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MONTHLY REVIEW OF BUSINESS CONDITIONS ISAAC B. NEWTON, Chairman of the Board and Federal Reserve Agent Federal Reserve Bank of San Francisco Vol. X IV San Francisco, California, March 20,1930 No. 3 S U M M A R Y O F N A T IO N A L C O N D IT IO N S Prepared by the Federal Reserve Board Industrial production increased in February while the number of workers employed in fac tories was about the same as in January. W holesale com m odity prices continued to de cline. Credit extended by member banks was further reduced in February but increased in the first two weeks of March. M oney rates continued to decline. Production. In February industrial produc tion increased about two per cent according to the Federal Reserve Board’s index, which is adjusted to allow for seasonal variations. This increase reflected chiefly a substantial gain in the output of iron and steel. Autom obile pro duction was in larger volume than during Janu ary, but was 30 per cent smaller than the large output of a year ago. Cotton and w ool con sumption by mills was substantially lower in February, and production of bituminous coal and copper also decreased. In the first two weeks of March the output of steel mills declined in comparison with Febru ary, contrary to the usual seasonal movement. Bituminous coal output also was smaller. The volume of building contracts awarded in Febru ary was about the same as in the preceding month. Residential building continued at an PERCEN T PER CENT 1926 exceptionally low level while contracts for pub lic works and utilities were large in comparison with the corresponding month in other recent years. Awards in the first two weeks of March were larger than in the first half of February. Employment. The volume of factory employ ment, which had reached a low point in Janu ary showed little change in February, when an increase usually occurs. Factory pay rolls increased during the month, but by a smaller amount than is usual at this season. In the steel, automobile, agricultural implement, and to bacco industries, employment increased during the four-week period, while further decreases occurred in the cotton and wool textile, lumber, automobile tire, electrical machinery, and ma chine tool industries. Distribution. Freight carloadings on an aver age daily basis were slightly larger than in January, but smaller than in the corresponding month of any other recent year, and a slight sea sonal increase was reported during early March. Department store sales in February continued to be below the level of a year ago. Prices. W holesale prices of commodities de clined further during February, and at 92.1 per cent of the 1926 average the Bureau of 1927 1928 1929 1930 IN D U S T R IA L P R O D U C T IO N Index number of production of manufactures and minerals,combined, adjusted for seasonal variations (1923-1925 average = 100). Latest figure, February, 105. W H O L E S A L E P R IC E S Index of United States Bureau of Labor Statistics (1926=100, base adopted by Bureau). Latest figure, February, 92.1. Requests for early numbers of this Review have been received from universities and libraries whose files of the publication are incomplete. It would be appreciated if those readers who have available copies of the Review for months prior to January, 1923, would forward them to the Federal Reserve Agent, Federal Re serve Bank, San Francisco. 18 MONTHLY REVIEW OF BUSINESS CONDITIONS Labor Statistics’ index was at the lowest point since January, 1922. Marked declines occurred during the month in the prices of many agricul tural products, particularly grains, hay, raw w ool and co tto n ; in certain imported raw mate rials, notably sugar and silk; and also in tex tiles, petroleum, and pig iron. During the first part of March, a number of these commodities B IL L O N S OF roi M arch, 1930 curities. All other loans, largely for commercial purposes, increased slightly. From the middle of February to the middle of March the volume of reserve bank credit outstanding decreased further by $90,000,000. This decline reflected chiefly an increase in gold stock of $75,000,000 and a further decline of m oney in circulation, offset in part by some increase in member bank M ILLIO N S OF D O L L A R S D O LLA RS 20001 r tota I. RESERVI E ....... — BANK CREPIT / i 1500 \ r 1000 v DI SCOUNTS J FOR MEMBER BANKS ^ 5 00 1930 M E M B E R B A N K C R E D IT Monthly averages of weekly figures for reporting member banks in leading cities. Latest figures are averages of first two weeks in March. declined still further in price. W heat and cot ton prices were considerably lower, and silver reached the lowest point on record. By the mid dle of the month, however, prices of cotton, hides, and silver had recovered somewhat. Bank Credit. Liquidation of credit at mem ber banks continued throughout February and on February 26 total loans and investments of member banks in leading cities were in about the same volum e as in the early summer of last year. During the follow ing two weeks, how ever, there was an increase of $230,000,000 in loans and investments, chiefly in loans on se- S x 7 1926 ] ACCE¡»TANCES \ U.S.!SECURITIES 1927 V 1928 1929 / 1930 R E SE R V E B A N K C R E D IT Monthly averages of daily figures for twelve Federal Reserve Banks. Latest figures are averages of first 18 days in March. reserve balances. Member bank indebtedness at the reserve banks declined to $267,000,000, the lowest level since early in 1925; reserve bank holdings of bills declined, while those of United States securities increased. M oney rates in the open market eased fur ther and bond yields declined rapidly to the lowest level since 1928. A t the middle of March the discount rate at the Federal Reserve Bank of New York was reduced from four to three and one-half per cent, and the rate at the Cleve land, Philadelphia, and San Francisco banks from four and one-half to four per cent. 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 B U SIN E SS C O N D IT IO N S The apparent improvement in business condi tions in the Tw elfth Federal Reserve District late in January and early in February did not continue throughout the later month. Total in dustrial production averaged approximately the same as in January, while trade was less active than in that month. W holesale com m odity prices continued the decline that has been evi dent since the summer of 1929. Total carloadings increased sharply during February and were in about the same number as a year ago. Credit ease has become more evident during the past six weeks and interest rates have de clined somewhat. Borrowings from the Reserve Bank have continued at relatively low levels. Growing conditions, improved by beneficial rainfall, are perhaps the most favorable factor in the present agricultural outlook. The con tinued declines in prices of farm products have had a depressing influence on the markets for many crops and for livestock, and have intro duced some uncertainty in planning agricul tural operations for the current season. W heat has not been marketed as satisfactorily as it was last year. Constant additions to the Dis trict’s herds of sheep during the past three years have combined with the current recession in prices of both lambs and w ool to handicap that industry in maintaining the favorable mar ket position it has occupied during recent years. This year’s Navel orange crop, of moderate size and good quality, has been bringing satisfac tory returns to citrus fruit growers. Engineering contracts awarded showed an increase in value during February, but residen tial and other building operations declined fur ther during the month. Increased output in two industries— lumber and petroleum— offset declines in some other lines of industrial activ ity during February, and total industrial pro duction was maintained at about the levels recorded for January. It should be noted, how- 19 FEDERAL RESERVE AGENT AT SAN FRANCISCO March, 1930 ever, that the lumber cut was unusually small in January and that increased crude oil produc tion in February was the result of permitting unrestricted output for a few days in order to establish the proper basis o f proration in the current curtailment program of that industry. The value of trade, partly because of price declines, was less in February than in other recent months or in February of last year. R e tail sales decreased over the year period in most cities of the District, increases in aggregate sales being reported only for Portland and Oak land. W holesale trade was less active than in February, 1929, but showed about the usual change when compared with January. Inter coastal trade receded further during February. Continued com m odity price declines have be come an increasingly important, though not en tirely unfavorable influence in the business situ ation. Prices of many basic commodities (for example, wool, silk, silver, lead, zinc, tin, rub ber, coffee) are at the lowest levels recorded for several years. Declining prices and rather large stocks in the hands of producers and users of many important raw materials have accom panied decreasing industrial output. Changes in the credit situation since midFebruary have added to the supply of funds available to District money markets. Loans and discounts of member banks have not shown any significant movements since that time, although their investment holdings have in creased somewhat as a result of the March 15 issue of United States Treasury certificates. Discounts at the Reserve Bank have remained at the unusually low volume which has pre vailed since mid-January. The discount rate of the Federal Reserve Bank of San Francisco was reduced from four and one-half to four per cent, effective March 21. ...... Ju lyl—March 19--------------\ Arizona 1929-1930 1928-1929 Normal Flagstaff .............................................. 12.2 13.9 18.8 Phoenix ................................................ 5.4 5.9 7.8 California Eureka .................................................. 19.5 23.3 34.0 5.6 6.2 7.8 Fresno .................................................. Los Angeles ...................................... 8.5 10.5 14.1 Red Bluff ........................................... 18.0 13.5 20.0 Sacramento ........................................ 12.0 8.8 14.8 San D iego ........................................... 7.6 6.0 8.5 San Francisco .................................. 14.4 13.1 19.1 Idaho Boise ..................................................... 8.1 6.8 9.2 Nevada 4.8 2.8 6.8 4.1 22.0 19.0 5.4 20.6 16.1 8.5 34.4 26.5 8.7 8.3 10.5 15.1 5.2 15.1 6.0 26.6 11.6 Source: Weather Bureau, United States Department of Agri culture. Conditions affecting soil cultivation and plant growth have been improved by rainfall in the Twelfth District during the past six weeks. During the same period fall-sown crops have been protected by snow -cover in the District’s colder regions, and additional snowfall in the higher altitudes has given greater assurance of a supply of irrigation water during the com ing summer months. Less favorable conditions have, however, confronted agricultural market ing activities, with the possible exception of the marketing of citrus fruits and a few minor crops. The continued decline of prices for most agricultural products has engendered consid erable uncertainty among producers and in some cases the planning of agricultural opera tions for the current season has been made more difficult. Marketing of wheat has been proceeding at a slow pace and up to March 1 of the 1929-1930 crop year total exports of wheat from Puget Sound and Columbia River ports were 11 per cent smaller in volume than during the corre sponding period of the 1928-1929 marketing sea son. During the same period there was also a reduction in exports of barley from San Fran cisco which amounted to seven per cent as com pared with a year ago. Figures of stocks of wheat and barley remaining on farms in this District and in the United States on March 1 are shown in the follow ing table. W H E A T A N D B A R L E Y -S T O C K S O N F A R M S f"1' W h ea t* Twelfth D i s t r i c t ............... ............ United States ................... ............ B arley* Twelfth D i s t r i c t ............... ............ United States ................... ............ R A I N F A L L — Twelfth District (In inches) Reno ....................................................... Oregon Baker City ......................................... Portland .............................................. Roseburg ........................................... Utah Salt Lake City ............................... W ashington Seattle .................................................. Spokane ................................................ Agriculture 1930 1929 — \ 1928 14,199 (12.5) 129,153 (17.1) 14,439 (11.4) 148,813 (16.5) 15,731 (11.3) 130,944 (14.9) 3,032 (6.9) 73,280 (23 .9 ) 4,914 (10.6) 97,050 (2 7 .2 ) 3,820 (9.2) 61,972 (23.3) * In thousands of bushels. Figures in parentheses indicate per centage of preceding year’ s crop remaining on farms M arch 1. S o u rce: United States Departm ent of Agriculture. Shipments of apples from California, Idaho, Oregon, and W ashington totaled 40,633 car loads from July 1, 1929, to March 1, 1930, a 26 per cent decrease from shipments during a comparable period of the 1928-1929 season. The D istricts commercial apple crop was 22 per cent smaller in 1929 than in 1928. On March 1 the Navel orange crop in Cali fornia was estimated to be 9,840,000 boxes or little more than half as large as the 1928-1929 crop. The smaller volume of production has been reflected in substantially reduced ship ments of oranges this season. The market for dairy products, particularly butter, has not improved in recent weeks. Cold storage holdings of butter in the United States increased during February and on March 1, MONTHLY REVIEW OF BUSINESS CONDITIONS 20 1930, were nearly four times as large as on March 1, 1929. Production of creamery butter in California, Idaho, Oregon, and W ashington during January, 1930, was approximately the same as in January, 1929, and only slight de clines in production were indicated by weekly reports received during February. E g g prices continued to decline seasonally during February. In early March, however, they were about nine per cent higher than in March, 1929. Rains and warm weather during February and early March were conducive to seasonal improvement in livestock ranges of the District, which in turn resulted in a decreased use of supplemental feed supplies except in the higher altitudes where there is still some snow-cover. Principally because of heavy feeding this past winter, the condition of livestock is now as good or better than it was in the spring of 1929. Receipts of livestock during January and February follow ed similar trends at Pacific Coast and mid-western stockyards. L I V E S T O C K — M A R K E T R E C E IP T S ^-January 1— F ebruary 28—^ Cattle 1930 1929 Tw elfth D i s t r i c t * .............................................. 133,491 129,090 M id -W e s t f .......................................................... 1,241,383 1,232,468 Sheep Tw elfth D istrict .............................................. 338,765 329,372 M id -W e st ............................................................. 2,324,119 2,237,682 H ogs 411,296 476,394 Tw elfth D istrict .............................................. M id -W est ............................................................ 5,154,986 5,218,957 ^Seattle, Spokane, Tacom a, Salt Lake City, O gden, Portland, L os Angeles, San Francisco. fChicago, Kansas City, Omaha, East St. Louis, St. Joseph, Sioux City, and St. Paul. Pacific Coast quotations for lambs have de clined since January 18 and on March 1 were about 30 per cent lower than a year earlier. Early reports of spring lambing operations in the District present a contrast to conditions existing a year ago. In the Pacific Northwest, the early spring lamb crop is turning out to be larger than in 1929 when adverse weather con ditions caused heavy losses of new-born lambs. In California, the number of early lambs ap proximates that of a year ago. Largely because of mild weather and improved feed conditions during February, this year’s lambs are stronger than usual and losses have been comparatively light. Few, if any, sales contracts for future delivery of lambs have been reported thus far. There has been some selling of the forthcom ing 1930 w ool clip in this District on a consignment basis during recent weeks, but outright sales of the new crop are reported to have been scarce. In d ustry A fter making allowance for seasonal m ove ments, there was little change in the aggregate industrial output of the Tw elfth District during February. Increases in lumber and crude oil production were approximately offset by de creases in output of the petroleum refining and non-ferrous metals industries. There was also a sharp decline in the value of building per mits issued. Unemployment was reported to be more extensive than at any time in several years. A slight increase in the number of w ork ers employed in the lumber industry of the Pa cific Northwest was not sufficient to offset in creased unemployment in most other parts of the District. Employment data for California as reported by a diversified list of 710 represen tative firms show that the number of workers employed in February, 1930, was five per cent less than in February, 1929. During February, daily average output of petroleum in California was moderately larger than during January, but was less than in February, 1929. Practically all of the increase may be attributed to the unrestricted output permitted in certain fields for several days in order to establish a basis for proration of pro- (B) Employment— t— (A ) Industry— Indexes of daily average production, adjusted for seasonal variations Industries (1 92 3 -19 2 5 daily average = 100) 1929— X ,----- 1930------ V Feb. Dec. Feb. Jan. 120 105 124 121 81 83 77 78 Slaughter of L i v e s t o c k ...................... 94 82 110 Lum ber ....................................................... . . 98 172 180 186 Refined Mineral O ilsf ........................ . . 169 108 116 78 Cement ....................................................... . . . 93 67 74 61 W o o l Consum ptionf .......................... Minerals : 106 121 107 113 Petroleum ( California) f .................... 101 115 136 Copper (U nited S t a t e s ) ^ ................... , , . 95 105 99 Lead (U nited S ta te s)$ ...................... 91 91 90 9Ì Silver (U nited States) $ ................... .. Manufactures: 5,778 (— 7.6) 6,251 18,486 ( — 11.3) 20,848 2,161 (— 7.1) 2,326 ■. 55 7,614 (— 2.5) Food, Beverages and T o b a c c o .. . 152 22,307 (— 7.2) W ater, Light and 7,807 . 112 Textiles . 17 V Power 97 51 57 66 88 .................. 149 117 109 76 190 98 69 24,031 11 8,601 (3 .0 ) 8,350 . 311 80,371 (— 3.7) 83,481 182 ( - - 1 3 .3 ) 51 12,728 ( — 7.3) 4 10 1,875 ( - -1 2 .5 ) 9* 470 (2 .8 ) 42 1,757 (8 .8 ) 210 13,737 2,142 457 1,615 M iscellaneous fNot adjusted for seasonal variation. ^Prepared by Federal Re serve Board. §Indexes are for three months ending on the month indicated. 38 1 92 82 50 — California--------- Oregon N o. of N o. of N o. r—Employees N o. r - Employees —s of Feb., Feb., of Feb., Feb., Firms 1930 1929 1930 1929 Firms 23,557 . 710 147,900 155,336 146 22,615 ( -4 .0 ) ( - 4 .8 ) Stone, Clay and Glass Products.. ... General: Carloadings— Industrial ................... . . . 97 Value of Building Permits§ , 50 T w enty Larger Cities ................... Seventy Smaller C i t i e s .................... 58 Value of Engineering Contracts Aw arded § Total .................................................. . . . 120 115 E xcluding Buildings ................. . , March, 1930 . 14 2,582 30 2,242 5,603 5,396 (15.2) (3 .8 ) * Laundering only, t Includes the follow ing indu stries: metals, machinery and con veyan ces; leather and rubber g o o d s ; chemicals, oils and p a in ts; printing and paper goods. Figures in parentheses indicate percentage changes from Febru ary, 1929. March, 1930 21 f e d e r a l r e s e r v e a g e n t a t s a n f r a n c is c o duction during the period of curtailment which began March 1. The objective of this curtail ment program, as announced by leaders of the industry, is to reduce production of petroleum in California to levels somewhat below con sumption so that present excessive stored stocks of crude oil may be reduced in supplying current demand. It is estimated that a daily average output of California crude oil ranging from 650,000 to 660,000 barrels is sufficient to meet current requirements of the industry. For the week ended March 15 the daily average out put, as reported by the American Petroleum Institute, was about 652,000 barrels. Refining activity decreased substantially during Febru ary and refined oils were produced in smaller volume than in February, 1929. Shipments to the Atlantic Coast declined during the month, however, and stocks, particularly of gasoline, continued to increase. Output of the non-ferrous metals continued to decrease in this District during February, whereas daily average production during that month usually expands to the highest levels of the year. A number of copper mines continued to' operate on a curtailed basis and mine stocks of copper declined. Demand for the metal was slight, however, and refined stocks, which, for several months, have been at levels substan tially above those of a year ago, increased sharply. Production of silver and lead also de clined during February. Both production and shipments of lumber in creased more than seasonally during February, and production was larger in volume than in February, 1929. Comparisons of the actual fig ures for February, 1930, with those reported for January, 1930, and February, 1929, are likely to be somewhat misleading, however, un less the fact that operations in the lumber in dustry were at exceptionally low levels during the two earlier months be borne in mind. As compared with the general level of output dur ing recent years, the cut during February, 1930, was relatively small. The ratio of shipments to production changed little during the month, but there was a slight increase in producers’ stocks, which continued larger than a year ago. The total value of building permits issued in ninety cities in the Twelfth District was sub stantially less in February, 1930, than in Janu ary, 1930, or February, 1929. The decline was chiefly attributable to sharp decreases in the value of building in Los Angeles and San Fran cisco. Exclusive of large industrial and com mercial buildings, the figures for which are included in building permits, the value of engi neering contracts awarded in the District was about the same as the average of the preceding three months. Production of flour increased by approxi mately the usual amount during February. There were, however, larger than seasonal re ductions in milling stocks of flour although they remained substantially larger in volume than a year ago. Stocks of milling wheat also decreased during February and were slightly smaller than those carried at the end of Febru- (C) Distribution and Trade— Arizona Phoenix ,-------- 1 9 3 0 -------- s ,-------- 1 9 2 9 — Feb. Jan. D ec. Feb. ,-----------Ii adexNuimbers*--------— ■> Foreign Trade 134 148 1321 T o ta lf ..................................................... 134 1201 129 I m p o r t s f .................................................. 140 155 143 Exports ................................................... Intercoastal T rade0 T otal ....................................................... . 100 128 W estbou nd ........................................... Eastbound ........................................... .. , 89 Carloadings$ Total ......................................................... Merchandise and Miscellaneous. . . 108 112 W holesale Trade§ Sales ....................................................... . . Retail Trade Autom obile Sales$ Total .................................................. Passenger Cars ............................. Commercial Vehicles ................. Department Store Stock Turnover|| ........................ C ollection s# Regular ........................................ Installm ent ............................... 107 124 97 107 142 98 99 134 87 94 105 101 115 108 116 99 100 95 104 115 114 124 108 104 155 1170 132 1300 1590 1120 1590 121 127 120 119 111 101 104 108 f -------- Actual Figures ------ -> .22 .22 .42 .20 42.9 14.7 45.8 15.7 43.8 14.1 44.3 15.3 •Adjusted for seasonal variation, 1923-1925 average— 100. In dexes are for three months ending on month indicated. f E x cluding raw silk. tD a ily average. §M onthly totals of ten lines combined. ffAt end of month. ¡¡Proportion^ of average stocks sold during month. # P e r cent of collections during month to amount outstanding at first of month. ORevised. iPreliminary. (D) Bank Debits*— Feb. 1930 .............. $ 37,278 California Bakersfield 12,786 Berkeley ............ 18,753 43,181 Fresno ................ L o n g Beach . . . 43,980 L o s Angeles . . ,. 969,142 Oakland ............ .. 169,807 Pasadena ............ 34,417 Sacramento 42,201 San Bernardino, 10,436 San D iego 55,306 San Francisco. . 1,142,644 San Jose ............ 24,726 Santa Barbara. 13,701 Stockton ............, 21,249 Idaho 12,383 Nevada 10,033 Oregon 5,976 Eugene ............... Portland ............ 150,371 Feb. 1929 $ 4 6 ,3 8 7 •— First Two M onths— \ 1930 1929 $ 84,267 $ 92,787 13,276 20,159 28,852 60,295 1,166,451 219,580 45,480 44,408 10,192 62,213 1,309,068 24,829 15,066 23,474 28,936 41,824 89,066 98,818 2,077,618 370,838 73,336 97,245 21,651 118.755 2,436,234 58,059 31,231 50,615 12,604 28,641 29,413 9,451 22,126 20,407 6,162 175,570 12,680 325,775 13,659 358,269 66,110 14,332 16,216 67,219 33,589 154,845 36,729 153,580 7,823 11,743 593 217,775 45,701 39,474 11,778 8,838 11,976 796 230,836 52,318 42,558 11,624 16,998 25,625 1,189 469,298 99,516 86,721 26,224 18,814 25,879 1,870 505,314 112,819 95,025 25,464 T o ta l............... $3,233,699 $3,735,898 $6,981,720 $7,915,884 Utah Ogden ................ Salt Lake C ity ., W ashington Bellingham Everett .............. Ritzville ............ Seattle ............... Spokane ............ T acom a ............ Yakim a ............ * I n thousands of dollars. 29,827 44,539 63,920 133,622 2,435,503 476,541 95,436 98,562 22,743 1 3 6 ,9 7 1 2,745,793 56,347 33,101 52,950 22 MONTHLY REVIEW OF BUSINESS CONDITIONS ary last year. The continued rapid movements of wheat prices during the past few months have been a disturbing factor in the flour mill ing industry in this District, particularly in view of the fact that the District’s millers gen erally have not practiced hedging their pur chases of wheat. Demand for flour has been but moderately active during recent weeks. Trade The course of trade during the second month of 1930 was less definitely downward than in other recent months. Both retail and wholesale sales declined by about the usual amount as compared with January and were smaller in value than in February a year ago. Although not conclusive, there is some evidence to indi cate that current price declines have extended PER CENT r ...... - SA LES Sb r r -w i J V\W »V»v / ’ v A A i 'WAI#/ a ' V w V l K » 1 /\ * \* V V 1 V l/ V V M arch, 1930 gregate sales than in 1929, but in practically all other parts of the District sales were smaller than last year. W holesale sales duringFebruary were smaller in value than in the corresponding month of last year. Decreases in sales were general in nearly all lines for which this Bank receives data. The level of wholesale com m odity prices has de clined sharply during recent months, and is now about four per cent lower than a year ago'. This movement has undoubtedly contributed to the declines in dollar value of wholesale trade. Most wholesalers have reported collec tions since the beginning of 1930 as being slower than in the corresponding period of last year. During February the number of new auto mobiles sold in this District increased as com pared with January but was substantially below the high level of February, 1929. Sales of com mercial vehicles declined and sales of passenger cars increased as compared with the previous month. PER CENT ST O C K S 1926 1927 1926 1929 1930 D E P A R T M E N T S T O R E S A L E S A N D ST O C K S Index numbers of daily average sales and of stocks at end of month of department stores in the Twelfth District, adjusted for seasonal variations (1923-1925 average=100). to retail prices and thus have accentuated the reported declines in value of trade. Sales of new automobiles increased as compared with January but were fewer in number than in February, 1929. Intercoastal trade continued in reduced volume, but loadings of freight on railroads in the District increased sharply from the low levels of January. R E T A I L T R A D E — Twelfth District ,------------N E T S A L E S *------------ ^ J a n .lto F e b .,1930 Feb.28.1930 compared compared with with Jan. 1 to Feb., 1929 Feb.28,1929 Departm ent S t o r e s f .. — 1.3 ( 68) Apparel S t o r e s ............ — 8.8 ( 32) Furniture Stores . . . . — 5.9 ( 47) A ll Store s ........................ — 2.5 (147) — 1.5 ( 66) — 7.9 ( 32) — 9.6 ( 46) — 3.2 (144) STOCK* Feb., 1930 compared with Feb.. 1929 5.1 ( 50) — 0.5 ( 20) — 3.5 ( 30) 3.4 (100) *Percentage increase or decrease (— ) . Figures in parentheses in dicate number of stores reporting, f Includes dry goods stores. The value of retail trade, as evidenced by sales of department, apparel, and furniture stores, decreased by two per cent when com pared with sales during February, 1929. Depart ment store sales declined by a smaller amount than did sales of either apparel or furniture stores. In Oakland and in Portland, department stores again reported substantially larger ag R E G IS T R A T IO N O F N E W A U T O M O B IL E S Indexes of daily average registrations of new passenger and commer cial motor vehicles in the Twelfth District, adjusted for seasonal variations (1923-1925 daily average=100). As a result of a larger movement of merchan dise and miscellaneous freight and of forest products, freight carloadings on the District’s railroads increased sharply during February. A growth of almost seven per cent in the value of the District’s foreign trade (excluding silk imports) during the year 1929 as com pared with 1928 was revealed by figures that have become available during the past month. There was an excess of exports over imports in 1929, but it was not so large as that reported for 1928. Silk imports during 1929 were almost four per cent smaller in value than in 1928, reflecting to a considerable extent the lower prices paid for that com m odity during the later year. During December, 1929, both imports (exclusive of silk) and exports were greater in value than in the same month of 1928. Some curtailment in foreign trade was evident in January, 1930. Silk imports were at low levels, and total imports exclusive of raw silk were below the figures for either December, 1929, March, 1930 or January, 1929. Figures of exports of goods were also markedly smaller during January, 1930, than in the preceding month or the corre sponding month of last year. Reduced tonnage figures were noted in inter coastal trade through the Panama Canal during the month of February, 1930. Shipments from the east coast recovered partially from the low levels of January but the eastbound movement of goods decreased substantially due to smaller lumber and petroleum shipments. Prices A ccording to the index of the United States Bureau of Labor Statistics, average wholesale com m odity prices during February were at the lowest levels recorded since 1922. Although declines were not confined entirely to the agri cultural products group, price movements with in that group were largely responsible for the downward movements of the index during February. Declining prices have, during recent months, encouraged producers using raw mate rials to draw heavily upon their reserve or surplus stocks rather than to make purchases for immediate or future use. The sharp down trend of price levels has thus affected, in vary ing degree, the market situation of nearly every major com m odity group and has added to the difficulties confronting recovery in busi ness activity. The current wheat marketing season has been characterized by violent movements of wheat prices. During late February there were further sharp declines, and on February 25 the price of the March contract for wheat dropped to a low point of 98% cents per bushel on the Chi cago market. The price at Chicago ranged from $1.05% to $1.06% per bushel on March 20,1930, compared with $1.22% to $1.23% per bushel a year ago. Substantial reductions in corn and cotton prices during February were of consid erable national significance. More plentiful forage on the District's live stock ranges was a factor in the decline of hay prices on local markets during February. H og prices moved upward steadily during the month, but quotations for other kinds of live stock tended downward in most District and national markets. Cattle prices* are still at fairly high levels but lamb prices are currently lower than at any time since 1924. The market for w ool again showed the weakness which, dur ing the past year has brought quotations to the lowest levels recorded in eight years. In the important non-ferrous metals markets only the price of copper remained unchanged during February and early March. A fter evi dencing signs of firmness in January and early February, quotations for both lead and zinc de clined at the close of the later month, showing 23 FEDERAL RESERVE AGENT AT SAN FRANCISCO in part a response to continued large stocks and small orders for those metals. Silver is cur rently quoted at the lowest prices ever recorded. On March 4 it sold as low as cents an ounce. Petroleum prices did not change during February but substantially increased quota tions for crude oil in California were announced during the second week in March. Although lumber price advances have been usual at this season in the past, the lumber market changed little during February and early March. Credit Situation During February and the first week of March the credit situation changed little in the Twelfth District. During the second and third weeks of March, however, several factors combined to increase the supply of funds and thus to ease local money markets, but, as is usual, this ease was not immediately reflected in lower interest rates to customers of commercial banks. The chief factors tending to ease the money market may be listed as follow s: (1) a slight decline of money in circulation, (2) an excess of United States Treasury expenditures over col lections within the District, (3) the purchase and subsequent sale of Treasury certificates by banks in this District. 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) -----Cond M ar. 19, M ar. 12, Feb. 19, M ar. 20, 1930 1930 1930 1929 T otal Loans and In v e stm e n ts.. . 1,960 1,944 1,949 1,954 1,372 1,371 T otal L o a n s ...................................... . 1,355 1,306 Commercial Loans ....................... 910 922 926 881 445 449 Loans o n S e c u r it ie s ...................... 446 425 Investments ...................................... 605 582 573 643 N et Demand D e p o s it s ................. 757 719 753 789 Tim e D e p o s i t s ................................. . 1,014 1,015 1,006 965 Borrow ings from Federal R e 0 serve Bank .................................. 8 5 61 r— The continued slight decline of money in circulation, combined with the United States Treasurer’s excess of expenditures over collec tions within the District released about 8 mil lion dollars of funds to member banks during the month ended March 19. A further addition of funds accrued to the banks from the Federal Government’s sale of Treasury certificates on March 15. O f the 40 million dollars of this issue allotted to banks in the Twelfth District, 37 million dollars were paid for by deposit credit, against which no cash reserve is required and which, therefore, involved no immediate outlay of funds. Part of these certificates were sold for cash to purchasers in other districts, some were sold within the Twelfth District, and the remainder was kept in the portfolio of subscrib ing banks. As a result of the sales to other dis tricts there was a flow of funds into the Twelfth District and commercial banks were able to re duce their indebtedness to other banks includ 24 FEDERAL RESERVE AGENT AT SAN FRANCISCO ing the Reserve Bank. The net result of the transaction was an increase in government de posits and in investments. Loans of reporting member banks were some what reduced during the month ended March 19, but, as stated above, there was a rather sub stantial increase in their investments. Holdings of bonds other than government bonds in creased as funds became available through increased time deposits and larger bankers’ bal ances, while government securities also in creased, with equivalent liabilities showing in the form of increased government deposits. Although city bank borrowings at the R e serve Bank were down to a very small amount, borrowings of country member banks were still relatively high on March 19. The accompanying chart shows the ratio of borrowings of city and country member banks to their reserve deposits with this Bank. The movements of the two curves have been inverse since January, 1928, large borrowings of city banks being accom panied by small borrowings of country banks and vice versa. During February, borrowings of city member banks amounted to approxi mately five per cent of their required reserves and borrowings of country member banks amounted to about 25 per cent of their required reserves. PER CENT M arch, 1930 ances on deposit with the larger city banks in creased, and these funds together with other funds made available through factors previously discussed, made such borrow ing unnecessary. F E D E R A L R ESE R VE B A N K OF SA N F R A N C IS C O (In millions of dollars) t--------------------- -----Condition--------- -------------- -*> Mar. 19, M ar. 12. Feb. 19, M a r .20, 1929 1930 1930 1930 117 59 Total Bills and Securities.......... 79 78 72 Bills D is c o u n te d ................................ 17 13 8 Bills B o u g h t ....................................... 34 30 34 36 12 13 United States Securities............... 37 24 265 283 308 244 Total Reserves .................................. 182 Total D e p o s it s .................................... 169 180 183 Federal Reserve N otes in Circulation ....................................... 156 158 162 157 Ratio of total reserves to deposit 83.6 and note liabilities c o m b in e d .. 81.4 89.3 71. Gold from Japan has continued to flow into the United States through Pacific Coast ports during the past month, when imports amounted to more than 40 million dollars. M ost of these shipments, which have totaled 65 million dollars during 1930, were for the account of eastern in stitutions and the funds were transferred to New York immediately upon purchase by the San Francisco mint. Credit extended by the Federal Reserve Bank of San Francisco during the first half of March virtually remained unchanged from the low levels of February. A slight increase in re discounts was offset by a decrease in holdings of locally purchased acceptances. On March 11 the Bank reduced its buying rates on accep tances by approximately one-half of one per cent, the reductions ranging from per cent to per cent according to maturity. Further reductions ranging from to 34 Per cent were made in these rates on March 14 and 18. E ffec tive March 21, the discount rate of the Federal Reserve Bank of San Francisco was reduced from A /j 2 to 4 per cent. The 4 y2 per cent rate had been in effect since December 6, 1929. R A T IO O F M E M B E R B A N K B O R R O W IN G S T O T H E IR R E S E R V E D E P O S IT S Monthly averages of daily figures, excepting latest figures which are averages of first three report dates in March. Shortly before the middle of March this Bank increased its holdings of government securities by 25 million dollars. This increase came largely through participation in transactions of the en tire Reserve System, and was consummated in the New Y ork market, hence it had but slight direct influence on money markets in the Tw elfth District. This transaction, together with a rather large unfavorable balance of com mercial check payments caused an outflow of funds, chiefly to the New York market. Com mercial transfers of funds are, as a rule, accom panied by increased borrowings of member banks, but during the past month bankers’ bal IN T E R E S T R A T E S — Twelfth District Interest rates charged customers by commer cial banks have tended slightly downward dur ing recent weeks.
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