The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
MONTHLY REVIEW OF B U S IN E S S C O N D IT IO N S Federal Reserve Agent Federal Reserve Bank of San Francisco Vol. X X San Francisco, California, May 20,1936 No. 5 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 Tw elfth District business continued to ex pand during April. Gains in the distribution of goods generally exceeded seasonal expecta tions but the advance in industrial production was of slightly less than customary propor tions. Except for the number of workers re ported by vegetable canneries, industrial em ployment increased seasonally, while pay rolls expanded less than in April of most recent years. Value of building permits was slightly below the unusually high March figure. Reports from 20 larger cities indicate that permits for resi dential building and for renovation and repair work continued to expand, the decline occur ring entirely in nonresidential permits which fluctuate rather erratically from month to month. Contract awards for public works were nearly twice as large in April as in March. Despite the recent substantial improvement in district and national building activity and a large accumulation of unfilled orders for lum ber, output at district lumber mills increased less than seasonally during April. Production of cement increased considerably further. Crude oil output increased slightly but the run to stills was somewhat smaller than in March. Vegetable canneries were packing spinach dur ing most of April, and the asparagus canning season commenced about the middle of the month. W ith the close of the California sar dine season at the end of March a substantial decline in activity at fish canneries and reduc tion plants took place. Flour production de clined during April, while livestock slaughter increased by more than the customary amount. District department store sales, after allow ance for seasonal influences and adjustment for the influence of Easter purchases, increased in most sections of the district. New automo bile sales continued to increase from the un usually high level of recent months and were larger than in any April since 1929. The cus tomary expansion in railroad freight carloadings and a contra-seasonal increase in inter coastal traffic took place during the month. W eather conditions were favorable for the seeding and growth of crops during April, but because of low temperatures earlier in the season the condition of planted crops and of deciduous fruits was below normal. Condition of livestock and livestock ranges improved dur ing April and early May in most sections of the district. Prices of most farm products declined somewhat from mid-April to mid-May. Earning assets of Twelfth District reporting member banks showed no material change dur ing the five weeks ending May 20. Although loans and securities have fluctuated more or less during the past few months, there has been no consistent tendency for total earning assets either to expand or contract since D e cember 1935. Total time and adjusted demand deposits at reporting member banks reached a record level on April 22 and declined only slightly in the succeeding four weeks. Substantial United States Treasury disburse ments in excess of local collections continued to be the principal source of additions to Twelfth District banking funds during the fiveweek period ending May 20. These additions were offset only in part by a net outflow of funds to other districts arising from payments in connection with commercial and financial transactions and by an increase in currency circulation. Chiefly because of these factors, member bank reserve balances expanded dur ing the period to the highest point on record. Agriculture After unusually low temperatures during the first few days of April weather conditions dur ing that month and the first half of May were generally favorable to agriculturalists. The seed ing of spring grains and field crops continued at a more rapid rate than a year ago when late April storms delayed farm operations. W arm, dry weather in the Pacific Northwest advanced the fruit bloom approximately to normal in most areas, and rains in early May were bene ficial to crops and ranges. Livestock were re ported to be in good to excellent condition in the Twelfth District generally. 34 MONTHLY REVIEW OF BUSINESS CONDITIONS Farmers’ cash income during April was esti mated to be slightly in excess of April 1935. This was entirely the result of a larger volume of agricultural marketing than in the same month last year, inasmuch as farm products prices averaged about the same as in April of last year. Marketing of this season's California Navel orange crop was practically completed during April and the first half of May at prices which averaged about the same as in March but slightly below last year. A s in every month since the first of the year, shipments were smaller than in the comparable month in 1935. Consumers’ demand for lemons slackened in April and both prices and shipments declined from March levels. Prices received during the month were 72 percent above those received in April 1935, but shipments were 32 percent smaller. Deciduous fruit crops in California are ad vanced further towards maturity than at this time last year. The 1936 yield of cherries, the only fruit for which figures are available, is forecast at 20,000 tons compared with 16,600 tons last year and an average annual produc tion o f 18,760 tons during the five years 1928 through 1932. Output of fruits in the Pacific Northwest may be reduced considerably this season because of low temperatures early in the year. Harvesting of wheat and barley began late in April in California. In the Pacific Northwest, abandonment of winter and fall sown wheat because of damage from cold and wet weather was greater than usual this year. The seeding and early grow th of field crops progressed under favorable weather conditions in all parts of the district. Early estimates indicate from moderate to substantial increases in acreage planted to field crops and a production of grains somewhat larger than the average of recent years. Agricultural Marketing Activity— Carlot Shipments Apples and Pears. Citrus Fruits . . . Vegetables .......... Exports Wheat ( b u . ) ........ Barley ( b u . ) ........ Receipts* Cattle .................. Hogs .................... Sheep .................. Eggs (cases) . . . . Butter (lbs.) . . . . Wheat (carlots) . Barley (carlots) .. Storage Holdings* (end of month) Wheat (bu.) . . . . Beans (bags) . . . Eggs (cases) . . . . Butter (lbs.) . . . . f--------- April --------- N 1935 1936 2,427 3,674 7,517 9,723 11,561 12,845 ’ 746,500 11,200 71,000 81,460 143,638 290,283 229,095 7,132,096 2,157 473 63,372 130,489 311,171 205,831 7,472,973 3,721 353 f *At principal district markets. 1 /jO April 3,805,000 1,244,000 352,000 242,000 March 5,086,000 1,470,000 146,000 77,000 (— Season to Date— % 1935 1936 41,650 37,104 39,948 33,308 62,079 63,694 50,161 8,344,738 2,801,193 3,733,827 307,460 346,913 574,969 615,198 928,367 918,577 707,335 787,046 24,121,930 22,937,089 54,906 44,061 7,927 7,734 m« r *■' March April 2,497,000 3,171,000 1,111,000 1,351,000 176,000 389,000 451,000 44,000 May 1936 The number of eggs received at Los Angeles, San Francisco, and Portland increased as is usual from March to April, and in the first four months of 1936 was larger than in the same period in any one of the last ten years. Prices advanced only 1 cent per dozen from the first of April through mid-May, compared with a four cent gain during this period last year. On May 15, 1936, egg prices at whole sale in San Francisco were 25 percent lower than on May 15, 1935. Increasing receipts of butter at Pacific Coast markets since the first of the year have reflected for the m ost part a seasonal growth in butter production in this district, and have been accompanied by the usual declines in wholesale prices. Butter is now selling at about the same level as a year ago. Ranges and pastures generally improved dur ing April, although cold weather early in the month retarded the growth of feed in the Pa cific Northwest. Losses of cattle and calves because of storms and low temperatures in the first week of April were not as great as at first expected and reports indicate improvement in the condition of range cattle since that time. The movement of early lambs eastward from California continued at a somewhat slower rate than last year but at about the average of re cent years. W o o l shearing was under way throughout the entire district by mid-May, and prices paid w ool growers were markedly higher than last season. Industry Industrial output in the Twelfth District ad vanced further during April but the rise was somewhat less than seasonal. Vegetable can ning and lumbering were the two industries chiefly responsible for the less than seasonal rise of production. Gains in industrial em ploy ment and pay rolls were also smaller than cus tomary at this time of year. Value of building permits declined moderately. Excluding the fruit and vegetable canning industry, industrial employment in California increased somewhat more than seasonally be tween mid-March and mid-April. The numbei of workers reported by vegetable canneries in creased sharply although the rise was not a< large as in April of most other recent years In Oregon, principally because of condition in the important lumber industry, expansion ir employment was somewhat smaller than hai been customary in April. In comparison witl April 1935, employment in identical manufac turing concerns advanced 3.5 percent in Cali fornia and 12.2 percent in Oregon. The mos significant increases over the year-period w er in the heavy goods industries, particularly ii the lumber and w ood products group w her May 1936 35 fe d e r a l re se rv e a g e n t a t san fr a n c is c o increases of 18 and 16 percent occurred in Oregon and California, respectively. The metals, machinery, and conveyances group in California reported an increase of 13 percent over the year. M id-April pay rolls in manufac turing industries were higher by 12 percent in California and 26 percent in Oregon than a year earlier. Follow ing an unusually sharp advance in the preceding month, the value of building permits in 90 district cities decreased slightly in April, but remained 44 percent above that of a year earlier. In the 20 larger cities for which segregated data are available, value of permits for residential building and for alterations and repair work continued to increase. These in creases were slightly more than offset by a decline in nonresidential construction from the unusually high March level. Contract awards for public works in the seven far western states amounted to 19 million dollars during April, an amount almost twice as large as that recorded in March. The total for the year to date is substantially higher than the figure reported for the same four-month period in 1935. District lumber production increased 8 per cent during April but this gain was consider ably less than has been customary in April of most other recent years. The failure to expand seasonally occurred notwithstanding continued reports that mill inventories are unusually low and that the volume of unfilled orders is large. Lumber shipments and new orders were sub stantially higher in April than in March. Ship ments by rail continued the sharp increase apparent since about the time competitively favorable freight reductions to all points east of the Illinois-Indiana line became effective on August 24, 1935. W ater-borne shipments of lumber advanced moderately during the month. Daily average crude oil output increased slightly during April follow ing a substantial decline in the preceding two months which resulted from a voluntary curtailment agree ment. A t 569,000 barrels daily average output was 3,000 barrels above that for March and 100,000 barrels higher than in April last year. The curtailment program set 539,000 barrels daily as an objective for April. Inventories of crude oil were reduced during the month, how ever, partly reflecting increased shipments to the East Coast. Crude runs to refinery stills declined somewhat during April and a reduc tion was brought about in the rather large accumulated supply of refined products. F ol lowing advances aggregating 4 cents per gallon in the first half of the month, gasoline quotations have since remained unchanged. Canning of spinach was active during April. Due to an unusually strong demand for fresh asparagus and the slow early season growth of that crop this year, asparagus canning did not reach an important volume until after the mid dle of April. It is now estimated by the trade that the spinach pack will be moderately smaller than last year (2,178,200 cases), while the asparagus pack will probably approximate the 1935 output of 2,238,400 cases. Opening prices of $2.60-$2.70 per dozen No. 1 square cans of large white asparagus and $1.15-$1.20 per dozen No. 2y2 size cans for spinach, were somewhat higher than last year and the market has continued firm at these quotations. W ith the closing of the sardine fishing season on March 31, activity at California fish Employment— Industry — f---------California---------% t— ■ Oregon— .. — ■ No. of No. of No. '— Employees No. /— Employees — > of April April of April April Industries Firms 1936 1935 1936 Firms 1935 19,183 All Industries* . . . 1,376 159,243 153,902 105 17,091 (+12.2) (+3.5) Stone, Clay, and 135 Glass Products. 60 125 6,841 5,703 3 (— 7.4) (+ 2 0 .0 ) Lumber and W ood 9,152 Manufactures .. 114 12,720 10,972 10,798 36 (+ 1 5 .9 ) ( + 18.0) T e x tile s............ 1,720 19 2,043 2,350 8 1,703 (— 13.1) (— 1.0) Clothing, Millinery, and Laundering 149 10,867 10,331 233 214 n ( + 5.2) (+ 8 .9 ) Food, Beverages, and Tobacco . . . 290 38,659 43,595 27 1,267 1,231 (+ 2 .9 ) (— 11.3) Public Utilities .. 54 46,906 43,804 ( + 7.1) Other Industries!. 692 74,693 70,346 ( + 6.2) 52 13,420 10,605 24 5,057 4,639 Miscellaneous . . . . (+ 2 6 .5 ) (+ 9 .0 ) Wholesale and R e ta il................ 378 54,425 52,210 ( + 4.2) ,------------ 1936— General Apr. Mar. Feb. Carloadings— Industrial. 63 60 63 Electric Pwr. Production 17411 174‘ir 179 Manufactures Lumber .......................... 63ÏÏ 68 70 Refined Mineral O ilsf. . 149H 153 156 109ÏÏ 117 101 Cement .......................... 115 87 97 100 105r W ool Consumption! . . . * * * Slaughter of Livestock. Minerals Petroleum (California)! 86U 86 89 Lead (United States) $. 59 62 Silver (United States) t 97 90 Building and Construction# Total .............................. 54 76 88 Building Permits— Value Larger Cities ............ 33 30 29 Smaller Cities .......... 50 53 54 Engineering Contracts Awarded— Value Total ...................... 79 127 167 Excludin g B uildi ngs 144 273 374 *Public utilities, wholesale and retail figures not included in this total, tlncludes the following industries: Metals, machinery, and conveyances; leather and rubber g o od s; oils and paints ; printing and paper goods. ^Laundering only. Figures in parentheses indicate percentage change from April 1935. fN ot adjusted for seasonal variation. ^Prepared by Board of Governors of the Federal Reserve1 System. #Indexes are for three months ending with the month indicated, flPreliminary. rRevised. *Under revision. Indexes of daily average production, adjusted for seasonal variation (1923-1925 daily average=100) Jan. 77 179 ,------- 1935------- V Apr. Mar. Feb. 50 54 55 148 152 154 75 152 101 120 93r * 60 52 53 124 125 127 93 114 107 58 53 64 118r 79r 112r 91 94 97 103 63 95 72 58 49 75 55 50 75 50 65 90 38 40 44 25 44 23 25 20 23 17 21 182 337 60 114 61 132 80 176 36 May 1936 MONTHLY REVIEW OF BUSINESS CONDITIONS reduction and canning plants declined consid erably. Output of canned sardines during the 1935-1936 season totaled 3,216,920 cases of one pound ovals or their equivalent, an increase of more than 70 percent from the preceding season. Production was larger than in any other year except 1929. The total catch was somewhat smaller than in 1934-1935, but a considerably smaller proportion was diverted to fish oil and meal. Practically no mackerel was canned in California during April, but spring tuna packing continued heavy through out the month. Preparations for the salmon canning season which opens on various dates ranging from M ay 1 to June 25 in the several localities in the Pacific Northwest and Alaska were started in April. Preliminary crews and shipments of equipment and supplies were sent to most plants in central and southeastern Alaska during the month. Trade Measures of the distribution of goods in the Twelfth District generally increased more than seasonally in April. District railway freight traffic increased dur ing April and this bank’s adjusted index, at 80 percent of the 1923-1925 average, was slightly higher than in the two preceding months. Load ings in the Pacific Northwest increased slightly more than usual, reflecting a substantial gain in year, despite the fact that year-period gains by reporting stores in the State of W ashington were negligible. This circumstance was the outcome of an unusually high level of sales in DEPARTM ENT STORE SALES-Twelfth District Index adjusted for seasonal variation (1923-1925 average=100). W ashington in April 1935, prior to imposition of a 2 percent retail sales tax which became effective on M ay 1 of that year. RETAIL TR AD E —Twelfth District Percentage^changes in value of sales and stocks (------------1936 compared with 1935-----------t-------- NET SALES-------- N STOCKS Jan. 1 to end April April* of April Department S tores.. . 9.4 6.8 ( 56 7.0 ( 83) 15.4 ( 6: 10.8 Los Angeles ........ 7.8 ( 6) 7.9 Other So. California 6] 9.5 8.5 ( 9) 5; O a k la n d ................ 10.8 4.7 10.6 ( 5) San Francisco . . . . 7.1 ( 8) 9.9 6.4 Bay Region ........ 10.2 5.8 8.4 ( 18) 16Í 6; 7.5 Central California. 4.9 ( 6) 4.3 7.9 Portland f .............. 14.1 16.8 ( 9) 4 2.1 ( 5) 5.8 2.5 5 3.0 18.9 — 2.6 ( 6) — 0.2 5.5 21.9 6 Tacomaf .............. ( 8) 2.9 4: 7.1 Salt Lake City. . . . 5.9 ( 4) 17.7 18.5 Apparel S to r e s ........ 28 13.4 ( 42) 32.7 11.7 25; Furniture S to r e s .... 24.8 ( 32) 9.5 (157) 12.8 8.6 *April 1936 had the same number of trading1 days as April 1935 tIncludes five apparel stores in Portland and six in Tacom; which are not included in district department store total Figures in parentheses indicate number of stores reporting. 1929 1930 1931 1932 1933 1934 1935 1936 C A R LO A D IN G S—Twelfth District Index adjusted for seasonal variation (1923-1925 average=100). lumber shipments, but in California they failed to expand by the full customary amount follow ing a sharp rise last month. Total loadings were about 10 percent larger than a year earlier. Value of department store sales advanced sharply from March levels. This bank’s index, which makes allowance for usual seasonal in fluences and for a substantial gain because of Easter purchases, advanced from 85 in March (1923-1925 = 100) to 89 in April. Increases in the value of sales exceeded seasonal expecta tions in most parts of the district. Total sales were 7 percent higher than in April of last Sales of new passenger automobiles anc trucks increased during April from the un usually high level reported for March and w en 30 percent larger than in April of last yeai when more cars were sold than in any othei W HOLESALE T R A D E —Twelfth District Percentage changes in value of sales Agricultural Implements. Automobile Supplies D r u g s ................................ Dry G o o d s ........................ Electrical S upplies.......... F u rn itu re.......................... Groceries .......................... H ardw are.......................... Shoes ................................ Paper and Stationery . . . All Lines .......................... April 1936 f-----compared with----Mar. 1936 Apr. 1935 — 12.6 37.0 5.9 7.8 — 0.5 7.5 — 4.2 5.0 39.1 2.3 9.7 — 5.2 2.9 — 2.7 7.2 22.3 — 8.2 6.9 — 2.6 17.5 0.4 14.3 Cumulativi 1936 compare« with 193i 47.1 11.3 9.2 4.8 39.4 — 1.8 7.3 23.5 9.6 13.8 15.2 month in 1935. This favorable comparison witl the peak month of 1935 took place despite the fact that new models have been selling twc months longer this season than last. The in- M a y 1936 crease in April occurred almost entirely in sales o f passenger cars, which were larger than in any month since July 1929. Registrations of commercial vehicles advanced slightly over the figure for March and exceeded the total reported for any preceding month on record. Intercoastal traffic through the Panama Canal increased somewhat more than season ally from March to April. The advance oc curred entirely in eastbound shipments, princi pally of lumber and crude and refined petroleum. Prices W holesale com m odity prices, as measured by the index prepared by the United States Bureau of Labor Statistics, continued to move lower during the four weeks ending May 16, the index declining to 78.1 percent of the 1926 average in the latest week. A t that point, wholesale prices of the 784 commodities in cluded in the index averaged approximately 3.4 percent lower than at the beginning of this year, and were the lowest since January 1935. The decline since the first of the year as well as in recent weeks has taken place principally in the prices of farm products and foods. Prices of food at retail in the larger Tw elfth District cities advanced slightly in early April, but since that time have resumed the moderate decline apparent in other recent months. W holesale quotations on canned apricots and pears declined slightly from mid-April to midMay and at the later date were 21 and 6 per cent, respectively, below those in effect a year ago. Canned peach prices advanced slightly. Dried apricot prices decreased 9 percent during the four weeks under review, but quotations for other dried fruits changed little. Quotations for domestic copper, which were advanced to 9j4 cents per pound in early April, remained unchanged from mid-April to May 20. Export copper quotations were somewhat lower in mid-M ay than a month earlier. Lead Distribution and T ra d e— Carloadingsi T o t a l .............................. Merchandise ................ ,------------ 1936------------- y ,------- 1935---------- \ Apr. Mar. Feb. Jan. Apr. Mar. Feb. Indexes adjusted for seasonal variation (1923*1925 average=100) 80 95 79 96 79 89 85 92 73 89 68 85 74 89 79 115 66 76 118 66 75 96 69 65 99 54 60 81 52 78 105 73 65 81 61 Intercoastal Trade Total .............................. Westbound .................. Eastbound .................... Retail Trade Automobile Salesi Total .......................... 140TT 144 121 106 107 107 104 Passenger .................. 13111 131 117 103 103 102 97 Commercial .............. 2441i 270 210 155 161 154 229 Department Store Sales* ........................ 89 85 85 84 83 79 80 Stocks§ ...................... 67 65 65 65 61 62 62 Collections# t------------------ Actual Figures-------------------Regular ................ 48.8 49.0 48.1 49.3 47.7 48.1 43.3 Installment .......... 17.6 18.4 18.0 18.4 17.8 18.5 16.8 JDaily average. §At end of month. #Percent of collections during month to amount outstanding at first of month. HPreliminary. 37 f e d e r a l r e se r v e a g e n t a t s a n f r a n c is c o and zinc prices have remained steady since late February. Although there were minor fluctuations in the spot price of foreign silver in New York during April and the first half of May, no net change was recorded during this period. Prices of sugar, rubber, and coffee, com m odi ties important as raw materials in three rela tively large Pacific Coast industries, declined slightly from prices at the beginning of April. T he Credit Situation Total loans and investments of Twelfth Dis trict city banks were practically unchanged in the five weeks ending May 20, remaining close to the level which prevailed during January of this year. Loans on securities to brokers and dealers outside New York City declined 7 mil lion dollars during the five-week period, largely reflecting the repayment of loans made in March and early April to finance the distri bution of new security issues. Changes in other loan classifications and in total loans of reporting member banks were small from April 15 to May 20. Aggregate investments of these banks were unusually stable, a moderate reduction in holdings of direct obligations of the United States Government being offset by increased investments in Government guaran teed issues and in all other securities. Notwithstanding the fact that total loans and investments of district city member banks remained virtually unchanged during the first B ank D ebits* — Arizona Phoenix .......... .$ California Bakersfield . B erk eley .......... Long Beach . .. Los Angeles . . . . Oakland .......... Pasadena .......... Sacramento . . . San Bernardino San Diego San Francisco . . . San J o s e .......... Santa Barbara. Santa Rosa Stockton .......... Idaho Nevada Oregon Eugene ............ P o rtla n d .......... April 1936 April 1935 $ t— First four months— \ 1936 1935 30,880 $ 141,340 $ 118,061 13,685 18,537 22,593 34,173 860,625 93,684 24,946 83,794 8,916 48,680 937,613 20,972 11,737 4,519 18,965 11,285 13,409 19,506 31,318 663,553 68,397 20,969 103,713 7,569 44,416 775,510 17,582 9,750 3,653 15,420 52,395 72,567 93,801 131,840 3,206,931 341,836 102,623 398,435 33,213 184,227 3,577,789 84,259 45,759 15,990 67,433 44,152 56,004 78,620 112,917 2,501,719 258,917 83,726 331,860 29,078 150,303 2,921,459 68,990 37,372 13,513 57,211 14,866 14,429 58,706 53,715 8,858 7,293 35,010 29,726 5,888 152,344 14,248 4,769 128,554 11,670 21,859 608,574 52,130 16,587 510,796 42,267 12,560 61,311 10,327 51,762 54,441 235,476 47,463 205,743 5,971 7,673 187,042 40,422 31,434 4,706 11,316 5,185 5,856 150,601 34,982 24,862 4,281 11,254 21,378 26,717 704,499 155,251 116,496 17,498 43,046 18,500 21,229 561,733 129,638 92,663 16,267 41,945 $2,302,755 $10,701,519 $8,652,174 36,242 Utah Salt Lake City. Washington Bellingham __ Everett ............ Spokane .......... T a c o m a ............ Walla W alla. . . Y a k im a ............ . Total . . . . $2,798,320 *Tn thousands of dollars. 38 May 1936 MONTHLY REVIEW OF BUSINESS CONDITIONS four months of 1936, total time and adjusted demand deposits expanded during the period, reaching the highest point on record on April 22. In the follow in g four weeks they remained near that level. M ost of the increase in deposits since the first of the year has resulted from op erations of the United States Treasury. Funds disbursed by the Treasury in the Twelfth Dis trict were received by individuals, firms, and corporations, and were deposited with local banks, thus increasing the deposit liability of those institutions. Only a portion of the addi tions was offset by charges against deposit accounts resulting from Treasury collections locally. The increase in deposits at district member banks w ould have been even larger if depositors had not drawn against their ac counts in order to make substantial net trans fers to other districts in payment for securities, commodities, and services. Reserve balances of district member banks increased 11 million dollars between April 15 and M ay 20, continuing the practically unin terrupted grow th evident since early in 1933. The principal source of net additions to district bank reserves continued to be substantial dis bursements by the United States Treasury, which exceeded local collections by 81 million dollars during the period. This addition was only partially offset by the transfer of 67 mil lion dollars (net) from this district to other regions in payment for commercial and finan cial transactions, and by an increase of 5 mil lion dollars in demand for currency. Member bank balances at the Federal R e + 5 .3 Commercial Treasury Operations Operations +26.6 — 48.1 + 19.3 — 1.9 + 18.0 + 9.5 + 19.1 + 4.5 — 3.6 + 10.6 2.9 + 16.5 + 11.7 — 32.6 — 12.2 + 19.2 — .4 + 17.7 + 15.4 — 19.0 Total Supply — 17.3 + 11.5 + 31.9 + 19.3 + 9.2 + 12.9 — 21.5 + 7.8 + 12.0 + 1.7 USES OF FUNDS Demand Week for Ending Currency 1936— AÏar. 1 8 ... .. — 2.3 Mar. 25 , , . . — 3.0 Apr. 1 .. . .. + 3 . 9 Apr. 8 . . . .. + 5 . 8 Apr. 15. .. . . — 4.1 Apr. 2 2 .. . , — .1 Apr. 2 9 ... .. — 2.2 May 6. . . .. + 10.6 May 1 3 ... .. — 3.9 May 2 0 ... . . + .4 Member Bank Reserve Deposits — 15.2 + 7.6 + 30.3 + 13.4 + 13.9 + 14.9 — 18.3 — 2.9 + 17.3 + .3 Other F.R.B. Accounts + .2 + 6.9 — 2.3 + -1 — .6 — 1.9 — 1.0 + .1 — 1.4 + 1.0 MEMBER BANK RESERVES—Twelfth District Monthly averages of daily amounts. past three years because of growth in time and demand deposits at district member banks. Increases in reserve requirements have been equal to considerably less than half of the rise in actual reserve balances, however, and a sub stantial volume of excess reserves has been (Amounts inmillions of dollars) SOURCES OF FUNDS Reserve Bank Credit + 4 .2 — 5.9 + 4.4 — 4.3 + 2 .2 — .7 — .6 + .8 MILLIONSOFDOLLARS CON DITION OF FEDERAL RESERVE BANK OF SAN FRANCISCO SOURCES A N D USES OF BANKING RESERVES Twelfth District Changes in millions of dollars during the weeks indicated Week Ending 1936— Mar. 18 .. Mar. 25 .. Apr. 1. .. Apr. 8. . . . . Apr. 15 . .. . . Apr. 22. . . . . Apr. 2 9 ... . . May 6. . . .. May 1 3 ... May 2 0 ... , , serve Bank of San Francisco are currently at the highest level on record. These balances reached the lowest point in recent years during the summer of 1932, when the total was as low as 128 million dollars. Expansion has been al most continuous since March of 1933, and since the middle of April of this year reserve balances of Twelfth District banks have ranged around 350 million dollars. Some advance in reserve requirements has also taken place during the Total Demand — 17.3 + 11.5 + 31.9 + 19.3 + 9.2 + 12.9 — 21.5 + 7.8 + 12.0 + 1.7 Total Bills and Securities. Bills D iscou n ted .......... Bills Bought ................ United States Securities Total R eserves.................. Total D ep osits.................. Reserve Note Circulation. Ratio— Reserves to Deposit and Note Liabilities........ May 20 1936 201 199 520 412 291 74.0% May 13 1936 201 399 531 418 291 75.0% April 15 1936 201 May 22 1935 201 i 99 510 409 285 Ì 99 342 298 220 73.5% 66.0% CONDITION OF REPORTING M EMBER BANKS Twelfth District (Amounts inmillions of dollars) May 20 M a y 13 April115 May 22 1936 1936 1936 1935 Loans and Investments— T ota l.. 2,134 2,138 2,141 1,973 Loans to Brokers and Dealers. . 16 18 22 14 Loans on Securities to Others (except Banks) ........................ 169 170 169 166 Acceptances and Com’l Paper. . . 22 22 19 23 Loans on Real Estate.................. 367 367 367 361 Loans to B a n k s............................ 1 1 1 1 Other Loans ................................ 366 362 360 324 U. S. Gov. Direct Obligations.. 696 678 683 651 Obligations Guaranteed by U. S .. 149 146 138 77 Other Securities .......................... 366 369 365 360 Reserve with F. R. Bank............ 246 240 239 172 242 Due from Domestic Banks.......... 250 249 222 795 Demand Deposits— Adjusted. . . . 811 818 730 Time D e p o sits.............................. 1,050 1,056 1,031 985 U. S. Government Deposits........ 114 113 66 115 Deposits of Other B a n k s .......... 262 267 275 241 B orrow in g s.................................... May 1936 built up. In March 1936, reserve deposits of Tw elfth District member banks averaged 300 million dollars or 49 percent in excess of re serve requirements. Nearly half of the reserve city banks and 51 percent of the country banks in the district had excess reserves amounting to 50 percent or more of their requirements during the first half of March. Moreover, most district banks keep a substantial amount of surplus funds on deposit with their city corre spondents in addition to their balances with the Reserve Bank. Including these deposits, DISTRIBUTION OF TW ELFTH DISTRICT MEMBER BANKS A C C O R D IN G TO PERCENTAGE OF EXCESS TO REQUIRED RESERVES (Percent of total banks ineachgroup) Reserves and Balances Due from ^Reserve Balances—'* Domestic Banks->. Reserve Reserve Percent in excess of City Country City Country reserve requirements Banks Banks Banks Banks 28 31 0 * Less than 25................ 25 to 50 ...................... 28 18 0 * 44 51 100 99 50 or more .................. Total 39 FEDERAL RESERVE AGENT AT SAN FRANCISCO ................ ....100 100 100 100 *Less than one percent. all district member banks in reserve cities and virtually all of those in other cities had de posits with the Reserve Bank and balances due from other domestic banks 50 percent or more in excess of legal reserve requirements. Even when allowance is made for the fact that a portion of the funds deposited with correspond ent banks represents normal working balances and should not be considered as surplus funds, practically all district member banks held read ily available funds substantially in excess of legally required reserves. Securities Markets Trading on Pacific Coast stock exchanges dur ing the month ending May 20 was less active than in the preceding month, continuing the decline in progress since the first of the year. Turnover increased during the last few days of April when prices were declining, but de creased sharply thereafter. Share price aver ages declined approximately 10 percent during the last half of April. The market moved irregularly in the first half of May, but the tendency was upward and stocks recovered about one-third of the losses sustained in the latter part of April. Pacific Coast corporation bonds declined fractionally in price during the stock market recession in late April but subsequently re covered to about the same level as quoted on April 20. Prices of municipal bonds were prac tically unchanged at the highest point in many years. The amount of new financing was small in both the corporate and municipal categories. Offerings of municipal bonds amounted to ap proximately $900,000 and corporate issues con sisted of $36,500,000 bonds and $6,100,000 pre ferred stock, largely for retirement of old issues. During this recent period of declining stock prices, loans by Tw elfth District brokers to their customers decreased about 5 percent. Notwithstanding the decrease in advances of local brokers to their customers, brokers’ bor rowings from Twelfth District and New York banks increased in anticipation of Regulation U which became effective M ay 1, placing cer tain restrictions on loans made by banks after that date. The demand rate on call loans in New York was increased from ¿4 percent to 1 percent on May 11. Rates charged by brokers on custom ers’ balances, however, were maintained at 4 percent for New Y ork listed securities in both San Francisco and Los Angeles and 4y2 per cent and 6 percent, respectively, for local securities. 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 Board of Governors of the Federal Reserve System Industrial production increased in April, re flecting principally larger output of steel and of automobiles. Employment and pay rolls in the durable goods industries showed advances. Production and Employment. Volum e of in dustrial production, as measured by the Board’s seasonally adjusted index, increased from 93 percent of the 1923-1925 average in March to 100 percent in April. The average rate of pro duction at steel mills in April was 69 percent of capacity as compared with 59 percent for the preceding month. A t automobile factories out put amounted to 503,000 passenger cars and. trucks and, except for the spring months of 1929, was larger than in any previous month. In the first three weeks of May activity in both the steel and automobile industries was main tained at about the levels reported for April. Output of nondurable manufactures in April was slightly larger than in March, due chiefly to increases at cotton textile mills, meat pack ing establishments, and tobacco factories. A c tivity at woolen and silk mills declined. Bitumi nous coal production showed little change from March to April, although a considerable de crease is usual at this season, while at anthracite mines there was a sharp rise from the low level of March. Output of crude petroleum continued to increase. F a c to ry e m p lo y m e n t and p ay* r o l ls w ere 40 MONTHLY REVIEW OF BUSINESS CONDITIONS larger in the middle of April than a month earlier. Increases in the number of workers were general in the durable goods industries, with the most marked advances at steel mills and at plants producing machinery, automo biles, and building materials. There was an in crease in employment at rubber tire factories, which in March had been affected by a strike, while at woolen mills employment declined. Value of construction contracts awarded, ac cording to figures of the F. W . D odge Corpora tion, increased in April by somewhat more than IN DU STRIA L PRODUCTION Index of physical volume of production, adjusted for seasonal variation, 1923-1925 average=100. By months, January 1929 to April 1936. May 1936 ties as a group continued to show little change. Bank Credit. Excess reserves of member banks have increased steadily since the latter part of March and by May 20 amounted to $2,860,000,000. The growth was due in April to Treasury disbursements from accumulated balances and in May to continued disburse ments together with substantial imports of gold. Treasury disbursements and gold imports have also been reflected in a sharp increase of deposits at reporting member banks in leading cities since the beginning of April. Adjusted FA CTO R Y EM PLOYM ENT Index of number employed, adjusted for seasonal variation, 1923-1925 average=100. By months, January 1929 to April 1936. the usual seasonal amount. Contracts for resi dential building were in considerably larger volume, and privately-financed projects other than residential continued to increase. Distribution. Retail trade showed a seasonal increase in April, follow ing a considerable ad vance in March. Department store sales rose by less than the usual seasonal amount, while demand deposits at these banks increased to a new high level and time deposits rose to the highest fig*L * * years. H oldings of United St\tes Government obligations by the reporting banks have increased further, while holdings of other securities and loans to cus tomers have remained at the levels reached early in April. Loans to brokers and dealers MILLIONS OF DOLLARS BILLIONS OF DOLLARS C O N STRU CTION CON TRACTS AW ARDED Three-month moving average of F. W. Dodge data for value of contracts awarded in 37 Eastern States, adjusted for seasonal variation. Latest figures based on data for February and March and estimate for April. at variety stores and mail-order houses there were further increases. Freight carloadings in creased from March to April. Com m odity Prices. W holesale prices of commodities showed little change during April and declined during the early part of May reflecting decreases in the prices of farm prod ucts and foods, while prices of other com m odi- BILLIONS OF DOLLAR* 6 MEMBER BANK RESERVES A N D RELATED ITEMS Wednesday figures. January 31, 1934 to May 20, 1936. in securities, which increased considerably in March and April, declined in the first half of May. The rate charged on call loans with stock exchange collateral was raised on May 11 by New Y ork City banks from ¿4 ° f one percent to one percent and that on time loans from one percent to 1*4 percent. Rates on other open market loans have continued at low levels.
@FedFRASER