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MONTHLY REVIEW OF B U S IN E S S C O N D IT IO N S ISAAC B. NEWTON, Chairman of the Board and Federal Reserve Agent Federal Reserve Bank of San Francisco Vol. X II San Francisco, California, May 21,1928 No. 5 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 continued in large volume during- April, reflecting chiefly in creased output in the metal products industry. Activity in industries producing food and cloth ing decreased. W holesale and retail trade also declined. The general level of wholesale com modity prices rose in April, reflecting advances in farm products. There were large exports of gold in April and May. Member banks’ loans, and their borrowings at the reserve banks, con tinued to increase; and money rates showed further advances. Production. Production of manufactures re mained in about the same volume in April as in March, while output of minerals declined slightly, ow ing chiefly to a decrease in produc tion of bituminous coal. Daily average output of iron and steel, copper, and zinc increased in April, but since the first of May there has been some curtailment in steel-mill activity. A u to mobile production was maintained in large volume during April and, according to prelimi nary reports, also during the first half of May. Textile mill activity, output of boots and shoes, and meat production showed substantial de clines during April. Volum e of factory em ploy ment declined slightly, reflecting chiefly decreases in the food, leather, and textile indus PER CENT 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, April, 109. tries. Building contracts awarded in April ex ceeded those for any previous month, and awards during the first three weeks of May con tinued in unusually large volume. Trade. Sales by department stores and by wholesale firms in most lines of trade declined in April and were smaller in dollar value than a year ago. Average daily sales of department stores, after allowance is made for the earlier date of Easter and the usual seasonal changes, were smaller in April than in March, and were also smaller than in April a year ago. This decrease was due largely to unfavorable weather conditions. Stocks of department stores, after adjustment for seasonal changes, were in about the same volume as in March and slightly smaller than a year ago. Freight carloadings showed an increase from the begin ning of April to the middle of May, but for most classes of commodities continued smaller than a year ago. Prices. The general level of wholesale com modity prices, as indicated by the index of the Bureau of Labor Statistics, rose from 96.0 per cent of the 1926 average in March to 97.4 per cent in April. This rise reflected sharp advances in the prices of grains, cotton, livestock, and hide and leather products. Rubber prices con- PER CENT W H O L E S A L E PR IC E S Index of United States Bureau of Labor Statistics (1926 prices=100, base adopted by Bureau). Latest figure, April, 97.4. Those desiring this Review sent them regularly will receive it without charge upon application. 34 M ay, M O N T H L Y REVIEW OF BUSINESS CONDITIONS tinued to decline, and most of the other groups of commodities changed little. Decreases in the prices of grains, flour, sheep, and hogs, and in creases in copper, zinc, and rubber prices oc curred during the first three weeks of May. outward movement of gold continued in M the decline in the monetary gold stock dur the four weeks ending May 23 being nearly million dollars. This loss of gold, together v further sales of United States government se BILLIONS OF DOLLARS A r, ,i_rr 1\\ 1r n* i1IL,\l Af ._ )— ^ • u-T~V 1 ;rV *• : L— 11— COMMERCIAL PAPIER RATE L Î — RESERVfZ BANK CDISCOUNT RATE — ACCEP'TANCE RATE w R ESE R V E B A N K C R E D IT Monthly averages of daily figures for 12 Federal reserve banks. Latest figures are averages of first 23 days in M ay. B an k C redit. A t member banks, loans largely for commercial and industrial purposes, fol low ing a rapid increase during February and March, have shown little change since the early part of April. Loans on securities continued to expand and total loans and investments of re porting member banks in the middle of May were larger than at any previous time. The M O N E Y RATES W eekly rates in New Y ork money market: commercial paper on 4- to 6>months paper, acceptance rate on 90-day paper, an( rediscount rate of the Federal Reserve Bank of N ew Y ork. rities by the reserve banks, was reflected in increase of nearly 140 million dollars in m< ber bank borrowing at the reserve banks. Th were further advances in open-market moi rates during May, and discount rates at Federal reserve banks of New York, Ph delphia, Cleveland, Atlanta, and Dallas w raised from 4 to 4y2 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 C O N D IT IO N S Primary credit demands arising from sea sonal needs of agriculture, manufacturing, and trade in the Tw elfth Federal Reserve District reached a spring peak during March and April. An adequate supply of funds was steadily available during this period. Commercial money rates at m id-M ay were the same as in April, 1928, and May, 1927, but prevailing rates on security loans have advanced slightly during recent weeks. The rediscount rate of the Fed eral Reserve Bank of San Francisco remained at 4 per cent. The agricultural season in the Pacific North west and in the Intermountain states was re tarded during April and early May by sub normal temperatures and heavy rains. In northern California, conditions have generally favored agricultural operations and growing crops. In southern California and Arizona, sea sonal rainfall is still below the average of previous years. There was a small seasonal increase in indus trial a ctiv ity during April. More wage earners were employed in industrial operations than in March, 1928, but both the numbers employed and their average weekly earnings were smaller than in April, 1927. Demands for farm labor during April and early May helped to bring about a reduction in the number of unemplo; in the cities of the district. The monthly t( of building permits issued in principal cities the district was IS per cent smaller in A than in March, 1928, contrary to the usual pectation of a small increase. Cumulative j mit figures for the period January 1-Ma> 1928, were 15 per cent smaller than a year ag a continuation of the downward trend prev ing since 1925, the peak year of urban build construction. Output of lu m ber in the dist increased by less than the usual seaso amount during April, but exceeded prod tion of a year ago. Daily average flow petroleu m from California wells declii slightly during the month. A ctivity in n ferrous m etals m in in g and flour m illin g been at relatively high levels during rec weeks. Total volume of Tw elfth District distribut and trade was smaller during April, 1928, tl during April, 1927, a reflection, in part, of fact that there was one less trading day in A of this year. Declines were reported in frei carloadings, sales at wholesale, and sales new automobiles. Retail sales, when compu on a daily average basis, were slightly lar in April, 1928, than in April, 1927. M ay, 1928 FEDERAL RESERVE AG EN T A T SAN FRANCISCO Agriculture The 1928 agricultural season in the Pacific Northwest and in the Intermountain states has been retarded during April and early May by subnormal temperatures and heavy rains. In northern California, conditions have generally favored agricultural operations and growing crops. In southern California and Arizona, sea sonal rainfall is still below normal. May 1 condition figures of the w in ter w h eat crop in the principal producing sections of the Pacific Northwest approximate those of a year ago. It is estimated that in Idaho, Oregon, and W ashington 2,656,000 acres of winter wheat will be harvested in 1928, compared with 2,604,000 acres harvested in 1927, and 2,174,000 acres harvested in 1926. The United States Depart ment of Agriculture estimates that of the acreage sown to winter wheat in the Pacific Northwest last autumn, approximately 6 per cent has been abandoned in Idaho, 3 per cent in Oregon, and 5 per cent in W ashington. Aban donment of winter wheat acreage in the United States as a whole is estimated at 25 per cent of the area sown. Preliminary estimates of the condition, production, and abandonment of win ter wheat follow : W IN T E R W H E A T ,--------- Condition--------- * f—-Production*-^ (in per cent of normal) Forecast H arM a y l, 1918-1927 M a y l, vested 1928 1927 Average 1928 1927 (bushels) (bushels) 1,450 1,206 90 90 A r iz o n a ........... 90 13,642 15,107 84 86 91 C a liforn ia 12,274 10,146 90 93 Id a h o ................ 89 120 121 96 98 N e v a d a ............ 97 23,400 17,925 92 94 O r e g o n ............ 93 3,013 2,888 94 92 U ta h ................. 93 33,684 34,200 92 88 W a s h in g t o n . . 93 T w e lfth 87,458 81,718 D is t r ic t 85.0 486,478 552,384 85.6 U n ite d S ta te s. 73.8 PerCent of Acreage Sown Abandoned t-----M ay— ^ 1928 1927 1.0 7.0 6.0 1.0 3.0 2.0 5.0 25Ä *000 om itte d . S o u r c e : U n ited States D e p a r tm e n t o f A g r ic u ltu r e . A report issued by the United States Depart ment of Agriculture on May 9 indicates that stocks of hay on farms of the district equal those of a year ago, and that the condition of grow ing hay crops is somewhat below the 1927 figure and the ten-year (1918-1927) average condition. ALL HAY r-Stocks* on Farms M a y l,-^ r “ Condition M ay 1,—■\ Ten-Year 1928 1927 1926 1928 1927 Average! (tons) (tons) (tons) A r i z o n a ........................... 27 78 34 87 94 91 C a lifo rn ia ...................... 320 463 506 87 90 87 I d a h o ............................. 232 179 672 86 90 94 N e v a d a ........................... 57 58 220 82 87 94 O r e g o n .......................... 281 112 437 93 92 94 U ta h ............................... 102 155 501 86 91 95 W a s h in g t o n ................ 237 184 251 88 88 91 T w e lft h D is tr ic t . . . . 1,256 1,229 2,621 U n ite d S tates ............ 17,920 10,819 11,481 76.1 86.8 88.4 *000 om itte d , f 1918-1927. California deciduous fruits have not devel oped sufficiently to permit an accurate estimate of 1928 production, but progress of these crops thus far has been satisfactory, except in south- 35 ern California where rainfall has been below the average of previous years. The fresh fruit shipping season in California this year began approximately ten days earlier than a year ago. An extensive, though at present undetermined, amount of damage was done to fruit in the Pa cific Northwest by rains during the fruit blos soming period. Reduced market supplies of citrus fruit have been reflected in higher prices for California oranges and lemons during the past month. Shipments of oranges and lemons during April were 5,277 and 1,146 carloads, respectively, as compared with 7,343 and 1,373 carloads, respec tively, shipped during April a year ago. The 1928 production of Valencia oranges in Califor nia is now estimated at approximately 9,312,000 boxes, compared with 11,640,000 boxes pro duced in 1927. The condition of ranges and of livestock has declined slightly since April 1 in all states of the district except W ashington. Subnormal tem peratures in the northern part of the district and lack of moisture in Arizona and southern California have retarded growth of range forage. A two-per cent increase in the number of sheep on farms, and reports of heavier indi vidual fleeces, indicate that the 1928 clip of w o o l in the Twelfth District will be larger than was the 1927 clip. Prices received for w ool this year have ranged from 3 to 7 cents per pound higher than a year ago. There has been a gradual rise in contract prices since the bulk of the 1928 clip was sold during January, Febru ary, and March. Recent losses of lam bs, due to unfavorable weather on spring ranges in the late lambing territory, have slightly reduced the 1928 spring lamb crop, but it is still prob able that the number of lambs saved will be greater this year than one year ago. Shipments of California spring lambs to Eastern markets totaled 304,228 head between March 17 and May 18, 1928, as compared with 300,000 head for the season to May 21, 1927. The proportion of choice grade lambs shipped during 1928 has been below that of a year ago, indicating a poorer run of stock. Receipts of livestock (largely “ grass-fed” cattle, spring lambs, and hogs) at the principal markets of the district and monthly average prices at these markets are shown in the fol lowing table : L IV E S T O C K — Twelfth District <------- A p ril---------(----------- March ------> ,------- February--------\ Receipts* 1928 1927 1928 1927 1928 1927 C a t t le ... 63,346 78,658 68,152 83,724 65,128 82,761 C a lves . . 14,905 18,752 14,043 20,296 15,215 17,501 H o g s . . . 235,614 162,668 270,678 202,573 283,623 188,714 Sh eep . . 236,558 245,103 179,271 161,204 177,462 191,514 P rice s! C a ttle ! .. 11.45 9.27 12.00 8.95 12.27 8.74 H ogs§ .. 9.97 12.18 9.10 13.03 9.30 13.12 S h eep H . 15.30 14.06 14.570 13.08 13.660 11.370 * E ig h t p rin cip a l m a rk ets o f T w e lfth D is trict. fW e ig h t e d ac c o r d in g to r e ce ip ts at s ix m a rk ets in the d istrict. Q u o te d in d olla rs p e r h u n d re d w e ig h t. J G o o d g ra d e steers. § L ig h t w e ig h t h o g s . 11C h o ic e la m b s. O Revised. 36 M O N T H L Y R EVIEW OF BUSINESS CONDITIONS Industry A small seasonal increase in industrial activ ity was evident in the Twelfth Federal Reserve District during April. More wage earners were employed in industrial operations than in March, 1928, but both the numbers employed and their average weekly earnings were smaller than a year ago. In lumbering and the w ood fabricat ing trades, in the industrial group manufactur ing “ foods, beverages and tobacco” products, and in the so-called “ miscellaneous” industries, however, more workers were employed during April, 1928, than in April, 1927, according to available employment statistics covering Cali fornia and Oregon. The largest decline in em ployment overtheyearperiod was in the “ chem icals, oils,paints,etc.,” group of industries. This group reported a 20-per cent decrease in num bers of men employed and a 19-per cent de crease in amount of payroll during April, 1928, as compared with April, 1927. Demands for farm labor during April and early May helped to bring about a reduction in the numbers of unemployed in the cities of the district. The chart on this page displays this bank’s seasonally adjusted index of carloadings (other than merchandise and miscellaneous com m odi ties) in the Tw elfth Federal Reserve District. INDEX NUMBERS C A R L O A D IN G S O F “ O T H E R T H A N M E R C H A N D IS E A N D M I S C E L L A N E O U S F R E I G H T ” — T W E L F T H D IS T R IC T Index adjusted for seasonal variation; 1923-1925 daily average = 100. Latest figure, April, 103. The commodities which make up these carload ings are largely the products of the principal industries of the district. As included in the (A ) In d u stry— Indexes of daily average production, adjusted for seasonal variation. (1923-1925 daily average = 100) 1927 - 1 9 2 8 - ------------\ Apr. Feb. Apr. M ar. M anu factures: 97 116 118 119 Flour ............................................ 98 105 106 105 Slaughter of Livestock . . . . 100 104p 106 1040 Lum ber ....................................... 150 146 147 148 Refined Mineral O i l s f . . . . 109 146 112 110 C e m e n t ........................................ 88 76 65 W o o l C o n s u m p tio n ................ M inerals: 94 98 92 93 Petroleum ( California) t . •• 112 106 103 101 Copper (U n ited S t a t e s ) ! .. 120 100 109 111 Lead (U nited States) $. . . . 90 86 92 83 Silver (U n ited S t a t e s ) !. . . M iscellaneou s: 97 103 106 103 Carloading§ ............................. p Preliminary. ^Revised. fN o t adjusted for seasonal variation. ÍPrepared by Federal Reserve Board. § Other than M er chandise and M iscellaneous. M ay, 1 index, they may be classified in two grou] (1) those commodities which are being shipf to manufacturing plants (e. g., livestock slaughter houses, logs to lumber and plani mills, and ore to smelters and refineries) a (2) those commodities which are being ship]: from manufacturing plants to distributors consumers (e. g., lumber, flour, meat, and otl semi-finished or finished products). In point time, carloadings of the first group tend to p cede manufacturing activity, while those of 1 second group tend to follow such activity, combination of the two groups with their c setting influences probably reflects with so: accuracy the current situation and gene trend of industrial production. Movements the “ other than merchandise and misc laneous” carloadings figures do not, ho ever, reveal changes in industrial producti with such accuracy as to permit their use exact indicators of month-to-month changes this field. The present chart reveals the shs downward trend of production experienced 1924, the subsequent recovery, the recessi during the second half of 1927 and the rec( rise from the low level of activity prevailing the beginning of 1928. The building and construction industry is many ways the most important single nc agricultural industry in the Twelfth Fede Reserve District. This industry consun nearly all of the brick and cement and appro mately half of the lumber produced in the d trict and is a large employer of skilled a unskilled labor. Urban building activity 1: decreased in each year since the peak w reached in 1925. From January 1 to May 1, 19 the value of building permits issued in nea 100 cities (figures compiled by S. W . Strc and Company) was 14 per cent less than in 1 same period of 1927. The monthly figures w< (B ) E m ploym ent— •California— r " ----- Oregon--------- N o. of N o . of N o. <—Employees N o. r— Employees of A p r., A p r., of A pr., Api 192 Industries Firms 1928 1927 Firms 1928 25,9 156 A ll Industries . . . . . 779 153,080 159,429 24,970 ( - 3 .8 ) ( -4 .0 ) Stone, Clay and 3< 47 7,364 7,805 5 223 Glass Products. ( — 5.7) (— 35.9) Lum ber and W o o d 15,587 23,489 59 15,9; M anufactures . . 121 24,583 (4 .7 ) (— 2.1) 19 2,453 2,781 12 1,971 i ,9 : (2 .1 ) ( — 11.8) Clothing, Millinery 65 4' and Laundering. 8,253 8,334 7* 432 (— 1.0) (4 .3 ) Foods, Beverages 35,215 34,243 41 1,388 and T o b a c c o ... 171 1,6( (2.8) ( — 13.6) W ater, Ligh t and Power ................. 5 7,531 7,538 (— 0.1) 65,666 73,243 Other In d ustries!. 337 ( — 10.3) 5,732 14 5,369 2,015 1,996 Miscellaneous . . . . (— 6.6) (1.0) ' * Laundering only, fln clu d es the following indu stries: me machinery and con veyan ces; leather and rubber go< chemicals, oils and p a in ts; printing and paper goods. Figures in parentheses indicate percentage changes from A 1927. M ay, 1928 approximately 15 per cent smaller in April than in March, 1928, whereas ordinarily there is a small seasonal increase during the later month. The value of contracts awarded for engineering and public-works projects in this district* dur ing April, as reported by Engineering News Record, was 10 million dollars (25 per cent) smaller than in March, 1928, but was 4 million dollars (15 per cent) larger than in April, 1927. A ll of the larger cities, except Salt Lake City, reported decreases in value of building permits granted during April as compared with March, 1928. Seattle was the only city of this group reporting larger figures in April, 1928, than in April, 1927. Many of the smaller cities of the district, particularly those located in the Great Valley of California, reported increases in value of building permits issued during April, 1928, as compared with March, 1928, and April, 1927. The lumbering and lumber products industry ranks first among all the manufacturing indus tries in the Twelfth Federal Reserve District. The value of its products constitutes more than 20 per cent of the value of all industrial prod ucts of this area. The considerable part played by this industry in the district’s econom ic life is partially revealed by comparison of the curve of carloadings (other than merchandise and miscellaneous commodities) and the curves of lumber production shown in the accompanying chart. (L og s and lumber constitute approxi mately 70 per cent of district carloadings other than loadings of merchandise and miscel laneous commodities.) Preliminary figures indicate that output of lumber increased by less than the usual sea* I n this compilation, the five southeastern counties of Arizona, which are in the Eleventh Federal Reserve District, are included. (C ) Bank D ebits* — B a k e r sfie ld ..........! Bellingham . . . . Berkeley ............ B o i s e ...................... Eugene ................. Everett ................. Fresno ................. Long Be a c h. . . . L o s A n g e l e s . .. . Oakland ............... Ogden ................. Pasadena ............ Phoenix ............... Portland ............ R eno ...................... Ritzville .............. Sacramento . . . . Salt Lake C ity . . San Bernardino. San D ie g o ............ San Francisco . . San Jose ............ Santa Barbara. . Seattle ................. Spokane ............... Stockton ............ Tacom a ............... Yakim a ............... D istrict 37 FEDERAL RESERVE A G E N T A T SAN FRANCISCO April, April, 1927 1928 ; 13,616 $ 12,717 10,123 10,496 22,201 20,244 12,910 12,740 8,155 7,831 13,441 13,092 40,694 33,876 53,760 54,860 1,093,193 954,235 228,179 282,006 15,322 15,091 44,776 45,288 36,669 28,563 171,307 1 62,473 ! 8,400 8,517 728 957 33,293 47,941 70,384 71,442 11,000 10,333 63,432 64,333 1,228,689 1,507,956 24,890 26,595 13,897 13,524 254,782 222,331 57,927 56,150 24,541 26,090 45,887 45,767 12,326 12,630 .$3,948,375 $3,434,225 t— First Four M onths— n 1927 1928 59,517 $ 53,795 39,835 39,183 87,194 86,293 53,971 51,683 27,046 27,783 48,982 49,814 132,672 161,577 204,198 214,096 3,939,358 4,212,170 891,564 1,005,699 73,897 68,043 175,245 173,288 138,664 112,330 642,212 626,957 34,744 33,867 3,065 3,703 191,373 116,546 273,318 292,752 41,100 40,058 252,471 265,863 4,846,579 5,995,693 103,116 108,169 55,407 53,864 815,337 951,744 219,986 222,235 107,142 115,322 179,013 180,027 50,423 48,994 $15,382,463 $13,616,514 *000 omitted. tlnclud es a pro rata of $2,392,000 reported for week ending M ay 2 from four new reporting banks in Portland. sonal amount during April, but exceeded that of a year ago. This bank’s seasonally adjusted in dex of daily average production rose from 104 in February, 1928, (1923-1925 daily av erage= INDEX NUMBERS L U M B E R P R O D U C T I O N —T W E L F T H D IS T R IC T . 1923-1925 daily average=100. Latest figures, April, adjusted, 104 (preliminary), unadjusted, 108. 100) to 106 in March, 1928, and declined to 104 (preliminary) in April, 1928. The index also stood at 100 in April, 1927. During April, 1928, new orders at reporting mills ex ceeded shipments, which in turn exceeded pro duction, so that unfilled orders increased and mill stocks decreased. Daily average production of petroleum in California declined slightly during April. Cur tailment of production in some districts has been offset to a considerable extent by discovery of new wells or increased flow from old wells in other sections. The shut-in oil is largely of the heavy or fuel oil type, while the newer produc tion is of a lighter quality, with a relatively high gasoline content. There is an active demand for the latter grade of oil by W est Coast refineries, and production of refined oils has tended up ward. Activity in the mining industry was at rela tively high levels during April, a reflection chiefly of increases in the price of copper. Sup ply of copper has become fairly well adjusted to demand during the past year and as a result, recent activity in both domestic and foreign copper markets has been quickly reflected in price advances for that metal. For the week ending May 12, copper prices at New York (D) Distribution and Trade— Carloadings, T o ta l! ...................... Carloadings, Merchandise and M iscellaneous! ............................. Sales at W h olesa le! ...................... Sales at R e t a il!.................................. Stocks, Retail § ............................... Stock Turnover, Retailti............... Collections, Retail || Regular ........................................... In stallment .................................... ,---------------1928--------------- *----1927 Ap r. M ar. Feb. Apr. ,--------------Index Numbers* " “ - ' 110 110 115 114 115 92 123 104 113 98 114 111 f-1 0.24 Actual Figures-------------^ 0.24 0.22 0.25 45.5 15.7 47.0 15.4 118 95 117 108 44.3 15.8 122 100 119 103 45.3 16.1 * Adjusted for seasonal variation, 1923-1925 a v e ra g e= 100. !D a ily average. JM onthly totals of eleven lines combined. § A t end of month. IfProportion of average stocks sold during month. ||Per cent of collections during month to amount outstand ing at first of month. 38 M ay, M O N T H L Y R EVIEW OF BUSINESS CONDITIONS averaged 14.021 cents per pound, compared with 13.960 cents and 12.767 cents per pound, one month ago and one year ago, respectively. In mid-May, the price of silver advanced to 60 cents per ounce, the highest point since February, 1927. Seasonally adjusted indexes of national production of those non-ferrous metals important in this district (copper, lead, and silver) are given in Table “ A .” O f these three metals, the Tw elfth District in 1927 produced the follow ing percentages of the national out put : silver, 69.7; copper, 66.1; lead, 49.0. This bank’s seasonally adjusted index of flour production of 19 mills of the district stood at 119 (1923-1925 monthly average = 1 0 0 ) for April, compared with 118 for March, 116 for February, and 107 for January, 1928. In April, 1927, the index stood at 97, while in December, 1927, it registered 99. Current active domestic demand for flour has raised local flour prices above an export basis, and during recent weeks there has been little export of flour, except on old contracts. F L O U R P R IC E S PER B A R R E L Received by Twelfth District Mills First Grade First Grade Straight Grade Export Family PatentBakers Patent (Soft Wheat) A p r., M ar., A p r., A p r., M ar., A p r., Apr., M ar., Apr., 1928 1928 1927 1928 1928 1927 1928 1928 1927 $9.15 $8.65 $8.25 $9.10 $8.50 $7.80 $6.70 $6.30 $7.25 Although there have been month-to-month increases in flour production since January, 1928, stocks of flour in millers’ hands at the end of April were 38,527 barrels or 8 per cent smaller than at the end of January, 1928. Distribution and Trade Total volume of distribution and trade was smaller during April, 1928, than during April a year ago, a reflection, in part, of the fact that there was one less trading day in April this year. Sales at retail, when reduced to a daily average basis showed a small increase in April of this year as compared with April of last year. Total monthly sales at wholesale, freight carloadings, and sales of new automobiles de clined as compared with April, 1927. As in March, retail trade was maintained at relatively higher levels in Seattle, Salt Lake City, and in the state of Arizona than in other parts of the district. Reported value of sales at retail during the first four months of 1928 was slightly larger than during the same months of 1927. A similar expansion of sales at wholesale shows little change over the year period. There was a sub stantial decrease in sales of new automobiles (as evidenced by registrations of new passen ger cars and trucks) during the first four months of 1928 as compared with the same period in 1927* Total freight carloadings on railroads of the district likewise showed a de cline. Total value of sales at retail reported by firms was 2.9 per cent smaller during April 1 year than during April a year ago, but there 1 one less trading day in April this year. 1 bank’s index of value of average daily sale* 28 department stores (index adjusted for s D IS T R IB U T IO N A N D T R A D E - T W E L F T H D IS T R IC Indexes adjusted for seasonal variation. 1923-1925 average = 100. ] average figures of department store sales and railway carloadin of merchandise freight. Monthly figures of sales at wholesale sonal variation, 1923-25 daily a v e ra g e = l was 123 in April, 1928, as compared with l b March, 1928, and 119 in April, 1927. Stocks h by reporting stores of the district at the closi April, 1928, were 1.4 per cent smaller than the close of April, 1927. The percentage of < lections to accounts receivable for all report retail stores changed little as compared wit year ago. R E T A I L T R A D E —Twelfth District ,--------- N E T S A L E S *--------- * STOC A p r., 1928, A p r., 1 compared comps ---------------- with ...............—». wit A p r., 1927 M ar., 1928 A p r., D e p a r tm e n t S t o r e s . . . . — 1.9 ( 61 ) 1.8 ( 6 0 ) — 0.3 ( A p p a r e l S to r e s ...............— 5.7 ( 27) — 5.1 ( 2 6 ) — 2.4 ( F u rn itu r e S to r e s ..........— 9.1 ( 4 8 ) — 7.9 ( 4 2 ) — 7.3 ( A ll S to r e s ........................ — 2.9 (1 3 6 ) — 0.2 (1 2 8 ) — 1.4 ( ^ P e r c e n ta g e in c re a s e o r d e c r e a s e ( — ) . in d ica te n u m b e r o f s to r e s r e p o r tin g . F ig u r e s in p a r e n t! Value of sales at wholesale during April this year was smaller than during April, IS sales of 234 reporting firms in eleven lines trade showing a decrease of 5.5 per cent o the year period. This bank’s seasonally adjus index of wholesale sales based on reports of firms stood at 92 (1923-1925 monthly averag« 100) in April, 1928, and 98 in March, 1928, c 100 in April, 1927. The value of wholesale inventories was approximately the same at end of April, 1928, as at the end of April, 19 Collections were slower than last year in m of the eleven lines of trade for which data available. Prices The wholesale com m odity price index of United States Bureau of Labor Statistics v steady at 96 (1926 prices=100) during the fi quarter of 1928, but during April it advan< moderately to 97.4, the highest point read by this index since December, 1926. The A] M ay, 1928 advance was largely the result of sharp in creases in prices of farm products, supple mented by higher prices in other groups of commodities, namely foods, hides and leather products, and building materials. A drop in crude rubber prices prevented the general in dex from showing a greater increase than was recorded. The general level of com m odity prices is now approximately 5 per cent higher than it was a year ago, at which time prices were at the low est levels since the beginning of 1922. Increases in prices of grains and raw cotton have been mainly responsible for the advance in prices of the farm products group since the first of April. A moderate increase was recorded in prices of livestock during this period. The up ward movement in prices of hogs during recent weeks has reversed a downward movement which began in the autumn of 1927. Since the first of May, a recession in farm products prices, especially prices of wheat and hogs, has taken place, but prices throughout the group as a whole have remained higher than they were before the recent advance commenced in late March. Prices of non-ferrous metals increased slightly during April and early May. Softwood lumber prices, while well below those of April and May, 1927, have recently been at the high est levels of the current year. Prices of Yellow Pine, Douglas Fir, W hite Pine, and Spruce have all shared in the advance, most of which occurred in the first half of April. Banking and Credit Primary credit demands arising from sea sonal needs of Twelfth District agriculture, manufacturing, and trade reached a spring peak during the last half of April. An adequate supM IL L IO N S O F 39 FEDERAL RESERVE AG EN T AT SAN FRANCISCO D O L L A R S Total earning assets of reporting city mem ber banks increased slightly during April and early May as a result of increased investment holdings and security loans. The volume of “ all other loans— largely commercial” declined, fol lowing the usual spring peak. Security loans of reporting banks, on the first three weekly re port dates in May, averaged 39 million dollars, or nearly 12 per cent, larger than a year ago. Their so-called commercial loans averaged 18 million dollars, or nearly 2 per cent smaller than a year ago. Borrowings of these city banks at the Federal Reserve Bank of San Fran cisco showed an increase from 31 million dol lars to 58 million dollars over the year period. Borrowings of country member banks at the Reserve Bank during May were 5 million dol lars (50 per cent) less than a year ago. 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) Average Condition During Month M ay, April, M ay, Total Loans and Investm en ts................. Total Loans ..................................................... Commercial Loans ....................................... Loans on Securities .................................... Investm ents ...................................................... N et Demand D e p o s i t s ............................... Tim e Deposits ................................................ Borrowings from Federal Reserve Bank ................................................................ 1928t 1928 1927 1,971 1,331 956 375 640 839 1,008 1,965 1,333 962 371 632 829 1,003 1,816 1,310 974 336 506 784 954 58 55 31 *Total resources of reporting banks are approximately 46 per cent of total resources of all banks and 62 per cent of total resources of all member banks in the Twelfth Federal R e serve District. Reporting banks embrace member banks and branches located only in Los Angeles, San Francisco, O ak land, Portland, Tacom a, Seattle, Spokane, Salt Lake City, and Ogden. tPreliminary. Total earning assets (bills discounted, bills bought, and United States government securi ties) held by the Federal Reserve Bank of San Francisco averaged 112 million dollars during the first three weeks of May, the same figure as the average for the month of April. A reduc tion of 6 million dollars in holdings of United States government obligations during May was offset by increases of 4 million dollars in the amount of paper discounted and of 2 million dollars in purchased acceptances held. F E D E R A L R E S E R V E B A N K O F S A N F R A N C IS C O (In millions of dollars) Average Condition During Month M ay, April, M ay, 1928* Total Bills and Securities...................... Bills Discounted ......................................... Bills Bought ................................................ United States Securities ........................ Total Reserves ............................................. Total D eposits ........................................... Federal Reserve N otes in Circulation 112 64 26 22 259 191 158 1928 112 60 24 28 248 187 155 1927 94 41 19 33 275 176 178 *Prelim inary. R E S E R V E B A N K C R E D I T —T W E L F T H D IS T R IC T Monthly average of daily figures. Latest figures are averages for first three weeks in M ay. ply of funds was steadily available and com mercial money rates at mid-May were the same as in April, 1928, and May, 1927. Rates on security loans, however, have advanced slightly during recent weeks. Interest rates on prime commercial paper in Reserve bank and branch cities of the district continued during May, 1928, at the same levels as in April, 1928, and May, 1927, ranging from Ay2 to 6 per cent, depending on the market and the borrower. The rediscount rate of the Fed eral Reserve Bank of San Francisco was un changed at 4 per cent. 40 M ay, M O N T H L Y R EVIEW OF BUSINESS CONDITIONS D e c id u o u s F r u it S h ip m e n ts — C a lifo r n ia Deciduous fruits* produced in California are consumed as fresh fruit, dried fruit, and canned fruit. A large increase in production of decidu ous fruits during the past ten years has been accompanied by year-to-year changes in the relative amounts of fruit canned, dried, and shipped fresh. Interstate shipments of fresh fruit from California have increased faster since 1919 than has either canned or dried fruit pro duction. A fourfold increase in the quantity of grapes (m ostly juice varieties) shipped has been the most important factor in this movement. During recent years, shipments of grapes from California have greatly exceeded those of any other fruit or vegetable, and have averaged approximately 27 per cent of total shipments of all California fruits and vegetables*)* each year. There has also been a consistent and, in recent years, rapid increase in volume of interstate shipments of fresh pears. Shipments of fresh apricots, cherries and plums have shown no such regular growth nor do they approach, in volume, the shipments of grapes and pears. Peach shipments have fluctuated more than have shipments of any other deciduous fruit. A ccording to a study of the peach industry published by the University of California,:]: ex perience indicates that “ W henever peach pro duction in other states is above normal, there is a tendency for California’s interstate ship ments [of peaches] to fall below normal; and conversely, whenever the production is below normal in other states, California’s shipments are above normal.” The same statement would apply, in some degree, to all California fruits which meet with competition from other pro ducing sections. Variations in the total tonnage of carlot ship ments of deciduous fruit from California from one year to another are shown graphically in the accompanying chart as well as in the index numbers of such shipments shown in Table I. Approxim ately 50 per cent of the fresh de ciduous fruit produced in California is dried. In the past ten years, the production of dried fruit has fluctuated markedly from year to year, but ^Includes apples, apricots, cherries, figs, grapes, peaches, pears, plums and prunes. fT h is calculation is based on data of inter- and intrastate shipments published by the Bureau of Railw ay E conom ics in their Bulletin N um ber 27, M onthly Shipments of Fresh Fruits and Vegetables— United States. $ California Agricultural Extension Service— Circular N u m ber 1— April, 1926, Series on California Crops and Prices— Peaches. T A B L E I. D E C ID U O U S F R U I T S H I P M E N T S F R O M C A L I F O R N I A — I N D E X N U M B E R S (1919= 100) Variety 1927 83 Apples ................. Apricots ............... 110 Cherries ............... 172 Grapes ................. 424 Peaches ............... 164 P e a r s ...................... 215 Plums .................... 139 M isc. and M ixed 342 A ll Varieties . . . 280 1926 122 63 221 319 58 232 178 597 247 1925 61 96 152 373 106 183 127 548 263 1924 1923 117 161 121 171 212 179 307 274 66 133 136 170 98 179 416 385 222 225 1922 106 101 149 216 85 136 119 373 174 1921 120 83 198 158 124 103 106 524 140 1920 108 74 147 127 113 103 87 491 118 1919 100 100 100 100 100 100 100 100 100 has generally followed the rapidly rising tre of fresh fruit production. Excluding grapes, apples, and prunes, wh are not important items in the canning ind try, approximately 42 per cent of Californi deciduous fruit crop was canned during ‘ years 1924-1926. If these fruits be included the calculation, however, a relatively small p portion (approximately 10 per cent) of G fornia’s total deciduous fruit crop was used canning purposes during this period. IN T H O U S A N D S O F T O N S 3800 3600 LO CAL 3400 3200 3000 2800 2600 2400 F R U IT F R U IT C O N S U M P T IO N , £ )R T S . W A S T E D R IE D IN T E R S T A T E FRESH F RU I CANNED 2200 2000 I800 I 600 1400 I200 I000 800 600 400 200 1919 1920 1921 1922 1923 1924 1925 Î926 Í927 D IS P O S IT IO N O F C A L I F O R N I A D E C ID U O U S F R U I Deciduous fruits are shipped from Califor during each month of the year, but the per: of the heaviest shipments is from June to Î vember. The peak of the movement is genera in late September and early October when grape shipping season is at its height. The percentage of total tonnage of deciduc fruits shipped from California represented each of the important varieties comprising th shipments, and the conversion factors used reduce carlot shipments to a tonnage basis ; given in Table II. Conversion factors used reduce figures of canned and dried fruit p duction to a comparable fresh fruit basis for 1 purposes of this study are also given in Table T A B L E II. S H IP M E N T S C O N V E R S IO N F A C T O Per cent of Carlot Canned D r Variety Total* Fruiti Shipments! Fr 5.03 Apples ............................... 12.96 A pricots .......................... 0.47 11.25 55 Cherries ............................. 0.78 10.63 63 Figs .................................... 0.05 Grapes ............................... 76.56 14.57 50 43 Peaches ............................. 2.58 Pears .................................. 9.43 12.48 40 Plums ............................... 4.75 11.25 60 Prunes ........................................... .. .. 3 R a i s i n s .......................................... . . . . A M isc. and M ix e d .......... 0.31 12.00 6 12.11 *B ased on 1924-1926 average shipments. f N e t tonnage of f fruit in one carload. JCases of canned fruit equal to one of fresh fruit. §Tons of fresh fruit equal to one ton of d fruit.
@FedFRASER