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ID AH O
ALASKA
FEDERAL RESERVE
T
TWELFTH
BANK
FEDERAL
OF S A N
RESERVE
FRANCISCO
DISTRICT
SHINGTON
http://fraser.stlouisfed.org/
CALIFORNIA
Federal Reserve Bank of St. Louis
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UTAH
'Y Y h x h c k . 1 9 6 2
A R IZO N A
NEVADA
AN N U A L REVIEW
1961 . . . A N N U A L R E V I E W
communities in the Twelfth Dis
trict celebrated in late February the new
year of 4660, the Year of the Tiger. The tiger
is an interesting symbol standing for a variety
of military virtues— such as dignity, stern
ness, courage, and fierceness; its parts may be
employed for medicinal purposes (its whisk
ers, we are assured, will cure toothaches);
and it scares away malignant spirits. Of more
relevance, the tiger also stands for wealth,
and the new year has been greeted as one
which will see a strong business situation.
The hesitation evident in the national statis
tics in January and, to some extent, in Febru
ary have suggested to some observers that the
year may turn out to be symbolized by a
pussycat rather than a tiger.
In this, our annual review of the District,
the data employed are naturally those of the
past. It is important to know where you are
before deciding where you are going. To help
pinpoint the economic situation in the Dis
trict, the course of our most recent recovery
and expansion is compared with the two prior
postwar business cycles in all cases where
data permit. This should give some clues as
to the character of the expansion currently
under way.
The low point in national economic activ
ity in the last recession occurred in February
1961, according to the National Bureau of
Economic Research. The last 10 months of
1961 were characterized by recovery and ex
pansion. In this article, the extent of recovery
in the Twelfth District in the 10-month period
from March through December 1961 is com
pared with that which occurred in the first 10
months of recovery in 1958-59 and 1954-55,
again using the National Bureau’s reference
troughs for national activity as the basis for
dating the start of recovery. Before examining
District developments in detail, it will be
helpful to review briefly the course of na
tional business activity last year.
h in e s e
C
Nationally, a swift recovery
from a mild recession
As 1961 began, the United States economy
was still in the grip of a recession. Almost 7
percent of the labor force was unemployed
and nearly one-fifth of manufacturing capac
ity idle. Although the business downturn was
proving to be relatively mild and was gener
ally expected to end by midyear (as it turned
out, it was the mildest of four postwar reces
sions, and it ended in the first quarter), there
was little expectation of a particularly bois
terous recovery. Perhaps the optimists were
still smarting from the high expectations
which had been held for 1960 and were still
awaiting fulfillment as that year ended. What
ever the reason, few observers were publicly
prepared for the type of expansion pattern
that emerged as 1961 unfolded.
Between the first and last quarters of 1961,
gross national product rose from an annual
rate of $501 billion to $542 billion. By mid
year industrial production had regained its
previous peak level, and by December had
risen 13 percent from its recession low. Re
flecting these gains, nearly half of the plant
capacity which was estimated as idle in Janu
ary was in use in December; unemployment
had fallen from 6.8 to 6.0 percent of the labor
force; and the number of major labor market
areas with a substantial labor surplus had de
clined from 101 in March to 60 in December.
Thus, the economy experienced in succes
sion its mildest recession and its swiftest re
covery in the postwar period. In outline, the
developments from mid-1960 through mid1961 were an example of the classic inven
tory cycle, in which reversals in inventory
policy, particularly with respect to steel, were
played out against a backdrop of relatively
slight changes in final demand. If the cycle
contained irregularities (and it is frequently
difficult to say what is irregular and what is
FEDERAL
RESERVE
BANK
C hart 1
NET RESERVES OF MEMBER BANKS
UNITED STATES
M illio n * of D o lla r*
Source: Board of Governors of the Federal Reserve System.
not, since the business cycle itself is a con
ceptual generalization covering a host of ir
regularities), they were that the sharp expan
sion in business was not particularly reflected
in unemployment rates or price indexes. If
it had not been for the declines in November
and D ecem ber, the unem ploym ent rate
would have been as high at the end of the
year as it had been in the preceding 10
months. Developments in prices were more
encouraging. During the first three quarters
of business expansion (through the end of
1961), virtually no signs of inflationary
pressures were evident. Indeed, the record
of price stability during 1961 was better than
it had been in the recession.
Monetary policy influenced by
outflow of short-term funds
This type of economic atmosphere created
no strong domestic wind against which mone
tary policy was required to lean in order to
forestall inflationary developments. The for
mulation and execution of monetary policy
were significantly influenced, however, by a
factor that was absent in prior postwar recov
eries, namely, a net incentive to invest United
States short-term funds abroad and an incli
OF
SAN
FRANCISCO
nation and ability to take advantage of it.
Following the introduction of nonresident
convertibility of currencies throughout West
ern Europe at the end of 1958, a fully inte
grated and active foreign exchange market
emerged which facilitated the international
flow of short-term funds. The official concern
over large outflows of short-term United States
capital which had begun in mid-1960 in re
sponse to higher interest rates abroad led to a
specific adaptation of monetary policy as one
method of discouraging the outflow.
The discount rate, which had been reduced
to 3 percent in August 1960, has since re
mained unchanged in order to help maintain
short-term interest rates, particularly those
on Treasury bills. The Treasury comple
mented this action by increasing the quantity
of Treasury bills outstanding, thereby tending
to depress their price and increase their mar
ket yield. In the second half of 1960, shortC hart 2
SHORT- A N D LONG-TERM INTEREST RATES
UNITED STATES
MONTHLY REVIEW
March 1962
thereby helping to maintain or bolster the
yields on short-term issues.
Changes in reserve requirements, the other
principal tool of monetary policy, were not
made during 1961. These were not needed
since, within the range of limitation posed by
the policy of maintaining or bolstering short
term rates, relative ease prevailed in the
money and capital markets throughout 1961
without inflationary developments. Free re
serves of member banks fluctuated around
the $500 million level during most of the
year. This contrasted with the reduction of
free reserves in the corresponding recovery
periods of the two prior cycles.
For the reasons indicated, monetary policy
contributed to the relative stability of interest
rates during 1961, which contrasted with the
larger amplitude of fluctuation in rates during
the 1958 cycle. Although short-term rates
rose a little as business expansion became
more pronounced toward the end of the year,
they did not rise much; long-term interest
rates changed relatively little during the year
despite a record volume of borrowing by
State and local governments and corporations
combined.
term rates in the United Kingdom, for ex
ample, generally exceeded those in the United
States by more than 1 percentage point after
allowance for the cost of covering the ex
change risk. Since mid-March 1961, however,
the net incentive to hold United Kingdom
Treasury bills has been much smaller and
sometimes negative.
Federal Reserve open market operations
were also adapted to help in maintaining
short-term rates while at the same time sup
plying reserves as an aid to recovery and ex
pansion. In two steps culminating in February
1961, the Federal Reserve System extended
its operations in the open market to United
States Government securities other than
Treasury bills, this action being taken “in
the light of conditions that have developed in
the domestic economy and in the United
States balance of payments with other coun
tries.” This new procedure permitted the
System to supply needed reserves to the mar
ket by p urchasing securities o th er than
short-term Treasury bills. Moreover, at times
long-term securities were purchased and
short-term issues were sold simultaneously,
THE HOW AND WHEREFORE OF THE CHARTS
The charts that ap p ea r in this article are
designed to compare the changes that have
occurred in various economic indicators for
the Tw elfth D istrict d u r in g the 1960-61
business cycle with those of prior postw ar
cycles. For this purpose, the dates for the
peaks and troughs of the reference cycles
for national economic activity, a s deter
mined by the N ational Bureau of Economic
Research, have provided the fram ework on
which the charts are drawn. In most cases,
the data for Twelfth District economic indi
cators have been converted to an index
with the trough month for each business
cycle being calculated a s equa! to 100; in
a few cases, absolute am ounts have been
used instead. Since there were 10 months
of recovery in 1961, data for only the first
10 months of recovery for prior business
cycles are show n on the charts. The data
have been carried back far enough from
the troughs so that they include the peak
of each cycle. These peaks are indicated by
the letter “ P” on each series.
It bears repeating that the peaks and
troughs show n are not necessarily those
for any of the individual indicators plotted
but rather are those of the reference cycles
for national business activity. The dates of
those peaks and troughs are a s follows:
Cycle
Peak
1953-54
1957-58
1960-61
July 1953
July 1957
M a y 1960
Trough
A u gu st 1954
April 1958
February 1961
FEDERAL
RESERVE B A N K
OF S A N
FRANCISCO
RECOVERY IN TWELFTH DISTRICT BUSINESS ACTIVITY
LESS RAPID THAN IN PRIOR CYCLES
Economic expansion following a recession
has characteristically been more vigorous in
the Twelfth District than in the nation, but
during the first few months of recovery in 1961
the rate of economic expansion in the District
lagged behind that of the nation. In the sec
ond half of the year, the District’s rate of
recovery compared more favorably with the
national performance. The District’s rate of
expansion during the last 10 months of 1961
was significantly less, however, than in the
corresponding periods of the two prior busi
ness cycles. This was most evident in the em
ployment data, which provide the most com
prehensive available measure of over-all
economic activity for the District.
Growth in District nonfarm
employment concentrated
in second half of 1961
Although nonfarm employment in the
Twelfth District (excluding Alaska and Ha
waii)1 reached a record high of 7,169,200
workers during 1961, the employment pic
ture was dominated by the effects of the
1960-61 business cycle. Unlike the national
experience, in which the peak occurred in
May 1960, nonfarm employment in the Dis
trict declined from March through July of
that year (the rise in April was caused pri
marily by the addition of 19,400 temporary
census workers). Following an increase in
August, it changed little during the rest of
1960 and began to turn up in January 1961,
two months earlier than in the nation. This
pattern accounted for the increase of 8,600
workers in the District from May 1960 to
1Data for Alaska and Hawaii are not included in the totals men
tioned in the text because seasonally adjusted figures, which are
used frequently in the discussion, are not available for those
two states. In 1961, nonfarm employment averaged 55,700
persons in Alaska and 187,200 in Hawaii, making a Twelfth
District total of 7,412,100. Average employment in Alaska in
1961 was 2 percent below the 1960 level, largely because of a
decline in contract construction activity, while Hawaii had a
2 percent increase with gains occurring in all industry divi
sions except manufacturing which had a small decline.
February 1961; however, this gain occurred
only in the service-producing in d u stries
(trade, finance, and services) and in govern
ment. Employment in the commodity-producing industries (manufacturing, mining,
and construction) and the related transpor
tation and public utilities industry declined
by 77,300 workers during the downturn, but
this loss was only one-fourth as great as in
the 1958 recession period, pointing up the
mildness of this recession.
In the 10 months after the February turn
ing point, nonfarm employment in the District
expanded by over 2.5 percent. Gains of 3.2
percent occurred in the commodity-produc
ing industries, 2.3 percent in the service-pro
ducing industries, and 3.4 percent in govern
ment employment, particularly in State and
local units.
District manufacturing employment in the
months of expansion grew rapidly after April,
although less than one-half of the recession
loss had been regained by July. By the end of
1961, the total loss of 55,900 workers that
occurred between May 1960 and February
C hart 3
NO N FARM EMPLOYMENT
TWELFTH DISTRICT
(Seasonally adjusted)
Trough* 100
March 1962
MONTHLY REVIEW
1961 had been recovered, and an additional
13,200 employees were at work. On an an
nual average basis, however, manufacturing
employment in 1961 in the Pacific Coast
States (where 92 percent of District manu
facturing employment is located) was 1.2
percent (20,400 workers) below the 1960
level; losses were widespread despite sharp
advances during the latter half of 1961.
In the durable goods sector, which has ac
counted for over 80 percent of the factory job
loss in the past three downturns, all but one
of the major industries suffered declines from
the 1960 levels. The one exception was the
electrical equipment and supplies industry in
which the average number of jobs increased
by more than 4.5 percent in 1961, reflecting
the effects of increased defense expenditures.
Employment in the transportation equipment
industry, the largest hard-goods employer on
the Coast, fell by 4 percent. The gain of
15,500 jobs from June to December in the
aircraft production centers did not offset the
previous losses earlier in the year. Aircraft
employment for the entire year, consequent
ly, was down by 4.2 percent from 1960, con
tinuing the sagging tendency in this type of
activity that has been prevalent since 1959.
West Coast shipbuilding and repair firms pro
vided a bright spot within the transportation
equipment industry; their average employ
ment rose by almost 11 percent in 1961 and
was at the highest level since 1953. However,
this industry employs less than one-tenth as
many workers as does the Pacific Coast air
craft industry. The industry with the largest
relative decline was lumber and wood prod
ucts, which had a job loss of over 14,000 in
1961 compared with 1960. This industry is
discussed further on page 57.
T able
1
C H A N G E S IN TWELFTH D SST R iC T EM PL O YM E NT SN
T H REE P O S T W A R B U S I N E S S CYC LE S
(Percentage changes from preceding peak to trough and
from trough to 10 months after)
1960-61
Number
employed1
December
1961
Nonagricultural
Manufacturing
Durable good}2
Nondurable goods2
Mining
Construction
Commodity-producing3
Transportation and public utilities
Trade
Finance, insurance, and real estate
Services
Service-producing
Government
Peak to
trough
1957-59
Trough
to 10
months
later
Peak to
trough
trough
Trough
to 10
months
later
Peak to
7,275.3
+ 0.1
+ 2.6
—
2.7
+
5.5
1,832.4
— 3.2
+ 3.9
—
8.8
+
8.3
— 1.7
— 5 .9 *
+ 10.0
1,150.9
— 4.5
+ 5.5
— 12.0
+ 10.0
— 8 .4*
+ 14.4
547.8
— 2.2
+ 2.2
—
2.9
+
3.8
-1 .9
+
2.8
68.8
— 3.0
+ 2.2
— 11.5
—
1.1
-3 .9
+
4.9
427.3
— 1.6
+ 0.6
—
2.4
+ 11.5
+ 0.2
+ 10.2
2,328.5
— 2.9
+ 3.2
—
7.7
+
— 4.6
+
9.8
523.3
— 2.3
— 0.1
—
6.0
- 0 . 5
-5 .3
+
3.7
1,589.6
0.0
+ 1.7
—
2.7
+
4.6
— 0.9
+
4.1
352.4
+ 2.7
+ 1.7
+
2.6
+
4.4
+ 2.7
+
5.8
1,089.3
+ 3.8
+ 3.4
+
1.9
+
6.4
+ 1.1
+
5.3
3,031.3
+ 2.1
+ 2.3
—
0.6
+
5.2
+ 0.1
+
4.7
1,392.2
+ 2.8
+ 3.4
+
2.S
+
3.5
+ 1.8
+
3.3
‘ In thousands, seasonally adjusted.
1 Pacific Coast States only.
8 Manufacturing, mining, and construction.
* Trade, finance, and services.
•Manufacturing employment was depressed in the 1954 trough by a strike in the lumber industry.
Source: State departments of employment.
1953-55
Trough
to 10
months
later
8.5
+
6.0
FEDERAL
RESERVE
BANK
C hart 4
MANUFACTURING EMPLOYMENT
TWELFTH DISTRICT
(Seasonally adjusted)
Troughs (00
10
5
Trough
S
Months Before
M onths A fto r
10
Note: Manufacturing employment was depressed in the 1954
trough by a strike in the lumber industry.
Source: State departments of employment.
Employment in nondurable goods indus
tries for the year also declined, but this loss
was only one-third as great as in durable
goods. Jobs in food and kindred products fell
by 1.4 percent, and in textiles and apparel,
by almost 2 percent. These declines were
partly offset by continued growth in the print
ing and publishing industries (up 2.8 percent
over 1960) and a moderate rise in paper and
allied products employment.
Although employment in mining rose by
2 percent between February and December,
this industry had been in a slump since the
1958 recession, and the 1961 annual average
employment was 0.7 percent below 1960.
The level of employment in contract con
struction fell by 7,000 workers during the
1960 downturn, and by December 1961 only
slightly more than one-third of the job loss
had been regained. Employment in transpor
tation not only failed to recover during the
expansion but continued to decline.
In the service-producing industries, the
finance, insurance, and real estate group and
the services group in the District showed the
same pattern of continued growth during the
OF
SAN
FRANCISCO
1961 business cycle as in the two previous
cycles. Employment in these two industry
groups expanded by 47,800 employees from
May 1960 to February 1961; 10 months after
the trough, another 40,700 jobs had been
added. Nevertheless, the rate of growth in
these industries was not so great in this recov
ery period as in 1958 and 1954. Employment
in wholesale and retail trade did not decline,
as it did in the prior recessions; but by
December the expansion in trade was far be
low the high levels reached in corresponding
periods— 1.6 percent by December compared
with 4.6 percent by February 1959, and 4.1
percent by June 1955.
For 1961 as a whole, nonagricultural em
ployment in the District averaged 95,300
more than in 1960, in contrast to the loss of
almost 300,000 in the nation. The number of
jobholders in government was 4.4 percent
greater than in 1960; in services, 4.5 percent;
and in finance, 2.8 percent. Trade employ
ment was up by only 14,100 in 1961, onequarter of the increase between 1959 and
1960. Manufacturing employment, which
averaged 1,792,300 in 1961, was 15,500 be
low the previous year’s level. Also, employ
ment in contract construction was below the
C hart 5
CIVILIAN EMPLOYMENT AN D UNEMPLOYMENT
PACIFIC COAST STATES
{Seasonally adjusted)
5
Trough
5
Month* S tfo r t
Month* A ftar
Source: State departments of employment.
March 1962
MONTHLY REVIEW
1960 level by 5,200 employees, transporta
tion by 10,000, and mining by 500.
The number of manufacturing production
workers in the District fell below the 1960
average by 2.5 percent for the year. However,
average hourly earnings were higher in 1961
and the workweek slightly longer; conse
quently, production workers took home an
average weekly paycheck of $106.79, up
$4.09 from 1960.
Persona! income rose more rapidly
than retail sales during 1961
Spurred by the recovery phase of the busi
ness cycle, total personal income and retail
sales in the Twelfth District, as in the nation,
reached record highs during 1961. Following
much the same pattern as occurred in the
1958-59 recovery period, personal income
grew at a faster rate than retail trade, possibly
indicating some uneasiness on the part of
consumers concerning future developments
in view of the continued high unemployment
rate.
The course of personal income during the
post World War II period has been one of
steady growth with but few moderate inter
ruptions. The pattern of growth in the 196061 cycle was no exception. In the District and
the nation, personal income continued to rise,
albeit moderately, for five months after the
May 1960 reference peak before declining
gradually to the trough month of February.
Coincident with the national economic up
turn, income rose through the end of the
year, with only one month’s interruption. Re
flecting larger relative gains in population and
employment in the District than in the nation,
personal income in the District had reached
a level 10 percent above the trough month by
the end of the year, while nationally it had
risen only 6 percent.
Comparisons over the course of earlier
business cycles are not available for District
personal income except for 1957-59. The re
covery pattern of the 1960-61 period was
C
hart
6
PERSONAL INCOME
TWELFTH DISTRICT
Trotigh'lOO
Source: Business Week,
roughly similar to that of 1958-59, with
personal income rising to about the same
level above the trough at the end of 10
months. In the recovery phases of both of
these cycles, it appears consumers were not
willing to increase their purchases at as fast a
rate as their incomes were growing. The dol
lar volume of sales by Group I retail stores1
in the Twelfth District during 1961 was some
what more than 1 percent above the 1960
level, while personal income rose about 5 per
cent. Similarly, sales had remained virtually
unchanged during the 1957-58 cycle, while
incomes rose.
District retail sales, on a seasonally unad
justed basis, generally conformed to the cycli
cal developments of 1960-61. Beginning in
May of 1960, there was a virtually uninter
rupted period of monthly declines from yearago levels, although there was substantial
variation in their intensity. After April 1961,
sales showed a consistent rise in the magni
tude of increase over the year-ago month.
Although by November total cumulative sales
for the year were slightly above those for the
1 Stores of firms operating 1-10 stores at the time of the 1958
Census of Business.
FEDERAL
RESERVE
BANK
comparable period in 1960, it was not until
the December figures were available that the
record sales year became a certainty.
This general pattern of behavior was shared
to a large extent by all categories of stores.
Sales of all types of soft goods stores showed
considerable improvement during the recov
ery phase in 1961, with the exception of food
lines. In the 1957-59 cycle, on the other hand,
food sales increased continuously over the
recession and recovery phases, reflecting, in
part, a rise in food prices which did not occur
to the same degree in 1960-61. Among the
durable goods stores, household goods and
building supplies never recovered in 1961
their year-ago levels, no doubt reflecting the
lack of buoyancy in housing demand. How
ever, sales of the automotive group (which
accounts for more than 75 percent of all hard
line sales) recovered sufficiently to bring total
hard goods store sales to a level 1 percent
above the total for 1960. Consumers ap
parently were cautious about committing
themselves to longer term debts during the
uncertainty of the early months of recovery;
consequently, this had a restraining effect on
sales of durable goods stores.
New car automobile registrations (unad
justed) may indicate more clearly the devel
opments in the hard goods area. Registrations
in the District turned up one month before
the February 1961 trough and continued to
rise for four months thereafter. The effects
of lowered inventories and preparation for
model changeovers resulted in a three-month
downturn in the late summer. Auto sales did
rebound sharply in October when the new
models were unveiled, and more moderate
increases occurred in November and Decem
ber. National experience was quite similar to
that of the District, though the magnitude of
fluctuations from the trough month were
much greater. District auto sales in 1961 were
comparable with those in the 1958 recovery
period, after correction for seasonal factors.
OF
SAN
FRANCISCO
However, in the 1954-55 recovery, automo
bile registrations reacted spectacularly to the
increased availability of credit and the easing
of terms which occurred in the early part of
1955.
Consumer credit typically lags
at start of an upturn
In the early months of the 1961 recovery,
consumers throughout the nation were repay
ing their outstanding credit at a faster rate
than they were borrowing. It was not until
April that consumer debt began to rise. This
reflected the softness in retail sales and the
desire of consumers to become more liquid as
evidenced by increased savings. However, as
sales, especially of Christmas items and of
automobiles, increased, consumer credit out
standing rose gradually. This type of pattern
generally prevailed at all types of consumer
lenders with the exception of banks. Loans
outstanding at sales finance companies, how
ever, dropped more in the earlier months than
at other lenders, and it was not until the end
of the year that loans regained their February
level. As a result, the volume of bank bor
rowing by sales finance companies was rela
tively small.
In the nation and Twelfth District1, the
experience of commercial banks was mar
kedly different from that of other consumer
lenders. This was primarily the result of the
purchase in early 1961 by quite a few banks
of a substantial amount of consumer paper
from a national retailer. As these loans were
paid off monthly, they were not regenerated
at banks; consequently, District banks hold
ings of “other consumer goods paper” de
clined gradually all year. Other types of bank
consumer loans increased, although automo
tive credit outstanding rose less than in the
other recovery periods. As a result of these
movements, outstanding consumer credit held
‘ The only consumer credit data regularly available for the Dis
trict are those for commercial banks.
March 1962
MONTHLY REVIEW
by banks in both the District and the nation
began to decline in February and continued
to drop in nearly every month of the 10month recovery period of 1961. This is in
sharp contrast with both 1954 and 1958.
During 1954-55, a sharp rise in bank out
standings was accounted for largely by auto
mobile financing, although personal loans
also rose; while during 1958-59, there were
moderate increases in automobile, other con
sumer paper, and repair and modernization
loans.
District construction up in 1961
District construction, as measured by con
tracts let, recovered in 1961 from its slump in
the preceding year. The dollar volume of all
construction contracts awarded was slightly
over $7.5 billion, about 9 percent greater than
the total for 1960. This was a more vigorous
recovery than materialized nationally, where
contracts rose only 2 percent above 1960.
Nevertheless, the performance of construc
tion in the recent economic recovery in the
District was less impressive compared with
earlier periods of recovery. The dollar volume
of construction contracts began to pick up in
the last half of 1960 while the District econ
omy was still declining and continued to in
crease through the first two months of 1961.
This increase was dominated by a sharp rise
in contracts awarded for heavy engineering
projects, particularly for new highway con
struction. Heavy engineering contracts began
to level off in early spring, however, and were
at relatively low levels throughout the rest of
the year. The slow up in this type of activity
was sufficient to push down the over-all level
of construction until late in the summer when
increasing levels of homebuilding along with
a moderate rise in nonresidential construc
tion helped push the total up again.
As a result of this pattern of events, con
struction made little positive contribution of
its own to recovery in the District economy,
despite the over-all increase in contracts
which occurred in the annual data. Contract
construction employment in the District, for
example, showed very little improvement
from the time when the national economy
started to turn up in March 1961. This was
in marked contrast with the corresponding
phases of the 1958-59 and 1954-55 recover
ies when employment increased 12 and 10
percent, respectively. In addition, the dollar
volume of construction contracts let, though
it increased in the latter part of the year, was
by the year end little improved from the level
prevailing in February. In the 1958-59 recov
ery, on the other hand, there was steady im
provement in contract awards over a corre
sponding 10-month period.
District residential construction, which
sputtered along initially, began to pick up in
late summer and accounted for most of the
increase in total construction which took
C hart 7
CONSTRUCTION CONTRACTS AWARDED
TWELFTH DISTRICT
[Seasonally adjusted)
Trough = 100
150
1 9 5 7 -5 8
1960-61
Residential
1960-6!
50
5
Trough
5
M onths B e fo re
M o n th * A fte r
Note: Data plotted are three-month moving averages.
Source: F. W. Dodge Corporation.
FEDERAL
RESERVE
BANK
C hart 8
CONTRACT CONSTRUCTION EMPLOYMENT
TWELFTH DISTRICT
(Seasonally adjusted)
Source: State departments of employment.
place in the latter part of the year. The con
struction of new residences held up as well
as it did in the early part of 1961 because of
a high level of multiple dwelling unit con
struction, which for the entire year was
about one-third greater than in 1960. In the
latter part of the year, however, single-family
home construction began to rise. Coupled
with the continued relatively high level of
apartment building, this increase in home
construction brought about a sustained rise
in District residential construction.
The increase in home construction may
have been due in part to “pent up” demand,
that is, families who had held off coming into
the market in 1960 may have decided that
1961 was the year to do something about their
housing. Their actions had an impact on new
construction because the “overhang” of un
sold new housing had been pared down in
some areas of the District, for example, Seat
tle, Portland, and San Diego. It may have
also been, in part, a belated response to the
relatively easy mortgage market conditions
which prevailed throughout most of the year.
There were a number of indications which
pointed to the availability of an adequate sup
OF
SAN
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ply of mortgage funds. District savings and
loan shares, for example, rose over $2.5 bil
lion, about one-fourth more than the increase
in 1960. In addition, time deposits of com
mercial banks in the District rose $1.7 billion
or roughly three times the amount they
increased in the previous year. Finally, the
substantial increase in mutual savings bank
deposits and in assets of life insurance com
panies nationally suggested that “Eastern” in
vestors had an abundant supply of funds to
invest in “Western” mortgages.
Interest rates were also lower, which in it
self suggests increased availability of funds.
The maximum rate on FHA-insured mort
gages was, of course, cut twice during the
year. The market response to the first of these
(the cut to 5V2 percent in February) indi
cated considerable ease in that the price dis
counts on FHA’s declined despite the lower
rate. The reduction to 5Va percent in May
resulted in somewhat larger discounts, but
the increase was not sufficient to offset the
lower rate, so that yields on these Federally
insured mortgages declined further. Rates on
conventional mortgages also declined some
what. The Federal Housing Administration
quarterly survey of the opinions of the Direc
tors of its insuring offices, for example, indi
cated that by the end of the year the average
interest rate on conventional first mortgage
loans on new homes in the West declined to
6.20 percent from the 6.55 percent average
that prevailed at the beginning of the year.
The role played by residential construction
in the current expansion, though it has been
a positive one, has been less impressive than
its contribution in the earlier stages of prior
postwar recoveries. Residential contracts
rose by roughly one-fifth in the 10-month
period following February, but this was less
than their increase of more than one-third
during a comparable period in the 1958-59
recovery. Contract data are not available be
fore 1956, but the housing starts data for the
March 1962
MONTHLY REVIEW
Western Region1suggest that the increase was
substantially more in the 1954-55 recovery
as well. This undoubtedly reflected, in part
at least, some persisting weakness in demand.
Vacancy rates, though they declined some
what in a number of areas in the District,
were still well above earlier levels. Another
factor may have been the cost of mortgage
funds, for although rates did decline through
out most of the year, they were also above
earlier levels.
N o n resid en tial c o n stru ctio n , w hich
increased moderately in 1961, contributed to
the recovery in the District’s economy. This
was in contrast with its performance in the
early stages of the 1958-59 recovery when
this type of activity declined. Nonresidential
construction contracts made during the year
amounted to $2.1 billion, 6 percent higher
than in 1960. This increase was due largely
to rising levels of contracts for the construc
tion of commercial, educational and science,
and public buildings. Contracts for industrial
buildings, which lagged behind 1960 levels
during the first half of the year, picked up in
the latter months, with the result that the
total for the year was slightly above 1960.
Heavy engineering construction also in
creased in 1961. As already indicated, con
tracts for this type of construction, partic
ularly for new highways, were at exception
ally high levels in the early part of the year
but then declined. However, the volume of
awards at the beginning of the year was suf
ficiently large so that the total of $1.8 billion
was 10 percent above 1960. The yearly in
crease was due mainly to a larger volume of
contracts for utilities construction and, to a
lesser degree, to increased contracts for
streets and highway construction.
Lumber output declined in 1961
The lumber industry, which suffered a
slump in I960, showed very little recovery in
1Includes Colorado, Montana, New Mexico, and Wyoming in
addition to District States.
1961. Despite a small rise in homebuilding
this past year, lumber output over the same
period failed to reach its 1960 level, due per
haps to efforts on the part of mills to keep
output more closely in line with new business,
which was affected by the continued substi
tution of other materials for lumber in homebuilding and other types of construction.
Lumber output and employment in the
District, which turned down in the early part
of 1960, continued to decline in the early
part of 1961. In early spring, however, mill
orders for lumber increased abruptly, pos
sibly as a result of dealer inventory accumu
lation in expectation of improvement in the
level of homebuilding. This led to a sharp rise
in lumber prices, which rose more than $5
from the beginning of March to mid-April,
and was followed by lumber output in
creases in April and May. Lumber employ
ment also began to pick up about that time.
New business, however, failed to maintain its
early spring pace, undoubtedly due to the
fact that the expected increase in housing
starts never fully materialized. As a result,
lumber prices began to fall in early summer,
followed by a leveling off of lumber output
and employment. Throughout the remainder
of the year, production was kept pretty much
in line with new business, which remained
below the high levels attained in the spring
of the year. This restraint on production kept
inventories from increasing, which in the case
of Western pine items was in sharp contrast
with what happened in 1960. At the end of
the year, Western pine inventories were 3
percent below the amount at the end of 1960,
whereas Douglas fir stocks were 5 percent
above.
Douglas fir lumber production for the en
tire year amounted to 7.8 billion board feet
and was 7 percent below 1960. Western pine
output was also below its 1960 level (3 per
cent). This was in contrast to the upward
movements of both in the early stages of other
FEDERAL
RESERVE
BANK
postwar recoveries in the District. Employ
ment in the lumber industry, after declining
in the first three months of the year, rose
moderately over the next several months and
then remained stable for the rest of the year.
At the end of the year lumber employment
in the District was about 6 percent above the
February level, the low point for over-all
economic activity in the nation. This, how
ever, was substantially less improvement than
occurred in the corresponding phases of the
1958 and 1954 recoveries.
Plywood production up
moderately; prices soft
Plywood production in the District contin
ued to expand in 1961, although, as in 1960,
the increase was of modest proportions. Soft
wood plywood output amounted to 8.4 bil
lion square feet, while 500 million square feet
of hardwood plywood was produced. The
combined total of nearly 9 billion square feet
was 7 percent above total plywood output
in 1960, marking the 16th consecutive year
of growth in production.
Although total output rose, production was
estimated to have averaged only about 75
percent of capacity during the year. The re
straining factor, of course, was the disap
pointing level of sales. Increased production
in the face of weak market conditions resulted
in an average of plywood prices for the year
that was at the lowest level on record. The
price of quarter-inch sanded stock, for ex
ample, was at an all time low of $60 per thou
sand square feet at the beginning of the year.
In the spring, this price rose to $72, but when
housing demand failed to pick up as much as
expected, it began to decline and continued
to do so until it reached $60 again in October
where it remained for the balance of the year.
The low prices during the year led the indus
try to conclude that 1961 was a year of
“profitless prosperity.”
OF
SAN
FRANCISCO
Defense build-up aids in
District expansion
Increased Federal government spending
for national defense measurably added to
the Twelfth District’s income and employ
ment during 1961. Slightly more than 30
percent of the $22 billion value of prime
contracts awarded for military procurement
during fiscal 1961 went to District States.
With defense expenditures still rising, the
further growth of the defense industry in the
District seems assured.
District employment in defense-related in
dustries in 1961 approximated 600,000, or
about one-third of manufacturing employ
ment and about 8 percent of nonfarm work
ers in the District. The role of the whole
complex of District defense and defenseoriented industry during fluctuations in the
general level of business activity is difficult
to analyze with precision. Much of the “de
fense industry” overlaps other industries.
Electrical manufacturing for defense pur
poses is an integral part of electrical manufac
turing in general. Missiles and components
are produced by the same firms that produce
civilian airplanes. Strictly naval defense work
is only a part of total shipbuilding along the
Pacific Coast. Chemical propellants are often
made at the same places that fertilizers and
industrial chemicals are produced. Sorting
out the precise dividing line between defense
and nondefense employment is therefore, at
best, a difficult task.
There is, however, another peculiarity in
the role of defense spending within the Dis
trict. Defense spending should theoretically
be largely independent of the business cycle.
Yet, as Table 2 shows, virtually all of the
defense-oriented industries within the District
showed cyclical fluctuations. General reces
sions were accompanied by declines (or
slower rates of increase) in employment; up
swings, by rises.
MONTHLY REVIEW
March 1962
T able 2
C H A N G E S IN TWELFTH D IS T R IC T D E F E N S E EM PL O YM E NT
IN T H R EE P O S T W A R B U S I N E S S CYC LES
(Percentage changes from preceding peak to trough
and from trough to 10 months after)
Industry
1953-55
1957-59
1960-61
Trough
to 10
months
later
Peak to
trough
Trough
to 10
months
later
Peak to
trough
2.3
5.5
4.4
18.9
Electrical
m achinery1
Peak to
trough
—
Trough
to 10
months
later
Average
3 cycles
Trough
to 10
Peak to
months
trough
later
6.6
17.0
— 2.9
13.8
Aircraft1
—
3.7
3.9
— 14.8
4.8
6.5
3.3
— 4.0
4.0
Private
ship yards1
—
4.6
16.8
0.6
3.8
— 15.7
18.7
- — 6.6
13.1
10.1
11.8
5.0
37.3
— 14.2
38.7
0.3
29.3
0.3
6.0
9.4
11.1
1.5
8.6
— 2.5
8.6
O rdnance1
Total
—
1 California, Oregon, and Washington.
2 Arizona, California, and Utah.
Source: State departments of employment.
T able 3
TW ELFTH D IS T R IC T E M PL O Y M E N T IN D E F E N S E IN D U S T R I E S
IN THREE R E C O V E R IE S
(Employment in thousands)
Industry
and area
Pacific Coast
Electrical machinery
Aircraft
Private shipyards
Arizona
Ordnance and aircraft
M achinery (including
electrical)
California
Ordnance
Instruments
Utah
Ordnance and trans
portation equipment
Total
At trough
February
1961
At trough
April
1958
10 months
later
At trough
August
1954
10 months
later
179.7
189.6
117.7
140.0
65.2
76.3
256.6
266.5
305.2
319.7
262.2
270.9
16.7
19.5
15.8
16.4
15.0
17.8
9.5
9.2
11.3
11.6
6.3
9.4
9.9
10.3
5.2
6.1
1.6
2.3
67.0
73.7
32.3
46.5
13.0
17.3
22.3
23.6
20.3
21.6
13.5
15.0
10.6
14.5
2.2
4.8
0.1
0.2
572.3
606.9
510.0
566.7
376.9
409.2
Note: Data are not adjusted for seasonal variation.
Source: State departments of employment.
10 months
later
FEDERAL
RESERVE
BANK
Regardless of the possible existence of
cyclical patterns in defense-oriented employ
ment within the District, the growth of these
industries has been impressive during the
period under review. In each successive
trough in general business, total employment
in District defense-oriented industries has
been at higher levels, as Table 3 shows. How
ever, as indicated in Table 2, the percentage
increase in this type of employment was
smaller during the recovery period in 1961
than in comparable periods of the two pre
ceding recoveries.
Within individual industries, there have
been important shifts in demand. For exam
ple, the shift from aircraft to missiles put
aircraft employment into a four-year slump
from which it is only now beginning to re
cover. Such shifts alter the proportion of pro
duction workers to the dollar value of sales
and can thus cause severe local effects, even
when total dollar sales are rising.
Some observations stand out from the ex
perience of the three recessions of the 1950’s.
First, only in the 1957 recession did total
defense-related employment actually fall, and
this decline was partly explained by the
change from airplanes to missiles. Second,
growth factors in these industries have out
weighed the cyclical response pattern and
probably will continue to do so while total
defense expenditures are increasing. Third,
there has been a cyclical pattern of sorts, but
analysis of the causes of this pattern must
await the development of better data.
Steel production fluctuated less
in District than in nation
Twelfth District steel production, which
turned up six months before general business,
already had risen almost 26 percent from its
own low point in August 1960 to the trough
in business in February 1961. Because steel
output in this District is less dependent on
automobile production, its behavior was in
contrast to national steel output which had
OF
SAN
FRANCISCO
risen only 18 percent from its lowest level in
December 1960 to February (Chart 9).
From February to May both District and
national steel production advanced steadily,
and by the end of that period the national
index, responding to increased demand for
steel by automobile assemblers, had moved
ahead of the District index. Steel production
then entered its usual summer slowdown. The
national index started recovering in August,
and by September, despite a strike at a major
automobile company, it had exceeded the
previous 1961 high for steel reached in May.
With labor disputes continuing to affect the
automobile industry, steel production in Oc
tober was little changed from September; it
fell in November, however, when automobile
makers did not increase their steel purchases
as they had been expected to do after the end
of the auto strike. National steel production
surged ahead in December under the impact
of improved demand from the automobile
industry and the beginning of stockpiling
against the possibility of a steel strike in
mid-1962. By December, a very favorable
month for steel production, the national
steel index had moved forward 39 percent
from the February trough, while District
steel output had risen only 10 percent.
Nevertheless, even with its relatively milder
decline in the recent recession, District steel
production of 5.6 million tons for the year
1961 was nearly 11 percent above its 1960
level, whereas the 1961 total for the country
as a whole was 1.3 percent shy of reaching
its 1960 figure. The same pattern occurred in
the recession and recovery periods of the two
immediately preceding postwar cycles, when
steel production in the District exhibited the
greater stability, falling relatively less in re
cession and rising relatively more in recovery
than steel in the nation.
The 10 percent advance in Twelfth District
steel production during the 10 months after
the business low in F e b ru ary 1961 was
MONTHLY REVIEW
March 1962
C hart 9
C h a r t 10
STEEL PRODUCTION
TWELFTH DISTRICT AND UNITED STATES
STEEL PRODUCTION
TWELFTH DISTRICT
Trough >100
Source: American Iron and Steel Institute.
considerably weaker than the 24 and 43 per
cent increases registered in the comparable
1954-55 and 1958-59 expansion periods, re
spectively. The gain in national steel produc
tion 10 months forward from the bottom of
the 1960-61 recession also was considerably
less buoyant than the 51 and 86 percent rises
of the two previous 10-month postwar recov
ery periods. The apparent mildness of the
1961 District steel expansion measured in
this way is partly dispelled if it is recalled
that production had already advanced sub
stantially before February. Measured from
the time it reached its lowest recession point
in August 1960 to its December 1961 level,
the 1961 advance outpaced the comparable
1954 rise by 6 percent. That it was only about
55 percent as high as in the 1958-59 period
is understandable in that steel output in the
later stage of that period was responding to
the anticipation of the strike which came in
July 1959.
The Western steel industry entered 1962
with high expectations which began to be re
alized in January when a marked upturn in
Western steel orders and output occurred.
Inventory building and strong demand from
the West Coast construction industry, espe
cially for missile base construction, are big
factors in the optimistic forecast for the first
half of 1962. Although imports of steel into
Western states and the nation as a whole de
clined approximately 5 and 6 percent, respec
tively, these imports continue to equal about
13 percent of West Coast steel production
and still offer considerable competition on
selected items to Far Western steel producers.
Noncyclical factors affect
copper production
Copper developments in 1961 were influ
enced as much by strikes and foreign activi
ties as by cyclical factors. The first significant
event for the copper industry in 1961 oc
curred in mid-January when major mine pro
ducers reduced prices by 1 cent for refined
copper in an attempt to reduce the gap be
tween domestic and foreign prices. Even with
this reduction to 29 cents a pound, designed
to stimulate demand, curtailments in output
were put into effect in February, and District
copper production from mines fell 4 percent
in that month. In May, increasing domestic
demand, higher prices in the world markets,
political turmoil in the Congo, heavy United
FEDERAL
RESERVE
BANK
OF
SAN
FRANCISCO
5TREAL PR O D U C T !© !
{1947-1949 = 100)
INDUSTRIAL
PRODUCTION
1946
1956
1957
1958
Copper
71
131
130
Lead
70
80
79
Zinc
83
72
Silver
64
106
1959
lgeo'
1961P
116
99
129
136
62
63
52
66
75
64
66
59
67
110
105
97r
94
110
G o ld
71
79
77
70
61
56
Steel Ingots
60
163
172
142
138
154
171
Alum inum
51
197
185
143
166
166
160
Crude Petroleum
94
105
101
94
92
91
92
Refined Petroleum
91
129
132
124
130
134
140
Natural G as
39
92
90
86
93
100
103
55r
Cement
81
156
149
158
174
161
169
Lumber
79
120
106
107
116
107
101
W ood Pulp
82
192
189
186
196
199
2 02
D o u gla s Fir Plyw ood
78
291
303
352
428
411
428
Canned Fruit
128
142
129
121
149
148
155
Canned Vegetables
124
225
194
214
190
2 02 _
207
M e at
101
149
139
127
134
143_
145
Sugar
90
120
128
116
137
133
135
Flour
108
105
106
112
112
113
109
Creamery Butter
69
87
99
93
99
108
117
American Cheese
Ice Cream
97
132
85
114
89
86
126
91
129
99
99
132
p— preliminary
120
127
r—revised
Note: Data given above supersede all previously published annual indexes.
Source: Federal Reserve Bank o£ San Francisco.
States exports of scrap copper, and the pos
sibility of labor trouble about midyear when
the contract at a major Western copper firm
was due to expire were factors in an increase
of 2 cents in the price of refined copper dur
ing the month and a 7 percent rise in Western
copper production. More copper was used in
products shipped during May from wire mills,
brass mills and foundries than for any month
since April 1945. New orders booked in May
called for the use of more copper than in
any month during the two previous years,
and stocks of the metal at the mills and found
ries were the smallest since February 1960.
Demand for copper subsided with the start
of July and August vacation closings at con
sumer plants and the reduction of inventory
hedge buying with the postponement of the
strike threat by production workers. A strike
by a comparatively small number of special
ized workers also contributed to a fall in
output in August. Resuming its rise by Sep
tember, District copper output had advanced
9 percent in the upswing from February
through December. Increases 10 months
from the respective troughs in 1954 and 1958
were 73 and 15 percent.
District copper production from mines in
1961 was 5 percent above 1960, but the share
of national production accounted for by the
District fell slightly from 78 percent in 1960
to 76 percent in 1961.
Contrary to their previous pattern in busi
ness recoveries, production of lead and zinc
in the Twelfth District each declined 16 per
cent from February to December 1961. Nev
March 1962
MONTHLY REVIEW
ertheless, output of these metals advanced 30
and 14 percent, respectively, from 1960 to
1961. The reduction in the output of lead in
the District reflects the fact that the industry
is suffering from excessive stocks and over
production here and abroad. By February
1962 the price of lead had fallen Vi cent
and was at its lowest level in more than 15
years. The outlook for the zinc industry ap
pears more favorable than for lead as 1962
begins. A rise of Vi cent (East St. Louis) on
December 1 for basic prime western grades
of zinc was accompanied by record sales.
Both industries have hopes that other coun
tries will agree to restrict shipments of these
metals to the United States when an interna
tional lead-zinc study group meets under
United Nations auspices at Geneva in March.
District petroleum situation
improved during year
Against a backdrop of continued general
oversupply, the Western petroleum industry
fared better in 1961 than in the previous
year. Domestic demand for petroleum prod
ucts in District V1increased 3.5 percent over
1960 compared with an 0.8 percent gain in
the nation. Despite the improvement, mar
keting changes (including entrance of new
firms into the area, mergers, and increased
emphasis on volume sales) kept gasoline
prices relatively weak, as reflected in con
tinued outbreaks of price wars in a number
of major marketing areas.
Production of crude petroleum in District
V rose 0.8 percent from 1960, but receipts
of crude from outside the District were up
over 10 percent. In contrast, receipts of gas
oline declined almost 10 percent, and pro
duction was up slightly more than 3 percent.
Domestic demand for gasoline in the West
was 4 percent higher than in 1960, while
demand for distillate fuel rose 4 percent, and
'D istrict V consists of Alaska, Arizona, California, Hawaii,
Nevada, Oregon, and Washington.
to ta l dem and fo r resid u al fuel declined
slightly.
Reflecting improved sales during the year,
stocks of crude petroleum and gasoline were
maintained below year-ago levels during vir
tually all of 1961. Stocks of distillate and
residual fuel oils were generally substantially
above previous year levels during most of
1961 but in each case were lowered sharply
towards year end.
Record flow of cash to District farmers
The flow of income to District farmers
moved up again in 1961 to record high levels.
In addition to the small acreage reduction
under the Feed Grain Program, modification
of the cotton program reduced District cotton
acreage. However, the reduction in acreage
of the designated feed grains and cotton was
offset, in part, by increased plantings of sugar
beets resulting from larger marketing allot
ments of sugar to domestic producing areas.
As a result, the over-all production of field
crops in 1961 changed little from 1960. Pro
duction of all crops, however, increased
slightly as a result of a recovery in deciduous
fruit production in the Pacific Northwest and
increased output of processing vegetables.
The record level of receipts in 1961 re
sulted from a strengthening in cash receipts
from marketings of livestock and livestock
products as well as crops during the latter
part of 1961. In the early part of the year, the
flow of income from crop marketings lagged
behind a year earlier as fresh vegetable prices
retreated from the unusually high level at
tained in the early spring of 1960. Receipts
from the sale of livestock and livestock prod
ucts also were at a record level in 1961; in
creased marketings accounted for much of
the rise from 1960, although prices also
strengthened during the latter part of 1961.
Cash income of District farmers was further
strengthened in 1961 by increased Govern
ment payments. Although payments to Dis
trict farmers from the Feed Grain Program
FEDERAL
RESERVE
BANK
were quite small, advance payments received
for participation in the 1962 Wheat Program
added considerably to the flow of cash to
District farmers, and it appeared that sugar
payments were also heavier than in 1960.
The business cycles in 1953-54 and 195758 were characterized by the independent
movement of farm income in both the Dis
trict and the nation. The lack of response to
fluctuations in general business conditions
during these two business cycles has been at
tributed to the continued high level of con
sumer expenditures for food, changes within
agriculture (such as cattle cycles), and the ef
fect of price supports and other Government
programs for agriculture. District farm in
come during the most recent cycle, however,
displayed a great deal more conformity with
the course of general business activity than
during the two previous cycles, as shown in
Chart 11. Although business activity was eas
ing throughout the year, the cash income of
District farmers in 1960 rose to a record
high. During the recovery and expansionary
phases of the cycle in 1961, farm returns
strengthened considerably in the spring of the
year soon after the trough in national business
activity was reached. However, the pattern
of crop receipts stemming from circumstances
within agriculture and changes in the Gov
ernment price support program rather than
the improvement in business conditions were
largely responsible for this strengthening in
farm income. Cash receipts were low during
the early spring months of 1961 in compari
son with the previous year because of unusu
ally high prices for fresh vegetables during
this period in 1960 as a result of very unfa
vorable growing conditions in other domestic
producing areas. As marketings of 1961 crops
began in volume at midyear, the increased
level of price support and rising farm prices
plus a somewhat heavier volume of market
ings raised returns above comparable months
of 1960, although crop returns for the year of
1961 were up only slightly from 1960. Hence,
OF
SAN
FRANCISCO
C h a r t 11
FARM CASH RECEIPTS
TWELFTH DISTRICT
M illio n ! o f D o lla rs
10
5
Trough = 0
5
Months B a fors
Months A fte r
|Q
N ote: In this chart, the dollar changes in monthly cash re
ceipts from a year earlier were used instead of indexes. These
dollar changes were then adjusted so that the trough month of
each cycle equaled zero.
Source: United States Department of Agriculture.
evidence continues to appear in support of
the position that recent business cycles have
had little effect on the flow of cash to District
farmers.
District canners boost output in 1961
Activity in the canning industry continued
to expand in 1961, judging from available
data. District canners produced a record
volume of 63 million cases of canned fruit
during the 1961 canning season. Vegetable
canning also appeared to be heavier than a
year earlier. Substantially larger packs of
corn and green beans in the Pacific North
west more than offset declines in the output
of canned peas in that area and of tomatoes
and tomato products in California. The in
creased output of canned fruit resulted, in
part, from a recovery of deciduous fruit pro
duction in the Pacific Northwest, following
the unfavorable growing conditions that had
sharply reduced fruit output in 1960. Gains
also occurred in California where increases
were recorded for most major canning fruits,
despite an unusually high level of inventories
at the start of the 1961 canning season.
MONTHLY REVIEW
March 1962
C h a r t 12
EMPLOYMENT IN C AN N IN G A N D PRESERVING
INDUSTRY, PACIFIC COAST STATES
(Seasonally adjusted)
The volume of fruits and vegetables packed
during a season appears to be little affected
by fluctuations in general business activity.
Food expenditures have been well maintained
during recent business cycles, suggesting that
domestic demand factors have been of minor
im portance in prom pting year-to-year
changes in canning activity. Supply consider
ations have been of greater importance in
influencing the volume of canning output.
These considerations relate both to the level
of inventories at the beginning of the can
ning season and to uncontrolled changes in
the supply of raw material for processing re
sulting from weather conditions.
Changes in important canning costs may
not be directly related to changes in general
business conditions. For example, the 25 per
cent increase in prices paid by canners for
tomatoes in 1961 over 1960 resulted pri
marily from labor and inventory considera
tions directly associated with that specific
activity.
Despite the apparent independence of can
ning output from short-run fluctuations in
general business conditions, changes in can
ning activity do at times influence measures
of economic well-being in the District. For
example, greater than seasonal expansions or
contractions in employment by canning and
preserving firms, which account for 13 per
cent of total em ploym ent in nondurable
manufacturing on the Pacific Coast, may add
to or detract from the labor force or unem
ployment. This is illustrated in Chart 12 by
the sharp rise in seasonally adjusted employ
ment by canning and preserving firms in
Pacific Coast States during the latter part of
1961 which undoubtedly aided in holding
down the unemployment rate in this area.
This was not the case in the 10-month re
covery period beginning in May 1958 or in a
comparable period beginning in September
1954 when this type of seasonally adjusted
employment moved erratically and had no
definite trend.
Pacific Coast foreign trade
in the 1961 recovery
M erchandise exports passing through
Pacific Coast customs districts in 1961, like
those of the nation, contributed little to eco
nomic expansion despite an upturn in the last
quarter. This is the first postwar cycle, more
over, in which West Coast exports have ex
erted less of a bolstering effect on the area’s
economy than those of the United States as a
whole. The dollar value of this area’s exports
in 1961 was 5 percent below the comparable
period of 1960, while that of the nation was
2.5 percent larger. Exports, however, re
mained at generally high levels as economic
activity abroad, especially in the industrial
ized nations of Europe, continued to rise
(although at a somewhat slower rate than in
1960) and in spite of the fact that a number
of other countries outside Europe experi
enced balance of payments difficulties which
necessitated some cutbacks in imports from
the United States. Shipments under the United
States Food for Peace Program continued to
boost both District and national export
totals.
FEDERAL
RESERVE
BANK
C h a r t 13
EXPORTS AN D IMPORTS
PACIFIC COAST STATES
Trough = 100
Exports
■
/
Im po rt*
1960-61
\
P
(9 5 3 - 5 4
P
-* * *
vs A
10
$
Trough
5
Monthi B tfort
M snlht A fltr
10
Source: United States Department of Commerce.
The expansionary impact of Pacific Coast
exports on general business activity in 1961
was the smallest of the last three recovery
periods because of the leveling off in eco
nomic activity abroad. The tapering off in
industrial activity abroad— and consequently
in United States and Pacific Coast exports—
during 1961 occurred during a less favorable
phase of the business cycle which coincided
more closely with the recovery in this coun
try compared to earlier cycles. In the 1958
recovery, exports had already fallen to a
plateau from the exceptionally high levels of
1957 before the upturn occurred so that they
were more or less neutral, while boom con
OF
SAN
FRANCISCO
ditions abroad prevailed and foreign reserve
positions showed marked improvement in the
1954-55 recovery, thus stimulating exports
through Pacific Coast ports.
Imports, on the other hand, are influenced
largely by changes in the tempo of business
activity in this country. During the 1960-61
business cycle, goods entering Pacific Coast
ports from abroad reacted most sharply to
cyclical fluctuations in comparison with pre
vious postwar cycles. Part of the explanation
probably arose from the fact that by 1960-61
much of the impact of industrial recovery
abroad from the effects of the war, with the
concomitant emergence into full production
of efficient, modem plant, had already been
registered. Consequently, cyclical influences
again became more dominant. Earlier, the
cyclical behavior of our imports had been to
a large extent obscured by the steadily rising
trend of our purchases overseas as producers
abroad gradually re-entered world markets.
The latest recovery period also revealed a
growing divergence in the m ovem ent of
Pacific Coast and United States imports, with
imports shipped into Pacific Coast customs
districts undergoing a wider range of varia
tion over the cycle. Pacific Coast imports in
1961, nevertheless, were still about 2 percent
below 1960— about the same as the United
States— because of a slight lag in the response
of imports to the turnaround in over-all eco
nomic activity.
March 1962
MONTHLY REVIEW
CONTINUED EASE IN FINANCIAL MARKETS
ACCOMPANIED RECOVERY IN BUSINESS ACTIVITY
The one feature of the current recovery
period which had the greatest impact on
banking performance in 1961 was the con
tinued relative ease in the money markets. In
the two preceding cyclical expansions, a
gradually increased pressure on bank reserve
positions occurred in the early months of the
upswing, as illustrated in Chart 1 on page 48
showing free and net borrowed reserves of
member banks in the nation. This condition
of ease was the combined result of monetary
policy during 1961 (the principal aspects of
which have been described at an earlier
point) and a lagging demand for bank loans.
The fact that the rate charged prime bor
rowers by commercial banks did not fall in
1961 may have played a role in the lack of
marked expansion in business loans. Since
open market money rates fell well below the
prime rate, some borrowing may have been
diverted into the commercial paper and
bankers’ acceptance markets. In addition, the
near-record volume of new security issues
sold by corporations may also have provided
some funds actually employed for short-term
purposes.
District loan demand lagged
in 1961 recovery
Changes in loan portfolios of member
banks in the Twelfth District in 1961 re
flected the general expansion in business ac
tivity since the cyclical trough in February,
but there was a somewhat longer time lag
than usual after the trough before a clear in
crease in loan demand materialized. It was
not until the fourth quarter of the year that
loan volume definitely turned up, and even
then part of the increase was due to seasonal
factors, including December borrowing re
lated to quarterly tax and dividend payments.
In the 10-month period from February to the
end of the year, District member bank loans1
increased 5.8 percent. This percentage gain
was less than three-fourths the rate of in
crease in the 10-month period after the trough
in the 1958 business cycle and only one-half
of that in the 1954 cycle. The mildness of the
recent recession, which resulted in only a
leveling off in loan volume rather than a de
cline, was a contributing factor to the lag in
the current loan upturn and also to the rela
tively moderate rate of increase.
An examination of the more detailed in
formation available for weekly reporting
member banks in the District disclosed that
business loans2 accounted for approximately
one-half of the $698 million increase in total
loans1 at these banks in the last 10 months of
1961. About one-fifth of the dollar gain was
in real estate loans, and the “other loan”
category, which is composed mainly of con
sumer loans, showed a small decline. This
latter loan category, if adjusted for repay
ments on consumer receivables involved in
one transaction with a national retailer early
in the year, would have shown an increase of
about $100 million rather than a decline.
This pattern was somewhat similar to that in
the 10-month period after the cyclical trough
of August 1954 when business loans1 ac
counted for one-half of the loan increase at
District weekly reporting member banks, and
the proportionate shares in real estate and
“all other” loans were roughly one-fourth and
one-fifth, respectively. The recent upturn con
trasted with the 1958 cycle when real estate
loans accounted for over one-half of the total
increase in loans adjusted during the first 10
1 Exclusive of loans to domestic commercial banks and after de
duction of valuation reserves.
2Including loans to sales finance companies ; business loan data
for the 1954 cycle also include agricultural loans.
The District banking data used in the follow ing analysis and
in the accompanying charts are not seasonally adjusted, and
the difference in timing of the troughs distorts to some extent
the cyclical comparisons. Data from the cyclical peak in April
1960 to December 1961 have been adjusted to include for the
entire period nonmember banks that became member banks
during I960 and 1961-
FEDERAL
RESERVE
BANK
C h a r t 14
LOANS AND INVESTMENTS OF MEMBER BANKS
TWELFTH DISTRICT
Trough«100
110
U.S. G o v trm tn t S e curities
90
i, ,r i i i.pA-1-
3
80
Months Befors
Months A fto r
Note: Loan data consist of total loans less valuation reserves.
months after the trough, with business loans1
contributing only one-fourth of the dollar in
crease in loans, and consumer loans respon
sible for one-fifth of the gain. Due to the
generally lessened demand for residential
housing in the last several years, demand for
bank credit to finance real estate is not ex
pected to be as strong in the current expan
sion as in other recent business cycles. At the
same time, because of the increase in interest
rates on time deposits and the continued
heavy inflow of such deposits, banks may be
expected to seek mortgages more aggressively
in 1962. Reversing its neutral influence in
the earlier months of the business recovery,
consumer demand now appears to be an in
creasingly positive factor, and banks can be
expected to increase their portfolios of con
sumer loans as sales of durable goods, par
ticularly automobiles, continue at high levels.
OF
SAN
FRANCISCO
rate of increase was about the same for both
United States Government and other securi
ties. This gain in total investments was in
sharp contrast to the 0.4 percent and 1.9 per
cent increases in the first 10 m onths of
recovery in the 1954 and 1958 cycles, re
spectively. As a result of the sizable addition
to security holdings, total bank credit1 ex
tended by District member banks in the first
10 months of the current upturn rose 10 per
cent, more than twice the rate in the corre
sponding periods of the 1954 and 1958
business cycle.
Steady rise in time deposits in 1961
District member banks had a steady in
crease in time deposits in 1961 with the level
of such deposits at the end of the year 11
percent above that of February, nearly double
the gain during the 10-month period follow
ing the trough in each of the two preceding
cycles. Based on the performance of weekly
reporting member banks, savings deposits
accounted for three-fourths of the total in
crease in time deposits. In the second quarter
of 1961 many banks, particularly in Cali
fornia, attracted additional funds by adopting
a policy of computing interest on savings ac
counts on a daily basis. Demand deposits, as
well as time deposits, rose gradually during
the 10-month period of recovery after Febru
ary, with the usual large seasonal increase in
December. Discounting the December in
crease, the gain in demand deposits was about
the same as in the corresponding periods of
the two former cycles.
Security holdings rose sharply
The most substantial change in assets of
District member banks in 1961 was an in
crease of 19 percent in security holdings since
the cyclical turning point in February. The
Bank liquidity improved
In the absence of restrictive pressure on
reserves, with only a moderate increase in
loan dem and, and with rising deposits,
Twelfth District banks used their uncom
mitted funds to rebuild short-term security
holdings, which had been substantially re
duced during the business boom that reached
1 In c lu d in g loans to sales finance companies.
l N et loans and securities.
MONTHLY REVIEW
March 1962
S E L E C TE D
O P E R A T IO N S
OF T H E
FE D E R A L R E S E R V E B A N K O F SAN F R A N C IS C O
(millions of dollars)
1961
Discounts
D a ily overage am ount held
1960
1959
2.5
24
38
131,908
119,857
116,689
129
137
136
3,946
4,361
4,075
6,839
6,255
6,137
Exchanged
19,923
15,771
13,630
Redeemed
8,041
8,421
7,737
Savin gs bonds
Issued
466
449
410
Redeemed
689
801
946
Checks handled
Coins and currency
Coins received and counted
Currency received and counted
Treasury issues
Other than savin gs bonds
Issued
its peak in April 1960. The ratio of short
term securities (1 year and under) to depos
its increased from 1.6 percent in June 1960
to 8.3 percent at the end of 1961. The ratio
of loans to deposits, another measure of bank
liquidity, dropped from the high of 64.3 per
cent in June 1960 to 58.7 percent in Decem
ber 1961. With this strengthening of their
liquidity position, Twelfth District member
banks are in a relatively good position to
service the credit needs of the District that
may arise as the current recovery progresses.
Net profits of District banks declined
With lagging loan demand and relatively
stable interest rates on loans, District banks
had only a slight increase in earnings on loans
in 1961 compared with 1960. Their earnings
on securities, however, rose by nearly the
same degree as did their security holdings.
The amount of interest paid on time deposits
rose substantially, reflecting both the steady
gain in deposits and the crediting of interest
on a daily basis. Other categories of expense
also rose, with the net result that the per
centage increase in total expense was twice
as large as the rise in earnings. As a conse
quence, the net profits after taxes of District
banks were about 2 percent below those in
1960.
Credit ease and increased service
operations affect activities of the
Federal Reserve Bank of San Francisco
Maintenance throughout 1961 of ease in
money and credit markets was reflected in
the operations and earnings for that year of
the Federal Reserve Bank of San Francisco.
One of the major effects was a substantial
decline in the volume of borrowing by Twelfth
District member banks. This decline is shown
in the accompanying table on a daily average
basis; for the year as a whole, the amount of
member bank borrowing declined from $4.4
billion in 1960 to a little more than $700
million. This decline was also reflected in
the Bank’s earnings on discounts, which fell
to less than one-tenth of their amount in 1960.
Earnings on the Bank’s share of total Federal
Reserve holdings of United States Govern
ment securities also declined in 1961 by about
HV 2 percent from 1960, despite an increase
in this Bank’s allotment of these securities
that occurred during the year. A fall in the
general level of interest rates in 1961, how
ever, more than offset the effect upon earn
FEDERAL RESERVE
BANK
ings not only of this increased “participa
tion” but also of the rise in total System hold
ings of Government securities.
The service operations of the Bank gen
erally continued to increase, as indicated in
the table. Both the dollar volume and the
number of checks processed by the Bank rose
about 12 percent in 1961. However, the dol
lar amounts of both coin and currency han
dled fell in 1961. This decline reflected the
effects both of a change in Federal Reserve
procedures which permitted vault cash held
by member banks to be fully counted as re
serves and of the discontinuance of coin
wrapping by this Bank in the latter part of
1960. The Bank ended the year with about 7
percent more of its Federal Reserve notes
outstanding than at the end of 1960. Trans
fers of funds for member banks also showed
a substantial rise in dollar volume.
Increased Treasury financing operations,
as in 1960, contributed to gains in 1961 in
the amounts of marketable United States
Government securities issued, exchanged, or
redeem ed by the Bank in its capacity as
fiscal agent for the Treasury. As has been
true in the past several years, the dollar
amount of United States savings bonds issued
by the Bank continued to rise, though at a
somewhat slower rate; the volume of redemp
tions continued to decline during 1961.
SU M M A R Y
Changes in the number of people at work
provide the most comprehensive measure of
over-all economic activity that is available
for making comparisons between the Twelfth
District and the nation. The Twelfth District
fared better than the nation for 1961 as a
whole in terms of average annual nonfarm
employment. Nearly 100,000 more people
were working at nonfarm jobs in the District
in 1961 than in 1960, whereas in the nation
there was a decline of almost 300,000. The
rate of increase in nonfarm employment from
the business trough in February 1961 was
OF
SAN
FRANCISCO
less rapid in the District than in the nation
during the first five months of recovery, but
in the second half of the year the District’s
rate exceeded the national one. Of greater
regional interest, perhaps, was the fact that,
after 10 months of expansion, District non
farm employment had risen less than 3 per
cent, compared with 5 to 6 percent gains
during comparable periods of the 1958-59
and 1954-55 recoveries.
Almost all major industry groups in the
District fared less well in terms of employ
ment gains than in prior recovery periods.
Employment in contract construction and in
lumber and wood products showed almost no
improvement during 1961, compared with
typically sharp gains in the two preceding
recoveries. This reflected primarily the more
limited and late revival in residential con
struction in 1961 as compared with the ear
lier periods.
The 4 percent growth in manufacturing
employment in the 10 months of recovery
was less than half as large as the increases in
the two prior periods, despite sharp advances
in both durable and nondurable goods indus
tries in the latter half of 1961. In the Pacific
Coast States, where District manufacturing
is concentrated, the annual average manu
facturing employment in 1961 was slightly
below the 1960 level. Only four industry
groups were above the 1960 level, and two
of these were defense-related, shipbuilding
and electrical equipment.
One of the important restraining influences
upon manufacturing employment in both the
District and the nation was the fact that the
level of total retail sales showed compara
tively little increase until late in the year.
Personal income grew at a considerably faster
rate than retail trade, reflecting perhaps some
feeling of uneasiness by consumers concern
ing the outlook in view of the continued high
unemployment rate.
Although the production of steel and nonferrous metals in the District did not rise as
March 1962
MONTHLY REVIEW
rapidly during the recovery in 1961 as in the
two prior recoveries, it is significant that out
put for the year as a whole was higher than
in 1960 in each case. Primarily because the
District steel industry is less dependent upon
automobile production, its output has typi
cally been more stable during the postwar
business cycles than has national production.
District producers of nonferrous metals were
considerably affected by factors not directly
associated with the domestic business cycle.
At the end of the year, a favorable aspect in
the outlook for copper was the relatively low
level of inventories, and zinc sales reached
record levels in December, reflecting in part
a rise in price at the start of the month. The
lead industry, however, is suffering from ex
cessive stocks and overproduction here and
abroad, with the result that in early 1962 its
price dropped to the lowest level in 15 years.
Farm income in the District, as in the
nation, fared well in 1961, rising to a new
record. The canning industry, which is an im
portant employer in the District, also turned
out a record pack of fruits and vegetables.
Neither farming nor canning in the District
has been particularly affected by recent busi
ness cycles, largely because consumer buying
of food has been well maintained even in
periods of recession.
The volume of merchandise exports pass
ing through Pacific Coast ports is primarily
responsive to changes in business conditions
abroad rather than in this country. With some
slowing down in the rate of business expan
sion abroad, exports from District ports in
1961 dropped below the 1960 level. Imports
through District ports were also below 1961,
reflecting some lag in the response of imports
to the domestic recovery which occurred in
the last 10 months of 1961.
The general ease in the reserve position of
banks and in financial markets generally per
mitted District banks to improve their liquid
ity position significantly from the low level
that developed in mid-1960. This should en
able the banks to meet rising credit demands
as the recovery progresses, although no clearcut evidence of a marked upsurge in loan
demand had developed in the early months
of 1962.
In conclusion, it is clear that District busi
ness activity by the end of 1961 had made a
significant recovery from the low point in
February, with much of the increase concen
trated in the second half of the year. How
ever, some hesitation in the rate of recovery
occurred in both the District and the nation
in the first two months of the new year. This,
coupled with the fact that the District’s re
covery has so far been considerably less vig
orous than in the prior two cycles, provides
the basis for some indecision at this point in
time. Although it is not yet clear whether the
tiger or the pussycat will prove to be the more
appropriate symbol for indicating the strength
of District business activity in 1962, at the
moment it does appear that it will at least
require a very large cat.
FEDERAL
RESERVE
BANK
OF
SAN
FRANCISCO
BANKING AND CREDIT STATISTICS AND BUSINESS INDEXES— TWELFTH DISTRICT'
( I n d e x e s : 19 47-1919 = 100. D o l l a r a m o u n t s in m i ll io n s o f d o ll a r s )
Condition items of all member banks’ 1 7
Bank debits
index
31 cities1' 6
Demand
deposits
adjusted3
Total
time
deposits
495
720
1,450
6 ,619
6 ,639
7,942
7,239
6,452
6,619
8,003
6,673
6.964
8 .278
1,234
951
1,983
10,520
10,515
11,196
11,864
12,169
1 1,870
12,729
33,375
13,060
14,163
1,790
1,609
2,267
7,502
7,997
8,699
9 ,1 2 0
9,424
10,679
12,077
12,452
13,034
15,116
42
18
30
140
150
153
173
190
204
209
237
253
270
17,525
17,517
17,637
17,632
17,578
17,504
17,779
18.028
17,901
18,212
18,199
6,991
6,916
7,436
7,393
7,571
7,935
7,863
7,955
8,190
8,182
8 ,278
12,750
12,860
13,222
12,865
12,935
13,200
13,212
13,317
13,901
13,944
14,103
13,639
13,754
13,999
14,289
14,371
14,492
14,656
14,786
14,867
14,874
15,116
256
273
266
265
26 8
267
262
277
291
265
293
18,646
18,622
8,082
7,820
13,671
13,163
15,448
15,647
294
289
Year
and
Month
Loans
and
discounts
1929
1933
1939
1952
1953
1954
1955
1956
1957
1958
1959
1960
1961
2 ,2 3 9
1,486
1,967
8 ,8 3 9
9 ,2 2 0
9 ,4 1 8
11,124
12,613
13,178
13,812
16,537
17,139
18,499
1961
F e b ru a ry
M a rc h
A p ril
M ay
Ju n e
J u ly
A ugust
S e p te m b e r
O c to b e r
N ovem ber
D ecem ber
1962
Ja n u a ry
F e b r u a ry
U.S.
Gov’t
securities
Bank rates
on
short-term
business
loans6’ 7
Total
nonagricultural
employ
ment
3 .9 5
4.14
4.09
4.10
4.50
4.97
4.88
5.36
5 .6 2
5.46
60
118
121
121
127
134
139
138
146
150
152
5 48
sifk)
5.45
5^42
Industrial production (physical volume)6
Year
and
month
1929
1933
1939
1951
1952
1953
1954
1955
1956
1957
1958
1959
1960
1961
1961
Ja n u a ry
F e b r u a ry
M a rc h
A p ril
M ay
Ju n e
J u ly
A ugust
S e p te m b e r
O c to b e r
N 0v e m b e r
D ecem ber
Crude
Refined
Dep’t
store
sales
(value)6
’57
130
137
134
114
154
161
153
165
165
163
102
52
77
100
100
96
104
104
96
89
94
88
87
30
18
31
120
122
122
132
141
140
143
157
156
175
64
42
47
115
113
113
112
114
118
123
123
125
127
150
150
150
151
152
152
152
153
153
154
154
161
161
160
162
163
162
164
165
166
107
167
83
83
88
81
85
86
84
87
99
100
92
164
100
164
153
162
167
157
170
164
165
175
127
127
127
127
126
126
125
126
127
128
127
155
156p
169r
l(j',)p
100
99
166r
176
127
128
Exports
Cement
SteeP
Copper1
95
40
71
113
115
116
115
122
120
11)6
107
116
110
109
87
52
67
106
107
109
106
106
105
101
94
92
91
92
78
50
63
112
116
122
119
124
129
132
121
130
134
140
55
27
56
128
121
131
133
145
156
1 19
158
174
161
109
24
146
139
158
128
154
163
172
142
138
154
171
103
17
80
11G
115
113
103
120
131
130
116
99
129
130
lOOr
1OOr
103
114
111
111
110
111
111
110
113
106
91
91
92
92
92
91
91
91
92
92
92
92
134
134
131
135
143
143
113
110
142
144
144
141
159
176
178
168
169
188
157
160
163
171
182
152
131 r
152
102
172
191
187
183
180
174
181
167
167
139
134
137
133
143
113
124
107
138
149
117
145
90
139
165
184
143
1962
Ja n u a ry
Carloadings
(number)6
Retail
food
prices
7, 8
Waterborne Foreign Trade Index7"•> !a
Petroleum7
Lumber
Total
n:f’g
employ
ment
Imports
Electric
power
Total
Dry Cargo
Tanker
Total
Dry Cargo
29
20
40
136
145
162
172
192
209
224
229
252
271
190
110
103
186
171
141
133
166
201
231
176
188
241
150
247
128
7
i0 7
194
201
138
141
178
261
308
212
223
305
243
175
130
145
123
149
117
123
123
138
149
124
72
95
162
204
314
26S
314
459
582
564
686
S08
’97
140
141
163
106
187
201
216
221
2f33
269
’57
7 33
1,836
4 ,2 3 9
2 ,9 1 2
3 ,6 1 4
7 ,1 8 0
1 0 ,1 0 9
9 ,5 0 4
1 1 ,6 9 9
1 4 ,2 0 9
277
270
285
283
285
289
293
300
295
310
305
23 5
248
264
261
265
224
271r
24 7
217
209
256
318
302
363
331
331
29 0
36 5r
322?317
310
331
118
95
124
163
171
128
138
140r
76
67
148
779
066
952
759
86 5
767r
l,0 2 6 r
80 5r
8 llr
872
756
2 18
233
252
286
2 92
289r
297
27 7 r
2 77
3 07
2G4
1 5 ,3 9 4
11 ,9 8 5
19 ,2 6 8
1 3 ,1 3 9
15,856
13,223r
2 0 ,0 2 5
14,586)
15 ,5 4 2
15,63 3
13 ,5 7 3
Tanker
1A d ju s te d fo r se a so n a l v a r ia tio n , e x c e p t w h ere in d ic a te d . E x c e p t fo r b a n k in g a n d c r e d it a n d d e p a r tm e n t s to r e s ta tis tic s , a ll in d e x e s a r e b a s e d u p o n
d a t a fro m o u ts id e so u rc e s, a s follow s: lu m b e r, N a tio n a l L u m b e r M a n u f a c tu r e r s ’ A s so c ia tio n , W e s t C o a s t L u m b e r m a n s A s so c ia tio n , a n d W e s te rn
P in e A s so c ia tio n ; p e tro le u m , c e m e n t, a n d c o p p e r, U .S . B u r e a u of M in e s; ste e l, U .S . D e p a r tm e n t of C o m m e rc e a n d A m e ric a n Iro n a n d S te e l I n s t i t u t e ;
e le c tr ic p o w er, F e d e ra l P o w er C o m m is sio n ; n o n a g r ic u ltu ra l a n d m a n u f a c tu rin g e m p lo y m e n t, U .S . B u re a u of L a b o r S t a tis tic s a n d c o o p e r a tin g s t a t e
ag e n c ie s ; r e ta il fo o d p ric e s, U .S. B u r e a u of L a b o r S ta tis tic s ; carlo ad in g 3 , v a rio u s ra ilro a d s a n d r a ilro a d a s s o c ia tio n s ; a n d fo re ig n tr a d e , U .S . D e p a r t m e n t
o f C o m m e rc e .
2 A n n u a l figures a r e a s of e n d of y e a r, m o n th ly figures a3 of la s t W e d n e s d a y in m o n th .
3 D e m a n d d e p o s its , e x c lu d in g
i n te r b a n k a n d U .S . G o v e r n m e n t d e p o s its , less c ash ite m s in p ro cess of co llectio n . M o n th ly d a t a p a r t ly e s tim a te d .
4 D e b its to t o t a l d e p o s i ts
e x c e p t i n te r b a n k p r io r to 1942. D e b its to d e m a n d d e p o s its e x c e p t U .S . G o v e r n m e n t a n d in t e r b a n k d e p o s its fro m 1942.
&D a ily a v e r a g e .
6 A v e ra g e rates o n lo a n s m a d e in five m a jo r c itie s, w eig h te d by lo a n size c a te g o ry .
7 N o t a d ju s te d fo r se a so n a l v a r ia tio n .
8 Los A n g e le s ,
S a n F ra n c isc o , and S e a ttle in d e x e s c o m b in e d .
9 C o m m e rc ia l c a rg o o n ly , in p h y sic a l v o lu m e , for the P a c iu c C o a s t c u s to m s d is tr ic ts plus A la s k a
and H a w a ii; s t a r t i n g with July 1950, ‘‘sp e c ia l c a te g o r y '’ e x p o r ts are e x c lu d e d because of security reasons.
10 Alaska a n d Hawaii a r e included
in indexes beginning in 1950.
p— P re lim in a r y .
r— R e v ise d .
@FedFRASER