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MONTHLY REVIEW
OF
B U S IN E S S
C O N D IT IO N S
ISAAC B. NEWTON, Chairman of the Board and Federal Reserve Agent
Federal Reserve Bank of San Francisco
Vol. X
San Francisco, California, June 21, 1926
No. 6
S U M M A R Y O F N A T I O N A L C O N D IT IO N S
Production in basic industries and factory
employment declined further in May, while
wholesale prices advanced slightly for the first
time in seven months. The volume of trade at
wholesale and at retail increased partly as the
result of more favorable weather conditions.
Production. Activity in most lines of indus
try was less in May than in April. The re
duction was reflected in a decreased volume of
output as well as in a decline in the number of
factory workers and in total wage payments.
The largest declines occurred in the textile,
leather and shoe, and iron and steel industries.
Production of automobiles continued large in
May. In the lumber, cement, brick, and glass
industries activity was maintained and there
were seasonal increases in the output of certain
food products. The volume of building con
tracts awarded declined further in May but con
tinued larger than in May of last year. Figures
for the first three weeks of June indicate fur
ther decreases and the volume of contracts
awarded was smaller in that period than in the
corresponding weeks of 1925. Recent declines
in contracts as compared with last year have
been particularly large in middle western and
southeastern districts. Reports by the Depart
ment of Agriculture indicate that the composite
condition of crops on June 1st was 8 per cent
below the average condition on that date for the
past ten years, and somewhat lower than the
average condition a year ago. On the basis of
PER C E N T
PER C E N T
150
200i----------
a
*
^
100
¿ ¿ s
150
%p w r o l i LS
L \
1 / ^V S '
. / #
E: m p l o y m e n ”T
100
50
50
1922
1923
1924
1925
1926
F A C T O R Y E M P LO YM E N T A N D PAYROLLS
Federal Reserve Board's indexes of factory employment and payrolls
(1919 = 100). Latest figures, M ay, employment, 94.8;
payrolls, 108.8.
1922
1923
1924
1925
1926
W H O L E S A L E PR ICES
Index of U . S. Bureau of Labor Statistics (1913=100, base adopted
by Bureau). Latest figure, M ay, 151.7.
T h o s e d e s ir in g t h i s r e v ie w s e n t th e m r e g u la r ly w ill r e c e iv e i t w ith o u t c h a r g e u p o n a p p lic a tio n .
42
the June 1st condition, the estimated yield of
winter wheat was 543,000,000 bushels as com
pared with an estimate of 549,000,000 bushels
made a month earlier and a final yield of 398,000,000 bushels in 1925.
Trade. W ith more favorable weather in May
than in the preceding month the volume of
wholesale and retail trade increased and was
larger than in May of last year. Department
store sales exceeded those of earlier months of
this year and total sales for the first five
months were larger than for the corresponding
period of any preceding year. Merchandise
stocks carried by wholesale firms were slightly
smaller at the end of May than a month earlier.
BILLIONS OF DOLLARS
June, prices of grains, livestock, silk, and nonferrous metals advanced, while those of sugar,
cotton, cotton goods, and pig iron declined.
Bank Credit. Growth in loans on securities
and in commercial loans carried total loans and
investments of reporting member banks in lead
ing cities in the middle of June to a new high
point above the total reached at the close of
last year. The large reduction in the volume of
loans on securities by New York City banks
since the beginning of the year has been more
than offset in the total of loans and investments
of all reporting banks by increases in commer
cial loans and in investment of banks both in
New York City and outside.
PEP CENT
M E M B E R B A N K C R E D IT
M O N E Y RATES
Monthly averages of weekly figures for banks in 101 leading
cities. Latest figures are averages for first three weekly report
dates in June.
Weekly rates in New Y ork money market: commercial paper
rate on 4- to 6*months paper and acceptance rate on
90-day paper.
Stocks of groceries, hardware, and drugs were
larger than a year ago, but those of meats,
drygoods, and shoes were smaller. Stocks at
department stores declined more than usual in
May and were only slightly larger at the end
of the month than a year ago. Railroad freight
shipments increased and in May and in the first
two weeks of June were above those of the same
weeks of previous years. Shipments of miscel
laneous commodities were especially large.
Prices. The general level of wholesale com
modity prices, according to the index of the
Bureau of Labor Statistics, rose slightly in May
for the first time since last August. Price ad
vances were shown both for agricultural and
non-agricultural commodities. Among the prin
cipal advances were those in the prices of gaso
lene, livestock and meat, while prices of grains
and cotton declined. In the first three weeks of
June, 1926
M O N T H L Y R EVIEW OF BUSINESS CONDITIONS
A t the reserve banks changes in the volume
of credit outstanding during the month ending
June 23rd reflected chiefly the financial opera
tions of the United States Treasury around the
middle of June. The temporary abundance of
funds caused by the redemption of maturing
United States obligations on June 15th caused a
sharp decline in borrowings of member banks,
particularly in New York City. As checks in
payment of income taxes were cleared and col
lected, however, borrowings at the reserve
banks rose to their previous level. Money rates
in general showed little change during the
month.
Rates on call and time loans were slightly
lower around the middle of June, but in the
third week were higher than in the latter part
of May. Rates on acceptances and on commer
cial paper remained practically unchanged.
43
FEDERAL RESERVE AG EN T AT SAN FRANCISCO
June, 1926
T W E L F T H F E D E R A L R E S E R V E D IS T R IC T C O N D IT IO N S
May,
1926
Statistical Summary-
Apr.,
1926
May, 1926 if
compared with
Apr.,
May,
1926
1925
Apr.,
1925
May,
1925
Bank Debits— 21 cities* ............................................... $2,835,348 $3,025,345
$2,582,108 $2,668,049
Bank Debits— Index N um bersf— 20 cities...........
153
150
139Q
134Q
Building Permits— 20 cities........................................ $28,830,537 $35,058,156$38,841,828 $41,593,882
Retail Sales— 32 stores— Index N u m b ersf...........
147
155
145
152
Savings Deposits— 69 b an k s*§.................................... $1,188,512 $1,180,395
$1,099,624^ $1,094,3940
Lumber Production— 4 associations— board feet*
806,991
812,316
698,816
680,690
Petroleum Production^— California— barrels . . .
.......
603,059
607,107
598,655
Flour Production— 16 companies— barrels .........
325,887
371,473
231,456
279,372
Reporting Member Bank Loans and Discounts||* $1,199,493 $1,203,697
$1,099,927 $1,102,303
$1,540,496 $1,549,405
Reporting Member Bank Deposits||*.................... $1,626,063 $1,622,774
Federal Reserve Bank Discounts^*.........................
$37,278
$44,228
$39,288
$29,771
Federal Reserve Bank Reserve Ratiofl..................
74.5
72.1
74.4
78.3
9.8
10.1
-25.8
1.4
8.1
15.5
— 6.3
2.0
— 17.8
— 5.2
0.7
— 0.7
40.8
9.1
5.6
- 5.1
0.1
— 12.3
— 0.3
0.2
— 15.7
3.3
*In thousands. fA d ju sted for seasonal variations— 1919 monthly a v e ra g e = 1 0 0 . JDaily average production. §N o t comparable with
figures published in previous Reviews. ||June 9 and M ay 12, 1926, and Tune 10 and M ay 13, 1925. Ifjune 16 and M ay 19, 1926,
and June 17 and M ay 20, 1925. ¿P e rc e n ta g e increase or decrease (— ). ORevised.
Agricultural Activities
A t mid-June, agricultural activities of the
district were further advanced than is usual at
this season of the year, a result of favorable
weather conditions during previous months.
More recently some areas of deficient rainfall
have been reported, particularly in the grain
growing regions of the Pacific Northwest, but
crop conditions generally have continued above
normal. The early season and satisfactory crop
conditions in this district are in contrast to the
situation prevailing in the country as a whole,
unfavorable spring weather having generally
retarded both the sowing and growth of crops.
Smaller than average abandonment of winter
wheat has been reported this year, but hot and
dry weather in certain parts of the Pacific
Northwest has recently caused some reduction
in estimates of production.
W IN T E R
DECID U O US A N D CITRUS FRUITS A N D NUTS
(California)
t----------- Condition ---------- ^ Production
(Per Cent of Normal)
(inThousands
of Tons)
June 1,
1926
June 1,
1925
W H E A T
---------Condition
10-Year
(P e rC e n t
A ve rage
...................
...................
..................
...................
..................
...................
...................
...................
...................
...................
(In Thousands of Bushels)
Condition
June 1,
1926
78
89
15,301
10,305
118
18,797
2,848
20,916
68,167
543,300
89
87
82
77.8
(—
H a r v e s t e d — ■n
1925
11,457
10,962
104
7,700
3,045
9,300
42,464
398,486
* Arizona and N evada not included in totals.
Five-Year
Average
1921-1925
11,386
9,607
15,913
2,594
26,441
65,941
549,418
*8-year average.
Average
1915-1924
56
50
63
49
82
88
80
73
81
68
92
Production ---------- >
In d ic a t e d b y
of Normal) (PerCent
June 1,
of Normal)
1926 1925
California . . . . . 88
88
90
Idaho ............... , . 91
94 101
Nevada ..........
90
O regon ........... .. 89
U tah ................ . . 9 8
95
W ashington . . . 83
80
Tw elfth District*
U nited States .. 76.5 66.5
Production estimates of deciduous fruits in
this district indicate a yield in excess of that
obtained in 1925, which approximated the aver
age of recent years. The apricot season in Cali
fornia had reached a peak by mid-June, and
large shipments of peaches and plums had
already gone forward. Condition of citrus
fruits has been well maintained as seasonal
picking has progressed. Valencia orange ship
ments have been at high levels despite market
competition offered by early maturing decidu
ous fruits. Large supplies of lemons, both from
California and Italy, are in prospect as the
summer season of peak demand approaches.
79
621
70
94
87
90
75
92
58
58
69
78
68
74
7.5
6,016 t
140
11
6,000 §
20,800 §
390
160
51
140
30.5
*
90
93
85
77
78
76
87
fCondition on M ay 1, 1926.
1925
$Bushels.
§B oxes.
(A ) Agricultural Marketing Activity—
Monthly
t-------- Exports--------- n t------- Carlot Shipments-------- .
Livestock Receipts ColdStorage Holdings^
Wheat*
Barley*
Deciat Eight Markets in 12th District
12th District
Portland and
San
duous Orangesf Lemonsf
Cattle
Butter Eggs
Puget Sound Francisco Fruitst Calif.
Calif.
and(1000
(1000
(1000 bu.) (1000 bu.) (cars)
(cars)
(cars)
Calves
Hogs
Sheep
lbs.)
M ay, 1926 ........................................................
April, 1926 .....................................................
M ay— 5-year a v e r a g e ..................................
(1919-1923)
3,087
587
2,109
518
509
300
1,273
5,520
68
5,8340
246
5,219
2,361
1,1210
1,605
Cumulative
f----------------------- Crop Y e a r ------------------------ s
T o M ay 31, 1926............................................ 16,320
11,435
1,341
31,576
7,080
(16 .3 )
(2 5 .0 )
(61.9)
(47.2)
T o M ay 31, 192 5........................................... 16,482
7,837
443 26,849
6,163
(24.6)
(34.4)
(55.9)
(53.6)
10,697
250 28,217
5,647
Five-year average to M ay 3 1 ................. 23,712
(1919-1923)
(2 0 .5 )
(26.5)
(59.6)
(49.9)
91,839
93,805
81,396||
140,112
167,801
148,802||
411,697
252,384
393,836|[
3,582
1,650
2,75111
,-------------Calendar Y ear--------------v
509,831
892,329
1,155,000
403,898
441,342||
1,096,173
901,917||
1,236,760
1,165,452||
Figures in parentheses indicate percentage of new crop only. *Season begins July 1st. fSeason begins November 1st.
excluding apples. Season begins April 1st. §At end of month. |||1921-1925. Tf1922-1926. ORevised.
421
272
45511
$ California,
cases)
44
Some reduction in acreage of field crops as
compared with a year ago is indicated by re
ports concerning crops already in the ground.
The downward trend of recent years in acreage
devoted to sugar beets apparently has con
tinued. Low prices paid for the beets during
recent seasons and high prices paid for alter
native crops, such as potatoes in 1925, have
been chiefly responsible for the decrease in
sugar beet acreage. The 1926 plantings of cot
ton in the district are reported to be approxi
mately 10 per cent less than in 1925 when
333,000 acres were planted to the crop. Cotton
planting had been practically completed by the
middle of June and a good early growth has
been noted. Average plantings of beans and rice
have been reported in California. In Idaho,
planting of beans has been limited in some
areas by a shortage of irrigation water.
Ranges throughout the district have been in
excellent condition, but are now drying rapidly.
Livestock, both cattle and sheep, show the
favorable effects of the mild winter and spring
and have returned to the summer range in
better than average condition. Persistence of
recent hot, dry weather may affect adversely
the late lambing in Idaho and Utah. As shear
ing of the clip has progressed there has been a
slight broadening in demand for wool. Prices
are a little higher than a month ago, now rang
ing from 28 cents to 30 cents a pound.
Industrial Activity
Industrial activity and employment in the
Twelfth Federal Reserve District continued,
during May, at approximately the levels of one
month ago and one year ago. Seasonal de
clines in some forms of manufacturing activity
were offset by seasonal increases in outdoor
construction. The usual surplus of common
labor which accumulates in the district during
( B ) B u ild in g P e r m it s M ay, 1926
Value
N o.
M ay. 1925
N o.
Value
Berkeley ....................
Boise ...........................
Fresno .......................
L o n g B e a c h ............
L o s A n g e l e s ............ .
Oakland ....................
O gden ........................
Pasadena ...................
Phoenix ...................
Portland ....................
Reno ...........................
Sacramento ............
Salt Lake C it y -----San D iego ...............
San Francisco
San Jose ....................
Seattle .......................
Spokane ...................
Stockton ....................
T a c o m a ......................
259
64
82
399
2,960
849
35
238
98
964
23
197
116
700
827
131
898
208
75
238
$
910,406
36,027
108,553
417,945
10,702,844
2,408,002
109,700
777,406
232,583
3,002,925
77,375
625,871
455,120
1,847,964
2,634,875
344,875
2,895,610
323,441
168,770
750,245
291
84
105
384
3,652
1,118
38
227
88
1,266
44
227
180
608
905
95
1,021
279
117
327
................. ,
9,361
$28,830,537
11,056
District
June, 1926
M O N T H L Y REVIEW OF b u s i n e s s c o n d i t i o n s
$
603,748
79,020
437,686
1,059,273
16,602,502
3,178,756
127,550
1,192,020
484,688
3,611,195
216,212
902,391
647,265
1,051,967
4,047,811
509,520
2,580,825
445,749
311,810
751,840
$38,841,828
the winter is gradually being absorbed by sea
sonal expansion in agricultural operations and
private and public works.
Building statistics for May confirm the evi
dence offered by April figures of a slight dimi
nution of building activity. Value of building
permits issued in 20 principal cities of the dis
trict declined 17.8 per cent during May, 1926, as
compared with April, 1926, a decrease greater
than that which usually occurs at this time of
the year. Compared with May, 1925, the May,
1926, figures showed a decrease of 25.8 per cent,
eighteen of 20 cities reporting smaller totals
than a year ago. A building trades strike in the
San Francisco Bay region is interfering with
building construction in that area. Cumulative
figures of value of permits issued during the
first five months of 1926 were smaller in amount
than figures for the first five months of 1925 in
16 of the 20 cities.
B U I L D I N G P E R M IT S IN 20 C IT IE S
Per Cent Increase or Decrease (— )
Months in 1926 compared
with same Months in
t— ...............
1925
■ '■—%
Monthly
Year-to-date
N o.
Value
N o.
Value
M ay . . . .
April . . .
M arch . .
February.
January. .
— 15.3%
— 12.7%
— 7.8%
— 11.2%
— 13.8%
— 25.8%
— 15.7%
— 9.8%
— 18.1%
— 7.3%
Month in 1926
compared with
preceding
Month
N o.
Value
— 12.0%
— 11.2%
— 10.7%
— 12.6%
— 15.5% — 11.3% — 17.8%
— 12.8% — 13.5% — 3.4%
— 11.6%
37.1%
35.7%
— 12.8% — 4.4% — 8.3%
...........................
3.5% — 21.3%
The United States Bureau of Labor Statis
tics’ index number of wholesale building ma
terials’ prices declined slightly from 173 in
April to 172 in May (1913 prices=100). In
May, 1925, the index stood at 174. The Aberthaw index of the total cost (labor and ma
terials) of constructing a standard concrete
(C) Employment—
t------ —California......
% r ..
N o. of
N o.
Employees —*
N o.
M ay,
of
A p r.,
of
Industries
Firms 1926
1926
Firms
A ll Industries........... 738 157,635 155,496
107
(1 .4 )
Stone, Clay and
Glass Products.
46
7.680
7,653
6
(0 .4 )
Lum ber and W o o d
27,421
M anufactures . . 115 29,021
47
(5 .8 )
2,586
2,577
5
(0 .4 )
Clothing, M illinery,
and Laundering. 61
7,768
7,783
8
(— 0 .2 )
Food, Beverages
32
29,485
and Tobacco . . 156 28,983
(— 1.7)
W ater, Ligh t and
9,107
8,937
5
(1 .9 )
69,461
Other Industries*. 325 70,285
(1 .2 )
2,179
9
2,205
M iscellaneous . . . .
12
(1 .2 )
N o . of
Employees —*
A p r.,
M ay,
1926
1926
20,111
20,181
( -0 .3 )
249
(— 5.0)
262
16,541
(— 1.1)
1,036
(— 7.7)
16,719
518
(— 5.1)
546
1,194
(2 0 .2 )
993
573
(6 .5 )
538
1,123
*Includes the following industries: m etals, m achinery and con
veyances ; leather and rubber g o o d s ; chemicals, oils and
p a in ts; printing and paper goods.
Figures in parentheses represent percentage changes from April.
June, 1926
factory building contiuued during May at 199
(1914 costs=100). A year ago it stood at 194.
The present volume of business in the lumber
industry is well above that of last year, but
prices are lower. Production of lumber during
May, 1926, was slightly smaller than during
April, 1926, but was 15.5 per cent larger than
during May, 1925. Volume of shipments and of
new orders booked was 9.8 per cent and 12.6
per cent, respectively, greater than in May,
1925, but both shipments and sales were less
than production.
LU M B ER A C T IV IT Y *
Production . . .
Shipments ____
Orders ...............
Unfilled Orders
N o. of Mills
R e p o r t i n g ...
45
FEDERAL RESERVE AG EN T AT SAN FRANCISCO
M ay,
1926
(board feet)
806,991
759,109
764,011
481,227
183
Apr.,
M ay,
/— First Five M onths—v
1926 1925
1926
1925
(board feet) (board feet) (board feet) (board feet)
812,316 698,816 3,416,055
3,100,159
788,887 691,408 3,512,488 3,189,734
751,192 678,792 3,557,590 3,159,424
553,076 422,745
183
177
183t
181t
*A s reported by four associations, 000 omitted except in case of
number of mills reporting. fA verage of first five months.
So u rce: National Lum ber Manufacturers Association.
Mineral production in the district is also
active but, as in the lumber industry, prices are
reported to be relatively low. Figures of na
tional production of non-ferrous metals, a con
siderable proportion of which is produced in the
Twelfth Federal Reserve District, follow :
N O N -F E R R O U S M E T A L S —National Production
M ay, 1926
Copper (short tons) (mine
production) ...........................
Zinc (short tons) ( s l a b ) . . .
Silver (o z .) (commercial
bars) ......................................... ,
A pr., 1926
the flour producing capacity of district mills
was being utilized during May, 1926.
A pr., 1926
371,473
M ay, 1925
231,456
Five-Year
Average
M ay,
1921-1925
315,287
375,133
1,942,454
411,850
920,309
458,858
1,642,181
F L O U R M I L L IN G *
Output ( b b ls .) ____
Stocksf
Flour ( b b l s . ) . . .
W heat ( b u .) ____
May, 1926
325,887
362,434
1,700,880
*A s reported by 16 companies.
low ing month.
t A s of the first day of the fol-
General Business and Trade
During May, general business and trade con
tinued at levels approximating those of March
and April, and was only slightly less active
than in February, the peak month of the year.
Increases in volume of business as compared
with a year ago were reported from most trade
centers.
Figures of bank debits are probably the best
single available index of trade volume. Most
trade payments are made by check, and checks
are debited by banks to the accounts on which
they are drawn. These bank debits are reported
to the Federal Reserve Bank by banks in prin
cipal cities of the Twelfth Federal Reserve Dis
trict, the figures providing a record of the cur
rent volume of trade payments. The amount of
these bank debits in 20 principal cities of the
district was smaller in May than in April, 1926,
INDEX NUMBERS
M ay, 1925
73,651
53,703
73,006
53,334
69,757
49,738
4,960,000
4,954,000
5,423,000
During May, 1926, average daily production
of petroleum in California continued the de
cline which has been in progress for the past
9 months, and, at 602,166 barrels, was 0.8 per
cent less than during May, 1925.
P E T R O L E U M — California
M ay,
April,
M ay,
Sept.,
Indicated
Average
Stored
— New W ells —>
Daily
Average
Daily <
Stocks at
Number ProducDaily
Consumption
End of
Opened
tion
Production (Shipments)
Month
(barrels)
(barrels)
(barrels)
(barrels)
1 9 2 6 .. . 602,166
575,243
125,519,693
58
15,738
1 9 2 6 .. . 603,059
873,618$
124,685,080
95
24,267
1 9 2 5 .. . 607,107
500,7910
110,769,8110
78
52,440
1 9 2 3 * .. 858,750
t
t
93
139,960
*Peak of production. fCom parable figures not available. $Includes fire losses during April equivalent to 273,829 barrels
daily. ORevised.
Sou rce: Am erican Petroleum Institute.
Flour milling activity, as reported by 16 prin
cipal milling companies of the district, declined
seasonally during May, approximating the fiveyear (1921-1925) average of production for that
month. Stocks of wheat held by millers at the
end of May were 85 per cent larger than one
year ago, but millers’ stocks of wheat were
smaller on May 31, 1925, than at any time since
January, 1920. Approximately 50 per cent of
B A N K D E B I T S - T W E L F T H D IS T R I C T
Index for 20 principal cities, Phoenix, Arizona, not included,(daily
averages, 1919 average = 1 0 0 ). Latest figures, M ay, with
______
adjustment, 153; without adjustment, 146.
•Based upon average month to month increase during the years
1919 to 1925 inclusive.
but, when account is taken of the usual seasonal
variation between the two months, the figures
reflect a slight quickening of trade. A s com
pared with May, 1925, an increase of 10 per cent
was recorded.
B A N K D E B IT S —Twelfth District
Index for 20 Principal Cities*
May,
April, March,
1926
1926
1926
W ith ou t Seasonal Ad justm ent. . .
146
150
159
W ith Seasonal A d ju stm en t...........
153
150
150
*Daily averages, 1919 average— 100.
M ay,
1925
133
139
June, 1926
M O N T H L Y REVIEW OF BUSINESS CONDITIONS
46
During May, 1926, sales of 68 reporting
retail stores of the district were larger by 1.7
per cent than in May, 1925. Forty stores re
ported increased sales and 28 reported de
creased sales for the year period. By cities, in
creased sales were reported from Los Angeles,
Oakland and Spokane, and decreased sales from
Salt Lake City, San Francisco and Seattle. A c
cording to this bank’s retail trade index based
on sales of 32 department stores in principal
cities of the district, there was an increase in
sales during May as compared with April, 1926.
Value of sales of 165 wholesale firms in 11
lines of business was 1.5 per cent greater during
May, 1926, than during May, 1925. Seven of the
11 reporting lines for which segregated data
are available showed increases over the year
period. Wholesale prices in May averaged
slightly higher than in the preceding month,
but were lower than a year ago.
W H O L E SA L E T R A D E
Percentage increase or decrease (—)
f—
in Value of Sales-----------s
May, 1926 May, 1926 A p r.,1926
compared compared compared
No. of
with
with
with
Firms
May, 1925 Apr., 1926 Apr., 1925
Agricultural Im plem ents.
Autom obile Supplies
Autom obile T i r e s * ............
D ry G o o d s .............................
Electrical S u p p lie s ............
Hardware
.............................
Stationery
.............................
15
13
18
7
15
9
16
21
17
10
24
14.8
6.5
0.9
1.6
— 4.6
15.8
11.9
1.6
3.4
10.7
— 2.7
—
—
—
—
—
—
—
1.8
4.2
18.9
10.2
5.3
8.3
14.3
2.1
2.3
2.7
8.3
22.3
1.0
14.2
1.8
1.1
1.5
— 1.5
5.5
5.4
1.0
— 9.6
—
*These figures are probably influenced by the discontinuance by
certain of the larger companies of “ spring dating” sales, or
the practice of advancing credit on sales made in autumn
months until M arch, April, and M ay of the following year.
On May 31,1926, savings deposits in 69 banks
in seven principal cities of the district were 8.1
per cent larger than on May 31, 1925, and 0.7
per cent larger than on April 30, 1926.
SAVIN G S DEPOSITS
Number
of
Banks
D EPAR T M EN T STORE S A L E S -T W E L F T H D ISTRICT
Index of 32 Stores in 7 cities (1919 monthly average=100). Latest
figures, May, with adjustment, 147; without
adjustment, 152.
If the usual seasonal variation be eliminated,
however, and relative activity rather than
volume of trade be considered, there was a
decline in May as compared with April. (Index
numbers of department store sales are given
below.) Volume of stocks on retailers’ shelves,
at the close of May, while three per cent smaller
than on April 30, 1926, was approximately four
per cent larger than on May 31, 1925. The in
dicated rate of stock turnover in May, 1926, 2.98
times per year, was lower than the indicated
rate of stock turnover in May, 1925 (3.06 times
per year).
D EPAR T M EN T STORE SALES—Index Numbers
Los Angeles . .
O aklandî -----Portland ..........
Salt Lake City
San Francisco.
Seattle ..............
Spokane ..........
T otal
............
13
7
7
8
14
14
6
1926. . 214
M ay,
1926. . 222
April,
March, 1926. . 247
1926. . 180
Feb.,
1926. . 210
Jan.,
1925. . 203
M ay,
152
144
148
112
124
143
San
Fran
cisco
Salt
Lake
City
147
134
146
108
113
148
121
106
105
82
86
124
133
139
147
142
128
135
105
113
115
114
104
108
Dis
trict
98
102
95
73
75
102
90
95
93
76
70
85
152
150
160
119
130
149
100
108
102
113
99
104
90
98
110
110
97
86
147
155
164
156
148
145
Seattle
163
149
158
149
145
154
May 31,19261
compared with
May Apr.
31,
30,
1925 1926
$416,044
$373,309 11.2 —
99,571
95,201
4.9
54,460
52,3960
4.5
32,342
29,822
8.7
479,715
457,5520
6.5
79,173
71,969 10.8
19,090 19,375 — 1.7 — 0.3
8.1
0.2
0.3
0.5
0.2
1.6
0.8
0.7
(D) B a n k D e b i t s *—
M ay,
M ay,
1926
.$
L o n g Beach
L o s Angeles
..
. ..
..........
.
Sacramento . . .
Salt Lake C ity.
San D iego .........
San Francisco . .
.
With Seasonal Adjustment
M ay,
1926. . 233
April,
1926. . 237
March, 1926. . 255
1926. . 223
F eb.,
Jan.,
1926. . 221
1925. . 221
M ay,
$415,224
99,829
54,731
32,410
487,509
79,767
19,042
May
31.
1925*
*000 omitted. ^Percentage increase or decrease (— ) . Jlncludes
one bank in Berkeley which was form erly a branch of an
Oakland bank. ORevised.
Pasadena
Spo
kane
Apr.
30.
1926*
69 $1,188,512 $1,180,395 $1,099,6240
(1919 Monthly Average=100)
Without Seasonal Adjustment
Los
Oak
Angeles land
May
31,
1926*
D istrict
19,595
11,844
32,516
48,193
794,586
158,101
14,952
37,642
26,211
182,313
9,004
28,724
64,948
63,368
978,494
23,691
200,714
57,921
26,863
44,112
11,556
.......... .$2,835,348
*000 omitted.
t— Five Months — %
1925
$
18,882
10,083
26,920
45,562
758,206
148,076
20,396
34,725
22,660
153,874
8,841
38,003
64,834
52,405
848,498
21,464
184,127
47,528
22,178
43,242
11,604
$2,582,108
1926
$
98,204
62,389
176,081
267,843
4,361,485
842,144
103,596
196,279
129,500
862,886
42,592
161,488
350,094
329,339
5,434,011
122,876
1,037,492
274,387
134,627
229,362
60,993
$15,277,668
1925
$
92,126
53,894
141,177
241,731
3,932,210
681,872
115,523
184,133
117,877
765,977
39,300
189,942
338,245
262,899
4,566,996
116,405
950,223
244,343
123,056
214,434
57,080
$13,429,443
E
T
a r n in g s
w e l f t h
F
E
a n d
e d e r a l
x p e n s e s
R
M
o f
D
e s e r v e
B
e m b e r
is t r ic t
a n k s
a n d
U
in
n it e d
t h e
St
a t e s
by
ISAAC B. N EW TO N , Chairman of the Board and Federal Reserve Agent
Federal Reserve Bank of San Francisco
Supplement
San Francisco, California, June 21,1926
Vol. X — No. 6
Figures of costs and earnings of all member banks in the Twelfth Federal Reserve District dur
ing the years 1925 and 1924 are presented herewith. These figures were compiled by the Federal
Reserve Board, as were those for the United States, which are given for comparative purposes.
A N A L Y S I S O F M E M B E R B A N K C O S T S A N D E A R N I N G S F O R Y E A R S E N D I N G D E C E M B E R 31, 1925 A N D 1924
(Statem ent of amounts per $100 of earning assets in even dollars and cents results in some instances in slight discrepancies between
component figures and the related totals.)
e---------Tw elfth
Federal R eserv e D i s t r i c t ----------\
4925----------------- > ,----------------1924---------------- Amount per
Amount per
Amount
$100 of earn
Amount $100 of earn
ing assets
(000 omitted) ing assets (000 omitted)
(--------------------------U n it e d S t a t e s --------------------------- \
,-------------- 1925 -------------- \ ,--------------- 1924
Amount per
Amount per
Amount
Amount $100 of earn$100 of earn
(000 omitted)
(000 omitted) ing assets
ing assets
$ 1 5 3 ,9 0 7
$ 6 .0 1
$ 1 4 3 ,5 7 9
$ 6 .1 4
$ 1 , 6 1 5 ,5 9 5
$ 5 .4 0
$ 1 ,5 1 4 ,5 0 0
$ 5 .4 8
............................
2 3 ,4 5 3
.9 2
2 1 ,1 3 4
.91
3 0 2 ,4 9 9
1 .0 1
2 7 1 ,9 7 1
.9 8
Gross E a r n i n g s .....................
$ 1 7 7 ,3 6 0
$ 6 .9 3
$ 1 6 4 ,7 1 3
$ 7 .0 5
$ 1 ,9 1 8 ,0 9 4
$ 6 .4 1
$ 1 ,7 8 6 ,4 7 1
$ 6 .4 6
Salaries and W a g e s ................
$ 1 .2 8
Interest Received .....................
O th er Incom e
$ 4 1 ,6 2 4
$ 1 .6 3
$ 4 0 ,1 4 4
$ 1 .7 1
$ 3 7 2 ,7 4 1
$ 1 .2 5
$ 3 5 5 ,0 1 8
Interest on Borrow ed M o n e y
2 ,0 3 5
.0 8
2 ,3 1 2
.1 0
2 5 ,9 5 4
.0 9
2 4 ,7 4 6
.0 9
Interest on D e p o s its .................
6 3 ,0 6 9
2 .4 6
5 5 ,1 7 5
2 .3 6
6 4 3 ,1 5 8
2 .1 5
5 9 4 ,4 3 2
2 .1 5
T a x es
...............................................
8 ,4 2 1
.3 3
8 ,0 3 9
.3 4
1 0 2 ,4 1 1
.3 4
9 7 ,3 4 1
.3 5
........................
2 2 ,7 0 9
.8 9
2 1 ,7 8 2
.9 3
2 2 3 ,0 5 3
.7 4
2 0 8 ,9 8 7
.7 6
T o ta l E x p e n s e s .....................
$ 1 3 7 ,8 5 8
$ 5 .3 9
$ 1 2 7 ,4 5 2
$ 5 .4 5
$ 1 ,3 6 7 ,3 1 7
$ 4 .5 7
$ 1 ,2 8 0 ,5 2 4
$ 4 .6 3
N e t E a r n i n g s ..........................
$ 3 9 ,5 0 2
$ 1 .5 4
$ 3 7 ,2 6 1
$ 1 .6 0
$ 5 5 0 ,7 7 7
$ 1 .8 4
$ 5 0 5 ,9 4 7
$ 1 .8 3
L osse s on L o a n s ........................
L osses on S ecu rities................
$ 1 1 ,3 8 4
* $ 0 .6 1
$ 1 1 ,1 5 9
* $ 0 .6 5
$ 1 2 8 ,7 7 4
* $ 0 .6 1
$ 1 3 3 ,0 7 9
O ther E xp enses
O ther
L o sse s
2 ,7 7 0
t
.39
3 ,2 1 3
t
.5 3
3 5 ,1 2 7
t
.3 9
3 3 ,1 9 6
* $ 0 .6 8
t
-41
............................
3 ,6 6 6
..........................
$ 1 7 ,8 2 0
$ 0 .7 0
$ 1 7 ,9 9 7
$ 0 .7 7
$ 1 9 3 ,0 9 9
$ 0 .6 5
$ 1 9 7 ,3 4 3
$ 0 .7 1
N e t Losses^: ............................
$ 1 2 ,2 7 3
$ 0 .4 8
$ 1 3 ,4 9 9
$ 0 .5 8
$ 1 3 1 ,2 9 3
$ 0 .4 4
$ 1 4 4 ,6 0 4
$ 0 .5 2
N e t A dd ition to P ro fits.........
$ 2 7 ,2 2 9
$ 1 .0 6
$ 2 3 ,7 6 2
$ 1 .0 2
$ 4 1 9 ,4 8 4
$ 1 .4 0
$ 3 6 1 ,3 4 3
$ 1 .3 1
D ividends D eclared ................
2 2 ,1 8 2
T o ta l L osse s
3 ,6 2 5
1 9 ,6 9 6
2 9 ,1 9 8
2 7 2 ,6 8 6
3 1 ,0 6 8
2 5 8 ,0 4 4
^Am ount per $100 of loans.
fA m ou n t per $100 of security holdings.
JTotal losses charged off less recoveries on assets previously charged off.
Gross earnings of member banks of the Dis
trict were larger by $12,647,000, or 7.68 per cent,
in 1925 than in 1924, but income per one hun
dred dollars of earning assets declined, indicat
ing that a lower level of interest rates prevailed
in the later year. Interest received during 1925
amounted to $6.01 per one hundred dollars of
earning assets, as compared with $6.14 in 1924,
and these figures approximate the average rates
at which bank funds were utilized in the two
years.
Expenses of the banks increased at a slightly
more rapid rate than did earnings during 1925,
the chief increase being in payment of interest
E a r n i n g s a n d E x p e n s e s o f M e m b e r B a n k s in t h e
T w e l f t h F e d e r a l R e s e r v e D i s t r i c t a n d U n it e d S t a t e s
0Concluded )
upon deposits including a large proportion of
time deposits. As a result of the proportion
ately greater increase in total expenses than in
gross earnings, net earnings were less per one
hundred dollars of earning assets in 1925 than
in 1924, the figures being $1.54 and $1.60 re
spectively. Net losses charged off in 1925 were
smaller in amount than in 1924, however, and
net profits of the banks increased both in total
amount and in amount per one hundred dollars
of earning assets.
Comparison between capital investment of
member banks in this district (as measured by
capital, surplus, and undivided profits) and
their earning assets, indicates that there were
$792 of funds in use per one hundred dollars of
capital in 1925 compared with $748 per one hun
dred dollars of capital in 1924. This increase in
volume of earning assets per unit of invested
capital, combined with an increase in the mar
gin of profits per one hundred dollars of earning
assets, noted above, resulted in a substantial
increase in rate of net return on invested capital.
During 1925 the return on capital investment so
measured was 8.42 per cent compared with 7.61
per cent in 1924.
P R O F IT S O F M E M B E R B A N K S IN R E L A T I O N T O E A R N I N G A S S E T S A N D IN V E S T E D C A P I T A L F O R Y E A R S E N D I N G
D E C E M B E R 31, 1925 A N D 1924
Twelfth Federal Reserve District—^
1924
1925
f----------- United States
1925
1924
Capital, Surplus, and Undivided Profits* (000 omitted) . . . .
$ 323,415
$ 312,225
$ 4,699,751
$ 4,491,663
Loans* (000 om itted)............................................................................
Investments* (000 omitted) ............................................................
$1,853,903
706,023
$1,729,713
607,027
$21,022,170
8,894,355
$19,498,525
8,163,266
$2,559,926
$2,336,740
$29,916,525
$27,661,791
$7.92
1.06
8.42
$7.48
1.02
7.61
$6.37
1.40
8.93
$6.16
1.31
8.04
Earning Assets* (000 omitted)
.................................................
Earning Assets per $1.00 of Capital, Surplus, and Undivided
Profits ....................................................................................................
Profit per $100 of Earning A sse ts...................................................
Profit per $100 of Capital, Surplus, and Undivided Profitsf
* Averages of amounts on call dates during the year.
•{•Obtained b y dividing net profits by average amount of invested ca p ita l; equivalent to the product o f the tw o p receding ratios.
June, 1926
47
FEDERAL RESERVE AG EN T AT SAN FRANCISCO
Prices
The United States Bureau of Labor Statis
tics’ index of wholesale prices stood at 151.7
(1913 prices=100) for May, 1926, compared
with 151.1 in April, 1926, and 155.2 in May,
1925, the low point for that year. The slight
advance in the index during May, and more
recent advances in available weekly indexes
follow a period of declining prices which began
last autumn.
The Department of Agriculture’s farm price
index declined from 140 to 139 during May,
while the Bureau of Labor Statistics’ whole
sale price index of non-agricultural commodi
ties advanced slightly, causing the ratio be
tween these two index numbers (an indication
of the purchasing power of farm products) to
decline from 87.8 to 86.8. One year ago in May
the ratio was 91.
Livestock prices as reflected in Chicago
markets advanced during May. W eekly aver
age prices for beef, hogs, and lambs, were 3.2
per cent, 8.6 per cent and 8.8 per cent higher,
respectively, on June 4, 1926, than on May 7,
1926. Prices for hogs and lambs were 15.4 per
cent and 23.1 per cent above the prices of June
5, 1925, but beef prices were 7.7 per cent below
prices of a year ago. The average price paid for
hogs, $13.90 per 100 pounds, is the highest re
ported since 1920. Lamb prices at $16.00 per
100 pounds, reached the average of the week of
January 2, 1926.
The contract price for September wheat at
Chicago, ranged from $1.32% to $1.34 per
bushel, for the week ending June 4, 1926, com
pared with a range of from $1.33% to $1.35 for
the week ending May 7, 1926. A year ago the
range was from $1.63^4 to $1.67^2. The general
trend of wheat prices during the present year
has been downward.
Cotton prices varied little during May. Spot
quotations for middling uplands cotton at New
Orleans, for the week ending June 4, 1926,
ranged from 17.96 to 18.04 cents per pound, an
increase of 0.2 per cent since May 7, 1926, but
a decrease of 25.3 per cent from the quotation
on June 5, 1925, when the range was from 23.60
to 24.60 cents per pound. An average of 98 wool
quotations on the Boston market at 66.90 cents
per pound on June 4, 1926, was 0.87 cents below
the price on May 7, 1926, and 6.58 cents below
the quotation on June 5, 1925.
W eekly average prices of copper, lead, and
zinc declined during May. The May, 1926,
prices for lead and zinc were 2.9 per cent and
1.9 per cent lower respectively than in May,
1925. Copper prices advanced 1.9 per cent over
the year period. The average price of silver in
creased during May, but was slightly below
that of a year ago. Prices of the metals, as a
group, continue well below the general level of
prices of all commodities, a price maladjust
ment which has persisted since the war.
A national index of lumber prices, published
by “The Lumber Manufacturer and Dealer,”
declined from 31.52 on May 7, 1926, to 31.46
on June 4, 1926. The index has fluctuated about
this level during most of 1926, ranging between
30.26 (January 2,1926) and 31.52 (M ay 7, 1926)
the high and low points of the year. A year ago
the index stood at 30.52.
Banking and Credit Situation
Commercial demand for credit in the Twelfth
Federal Reserve District declined slightly dur
ing May and the first half of June. Adequate
supplies of funds were available at moderate
rates of interest.
Total loans and investments of 66 reporting
member banks in nine principal cities of the
district reached a peak on May 26th and then
declined slightly. The net movement for four
weeks ending June 9, 1926, was a decline of six
million dollars, 0.4 per cent, the chief decrease
being in the item, loans on securities. Present
( E ) C o m m o d it y P r ic e s —
Commodity
W holesale Prices (U . S. Bureau o f L a b or) 1913— 100.....................................
Purchasing P ow er of Farm P rodu cts (U . S. Departm ent o f A gricu ltu re)*
Cattle (N ative B eef) . W eekly average price at C h ica g o ...................... ............
H o g s ...............................W eekly average price at C h ica g o....................... ............
L a m b s.............................W eekly average price at C h ica g o ....................................
W h ea t.............................C hicago contract price for Septem ber w heat............
B a rley ............................ Shipping barley f. o. b. San F ra n cis co .........................
C o tto n .............................M iddlin g U plands— W eek ly range o f spot quota
tions at N ew O rlea n s....................................... ............
W o o l ...............................A verage of 98 quotations at B o sto n .............................
S ugar...............................Beet granulated f. o. b. San F ra n cisco........................
P ru n es............................ Size 40/50 in 25-lb. b oxes f. o. b. C aliforn ia ...........
C op p er............................ E lectroly tic— M onthly average at N ew Y o r k , .........
L e a d .................................M on th ly average at N ew Y o r k ........................ ............
S ilv er...............................M on th ly average at N ew Y o r k ......................................
Z in c ................................. M on th ly average at St. L o u is ........................................
L um ber (S o ftw o o d ). .W eekly In d ex U nited S ta te sf..........................................
Unit
100 lbs.
100 lbs.
100 lbs.
bu.
cental
lb.
lb.
lb.
lb.
lb.
lb.
07..
lb.
June 4,1926
151.7
86.8
$9.60
13.90
16.00
1 . 3 2 ^ -1 .3 4
N om inal
17.96-18.040
66.900
5.60(i
.0 8 ^ - . 0 9
13.5990
7.7510
65.0750
6.8210
31.46
One Month Ago
151.1
87.8
$9.30
12.80
14.70
1 .3 3 ^ -1 .3 5
1.20-1.25
17.89-18.020
67.770
5.600
m y 2-.0 9 %
13.7060
7.9710
64.4090
7.0010
31.52
One Year Ago
155
91
$10.40
12.05
13.000
1 .6 3 H ~ 1 .6 7 y2
1 .75-1.8 0
23 .6 0 -2 4 .6 0 0
73.480
5.700
.0 8 } 4 -.0 8 %
13.3470
7.9850
67.5800
6.9510
30.52
*Ratio of farm prices (August, 1909-July, 1914=100) to wholesale prices of non-agricultural commodities (1910-1914=:100).
tA s published by “ The Lumber Manufacturer and Dealer.” QRevised.
June, 1926
M O N T H L Y R EVIEW OF BUSINESS CONDITIONS
48
volume of loans is considerably above that re
ported one year ago. Investments of these
banks have changed little in amount during
recent weeks, continuing larger in volume than
in corresponding weeks of 1925. Net demand
deposits changed but little in May and on June
9th the total of such deposits at reporting memMILLIONS OF D O L LA R S
increased by 2 per cent during the four weeks,
but remained smaller in volume than one year
ago.
F E D E R A L R ESE R VE B A N K O F SA N F R A N C IS C O
(In millions of dollars, percentage changes in parentheses.)
C on
dition r
June 16,
One Month
One Year
A go
1926
A go
Total Bills and Securities.. 107
+ 5 ( 4.8)
— 7 ( 5.8)
B ills D is c o u n t e d ................. ..
37
— 7 (1 5 .7 )
— 2 ( 5.1)
U nited States Securities..,.
45
— 5 (1 0 .6 )
+ 3 ( 7.6)
Bills B ought ..........................
25
+ 6 (28 .4 )
+ 4 (1 9 .1 )
Total Reserves ....................
269
+ 14 ( 5.3)
+ 3 ( 1.0)
T otal D e p o s i t s ...................... .
170
+ 2 ( 1.2)
+ 10 ( 6.2)
Federal Reserve N ote
190
Circulation ........................ ,
+ 5 ( 2.4)
— 7 ( 3.5)
MILLIONS OF DOLLARS
300
ZOO
100
M E M B E R B A N K C R E D I T — T W E L F T H D IS T R IC T
Figures for 66 member banks in leading cities, as of last Wednesday
of each month. Latest figures, M ay 26.
0
1922
1923
1924
1925
1926
R E S E R V E B A N K C R E D I T - T W E L F T H D IS T R I C T
ber banks was 7 58 million dollars compared
with 743 million dollars on April 28th. The
upward movement of time deposits continued.
R E P O R T IN G M E M B E R B A N K S * — Twelfth District
(In millions of dollars, percentage changes in parentheses.)
cCondition
June 9,
1926
Total Loans ........................... 1,199
Commercial Loans ............
907
293
Loans on Securities ..........
Investm ents ...........................
474
Total Loans and Invest
ments .................................... , 1,674
758
N et D em and D eposits. . . .
849
Tim e D eposits ......................
Borrow ings from Federal
21
Reserve B a n k ...................
t------------ Changes
One Month
Ago
— 4 ( 0.3)
+ 1 ( 0.1)
— 5 ( 1.8)
— 2 ( 0.4)
from-------------\
One Year
Ago
+ 100 ( 9.1)
+ 47 ( 5.4)
+ 53 (22.1)
+ 22 ( 4.8)
— 6 ( 0.4)
— 4 ( 0.6)
+ 11 ( 1.4)
+ 121 ( 7.8)
—
1 ( 0.1)
+ 78 (10.1)
— 14 (39.3)
+
*Total resources of reporting banks are approximately
cent of total resources of all banks, and 71 per cent
resources of all m em ber banks in Tw elfth Federal
D istrict. R eporting banks embrace m em ber banks
A n geles, San Francisco, Oakland, Portland, Tacom a,
Spokane, O gden , and Salt Lake City.
1 ( 7.3)
50 per
of total
Reserve
in Los
Seattle,
During the four weeks ending June 16, 1926,
there was a decline of seven million dollars or
15.7 per cent in volume of discounts at the Fed
eral Reserve Bank of San Francisco. Security
holdings changed little, and total earning assets
declined by approximately the same amount as
did discounts. Federal Reserve note circulation
Figures for Federal Reserve Bank of San Francisco, as of last W ednes
day of each month. Latest figures. M ay 26.
Interest rates on prime commercial paper in
leading money centers of the district ranged
from 5 to 6 per cent at mid-June, compared
with a range of 5 to 7 per cent in June, 1925.
The discount rate at the Federal Reserve Bank
continued at four per cent, the official rate
established on November 23, 1925.
On June 7, 1926, the Treasury Department
issued the following statement:
“ The Treasury will make no offering of Gov
ernment obligations for sale June 15th, 1926.
This departure from the usual procedure on
the quarterly tax payment dates has been made
possible on account of the increase in income
tax and other receipts over earlier expectations
and the fact that the aggregate public debt
maturities due June 15th are somewhat less
than usual. The amount of taxes to be received
in June together with the balances now on hand
is expected to be sufficient to meet the Treas
ury’s cash requirements until September, when
further financing will be necessary.”
This is the first time since the war that the
Treasury Department has not had to seek funds
in the market on a quarterly tax payment date.
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