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MONTHLY REVIEW OF B U S IN E S S C O N D IT IO N S ISAAC B. NEWTON, Chairman of the Board and Federal Reserve Agent Federal Reserve Bank of San Francisco Vol. XI San Francisco, California, March 21,1927 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 b y the F ederal R e se r v e B oard Industrial output increased further in Febru ary and was slightly larger than a year ago. Distribution of commodities by the railroads was larger than for the corresponding period of any previous year. The general level of whole sale prices continued to decline and was, in February, at the lowest level since the summer of 1924. Production. Production of manufactures in creased in February for the second consecutive month. Output of minerals, after declining in January, advanced in February to the record level reached last December. Factory produc tion and employment, however, continued smaller than during the corresponding month of last year. Production of iron and steel has increased steadily since December, and reports indicate that operations of steel mills in March, 1927, were at almost the same high rate as in March, 1926. Autom obile production increased from 234,000 cars in January to 298,000 cars in February, and weekly figures of employment in Detroit factories indicate some further addi tions to production in March. Output, how ever, has continued much smaller than a year ago. Daily average mill consumption of cotton was larger in February than in any previous month on record, but activity of woolen and silk mills decreased as compared with January. Production of bituminous coal has been main tained in large volume, while that of anthracite has been considerably reduced. The output of building materials was smaller during the first two months of this year than in the corresponding period of 1926. The value of building contracts awarded in February was 3 per cent smaller than in the same month of last year, but awards for the first three weeks in March were in approximately the same volume as in 1926. Volum e of contracts awarded in south eastern and northwestern states has been con siderably smaller than a year ago, while in the central western states it has been much larger. Trade. Retail trade showed less than the usual seasonal decline between January and February. Sales of department stores and chain stores were larger than in February of last year, while sales of mail-order houses were smaller. W holesale firms reported a smaller volume of business in February than a year ago, declines occurring in nearly all leading lines. Inven tories of department stores increased in Febru ary in anticipation of the usual expansion in spring trade, but the growth was less than is customary at this season. A t the end of the month stocks were slightly smaller than a year P E R CEN T PE R CENT PAY R OLLS /" v - N A i A ** ..^ * - i x MINEF*ALS 1924 r K 'V 'S / ElMPLOYMEN’r 1925 1926 1927 P R O D U C T IO N O F M A N U F A C T U R E S A N D M I N E R A L S Index numbers of production of manufactures and minerals, ad justed for seasonal variations (1923-1925 average = 100). Latest figures, February, manufactures, 106; minerals, 120. Vv \S‘ # MAINUFACTURIES 1923 , / 1923 1924 1925 1926 1927 FA C T O R Y E M P LO YM E N T A N D PAYROLLS Federal Reserve Board’ s indexes of factory employment and payrolls (1919 monthly average= 100). Latest figures, February, employment, 93.7; payrolls, 108.5. 18 March, 1927 MONTHLY REVIEW OF BUSINESS CONDITIONS ago. Stocks of merchandise carried by w hole sale firms also increased in February, but they were generally smaller than in the correspond ing month of last year. Railroad shipments of commodities have increased steadily and by more than the usual seasonal amount since January. They have exceeded shipments for the same period last year, ow ing to larger m ove ment of coal, of miscellaneous commodities,and of merchandise in less-than-carload lots. P E R CENT sonally between the middle of February and the middle of March. There was also growth in the volume of funds used in the security mar ket as indicated by increases in loans to bro kers and dealers in securities. Consequently to tal loans of reporting banks at the end of the period were close to the level of last autumn. Financial operations of the United States treas ury around the middle of March, with disburse ments temporarily in excess of receipts, rePE R CENT 6 7 »1 11 .............. * I t L ri uw / - " ¡M \/V r*Vt V v \ l/ 111 / \1 / w *1 YL_jL_ V / 'v / V — CO N 1 M E R C IA L 1 PAPER _ ------ N E V / Y O R K R E S E R V E BA N IK D IS C O U I sIT R A T E ------A C C : e 1923 W H O L E S A L E PR ICE S Indexes of United States Bureau of Labor Statistics, (1913 prices = 100). Latest figures, February, all commodities, 146.4; non-agricultural commodities, 148.3; agricultural commodities, 143.8. Prices. W holesale prices, according to the index of the Bureau of Labor Statistics, con tinued to decline in February. A m ong nonagricultural products decreases occurred in the prices of coal, petroleum, iron, and steel, nonferrous metals, and lumber; and the index for non-agricultural prices as a group was at the lowest post-war level. Prices of livestock and livestock products and of clothing materials advanced in February. During the first three weeks of March there were decreases in prices of grains, livestock, sugar, silk, wool, coal, pe troleum, and gasoline, while prices of potatoes, pig iron, hides, and rubber advanced. Bank Credit. Demand for commercial credit at member banks in leading cities increased sea pt a n ce 1924 _ RATE 1925 1926 19 27 M O N E Y RATES Weekly rates in New York money market: commercial paper rate on 4- to 6-months paper and acceptance rate on 90-day paper. suited in a temporary abundance of fundswhich was reflected at member banks in leading cities by a growth of deposits, a reduction of indebt edness at the Reserve Banks and increased holdings of securities. A t the Reserve Banks, follow ing changes in holdings of bills and securities accompanying the financial operations of the treasury, the total volume of credit outstanding on March 23rd was somewhat larger than four weeks earlier. Conditions in the money market in March were slightly firmer than in February. Rates on prime commercial paper advanced from 4 per cent to 4^4 per cent. Call money was also higher, while rates on acceptances declined slightly. T W E L F T H F E D E R A L R E S E R V E D IS T R IC T C O N D IT IO N S The total volume of business transacted in the Twelfth Federal Reserve District was smaller during February, 1927, than during January, 1927, but when adjustment is made for variations in the number of working days in the month, an increase in the rate of activity is indicated. The increase, however, was less than that which usually occurs at this season of the year. This bank's index of daily average volume of checks cashed (bankdebits) by banks in 20 principal cities of the district declined from 161 (revised) per cent of the 1919 average in January, 1927, to 160 per cent in February, 1927. A year ago the index stood at 158 per cent of the 1919 average. According to the in dex of bank debits, as presented in the accom panying chart, general business activity thus far in 1927 has been at levels above the trend of past years. B A N K D E B IT S * —Twelfth District Index for 20 Principal Cities Feb., Jan., D ec., 1927 1927 1926 W ithout Seasonal A d justm ent............ 182 1660 163 W ith Seasonal A d ju stm en t................. 160 1610 158 *Daily average, 1919 average— 100. ORevised. Feb., 1926 175 158 M arch, 1927 Heavy rains over the district during Febru ary and early March hindered spring agricul tural operations, but assured an ample supply of soil moisture for the early grow ing season, added to prospective supplies of irrigation water, and gave promise of adequate feed sup plies on spring and summer ranges. IN D E X NUM BERS B A N K D E B IT S — T W E L F T H D IS T R IC T Index for 20 principal cities, Phoenix, Arizona, not included, (daily averages, 1919 average — 100). Latest figures, February, with --------adjustment, 160; without adjustment, 182. * Based upon average m onth to m onth increase during th e years 1919 to 1926 inclusive. Industrial activity reached slightly higher seasonal levels during February than during January, 1927, but continued a little below the levels of a year ago. Lumbering and building construction were less active than in 1926, while output of general manufactures, petroleum, and flour and other foodstuffs was greater than in the earlier year. Total volume of employ ment continued slightly larger than a year ago. Trade activity was maintained at moderate levels during February, 1927. Value of sales at retail declined by less than the usual seasonal amount as compared with January, 1927, and was greater than during February, 1926. Sales at wholesale were slightly smaller in value than in February, a year ago. The decline approxi mated that of the general level of wholesale prices over the year period, however, and it is probable that the physical volum eof goods moved through wholesale channels was as large during February, 1927, as during February, 1926. Prices generally fluctuated irregularly within relatively narrow limits during February, the trend being slightly downward. Representa tive indexes of prices at wholesale were ap proximately 5.5 per cent lower during Febru ary, 1927, than during February, 1926. Prices of some of the important products of this dis trict moved counter to the general price level during the month and there were small ad vances in quotations on livestock, wool, cotton, oranges, silver, zinc, and lumber. Reflecting seasonal expansion in business ac tivity, commercial loans of reporting city mem 19 FEDERAL RESERVE AGENT AT SAN FRANCISCO ber banks rose to record levels during the latter days of February and the first week of March. Borrowings of member banks from the Federal Reserve Bank of San Francisco also increased seasonally during this period. Agriculture Heavy rains over the district during Febru ary and early March hindered spring agricul tural operations, but assured an ample supply of soil moisture for the early grow ing season and added to prospective supplies of irrigation water. Movement to market of those semi-perish able and non-perishable crops, the marketing season of which extends throughout the year, has continued. By February 28th, exports of wheat from Puget Sound ports and from Port land, for the crop year commencing July 1, 1926, had totaled 29,671,000 bushels, compared with total exports of 11,577,000 bushels during the first 8 months of the 1925-1926 crop year. Barley exports from San Francisco have been smaller in volume during the current season than they were last year, shipments during the 8 months ending February 28, 1926, and Febru ary 28, 1927, amounting to 10,162,000 bushels and 8,031,000 bushels, respectively. Partly as a consequence of these diverse market m ove ments, stocks of wheat on farms of the Pacific Northwest are reported to be smaller and stocks of barley, particularly in California, are reported to be larger than a year ago. United States Department of Agriculture figures of stocks of wheat and barley remaining on farms on March 1st fo llo w : W H E A T A N D B A R L E Y —STOCKS O N F A R M S Per Cent of Crop Shipped Out or T o Be t— — March 1,------------^ t<-----Where Grown------ \ Five-Year Five1926 Averagef r-M arch l.-^> Year W heat (bu.)* (bu.)! (bu.)* 1927 1926 Averaáef California 1,201 803 948 62 $ 69 (10.0) (7 .0 ) (8.3) 2,956 3,906 4,290 $ 68 63 (12.0) (15.0) (17.4) O regon ............ 2,154 2,079 2,328 62 60 65 (11.0) (11.0) (11.1) W ashington . . 3,624 3,623 4,560 75 65 73 (9 .0 ) (9.0) (10.6) Four States . ,. 9,935 10,411 12,126 U nited States...130,444 100,137 151,428 68.3 68.6 64.9 (15 .7 ) (14.8) (18.9) Barley California 4,044 3,438 2,876 64 68 t (13.0) (11.0) (10.0) 663 1,364 680 33 31 t (15.9) (25.0) (18.1) O regon ............ 35 7 441 634 16 28 19 (15.0) (20.0) (18.3) W ashington . . 435 402 588 28 28 27 (20.0) (13.0) (22.1) Four States . . 5,499 5,838 4,585 U nited States.,. 40,829 52,915 46,997 29.2 35.5 36.1 (21.4) (24.4) (25.2) 1927 Figures in parentheses indicate percentage of preceding year’ s crop remaining on farms M arch 1st. *000 omitted, f 19211925. ^Figures not available. Source: United States Departm ent of Agriculture. During February, 1927, 3,806 cars of oranges and 727 cars of lemons were shipped, compared 20 MONTHLY REVIEW OF b u s i n e s s c o n d i t i o n s with shipments amounting to 3,483 cars of oranges and 558 cars of lemons reported for February, 1926. The 1926-1927 Navel orange crop is estimated at 13,000,000 boxes compared with 10,100,000 boxes grown in 1925-1926. Apple shipments from this district during the 1926-1927 season to February 28, 1927, totaled 43,758 carloads. Between July 1, 1925, and February 28, 1926, 44,482 carloads of apples were shipped from the district. Livestock on winter ranges have been gener ally benefited by comparatively mild weather during the past month, while recent heavy rains give promise of adequate feed supplies on spring and summer ranges. Reports from those sections of the district where lambing is or has been in progress indicate that the lamb crop in Arizona, Utah, and California will be ap proximately the same as a year ago, while in Oregon, Idaho, and W ashington a slight de crease has been reported. Market demand for choice lambs has been active, and shipments to Eastern markets have begun. Condition of live stock and ranges of the district is shown as a per cent of estimated normal in the follow ing table : C O N D I T I O N O F R A N G E S A N D L IV E S T O C K (PerC en t of Estimated Normal) W ashin gton . . O regon ......... . Idaho ........... . U tah .............. . N evada ......... . Arizona . . . . . California . . . Source : M ar. 1, 1927 87 92 88 89 85 90 94 -Cattle ------- \ , -------- SheepRanges-------- s 1 Feb. M ar. Mar. Feb. M ar. M ar. Feb. M ar. 1, 1, 1, 1, 1, 1, 1, 1, 1927 1927 1926 1927 1927 1926 1927 1926 87 90 92 92 93 90 91 96 99 92 92 88 98 91 91 98 98 90 77 96 93 88 98 93 103 85 96 93 89 104 93 89 83 100 90 88 105 89 86 103 85 95 85 86 85 88 90 88 92 92 91 93 93 90 90 89 United States D epartm ent of Agriculture. The follow ing table shows total receipts of cattle and calves, sheep, and hogs at eight prin cipal markets of the district during the first two months of 1927 and 1926 and the five-year, 19211925, average for that period. L I V E S T O C K R E C E IP T S A T E I G H T M A R K E T S January and January and 5-Year* February,1927 February, 1926 Average Cattle and C alves...................... 217,704 216,690 187,918 Sheep .............................................. 412,740 305,490 361,360 H o g s ............................................... 440,050 400,621 429,554 *1921-1925. W o ol buyers have been more active in the field during recent weeks than was the case a year ago. Contract prices of wool, however, are reported as ranging from 28 to 32 cents per pound which is slightly lower than last year when the range was from 32 to 35 cents per pound. Industry Industrial activity reached slightly higher seasonal levels during February than during January, 1927, but continued at or a little below the levels of a year ago. Available statistical and non-statistical data on employment show M arch, 1927 a small increase in volume of employment in California and a slight decrease in the Pacific Northwest during February, 1927, as compared with one month ago and one year ago. A sea sonal surplus of unskilled labor is now reported in all states of the district. Further prospective curtailment of building activity, particularly in the larger metropolitan areas, is indicated by figures of building per mits granted in 20 cities of the district during February, 1927. For the district as a whole and in most of the principal reporting cities, value of permits issued was less than during Febru ary, 1926. In some of the smaller urban centers an increase over the year period was reported. The present downward trend of building con struction follows upon a four-year period of great activity, born of the necessity for making up war-time building losses and, in its later phases, stimulated by the presence of large sup plies of capital seeking employment at m od erate rates of interest. District percentage changes are presented below, and detailed figures by cities are presented in Table “ B.” B U I L D I N G P E R M IT S IN 20 C IT IE S Per Cent Increase or Decrease (— ) Months in 1927 compared Month in 1927 with same Months in compared with preceding t---------------------- 1926 --------------------- ^ Monthly Year-to-date Month N o. Value N o. Value N o. Value F e b r u a r y .... — 13.2 — 14.4 — 14.4 — 15.5 — 1.9 — 6. 0 January ........ — 15.4 — 16.5 — 16.5 — 16.5 3.6 — 19.2 The United States Bureau of Labor Statis tics’ index number of wholesale building ma terials prices at 167.9 (1913 prices=100) for February, 1927, showed a decline of 1.8 points from the January, 1927, level. The February, 1927, figure is the lowest recorded since the summer of 1922, and is 10 points or 5.6 per cent below the February, 1926, figure. As a result of lower building materials prices, the Aberthaw index of total cost of building declined 1 point (A ) E m ploym ent— — Oregon ir~ " -Californ ia ■ ■—> t 1 N o . of N o . of N o. r— Employees —% N o . <— Employees —■* of Feb., Feb., of Feb., Feb.. Industries Firms 1927 1926 Firms 1927 1926 All Industries........... 809 145,832 141,815 150 21,375 23,352 (2.8) ( 8 .5 ) Stone, Clay and 6,992 6,301 Glass Products. 48 4 186 204 (11.0) (— 8.8) Lum ber and wood 57 Manufactures . . 127 23,462 24,387 12,415 14,308 (— 3.8) ( — 13.2) 17 2,554 2,618 1,354 8 1,367 (— 2.4) (— 1.0) Clothing, Millinery 66 8,353 7,934 and Laundering. 7* 318 307 (5.3) (3 .6 ) Foods, Beverages 45 and T o b a c c o .. . 178 24,337 23,471 1,480 1,438 (3.7) (2 .9 ) W ater, Light and 5 7,775 8,859 ( — 12.2) Other Ind ustries!. 356 70,354 66,350 (6 .0 ) 5,622 2,005 12 29 5,728 1,895 Miscellaneous . . . . (5 .8 ) (— 1.9) *Laundering only, f Includes the following indu stries: M etals, 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, 1926. M arch, 1927 21 FEDERAL RESERVE AGENT AT SAN FRANCISCO during February, and at 193 on March 1, 1927, was at the lowest point in the past four years. It stood at 195 on March 1, 1926. Further curtailment of lumber production was reported in this district during February, 1927, and for the second consecutive month orders received exceeded shipments, which in turn exceeded output, so that stocks of lumber held by mills decreased and unfilled orders in creased. The lumber association figures for February, 1927, include reports of only 146 mills, however, whereas 168 mills reported dur ing January, 1927, and 177 mills during Febru ary, 1926. Production, shipments, and orders received, showed decreases during February, 1927, as compared with both the preceding month and the corresponding month of last year. LUM BER* Feb., 1927 Jan.,1927 Feb.,1926 (board feet) (board feet) (board feet) Production ____ 426,771 460,184 557,605 Shipments .......... 489,800 528,296 598,385 Orders ................. 525,744 585,005 614,234 Unfilled O rd ers! 400,204 375,877 502,278 N o . of M ills R eporting? . . 146 168 177 -F irst Two 1927 (board feet) 886,601 1,016,759 1,109,311 M onth s1926 (board feet) 1,049,230 1,203,309 1,249,925 157 178 *A s reported by four associations, 000 omitted except in case of number of mills reporting. !R ep orted by three associations. The figures are not strictly comparable with other figures appearing in the table. $Average. Source: National Lum ber M anufacturers Association. Figures of national non-ferrous metal pro duction, together with a guide to the propor tionate importance of this district in such pro duction, follow : N O N -F E R R O U S M E T A L S National Production Per Cent of Total Produced in Feb., 12th D is t* 1926 in 1926 67,793 64.1 47,604 51.6 53,237 13.3 Feb., Jan., Copper (short tons) (mine 1927 1927 production) ...................... 69,031 76,684 Lead (short tons) (crude) 48,251 52,697 Zinc (short tons) (s la b ). 51,341 56,898 Silver (o z.) (commercial bars) ................................... 5,011,000 5,841,000 4,970,000 69.7 *Including all of Arizona, the five southeastern counties of which are in the Eleventh Federal Reserve District. Reported daily average production of petro leum in California during February, 1927, was 1.4 per cent (8,885 barrels) less than during January, 1927, but 4.8 per cent (29,241 barrels) greater than during February, 1926. Reported shipments showed substantial increases both as compared with last month and the correspond ing month last year, and were 8.6 per cent (1,545,347 barrels) larger than production. Stored stocks declined, follow ing a brief period of accumulation in December and January. P E T R O L E U M — California Indicated Average Stored Average Daily Stocks at Daily Consumption End of Production (Shipments) Month (barrels) (barrels) (barrels) Feb., 1 9 2 7 . . . 642,240 697,431 119,021,225 Jan., 1927____ 651,125 "" “ “ 618,092 120,566,572 Feb., 1926____ 612,999 586,888 128,106,096 Source : New W ells —n D aily Produc tion (barrels) 29,011 46,370 103 26,969 98 Number Opened 68 Am erican Petroleum Institute. Flour milling activity in this district, as rep resented by operations of 14 large milling com panies regularly reporting to this bank, in creased during February, 1927, both as com pared with February, 1926, and January, 1927. Increased daily average output was not accom panied by an increase in sales, however, and while total production decreased nearly 22 thousand barrels as compared with the previous month, stocks of flour in millers’ hands in creased by over 19 thousand barrels. F L O U R M IL L IN G * Feb., 1927 Output ( b b l s . ) . . . 387,551 S to c k s! 468,617 Flour ( b b ls .).. . W h ea t (bu .) . . . 2,857,031 Jan., 1927 409,439 449,512 2,964,471 Feb.,1926 325,161 417,548 2,295,563 Five-Year Average Feb., 1922-1926 436,772 499,446 2,949,412 C o n so lid a tio n s have reduced the number of reporting com panies but have not seriously affected the comparability of the figures. ! A t end of month. Distribution and Trade Trade activity in the Twelfth Federal R e serve District continued at moderate levels during February, 1927. Sales at retail were larger in value in February, 1927, than during February, 1926. Sales at wholesale were slightly smaller in value than a year ago, but the decline was less than that of the general level of whole sale prices over the year period. It is probable (C) Bank Debits* — (B ) Building P erm its— Berkeley ...................... Boise ............................. Fresno .......................... L o n g Beach ............... L o s A n g e le s ............... Oakland ...................... O gden ........................... Pasadena ..................... Phoenix ....................... Portland ...................... Reno ............................. Sacramento ............... Salt Lake C ity .......... San D iego ................. San Francisco San J o s e ...................... Seattle ........................ Spokane ....................... Stockton ...................... T a c o m a ........................ District ................ February, 1927 N o. Value 143 $ 390,135 47,000 48 98,322 75 546,240 308 7,574,354 2,476 584 1,720,644 31,250 14 162 265,963 92 159,775 1,006 3,065,935 23,600 10 1,486,280 254 247,075 56 963,763 548 623 3,210,978 610,510 96 833 1,535,810 149,180 107 111,715 74 212 639,135 7,721 $22,877,664 First Two Months 1927 1926 41,325 $ 38,889 25,896 26,672 76,718 70,753 91,953 106,790 1,889,244 1,727,795 329,877 424,195 40,647 52,477 83,882 78,137 54,913 50,335 310,985 325,485 16,591 16,713 54,243 66,447 134,154 139,764 136,315 124,667 2,275,331 2,215,123 52,273 49,490 370,838 388,008 106,901 104,494 55,752 54,140 84,371 86,328 23,302 23,560 (— February, 1926 N o. Value 227 $ 476,546 48 21,273 91 88,327 404 815,675 2,783 8,542,370 3,062,466 909 11 19,150 223 509,666 91 152,332 1,009 2,502,190 14 75,050 443,673 199 54 187,690 574 1,293,205 753 4,711,886 107 303,895 901 2,346,300 204,555 159 93 219,175 248 761,140 8,898 $26,736,564 B e r k e le y ............... Boise ..................... Fresno ................. L o n g Beach L o s A n geles . . . . Oakland ............... O g d e n ................... Pasadena ............ Phoenix ............... Portland .............. Reno ..................... Sacramento Salt Lake C ity. San D iego .......... San Francisco . . San J o s e ............... Seattle .................. Spokane ............... Stockton .............. Tacom a ............... Y a k i m a ................. D istrict ........... *000 omitted. Feb., 1927 Feb., 1926 17,175 19,181 $ 11,012 11,138 35,545 31,284 51,011 43,949 842,902 920,904 162,428 211,006 16,438 19,556 38,521 36,932 24,309 22,745 148,588 157,839 7,212 7,427 31,127 26,881 59,916 56,610 58,180 58,775 1,174,933 1,161,763 22,709 21,375 181,687 181,529 46,024 48,028 24,656 23,387 39,519 39,447 10,826 10,511 .$3,118,905 $2,996,080 $ $6,349,951 $6,075,822 22 M O N T H L Y REVIEW OF BUSINESS CONDITIONS that a larger volume of goods was moved through wholesale channels in February, 1927, than in February, 1926. Total sales of 92 reporting stores in 7 lines of trade at retail were 4.7 per cent larger in value during February, 1927, than during February, 1926, and were 9 per cent less than sales of the same firms during January, 1927. In the past 8 years, the January to February decline in value of sales has averaged approximately 13 per cent. Value of sales of 39 department stores in creased by 3.2 per cent as compared with February, 1926, and was 8.3 per cent smaller than in January, 1927. Stocks on the shelves of 69 stores in 7 lines of trade at the end of the month were 4.3 per cent larger than at the close of January, 1927, and 3.0 per cent larger than at the close of February, 1926. Stocks of 35 de partment stores averaged 1.9 per cent larger on February 28, 1927, than on February 28, 1926, and were up 5.1 per cent from the January 31, 1927, figure. The rate of stock turnover of 58 stores in 7 lines of trade during February, 1927, was 2.5 times per year, the same as in February, 1926. Rate of stock turnover at 35 department stores (2.4 times per year) was also the same during February, 1927, as during Feb ruary, 1926. Collections of 69 retail stores dur ing February, 1927, averaged slightly better than during February, 1926. D EPAR TM EN T STORE SAL ES-Index Numbers (1 9 1 9 M onthly Average = 10 0 ) Oak Los Angeles land (6)* (5)* nal Adjustment J an ., D e c ., N o v ., O c t ., F e b ., 1 9 2 7 ., 1 9 2 6 ., 1926. 1926. 1 9 2 6 ., . . . . . . 196 230 411 253 241 180 117 130 286 151 182 112 San Fran cisco (8)* Salt Lake City (4)* Seattle (5)* 108 115 247 155 151 108 79 87 198 118 127 82 79 81 193 1120 112 73 74 69 165 102 132 76 124 138 281 1690 170 119 141 130 154 150 139 142 110 105 127 111 107 114 122 107 122 1140 101 113 107 96 109 97 99 110 163 157 180 1710 158 156 Spo kane (3)* Dis trict (32)* With Seasonal Adjustment F e b ., Tan., D e c ., N o v ., O c t ., F e b ., 1927. . 1927. , . 1 9 2 6 ., . 1926. . 1926. . 1926. . 242 243 272 253 234 223 155 152 171 149 168 149 * F ig u r e s in pa re n th e se s in d ica te n u m b e r o f s to re s. O n e sto re in c lu d e d in d is tric t fig u re s n o t in c lu d e d in citie s s h o w n a b o v e . O R evised. Total value of sales of 200 firms in eleven lines of trade at wholesale was approximately 5.3 per cent smaller during February than in January of this year and 1.4 per cent smaller than in February of last year. Sales of reporting dry goods houses averaged 2.3 per cent below a year ago, while sales of wholesale hardware dealers, another important group, declined more than 5 per cent. Sales of wholesale gro cers showed a slight increase during February, 1927, as compared with February, 1926, but, if January and February sales be combined, the 1927 figure was smaller than that for 1926. Dealers in automobile equipment and electrical supplies continued to report larger sales than last year. The general level of wholesale prices, M a r c h , 1927 according to the United States Bureau of Labor Statistics’ index, has declined 5.5 per cent since February, 1926. Collections of reporting w hole sale houses averaged slightly better during February of this year than in February, 1926. W H O L E SA L E TR A D E Percentage increase or decrease (—) t----------- in Value of Sales------------ \ Feb., 1927 Feb., 1927 Jan., 1927 compared compared compared No. of with with with Firms Feb., 1926 Jan., 1927 Jan., 1926 A g r ic u ltu r a l Im p le m e n t s . 15 A u t o m o b ile S u p p lie s . . . . 24 19 A u t o m o b ile T i r e s ............... D ru g s ....................................... 7 D r y G o o d s ............................. 29 E le c t r ic a l S u p p lie s .......... 9 16 F u rn itu r e ............................... 27 G r o c e r ie s ............................... 21 H a r d w a re .............................. 12 S h o e s ....................................... 21 P a p e r and S t a t io n e r y . . . . A ll L i n e s ............................... 200 — 22.4 6.0 15.2 — 0.4 — 2.3 6.9 — 5.1 0.9 — 5.5 — 9.5 0.2 — 1.4 — 9.7 — 6.6 — 7.0 — 4.9 — 4.1 — 7.4 5.8 — 6.9 — 2.7 — 5.1 — 10.2 — 5.3 — — — — — — — 9.5 7.3 65.5* 5.4 6.1 5.2 7.0 2.7 5.8 11.2 3.0 1.3 * P a r t o f this in c re a s e d u e t o th e r e s u m p tio n b y ce r ta in o f the la r g e r c o m p a n ie s o f “ s p r in g d a t in g ” sales, n a m e ly th e p r a c t ic e o f e x t e n d in g c r e d it o n sales m a d e in au tu m n an d w in ter m o n th s u n til M a r c h , A p r il, an d M a y o f th e f o llo w in g year. T h is p r a c t ic e w a s n o t f o llo w e d b y th ese c o m p a n ie s d u r in g the au tu m n an d w in te r o f 1925. Prices A further slight decline in the level of com modity prices occurred during February, 1927. The United States Bureau of Labor Statistics’ index of wholesale prices was fractionally lower, standing at 146.4 (1913 prices— 100) compared with 146.9 in January, 1927. A year ago this index stood at 155.0. Group indexes for farm products, foods, fuel and lighting, metals, building materials, and chemicals and drugs de clined, while the cloths and clothing, house furnishings, and miscellaneous groups ad vanced slightly. The United States Department of A gricul ture’s index of prices paid for farm products at the farm advanced from 126 (August, 1909July, 1914 prices = 100) in January to 127 in February, 1927, while the Bureau of Labor Sta tistics’ index of non-agricultural commodities declined from 156 (1913 p rices= 1 0 0 ) to 155. As a result of these divergent movements, the ratio between the two indexes, an indication of the purchasing power of farm products (pre war purchasing p o w e r = 100), advanced from 81 in January, 1927, to 82 in February, 1927. A year ago the ratio was 87. Livestock prices, as reflected by Chicago market quotations, were generally higher dur ing February, 1927, than during the previous month. W eekly average prices for cattle, sheep, and lambs advanced approximately 4 per cent, 19 per cent, and 4 per cent, respectively, during the month. Prices paid for hogs declined slightly. W eekly average prices for cattle and hogs during February, 1927, were respectively 12 per cent and 6^2 per cent higher and of sheep and lambs about 9 per cent and 26 per cent lower, respectively, than during February, 1926. Lamb prices advanced approximately 10 M a r c h , 1927 per cent during the first weeks of March. Com parative quotations are shown in the following ta b le: liv e s t o c k p r ic e s a t c h ic a g o F e b ru a r y , J a n u a ry , F e b ru a r y , 23 FEDERAL RESERVE AG EN T A T SAN FRANCISCO (Monthly average per 100 pounds) C a ttle H ogs 1 9 2 7 ............... $10.50 $11.81 19 2 7 ............... 10.08 11.92 1 9 2 6 ............... 9.35 11.09 Sheep $7.66 6.43 8.45 Lam bs $13.01 12.52 17.49 Early in March, quotations for hogs declined from February levels and, at $11.70 per 100 pounds for the week ending March 4th, were lower than the average price ($12.45 per 100 pounds) quoted during the week ending March 5th a year ago. Prices paid for best grade live stock at six markets of the Twelfth District during February were slightly higher than dur ing January and compared favorably with prices paid in February, 1926. Inactivity in the wheat market, which char acterized the early days of February, persisted throughout the month. Quotations for May contract wheat at Chicago on March. 4, 1927, ranged from $1.41 to $1.42% per bushel, com pared with a range of $1.42% to $1.43% on February 4, 1927. On March 15, 1927, quota tions for this grade of wheat ranged from $1.37% to $1.37%, and on March 15, 1926, from $1.63% to $1.65% per bushel. Although prices for spot cotton during February, 1927, continued at levels approxi mately 30 per cent below those of a year ago, daily quotations for the month averaged about 5 per cent higher than for January, 1927, and 18 per cent above the low point of December 3, 1926. The market declined slightly toward the middle of March. For the week ending March 4, 1927, prices for spot middling uplands cotton at New Orleans ranged from 14.06 to 14.55 cents per pound compared with a range of 13.32 to 13.65 cents per pound for the week ending February 4, 1927. A year ago prices for this grade of cotton ranged from 18.14 to 18.83 cents per pound. On March 10th the quotation was 14.10 cents per pound. W oo l prices, as in dicated by an average of 98 quotations on the Boston market, changed but little during the month. The average advanced fractionally from 65.42 cents per pound on February 4, 1927, to 65.71 cents per pound on March 4, 1927. A year ago this average stood at 76.02 cents per pound. During most of February the dried fruit mar ket was quiet. Distributors report moderate un sold holdings of dried fruit. Canned fruit prices have changed little during recent weeks. Retroactive price reductions made early in the year are reported to have hastened the m ove ment of spot stocks into consumption. Canners’ stocks are reported to be slightly larger in volume than one year ago. Heavy rains in Southern California ham pered shipment of oranges during February and diminished receipts caused a temporary rise of prices in Eastern markets in mid-Febru ary. Price quotations for California oranges (No. 252’s) rose from $3.05 to $4.32 per box on February 11, 1927, to $4.15 to $5.55 per box on February 25, 1927, and then declined to $3.10 to $5.20 per box on March 11, 1927. Monthly average prices for copper and lead at New York declined during February. Prices for silver and zinc advanced slightly, interrupt ing, at least temporarily, a tendency toward lower price levels which persisted during the entire year 1926 and early weeks of 1927. A national index of lumber prices published by “ The Lumber Manufacturer and Dealer” stood at 29.82 for February, 1927, compared with 29.73 for January, 1927, and 31.44 for February, 1926. Banking and Credit Seasonal expansion in business activity dur ing late February and early March was re flected in banking statistics of the period, both as reported by commercial banks and by the Federal Reserve Bank of San Francisco. Following a decline during the first seven weeks of 1927, the volume of commercial loans of reporting city member banks expanded from the year’s low of 950 million dollars, reached on February 16th, to a new all time high figure of 989 million dollars recorded on March 9th. During the follow ing week, the volume of com mercial loans declined slightly but on March 16th was still above the 1926 peak attained (D) Commodity Prices — C om m o d ity W h o le s a le P r ic e s (U . S. B u re a u o f L a b o r ) 1 9 1 3 = 1 0 0 ...................................... P u r c h a sin g P o w e r o f F a rm P r o d u c t s (U . S. D e p a r tm e n t o f A g r ic u lt u r e )* C a ttle (N a t iv e B e e f ) . .W e e k ly a v e ra g e p r ice at C h ic a g o .................................... L a m b s ................................W e e k ly a v e ra g e p r ice at C h ic a g o ..................................... H o g s ..................................W e e k ly a v e ra g e p rice at C h ic a g o ...................................... W h e a t ............................... C h ic a g o c o n t r a c t p r ice fo r M a y w h e a t .......................... W o o l ..................................A v e r a g e o f 98 q u o ta tio n s at B o s t o n . ................ .............. A p p le s ............................... E x tr a F a n c y W in e s a p s , f. o. b. P a c ific N o r t h w e s t . O r a n g e s .............................N a v e ls, F a n c y , w h o le s a le at S an F r a n c i s c o ................. P r u n e s ............................... S iz e 4 0 /5 0 in 25-lb. b o x e s , f. o . b. C a lifo r n ia ............. R a is in s ..............................T h o m p s o n S eed less, b u lk , in 25-lb. b o x e s , f. o. b. C a lifo rn ia ........................................*••••............................... C a n n ed P e a c h e s ............ C lin g , C h o ic e , 2*^s, f. o. b . C a lifo r n ia ........................... B u t t e r ............................... 92 s c o r e at San F r a n c i s c o .................................................... C o p p e r ............................... E le c t r o ly t ic , m o n th ly a vera ge at N e w Y o r k ............... L e a d .................................... M o n th ly a v era g e at N e w Y o r k ............................................ S ilv e r ..................................M o n th ly a v e ra g e at N e w Y o r k ............................................ L u m b e r ( S o f t w o o d ) . .W e e k ly I n d e x U n ite d S t a t e s f. U nit 100 lb s. 100 lb s. 100 lb s. bu . lb. box box lb . lb. doz. lb. lb . lb . o z. M a rch 4,1927 146.4 82.0 $10.60 14.90 11.70 1.41-1.4 2^3 65.710 1.8 5 -2 .0 0 4 .0 0 -5 .0 0 . 0 7 - .0 7 ^ .0 7 ^ 2.20 .46 12.6820 7.4200 57.8980 29.82 O n e M on th A g o 146.9 81.3 $10.50 12.80 12.05 il.4 2 H -l.4 3 tf 65.420 1.6 5 -1 .8 0 4 .2 5 -4 .8 5 .0 7 -.0 iy 2 O ne Y ear A go 155.0 87.0 $9.85 13.60 12.45 1.57-1.6 1 76.020 1.80 4 .2 5 -4 .7 5 .08H --09M .07y2 2.20 .4 7 tf 12.9900 7.5770 55.7950 29.73 *Ratio of farm prices (August, 1909-July, 1914=100) to wholesale prices of non-agricultural commodities (1910-1914=100). tA s published by ‘‘The Lumber Manufacturer and Dealer.” .0 7H 2.20 .45y» 13.9990 9.1540 66.7730 31.44 24 M a r c h , 1 927 M O N T H L Y R EVIEW OF BUSINESS CONDITIONS during the Christmas holiday season. Loans on securities also increased at these banks during February and early March and total loans had reached record levels on March 16, 1927. Investments of reporting banks also reached record levels during the month, largely as a result of increased holdings of United States Government securities coincident with recent government financing. At 511 million dollars M IL L IO N S OF D O LLAR S 1400 1200 seven million dollars larger on March 16th, than on February 16, 1927. The March figure was 10 million dollars or nearly 20 per cent smaller, however, than on March 17, 1926. Holdings of United States government securi ties and of bills purchased in the open market declined slightly during the four-week period, but the decrease in this item was less than the increase in discounts, and total earning assets (total bills and securities) of the Reserve Bank increased three million dollars or three per cent. FED ER AL RESERVE BANK OF SAN FRA N C ISCO (In millions of dollars, percentage changes in parentheses) Condition Mar. 16, 1927 T o t a l B ills and S e c u r itie s . . B ills D i s c o u n t e d ...................... U n ite d S tates S e c u r itie s . . .. B ills B o u g h t ............................. T o t a l R e s e r v e s .......................... T o t a l D e p o s it s ......................... F e d e ra l R e s e r v e N o te .,. 3 OO '- VM V1 9 2 3 1 9 2 4 1 9 2 5 1 9 2 6 1 9 2 7 M EM B ER BAN K CR ED IT—T W E L F T H DISTRICT Figures for about 65 member banks in leading cities, as of last Wednesday of each month. Latest figures, March 16. on March 16, 1927, they were 29 million dollars, or six per cent larger than on February 16,1927. Total deposits continued their upward trend. An increase of 50 million dollars, or 2.9 per cent, was due in part to the expansion in loans granted, and consequent increase in demand de posits, but was chiefly the result of an increase of 58 million dollars, or 6.5 per cent, in time deposits. A t 1,745 million dollars on March 16th, total deposits were 32 million dollars above previous record figures reported during the last of December, 1926. T o meet expansion in demand for primary credit accommodation during late February and early March, report ing member bank borrowings from the Federal Reserve Bank of San Francisco increased by 34 million dollars, or 37.7 per cent, but were still 8 million dollars, or 18.8 per cent, smaller than total borrowings from the Reserve Bank at this time last year. REPORTING M EM B ER B AN K S— Twelfth District (In millions of dollars, percentage changes in parentheses) ■ ■> Condition /--------- Changes from Mar. 16, One Month One Year 1927 Ago Ago T o t a l L o a n s ................................ 1,314 C o m m e r c ia l L o a n s .................... 981 L o a n s o n S e cu ritie s ............... 333 In v e s tm e n ts ................................. 511 T o t a l L o a n s a n d I n v e s tm e n ts 1,825 N e t D e m a n d D e p o s it s ............. 792 T im e D e p o s it s ........................... 953 B o r r o w in g s fr o m F e d e ra l R e s e r v e B a n k ........................ 34 (+ = +35 +31 + 4 +29 +65 + 2 +58 + increase. — = decrease. ) ( 2 .8 ) + 1 1 8 ( 9 .9 ) ( 3 .3 ) + 71 ( 7 .7 ) ( 1.2 ) -j- 48 (1 6 .8 ) ( 6 .1 ) + 23 ( 4 .8 ) ( 3 .7 ) + 1 4 2 ( 8 .4 ) ( 0 .2 ) + 19 ( 2 .5 ) ( 6 .5 ) + 1 3 2 (1 6 .1 ) 9 (3 7 .7 ) — 8 (1 8 .8 ) Increased demands upon all member banks were partially reflected in their borrowings from the Federal Reserve Bank of San Fran cisco, and discounts at the Reserve Bank were ,------- Changes from----------s One Month One Year Ago Ago ( + = increase. — = decrease. ) 99 40 35 23 270 182 + 3 ( 3.0 ) + 7 (2 2 .7 ) — 3 ( 9 .8 ) — 1 ( 4 .6 ) + 6 ( 3 .2 ) — 6 ( 6 .0 ) — 10 (1 9 .2 ) + 3 (1 0 .0 ) + 1 ( 2 .7 ) + 11 ( 4 .1 ) + 18 (1 0 .9 ) 170 — 2 ( 1.1) — 14 ( 7 .7 ) + 4 ( 1.4) On March 7, 1927, the Treasury Department announced its usual March financing in the form of an offering of two series of Treasury Certificates of Indebtedness, TS2-1927 and TM-1928, both dated and bearing interest from March 15, 1927. Series TS2-1927 matures on September 15, 1927, and bears interest at the rate of per cent per annum, payable on a semi-annual basis. Series TM-1928 matures on March 15, 1928, and bears interest at the rate of 3% Per cent per annum payable on a semi annual basis. Subscription books for both series were closed on March 12, 1927, the issues being heavily oversubscribed. A total of $484,296,000 was allotted, of which $47,078,000 was allotted in the Twelfth Federal Reserve D is trict. Interest rates borne by the most recent issues of Treasury certificates were lower by one-eighth per cent and one-quarter per cent, respectively, than rates borne by the last two issues of Treasury certificates of comparable maturity period. In addition to the regular March financing, the Treasury Department, on March 8th, an nounced an issue of United States Treasury Notes, Series A-1930-1932, dated and bearing interest at 3j4 per cent per annum from March 15, 1927, and maturing March 15, 1932, offered only in exchange for Second Liberty Loan Con verted 4j4 per cent bonds of 1927-1942. Up to March 15th over one billion dollars of Second Liberty Loan 4j4 per cent bonds had been pre sented for conversion, and the Treasury D e partment announced that, in order to give other holders of Second Liberty Loan 4% per cent bonds an opportunity to avail themselves of the offer, subscription books would remain open until the close of business on Tuesday, March 22nd.* * P r e lim in a r y e stim ates o f e x c h a n g e s as o f th e la tte r date to ta le d $1,354,611 ,650 , o r a p p r o x im a te ly 44 p e r ce n t o f the to ta l o f this issu e o u ts ta n d in g o n M a r c h 8, 1927.
@FedFRASER