The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
MONTHLY REVIEW TWtiFTH FfDERAl RESERVE DISTRICT Novem ber 1951 Fe d e r a l R e s e r v e B a n k S a n Fr a n c i s c o of THE DISTRICT LUMBER INDUSTRY DURING MOBILIZATION D u r i n g th e p a s t y e a r it h a s b e c o m e c o m m o n p la c e to a s s u m e th a t th e d e fe n s e p r o g r a m tiv it y in m ost in d u s tr ie s . In th e h a s s tim u la te d a c T w e lfth D is tr ic t th e ta in e d . O u t p u t g a in s o f a b o u t 5 p e r c e n t o v e r r e c o r d e d f o r th e s e c o n d q u a r t e r in b o t h r e g io n s o f th e D is tr ic t. U n fa v o r a b le 1 9 5 0 w ere t h e p in e a n d fir w e a th e r c o n d itio n s m a r k e d e x p a n s io n in a ir c r a ft p r o d u c tio n , m a c h in e r y o u t d u r i n g J u ly a n d A u g u s t , h o w e v e r , r e s u lt e d in a d r o p in p u t, a n d m e ta l p r o c e s s in g h a s o b s c u r e d th e fa c t th a t s o m e p r o d u c tio n , a lr e a d y a ffe c te d b y r e d u c e d o r d e r s . A in d u s t r ie s h a v e n o t s h a r e d f u lly in t h e g e n e r a l u p s w in g in and b u s in e s s r e g io n , c r e a te d s e r io u s fir e h a z a r d s th a t c u t lo g g i n g o p e r a c tiv ity . Lum ber is th e p r in c ip a l in d u s tr y in th e D is t r ic t f o r w h ic h th is h a s b e e n tr u e . severe. by su b s ta n tia l m a r g in a P r ic e s are now h ig h e r a lth o u g h th a n b e fo r e K orea s o m e w h a t lo w e r th a n th e p e a k r e a c h e d e a r lie r th is y e a r . F o llo w i n g th e K o r e a n o u tb re a k th e lu m b e r in d u s tr y th e e x p e c ta tio n s c re a te d w as dry severe s p e ll, p a r tic u la r ly in t h e D o u g l a s fir a tio n s s h a r p ly a n d lim it e d s o m e m ill o p e r a t io n s . P r o d u c T h e e ffe c ts , h o w e v e r , in th e lu m b e r in d u s tr y h a v e n o t been p r o lo n g e d s tr o n g ly ever, th e fla g g in g d e c lin e dem and in lu m b e r th a n of cut w as bad m ore w e a th e r. In th e r e s u lt o f S e p te m b e r, by D o u g l a s fir p r o d u c t io n r e c o v e r e d s h a r p ly a s th e fir e h a z M any a r d a b a te d a n d d e m a n d r e v iv e d m o d e r a t e ly , b u t p in e p r o a ffe c te d b y th e d e fe n s e p r o g r a m . tio n o f b o t h p in e a n d fir w a s d o w n a b o u t 8 p e r c e n t f r o m th e th ir d q u a r te r o f 1 9 5 0 . I n th e W e s t e r n p in e a r e a , h o w u s e r s o f lu m b e r , p a r tic u la r ly r e s id e n tia l b u ild e r s a n d r e ta il y a r d s , s to c k e d u p h e a v ily . A d d e d to th is w a s th e r u s h to b u ild h o u s e s b e fo r e r e s tr ic tio n s b e c a m e e ffe c t iv e . T h e d u c tio n h a s c o n tin u e d to d r o p . O u tp u t s ta b le in th e th ro u g h o u t red w ood r e g io n has th e except fo r year r e m a in e d norm al fa ir ly seaso n al r e s u lt w a s th a t lu m b e r p r o d u c tio n in c r e a s e d s u b s ta n t ia lly c h a n g e s . T h e s p e c ia lt y n a tu r e o f r e d w o o d a n d its g r e a te r a n d h a s r is e n t o a n a ll-t im e h ig h . u s e in in d u s tr ia l p r o je c t s t e n d to in s u la te th is s e g m e n t o f T h e m o m e n tu m th a t ev e n d u stry w hen lu m b e r c o n tin u e d m o n th s. M ore o f th e se d e v e lo p m e n ts w a s so to c o n s u m p tio n p rodu ce at a r e c e n tly , h ow ever, o f r e s tr ic tio n s o n c r e d it a n d s la c k e n e d , record th e ra te stro n g th e fo r in som e c u m u la tiv e e ffe c t m a te r ia ls fo r v a r io u s ty p e s o f b u ild in g h a s le d t o a d e c lin e in p r o d u c t io n b e lo w th e le v e ls o f t h e s e c o n d h a lf o f 1 9 5 0 . E v e n th is lo w e r le v e l o f o u t p u t , h o w e v e r , w i ll s t ill b e h i g h r e la t i v e t o t h e s e c o n d h a lf o f m o s t o t h e r y e a r s . P r ic e s a r e lik e ly t o r e m a in r e a s o n a b ly stea d y and p r o fit e x p e c ta tio n s on an in d u s tr y th e lu m b e r in d u s tr y fr o m g y r a tio n s th a t h a v e stro n g e ffe c t o n D o u g la s fir a n d , t o s o m e e x t e n t , o n p in e . D e m a n d — a com bination of fact a n d expectation T h e la r g e v o lu m e o f n e w fle c te d t h e im p e tu s to ord ers in v e n to r y e a r ly in th e y e a r r e a c c u m u la tio n im p a r te d b y d e v e lo p m e n ts in K o r e a a n d th e u n u s u a l le v e l o f r e s i d e n tia l c o n s tr u c tio n — p o s t-K o r e a m any b a s is d o n o t a p p e a r d is m a l in a n y s e n s e . s o m e o f th e s h o r t-r u n d e m a n d su ch a ev e n ts. lu m b e r it s e lf p a r tia lly E x p e c ta tio n s d e a le r s and of b u ild e r s to a b y -p r o d u c t sh o rta g e s of in d u c e d o r d e r h e a v ily . In a d d itio n , th e a c c e le r a tio n in r e s id e n tia l b u ild in g , th e m a R ecord production despite d eclining d e m a n d jo r D u r i n g th e fir st n in e m o n t h s o f th is y e a r , D is t r ic t lu m sou rce of dem and fo r m ost D is tr ic t lu m b e r , added c o n s id e r a b ly to t h e le v e l o f s a le s . D u r i n g th e fir s t q u a r te r b e r o u tp u t w a s a t a n a ll-t im e h ig h . H e a v y d e m a n d e a r ly th e a m o u n t o f n e w o r d e r s e x c e e d e d a ll p r e v io u s r e c o r d s , in th e y e a r a n d u n u s u a lly m ild w e a t h e r r e s u lte d in r e c o r d a n d t h r o u g h M a y t h e y c o n tin u e d a t a v e r y h ig h le v e l. p r o d u c tio n d u r in g th e fir st q u a r te r . P in e p r o d u c tio n w a s u p 2 6 p e r c e n t a n d D o u g la s fir p r o d u c tio n w a s u p 2 3 p e r cen t fr o m w o o d r e g io n s h o w e d o n ly a m o d e r a te rise . T h e la r g e g a in s in p in e a n d in 1950 fir r e fle c t th e lo w cau sed by severe le v e ls o f p r o d u c tio n e a r ly w e a th e r as w e ll as th e very s t r o n g m a r k e t c o n d itio n s e a r ly th is y e a r . T h o u g h s a le s e a s e d a ft e r M a r c h t h is y e a r a n d d e c lin e d s h a r p ly Also in This Issue th e s a m e q u a r te r in 1 9 5 0 , b u t o u tp u t in th e r e d in June, p r o d u c tio n w as r e a s o n a b ly w e ll su s Recent Changes in the Geographic Distribu tion of Bank Deposits — Twelfth District Postwar Consumer Instalment Credit Real Estate Loans in the Twelfth District FEDERAL RESERVE B A N K OF SAN FRANCISCO 86 D u r i n g t h e s e c o n d q u a r t e r o f th e y e a r it b e c a m e a p p a r e n t, h ow ever, w o u ld th a t th e v o lu m e d e c lin e . W i t h d r a w a l b a n k s fr o m th e m o r tg a g e c o m m itm e n ts bonds and r e s u lte d sh a rp F H A dow n and V A con su m er p r ic e s c u tb a c k s p a y m e n ts in X b u ild in g m a r k e t fo r and h o u s in g , fo r b u ild e r s ’ p la n s . by R e g u la tio n w ith c o n s id e r a b ly . A s T h ese X and a m o d e r a tio n narrow ed c o n s u m p tio n . m uch th e fo rc e s, of r e s id e n tia l a lo n g w ith In la r g e r in c re a se d th e p in e in v e n to r ie s fr o m r e g io n , th a n w h ic h th e fir u s u a lly area, c a r r ie s sto ck s have a tw o m o n t h s ’ s u p p ly to b e tte r th a n tw o a n d o n e -h a lf m o n t h s . G overn m ent h o u s e s d im in is h e d , in r e q u ir e d r e g u la tio n s , a lo n g fe r v o r b u ild in g m a r k e t b e c a u se o f u n d ig e s te d u n fa v o r a b le in r e s id e n tia l o f in su r a n c e c o m p a n ie s th e b a c k lo g o f p r e -R e g u la tio n creased of November 1951 B ased on norm al p rew ar p r a c tic e , m ill in v e n to r ie s c o u ld in c r e a s e s u b s t a n t i a lly in a ll s e g m e n t s o f t h e in d u s try b e fo r e th e w ar, any s e r io u s D o u g la s m o n th s ’ s u p p ly p r o b le m fir m ills of sto ck s and a b o u t a fo u r m o n th s ’ s u p p ly . in sto ck s r e la tiv e to new w o u ld u s u a lly occu r. c a r r ie d th e W e ste rn p in e N e v e r th e le s s , ord ers is lik e ly P r io r about a to tw o re g io n th e in c r e a s e to m ake pro h i g h in v e n t o r ie s in b u il d e r s ’ a n d r e t a i le r s ’ h a n d s , r e d u c e d d u c e r s m o r e c o n s e r v a tiv e . P r o d u c tio n m a y b e r e s tr a in e d th e s o m e w h a t a n d m a y r u n o n ly s lig h tly a h e a d o f n e w o r d e r s . dem and fo r lu m b e r a p p r e c ia b ly . T h is d e c lin e con tin u e d th r o u g h m o s t o f th e th ir d q u a r te r , b u t a S e p te m b e r in c r e a s e in h o u s in g s ta r t s , d u e in p a r t to th e r e la x a t io n in c r e d it r e g u la t io n s , r e s u lt e d in a n in c r e a s e in n e w o r d e r s f o r D o u g la s fir . In in v e n to r ie s s u p p ly fo r o p e r a tio n s th is of lu m b e r w in te r d u r in g th e is have ra th e r su m m er d ry in c r e a s e d , lo w . s p e ll The th e reduced d im in is h e d th e s u p p ly o f lo g s o n h a n d b e lo w th e le v e ls n o r m a lly e x p e c te d a d d it io n to th e d e c lin e in r e s id e n tia l b u ild in g , N a tio n a l P r o d u c tio n A u t h o r it y of am u sem en t A lth o u g h lo g p la c e s , r e s tr ic tio n s o n c o n s tr u c tio n c o m m e r c ia l and p u b lic b u ild in g s , a t th is t im e o f y e a r . T h i s w ill n o t b e a s e r io u s p r o b le m lu m b e r r e q u ir e m e n ts s h o u ld str e n g th e n r e m a in and m o d e ra te , but w e a th e r c o n d itio n s if cut if dem and in to lo g c h u r c h e s , a n d c e r ta in o th e r ty p e s o f s tr u c tu r e s h a v e a ls o g i n g o p e r a t io n s , s o m e t ig h t n e s s in lu m b e r s u p p lie s c o u ld cu t th e need f o llo w . c u ts in lu m b e r u se , in c r e a s e d been fo r im p o r ta n t. m o v e d fr o m D is tr ic t lu m b e r . Though A s an o ffs e t to th e se m ilita r y c o n s u m p tio n a d d in g le s s th a n has has been re th e d e m a n d p ic tu r e , m ilita r y n e e d s fo r c o n Prices dip but remain well above pre-Korea level L u m b e r p r ic e s h a v e g e n e r a lly reced ed fro m th e h ig h s t r u c t io n o f n e w in s ta lla tio n s d o m e s tic a lly a n d a b r o a d a r e p o in ts r e a c h e d e a r lie r t h is y e a r o r la te la s t y e a r , y e t r e e x te n s iv e . m a in w e ll a h e a d o f th e p r ic e s p r e v a ilin g ju s t p r io r to th e dunnage In are a d d itio n , g r e a te r r e q u ir e m e n ts fo r th a n fo r c iv ilia n p a c k a g in g good s. and M ilit a r y K o r e a n o u tb r e a k . I n S e p t e m b e r , D o u g la s fir N o . 1 c o m r e q u ir e m e n ts m a y ta k e a n in c r e a s in g v o lu m e o f lu m b e r , m o n 2 x 4 ’s w e r e q u o te d a t $ 8 2 p e r th o u s a n d b o a r d fe e t, 8 b u t w ill p r o b a b ly n o t o f f s e t t h e d r o p in c o n s u m p t io n f o r p e r c e n t le s s th a n a t th e h ig h p o in t r e a c h e d th e p r e v io u s r e s id e n tia l h o u s in g a n d o t h e r c iv ilia n u s e s . O ne in te r e s tin g G overn m en t in c r e a se r e s tr ic tio n s in on w h ic h a re lu m b e r m o r e th a n u sed in a num ber of u tiliz a tio n th e u se of S e p te m b e r, b u t 9 p ercen t ah ead r e s u lt s s te e l. fr o m T im b e r s , fiv e in c h e s th ic k , a r e b e in g stru ctu res to r e p la c e ste e l b eam s. r e a liz a tio n s lu m b e r p r o d u c e d ) s o m e w h a t le s s , w ere a ls o of June 5 fu rth e r above s in c e S e p te m b e r p r e -K o r e a t h a n w e r e th e p r ic e s o f 2 x 4 ’s , p r in c ip a lly fo r m a t e r ia l. T h e o v e r -a ll v o lu m e o f t im b e r u s e d in th is a p p li ste a d y d u r in g c a t io n w ill b e lim it e d b o t h b y th e lo g s u p p ly a n d th e n u m d erosa l x 8 ’s and grad es th e p a s t fe w p in e h a v e s e llin g o th e r in re a c te d th a n 2 x 4 ’s fa lle n 1950. le v e ls , e te r a n d m u s t c o m p e te w ith p ly w o o d fo r th is ty p e o f r a w b e r o f s t r u c t u r e s in w h ic h s u c h b e a m s c a n b e u s e d . A verage fo r th e r e g io n a s a w h o le h a v e p e rce n t, T h e s e tim b e r s r e q u ir e lo n g , h ig h -g r a d e lo g s o f la r g e d ia m ty p e s 1950. ( a n a v e r a g e o f p r ic e s r e c e iv e d o n a ll t y p e s o f 12 They p e rce n t, b e c a u s e p r ic e s have been q u ite m o n th s . T h e p r ic e s fo r s im ila r ly S e p te m b e r fo r 9 w ith N o. percent 3 le s s pon- com m on th a n la s t A p r i l ’ s h ig h , y e t 1 5 p e r c e n t a h e a d o f p r e -K o r e a p r ic e s . Inventories rise as orders decline D e sp ite th e d e c lin in g le v e l of L it t le b a s is e x is t s a t p r e s e n t f o r a n y s h a r p r is e in lu m o r d e r s, p r o d u c tio n has b e r p r ic e s d u r in g th e n e x t fe w d e c r e a s e d o n ly s lig h t ly in r e c e n t m o n t h s . I n p a r t th is r e lu m b e r fle c ts th e e x p e c t a t io n s th a t th e n e e d f o r lu m b e r , p a r tic u and la r ly fo r r e s id e n tia l b u ild in g , m ay prove to be g r e a te r has e a r ly le v e ls at n e x t s p r in g th a n a t p r e s e n t. I n a d d itio n , in v e n to r ie s d u r m o d e ra te i n g m o s t o f th e p o s t w a r p e r io d h a v e b e e n u n u s u a lly lo w th e lo w and in c r e a s e m any produ cers appear to be w illin g to accept an been 1951 le a s t m o d e ra te and u n til n a tu r e w ill p r o b a b ly s p r in g . m ay m o n th s . T h e d e m a n d fo r com p ared occur Som e fo r w ith th a t o f c o n tin u e p r ic e D o u g la s at 1950 cu rrent in c re a se s fir of b ecau se a of lo g in v e n to r y , b u t e v e n th is w o u ld r e q u ir e s o m e in new ord ers. M ost fo r e c a s ts of r e s id e n tia l in c r e a s e in s t o c k s . A s a r e s u lt o f th e r e la tiv e ly h ig h le v e l h o u s in g n e x t y e a r in d ic a te a d e c lin e o f 2 0 p e r c e n t o r m o r e o f o u tp u t in fro m th e fa c e o f d e c lin in g d e m a n d , th e r a tio of m ill s to c k s to n e w o r d e r s h a s r is e n s h a r p ly . t h e t o t a l e x p e c t e d f o r 1 9 5 1 . T h i s w o u l d r e s u lt in a c o n s tr u c tio n ra te n o t to o d iffe r e n t fr o m th e p r e se n t c o m I n th e D o u g l a s fir r e g io n , m ill s t o c k s r o s e 9 p e r c e n t in p a r a t iv e ly lo w v o lu m e . E v e n if m ilit a r y u s e o f lu m b e r in t h e t w e lv e m o n t h s e n d in g in S e p t e m b e r ; in th e W e s t e r n c r e a s e s s u b s ta n t ia lly , it w ill n o t o f f s e t th e d e c lin e in c o n p in e r e g io n th e g a in w a s 2 2 s u m p tio n a r is in g f r o m th e lo w e r le v e l o f r e s id e n tia l b u ild th e p e rce n t. S to c k s o n hand in D o u g la s fir r e g io n a t p r e s e n t a r e e q u a l to a b o u t o n e in g . L u m b e r s h o u ld not w ill p r o b a b ly vary m uch c o n tin u e and o r d e r s . I n M a r c h t h e y a m o u n t e d t o little o v e r t w o w e e k s ’ t h o u g h m o d e r a t e d e c lin e s c o u ld o c c u r f r o m p r ic e s m a rk e ts m o n t h ’s c o n s u m p tio n , b a s e d o n th e c u r r e n t le v e l o f n e w fro m to presen t be d u ll le v e ls , tim e to tim e . November 1951 87 M O N T H L Y R E V IE W RECENT CHANGES IN THE GEOGRAPHIC DISTRIBUTION OF BANK DEPOSITS — TWELFTH DISTRICT t th e e n d A of 1950 p e rc e n ta g e g a in to ta l d e p o s its o f in d iv id u a ls , p a r t- w as k- n e r s h i p s , a n d c o r p o r a t i o n s i n a l l b a n k s i n t h e T w e l f t h D is t r ic t h a d in c r e a s e d le s s th a n 2 p e r c e n t s in c e th e e n d o f in d e p o s it s c o n c e n tra te d area in s u r r o u n d in g P h o e n ix . N e v a d a ’s la r g e s t a n d tim e d e p o s its w e r e d o w n p e r c e n t a g e in c r e a s e o f a n y c o u n t y in th e D is t r i c t — 3 2 p e r D is tr ic t w ere p e rce n ta g e n e a r ly S ta tes. The one very s lig h tly . in c r e a s e s and h ig h a h a lf ra te H o w e v e r , fo r th e c e n t; to th e e n d o f 1 9 5 0 , T w e lft h in b o th tim e s ty p e s of th o se in th e of d e p o s its doubt lo c a te d . th is is The r e la te d C la r k la tte r h a d to th e C o u n ty , th e la r g e s t a c tiv itie s of th e a t o m ic te s t in g in s ta lla tio n s in th a t a r e a . d e p o sits o f e x p a n s io n no is and th e in c r e a se s w ere V egas (R e n o ) in c r e a se C o u n tie s , w h ere Las C o u n ty P in a l 1 9 4 7 , c o m p a r e d w it h a 6 .4 p e r c e n t in c r e a s e in th e c o u n t r y th e e n d o f 1 9 4 1 W ash oe D is tr ic t, th e and a s a w h o le . D is tr ic t d e m a n d d e p o s its w e r e u p 3 .2 p e r c e n t p e r io d f r o m in in th e M a r ic o p a U n ite d T h i s c o n c e n tr a tio n o f in c r e a se s a r o u n d p o p u la tio n c e n in ters th e D is t r ic t s ta te s d u r in g th e w a r a n d e a r ly p o s tw a r y e a r s co n tra sts w ith th e g ro w th of d e p o s its fro m 1941 t h r o u g h 1 9 4 7 w h e n it w a s f o u n d th a t in c r e a s e s in m e t r o h a s d r o p p e d c o n s id e r a b ly s in c e 1 9 4 7 , a n d th e r e h a s b e e n p o lit a n s o m e s h ift in th e d is t r i b u t io n o f d e p o s i t s a m o n g c o u n t ie s . t h a n g a in s in th e p r e d o m in a n t ly a g r ic u lt u r a l c o u n t ie s o f I n a ll s ta t e s o f t h e D is t r i c t , 1 9 4 7 - 1 9 5 0 in c r e a s e s in d e th e D is t r ic t . D u r in g 1 9 4 7 , h o w e v e r , D is t r ic t fa r m e r s ’ n e t areas w ere c o n s id e r a b ly p o s its — p a r tic u la r ly d e m a n d d e p o s its — o c c u r r e d m o r e o f in c o m e w a s a t a reco rd te n a n d w e r e la r g e r p e r c e n t a g e w is e in c o u n t ie s w it h la r g e dem and had p o p u la tio n th a t y e a r. F r o m c e n te rs th a n in o th e r c o u n tie s. In n o rth e rn d e p o sits s m a lle r le v e l, a n d reach ed 1 9 4 8 th ro u g h an p e r c e n ta g e w is e fa r m e r a ll-t im e o w n e r s h ip of h ig h in 1 9 5 0 n et fa r m e a r ly in c o m e d e C a lifo r n ia , f o r in s ta n c e , th e r e w e r e in c r e a s e s in d e p o s it s c lin e d s te a d ily a s d id a ls o th e a m o u n t o f d e m a n d d e p o s its in a lm o s t a ll c o u n t ie s in t h e S a n F r a n c i s c o B a y a r e a , w h ile h e ld b y f a r m e r s . F o r th e w h o le p e r io d f r o m d e p o s i t s in t h e S a n J o a q u i n a n d S a c r a m e n t o V a l l e y c o u n 1950, tie s la r g e r f o r r u r a l c o u n t ie s t h a n f o r a r e a s n e a r la r g e c itie s . d e c lin e d c o n s id e r a b ly . In W a s h in g to n and O regon h ow ever, percent in c r e a se s 1 9 4 1 th ro u g h g e n e r a lly T h e m a jo r e x c e p tio n s — L o s e r n p a r ts o f t h o s e s ta te s w h e r e m o r e o f t h e c itie s a n d la r g e c o p a C o u n t y , A r i z o n a — a r e la r g e a g r ic u ltu r a l p r o d u c in g to w n s a r e lo c a te d . I n A r iz o n a , th e sta te w ith th e la r g e s t a s w e ll a s m e t r o p o lit a n c e n te r s . e p o s it s of I n d iv id u a l s , P D a r t n e r s h ip s ecem ber , C a n d o r p o r a t io n s 31, 1947 and 1950— T in a ll w e l ft h D B a n k s , by S elected C C o u n ty an d m uch m o s t o f th e in c r e a s e w a s in d e m a n d d e p o s it s in th e w e s t D A n g e le s w ere o u n t ie s M a r i ,1 is t r ic t Percentage change (in m illions) r — --------------- T o ta l------------------- N ,— ----------- D em and--------------- N r~ --------------- T im e ------------------«y ( --------------- - 1 9 4 7 -5 0 ------ ------------ 1950 Arizona ................................................ Maricopa .................................... California ........................................... Northern California ................. San Francisco ........................ Alameda .................................... Sacramento ............................... Santa Clara ............................. Fresno ........................................ San Joaquin ............................. San Mateo ............................... Southern C a lifo rn ia ................... $ 1947 245.5 186.5 $ 1950 222.8 171.3 $ 1947 182.1 136.9 $ 1950 66.2 51.0 $ 1947 63.4 49.6 6,396.2 3,045.0 1,330.0 352.5 141.9 142.5 140.2 90.3 63.6 3,351.2 2,758.1 205.8 6,177.4 3,000.9 1,322.0 317.9 140.5 131.5 135.7 100.4 52.0 3,176.6 2,589.9 190.3 5,322.4 3,180.5 1,244.5 487.1 160.2 151.9 117.0 100.9 115.4 2,141.9 1,734.6 162.5 5,353.1 3,144.0 1,221.1 500.8 158.1 144.9 117.3 104.8 98.7 2,209.1 1,795.6 164.1 T otal + 17.7 + 19.2 D em and + 2 2 .4 + 2 5 .1 T im e + 4.4 + 2.8 368.3 11,530.5 6,144.9 2,543.1 818.8 298.5 276.4 253.0 205.2 150.6 5,385.7 4,385.4 354.4 ............ ............ ............ ............ ............ 368.7 101.7 27.7 267.0 63.4 384.2 98.5 24.3 285.7 60.2 265.6 71.9 19.3 193.7 45.1 289.6 71.5 17.6 218.0 43.3 103.1 29.8 8.4 73.3 18.3 94.6 27.0 6.6 67.7 16.9 — 4.0 + 3.2 + 14.0 — 6.5 + 5.3 — 8.3 + 0.6 + 9.7 — 11.1 + 4.2 + 9.0 + 10.4 + 27.3 + 8.3 + 8.3 N e v a d a ................................................... W ashoe ....................................... ............ 72.2 141.0 67.3 93.2 44.7 86.6 41.5 59.0 27.5 54.4 25.8 + + 7.9 7.3 + + 7.6 7.7 + + 8.5 6.6 ............ ............ ............ ............ 1,109.6 628.4 181.9 31.0 1,284.9 1,105.4 639.2 179.4 29.8 883.6 738.4 397.2 145.2 25.0 866.1 722.9 396.3 143.2 24.5 407.9 371.2 231.2 36.7 6.0 418.8 382.6 243.0 36.2 5.3 + + — + + 0.5 0.4 1.7 1.4 4.0 + + + 2.0 2.1 0.2 — — — 2.6 3.0 4.9 + + 1-4 2.0 + 1-4 + 13.2 Utah ....................................................... ............ Salt Lake .................................. ............ 473.0 293.6 460.8 275.7 294.7 191.0 296.9 189.5 178.3 102.6 163.9 86.2 + + 2.6 6.5 — + 0.7 0.8 + 8.8 + 19.0 Eastern W ashington ................. ............ Spokane ....................................... ............ 521.4 191.9 1,263.0 874.5 526.7 110.7 388.5 133.6 1,230.7 835.0 504.3 99.3 395.8 119.2 743.0 610.1 403.7 76.7 132.9 58.3 767.2 625.7 403.2 76.5 141.5 60.6 + + + + — + 0.4 1.6 2.5 6.5 2.9 6.7 2.6 1,484.6 930.4 1,997.9 1,460.7 907.5 175.9 537.2 179.8 + W estern W ashington ............... ............ K ing .............................................. ............ + 4.7 + 4.4 + 11.5 — 1.8 + 12.1 — 3.2 — 2.5 + 0.1 + 0.3 — 6.1 — 3.8 ............ $ 16,299.1 $ 16,045.0 $ 9,419.2 $ 9,129.4 $ 6,879.9 $ 6,915.5 + 1.6 + 3.2 — 0.5 $137,108.9 $90,998.9 $84,997.7 $54,932.4 $52,111.2 + 6.4 + 7.1 + 5.4 ............ ............ ............ 11,718.6 6,225.5 2,574.5 ............ ............ 302.1 294.4 ............ ............ ............ 191.2 179.0 5,493.1 San D i e g o .................................. ............ Idaho ..................................................... Northern Idaho ........................... Nez Perce ............................... Southern Idaho ........................... Ada .............................................. Oregon ................................................ W estern Oregon ........................ Multnomah ................................ Eastern Oregon ........................... Umatilla .................................... Twelfth United District States ...................... .................................. + + 1.6 1.3 + 3.5 — + 0.6 1.2 + 1-2 + 2.5 + 1.2 + 6.5 + 1.7 — 6.8 + 18.9 + 2.0 + 2.4 + 3.9 + 1-5 + 0.6 + 10.9 + 1.0 + 8.4 + 3.3 — 10.1 + 2 2 .3 + 5.5 + 6.5 + 8.1 + 1.9 — 2.7 + 1.3 + 4.8 — 0.3 — 3.7 + 16.9 — 3.0 — 3.4 — 1.0 1 Counties with the largest deposits as of December 30, 1950 in all states or areas shown and all other counties with total deposits (including interbank and governmental deposits) over $200 million. 88 November 1951 FEDERAL RESERVE B A N K OF SAN FRANCISCO POSTWAR CONSUMER INSTALMENT CREDIT A T t h e e n d o f J u ly to ta l c o n s u m e r in s t a lm e n t c r e d it o u ts t a n d in g in th e n a tio n w a s $ 6 0 0 m illio n b e lo w th e a lltim e peak of $ 1 3 .5 D ecreases occu rred b illio n reached in o f th e fiv e in D ecem ber fir s t s e v e n 1950. m o n th s of h a d little e ffe c t o n t h e a lr e a d y s t e e p ly u p w a r d t r e n d . I n c o m e s w e r e r is in g a n d liq u id a s s e t h o ld in g s w id e ly d is tr ib u te d , so p a y m e n t r e q u ir e m e n ts h a d n o t g r e a tly in h ib ite d th e c o n s u m e r -b o r r o w e r . In th e la t t e r part of 1948 th is y e a r . F o ll o w i n g th e c o n s id e r a b le r e la x a tio n o f t e r m s s o m e s la c k e n in g w a s a p p a r e n t, p r o b a b ly d u e m o r e to s a t o n J u ly 3 1 in a c c o r d w ith th e a m e n d m e n t s t o th e D e f e n s e is fa c t io n o f t h e in itia l p o s t w a r r e p la c e m e n t n e e d s t h a n t o P r o d u c tio n A c t, con su m er in s ta lm e n t c r e d it expanded F e d e r a l c o n tr o ls o n c o n s u m e r le n d in g , r e im p o s e d a s a n a n ti-in fla tio n a r y m e a s u r e in S e p te m b e r 19 5 0 , h ave been b la m e d b y m a n y fo r th e b u y e r a p a th y a n d a c c o m p a n y in g in v e n to r y and lo g ja m w h ic h have p la g u e d m a n u fa c tu re r s d is tr ib u to r s o f c o n s u m e r d u r a b le s s in c e la s t s p r in g . I n v ie w o f th e in te r e s t a tta c h in g to c o n s u m e r c r e d it a s a n e c o n o m ic s tim u la n t o r in fla t io n a r y fo r c e , it m a y be ap p r o p r ia te a t th is tim e t o tr a c e b r ie fly th e tr e n d o f in s ta l m e n t le n d in g in th e e x p a n d in g r e im p o s itio n of R e g u la tio n W in S e p te m b e r. T h e o u t s ta n d in g v o lu m e o f in s ta lm e n t c r e d it d ip p e d m o d e r a te ly s u b s ta n t ia lly in A u g u s t a n d S e p t e m b e r . econom y o f th e p o stw a r in th e fir s t q u a r te r o f 1949 sea so n a l fa c good s, bu t resu m ed its up w ard c lim b in M a r c h — th re e m o n th s b e fo r e F e d e r a l c o n tr o ls w e r e a g a in r e m o v e d . T h e r is e w a s s h a r p ly a c c e le r a te d in m i d - 1 9 5 0 w h e n t h e o u t b r e a k o f th e K o r e a n w a r le d t o s c a r e b u y in g , d o n e in la r g e p a r t o n c r e d it. M o r e o v e r , in th e m in d s o f m a n y p e o p le , t e le v is io n h a d b e c o m e o v e r n ig h t a n e a r -n e c e s s it y , a n d a p r e -1 9 4 9 a u to m o b ile w a s c o n s id e r e d o b s o le te . R e -e s t a b lis h m e n t o f R e g u la t io n W p e r io d , w it h s p e c ia l r e fe r e n c e to th e T w e l f t h D is t r ic t . in r e s p o n s e to t o r s a n d t h e m ild r e c e s s io n in c o n s u m e r b u y in g o f d u r a b le b r o u g h t a n im m e d ia te le v e lin g o f f o f th e r is e d u r in g th e fo u r th q u a r te r o f 1 9 5 0 , a n d d u r R apid expansion since B e g i n n i n g in 19 4 5 i n g 1 9 5 1 t h e t r e n d w a s g e n e r a lly d o w n w a r d u n til t h e e n d 1 9 4 5 -4 6 , w h e n r e c o n v e r s io n p la c e d n e w su p p lie s o f a u to m o b ile s , h o u s e h o ld a p p lia n c e s , fu r n itu r e , and b u ild in g m a te r ia ls on th e n a tio n ’s m a rk e ts, th e a m o u n t o f c o n s u m e r in s ta lm e n t c r e d it o u ts ta n d in g in th e n a tio n e x p a n d e d s w iftly . D is c o n tin u a n c e o f th e w a r tim e o f J u ly . A s p r e v io u s ly n o te d , h o w e v e r , a s u b s ta n tia l e x p a n s io n occu rred in A u gu st and S e p te m b e r th e r e la x a tio n o f th e te r m s o f R e g u la tio n W fo llo w in g to c o n fo r m w ith th e a m e n d e d D e fe n s e P r o d u c tio n A c t . Com m ercial ba nk pattern c o n s u m e r c r e d it r e g u la t io n in N o v e m b e r 1 9 4 7 a p p a r e n t ly C o n s u m e r in s ta lm e n t lo a n s o f c o m m e r c ia l b a n k s c o n C O N S U M E R IN S T A L M E N T C R E D IT O U T S T A N D I N G , 1 9 4 6 -5 1 sid e r e d s e p a r a te ly h a v e d is p la y e d a p o s tw a r p a tte r n v e r y s im ila r to th a t o f to ta l c o n s u m e r in s ta lm e n t c r e d it, th e c h ie f d iffe r e n c e s b e in g a le s s p r o n o u n c e d s e a s o n a l m o v e m ent and v a r ia tio n s in 1946 a are ste e p e r u p w a rd n o tic e a b ly s m a lle r te n d en cy . in Season al c o m m e r c ia l bank h o ld in g s , w h ic h c o n s is t la r g e ly o f p a p e r p u r c h a s e d f r o m r e ta ile r s , w h ile to ta l in s ta lm e n t c r e d it s h o w s a C h r is tm a s p e a k r e s u lt in g la r g e ly f r o m s a le c r e d it e x t e n d e d d ir e c tly b y r e ta ile r s o t h e r th a n a u to m o b ile d e a le r s . T h e r e la t iv e ly r a p id r ise o f c o m m e r c ia l b a n k o u ts ta n d in g s in 1946 re fle c te d in p a r t th e e n t r y o f m a n y b a n k in g in s t it u t io n s in t o t h e c o n s u m e r lo a n fie ld f o r t h e fir s t t im e . T h i s f a c t o r w a s le s s im p o r ta n t h ow ever, s in c e in th e T w e lfth con su m er D is tr ic t c r e d it th a n a c tiv ity by n a tio n a lly , banks h ere w a s w id e s p r e a d b e fo r e th e w a r . Twelfth District experience I n a n a ly z in g c o n s u m e r in s ta lm e n t c r e d it in th e T w e lf t h D i s t r i c t , it is n e c e s s a r y t o b a s e c o n c lu s i o n s o n t h e c o m m e r c ia l b a n k fig u r e s . T h e r e a v a ila b le f o r o th e r ty p e s H o w e v e r , th is d e fe c t is le s s sin c e c o n s u m e r le n d in g are no o f le n d e r s c o m p r e h e n s iv e d a ta a c u r r e n t b a s is . se r io u s th a n m ig h t a p p e a r, in th is on D is tr ic t is d o m in a te d by th e b a n k s , w h ic h h o ld a b o u t t h r e e -fo u r t h s o f t o t a l in s t a l m ent paper o u t s t a n d i n g .1 C e r ta in ly th e p o stw a r tre n d o f c o n s u m e r lo a n s o f T w e lf t h D is t r ic t c o m m e r c ia l b a n k s N o t e : T h i s c h a r t 19 p l o t t e d o n a l o g a r i t h m i c s c a l e o n w h i c h e q u a l v e r t i c a l d is t a n c e s r e p r e s e n t e q u a l p e r c e n t c h a n g e s r a t h e r th a n e q u a l a b s o lu te a m o u n ts. 1 T h is e s t im a t e is b a s e d o n d a ta p r o v id e d b y r e g is t r a t io n s t a t e m e n t s u n d e r R e g u l a t i o n W ( s e e M o n t h l y R e v ie w , A u g u s t 1 9 5 1 ) . T h e s e d a ta s o m e * w h a t u n d e r s t a t e t h e r e la t iv e im p o r t a n c e in t h e T w e lf t h D i s t r ic t o f n o n b a n k le n d e r s , h o w e v e r , s in c e s u c h le n d e r s o p e r a t in g in m o r e th a n o n e F e d e r a l R e s e r v e d is t r ic t r e p o r te d c o n s o lid a te d fig u r e s t o t h e F e d e r a l R e s e r v e b a n k in t h e ir h o m e o ff ic e d is t r ic t. November 1951 89 M O N T H L Y R E V IE W h a s c lo s e ly p a r a lle le d th e U n ite d S ta te s a s a w h o le . F r o m th a t fo r to ta l in s t a lm e n t c r e d it in S e p te m b e r 1 9 4 8 , th e in c r e a s e w a s r a p id a n d th e r a te o f th e w a r ’ s e n d u n til n e c tio n s . A s a r e s u lt, a u to m o b ile in s t a lm e n t p a p e r p u r ch ased b y b an k s fro m d e a le r s h a d d e c lin e d f r o m c e n t o f t o t a l p a p e r h e ld in D e c e m b e r 1 9 4 1 to 31 p er 16 percen t g a in s t e a d y , a v e r a g in g 4 .6 p e r c e n t p e r m o n t h . A f t e r fiv e in A u g u s t 1 9 4 5 , w h ile d ir e c t lo a n s to a u to b u y e r s h a d in m o n t h s o f n o n e t c h a n g e — a s t a b ilit y a t t r ib u t a b le in p a r t c r e a s e d in im p o r t a n c e f r o m 2 3 to 3 7 p e r c e n t . O t h e r r e ta il to th e re tu r n o f R e g u la tio n b u s in e s s r e c e s s io n — T w e l f t h b e g a n to e x p a n d a g a in W and in p a r t to th e m ild D is t r ic t in s ta lm e n t le n d in g in M a r c h 1 9 4 9 , th e o u ts ta n d in g s g r o w i n g b y a n a v e r a g e 2 .8 p e r c e n t p e r m o n t h u n til m i d - ages of F o l l o w i n g t h e o u t b r e a k o f w a r in K o r e a , T w e l f t h D is tr ic t c o n s u m e r s s te p p e d u p th e ir b o r r o w in g , a n d fo r th e th ir d q u a r te r th e m o n t h ly B e tw e e n c r e d its J u ly 1 and e x te n d e d s w e lle d by ra te o f g a in S e p te m b e r T w e lfth th e d e m a n d 1950, fo r co n su m er g o o d s W in by banks about $ 1 5 0 th e in tr o d u c tio n S e p te m b e r th e e x p a n s io n o f th e ceased new sam e p e r io d , h o u s e h o ld fo r p u rp oses 1 7 to 6 p e r c e n t o f th e r e fle c tin g a p p lia n c e s o th e r g o o d s ; re p re se n te d 2 9 w a r tim e and sh o rt fu r n itu r e . P er th an a c q u is itio n of p e rc e n t o f th e A u g u s t d u r a b le 1945 to ta l, c o m p a r e d w ith 1 9 p e r c e n t in D e c e m b e r 1 9 4 1 . W i t h r e c o n v e r s io n a n d th e r e tu r n o f n o r m a l p e a c e tim e p e rc e n t. in s ta lm e n t D is tr ic t c o m m e r c ia l m illio n n e t o f r e p a y m e n t s . W i t h R e g u la tio n w a s 4 .1 30, th e s o n a l in s ta lm e n t c a s h lo a n s , w h ic h r e fle c t p r im a r ily b o r r o w in g 1950. new in s ta lm e n t c r e d it h a d d r o p p e d fr o m to ta l d u r in g c o n d itio n s , th e p rocess w as reversed , and th e v a r io u s ty p e s o f in s ta lm e n t c r e d it s h ifte d b a c k to a p p r o x im a t e ly th e ir p r e w a r r e la tiv e im p o r ta n c e . P u r c h a s e d paper a cc o u n te d fo r 41 p e rc e n t o f th e a u to m o b ile S e p te m b e r 1951 to ta l, e x c e e d in g its p r e w a r p e r c e n t a g e ; a t th e s a m e tim e , a b r u p tly . I n c o n tr a s t to th e n a tio n a l e x p e r ie n c e , T w e lf t h d ir e c t lo a n s D is tr ic t b ile s h a d d w in d le d t o 1 3 p e r c e n t . R e t a il in s t a lm e n t p a p e r c o m m e r c ia l bank in s ta lm e n t c r e d it fe ll o ff to con su m ers fo r th e p u rch ase o f a u to m o D e c e m b e r . I t h a s c o n tin s e c u r e d b y c o n s u m e r g o o d s o th e r th a n a u to m o b ile s m a d e u e d to r e c e d e , th o u g h a t a d im in is h in g ra te , d u r in g 1 9 5 1 . u p 1 8 p e r c e n t o f th e S e p te m b e r o u ts ta n d in g s . I t m a y b e s h a r p ly d u r in g N o v e m b e r a n d A n A u gu st u p tu rn fo llo w in g th e r e la x a tio n of F ederal c o n t r o ls — n o ta b ly th e p r o v is io n a llo w in g t r a d e -in s to b e s ig n ific a n t th a t a year ago, a t th e h e ig h t of th e scare- b u y in g s p r e e , th is t y p e o f c r e d it c o m p r is e d 2 1 p e r c e n t o f p a r t o f th e r e q u ir e d d o w n p a y m e n t — w a s th e fir s t m o n t h th e to ta l. D o u b t le s s th e r a p id r e s u r g e n c e o f n o n -a u t o m o - ly b ile in c r e a s e crea se s in c e occu rred S e p te m b e r in 1950. S e p te m b e r. A H ow fu r th e r m uch s m a ll o f th e in 1951 re ta il in s ta lm e n t c r e d it— a s w e ll as th e drop s in c e S e p t e m b e r 1 9 5 0 — r e fle c ts in c o n s id e r a b le p a r t th e m u s h d e c lin e in c o n s u m e r c r e d it o u t s t a n d in g c a n b e a t t r ib u t e d r o o m in g e x p a n s io n o f th e t e le v is io n in d u s t r y a n d its v i to th e r e g u la tio n a n d h o w c issitu d e s d u r in g th e p a st y e a r . m u c h to th e g e n e r a l s lu g g is h n e s s o f tr a d e , in r e a c tio n to th e s c a r e b u y in g e x c e s s e s o f 1950 a n d e a r ly 1 9 5 1 , is a m o o t p o i n t . I n c le a r th a t n o t o n ly a u to m o b ile s s o ft g o o d s n o t c o v e r e d fr o m s lo w dem and by w ith and c a s e , it is o th e r d u r a b le s , b u t R e g u la tio n an any W , h a v e su ffe r e d a c c o m p a n y in g in v o lu n ta r y a c c u m u la tio n o f tr a d e s to c k s . R e p a ir a n d m o d e r n iz a t io n c r e d it a c c o u n te d fo r ty p e h a s g r a d u a lly g a in e d and p o stw a r d ro p p e d fr o m and of C h a n g e s in distribution of loans 17 per c e n t o f th e to ta l o u ts t a n d in g in S e p t e m b e r th is y e a r ; th is p e r io d s . in im p o r t a n c e d u r i n g th e w a r P erson al in s ta lm e n t cash lo a n s 2 9 to 11 p e r c e n t o f th e to ta l b e tw e e n 1 9 4 5 1 9 5 1 . I n g e n e r a l, it a p p e a r s th a t th e p r e w a r p a tte r n c o m m e r c ia l b a n k con su m er lo a n p o r tfo lio s has been r e s t o r e d , b u t is d o m i n a t e d e v e n m o r e b y r e t a il i n s t a l m e n t W h en T w e lfth th e w a r e n d e d th e c o n s u m e r lo a n p o r tfo lio s o f p a p er p u rch a sed fro m D is tr ic t m o b ile s a n d o th e r m e r c h a n d is e . c o m m e r c ia l banks w ere not o n ly at a th e r e ta ile r a n d secu red b y a u to lo w le v e l— a b o u t o n e -e ig h t h o f th e a m o u n t n o w o u ts t a n d in g — b u t w a r t im e s h o r ta g e s a n d d is r u p t io n s h a d a lte r e d s ig n ific a n tly th e d is tr ib u tio n o f lo a n s o f v a r io u s ty p e s . F o r e x a m p le , c e s s a tio n b r is k new tu rn o v er in of u sed new c a r p r o d u c tio n cars and to th e had in flu x le d to a of m any d e a le r s w h o d id n o t h a v e e s t a b lis h e d fin a n c in g c o n - The outlook for instalment lending In g e n e r a l, fu tu r e c r e d it and are th e m ore p r o b a b le a p ro sp e cts fo r fu n c tio n sta te of c o n s u m e r in s ta lm e n t th e of dem and a v a ila b ility of th a n term s o f th e goods of R e g u la t io n W . T h e e x p a n d in g d e fe n s e p r o g r a m , a c c o m p a n ie d b y t ig h te n in g F e d e r a l c o n tr o l o f sc a r c e m a te r ia ls , D is t r ib u t io n by T y pe of of L O o a n u t s t a n d in g — T w e l ft h C D o n su m e r is t r ic t Decem ber 1941 Retail automobile instalment credit: Direct loans ....................................... Purchased paper ............................. . . 31 Other retail instalment credit: Direct loans ......................................... | Purchased paper ................................ n st a l m e n t o m m e r c ia l August 1945 37 16 B Septem ber 1950 11 44 C r e d it a n k s Septem ber 1951 13 41 1 5 s 2 21 18 11 11 14 17 -----........................................................ . . 100 29 -----100 10 -----100 11 -----100 Repair and modernization c r e d it.. . . Personal instalment cash loans. . . Total C I 171 * N o t a v a ila b le s e p a r a t e ly . 2L e s s t h a n o n e - h a lf o f o n e p e r c e n t . N o t e : D e t a il m a y n o t a d d e x a c t ly t o to t a ls b e c a u s e o f r o u n d in g . sh o u ld a ffe c t th e p r o d u c tio n o f c o n s u m e r d u r a b le g o o d s to a n in c r e a s in g e x t e n t . A c t u a lly th e r e s h o u ld b e a s iz e a b le la g b e t w e e n r e s tr ic tio n o f o u tp u t a n d r e s u lt in g c o n tr a c tio n o f r e ta il s a le s a n d o f c o n s u m e r c r e d it, a s p r e s e n t s to c k s a r e a b n o r m a lly h ig h a n d c o u ld s u p p o r t c u r r e n t o r h ig h e r le v e ls o f s a le s f o r m o n t h s . T h i s is le s s tr u e in th e case of a u to m o b ile s , e s p e c ia lly th o se pro d u ced by th e m a jo r c o m p a n ie s . A l s o , m a n y d u r a b le g o o d s m a n u fa c tu r e r s h a v e v o lu n t a r ily ern m ent r e s tr ic tio n v e n to r ie s — a g a in du cers. c u t p r o d u c tio n to in advance of G ov ease th e bu rden of e x c e s s iv e e x c e p tin g th e m a jo r a u to m o b ile in pro November 1951 FEDERAL RESERVE B A N K OF S A N F R A N C ISCO 90 W i t h r is in g p e r s o n a l in c o m e s a n d o n ly m o d e r a te c o n ten . W i t h o u ts ta n d in g s a t c u r r e n t h ig h le v e ls , a la r g e tro l, sin ce A u g u s t , u n d e r R e g u la t io n W , c o n s u m e r s m a y v o lu m e o f n e w lo a n s m u s t be m a d e each m o n th ju s t to a d d s u b s ta n tia lly to th e ir in s ta lm e n t o b lig a tio n s in the o ffs e t th e flo w o f r e p a y m e n ts. I n th e T w e lft h n e x t fe w m o n th s . W a r n i n g s o f im p e n d in g s c a rc ity m a y th e se r e p a y m e n ts at c o m m e r c ia l b a n k s a m o u n t to a b o u t D is t r ic t o n c e a g a in fin d th e e a r o f th e c o n s u m e r . B u t b a r r in g d r a s $ 1 4 0 m illio n p er m o n th , a n d if th e v o lu m e o f n e w in s ta l tic m o d ific a tio n o f p r e s e n t d e fe n s e p la n s th e lo n g -h e r a ld e d m e n t co n tr a c ts a n d lo a n s d r o p s b e lo w th is ra te th e to ta l sh o r ta g e s w ill e v e n tu a lly a p p e a r, re d u c in g th e v o lu m e of o u ts ta n d in g w ill d ec lin e. I n a d e fe n se e c o n o m y su ch a n d u ra b le g o o d s sale s a n d o f reta il in s ta lm e n t p a p e r w r it - e v e n t a p p e a rs lik e ly . REAL ESTATE LOANS IN THE TWELFTH DISTRICT o m m e r c i a l b a n k s o w n a b o u t h a lf th e m o r tg a g e p a p e r C h eld in th e T w e l f t h D is t r ic t, w h ile s a v in g s a n d lo a n a sso c ia tio n s a re s e c o n d in im p o r ta n c e w ith 2 8 p erce n t, a c c o r d in g to d ata s u b m itte d b y m o r e th a n 4 ,4 0 0 r e g is tr a n ts u n d e r R e g u la t io n X w ith $ 6 .3 b illio n in real e state th a n d id a n y o th e r ty p e o f le n d e r, w h ile in W a s h i n g t o n , w h e r e m u tu a l sa v in g s b a n k s are a lso im p o r ta n t, th e y ra n k ed se c o n d . T h e fo u r m a jo r ty p e s o f le n d e rs a c c o u n te d f o r m o r e th a n 9 4 p e r ce n t o f T w e l f t h D is t r ic t m o r tg a g e h o ld in g s . lo a n s o u ts ta n d in g as o f M a y 3 1 , 1 9 5 1 . T h e sta tistica l d ata T h e re m a in d e r re p re se n te d , fo r th e m o s t p a r t, h o ld in g s o f in clu d e d in th e re g is tr a tio n sta te m e n ts c o n s titu te a d e tr u st d e p a r tm e n ts ta iled re c o rd o f m o r tg a g e lo a n h o ld in g s in the D is tr ic t. b r o k e r s , a n d b u ild e rs a n d of ban ks, m o rtg a g e d e v e lo p e r s . c o m p a n ie s M o rtga ge and com T h e y p r o v id e in fo r m a t io n n o t o n ly a b o u t th e ro le p la y e d p a n ie s b y d iffe r e n t ty p e s o f le n d e r s b u t a ls o a b o u t th e re la tiv e lo a n s h e ld fo r th e a c c o u n t o f o t h e r s ; in th is c a p a c ity th e y and brokers are p r im a r ily a c tiv e in se r v ic in g im p o r ta n c e o f d iffe r e n t k in d s o f real e state lo a n s a n d the re p o r te d c u s to d y o f $ 1 .2 b illio n in m o r t g a g e s , o r m o r e g e o g r a p h ic a l d is tr ib u tio n o f h o ld in g s . th a n h a lf o f th e $ 2 .2 b illio n liste d as s e rv ic e d f o r o th ers b y all re g istra n ts c o m b in e d . Distribution by type of owner W i t h c o m m e r c ia l b a n k s h o ld in g 5 0 p e r c e n t a n d s a v in g s Relative importance of loan types a n d lo a n a s s o c ia tio n s 2 8 p e r c e n t, th e o n ly o th e r m a jo r N o n -f a r m re sid e n tia l lo a n s w e r e a b o u t 8 7 p erce n t o f all ty p e s o f in stitu tio n a l le n d e r s a re life in su r a n c e co m p a n ie s rea l esta te m o r tg a g e s o w n e d in th e T w e l f t h D is tr ic t. T h is w ith g r o u p w a s d iv id e d a lm o s t e q u a lly b e tw e e n G o v e r n m e n t 1 0 p e r ce n t a n d s a v in g s b a n k s w ith 6 p e r ce n t. I t s h o u ld be b o r n e in m in d th a t th e d a ta r e p re se n t o w n e r s h ip in su r e d or g u a r a n te e d ty p e s and c o n v e n tio n a l lo a n s. o f rea l esta te lo a n s b y T w e l f t h D is t r ic t in s titu tio n s , ra th e r T h r e e -f ift h s o f the in su r e d o r g u a r a n te e d m o r tg a g e s h e ld th a n b y T w e lf t h D is t r ic t le n d e r s w e r e in su r e d b y th e F e d e r a l lo c a tio n o f m o r tg a g e d p ro p e rtie s in th e D is tr ic t. F o r e x a m p le , th e fig u re o f 1 0 p e r c e n t g r o s s ly u n d e r sta te s th e H o u s i n g A d m in is tr a tio n , th e b a la n ce b e in g g u a r a n te e d im p o r ta n c e o f in s u r a n c e c o m p a n ie s as a s o u r c e o f m o r t b y th e V e t e r a n s ’ A d m in is t r a t io n . T h e r e w a s r e m a r k a b ly g a g e m a r k e t fu n d s in th e T w e l f t h D is t r ic t, sin ce th e o p e r little v a ria tio n in th e r e la tiv e im p o r ta n c e o f th e F H A - a tio n s o f th e m a jo r e a ste r n firm s are n e c e s s a r ily e x c lu d e d in su r e d , V A - g u a r a n t e e d , a n d c o n v e n tio n a l lo a n s a m o n g in a s m u c h as th e ir h e a d offices a r e lo ca te d o u ts id e th is th re e o f th e m a jo r ty p e s o f le n d e rs. C o m m e r c ia l b a n k s, D is t r ic t. S o m e c o n fir m a tio n o f th is fa ct is a ffo r d e d b y a in su r a n c e s im ila r s u r v e y m a d e b y th e F e d e r a l R e s e r v e B a n k o f s lig h tly m o r e th a n a th ird o f th e ir real e sta te lo a n s to be N ew F H A - i n s u r e d , s lig h tly less th a n a th ird c o n v e n tio n a l, a n d Y o r k in w h ic h it w a s fo u n d th a t in s u r a n c e c o m c o m p a n ie s , and sa v in g s banks a ll re p o r te d p a n ie s a re th e le a d in g m o r tg a g e h o ld e r s in th e S e c o n d F e d e r a l R e s e r v e D is tr ic t. T h e g r e a t im p o r ta n c e o f in s u r a n c e c o m p a n ie s in th is field in N e w Y o r k m a y be a ttr ib P e r c e n t a g e D is t r ib u t io n M a jo r T u te d la r g e ly to th e ir n a tio n w id e o p e ra tio n s. T h e d o m in a n t ro le o f th e c o m m e r c ia l b a n k s is u n d e r lin e d b y th e fa c t th a t th e y h e ld m o r e th a n h a lf th e real e sta te lo a n s o u ts ta n d in g in e v e r y T w e lf t h D is t r ic t state e x c e p t U t a h a n d W a s h i n g t o n , w h e r e s a v in g s a n d lo a n a sso c ia tio n s are e sp e c ia lly s tr o n g . E v e n in U t a h th e c o m m e r c ia l b a n k s o w n e d a la r g e r p e r c e n ta g e o f th e to ta l of w elfth otal R eal E state by T L oans H y p e of eld i n th e T w elfth D Savings and loan associations........ ................ Life insurance companies ................ ................ ................ All other lenders .............................. ................ 1,762 612 403 349 Percent of total 50.2 28.1 9.7 6.4 5.6 ................ 6,276 100.0 Type of owner by T L oans O y p e of wned by L oan Com mercial banks Residential: 34.5 FHA-insured .......................... VA-guaranteed or insured.. .. 19.3 Conventional .......................... . . 31.3 Total residential ................ , , Savings Life and loan associa insurance Savings tions companies banks 9.4 33.6 33.8 16.8 13.6 19.9 71.3 30.4 26.8 85,2 97.5 77.6 80.6 3.6 11.2 0.1 2.4 2.0 20.4 1.3 18.1 14.8 100.0 2.5 100.0 22.4 100.0 19.4 100.0 9.6 380 10.8 288 1.7 43 Nonresidential: is t r ic t O w n e r — M ay 31, 1951 Dollar amount (in millions) state D is t r ic t — M ay 31, 1951 .. T R eal E I n s t i t u t i o n a l L en d e r s Total nonresidential.......... Total .............................. . Loans held for others1 ............ Number of firms ...................... , , 8.3 312 JThe percentages shown for this item represent the ratio of the loans serviced for others to the loans held for own account. 2Some of the banks which classified themselves as savings banks for pur poses of registration under Regulation X also hold demand deposits. Note: Detail may not add exactly to totals because of rounding. November 1951 91 M O N T H L Y R E V IE W P ercentage D istribu tio n of R eal E state L o ans H eld in T w e l f t h D istrict S tates b y T ype of L o a n — M ay 31, 1951 Total Twelfth Nevada Oregon Arizona California Idaho District Residential : 2 9 .5 3 8 .7 18.5 2 5 .8 56.6 2 6 .5 FHA-insured ...................... VA-guaranteed or insured Conventional ........................ Total residential Nonresidential : Farm ........................ Other ...................... Utah Wash ington 2 9 .6 1 5.7 4 0 .5 1 7.6 4 3 .4 16.1 1 9.7 1 7 .4 4 5 .0 2 3 .0 2 9 .9 12.7 3 1.1 2 5 .6 3 7 .0 3 0 .6 1 3.2 4 0 .4 8 7 .4 9 2 .4 8 8 .2 8 2 .4 8 2 .5 8 1 .1 8 4 .2 8 5 .8 2 .3 10.3 2.9 4 .7 2 .0 9 .8 4 .4 1 3 .2 2.3 1 5 .2 4 .2 1 4.7 4 .8 11.0 2 .5 1 1.7 1 2 .6 7.6 1 1.8 1 7.6 1 7.5 1 8.9 1 5 .8 1 4 .2 ,. 1 0 0 .0 1 0 0 .0 1 00 .0 1 0 0 .0 1 0 0 .0 1 0 0 .0 1 0 0 .0 1 0 0 .0 3 5 .7 7 8 .0 2 9 .9 3 4 .3 2 1 .5 5 6.1 5 7 .6 6 0 .6 .. 4 ,4 0 8 46 3 ,2 1 0 106 28 32 2 1 28 5 68 Total nonresidential Loans held for others1 *The percentages shown for this item represent the ratio of the loans serviced for others to the loans held for own account. N o te : Detail may not add exactly to totals because of rounding. the re st d iv id e d b e tw e e n V A - g u a r a n t e e d lo a n s a n d n o n w e r e m o s t im p o r ta n t in U t a h , Id a h o , a n d O r e g o n , w h ile re sid e n tia l c red it. B u t s a v in g s a n d lo a n a s so c ia tio n s re o th e r n o n re sid e n tia l m o r tg a g e s re p re se n te d p o rte d th a t m o r e th a n s e v e n -te n th s o f th e ir lo a n s w e r e o f o f th e o u tsta n d in g s th e c o n v e n tio n a l ty p e , a n d less th a n o n e -te n th in su r e d th a n 5 p erce n t in A r iz o n a . by F H A . in N evada and 15 p erce n t O regon, and less Geographical distribution F o r all le n d e rs c o m b in e d , fa r m lo a n s c o m p o s e d 2 p e r c e n t o f th e o u ts ta n d in g s a n d o th e r n o n re sid e n tia l cre d it C a lifo r n ia firm s o w n 7 9 p e rce n t o f to ta l real estate loa n s 1 0 p e rce n t. F a r m lo a n s a c co u n te d fo r a lm o s t 4 p e r ce n t o f h e ld in the T w e lft h D is tr ic t. T h is is a m u c h la r g e r sh are real e state c r e d it o f c o m m e r c ia l b a n k s , a n d 2 p erce n t o r th a n ca n b e e x p la in e d o n the ba sis o f p o p u la tio n o r e v e n less f o r o th e r le n d e rs . O t h e r n o n re s id e n tia l c r e d it e x o f in c o m e , a n d re flects th e im p o r ta n c e o f S a n F r a n c is c o te n d ed b y th e s a v in g s a n d lo a n a s s o c ia tio n s a m o u n te d to a n d L o s A n g e le s as fin an cial ce n te rs. T h e re v e r se is tru e le ss th a n 3 p e r ce n t o f th e ir m o r tg a g e h o l d i n g s ; f o r the o f e v e r y o th e r T w e lf t h D is t r ic t s t a t e ; e ach h o ld s a sm a lle r o th e r th re e ty p e s o f in stitu tio n s th is c a te g o r y in clu d e d 15 p e r c e n ta g e o f to ta l m o r tg a g e s in th e D is tr ic t th a n its to 2 2 p e r c e n t o f th e to ta l. p r o p o r tio n o f D is t r ic t p o p u la tio n o r in c o m e . T h e r e w a s c o n s id e r a b le g e o g r a p h ic a l v a ria tio n in the T o ta l R e a l E sta te re la tiv e im p o r ta n c e o f lo a n ty p e s . F H A lo a n s a c co u n te d by f o r 5 7 p erce n t o f th e A r iz o n a to ta l, b u t le ss th a n 1 9 p e r ce n t in O r e g o n , w h e r e V A lo a n s w e r e 2 6 p e r ce n t o f th e o u tsta n d in g s . E x c e p t in O r e g o n , lo a n s g u a ra n te e d b y the V A r a n g e d f r o m 13 to 2 3 p e r c e n t o f th e to ta l. C o n v e n tio n a l lo a n s w e r e m o s t im p o r ta n t in C a lifo r n ia , w h e r e th e y c o m p r is e d 4 5 p e r c e n t o f th e o u ts ta n d in g s , a n d in U t a h a n d W a s h in g t o n . R e s id e n tia l lo a n s as a w h o le w e r e m o s t im p o r ta n t in A r iz o n a a n d C a lifo r n ia . F a r m loa n s L oan s H e ld S ta te — in th e T w e lfth D is tr ic t May 31, 1951 Dollar amount State Arizona . Idaho ......... Nevada Oregon Utah ........... W a s h in g to n Twelfth District .................................................. (in millions) Percent of total 84 1.3 4 ,9 5 7 94 7 9 .0 1.5 0 .7 43 291 1 42 665 6,276 6 ,2 7 6 4.6 2 .3 10.6 1 0 0 .0 92 November 1951 FEDERAL RESERVE B A N K OF SAN FRANCISCO B U S I N E S S I N D E X E S — T W E L F T H D IS T R I C T 1 (1935-39 average = 100) Waterborne Car Total Dep’t foreign m f’g loadings store Retail trade8»8 food sales Wheat Electric employ (num ber)2 Copper8 flour8 power ment4 (value)2 prices*»5 Exports Imports Industrial production (physical volume)2 Year and month Petroleum8 Lumber Crude Refined Cement Lead* 1929.............. 1931.............. 1933. .......... . 1934________ 1935............ . 1936.......... . 1937.............. 1938............ 1939............ 1940.............. 1941.............. 1942.............. 1943.............. 1944.............. 1945.............. 1946________ 1947.............. 1948________ 1949________ 1950............... 148 77 62 67 83 106 113 88 110 120 142 141 137 136 109 130 147 159 151 171 129 83 76 77 92 94 105 110 99 98 102 110 125 137 144 139 147 149 147 144 127 90 81 81 91 98 105 103 103 103 110 116 135 151 160 148 159 162 167 168 110 74 54 70 68 117 112 92 114 124 164 194 160 128 131 165 193 211 202 227 171 104 75 79 89 100 118 96 97 112 113 118 104 93 81 73 98 109 105 113 160 75 26 36 57 98 135 88 122 144 163 188 192 171 137 109 163 154 142 176 106 101 88 95 94 96 99 96 107 103 103 104 115 119 132 128 133 116 104 94 83 82 73 79 85 96 105 102 112 122 136 167 214 231 219 219 256 284 303 333 “ 88 100 112 96 104 118 155 230 306 295 229 181 187 191 183 197 135 91 70 81 88 103 109 96 104 110 128 137 133 141 134 136 142 134 126 131 112 92 66 74 86 99 106 101 109 119 139 171 203 223 247 305 330 353 331 353 132.0 104.0 86.8 93.2 99.6 100.3 104.5 99.0 96.9 97.6 107.9 130.9 143.4 142.1 146.3 167.4 200.3 216.1 209.6 209.8 124 90 72 86 88 86 112 108 107 86 118 76 69 74 103 110 114 82 90 96 *58 85 57 55 59 55 78 93 115 131 1950 August____________ September_________ October ___________ November_________ December_________ 186 176 187 167 168 145 148 153 154 154 178 177 177 179 173 251 248 252 229 229 96 104 106 111 118 177 175 176 195 195 112 105 99 97 120 340t 339 352 353 345 207 209 210r 208r 208 135 140 131 131 152 374 368 343 845 376 212.5 211.0 214.1 216.0 222.9 48 58 62 68 70 141 134 143 167 167 1951 January___________ February__________ March____________ April______________ May______________ June______________ Julv — .................... August____________ September_________ 187 171 168 189 199 190 154 174 160 154 155 155 155 155 157 156 157 158 176 187 179 180 179 179 182 187 188 239 255 246 247 278 266 330 319 313 101 110 106 101 101 98 90 72 80 181 178 180 195 182 175 171 161r 173 134 121 111 110 106 96 98 106 108 361 361 380 378 378 378 393 396 379 213r 219r 220 221 224 224r 224 224 221 130 124 133 152 142 144 123 126 140 420 375 335 346 348 347 365 360 356 230.8 230.2 234.5 233.0 235.3 233.4 234.6 233.1 235.5 75 98 110 122 126 128 132 146 159 169 174 133r 158r 140 136 B A N K I N G A N D C R E D IT S T A T IS T IC S — T W E L F T H D IS T R IC T (amounts in millions of dollars) Year and month Condition items of all member banks7 U.S. Demand Loans deposits and Gov’t discounts securities adjusted* Total time deposits 2,239 1,898 1,486 1,469 1,537 1,682 1,871 1,869 1,967 2,130 2,451 2,170 2,106 2,254 2,663 4,068 5,358 6,032 5,925 7,093 495 547 720 1,064 1,275 1,334 1,270 1,323 1,450 1,482 1,738 3,630 6,235 8,263 10,450 8,426 7,247 6,366 7,016 6,381 1,234 984 951 1,201 1,389 1,791 1,740 1,781 1,983 2,390 2,893 4,356 5,998 6,950 8,203 8,821 8,922 8,655 8,536 9,254 1,790 1,727 1,609 1,875 2,064 2,101 2,187 2,221 2,267 2,360 2,425 2,609 3,226 4,144 5,211 5,797 6,006 6,087 6,255 6,251 1950 September October November December 6,664 6,810 6,963 7,093 6,495 6,452 6,319 6,381 8,754 8,871 9,018 9,254 6,213 6,239 6,194 6,251 1951 January February March April May June July August September October 7,152 7,184 7,293 7,367 7,422 7,509 7,473 7,630 7,704 7,791 6,071 5,811 5,734 5,696 5,685 5,708 6,005 6,000 5,998 6,204 9,190 8,834 8,819 8,828 8,834 8,862 9,052 9,058 9,235 9,485 6,337 6,352 6,338 6,332 6,357 6,448 6,510 6,547 6,576 6,642 1929 1931 1933 1934 1935 1936 1937 1938 1939 1940 1941 1942 1943 1944 1945 1946 1947 1948 1949 1950 Bank rates on short-term business loans1 Member bank reserves and related Items10 Reserve bank credit11 0 - 154 - 110 - 198 - 163 - 227 90 - 240 - 192 - 148 - 596 -1,980 -3,751 -3,534 -3,743 -1,607 - 510 + 472 - 930 -1,141 b 23 - 154 - 150 - 257 - 219 - 454 - 157 - 276 - 245 - 420 -1,000 -2,826 -4,486 -4,483 -4,682 -1,329 h 698 - 482 + 378 +1,198 — 4- 62 56 24 48 - 45 93 21 80 + + + + 30 32 3 — 45 4- 13 73 + — 14 4- 159 — 43 121 + - 59 38 124 200 162 113 342 80 18 143 + 4+ + H4+ 44+ 3.20 3.35 34 21 + 2 — 7 2 + 6 + 1 — 3 2 + 2 + 4 4+ 107 214 + 4- 98 76 9 + 302 17 + 13 + 39 + 3.29 + — 3.37 3.48 3.67 3.65 Coin and currency in Commercial Treasury operations12 operations12 circulation11 + + + — — Reserves Bank debits Index 31 cities*»18 (1935-39100)* 4+ 4— 44444444— — — — — 6 48 18 4 14 38 3 20 31 96 227 643 708 789 545 326 206 209 65 14 175 147 185 242 287 479 549 565 584 754 930 1,232 1,462 1,700 2,033 2,094 2,202 2,420 1,924 2,026 146 97 63 72 87 102 111 98 102 110 134 165 211 237 260 298 326 355 350 395 72 150 42 131 44— 4- 9 10 3 4 1,893 1,930 1,983 2,026 417 428 425 464 168 6 130 226 150 199 298 86 42 283 _ 4— + + + 4444- 68 21 8 26 36 39 19 41 32 17 2,284 2,206 2,186 2,180 2,149 2,217 2,186 2,312 2,293 2,291 455 444 461 431 449 461 429 443 445 462 1 Adjusted for seasonal variation, except where indicated. Except for department store statistics, all indexes are based upon data from outside sources, as follows: lumber, various lumber trade associations; petroleum, cement, copper, and lead, U.S. Bureau of Mines; wheat flour, U.S. Bureau of the Census; electric power, Federal Power Commission; manufacturing employment, U.S. Bureau of Labor Statistics and cooperating state agencies; retail food prices, U.S. Bureau of Labor Statistics; carloadings, various railroads and railroad associations; and foreign trade, U.S. Bureau of the Census. * Daily average. 8 Not adjusted for seasonal variation. * Excludes fish, fruit, and vegetable canning. 6 Los Angeles, San Francisco, and Seattle indexes combined. • Commercial cargo only, in physical volume, for Los Angeles, San Francisco, San Diego, Oregon, and Washington customs districts; starting with July 1950, “ special category” exports are excluded because of security reasons. 7 Annual figures are as of end of year, monthly figures as of last Wednesday in month or, where applicable, as of call report date. * Demand deposits, excluding interbank and U.S. Gov’t deposits, less cash items in process of col lection. Monthly data partly estimated. • Average rates on loans made in five major cities during the first 15 days of the month. 10 End of year and end of month figures. 11 Changes from end of previous month or year. 12 Minus sign indicates flow of funds out of the District in the case of commercial operations, and excess of receipts over disbursements in the case of Treasury operations. 18 Debits to total deposit accounts, excluding inter bank deposits. r—revised.
@FedFRASER