir e d b e fo r e th e v o lu m e o f c o n s t r u c t io n p u t in p la c e c o u ld b e R e s id e n t ia l b u ild in g h a s fa c e d t w o o b s t a c le s . I n O c t o b e r , R e g u la tio n X , is s u e d b y th e B o a r d o f G o v e r n o r s o f th e F e d e r a l R e s e r v e S y s te m , a n d th e c o m p a n io n r e g u la tio n s o f th e V e te r a n s A d m in is tr a tio n a n d F e d e r a l H o u s g in to r is e a g a in . in g A d m in is tr a tio n r a is e d th e d o w n p a y m e n ts o n h o m e s C h a n g i n g setting o f c o n s t r u c t i o n activity D e s p ite th e m a n y a n d v a r ie d s h a r p ly . s h ifts in th e fo r t u n e s o f In a n tic ip a tio n b u ild e r s a c q u ir e d of th ese r e g u la tio n s , la r g e c o m m itm e n ts h ow ever, th e V A and its c o m p o n e n t s , to ta l c o n s t r u c t io n a c t iv it y h a s r is e n c o n F H A s is te n tly sin c e th e e n d o f W o r l d W a r I I f r o m t h e b a s is o f h a v in g file d a p p lic a t io n s p r i o r to O c t o b e r 1 2 , to a n o th e r, except in 1949. have been c h a r a c te r iz e d r e s tr a in ts on v a r io u s by D e v e lo p m e n ts lim ita tio n c a te g o r ie s of on e record s in c e ord ers and K orea c r e d it c o n s tr u c tio n , yet 1950, w h ic h w e r e e x e m p t fr o m fr o m or on th e expended to advance b a sis of th e r e g u la tio n s e ith e r o n h a r d s h ip p r o je c t s to becau se th e of b u ild in g N e v e r t h e le s s , it w a s a n tic ip a te d t h a t t h e d o w n t h r o u g h th e fir s t s i x m o n t h s o f th is y e a r to ta l c o n s t r u c r e q u ir e m e n ts tio n in th e U n i t e d S ta te s w e r e w e ll a h e a d N e v e r t h e le s s , it w a s b e c o m in g e v i d e n t th a t a c t iv it y in s o m e c a t e g o r ie s o f c o n s t r u c t i o n — p a r tic u la r ly red uce r e s id e n tia l paym ent s u b s ta n tia lly . e x p e n d itu r e s o f la s t y e a r . w o u ld fu n d s sta g e . c o n s tr u c tio n B e f o r e th e e ffe c t s o f th e s e r e q u ir e m e n ts c o u ld b e fu lly t e s t e d , c o n d it io n s in th e m o n e y m a r k e t c h a n g e d m a r k e d ly , a m u s e m e n t p la c e s , c o m m e r c ia l b u ild in g s , a n d h o u s in g — c a u s in g a s h a r p r e d u c t io n in fu n d s a v a ila b le f o r m o r t g a g e w as le n d in g o n fu tu r e p r o je c t s o f a n y s iz e . W i d e -s p r e a d p o rts d u r in g d e c lin in g . Restrictions o n n o n r e s i d e n t i a l c o n s t r u c t i o n fo u n d P r in c ip a lly am u sem en t N a tio n a l 1950, r e s p o n s ib le p la c e s has P r o d u c tio n w h ic h fo r been th e th e o f th is ty p e o f s tr u c tu r e . b r o a d e n e d to r e q u ir e N P A issu e d c o n s tr u c tio n The in R e g u la tio n A u th o r ity , p r o h ib ite d d e c lin e r e g u la tio n b u ild in g M -4 in of a has of it n e c e s s a r y b u ild e r s to s c a le have dow n lis t sin c e b e e n a p p r o v a l o v e r a w id e v a r ie ty h o u s in g , la r g e m u lt i-u n it r e s id e n tia l b u ild in g , in d u s tr ia l re recen t m o n th s th e ir p la n s fo r th e o f c o n s tr u c tio n , in c lu d in g c o m m e r c ia l s tr u c tu r e s , lu x u r y th a t of S e p te m b e r broad in d ic a te A l s o in This Issue An Evaluation of the Torquay Tariff Negotiations Use of the Check Routing Symbol fu tu r e 40 FEDERAL RESERVE B A N K OF S A N FR A N C ISCO NEW C O N S T R U C T IO N PUT IN PL A C E —U N IT E D S T A T E S , 1 9 4 9 -5 1 (Billions of June 1951 H O U SIN G STARTS—U N IT E D STATES, 1949-51 Thousands ©f dwelling units } 1951 15 90 ' s /A / 1950 / • / • / • * • • ♦ / ....................... d A __________ •• ■• • m m i * 1949 ■ # # •• ♦♦*** M M / •1 a• ..••*1949 > * x . . « ___L . - J. L -1 ... JL.. .J ....... _ . i ..... .1....... J L ,.... -, Source : Joint estimates of the Departments of Labor and Commerce. a c t iv it y a n d , a s a r e s u lt , h o u s in g c o n s t r u c t io n w ill p r o b a b ly d e c lin e m o r e t h a n s e a s o n a lly d u r in g th e r e m a in d e r . ! 1 ...J ! _ .J .____ L .... - - - 1 ! d j f m a m j j a s o n d Source: United States Department of Labor, Bureau of Labor Statistics. r e s u lt e d in a r e c o r d v o lu m e o f p r iv a t e h o u s in g e x p e n d i tu r e s d u r in g th e fir st fo u r m o n t h s o f th is y e a r . H o u s i n g s ta r ts , h o w e v e r , h a v e la g g e d b e h in d th e 1 9 5 0 n u m b e r b y o f th e y e a r . an T ig h tn e s s in th e s u p p ly of m o rtg a g e m oney in c r e a s in g m a r g in sin c e F ebru ary. A s a r e s u lt , th e r e fle c ts v o lu m e of r e s id e n tia l c o n s tr u c tio n in process has been h o u s in g con a c tio n b y th e T r e a s u r y a n d th e F e d e r a l R e s e r v e S y s te m . le v e lin g In o ff, and p r iv a te e x p e n d itu r e s on M a r c h , th e T r e a s u r y o ffe r e d a 2 ^ 4 p e r c e n t lo n g -te r m n o n m a r k e t a b l e b o n d i n e x c h a n g e f o r a n o u t s t a n d i n g 2]/2 s tr u c tio n d r o p p e d b e lo w th e c o r r e s p o n d in g m o n th o f 1 9 5 0 f o r th e fir s t t im e th is y e a r in M a y a n d a ls o d e c lin e d m o d p e r c e n t is s u e . M a n y in s u r a n c e c o m p a n ie s a n d b a n k s t o o k a d v a n ta g e o f th e e x c h a n g e , a n d th u s r e d u c e d th e p r o p o r tio n of m a r k e ta b le s e c u r itie s in th e ir p o r tfo lio s . th e sa m e tim e , th e F e d e r a l R e s e r v e S y s te m About O p en M ark et e r a te ly fr o m th e A p r i l 1 9 5 1 v o lu m e . F o r th e p e r io d J a n u ary very a r e s u lt in s u r a n c e c o m p a n ie s a n d b a n k s b e c a m e r e lu c ta n t to ta k e on new c o m m itm e n ts t r a c t s , p a r tic u la r ly if 4 p e r c e n t V A R e c e n tly th is r e lu c ta n c e la r g e b lo c k s o f F H A and b a n k s fo u n d tio n a l fu tu r e th e has la r g e lo a n s w e r e in v o lv e d . sp read to th e fin a n c in g of lo a n s a s w e ll. I n s u r a n c e c o m p a n ie s t h a t in o r d e r t o o b t a in fu n d s f o r a d d i le n d in g th e y se c u r itie s th e y a ttr a c tiv e n e s s fo r of w o u ld w o u ld n e ed to m o rtg a g e s, e r a n s A d m in is tr a tio n have to s e ll. T h i s e s p e c ia lly g u a ra n te e d ta k e a lo s s 4 red u ced percent on th e V e t June, p r iv a te m ore th a n d o u b le th e c o m p a r a b le la r g e in t h is v o lu m e D i s t r i c t , wra s of h o u s in g 1950 v o lu m e . w as M any p la n s f o r in d u s t r ia l c o n s t r u c t io n t h a t h a d b e e n in p r o c e s s or even tio n s m a te r ia l w ere p a n s io n be in a b e y a n c e w e r e h u r r ie d of goods th e d u c in g sh o rta g e s p r in c ip a l and c iv ilia n c o n s is te d p r o d u c ts and in to a c tio n . E x p e c t a in c r e a se d m o tiv a tio n s . in a c t i v i t y o c c u r r e d m easu red a ls o 1 9 5 0 t h e r e c o r d r a t e o f c o n s t r u c t io n a c t i v i t y in th e n a t i o n , a s wre l l a s r e s id e n tia l d u s t r ia l c o n s t r u c t io n in th e fir s t fiv e m o n t h s o f 1 9 5 1 dem and M ost b e fo r e m ilita r y e ith e r of of fo r th e ex n e e d s c o u ld fa c ilitie s o r at m o s t p ro d u c ts C o m m e r c ia l c o n s tr u c tio n c e p tio n a lly on fo r p ro th a t c o u ld b e u s e d fo r e ith e r c iv ilia n o r m ilit a r y p u r p o s e s . lo a n s . Shifts in c o n s t r u c t i o n activity In e x p e n d itu r e s I n m a r k e d c o n t r a s t to r e s id e n tia l b u ild in g , p r iv a te in C o m m itte e s to p p e d s u p p o r tin g G o v e r n m e n t se c u r itie s a t par. A s th ro u g h b u ild in g w e r e a b o u t th e s a m e a s in 1 9 5 0 . paced by an c o n s tr u c tio n . s u b s ta n t ia lly becau se of ahead m o d e ra te in th e o f th e fir st s ix m o n th s w as 1 9 5 0 v o lu m e , p r in c ip a lly a p p lic a tio n s of N P A r e s tr ic tio n s ex e a r lie r th is y e a r . C r e d it r e s tr ic tio n s u n d e r R e g u la t io n X A p a n d th e lim ita tio n s im p o s e d b y th e N P A , h o w e v e r , p r o b p r o x i m a t e ly 1 .4 m illio n h o u s in g u n its w e r e s ta r t e d in th e a b ly n a tio n t h e c o m m e r c i a l fie ld . d u r in g th e y e a r . O u r in v o lv e m e n t in t h e K o r e a n c o n flic t a n d th e p r o s p e c t o f lim ita tio n s on c o n s tr u c tio n , p re v e n te d a m uch g r e a te r e x p a n s io n o f a c tiv ity in P u b lic c o n s tr u c tio n in c r e a se d m u c h m o r e th a n p r iv a te m a te r ia l s h o r ta g e s , a n d in c r e a se d d e m a n d fo r g o o d s a n d c o n s tr u c tio n se r v ic e s D e f e n s e D e p a r t m e n t r e q u ir e m e n t s H a v e r e s u lte d in c o n a lr e a d y of a ll la r g e ty p e s h o u s in g gave boom a d d itio n a l and s tim u lu s in d u c e d to th e c o n s id e r a b le a c t i v i t y in n o n r e s id e n t ia l b u ild in g . and w ork under w ay th e sid e r a b le e x p e n d itu r e s o n fir s t s ix m o n th s of r e a c tiv a tio n a n d th is year. e x p a n s io n of a ll t y p e s o f m ilit a r y e s t a b lis h m e n t s . I n a d d itio n , G o v e r n T h e n a tio n a l c a r r y -o v e r o f a u th o r iz a tio n s e x e m p t fr o m r e g u la tio n d u r in g in th e h o u s in g fie ld m e n t e x p e n d itu r e s a to m ic en ergy, fo r have p r o d u c tio n added fa c ilitie s , p a r tic u la r ly c o n s id e r a b ly to to ta l p u b lic June 1951 41 M O N T H L Y R E V IE W areas d e c lin e d w ere V A L U E O F U R B A N B U IL D IN G A U T H O R IZ E D — T W E L F T H D IS T R IC T , 1949-51 sharp a lm o s t 4 in c r e a s e s p e rcen t. in O ffs e ttin g a u th o r iz a tio n s th is fo r d e c lin e fa c to r ie s , p u b lic w o r k s , o ffic e b u ild in g s , p u b lic b u ild in g s , a n d c o m m e r c ia l stru ctu res. C o m m e r c ia l a u th o r iz a tio n s c lin e d s h a r p ly f r o m ary, r e fle c tin g have de th e h ig h r a te o f J a n u a r y a n d F e b r u th e g r o w in g im p a c t of c r e d it and N P A r e s tr ic tio n s . N ot r e fle c te d la r g e e x p a n s io n tio n in th is in th e urban a u th o r iz a tio n s is a very in m i li t a r y a n d a t o m i c e n e r g y c o n s t r u c D is tr ic t. C o n s id e r a b le e x p a n s io n lin e s o f a c t iv it y h a s a lr e a d y o c c u r r e d . A in th ese n u m b er o f p r o j e c ts e x c e e d in g $ 1 0 m illio n e a c h h a v e b e e n a u th o r iz e d a n d a m uch la r g e r m illio n e ith e r num ber are o f p r o je c t s under w ay or b e t w re e n w ill be $1 and sta rte d n e a r fu tu r e . T h e s e p r o je c ts h a v e a b s o r b e d $10 in th e la r g e q u a n ti tie s o f m a te r ia ls a n d m a n p o w e r , b u t th e fu ll fo r c e o f th e ir i m p a c t o n c o n s t r u c t i o n a c t i v i t y is y e t t o c o m e . C o n t r a c t s f o r s o m e p r o je c t s h a v e b e e n s ig n e d o n ly r e c e n tly a n d th e r a t e o f a c t i v i t y o n t h e s e is s t ill l o w . M ore co n tra cts a re s till to b e i s s u e d a n d t h e s e w ill g i v e r is e to a h i g h e r r a te e x p e n d it u r e s . D e s p it e th e in c r e a s e in m ilit a r y a n d p u b lic o f m i l i t a r y c o n s t r u c t i o n t h a n is n o w e v id e n t. in d u s t r ia l e x p e n d it u r e s , h ig h w a y s a n d e d u c a t io n a l b u ild in g s s t ill c o n s titu te d th e m a jo r s in g le ite m s of p u b lic Outlook for construction sp e n d in g . The Construction in the Twelfth District D a ta on T w e lfth c o n s tr u c tio n le v e l o f c o n s tr u c tio n in b o t h th e T w e lft h fo r th e n e x t se v e ra l m o n th s D is tr ic t a n d th e U n ite d S ta tes w ill d e p e n d la r g e ly u p o n th e a v a ila b ility o f m o r t g a g e m o n e y e x p e n d itu r e s fo r 1951 in th e D is t r ic t a r e n o t y e t a v a ila b le , b u t b u ild in g p e r fo r n e w r e s id e n tia l p r o je c t s a n d th e e ffe c t o f R e g u la t io n X and N P A r e s tr ic tio n s o n p r iv a te a n d p u b lic n o n r e s id e n - m its is s u e d f o r u r b a n p la c e s g iv e s o m e in d ic a tio n o f th e tia l b u ild in g n o t r e la te d to th e d e fe n s e e f f o r t . A v a i la b ili t y c o u r s e o f a c tiv ity . I n of th e fir st fo u r m o n t h s o f th is y e a r , ste e l and t o ta l c o n s t r u c t io n a u th o r iz e d in u r b a n p la c e s o f th e D i s severe tr ic t o th e r b y th e N P A w as s lig h tly ahead of la s t year. Though th e g a in w a s m u c h s m a lle r t h a n th e g a in in e x p e n d it u r e s r e p o r t e d d u c tio n fo r th e tio n p r o b le m U n ite d S ta tes th ro u g h M a y , it m u s t b e r e m e m c r itic a l e a r lie r m a te r ia ls , th is year, w h ic h w ill w as g u id e not a a p p r o v a ls o f t h e s e p r o j e c t s . I t is l ik e l y t h a t s o m e re in b o t h p u b lic a n d p r i v a t e n o n d e f e n s e c o n s t r u c m ay be n ecessary becau se o f lim ite d a v a ila b ility of b e r e d th a t th e e x p e n d it u r e s fig u r e s r e fle c t w o r k o n a u th a o r iz a tio n s m a d e t h a t t o t a l c o n s t r u c t io n m a y d e c lin e m o r e th a n s e a s o n a lly a u th o r iz a tio n s . s o m e tim e a g o C o n s tr u c tio n a s w e ll a s w o r k a u th o riz e d in on new th e U n ite d fe w c r itic a l d u r in g th e m a te r ia ls . next fe w T h ese m o n th s c o n s id e r a tio n s d e s p ite som e in d ic a te in c r e a se in S t a t e s t h r o u g h A p r i l o f th is y e a r w a s 3 p e r c e n t le s s t h a n m ilita r y c o n s tr u c tio n . in t h e fir s t f o u r m o n t h s o f 1 9 5 0 . T w e lfth D is t r ic t t e n d to s u p p o r t th is a s s u m p t io n . T h e s e A d e c lin in g le v e l o f r e s id e n tia l a u t h o r iz a t io n s h a s ta rd e d th e T h rou gh to ta l b u ild in g A p r il, h o m e a u th o r iz e d c o n s tr u c tio n in th is a u th o r iz e d re D is t r ic t . in urb an P r e lim in a r y r e p o r ts in d ic a te a m o d e r a te new c o n s tr u c tio n M ay fo r th e d e c lin e in a u th o r iz a t io n s in u r b a n a r e a s f r o m s u b s ta n tia l d e c lin e f r o m rep o rts M ay A p r il 1951 of and a 1950. A N EVALUATION OF THE TORQUAY TARIFF NEGOTIATIONS h e r e s u lts o f th e t a r i f f n e g o t ia t io n s a t T o r q u a y , E n g d is a p p o in tin g ; o n la n d , w e r e m a d e p u b lic o n M a y 9 , 1 9 5 1 . T h e T o r q u a y T out at T o rq u a y th e o th e r h a n d , th o se w h o m ay sw e a te d ta k e ju s t ifia b le p r id e in m a n y c o n fe r e n c e w a s th e th ir d o f a s e r ie s o f th r e e in te r n a tio n a l a c c o m p lis h m e n ts . t a r if f c o n fe r e n c e s h e ld d u r in g th e p o s t w a r p e r io d w ith in s in c e r e ly th e fr a m e w o r k o f th e G e n e r a l A g r e e m e n t o n T a r iffs a n d w ill T r a d e . T h e n e g o tia tio n s a t T o r q u a y w e r e c o n d u c te d d u r d u s t h a s s e t t le d o v e r t h e q u ie t s e a s i d e r e s o r t in E n g l a n d in g a p e r io d o f s e v e n m o n t h s fr o m a n d o n c e th e p a r tis a n s o n b o th s id e s h a v e h a d th e ir sa y . to A p r il 2 1 , S e p te m b e r 2 8 , 1 9 5 1 . T h e m a n y c o m m e n ts w h ic h 1950, have ap be O n in te r e ste d a b le to b a la n c e , in fin d th e m uch h ow ever, th o se it real w ho g ro w th o f m u lt ila t e r a l th a t h e a r te n in g , is are tra d e once th e T h e T o r q u a y m e e tin g w a s th e p r o d u c t o f m a n y y e a r s p e a r e d sin c e th e c o n c lu s io n o f th e n e g o tia tio n s h a v e b e e n o f c o n tin u in g e ffo r t b y th e U n it e d c o n fu s in g t io n s t o a c c o m p lis h a r e d u c t io n in th e t a r if f b a r r ie r s w h ic h sin c e th e y have te rm e d th e m e e tin g b o th a d is m a l fa ilu r e a n d a g lo w i n g s u c c e s s . T h e r e a s o n f o r th is had w id e v a r i a t i o n in e v a lu a t io n s is t h a t in m a n y r e s p e c t s th e The r e s u lt s o b t a in e d a f t e r m a n y m o n t h s o f n e g o t ia t io n s w e r e b e g in n in g th r o ttle d w o r ld tra d e a c c o m p lis h m e n ts in 1934 w ith at d u r in g S ta te s an d th e T orqu ay th e p a s s a g e o th e r n a in te r -w a r a c tu a lly o f th e p e r io d . had o r ig in a l th e ir R e 42 June 1951 FEDERAL RESERVE B A N K OF S A N F R A N C ISCO c ip r o c a l T rade A g re e m e n ts A ct w h ic h em pow ered th e d iffic u ltie s th a t m a y have d e v e lo p e d o u t o f th e b ila te r a l P r e s id e n t to r e d u c e th is c o u n t r y ’ s ta r iffs b y a s m u c h a s n e g o t ia tio n s . F in a lly , w h e n th e c o n c e s s io n s c o n t a in e d in 50 th e p e r c e n t o f th e a ll-t im e p e a k le v e l s e t b y th e H a w le y - Sm oot T a r iff A ct of 1930. T h is o r ig in a l act has been c o n s o lid a te d sc h e d u le s are agreed upon, th e y are g r a n t e d to a ll o th e r c o n t r a c t in g p a r tie s . -e x te n d e d s e v e n t im e s f o r d if f e r e n t p e r io d s o f t im e , v a r y in g b e tw e e n one te n sio n , p a sse d and by th re e years. C on gress on The m ost June 6, recen t e x General Agreement on Tariffs and Trade (GATT) 1 9 5 1 , e x te n d e d A t th e G e n e v a m e e t in g in 1 9 4 7 , t h e G e n e r a l A g r e e m e n t th e a c t, w ith m o d ific a tio n s , fo r tw o y e a r s to J u n e 1 2 ,1 9 5 3 . o n T a r iffs a n d T r a d e T h e G A T T , 1945 e x te n s io n gave th e th o r ity to re d u c e ta r iffs to T h u s , th e m a x im u m P r e s id e n t a d d itio n a l 5 0 p e rc e n t o f th e 1945 au le v e l. a m o u n t b y w h ic h th e P r e s id e n t m a y 23 n a tio n s (G A T T ) c a m e in to b e in g . U n d e r n e g o tia te d s ig n ific a n t r e d u c tio n s in t a r if f b a r r ie r s a g a in s t th e flo w o f w o r ld tr a d e . T a r i f f c o n c e s s io n s r e s u lt in g fr o m r e d u c e a t a r i f f is 7 5 p e r c e n t o f t h e 1 9 3 0 le v e l. T h i s m a x i 4 5 ,0 0 0 m um th is m e e tin g w e r e m a d e o n over th e w o r ld ’s tra d e . r e d u c tio n , how ever, w o u ld a p p ly o n ly to th o se c o m m o d itie s o n w h ic h th e t a r iff h a d a lr e a d y b e e n r e d u c e d th e m a x im u m p e r m is s ib le b y 1 9 4 5 . to a c c o m p lis h th e g ro w th m u ltila te r a l tra d e ; a cc o u n ted fo r about t w o -t h ir d s of fe a tu re s. The fir st c o n s is ts of th e s p e c ific ta r iff c o n c e s s io n s w h ic h a r e s e t f o r t h in t h e s c h e d u le s a n n e x e d it t o th e A g r e e m e n t . T h e o t h e r r e la te s to s u c h p r a c tic e s a s w a s n e c e s s a r y , h o w e v e r , to s ta r t w ith a b ila te r a l a r r a n g e t a r iff d is c r im in a tio n , q u a n tita tiv e im p o r t r e s tr ic tio n s , a n d m en t w h ereby cu sto m s th e U n it e d of w h ic h T h e G e n e ra l A g r e e m e n t o n T a r iffs a n d T r a d e h a s tw o m a jo r T h e u ltim a te o b je c tiv e o f th e r e c ip r o c a l tr a d e p r o g r a m w as ite m s , S ta te s a ttem p ted , co u n try by fo r m a litie s . T h e s e m ore g e n e r a l p r o v is io n s are c o u n t r y , to r e d u c e t a r iff b a r r ie r s o n a b a s is o f r e c ip r o c ity . n e c e s s a r y to s a fe g u a r d th e a d v a n ta g e s g a in e d th r o u g h th e D u r in g s p e c ific c o n c e s s io n s . N o th e y e a r s m e n t n e g o tia te d w ith 29 m e n ts in c o u n tr ie s A c t. retu rn In fo r p r io r to W o r ld W a r II, our G overn a s e r ie s o f in d iv id u a l tr a d e a g r e e m e n ts under th ese th e R e c ip r o c a l a g re e m e n ts r e d u c tio n s we reduced on our ta r iffs A m e r ic a n th e G en eral p e r m a n e n t o r g a n iz a tio n w a s set A greem en t cam e in to b e in g . The v a r io u s m e e tin g s u n d e r th e A g r e e m e n t h a v e b e e n o f tw o ty p e s: fir s t, th o se h e ld to n e g o tia te ta r iff c o n c e s s io n s ; a n d s e c o n d , th o s e h e ld to c o n s id e r th e p r o b le m s o f c a r r y p o r t s . W h i l e t h e s e tr e a t ie s w e r e b ila te r a l in n a tu r e , t h e y in g o u t th e p r o v is io n s o f th e G e n e r a l A g r e e m e n t . I n c lu d a ll in g th e T o r q u a y m e e t in g s , th r e e t a r iff m e e t in g s a n d fiv e th e th e ta r iffs A gree wT e n h ex c o n ta in e d in Trade up “ m o s t -fa v o r e d -n a t io n ” c la u s e w h ic h p r o v id e d th a t c o n c e s s io n s g r a n te d to a n y c o u n tr y u n d e r a tr a d e a g r e e m e n t w o u ld a ls o a p p ly to a n y o th e r c o u n tr y w ith w h ic h w e h a d a s im ila r tr a d e a g r e e m e n t. T h u s process w as m u ltila te r a l to th e e x te n t s i o n s a p p lie d t o a ll c o u n t r i e s w i t h th a t w h ic h th e th e con ces w e had s ig n e d tra d e a g re e m e n ts. be c o n s id e r a b ly th e m a jo r one tim e tr a d in g fo r one s tim u la te d n a tio n s c o u ld gran d and a c c e le r a te d if a ll be b ro u g h t to g e th e r at ta r iff-r e d u c in g bee. A t such a T m e e t in g a n y c o u n t r y w o u l d b e a b l e t o u n d e r t a k e n e g o t i a t i o n s w it h a n y o t h e r c o u n t r y w i t h w h ic h it t h o u g h t e f f e c t i v e n e g o t ia tio n s w o u ld b e p o s s ib le . T h u s , a t o n e m e e t in g , ta r iff c o n c e s s io n s c o u ld be o b ta in e d on a g iv e -a n d -t a k e b a s is w h ic h o th e r w is e m ig h t h a v e b e e n s p r e a d o v e r a lo n g p e r io d U n d e r th e G e n e r a l A g r e e m e n t s ig n e d b y th e 2 3 n a tio n s a t G e n e v a , it w a s p r o v id e d th a t a d d itio n a l c o u n t r ie s c o u ld becom e v o te p a r tie s o r ig in a l ta r iff upon s ig n a to r ie s a t w o -t h ir d s and c o n c e s s io n s . upon U nder m a jo r ity c o n c lu s io n th is of p r o v is io n a s e c o n d m e e t in g w a s h e ld a t A n n e c y , F r a n c e , in 1 9 4 9 , f o r th e p r im a r y p u rp ose of a d d in g n in e c o u n tr ie s to th e G e n e r a l A g r e e m e n t .1 A t T o rq u a y , 31 sig n a to r y c o u n tr ie s 2 p a r tic ip a te d a n d s i x n a tio n s 3 e n te r e d n e g o tia tio n s w ith a v ie w to b e c o m in g c o n tr a c tin g p a r tie s . In c lu d in g U r u g u a y , th is to ta l o f 3 8 c o u n tr ie s r e p r e se n ts o v e r fo u r -fifth s o f th e w o r ld ’s to ta l tr a d e , a c c o u n tin g fo r and about 85 80 p e rc e n t o f to ta l w o r ld im p o r ts p e rc e n t o f to ta l w o r ld e x p o r ts . o f y e a r s o n a c o u n t r y b y c o u n tr y b a s is . In T h e p rocess of n e g o tia tio n fir s t o f th e se m e e tin g s at c o n tr a c tin g o f th e sa tis fa c to r y A t t h e e n d o f t h e w a r , it w a s d e c id e d t h a t t h is p r o c e s s c o u ld s e s s io n s o f th e c o n t r a c t in g p a r tie s h a v e b e e n h e ld . la t e r m e e tin g s at th a t w as (G e n e v a , 1 9 4 7 ) Annecy and fo llo w e d at th e w a s a ls o fo llo w e d T orqu ay. U nder th is a d d itio n T orqu ay e x te n d G eneva to n e g o tia tio n s c o n fe re n c e to Jan uary and a ls o 1, A nnecy, fo r new r e s u lte d 1954, w ith th e in an c o n c e s s io n s , c o n c e s s io n s c e r ta in th e a r r a n g e m e n t to g ra n te d m o d ific a tio n s , at w h ic h p r o c e d u r e , b ila te r a l lis ts o f o f f e r s a r e e x c h a n g e d b y in te r w ill b e m e n t io n e d la te r . T h u s , th e t a r iff s c h e d u le s o f th e e s t e d p a ir s o f c o u n tr ie s a t th e b e g in n in g o f th e m e e t in g . m a jo r T h rou gh tr ie s th e p r o c e s s o f n e g o tia tio n th e n e ith e r agree upon r e c ip r o c a l c o n c e s s io n s be tw e e n th e m s e lv e s o r c o n c lu d e th a t n o b a s is fo r a g r e e m e n t «e x ists. T h e in to a A fte r c o n c e s s io n s a g r e e d s in g le th is , s c h e d u le th e of to a re th en c o n c e s s io n s c o n s o lid a te d sc h e d u le s fo r are c o n s o lid a te d each co u n try . c ir c u la t e d to a ll p a r tic ip a tin g c o u n tr ie s s o th a t e a c h c o u n t r y m a y a s s e s s t h e to ta l r e s u lt s o f th e n e g o t ia t io n s a n d , w h e r e n e c e s s a r y , n e g o t ia te f o r th e p u r p o s e o f r e m o v in g in e q u itie s o r o th e r p art of th e w o r ld ’s tra d e w ere s ta b iliz e d fo r at th e s e p a ir s o f c o u n le a s t th r e e y e a r s . 1 One country — Uruguay — negotiated at Annecy and later at Torquay, though she has not completed the process of becoming a contracting party. 2 T he 31 countries are Australia, Belgium, Brazil, Burma, Canada, Ceylon, Chile, Cuba, Czechoslovakia, Denmark, the Dominican Republic, Finland, France, Greece, H aiti, India, Indonesia, Italy, Liberia, Luxem bourg, the Netherlands, N ew Zealand, Nicaragua, Norw ay, Pakistan, Southern R ho desia, Sweden, Syria, Union of South Africa, the United Kingdom , and the United States. 8 Austria, German Federal Republic, Korea, Peru, Republic of the Philip pines, and Turkey. June 1951 43 M O N T H L Y R E V IE W Tariff concessions negotiated at Torquay S u m m a r y of U n it e d S t a t e s G a i n s a n d C o n c e s s io n s a t T orquay T h e lis t o f c o n c e s s io n s m a d e a t T o r q u a y is im p r e s s i v e , p a r tic u la r ly w h e n c o n c e s s io n s had c o n s id e r a b ly c e p t, of it is p r e v io u s ly cou rse, rem em b ered g ra n te d red u ced in th e th e case at area of th a t th e G eneva fo r th e la r g e and s c a le th a t T orqu ay w as a to ta l of 147 p a ir s w ere o f n e g o tia tio n s in w h ic h 3 4 c o u n tr ie s 1 p a r tic ip a te d . D u r in g th e 2 0 6 d a y s o f n e g o tia tio n , o v e r 8 .7 0 0 c o n c e s s io n s w e r e g r a n te d . A m o n g th e n e g o tia to r s , c o n c e ss io n s— France g ra n te d th e la r g e s t num ber of 1 ,3 9 0 . G e r m a n y lo w e r e d o r fr o z e ta r iffs o n 1 ,2 9 0 ite m s , I ta ly o n 1 ,1 5 0 , th e U n it e d S ta te s o n 7 6 0 , a n d th e U n i t e d K i n g d o m o n 2 0 0 . T h e s e c o n c e s s io n s p lu s t h o s e m a d e a t G e n e v a a n d A n n e c y c o v e r a to ta l o f s o m e 5 8 ,0 0 0 c la s s ific a tio n s o f c o m m o d it ie s . T h e U n i t e d S t a t e s s u c c e s s fu lly c o n d u c te d n e g o tia tio n s w ith 17 c o u n tr ie s 2 in c lu d in g fiv e o f th e s e v e n c o u n tr ie s th a t w e r e p a r tic ip a tin g fo r th e fir s t t im e a t T o r q u a y . T h e U n ite d S ta te s o b ta in e d lo w e r ta r iffs new c o n c e s s io n s , in th e f o r m o r th e c o n tin u a tio n United States States gains------- \ ( concessions---------Covered Covered Covered Covered by by byby Direct Indirect Direct Indirect Conces- ConcesTotal Conces- Concessions sions1 imports sions sions1 /------- United (e x n e g o t ia t in g f o r th e fir s t t im e a t T o r q u a y ) . T h e fin a l s c o r e at (in thousands of dollars) A nnecy n e g o tia tio n c o u n tr ie s Based on the value of trade in 1949 of o f p r e se n t ta r iff tr e a t m e n t , o n e x p o r t s f r o m th is c o u n t r y v a lu e d a t o v e r a b illio n d o lla r s in 1 9 4 9 . I n r e t u r n , U n i t e d S t a t e s d u t ie s o n s p e c ific p r o d u c t s w e r e e ith e r fix e d a t e x i s t i n g le v e ls u n til J a n u Total exports Country Austria ............ 181,187 30,310 Benelux2 ____ 582,392 35,000 Brazil ............... 381,164 295 C a n a d a ............ 1,951,860 290,316 Denmark ____ 93,023 3,552 Dominican Republic . . . 38,178 5,444 France ............ 490,000 25,582 Germany ____ 754,367 563,907 Indonesia ____ 124,229 750 Italy ................. 454,000 9,340 Korea ............... 52,000 7,000 Norway .......... 69,574 5,633 Peru ................. 90,842 45,252 80,308 1,122 Sweden .......... Turkey ............ 58,667 28,038 15,000 4,800 ...3 6,275 5,110 9,615 154,680 551,084 1,552,000 6,445 ...3 12,000 ...3 1,600 9,000 ...3 8,852 5,000 3,656 4,641 6,501 29,914 107 125,500 263 24,679 62,207 43,660 120,262 70,572 1,602 29,942 40,708 54,430 50,047 364 2,683 750 3,728 305 2,844 90 12,871 3,984 6,853 3,474 424 84* 5,073 4,000 141 ...3 2,020 3,611 25,789 9,365 403 1,413 44,604 2,893 1 Indirect concessions consist of benefits derived from concessions granted other countries through “ most-favored-nation” treatment. 2 Includes Belgium, the Netherlands, and Luxembourg. 3 N ot available or of insignificant importance. 4 Indonesia entered agreements under its own name for the first time at Torquay. Previous negotiations for Indonesia had been carried on by the Netherlands. Over 96 percent of Indonesia’ s exports to the United States were already duty free and thus only minor concessions were made at Torquay. Source of data: United States Department of State, Analysis of Torquay Protocol of Accession, Schedules, and Related Documents, Publication 4209, Commercial Policy Series N o. 135, M ay 1951. a r y 1 , 1 9 5 4 , o r r e d u c e d u n til th a t d a te , o n a to t a l o f a b o u t a h a lf b illio n d o lla r s o f t r a d e , in t e r m s o f T h e year 1949 im p o r ts. re tte le a f to b a c c o , a lu m in u m , lo n g -s ta p le c o tto n , p r e c io u s w a s u s e d a s th e b a s e f o r a ll n e g o t ia tio n s 1949 a n d s e m i-p r e c io u s s to n e s , c e r ta in la c e s a n d e m b r o id e r ie s , a t T o r q u a y b e c a u s e it w a s t h e m o s t r e c e n t y e a r f o r w h ic h f e r r o m a n g a n e s e , flo w e r b u lb s , s u g a r c o m p le te d a ta w e r e a v a ila b le . H o w e v e r , e x p o r t s f r o m th e and U n ite d m e n t s ) , c h e e s e , b o n ito , a n d c e r ta in o t h e r fis h . S t a t e s w e r e u n u s u a lly h ig h in 1 9 4 9 a n d im p o r ts w re r e u n u s u a l l y l o w , p a r t i c u l a r l y d u r i n g t h e f i r s t h a l f o f th e y e a r . T o ta l U n ite d S ta te s e x p o r ts d e c r e a se d fr o m $ 1 2 b illio n in 1 9 4 9 t o $ 1 0 b illio n in 1 9 5 0 ; w h ile t o t a l im p o r t s in c r e a se d fr o m $ 6 .6 b illio n t o $ 8 . 8 b illio n . I t is p o s s ib le th e A P h ilip p in e s sum m ary n e g o tia te d of w ith w h ic h U n ite d are S ta te s in d iv id u a l (e x c e p t fr o m covered g a in s c o u n tr ie s by o th e r and Cuba agree c o n c e ssio n s ap pears above. By fa r th e m o s t p r o d u c tiv e o f th e s e n e g o tia tio n s w e r e th o s e c o n d u c te d w ith C anada and G erm an y. t o o b t a i n a n a p p r p x i m a t i o n o f t h e v a l u e o f c o n c e s s i o n s in t e r m s o f 1 9 5 0 tr a d e b y a s s u m in g th a t th e r e la tiv e im p o r ta n c e o f th e c o m m o d itie s upon w h ic h c o n c e s s io n s m a d e r e m a in e d th e s a m e in th e t w o y e a r s . O n th is b a s is , th e e stim a te d U n ite d v a lu e of th e c o n c e s s io n s o b ta in e d by th e S t a t e s in t e r m s o f 1 9 5 0 e x p o r t s w o u ld a m o u n t to $ 8 5 0 m i lli o n . T h e e s t im a t e d v a lu e o f i m p o r t s in 1 9 5 0 u p o n w h ic h c o n c e s s io n s w ere g ra n te d by th e U n ite d S ta tes w o u ld b e $ 6 7 0 m illio n . U n ite d S ta te s e x p o rts, The fifth T orqu ay s e ssio n of in c lu d in g flo u r , c o r n , c o tto n , la r d , d r ie d a ls o th e p a r tie s scen e of th e fo r th e G eneral le m s o f tr a d e c o n t r o ls w e r e c o n s id e r e d . T h e s e c o n s u lt a tio n s p ro ceed ed s im u lta n e o u s ly w ith th e ta r iff n e g o tia t io n s a n d w e r e c o n c lu d e d in D e c e m b e r 1 9 5 0 . T h r e e m a j o r and w heat canned and w heat fr u it, a w id e c e d u r e w a s se t u p , th r o u g h th e e s ta b lis h m e n t o f a p e r m a n e n t o ffic e in G e n e v a , fo r r e s tr ic tio n s ; ( 2 ) fo r s io n a p p a r a tu s , e le c tr ic r e fr ig e r a tio n a n d a ir c o n d it io n in g and e q u ip m e n t , a g r ic u lt u r a l im p le m e n t s , a n d o ffic e a p p lia n c e s . in g S ta te s g ra n te d c o n c e s s io n s o n su ch c o m m o d it ie s a s le a d a n d z in c , C a n a d ia n -t y p e w h is k e y , c ig a - o b ta in in g in fo r m a tio n needed in th e d e ta ile d e x a m in a t io n o f c u r r e n t im p o r t a n d e x p o r t r a n g e o f c h e m ic a ls , m a c h in e r y , in c lu d in g a u to m o b ile s a n d U n ite d w as c o n tr a c tin g A g r e e m e n t o n T a r iffs a n d T r a d e a t w h ic h g e n e r a l p r o b p a r ts , t e x t ile s p e c ia ltie s s u c h a s n y lo n , r a d io a n d t e le v i The C o n fe r e n c e th e a c c o m p lis h m e n ts c a m e o u t o f th e s e m e e tin g s : ( 1 ) a p r o O t h e r n a tio n s r e d u c e d th e ir t a r iffs u p o n a w id e r a n g e of Trade controls other than tariffs also discussed at Torquay w ere th e a c o d e o f s ta n d a r d p r a c tic e s w a s se t u p a d m in is tr a tio n (3 ) of n ecessary tra d e r e s tr ic tio n s ; p r o c e d u r e s w e r e e s ta b lis h e d to e n a b le c o n t r a c t p a r tie s w ho are not m em bers of th e I n te r n a tio n a l M o n e ta r y F u n d to c a r r y o u t th e ir A g r e e m e n t o b lig a tio n s a ffe c tin g th e c o n tr o l o f fo r e ig n e x c h a n g e . I n a d d itio n to th e s e th r e e d e c is io n s th e c o n t r a c t in g p a r tie s a v o id e d th e 1 Four contracting parties undertook no tariff negotiations at Torquay. They are: Burma, Liberia, Nicaragua, and Syria. 2 O f the 17 countries, the following 12 had previously particapated in G A T T negotiations: Belgium, Brazil, Canada, Denmark, the Dominican Repub lic, France, Indonesia, Italy, Luxem bourg, Netherlands, Norw ay, and Sweden. The remaining five negotiating for the first time were Austria, Germany, Korea, Peru, and Turkey. p it in w h ic h lie O r g a n iz a tio n am endm ent tio n of th e bones of th e In te r n a tio n a l T rade ( I T O ) ; n a m e ly , th e y r e je c te d a p r o p o s e d of p o lic ie s th e in A greem en t each p r o v id in g s ig n a to r y fo r c o u n try th e th a t adop w o u ld 44 June 1951 FEDERAL RESERVE B A N K OF S A N FRA NC ISCO fo ste r th e m a in te n a n c e of fu ll e m p lo y m e n t and a h ig h T h ese a c tio n s c o n tr a c tin g rep resen t p a r tie s to tu a l c o n s e n t a m o n g an set u p e ffo rt on th e w ith o f th e w as fe lt to p art e ffe c tiv e m a c h in e r y th e s e d ir e c t c o n tr o ls . W i t h o u t ad th e m in is te r th e G e n e r a l A g r e e m e n t b e tw e e n p le n a r y se s s io n s a n d to e x p a n d th e a s p e c ts o f c o m m e r c ia l p o lic y c o v e r e d . lim ite d In th e I M F s e t t in g u p a c o d e o f s t a n d a r d p r a c tic e s , it w a s r e c o g th a t bound to sin c e governm en t c o n tin u e h a r d s h ip s fo r som e to m e r c h a n ts r e s tr ic tio n s d e c is io n w ith s ig n ific a n c e . The in com e th e fo r such le v e l T h ese It in r e d u c tio n s of ta r iffs dem ands and to w ar. r e d u c tio n som e th e in d ir e c t w o u ld th e have appeal of m e n tio n e d in fe ll o n b a r r e n g r o u n d . fo u rth n e g a tiv e fa c to r c o m m o n ly are and c o n n e c t i o n wT t h T o r q u a y i s t h e f a c t t h a t d u r i n g t h e n e g o i un t ia tio n s r e s u lt in g f r o m regard r e d u c tio n had o f th e w o r ld fo llo w in g tra d e v a r y in g and had p r e d ic ta b le o p e r a tio n o f c o n tr o ls m u s t b e r e d u c e d . The a tim e n a tio n s c o n d itio n s u n c e r ta in tie s tim e , th e on u n u su a l th a t th e c o n tr o ls n iz e d th e tr a d in g deal le v e l o f e c o n o m ic a c tiv ity . to c o o p e r a tio n w ith th e In s ix te e n c o u n tr ie s p r e v io u s ly been w ith d r e w m ade c o n c e s s io n s at G en eva and wT i c h h Annecy. The m o d ific a tio n o r w ith d r a w a l o f c o n c e s s io n s w a s p r o v id e d te r n a tio n a l M o n e t a r y F u n d a ls o m a r k e d a s ig n ific a n t s te p fo r fo r w a r d . U n d e r th e B r e tto n W o o d s A g r e e m e n t, th e I M F c o n c e s s io n s m a d e in A r t i c l e X X V I I I is c h a r g e d w i t h t h e r e s p o n s i b i l i t y o f m a i n t a i n i n g o r d e r l y o n ly to J a n u a r y r a te s o f e x c h a n g e a n d o f a s s is t in g m e m b e r s in o v e r c o m in g c o n tr a c tin g p a r ty to w ith d r a w s h o r t -r u n b a la n c e o f p a y m e n t s p r o b le m s . I n th is d e c is io n c e s s io n s m a d e . O f th e 1 6 c o u n tr ie s w ith d r a w in g o r m o d i in o f th e 1947 G en era l A g re e m e n t. T h e and 1949 had an assu red o r m o d ify a n y o f th e c o n th e c o n tr a c tin g p a r tie s h a v e r e c o g n iz e d th e p r e r o g a tiv e s f y in g c o n c e s s io n s , o n ly th r e e — C u b a , F r a n c e , a n d o f th e I M F A fr ic a — q u a y , th e G A T T in th e s p h e r e o f e x c h a n g e c o n t r o ls . A t T o r IM F e n te re d a c tiv e ly in to th e p r o c e e d in g s o f fo r th e fir st tim e . D u r i n g th e c o u r s e o f th e m e e t in g , r e p r e s e n ta tiv e s o f th e I M F p r e s e n te d a n a n a ly s is o f life 1 , 1 9 5 1 . T h e r e a f t e r , it w a s o p e n t o a n y m ade im p o r ta n t ch an ges. fa c to r y a g r e e m e n t w a s re a c h e d S o u th F u rth e rm o re , at T o rq u a y s a tis o n th e c o m p e n s a t i o n t h a t s h o u ld b e g i v e n f o r a ll o f t h e G e n e v a a n d A n n e c y c o n c e s s io n s w h ic h w e r e m o d ifie d o r w ith d r a w n . th e r e s e r v e p o s itio n o f th e p a r tic ip a n ts a n d m a d e r e c o m F o r e x a m p le , c o n c e s s io n s o b ta in e d b y th e U n it e d m e n d a t i o n s f o r t h e r e d u c t i o n o f c o n t r o l s , p a r t i c u la r ly in a t th e e a r lie r m e e t in g s c o v e r in g a n e s t im a t e d $ 1 0 0 m illio n th e of case o f d is c r im in a to r y m easu res in fo r c e C o m m o n w e a lt h c o u n tr ie s a g a in s t U n it e d in B r itis h S ta te s e x p o rts. U n ite d S ta te s e x p o rts w ere w ith d r a w n at S ta te s T orqu ay, b u t c o m p e n s a to r y c o n c e s s io n s c o v e r in g a n e s tim a te d $ 1 0 5 m illio n w e r e o b t a in e d in e x c h a n g e . I n g e n e r a l, th e b a la n c e Failures at Torquay o f c o n c e s s io n s o b ta in e d a t G e n e v a a n d A n n e c y w a s m a in T h o s e w h o h a v e b e e n c r itic a l o f th e r e s u lts a t T o r quay have fo r th e m ost p art c o n c e n tr a te d on fo u r F i r s t w a s th e fa ilu r e o f th e U n i t e d new S t a t e s t o c o m p le te ta r iff a r r a n g e m e n ts w ith th e U n ite d K in g d o m a r e a b le to c o m m it th e m s e lv e s to fa ir a n d e q u ita b le p r in c ip le s a n d p r a c tic e s o f c o m m e r c ia l p o lic y . a n d th e D o m in io n s o f A u s t r a lia , N e w Z e a la n d , a n d S o u th A A f r i c a . T h e s e d is c u s s io n s a r e k n o w n to h a v e fa ile d o v e r th a t th e w h ic h issu e of in d ic a tin g a fa ilu r e , t h e r e fo r e , t h e s e w ith d r a w a ls a c tu a lly p r e s e n te d e v id e n c e th a t th e G e n e r a l A g r e e m e n t is a f le x ib le in s t r u m e n t u n d e r w h i c h c o u n t r ie s c o n s id e r a tio n s . any ta in e d . R a th e r th a n Im p e r ia l P r e fe r e n c e . It is not p o s s ib le to s i g n ific a n t f a c t o r in t h e t h r e e f a ilu r e s a t T o r q u a y is th ey are in a ll tu rn c lo s e ly r e fle c ts r e la te d to la r g e part in one th e m a jo r p r o b le m p o lic ie s of one p la c e r e s p o n s ib ilit y f o r th is fa ilu r e w ith o u t fu ll k n o w le d g e g o v e r n m e n t , th e U n i t e d K in g d o m . T h e fa ilu r e to n e g o t i o f th e d e m a n d s a n d a te a n a g r e e m e n t w ith th e U n it e d S ta te s a n d b y so d o in g o ffe rs e x c h a n g e d by each s id e , a n d r e la x th e s y s te m t h e s e fa c t s h a v e n o t b e e n m a d e p u b lic . S e c o n d w a s th e fin a l a b a n d o n m e n t o f e f f o r t s to b r in g th e In te r n a tio n a l T r a d e O r g a n iz a t io n (IT O ) in to b e in g . T h e U n i t e d S t a t e s d e le g a t io n s ta te d d u r in g th e e a r ly d a y s o f t h e c o n f e r e n c e t h a t it w o u l d n o t a s k C o n g r e s s to r a t ify th e I T O o f I m p e r ia l P r e fe r e n c e , th e in c lu s io n o f c e r ta in p r o v is io n s in th e I T O C h a r t e r w h ic h a p p a r e n t ly m a d e it u n a c c e p t a b le t o t h e U n i t e d S ta te s C o n g r e ss, a n d fin a lly , th e r e fu s a l to r e d u c e d is c r im in a t o r y d ir e c t c o n t r o ls and exchange co n tro l are a ll r e la te d to th e u n q u a lifie d a d h e r e n c e o f th e B r itis h G o v e r n m e n t to th e m a in te n a n c e ch a rter. o f fu ll e m p lo y m e n t in t h e ir o w n e c o n o m y . A s a r e s u lt o f T h i r d w a s th e fa ilu r e t o p e r s u a d e th e U n i t e d K i n g d o m e x p e r ie n c e g a in e d d u r in g th e in te r w a r p e r io d it h a s b e a n d c e r ta in o th e r m e m b e r c o u n tr ie s to u n d e r ta k e a g r a d com e ap paren t to th e n a tio n s of th e w o r ld th a t, w h ile u a l r e la x a tio n o f th e ir im p o r t r e s tr ic tio n s a n d to m o d ify tr a d e r e la tio n s w it h th e d is c r im in a to r y m anner in w h ic h th o se M o n e ta r y reserve Fund fo r m ade th e se p o s itio n of its r e p o r t to r e d u c tio n s th ese and c o u n tr ie s o t h e r w o r d s , it w a s r e c o g n i z e d p e r io d d ir e c t p r o v is io n s , m ore c o n tr o ls and in exchange im p o r ta n t p a rt th a n G A T T c itin g th e as b a c k in g th e th e im p r o v e d ju s tific a tio n . In th a t d u r in g th e p o s tw a r fo rm c o n tr o ls , of q u o ta s, have fo r m a l ta r iffs as lic e n s in g p la y e d a fa r su ch . T h e se m e a s u r e s w e r e u n d e r ta k e n , fo r th e m o s t p a rt, w ith m u o b v io u s a d v a n r e s tr ic tio n s a r e a p p lie d . I t w a s o n th is s u b je c t th a t th e I n t e r n a t io n a l dem and o th e r n a tio n s b r in g t a g e s , s u c h r e la t io n s a ls o b r in g c e r ta in lia b ilit ie s . T o th e e x te n t th a t a n a tio n b e c o m e s d e p e n d e n t u p o n o th e r c o u n t r ie s , it s u b je c t s its in te r n a l e c o n o m y t o e c o n o m ic flu c t u a tio n s m any in th e se o th e r c o u n tr ie s . T h is c o u n tr ie s to a d o p t c o n tr o ls k n o w le d g e o v e r th e flo w has le d o f th e ir in te r n a tio n a l t r a d e in a n e f f o r t to in s u la te th e ir in te r n a l e c o n o m ie s a g a in s t tren d been has p a y m e n ts e x tern a l e c o n o m ic stre n g th e n e d p r o b le m s in m any by th e flu c tu a tio n s . severe c o u n tr ie s T h is b a la n c e -o f- d u r in g th e p o st June 1951 45 M O N T H L Y R E V IE W w a r p e r io d . T h e p r e s e n t B r i t i s h G o v e r n m e n t is c o m m i t t e d C on gress to a p o lic y o f fu ll e m p lo y m e n t a n d th is p o lic y ta k e s p r i of o r it y o v e r v i r t u a lly a ll o t h e r c o n s id e r a t io n s . I t h a s b e e n su b o r d in a te r e fle c te d in th e r e p e a te d r e lu c ta n c e o f th e B r it is h to p a r o r g a n iz a tio n . tic ip a te in th e v a r io u s program s fo r th e e c o n o m ic in te g r a tio n o f E u r o p e . A t th e B r itis h a ls o , T orqu ay m e e tin g , th e ir r e d u c tio n B r itis h c o ld in p o lic y r e s u lt e d o f th e c o n tr o ls . is a p p a r e n t ly T o IM F s c u s h io n e d by th e q u o te “ to ap peal fo r p u ll d o w n exchange a Economist, th e th e sh u tte rs, to se e k th e c o s y s e c u r ity o f th e C o m m o n w e a lt h — Canada— in o n th e p r e fe r e n c e fr o n t a n d , r e c e p tio n o th e r p o lic y th is c o n tro l w ith o u t and im p o r t lic e n s in g .” 1 I n th e c a s e o f th e s c u ttlin g o f th e I T O , o n e o f th e k e y w a s in v o lv e d in d r a w in g u p th e C h a r t e r , w a s th e q u e s t io n g u a ra n tee s From c le a r on th e m a in te n a n c e of fu ll th e e a r lie s t m e e t in g th e B r it is h th a t b e fo r e th e y econom y to w o u ld be w illin g e x t e r n a l flu c tu a tio n s e m p lo y m e n t. d e le g a t e s m a d e it to th ro u g h exp ose th e and c o n tr o ls n ecessary in te rp re te d have to to by adopt o v e r th e ir in te r n a l e c o n o m ie s m a in ta in m any som e to fu ll m ean fo r m of e m p lo y m e n t. th a t a ll p la n n e d T h is m em bers c o m m itm e n ts m ade to p o lic y an m u st be in te r n a tio n a l in d ic a te th a t th e road to c o n v e r t ib ilit y of cu r r e n c ie s a n d f r e e m u lt ila t e r a l t r a d e is l o n g a n d u n c e r t a in . The m e e tin g A greem en t d e m o n stra te d , is a fle x ib le how ever, in str u m e n t th a t th e under G en eral w’ h i c h th e m e m b e r s m a y n e g o tia te s u c c e s s fu lly f o r t a r if f r e d u c tio n s w ith th e c o n se q u e n t e x p a n s io n o f m u ltila te r a l tr a d e . In a d d itio n , th e c o n t r a c t in g p a r tie s in d ic a te d t h a t t h e y w ill be in c r e a s in g ly con cern ed w ith no th e broader a sp e c ts of fu r th e r ta r iff n e g o tia tio n s a r e p la n n e d a t p r e s e n t , th e c o n t r a c t in g p a r tie s w ill c o n tin u e to c o n s id e r r e la te d p r o b le m s a n d th e im p le m e n t a t io n o f th e G e n e r a l A g r e e m e n t. T h e s ix th se s s io n o f th e c o n t r a c t in g p a r tie s w ill b e h e ld a t G e n e v a , S w it z e r la n d , b e g in n in g S e p te m b e r 17, 1951. The as w as w o u ld m ost im p o rta n t fa c to r in c o n s id e r in g fu tu re b e e x p e c t e d to r e p la c e th e ill-f a t e d I T O . T h e p r o g r a m ta r iff r e d u c tio n s m e n t o r ig in a lly u n d e rta k e n w as under in te n d e d th e G eneral as a m ean s r e d u c t io n s in tr a d e r e s t r ic t io n s w h ile th e a IT O w a s in th e p r o c e s s o f f o r m u la t io n H ad th e Such th e o f t h e G e n e r a l A g r e e m e n t is t h e e x t e n t t o w h i c h it m a y S t a t e s a n d in econom y. p r o p o s a l w a s n o t a c c e p ta b le to th e U n i t e d a c c e p t th e im p lic a tio n s e c o n o m ic T h e fa ilu r e s a t T o r q u a y a n d th e u n d e r ly in g p r o b le m s r e d u c tio n th e g o v e r n m e n t s o f a ll o t h e r m e m b e r s w o u ld a d o p t s u c h are to d o m e stic th e ir o f fo r e ig n tr a d e c o n tr o ls , th e y m u s t h a v e a s s u r a n c e th a t m easu res b e u n w illin g to th a t c o m m e r c ia l p o lic y . W h i l e is s u e s , a n d c e r t a in ly th e m o s t c o n t r o v e r s ia l is s u e , w h ic h of w o u ld C h a rte r in v o lv e d re fu sa l to w ith d r a w in th e IT O been e s ta b lis h e d , th e of A gree o f e x p e d itin g C h a r te r o f th e and r a tific a tio n . G en eral A g reem en t s p ite o f e ffo r t s to c o m p r o m is e th e is s u e a n d th e fa c t th a t w o u l d h a v e b e c o m e a p a r t o f it. H o w e v e r , it n o w a p p e a r s th e fin a l p r o v is io n s w ere c o n s id e r a b ly le s s m a n d a to ry th a t th e G e n e r a l A g r e e m e n t m a y b e g iv e n th a n th e B r it is h w o u ld h a v e d e s ir e d , it b e c a m e a p p a r e n t fo rm , O th e r b y th e tim e o f th e t a r iff c o n fe r e n c e a t T o r q u a y th a t th e fo u n d , o u ts id e o f G A T T , to im p le m e n t su c h p a r ts o f th e U n ite d S ta tes C on gress w o u ld not a c c e p t th e C h a rte r. IT O w ith o u t ch a rter r e fe r e n c e as th o se to IT O . r e la tin g to a perm an en t m eans n o n p o litic a l m ay be p r a c tic e s a n d in te r n a tio n a l c o m m o d it y a g r e e m e n t s . 1 The Economist, London, April 21, 1951, pp. 901-902. USE OF THE CHECK ROUTING SYMBOL M o s t p e o p le w h o h a v e c h e c k in g a c c o u n ts a t th e ir b a n k s h a v e n o tic e d a t o n e tim e o r a n o th e r a n u m e r ic a l fr a c a s th e c a se m a y b e ) F ederal R eserve o f th e r o u tin g s y m b o l in d ic a te s th e D is tr ic t in w h ic h th e draw ee c h e c k . I t is a r a t h e r a p p a l l i n g f r a c t i o n , o n e w e s h o u l d n o t a c h e c k r o u t in g s y m b o l o f t h r e e d ig it s , a n d t h o s e in D i s care tr ic ts 1 0 to have a n y th in g to do w ith in m a k in g a m a th e m a tic a l c a lc u la tio n . F o r t u n a t e ly , its u s e d o e s n o t r e q u ir e m u lt i p ly i n g o r d i v i d i n g it w i t h a n y o t h e r fi g u r e . I n fa c t, e v e n t h o u g h it l o o k s l i k e a f r a c t i o n , i t a c t u a l l y i s n ’ t o n e . In stea d bank th e it is a s y m b o l t h a t t e lls c e r t a i n t h i n g s a b o u t t h e w h ose nam e s y m b o l, and is its on th e p o s itio n check. in The th e in fo r m a tio n upper in r ig h t-h a n d c o r n e r o f th e c h e c k a b o v e th e a m o u n t , e n a b le th e p e o p le w h o h a v e to s o r t th e c h e c k s to w o r k m u c h m o r e q u ic k ly The upper 1 2 h a v e a fo u r -d ig it s y m b o l. seco n d d ig it (o r th ir d d e s ig n a te s th e F e d e r a l R e s e r v e th e te r r ito r y in w h ic h in a bank fo u r -d ig it s y m b o l) or branch th e d r a w e e b a n k s e r v in g is s it u a t e d . T h e H e a d O f f i c e is i n d i c a t e d b y t h e f i g u r e 1 ; b r a n c h e s , if a n y , a r r a n g e d a lp h a b e tic a lly , a r e in d ic a te d b y th e fig u r e s 2 to 5. F ig u r e s 6 to 9 are u sed (o r reserved ) to d e s ig n a te s p e c ia l c o lle c t io n a r r a n g e m e n t s . T h e la s t d i g i t s e r v e s t w o p u r p o s e s : fir s t, it fa c ilit a t e s c r e d it fr o m of sym bol (A m e r ic a n have th e s e p a r a tio n o f ite m s th a t a r e r e c e iv a b le f o r im m e d ia te a n d a c c u r a te ly . M e a n in g The 1 to 9 is lo c a te d . B a n k s in F e d e r a l R e s e r v e to D is tr ic ts bank tio n th a t a p p e a r s n e a r th e u p p e r r ig h t-h a n d c o r n e r o f ea c h h a lf th o s e th a t a r e r e c e iv a b le fo r d e fe r r e d c r e d it, a n d s e c o n d , it f a c i l it a t e s t h e s o r t i n g o f i t e m s b y s t a t e s in of B an kers th e fr a c tio n A s s o c ia tio n , is or th e A B A id e n tific a tio n n u m ber) of a n y c a s e w h e r e th a t is c o n v e n ie n t . I f t h e d r a w e e b a n k is lo c a te d in a F e d e r a l R e s e r v e h e a d o ffic e o r b r a n c h c it y , t h e b a n k u p o n w h i c h t h e c h e c k is d r a w n . T h e l o w e r h a lf e x c e p t t h e o u t ly i n g s e c t io n s o f s o m e c itie s a s in L o s A n is t h e c h e c k r o u t i n g s y m b o l . T h e f ir s t d i g i t g e le s , th e fig u r e ( o r fir s t t w o , 0 is u sed . S in c e c r e d it is im m e d ia t e , if 46 FEDERAL RESERVE B A N K OF S A N F R A N C ISCO r e c e iv e d ch ecks d ig it in tim e d raw n a ls o to on be in d ic a te s fe r r e d . A c le a r e d banks on lo c a te d w h e th e r th e in cu rren t th o se c r e d it is day, fo r th e la s t p r o b a b ly or de June 1951 o p e r a tio n s . c itie s , im m e d ia te has la s t d ig it o th e r th a n 0 s ig n ifie s d e fe r r e d c r e d it now been reached u se th e T h e ra n g e fr o m and m ore r o u tin g t h e e x p r e s s i o n is u s e d lit e r a ll y — m ay a g e p o in ts . I n be d e fe r r e d . of That th e is s t ill v a r io u s d e te r m in e d F ed eral by R eserve th e tim e banks and M a in e , 9 3 banks th e ir w ill s o r tin g a n d in t h is c a s e a m o u n te d to 3 3 p e r c e n t p e r c e n t o f th e c h e c k s s u r v e y e d c a r r ie d th e s y m b o l, a n d in C a lif o r n ia t h e fig u r e w a s o n ly b ran ch es. 6 0 p e rc e n t. T h e s y s te m w a s v i r t u a lly a s p o p u la r in N e w Y o r k a s in M a i n e , w i t h 9 1 p e r c e n t o f t h e c h e c k s c a r r y i n g E x a m p le s are as fo llo w s : th e s y m b o l. T h e o th e r T w e lf t h 90-1 3 2 ABA transit number th e sy ste m m ore e x te n s iv e ly p e rce n ta g e s R °ut*n£ symbol 11-24 ABA transit number 1 2 1 0 are 90 W a s h in g to n 12 22 m ore in M a in e to C a lifo r n ia — b u t d o e s n o t in d ic a te th e n u m b e r o f d a y s fo r w h ic h c r e d it s c h e d u le s and sym bol fo r and Id ah o, 8 2 D is tr ic t sta te s h a v e u s e d th a n O regon , fo r has 89 C a lifo r n ia . fo r U ta h , N evad a, and 88 75 T h e fo r fo r A r i z o n a . T h e s e s ta te s p u lle d th e D is t r i c t t o ta l u p t o 7 2 p e r c e n t, o r to e le v e n th p la c e a m o n g th e t w e lv e F e d e r a l R e sy m b o l se r v e D is tr ic ts . In th e n a te s r o u tin g th e sym bol T w e lfth in t h e fir s t e x a m p l e , F ederal R eserve d e s ig “ 12” D is tr ic t; A th ir d sid e th e d ig it “ 2 ” d e s ig n a te s th e L o s A n g e le s B r a n c h o f th e F e d eral R e s e r v e Bank of San F r a n c i s c o ; a n d th e la s t d ig it b a n k th a t h a n d le s m a n y c h e c k s d r a w n o n b a n k s o u t its ow n sta te g re a t deal fro m s y m b o l. The F ederal R eserve D is tr ic t g a in s a c le r k s sort th e see th e at a zon e era l R e s e r v e b a n k to w h ic h th e c h e c k m a y b e fo r w a r d e d e x a m p le , th e fo r c o lle c t io n a n d th e a m o u n t f o r w h ic h it m u s t b e lis te d . fir st tw o T w e lfth Los d ig its of F ederal th e In th e r o u tin g R eserve d e s ig n a te s th e H e a d of San C a lifo r n ia in th e L o s A n g e le s . second sym bol D is tr ic t; th e A n g e le s d e s ig n a te th ir d th e d ig it O ffic e o f th e F e d e r a l R e s e r v e B a n k F r a n c is c o , a n d th e la s t d ig it “ 0 ” in d ic a te s im m e d ia te a v a ila b ility , o r th a t th e c h e c k w a s d r a w n o n a b a n k in San The a c c o m p a n y in g p o s itio n “ 1” above o f th e th e a m o u n t. th e th e correct r ig h t-h a n d corn er, proper p o s itio n , even if I t is h o p e d t h a t t h e u s e o f t h e c h e c k r o u t i n g s y m b o l w i ll W id e sp re a d use 1, is illu s tr a te s upper ce n te r o f th e ch e ck . F r a n c is c o . June T h is check th e Fed th e n a m e o f th e b a n k a p p e a r s e ls e w h e r e th a n a t th e to p c o n tin u e to g r o w O n s a m p le s y m b o l, in sym bol can b o th d raw n on in c o r r e c t ly -p la c e d ch ecks g la n c e a b a n k in th e w ho “ 2 ” in d ic a te s d e fe r r e d c r e d it a n d a ls o th a t th e c h e c k w a s o th e r th a n fr o m or th e w id e s p r e a d u se o f th e c h e c k ro u tin g a s its a d v a n t a g e s b e c o m e m o r e a p p a r e n t. B a n k s th a t h a v e n o t a lr e a d y d o n e s o , a n d in d iv id u a ls 1 9 5 1 , th e c h e c k ro u tin g sy m b o l ap p eared a n d c o r p o r a tio n s w h o h a v e th e ir o w n c h e c k s p r in te d , a r e in t h e a p p r o v e d p o s it io n o n a p p r o x i m a t e l y 8 2 p e r c e n t o f b e in g a ll t h e c h e c k s F e d e r a l R e s e r v e b a n k s, a n d o th e r b a n k s to u se th e c o r in c lu d e d in th e la te s t s e m i-a n n u a l s u r v e y urged by th e A m e r ic a n r e c tly -p la c e d in g B an kers c u r r e n t s u p p ly o f c h e c k s a r e e x h a u s te d . U s e o f th e c h e c k in r o u tin g s y m b o l n o t o n ly m a y r e d u c e o u ts t a n d in g tim e o n A s s o c ia tio n fir st a d o p te d and th e b y th e A m e r ic a n F ederal R eserve S y ste m June on th e ir checks A s s o c ia tio n , th e c o n d u c te d b y th e F e d e r a l R e s e r v e b a n k s. W h e n th e r o u t sym bol w as sym bol B an kers as soon as 1 9 4 5 , th e fig u r e o f 8 0 p e r c e n t w a s m o s t c o m m o n ly c ite d c h e c k s in p r o c e s s o f c o lle c t io n , b u t a ls o as o p e r a t in g c o s ts f o r a ll c o n c e r n e d b y in c r e a s in g th e s p e e d th e w o u ld m in im u m becom e n ecessary b e fo r e a d v a n ta g e o u s to s o r tin g b an k s. by T h is sym bol m in im u m B la n k T a n d a c c u ra c y o f s o r tin g . ru st C o m pa n y N o _____ 98-4 5 1251 BLANK, WASHINGTON,._________________ 19____ p A Y TO TH E O R D E R O F ___________________________________________________ • $ ----------------------- ______________________________________________________________________ _____________ D o l l a r s Specim en te n d s to th e ir reduce June 1951 46A M O N T H L Y R E V IE W BUSINESS INDEXES— TW ELFTH DISTRICT1 (1935-39 average — 100) In d u str ia l p ro d u ctio n (p h y sica l v o lu m e )2 Y e ar an d m o n th P e tro le u m 3 Lum ber Crude R e fin e d C e m e n t L ead3 W heat C o p p e r3 flo u r3 CarT o ta l D e p ’t lo a d in gs store m f ’g sales E le c t r ic em ploy* ( n u m ber)2 (value)' power m e n t4 W ate rb orn e foreign R etail trade 3*8 food prices3 1 E x p o r t s Im p o r ts » 100 112 96 104 118 155 230 306 295 229 181 187 191 183 196 135 91 70 81 88 103 109 96 104 110 128 137 133 141 134 136 142 134 126 131 112 92 66 74 86 99 106 101 109 119 139 171 203 223 247 305 330 353 331 353 132.0 10 4 .0 8 6 .8 9 3 .2 9 9 .6 1 00.3 10 4 .5 9 9 .0 9 6 .9 9 7 .6 1 07.9 130.9 1 43.4 142.1 146.3 1 67.4 2 0 0 .3 216.1 2 0 9 .6 2 0 9 .8 124 90 72 86 88 86 112 108 107 86 118 76 69 74 103 110 114 82 90 58 85 57 55 59 55 78 93 115 130 330 325 341 331 341 340 339 352 353 345 184 186 194 195 198 205 207 210 208 208 125 135 141 148 125 135 140 131 131 152 322 333 336 342 454 374 368 343 345 376 2 0 4 .0 20 5 .3 2 0 5 .2 2 0 5 .9 2 0 9 .4 2 1 2 .5 2 1 1 .0 2 1 4 .1 2 1 6 .0 2 2 2 .9 65 57 61 66 59 48 58 62 68 70 106 108 107 150 110 141 134 148 167 167 361 361 380 378 212 218 219 221 130 124 133 152 420 375 335 346 2 3 0 .8 2 3 0 .2 2 3 4 .5 2 3 3 .0 75 98 109 146 159 153 1929. 1931 1933 1934 1935 1936 1937. 1938 1939 1940 1941 1942 1943 1944 1945 1946 1947 1948 1949 1950 148 77 62 67 83 106 113 88 110 120 142 141 137 136 109 130 147 159 151 171 129 83 76 77 92 94 105 110 99 98 102 110 125 137 144 139 147 149 147 144 127 90 81 81 91 98 105 103 103 103 110 116 135 151 160 148 159 162 167 168 110 74 54 70 68 117 112 92 114 124 164 194 160 128 131 165 193 211 202 227 171 104 75 79 89 100 118 96 97 112 113 118 104 93 81 73 98 109 105 113 160 75 26 36 57 98 135 88 122 144 163 188 192 171 137 109 163 154 142 176 106 101 88 . 95 94 96 99 96 107 103 103 104 115 119 132 128 133 116 104 94 83 82 73 79 85 96 105 102 112 122 136 167 214 231 219 219 256 284 303 333 1950 M arch _____ April______ M a y _______ June_______ Ju ly---------August____ September. October___ November. December _ 160 174 207 181 184 186 176 187 167 168 138 138 140 142 142 145 148 153 154 154 151 159 162 170 170 178 177 177 179 173 201 217 240 244 245 251 248 252 229 229 125 124 132 118 87 96 104 106 111 118 168 172 180 172 167 177 175 176 195 195 91 87 95 105 113 112 105 99 97 120 1951 January— February._ M arch____ April_______ 187 171 168 1S9 154 155 155 155 176 187 179 180 239 255 246r 247 101 110 106r 108 181 178 180 194 134 121 111 110 BANKING AND CREDIT STATISTICS— TWELFTH DISTRICT (amounts in millions of dollars) C o n d itio n ite m s of all m e m b e r b a n k s7 Y ear an d m o n th Loans U.S. Dem and and deposits G o v ’t d is c o u n t s s e c u r it ie s a d ju ste d 8 T o ta l tim e deposits 2,239 1,898 1,486 1,469 1,537 1,682 1,871 1,869 1,967 2,130 2,451 2,170 2,106 2,254 2,663 4,068 5,358 6,032 5,925 7,093 495 547 720 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 6,381 1,234 984 951 1,201 1,389 1,791 1,740 1,781 1,983 2,390 2,893 4,356 5,99S 6,950 8,203 8,821 8,922 8,655 8,536 9,254 1,790 1,727 1,609 1,875 2,064 2,101 2,187 2,221 2,267 2,360 2,425 2,609 3,226 4,144 5,211 5,797 6,006 6,087 6,255 6,251 1950 April M ay June July August September October November December 5,914 6,005 6,034 6,162 6,418 6,664 6,810 6,963 7,093 6,896 6,932 6,905 6,810 6,699 6,495 6,452 6,319 6,381 8,307 8,354 8,289 8,458 8,627 8,754 8,871 9,018 9,254 6,282 6,275 6,315 6,250 6,210 6,213 6,239 6,194 6,251 1951 Jamiary February March April May 7,152 7,184 7,293 7,367 7,422 6,071 5,811 5,734 5,696 5,685 9,190 8,834 8,819 8,828 8,834 6,337 6,352 6,338 6,332 6,357 1929 1931 1933 1934 1935 1936 1937 1938 1939 1940 1941 1942 1943 1944 1945 1946 1947 1948 1949 1950 Bank rates on short-term bu sin e ss lo a n s9 M e m b e r b a n k reserves an d related ite m s 1 0 Reserve bank cre d it1 1 _ + — + + _ + + + + + + + 3.20 3.35 + + + + 3.37 — 3.29 + 3.37 + + + + 3.48 — — — + 34 21 2 7 2 6 1 3 2 2 4 107 214 98 76 9 302 17 13 39 C o in an d C o m m e rc ia l T re a su ry cu rre n cy in o p e ra tio n s1 o p e ra tio n s1 c ir c u la tio n 1 2 2 1 0 154 110 198 163 227 90 240 192 148 596 - 1 ,9 8 0 -3 ,7 5 1 -3 ,5 3 4 - 3 ,7 4 3 - 1 ,6 0 7 510 + 472 930 -1 ,1 4 1 + + + + + + + + + + +1 +2 +4 +4 +4 +1 + 23 154 150 257 219 454 157 276 245 420 ,000 ,826 ,486 ,483 ,682 ,329 698 482 + 378 + 1 ,198 28 14 10 3 2 62 56 24 48 + - 126 199 23 149 102 45 93 21 80 + + + + + + + + + 106 170 32 169 125 72 150 42 131 30 32 3 45 13 - 59 38 124 200 162 + + + + + 168 6 130 226 150 _ + + + + + + + + + + + + — __ — + + + + + + + _ + + + Reserves B a n k debits index 31 citie s3 1 »8 (1935-39= 100)2 6 48 18 4 14 38 3 20 31 96 227 643 708 789 545 326 206 209 65 14 175 147 185 242 287 479 549 565 584 754 930 1,232 1,462 1,706 2,033 2,094 2,202 2,420 1,924 2,026 146 97 63 72 87 102 111 98 102 110 134 165 211 237 260 298 326 355 350 395 4 8 5 0 18 9 10 3 4 1,821 1,802 1,836 1,858 1,863 1,893 1,930 1,983 2,026 361 371 389 382 421 417 428 425 464 68 21 8 26 36 2,284 2,206 2,186 2,180 2,149 455 444 461 431 449 1 Adjusted for seasonal variation, except where indicated. Except for department store statistics, 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; wheat flour, U.S. Bureau of the Census; electric power, Federal Power Commission; manufacturing employment, U .S. Bureau of Labor Statistics and cooperating state agencies; retail food prices, U .S. Bureau of Labor Statistics; carloadings, various railroads and railroad associations; and foreign trade, U .S. Bureau of the Census. 2 Daily average. 3 N ot adjusted for seasonal variation. 4 Excludes fish, fruit, and vegetable canning. 5 Los Angeles, San Francisco, and Seattle indexes combined. « Commercial cargo only, in physical volume, for Los Angeles, San Francisco, San Diego, Oregon, and Washington customs districts; starting with July 1950, “ special category” exports are excluded because of security reasons. ^ 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. 8 Demand deposits, excluding interbank and U.S. G ov’t deposits, less cash items in process of col lection. M onthly data partly estimated. 9 Average rates on loans made in five major cities during the first 15 days of the month. End of year and end of month figures. 1 Changes from end of previous month or year. 1 12 Minus 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. 1 Debits to total deposit accounts, excluding inter 3 bank deposits. r— revised.
@FedFRASER