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MONTHLY REVtëW TWE L FT H F E D E R A l R E S E R V E D IS T R I C T Fe d e r a l R e se r v e B a n k NOVEMBER 1955 S a n Fr a n c is c o of PRICE MOVEMENTS BN A PERIOD OF RECOVERY n in te r e s tin g A u c o v e r y n a r r o w p r ic e th e w id e ly T h is d e c lin e d fr o m o f p r ic e s a th e fo r le v e lle d p ea k fa llin g in to a n r e c tio n s . rea ch ed in o f th e b een a n d th e rev e r y s ta b ility b een r a is e s th e q u e s tio n m o v e m e n ts b e tw e e n c o n tin u e to b y o f th e a cu rr en t o f w h e th e r 195 1 o f th e se s in c e m id - o f c o n su m e r fa r m d i p r ic e b etw e e n u p s w in g o r n o t th e se o th e r in th e in in b u s i d iv e r g e n t o v e r -a ll p r ic e in d e x e s . th e fo r p la n t a n d T h e in v e n to r y S o fa r , d u r in g e a re n o w str o n g . In W ith 1 9 5 4 b o o m th is h ig h th e p r o s p e r ity , a y e a r ly c o n su m e r s th e ir p e r so n a l ra te tw o s tim u la te d su m e r s c r e d it in o f b een h a s $ 2 7 0 in c r e a s e d co m e b illio n , th r o u g h o u t H ig h le v e ls o f b u s in e s s re v e n u e s in th e In th e U n ite d to p p in g a str o n g a m o u n ts. e c o n o m y th e ir to h a v e E a r ly w e r e o f th ir d s a le s in g a n d fa c to r s, c a p a c ity , r e c e s s io n a n d th e a n d q u a r te r to to r a t io S ta te a n d in o f fir m s it h a v e co n su m e r r e c e n tly in te n d to c o n n o n d u r a b le s . m e a n t h ig h 1 9 5 5 . O n a p p e a rs th e ste a d c a n n o t p a st b u s in e s s to q u a r te r o f sto c k s to p o lic y b y e n o u g h to e x p e n d itu r e s e x p e n d it u r e s 1 9 5 4 to r is in g th e d ir e c te d to w a r d th e h a v e in c r e a s e d a in in F e d e r a l r e s u lt c h a n g e fr o m q u a r te r fir m s , a n d A s in s a le s s ig n ific a n tly . h a s d e fe n se . n o c o n tr ib u te d d e c lin e to ta l th e th ir d o f th is y e a r . o f th e in c r e a s e d c o n s u m e r s , b u s in e s s h a s b een fo r th e th ir d s ig n ific a n t p o r tio n h a s b o o m in g fr o m sh o w a ccu ra cy . liq u id a tio n p a r tic u la r ly s p e n d in g o ffse t s p e n d in g , w ith fr o m y e a r u p s w in g , s a le s b illio n e x p e n d it u r e b u s in e s s fo r e se e n th is $ 3 0 o f c o n tin u e w e ll in to o f in v e n to r y a c c u m u la tio n th e o f y e a r G o v e r n m e n t m e n ts b e lo c a l g o v e r n m e n t g o v e r n m e n t b y e x p e c te d ite m n e a r ly ra te q u a r te r o f 1 9 5 5 . N e v e r t h e le s s k ep t th e A in o f T h is d em a n d fo r g o o d s sta te a n d lo c a l g o v e r n d u r a b le s , in c lu d in g a u to m o b ile s , h o u s e h o ld g o o d s , in d u s tr ia l e q u ip m e n t , c o n s t r u c tio n m a te r ia ls , a n d fa b r ic a te d m e ta ls a n d o f m a n u fa c tu r e r s se q u en ce o f th e n e a r -c a p a c ity p r im a r y a re in c r e a s e d o r c a p a c ity era l se c to r s. T h e m e ta ls . m a c h in e r y b a c k lo g a d em a n d r e s u lt, lo w , r is in g . A n sto c k s w h ile o rd er a d d itio n a l c o n fo r d u r a b le s is th a t rea ch ed in s e v o u tp u t h a s b een o f n e w m e ta l in d u s tr ie s . A s a re o r d e r s is m o u n tin g S te e l sh o r ta g e s h a v e in a ll se r v e d to lim it fr e ig h t c a r p r o d u c tio n . R a t io n in g o n th e b a s is o f p a s t p u r ch a ses h a s ste e l p ro d u c er. h ere fa c e ity a n d S tr ik e s a b ro a d o f e x p a n d in g p r o d u c tio n m a n d s a n d r e c e n tly o f g e n e r a te d th e B o o m N e w h a v e b een in a u g u r a te d la s t y e a r re d u ce d w o r id -w id e c e m e n t b y h a s h ig h w a y E n g la n d flo o d a n d s u p p lie s a n d to o o n e th is o f d em a n d . b een b y e a r ly co p p er S im ila r ly , s m a ll b u ild in g to m a jo r y e a r b o th in th e c a p a c m e e t d e c o n s tr u c tio n d a m a g e. c o n d it io n s in o th e r in d u s tr ia liz e d e c o n o m ie s , p a r tic u la r ly W d em a n d fo r e s t E u r o p e a n su ch c o u n tr ie s , in t e r n a tio n a lly h a v e tr a d e d a d d e d to th e c o m m o d it ie s re co v e ry . e n jo y e d p r o fit r e c o r d s b e c a u se b u s in e s s fir m s b een p a r tic u la r ly sp en d — p u r c h a se s o f b u s in e s s a c t iv it y th e th e w illin g n e s s a d d itio n , th e y d e c is io n s in c o m e . M a n y s a tis fa c to r y in p r ic e s . P u r c h a s e s o f s e r v ic e s b y c o n s u m e r s h a v e in c r e a s e d ily a n d a n o n in r e s id e n tia l c o n s tr u c tio n . M o r e h a v e a c t iv it y s w ift d em a n d in c o m e re co r d th e c o n su m e r b u s in e s s b illio n . T h r o u g h o u t th e p r e s e n t in c o m e s . se c to r s b y d u r a b le s a n d o f o f h a v e d e m o n str a te d h ig h in s ta lm e n t r e c o v e r y o f h a s h o w e v e r , p r e ssu r e d is p o s a b le rea ch ed le v e ls r e c o v e r y u p w a r d fig u r e b y a lm o s t $ 1 6 sp en d u s in g fo r str o n g S e p te m b e r S ta te s to e n jo y in g e m p lo y m e n t, c r e a s in g ly c h a n g e ra te 1 9 5 5 . im p o r ta n t in v e s tm e n t, 1 9 5 4 th e a n n u a l o f e q u ip m e n t is c o n s id e r a b ly se c o n d reco rd o th e r th e b a c k lo g s W a q u a r te r o f fa b r ic a te d Pressure o n p rice s a n d a t fo u rth 1 9 5 6 . d i a g r ic u ltu r a l a n d in d u s tr ia l p r ic e s w ill o ffse t ea ch e q u ip m e n t 1 9 5 3 , o p p o s ite b a la n c e r a p id in p r ic e s in h a v e in r a p id ly m o v in g a c o n se fa ll P r ic e s w h o le s a le b een a is W h o le s a le to 1 9 5 2 . fa ir ly r e s u lt a s w a r . m o d e r a te ly T h u s T h e 1 9 5 1 b y I t p r o d u c ts b e g a n o f d is p la y e d th e m o v e m e n ts. a ls o ro se h a v e fa r m e a r ly a c h ie v e d in d e x e s . K o r e a n r is e n h ig h . w a s th e o f in th e m id d le h a v e p r o d u c ts h a s w ith in p r ic e s m a te r ia ls a ll-tim e T h e a ls o v e r g e n t n e ss d o w n tu r n h a s s ta b ility m a te r ia ls 1 9 5 4 , a n d n o n fa rm th a t o u tb rea k in d u s tr ia l c e a sed in d e x r e c e n t b o o m o f ite m s fa c t n o n a g r ic u ltu r a l 1 9 5 5 th e a p p a r en t m o v e m e n ts p u b lic iz e d q u e n c e a n d o f p r e se n t r a n g e o f m o v e m e n t in th e c o n s u m e r a n d w h o le s a le in d e x e s . o ff s e tt in g b u t fe a tu r e a n d a n d le v e ls r e c o r d -b r e a k in g th e o th e r n e c e ssa r y p u r ch a se str e n g th o f e n c o u r a g to e x p a n d p la n t a n d A ls o in This Issu e The United States Balance of Payments Since 1953 . . 128 a s 126 November 1955 FEDERAL RESERVE B A N K OF SAN FRANCISCO ru b b er, T h e s te e l, a n d n o n fe r r o u s w o r ld -w id e b o o m m a n y U n ite d p r e ssu r e s v a lu e o f U n ite d to e x c e e d o f 1 9 5 4 c r e a se c o a l, S ta te s ra w o f th e se th e b y in S ta te s o f p e r c e n t. e x p o r ts p a p er, a n d J a p a n in e x p o r ts th e fo r fir s t th e o f ste e l in t r ie s s u g g e s t th a t e x p o r t d e m a n d F r a n c e a n d fir s t s ix o th e r th e th e s c r a p ), scra p E u r o p e a n c o u n S ta te s Raw Industrials in fo r U n ite d Metals 1 9 5 5 m o n th s o f in c r e a s e s fo r o f (in c lu d in g p r ic e PERCENT CHANGES IN PRICES OF BASIC COMMODITIES, UNITED STATES-OCTOBER 1954 TO OCTOBER 1955 fo r ca u sed h a lf p o r tio n ste e l R e c e n t C hart 1 co p p er. p r o d u c ts. T h e d em a n d s s u b s ta n tia l c o n s is te d in in c lu d in g a u g m e n t d em a n d fo r e ig n e x p o r ts A p u lp . a n d to a n d m a n u fa c tu r e d c o m b in e d v a lu e 1 4 m e ta ls , h a s se r v e d - 20 - 15 - 10 T I r is in g th e p r o d u c tio n su r e s o n s id e r a b le c o sts u n u tiliz e d c o sts, a n d la te d in to s te e l, p r ic e in a (lis t e x is te d . W h ir in g a n d a g e th e in th o se th e r e u se o f in se c to r s fa r m p r o d u c ts, r u b b e r p r o d u c ts , c o a l, te le v is io n o f tr a n s w h e r e e q u ip m e n t , a lu m in u m Total change— October 1954 to October 1955 • in in c lu d in g 1 9 5 6 in d e x a u to m o p r o d u c ts, se ts, p a p e r p r o d u c ts, a n d fo r a ll c o m m o d it ie s fo o d stu ffs — in sh o w o p p o s ite U n til str o n g p r ic e co p p er - Change since June 1955 Source: United States Department of Labor, Bureau of Labor Statistics. sta n d b y c o sts o cc u r re d o f in d u s tr ia l p r o d u c ts , m e ta ls , th e c o sts. T h e se in c r e a s e d h a v e Foodstuffs c o n in c r e a se s , sta n d a r d s p r o d u c tio n in c lu d in g Textile Fibers and Fabrics p r e s w h e n m a te r ia ls , h a v e a lr e a d y b e e n r a n g e p r ic e s ), o f u p w a r d d a n g e r th a n r a is e d c o sts, T h u s w id e a rea s. 1 5 .1 la te a p p e a r to h a v e h a d n o n a g r ic u ltu r a l o n th e fa r m p r ic e s p r ic e s ju d g e d W a r s a c o n s id e r a b le p r o d u c ts o f fa r m w e r e h ig h r e la tiv e b y th e ir r e la tio n s h ip I a n d I I . D u r in g la r g e e x p o r t p r o d u c ts. T h is e x p o r t e s p e c ia lly fo o d g r a in s s ta n tia lly w h e n c o u n tr ie s w e r e th e a th e d em a n d fa ir ly o m ie s . In in c r e a s e d a s h a s a s d r a m a t iz e d v e lo p m e n ts in fo r o u r d r ie d th e w h e n a th e In U n ite d fo r e ffe c ts o f th e se p r ic e s a re ra w a to ta l in h a s a n d e c o n m o st c le a r ly T h e fr o m p r ic e o f a n d sh o w n c h a n g e O c to b e r s ix a n d co p p er th e d if f e r e n t b y in a n d in d e x e s th e 1 9 5 4 to p r ic e s d e in d u s tr ia l o f o f O c to b e r c o m p o n e n t in d e x e s . a p er c e n t in a m e ta ls p r ic e b y p e rc en t s h o w in g a fo r W p r ic e is o f r is e 1 9 5 5 . n a tu r a l e s te r n d em a n d m e ta l a ru b b er h ig h Ir o n a n d A n le v e l in d u s tr ia l so o f T h is E u r o p e . p r o d u c ts p e r c e n t. o f e c o n o th a t ste e l r a is e d th e se scra p th is p e r io d . T h is w a s a c c o m in in c r e a se 4 4 s tr a te g ic a o u tp u t o f d u r a b le g o o d s a n d 9 .7 n o n fe r r o u s w h o le s a le O c to b e r n u m b e r p e r c e n t d u r in g 6 o f fe w s e m i- fin is h e d in m e ta ls fin is h e d in c r e a se d p e r c e n t p r ic e ste e l p r o d ste e l 2 0 p r o d u c ts. p e r c e n t, w ith in c r e a se in a y e a r 's tim e . R e c e n t p r ic e in c r e a s e s fo r c h e m ic a ls , p a p e r b o a r d , w o o d p u lp , v a r io u s m e ta ls , b u ild in g c lo th e s , fu r n itu r e , te le v is io n b e r o f fin is h e d o f n o n fa rm th a t th e h a s r is e n p r ic e s a n sh o e s, w h o le s a le p r ic e s te a d ily r is e n p r ic e s in d e x th r o u g h a t a n in O c to b e r . o f a n n u a l ra te in th e C h a rt 2 in d u s tr ia l O c to b e r . w o r k a d d itio n a l n u m g o o d s a c c o u n t fo r th e in c r e a s e c o m m o d it y h a v e m a te r ia ls , se ts, a n d in d e x sh o w s c o m m o d it ie s S in c e o f a lm o s t J u n e 1 0 th e se p erc e n t. Consumer prices T h e p r ic e s 2 2 in b a s ic 1 9 5 5 T h o u g h is in to th e c o n s u m e r p r ic e in d e x h a s c h a n g e d th e p a s t y e a r . R e ta il p r ic e s a r e k n o w n g is h ly fa r m th is a sh o w to in b y a 7 p e r c e n t in c r e a s e M e a n w h ile in d e x C h a r t 1. F o r c o n v e n ie n c e th e s e a r e g r o u p e d in d e x u c ts 15 sto c k d em a n d . m a r k e ts. m a te r ia ls sh o w n b o ls t e r e d s e le c tio n s h a r p ly T h e d iv e r g e n t m o v e m e n ts b e tw e e n p r im a r y n o te d d u r a b le s w h o le s a le in fo r e ig n h a v e G o v e r n m e n t th e su b r e su m ed E u r o p e a n T h e a n fa r m p a n ie d p r o d u c ts, w a s c o n su m e r 1 9 5 1 . w a s S ta te s m a te r ia ls F e d e r a l b a se w a s o f W o r ld d e cr ea sed co n tr a st, w e e x p a n s io n s in c e 3 2 S ta te s fa r m fo o d s, p r o d u c tio n fo r in c r e a se d th e r e d em a n d fo r in f lu e n c e 1 9 4 9 b e h in d S im ila r ly , in c r e a s e d in a n d to d em a n d d em a n d p r o d u c tio n d em a n d 1 9 5 4 d o m e s tic fa c to r in c r e a se d b e tw e e n p e r io d th e 1 7 in c r e a se s p r o d u c ts O c to b e r in c r e a s e d o f th r o u g h U n ite d in d u s tr ia l p e r io d th e p e r io d in d u s tr ia l m a te r ia ls 1 9 4 7 fo r d e m a n d a d d itio n , s tr a te g ic 1 9 4 7 -4 9 fo r p r ic e s in d u s tr ia l p r ic e s , w h e n 1 9 4 7 -4 9 a n d th e n o tic e a b le d em a n d c u r t a ile d . str o n g p ro n o u n c e d p ile d th e a g r ic u ltu r a l a id b y le s s to in a n d w a r -w r a c k e d p r o g r a m s a p r o d u c ts. F r o m u n u s u a lly th a t a n d im p a c t o n a b o v e c h a n g e , m e ta ls a n d o f c o n fin e d ru b b er fr o m r e fle c ts p r ic e la r g e ly a n d a s m ie s . p r e s s u r e s o n p r ic e s b r ie fly d is c u s s e d c h a n g e s su m m e r, w e r e p er c e n t a u to m o b ile The prices of industrial products th is R u b b er w e ll s h o w s little r e s p e c tiv e d ir e c tio n s . c o m m o d itie s im p o r ta n t c e m e n t. T h e u p w a r d |~ Fats and Oils scra p C o n s e q u e n t ly , r e s u lta n t m a r k e ts, in c r e a se s p r e v a ils . fa b r ic a te d b ile s la b o r p r o d u c tio n d em a n d th e lo w e r in g s e m i-fin is h e d c r e a se s w ith m o r e o f a e q u ip m e n t h a v e in c r e a se d h15 a b o v e h a v e p u sh ed o f c a p a c ity . c a p a c ity th e o f tig h te n in g p la n t a n d r a w “ b a r r ie r ” p r ic e s a r e n o w o v e r tim e fa c e to j Livestock and Livestock Products le v e ls o f d e m a n d d is c u s s e d o u tp u t c lo s e r h 10 ] All Commodities s t e e l w ill in c r e a s e . T h e h ig h +5 Percent change a th a n c o lle c tio n te r ia l, w h o le s a le o f c o sts p r ic e s . th a t m a n u fa c t u r in g , ca n M a n y in c lu d e d is t r ib u tio n , v e r y s lig h tly in to m o v e m o r e s lu g co n su m e r p r ic e s a re tr a n s p o r ta tio n , m a a n d s e r v ic e ch a r g e s. I t is r a r e ly th e c a s e th a t a ll o f t h e s e c o s t e le m e n ts m o v e a t th e sa m e tim e . T h e w ill m o v e u p w a r d r e c e n tly th e p o s s ib ility se e m s w h o le s a le to th a t m o r e o f th e se c o sts b e in c r e a s in g , h o w e v e r . U n t il p r ic e in d e x fo r c o n su m e r g o o d s November 1955 o th e r th a n fo o d h a s b een o f m o r e w id e ly e x c lu d in g m a y su g g e st r is e S o w h o le s a le a m o n g fo o d s, th a t h a d p r ic e s fin is h e d c o u p le d w ith r e ta il p r ic e s o f h a v e fo u n d n o d u r a b le s h a v e s u p p ly o n r is in g b een in d e x th e a u to m o b ile s c o sts to p le n t if u l. sh o r ta g e s o f d e c lin e T h e p r e ssu r e J a n u a r y w a s m o r e a u to m o b ile th a n d e c lin e in b y in c r e a s e d a p p a rel S ep te m b e r , I t is h o ld b e o f o f a n d s a le s a b u n d a n t y e a r o f n e w to w a s a n d o ffse t p u b lic e ffo r ts th e 1 2 5 .3 . in tr a n sp o r te m p o r a r ily o f d e a le r s b e in th is c o n tr a st, in c r e a se c h a r a c te r . lo w e r , tu r n e d a p p e a rs F o o d p r ic e s , p r in c ip a lly u p w a r d to in h a v e b een th e o th e r o n r e fle c tin g p r ic e to n o te in c r e a s e d th a t a lm o s t a ll c o n s u m e r in c r e a s e s o f S e p te m b e r b e tw e e n th a t c o n su m e r fr o m A s id e q u a r te r fr o m th e S e p te m b e r se r v 1 9 5 4 a n d 1 9 5 5 . A m o n g th e se a re re n t, h o u se o p e r a t io n s , m e d ic a l c a r e , a n d r e c a lle d It fo r h a s p a n s io n p lie s g r o w th a n d y e a r ly s p e n d in g to q u a r te r ste a d y p er so n a l ca re. It m u st fo r s e r v ic e s h a s th r o u g h o u t g r o w th in d em a n d b een 1 9 5 4 a n d fo r c o n 4 2 c a p ita l a g o o d s. F o r e x a m p le , a p e r s is te n t th e p r ic e s in c r e a s e in w h o le s a le p r ic e OF W H O LESALE P R IC E S O F C O M M O D IT IE S —U N IT E D th a t d em a n d in c r e a s e d d e c lin e in in d e x c a p ita In h a v e in c r e a s e d T h e fa ll in th a t o cc u r re d s ig n th a t th e o f 2 in d e x th e s u p p ly fa r m p r ic e s in A u g u s t sa m e p r o d u c ts d e c lin e p e rc en t c o m p ile d d e c lin e o f O c to b e r 5 h a d o cc u r re d b y th e in in th e D e c lin e s b y w o o l, ir r e g u la r . O c to b e r . a s 2 0 O c to b e r r e c e iv e d m e r c ia l v e g e ta b le s h o w e v e r , a n d in c r e a s e d in p o u ltr y p r ic e a n d 2 4 th e a a n d w e r e o il-b e a r in g 1 0 p e rc en t. C o m 2 6 p r o d u c ts, p erc e n t, r e sp e c tiv e ly . In th e w h o le s a le S ta tis tic s , 1 9 5 4 th e w e r e in 1 9 5 2 b y o f p r ic e s p r ic e s th e p r ic e g r e e n o c c u r re d , th e th a t in d e x s p e c t a c u la r r e g is te r e d d e c lin e s 1 9 5 4 , so p r ic e m o st c o ffe e h o w e v e r , o f th e se h a v e B u r ea u a n d a fte r fa lle n L a b o r s in c e c o c o a v e r y p r o d u c ts, n o w o f d e c lin e s J u ly b ea n s. r a p id in p a r tic u la r ly to in a p p r o x im a te ly le v e ls . p r ic e s fo r fa r m p r o d u c ts h a v e b een a c c o m SELEC TED S T A T E S , 1 9 5 0 -1 9 5 5 (1 9 4 7 -4 9 = 1 0 0 ) Percent p a n ie d b y fa llin g w h o le s a le p r ic e s T h e p r ic e d e c lin e o f p r o c e s s e d m o r e 1 9 5 5 r e c e n t, d e c lin e s b e v e r a g e a n d h o w e v e r . w e r e m a te r ia ls p r o c e sse d O c to b e r a b o u t 3 .4 re co r d e d (c o ffe e fo r fo o d s h a s b een F r o m th e d e c lin e m e a s u r e d p r ic e b y a n d 1 9 5 4 to a n d o ils , h a v e d em a n d a p ro n o u n ce d c h a n g e s h o w e v e r , th a t c o m m o d it ie s c o c o a ), u n p r o c e sse d ra th e r fo r e ig n d o e s e ffe c t o n s lo w ly . W d em a n d h a v e b een p o r ts in n o t d is p la y th e w h o le s a le s in c e p r o c e sse d su m e r s O c to b e r p a r tic u la r ly h a rd h it b y p r o d u c ts e h a v e n o te d U n ite d sa m e a b o v e, S ta te s s ta b ility fa r m a s d o fo o d s, c o tto n , a n d r ic e th e d e c lin e in fa r m e x r e c e n t y e a r s. h ile p e rc en t o n ly fis h , p r ic e s in c e d o m e s tic fo r m e s tic d e m a n d . W h e a t , flo u r , d r ie d Source: United States Department of Labor, Bureau of Labor Statistics. b ig g e s t p a ck a g ed I n th e s h o r t r u n a c h a n g e in th e s u p p ly o f fa r m W O c to b e r p e rc en t. T h e fa ts fo o d . s m a lle r a n d m e a ts. is a p t to a a ll fa r m m o r e p o u ltr y a n d to 1 9 5 4 fo r o r g r a in s , a n d c r o p s . M e a t a n im a l p r ic e s fe ll m o r e th a n a s a d d itio n a l A g r ic u ltu r e , p er c e n t p o ta to e s, fe e d le v e lin g h a ile d A c c o r d in g o f b e tw e e n fa r m e r s la r g e h a r v e sts A w a s H o w e v e r , a n D e p a r tm e n t p r ic e s a s th e 1 6 p e r p r o d u c ts. b een h a lt e d . to p h y s i p e r io d d ecr ea sed S e p te m b e r p erc en t o cc u r re d 1 9 5 5 p r o d u c ts. h a s a n d su p A c c o r d in g o v e r s e a s d e c lin e d th e o f fa r m e x p o p in c o m e , b u t C o m m er ce, th e s t u f f s s h ip p e d o f fa r m th e w ith d o m e s t ic e x p o r ts. 1 9 5 4 . d em a n d w ith in c r e a s e d in c r e a s e d D e p a r tm e n t o f to to ta l p a ce rea l p er o ffse t b y 1 9 5 1 th e n o t k ep t in c r e a se d o f th e fr o m F a llin g IN D E X E S in to c e n t. M e a n w h ile p r o d u c tiv ity in c r e a s e s a n d g o o d th e ir C h ar t 2 a n d s u b s ta n tia l p erc en t c r e a se s in c r e a s e s in h a s c a l q u a n tity o f c r u d e fo o d T h e se p r e v io u s tr a n s la te d m e n t io n e d m o r e th a n to t a ls a s a la g g e d a d ju stm e n t to b een p r o d u c ts o f s u p p ly . D o m e s tic th is h a s b e e n s u m e r s e r v ic e s , r e c e n t p r ic e in c r e a s e s c o u ld b e in te r p r e te d o f a lr e a d y a g r ic u ltu r a l r e g is te r e d in te r e s tin g e v e n tu a lly The prices of farm products and food d ro p 1 9 5 6 m o d e ls . o f m e a t. in c r e a s in g 1 9 5 5 . in c le a r ly sh o w th e en d g o o d s m o st 1 2 7 .6 to p r ic e s a u to m o b ile p r ic e s p r ic e s , th o u g h se a so n a l a re s u p p lie s ic e s th e in tr o d u c tio n R e ta il h a n d , o f s u ffic ie n t r e p a ir s ta t io n . T h is p a r tly in b y th e m o v e o f th is fr o m effective in in is b e b u y . S u p p lie s o f c o n s u m e r S in c e a c c e n tu a te d fo r e th e co n su m e r c o sts re n ts. g o o d s, m a n u fa c tu r e d ' ‘t r a n s p o r t a t i o n ” i n d e x h a s d e c r e a s e d c r ea sed c o n su m e r p r ic e is m o s t c le a r ly d e m o n s tr a te d m e n t o f a u to m o b ile p r ic e s . u se d w ill c o n s tr u c tio n u la t io n fa r , c o n s u m e r s th is w h ic h so m e a ls o . th e th in g s th e y h a v e w a n te d In p e r m it te d a n d th e p r ic e o f th e s e c o n s u m e r g o o d s a t r e ta il. T h e in le v e l m a r g in s p ro sp e c ts in c r e a se s r e ta il lo w e r d e c lin e in c o m e s, th e a n d v o lu m e a g a in o n s ta b le , in c r e a se d sp rea d 127 M O N T H L Y REVIEW fo o d s fe ll le s s 1 9 5 5 . s lig h t p r ic e s O c to b e r d e c lin e d th a n 1 E x c e p t e v id e n c e fo r 1 9 5 4 o f 4 .6 fa r m a n d fr e sh fa llin g fr o m p r ic e p r ic e s fo r O c to b e r m e a ts, fa r m d e c lin e d w h o le s a le p e r c e n t, fo o d p e rc en t fo r p r o d u c ts th e p r ic e s . c o n 1 9 5 4 c o n su m e r s R e ta il 7 o f to see fo o d November 1955 FEDERAL RESERVE BA N K OF SAN FRANCISCO 128 p r ic e s , a s in fo o d , a re r is e n , th e a n c a se o f th e a m a lg a m o ff s e tt in g w h o le s a le o f m a n y th e d e c lin e p r ic e c o sts. S o m e th e p r ic e s in o f p r o c e sse d in p r o g r e ss o f th e se h a v e c u r r e n tly o f fa r m a n d ra w to o u tp u t in b u ild -u p R e tu r n in g c o n tin u e d to th e p r ic e o r ig in a l q u e s tio n o f th e s ta b ility , a ll s h o r t- r u n p r o sp e c ts e v id e n c e fo r se e m s h a lf o f in to w a r d s c o n tin u e d h ig h le v e ls o f in c o m e a n d It is le s s c e r ta in s p e n d in g a s h ig h th a t c o n su m e r s a p r o p o r tio n w ill h a v e co m e, u se p e r so n a l su m e r N e v e r t h e le s s , in s ta lm e n t in c o m e ta x e s a r e c u r r e n tly s a le s v o lu m e th is o f e x p e n d it u r e s sto r e s m a s b een . th e o n th e th a t in 1 9 5 6 , w ill a ls o p la n n in g b a s is o f o cc u r re d a n 8 w is h d u r in g m e a n to to th r e e b y th e th a t c o n C h r is t in a n d d o lla r q u a r te r s In in R e ta il fo u rth q u a r te r o f 1 9 5 5 e q u ip m e n t a t T h e d if fic u lt t o fu tu r e e v a lu a te . A o n a n d h ig h c o u r se S e c u r itie s a n d M c G r a w -H ill, in c r e a s e th e ir s p e n d in g p la n t a n d 1 9 5 6 . a n d b u s in e s s p la n t a n d to c o n tin u e le v e ls in o f in v e n to r y fo r h a lf o f th e th a t o c c u r r e d in th e fir s t 1 9 5 5 . G o v e r n m e n t s c h o o ls e x p e n d it u r e s a n d h ig h w a y a re e x p e c te d to r e q u a r te r s. T h e n eed c o n s tr u c tio n th e o f s e a s o n a l in v e n to r y E x fir m s su m m a r y , g r o w th in s h o u ld o f m o r e is n o w th e o r p r ic e in in th e th a t d em a n d in c r e a s e 1 9 5 6 . fu tu r e . y e a r s in c r e a s e s is fo r b e w h ic h m a y m ig h t b e th e s e r v ic e s r e fle c te d in in c r e a sin g F e d e r a l e x p e n d it u r e in f la t io n a r y a n d d u r in g a n d s u r p lu s m a y if se r v e th e d e u n r e s tr a in e d , F e d e r a l a ls o p o lic y , o f in f la t io n a r y o f p a st in f la t io n a r y so m e w h ic h , c o n th e C u rr en t m o n e ta r y a n d to in c r e a s e s w h o le s a le r e d u c in g g o o d s o v e r w h e r e in e n d a n g e r e d to w a r d a c c r u in g lik e ly a n tic ip a te d o n .” U n d e r th e s e c o n p r e v a ile d d e v e lo p . d ir e c te d c u r r e n tly c u r t a il o f h a s is T h is s itu a tio n s ta b ility in d e x e s T h e to to ta l n e a r p r e se n ts a r e la tiv e th re e h o w e v e r , w o u ld fo r a p p e a rs d em a n d p r ic e s p e n d in g fir s t q u a r te r it g r o w in g in d itio n s su m er m a n d s b u ild -u p s p e n d in g c o s t c a n m o r e r e a d ily b e “ p a s s e d e q u ip m e n t in in v e s tm e n t is lo c a l g o v e r n m e n t c o n tin u e tw o C o m m is s io n o f a u to m o b ile s a c c o u n te d in c u t g r o w . in c r e a se fir s t in a r e c o r d -b r e a k in g th e o f to y ea r . c h a n g e th e g r o w th p o s sib ly s h o u ld p er c e n t A c c o r d in g to p o lls c o n d u c te d p la n a n d c o n tin u e fo r r a t io o f th e ir in c o m e a s c o n tin u e d c r e d it, th e in d u s tr y . A c c u m u la t io n fa ir ly c o n s ta n t o v e r th e n e x t fe w sta te th e y in f lu e n tia l, is in v e n to r ie s fa c to r in v e s tm e n t, to fo r c o n tin u e b e im p o r ta n t in v e n to r y e m m a in p lo y m e n t. in a u to m o b ile r e ta ile r s F e d e r a l p o in t A n o th e r ch a n g e s th e o f d e a le r s ’ s to c k s The price outlook C h r is tm a s . o n e th a t w ill c o n tin u e to s a le s p r o d u c ts. b efo r e in flu e n c in g p r e ssu r e s. ta x in r e v e n u e s so m e d e g r e e te n d e n c ie s . THE UNITED STATES BALANCE OF PAYMENTS SINCE 1953 u r in g D tin u e d s a c tio n s g a in e d th e th e to w ith so m e th e g o ld b e g in n in g p e r io d , o f ste a d y se n t a o f h o w e v e r , a m o u n ts T h e fir s t g a in g o ld g a in s m a r k e d h a lf g o ld o f a n d U n ite d a n d th e r e S ta te s. O n a sse ts (C h a r t 1 ). w e r e tim e s d o lla r o f th e fo r e ig n d o lla r a s s e t s d o lla r 1 9 5 2 a n d 1 9 5 5 , la s t th r e e im p r o v e m e n t in w h e n to a n d th e th e ir b a la n c e , e v e r y E a r lie r a sse ts c o u n tr ie s fr o m th e th e y h a v e d o lla r s s in c e is in th e th e y p o stw a r lo s t U n ite d la r g e S ta te s. re p r e p a y m e n ts s itu a tio n . ste a d y a in th e IN F O R E IG N h a r t GO LD A N D T R A N S A C T IO N S W IT H H ALF D O L LA R ASSETS T H R O U G H TH E U N IT E D STATES Y E A R S , 1 9 4 7 -5 5 b y fo r e ig n if o f ea ch th e w o r ld in te r n a tio n a l tr a d e . G o ld a c c e p ta b le to d a y . u p o n W m e a n s b a la n c e a c o u n tr ie s w e a p o n s a n d in to a n d d o lla r s o f r e p r e se n t a n d m in o r n a tio n r e s tr ic tiv e o f c o m m e r c ia l flo w o f g o o d s a r e th e a n d im p o r t p o lic y . a n d in th e d ra w in its a lte r n a tiv e q u o ta s, a n d a d eq u a te n a tio n s e r v ic e s o f w o r ld to se tb a c k s n o A n a n y n a tio n s m o s t w id e ly d o lla r s h a v e a n a n d fu ll b e n e fits c y c lic a l m a y o f g o ld tr a d in g th e p a y m e n t g o ld d o lla r s is e s s e n t ia l t o th e m a jo r e n jo y in te r n a tio n a l ra n d o m c o n tr o ls , o f th e is r e se r v e o f p a y m e n ts, a o f g o ld fr e e ly o f ith o u t d u r in g su ch 1 g a in s h a n d s n e c e s s ity e x c h a n g e C CH ANG E T h e s e im p r o v e m e n t in t h e s e n s e th a t a s iz a b le s u p p ly h a lf -y e a r a h a lf y e a r s w o r ld c o n tr a n to o th e r s u p p ly p a r tic ip a tin g a c r o ss n a tio n a l b o u n d a r ie s . In million» of dollars T h e fr o m w o r ld p a y m e n ts a llo w in g a c r o ss ev e r, a n n a tio n a l th e n e tw o r k m o v e d o f s p e c ia l d e v o te d is a g r e a t tr en d s a re fo r e p r e s s in g s tu d y in g a n ce o f b e tw e e n o r w o r k in g r e c e n t th e d ea l in te r n a tio n a l p a y m e n ts , a tim in g h e th e r fo r n e x t m a jo r n o t q u e s tio n o r in a lo n g la s t y e a r s, in o f fe w r e a lit y a n d ste p r e s to r a t io n in th e o f h a s m o st U n ite d p r e u n o f fr e e c u r r e n c ie s in te r n a tio n a l m in d s th e to w a r d a g a in s t c o n v e r tib ility th e h o w c o m p le x m a jo r tr a d in g th o u g h t to la r g e th e a w a y s e r v ic e s c u sto m s— th e fo r e ig n c u r r e n t d e v e lo p m e n ts o f p a y m e n ts. s till a n d a g r e e m e n ts, h a m p ere d W is o f g o o d s o f th is g o a l, a n d a n d d o lla r s . th e r e q u is it e s c o n v e r tib ility Source: United States Department of Commerce, Bureau of Foreign and Do mestic Commerce. w h ic h la w s , th e d ir e c tio n h a v e flo w b o u n d a r ie s . J n m e c h a n is m — in n a tio n s m e c h a n is m u n h a m p er ed a n d e c o n o m ic is th e r e o b se r v e r s S ta te s b a l November 1955 D u r in g th e 1 9 5 3 -5 4 d e v e lo p m e n ts sh a rp r is e U n ite d in c lu d e d in e x p o r ts, a S ta te s c y c lic a l fa ll c o m b in in g to r e c e s s io n , in th e se im p o r ts in c r e a s e th e a n d a U n ite d d u c tio n th e e v e n W n eed s o u tflo w s , w ith d o lla r s p lu s to r e g a in e d c o n tin u e d la r g e r is e r is e . th e ir in h o w e v e r , d o lla r T h e D u r in g e a r ly e x p o r ts, d e c r e a se d . U n ite d en ed , e x te n t b y th e r e s u lt th a t fo r e ig n c o n tin u e d im p o r ts a so a c q u is itio n s th e le v e l, o f b ro a d c h a n g e s a n d e x p o r t th e ir a ls o fo r e ig n a lth o u g h a t a to a n d re co v e ry , th a t d e s p it e S ta te s r e m a in d e r o f th is a r t ic le is d e v o te d th e se so c a p ita l o u tflo w s a m o u n t c o n tin u e d 1 9 5 4 -5 5 U n ite d S ta te s th a t c a p ita l h o ld in g s o f g o ld th e 1 9 5 3 th e in c r e a s in g a su r s la c k g o ld a n d red u ce d ra te. a d is c u s s io n T h e th e r is e in e x p o r ts U n ite d C o m p a r in g th e th e 1 9 5 3 -5 4 (e x c lu d in g g o o d s U n ite d A fte r d o lla r s . a n d r e c e s s io n , c le a r o f in c r e a s e d B e tw e e n b y th e a d ju stm e n t b y n a tio n a l fo r 13 B e h in d o f th e r is e in E u r o p e d e v e lo p m e n t (C h a r t w ith th e in g o o d s o n ly p ro d u c t se a so n a l 2 ) . fir s t la s t s e r v ic e s S ta te s G o v th a n p e r io d s , im p o r ts 3 p erc en t b y o n ly v a r ia tio n , a n d 4 a o f to ta l p e r c e n t. fu r th e r m o r e , fe w y e a r s. r a p id in d u s tr ia l I n d u s tr ia l p ro - h a r t 2 o f E u r o p e 1 9 5 3 th a n a n d th e r is e E u r o p e a n s te e l, c o a l, w o o d lib e r a liz e d tim e , a th e ir b y 1 9 fir s t p erc en t h a lf o f to ta l U n ite d p r o d u c tio n b o o m p u lp , a n d e x p o r te d n u m b e r o f S ta te s h a v e b y b e tw e e n 1 9 5 5 — o th e r th e a co m e r a w r is e e x p o r ts. a d d ed m a te r ia ls U n ite d E u r o p e a n b a r r ie r s a g a in s t d o lla r S ta te s. c o u n tr ie s h a v e im p o r ts , a n d th u s h a v e m a d e it p o s s ib le fo r th e r is e in d e m a n d to b e r e fle c te d in a r is e th e in r is e p o r ts S ta te s U n ite d S ta te s W e ste r n E u r o p e . to T h e U n ite d in c o m b in a tio n r is in g d em a n d S ta te s ) a n d n u m b er o f o f im p o r t e x a m p le , fir s t a n d h a lf U n ite d In W 1 9 5 5 , e ste r n G er m a n y , m e r c h a n d is e p e r c e n t fr o m b o th th e 1 9 5 5 . In ta t iv e r e s tr ic tio n s o n tw o -y e a r T h e fir s t T h e p erc en t g a in 1 9 5 3 im p o r ts fo r a N e th e r in in a n d th e fr o m th e d u r in g th e s a m e p e r io d . in d u s tr ia l im p o r ts U n ite d c le a r ly p r o d u c tio n fr o m h a lf o f th e 1 9 5 3 ro se U n ite d to th e 31 p e r S ta te s fir s t b y h a lf o f c o u n tr ie s , s u b s ta n tia l r e la x a tio n s o f q u a n ti in d o lla r im p o r ts t o o k w o r ld e x p o r ts u p w a r d d o u b le d o f e x p la c e d u r in g th e p e r io d . r is e S ta te s 2 0 b y th e u p fir s t h a lf o f m e r c h a n d is e S ta te s m o r e th a n c e n t a n d 7 0 o f a th e fo r (a c c o m p a n ie d c o u n tr ie s . e x p e r ie n c e d p erc en t b y sh o w s E u r o p e a n b e tw e e n 7 0 a c c o u n te d e x p o r te d lib e r a liz a tio n d u s tr ia l p r o d u c tio n A b o u t is p r o d u c tio n p r o d u c ts in d iv id u a l la n d s , f o r e x p o r ts. e x p o r ts r is in g fo r p r e ssu r e a m o n g in d u s tr ia l p r o d u c tio n h a s th e r e c e n tly o n p r ic e s . b een e x t e n t, d e c lin in g a n d in a c c o m p a n ie d U n ite d b y S te e l, c o p p e r , tin , a n d in t e r n a tio n a lly w h ic h h a v e g o n e u p in T H E IN T E R N A T IO N A L T R A N S A C T IO N S O F T H E U N IT E D S T A T E S in fo r sa m e r o se th e th e th e a re C e ste r n s e m i- m a n u f a c tu r e s A t s till m o r e s in c e m id -y e a r . e x p o r ts lie s th e v e r y th e a n d p e r c e n t, o r m o r e sa m e tw o in c r e a s e d g r o ss o f u n d e r U n ite d m e r c h a n d is e e x p o r ts h a v e r is e n g r o w th re ce n t p a y m e n ts e x p o r ts s h ip m e n t s s e r v ic e s S ta te s v e r y w a s th e la s t h a lf-y e a r b e fo r e th e o n s e t m ilita r y e r n m en t g r a n ts ) b illio n a b a la n c e fir s t h a lf o f th e c u r r e n t y e a r h a lf o f 1 9 5 3 , w h ic h o f is S ta te s a n d b y Exports rise continuously in ith o f s ig n ific a n c e . W h a lf g r e a te r S t a t e s e x p o r t s u r p lu s s u b s ta n tia lly . T h e in c r e a s in g e x p o r t o ffse t to in fir s t s u r p lu s w a s 129 M O N T H L Y REVIEW tr a d e d b a s ic so m e ru b b er c o m m o d it ie s p r ic e d u r in g th e p a s t y e a r . T o c o ffe e , co c o a , a n d te a p r ic e s h a v e so m e o ffse t S E L E C T E D I T E M S , 1 9 5 3 -5 5 r is in g In m illions of d o lla rs llljilHjijl Im ports o f goods an d services H | | | | U. S. G o vernm ent g rants a n d credits ■ P P I (excluding military transfers under grants) 1 1 ,0 0 0 ra w in te r n a l Exports of goods an d services N e w p riv ate U. S. c a p ita l an d rem ittances m a te r ia ls d em a n d , o f it n e c e s s a r y , lik e th e U n ite d S ta te s, c r e d it c o u n tr ie s th e fir s t h a v e e s t a ll o f th e w o r ld p r e ssu r e s c o u n tr ie s h a v e fo u n d C a n a d a , W r is in g th e to r e s tr ic tiv e a s o f fo r e ig n a d o p t w e ll B e c a u se tr a d e , B r ita in , 1 0 ,0 0 0 p r ic e s . a s p o lic ie s d u r in g 1 9 5 5 . G er m a n y , J a p a n , a n d r a is e d th e ir ce n tra l b a n k G rea t se v e n o th er ra tes s in c e y ea r . Imports follow recession and recovery 9,000 C o u p le d illu s tr a te d a w ith th e b y th e flu c tu a tin g r is in g D u tc h le v e l o f U n ite d a n d G erm a n le v e l o f U n ite d S ta te s S ta te s e x p o r ts e x p e r ie n c e h a s b e e n im p o r ts . A s in p r e v i 8 ,0 0 0 o u s U n ite d 1 9 5 3 -5 4 1 9 5 3 in 6 ,0 0 0 to a n d th e b o o m . fir s t m e r c h a n d is e T h e d o m e s t ic L te m b e r Jan.-June July-Dee. Jan.-June July-Dee. Jan.-June 1953 1953 1954 1954 1955 N o te : D uring each half-year, the first colum n shown represents dollars spent b y foreign countries; the second, dollars received b y foreign countries. T h e dif ference equals net additions to foreign gold and dollars through transactions with the United States plus a small item o f errors and omissions. Source: U nited States D epartm ent o f Com m erce, Bureau o f Foreign and D o mestic Com m erce. in h a s fo r e ig n U n ite d fa ste r th a n b a la n c e , 1 9 5 5 a n d b een a w a s in to ta l d u r in g fr o m th er e r is e a th e in v e n to r ie s tr a v el S ta te s in c r e a s e d o f d ro p O c to b e r , le v e ls o f th e e a r ly im p o r ts O n h a lf im p o r ts c o ffe e a n d a n d im p o r ts m e r c h a n d is e le v e l o f c o ffe e 0 r e c e s s io n s , im p o r ts d r o p p e d d o w n s w in g r e c o v e r y 7,000 S ta te s in w e r e b y U n ite d fo r e ig n p er so n a l o f h e a v ily S ta te s tr a v e l b y r is e n lo w B y S e p a b o v e th e r is e in th e c u r r e n t b o o m c itiz e n s . e x p e n d it u r e s d is p o s a b le th e y e a r , w h e n re d u ce d . h a d o f d ro p o f s e r v ic e s . la r g e ly b e in g h a lf s lig h t fir s t h a lf o f th is im p o r ts th e 1 9 5 4 -5 5 fir s t a im p o r ts r e s u lt m o n th s o f 1 9 5 5 . T h e in f lu e n c e d th e th e w a s d u r in g in c o m e ; “ in v is ib le ” S in c e h a v e fo r e ig n 1 9 5 0 , g r o w n tr a v e l 130 e x p e n d it u r e s , in c o m e b le ” th a n h o w e v e r , th e y im p o r ts m ilita r y h a v e to o f th e p r o d u c t. w ith th e r is e im p o r ts in p r o p o r tio n U n ite d s ig n ific a n t, g o o d s In th e 1 9 5 4 se c o n d G o v e r n m e n t o f S ta te s h a lf m ilita r y th e d ro p 1 9 5 4 , th e in g r o ss e x p o r ts in c r e a s e d S ta te s u n d e r b y I t h a s o fte n to o f b een th e o b se r v e d to 1 9 5 5 , ra te th a t “ w h e n w o r ld th e r e d a n g e r o u s th e U n ite d c a tc h e s h a s c e r ta in g o ld w h ic h lo s s e s h a v e n o a n d d o lla r s w a s c a u se W o th e r in c e n tiv e to e x p o r t ra tes lo w . b illio n a th e fir s t h a lf J a n u a r y - U n ite d a n m a y in b e h a v io r v a r ie ty re p r e se n ts c o m e s p e c ia lly th e so m e E u r o p e , fir s t h a lf co n ce rn , O th e r a re o f 1 9 5 5 r e c e n tly a re a s, b u ild in g o n to u p g a in a t a th e se e s p e c ia lly g o ld th e w h o le , a s c o n tin u e d a n d a rea , w e r e g o ld a n d C h a rt 1 a n d d o l a d a , th e so m e g r o u n d o f im p o r ts fo r s in c e p e s s im is m s itu a tio n , th e r e h a v e su p p o r t a o p tim is tic m e n ts m o r e b een 1 9 5 3 a b o u t v ie w p a st m ig h t se e m th e o ff s e tt in g th e w o r ld fa c to r s to o ffe r p a y m e n ts w h ic h o f r e c e n t b a la n c e m ig h t o f p a y re a so n w h y th e g r o w th in th e w a s th e fa ll in s u r p lu s d id n o t r e d u ce fo r e ig n g o ld U n ite d $ 3 5 th e ra te 1 9 5 4 g r e w is th a t U n it e d v e r y in r e m a in e d fa ir ly th e in o f a n o f a 1 9 5 3 , A m e r ic a n s sh o r t-te r m h a lf -y e a r m illio n . fo lio lio n In to e n te r p r is e s o w n e d b y m illio n th e a n d p a p e r a m o u n t 1 9 5 4 , th e sh o r t-te r m fir s t d e c lin e d h a lf th e lo a n s 1 9 5 5 , to a a b o v e s e n s itiv e to e x p e c ta tio n s a a n d e x p e r ie n c e o f th e 1 9 2 0 ,s , to C a n a d a h a lf o f h a v e c a se o f r e fle c tin g S ta te s e x p o r t fr o m th e a 1 9 5 4 th e th e fir s t to S ta te s S ta te s $ 1 1 0 in te r e s t a re w ith th e ro se m illio n sa m e s u r p lu s U n ite d a le v e l b o n d s in f lu e n c e s in d e c lin e U n ite d to b y th e m illio n th e C a n a d ia n fir s t h a lf o f b een in in te r e s t r a te s to se a so n a l to ze r o fo r o v e r C a n b o u g h t $ 1 5 7 c ite d to h a v e b o n d s re a ch ed p r e m iu m 1 9 5 4 , to a lm o s t c o m m o n ly a fte r a s o f to lo n g -te r m d e c lin e d c o u n tr ie s a p p e a rs C a n a d ia n liq u id a tio n A n d , (c o n tr a r y th e c a p ita l e x p o r t s e lim C a n a d a se c o n d s u r p lu s h a lf w ith a ll g r o u p ). ra tes sh o r t-te r m a ls o a p p e a r c a p ita l to e x p o r ts h a v e p la y e d a to B r ita in , c la im s o w n e d b y r o le . S h o r t d o lla r s te r lin g d e p o s it s a n d A m e r ic a n s b y n e a r ly $ 1 0 0 to th e w id e n in g c a p ita l In in c r e a se s o f $ 2 6 6 fir s t lo n g In th e d ro p p e d in m illio n a n d n e x t to p r iv a te a n d h a lf $ 8 4 p o r t $ 5 9 4 m il h a lv e s o f th e y e a r , r e s p e c tiv e ly . h o w e v e r , n e g lig ib le 1 9 5 4 , o f a t le a s t B r itis h p a r tly in sh o r t-te r m su c h fig u r e . h o w e v e r , S t a t e s r a t e s . S t e r lin g c la im s fe ll in d e s p ite th e fa c t th a t r is e s in e a r ly B r ita in 's ch a n g ed th e m illio n . r e d u c t io n in m a r g in A m e r ic a n s — in v e s tm e n t in $ 2 6 8 m illio n th a t is , in a y e a r , b u t th e o u tflo w . th e ir b y w e r e se c o n d o f s h a r p ly , o f th e r e in th e fir s t a n d sh o r t-te r m s u b s ta n tia l r e d u ce d fo r e ig n In a n d U n ite d S ta te s p r iv a te in v e s tm e n t s ta b le , a b o u t $ 7 0 0 p o r tfo lio in f lo w o f o n se t o f c a p ita l— 1 9 5 3 -5 4 o f ty p e th e m o v e m e n ts d e c lin e d u su a l th e U n ite d to 1 9 5 4 1 9 5 5 , fr o m d ir e c tio n T h is m in o r p a tte r n ra tes o f r e a so n S ta te s r a te s o v e r U n ite d m o v e m e n t th e ca u se e x p o r ts— S ta te s a n d r a p id ly . D ir e c t in v e s tm e n t— fo r e ig n T h e p o r tfo lio is s u e s th e m illio n r e sp o n se v e stm e n t th e m o r e th e c a p ita l in te r e s t C a n a d ia n se c o n d in a t e d , r o se a b ro a d in o u tflo w . p o litic a l to m a y in te r e s t w h ic h r e la tiv e to p r iv a te 1 9 5 4 , a fte r h a v in g c h a n g e s. te rm h o ld in g s in to in v e s to r s e lim in a te d in t e r e s t e x p o r t N e w h a lf o f fo r e ig n U n ite d o f fir s t h a lf . T h e In m a jo r re g a rd w h e r e fo r c e s m u c h ra tes. r e tu r n o f p r iv a te se c o n d th e o f United States capital outflow offsets changes in export surplus A c a se S ta te s in a in f lu e n c e a p p e a rs d e v e lo p m e n ts . w ith U n ite d fr o m b e h a v io r th r o u g h o u t h o w e v e r , in te r e s t th u s h a v e a n S ta te s, 19 2 0 's . A fte r a n d d o in te r e s t b o r r o w e r s m a y d u r in g w a s to in te r e s t in f lu e n c e e x is t o f ta k e w h e r e c a p ita l m id d le e c o n o m ic p a rt c o n s id e r a b le . a tin g S ta te s to to S ta te s, le n d e r s a b ro a d , im p o r ts so m e c a p ita l— to in r e la tiv e U n ite d S ta te s o f th e o f th a n th e ra tes. U n ite d th e fir s t E u r o p e . In y e a r s . T h u s , e v e n th o u g h th e r is in g e x p o r t s a n d th e flu c tu th e to 1 9 5 3 b e h a v io r U n ite d r e c e s s io n a r y D e p r e s s io n , ev e n ts r a p id ly , a n d c o u n tr ie s sh o r t-te r m c r isis in e x p e c te d S ta te s fo r e ig n a fa ll in e x e r t b e fa ll fu n d s th e sa m e fo u n d G re a t w h ic h fr o m w a s a ll, 1 9 4 9 r e c e s s io n . in U n ite d r e c e s s io n s ev e n th e s te r lin g w a y th e th re e la r s th is 1 9 5 3 p a y m e n ts T h e in c r e a se d w id e fr o m d e c lin e d th e to U n ite d in v e s t b o r r o w d o lla r S ta te s sn e e z e s, th e to e x p o r t s u r p lu s — a n m a n n e r r o se o ff s e tt in g to lik e ly c o u n tr ie s . S ta te s a n d a re r a te s h a v e n o t fa lle n , a n d in c e n tiv e a re th e n m ig h t c o n fin e d ra tes in su r o ff s e tt in g w h ic h th is c a p ita l r e c e s s io n a n y e t, d u r in g fo r a ra tes m o r e a n a n d w h y S ta te s in te r e s t fr o m d im in is h e d . e s te r n fo r e ig n In A n d w o r ld r e a so n s U n ite d e x p o r ts in c r e a s e d a r e a s , p a r tic u la r ly g r e a tly c o n tin e n ta l p la c e . in s u r p lu s , c u rr en t y ea r . a re p r iv a te m e s tic b eh a v ed e x p o r t t h e la s t h a lf o f 1 9 5 4 h a lf o f t h e h a v e r o se g o ld p n e u m o n ia .” a n d b een d o lla r r e s e r v e s v e r y sh o w s, th r o u g h th u s S ta te s a g a in th a n in p a r a b le , f o r e x a m p le , t o t h e o n e d u r in g t h e T h o u g h a b ro a d U n ite d n a tio n a l S ta te s th a t e v e n m ild p ro d u c e im p o r ts d r o p p e d lo s in g th e S ta te s te n d d r a in s a b r o a d — re st o f le v e l. r e c e ss io n s th o u g h le n d in g c o m p a r is o n o f th e c u r r e n t y e a r , b u t it r e m a in s fa r a b o v e th e 1 9 5 3 d ro p h a lf U n ite d m o r e so m e w h a t h a lf T h e fir s t e x p o r ts U n ite d d e c lin e d a a b o u t th r e e tim e s th e o f a n d sh o w s. fr o m im p o r ts la g g e d ; in m ilita r y s u r p lu s la s t tw o C h a rt 2 w a s a s 1 9 5 3 g r a n ts ) T h e a s th e s e r v ic e s b e fo r e , w h ile fir s t h a lf d o lla r s . a n d fir s t h a lf o f (e x c lu d in g J u n e o f “ in v is i o ffsh o r e p r o c u r e m e n t fo r d u r in g p e r c e n ta g e w is e , th a n th e p lu s s m a lle r T h e r e in b een se v e r e , r a p id ly a a id . im p o r ts 1 9 5 3 a s b een s till 1 9 2 9 . A n o t h e r fa c to r in a b r o a d , in c lu d in g F lu c tu a tio n s y e a r s a re w e r e in h a s e x p e n d it u r e s in November 1955 FEDERAL RESERVE BA N K OF SAN FRANCISCO fo r e ig n U n ite d le n d in g S ta te s sh o r t-te r m U n ite d c u s s io n s w a s a n in te r e s t r a te s w id e n e d th e B r itis h m a r g in o v e r S ta te s r a te s . U n c e r ta in ty a b o u t th e p o s s ib le r e p e r o f th e fa ll in B r ita in 's im p o r ta n t c a u s e g o ld a n d d o lla r h o ld in g s o f th e fa ll. I n te r e s t r a te s , in o th e r w o r d s , w e r e n o t th e o n ly fa c to r d e te r m in in g c a p ita l m o v e m e n ts fr o m In th e U n ite d ra tes d o th e c a se S ta te s U n ite d o f S ta te s B r a z il, fu n d s, b o th n o t a p p e a r to th e to th e U n ite d o th e r m a jo r lo n g - h a v e b een a n d K in g d o m . b o r r o w e r sh o r t-te r m , a m a jo r fa c to r in o f in te r e s t in d u e - in g c a p ita l m o v e m e n t. A fr o st fo r d a m a g e B r a z il tio n s . In to to th e b o r r o w a d d itio n c o m b in a tio n 1 9 5 3 in to a c o ffe e o rd er o f in f la t io n cr o p to m a d e m e e t h er s u b s ta n tia l c o m m e r c ia l c r e d it, tw o a n d it a n d fo r e ig n in c r e a s e in th e n e c e ssa r y o b lig a sh o r t-te r m la r g e lo a n s w e r e a r r a n g e d in 1 9 5 4 1 9 5 5 . O n e w a s a $ 2 0 0 m illio n , fiv e - y e a r a d v a n c e fr o m p r iv a te U n ite d w a s a $ 7 5 S ta te s b a n k s in m illio n lo a n fr o m N o v e m b e r th e 1 9 5 4 ; th e o th e r E x p o r t-Im p o r t B a n k m illio n . A c t u a l e x p e n d it u r e s a r e a ls o e x p e c t e d in 1 9 5 6 , b u t b y cr ea se, 1 9 5 5 . B o th lo a n s w e r e m a d e in v ie w o f in s itu a tio n a n d fo r o th e r r e a so n s th a n a m ilita r y , p o r tio n in in te r e s t a b ro a d h a lf p r iv a te in c r e a s e d o f 1 9 5 5 . b y p o r tf o lio a v e r y a n d th e in c r e a s e th e n e t c o n tr a c tio n S ta te s in v e s to r s se e m h o ld in th e b a n k e r s’ a c c e p ta n c e s o f d o lla r in te r n a tio n a l flu e n c in g a n d N o r w a y b o n d s .1 T h e s e c a p ita l in c e n tiv e s , w h ic h fir s t c o n tr a sts fo r e ig n su b lo a n s d u r in g U n ite d to h a v e b e c o m e in c r e a s in g ly w illin g A u s tr a lia , B e lg iu m , a n d is s u e s o n ly o n e th e fo r e ig n d o lla r b o n d s; h a v e a ll r e c e n tly fa c ts m o v e m e n t w a s c a p ita l d u r in g in m a y b e r e sp o n se o f a n u m b e r 1 9 5 3 -5 5 a flo a te d s ig n to th a t p e r io d , is h a v e a ll in g a in in g in th e r e ce n t o f v ie w G r a n ts a n d o f th e h ig h ly s u p p lie s c r e d its to 1 9 5 4 th e a n d fo r e ig n U n ite d r o se c o m b in e d to in c r e a s e d Im p o r t B a n k o f w h e a t to n a tio n s a n d S ta te s lo a n a g a in p ro d u c e b y to in e a r ly th e se a s p e c ia l B r a z il a n d P a k is t a n . a n d m o r e r a p id ly in co m e. T h e se to lu x u r y w h ic h a r a p id ly r e c o v e r y flu c tu a tio n s in te r n a tio n a l S ta te s p a y m e n ts th e s itu a tio n , 1 9 5 5 . fe ll M a n y c h a n g e s. In 1 9 5 4 , $ 3 0 0 b y th e In tr a d e d ep en d O ffs e ttin g th e re ce n t a n d o f th e K o r e a n th e p a s t, im p o r ts in c o n su m e r th a n a in c o m e . g o o d s R a w c o n s titu te r e c e ss io n to ta l in c r e a se a re a o n s a le s h e a v ily th is w e a k b e h a v io r th e m a jo r sh o r t-te r m th e g a in S ta te s p r o b le m in a n d U n ite d o f p o in t h a s p r iv a te b een U n ite d in r is k s to o f n a tio n s U n ite d r is e s flo w in g a n d S ta te s str o n g th e w h e n fo r c e fo r e ig n th e p o in t, c a p ita l. r e sp o n se to s ta b iliz in g o u t w h e n r e tu r n in g a S ta te s th e e x t e n t th a t p r iv a te c a p ita l m o v e s in n a tio n a l tr a d e , in in te r im p o r t s u r p lu s T o in te r su r fa lls . T h e d u r in g o n e o f a n u m b e r 1 9 5 3 -5 5 , a n d th e r e o f in f lu e n c e s a re s ig n s o n th a t th e s p e c ia l o f th is fa c to r m a y b e in c r e a s in g . th e su m o f a ll th e r e ce n t m o v e m e n ts in im p o r ts , e x E x p o r tp o rts, c a p ita l flo w s , fa ir ly ste a d y g a in a n d g r a n ts a n d c r e d its h a s b een a s h ip m e n t s U n ite d S ta te s o f U n ite d S ta te s R e c o n s tr u c t io n w a s fr o m 1 9 5 3 m illio n e m e r g e n c y en d in c h a n g e s m a r k e t. 1 9 5 3 to U n ite d d u r in g m o r e d ro p U n ite d A g e n c y S ta te s b y th r o u g h J u n e in th e g o ld re st a n d o f d o lla r th e a sse ts w o r ld . fr o m F r o m th e J a n u a r y 1 9 5 5 t h e g a in a m o u n te d to $ 4 .8 b illio n , o f o r th e U n ite d th e in te r n a tio n a l G o v e r n m e n t m ilit a r y r e lie f in K o r e a a n d th e r e d u c t io n c o n tr ib u tio n s in S ta te s im p o r ts , a n d th e r e fo r e T h e w a s p ro g ra m . im p o r ts im p o r ta n c e to ta l is th e le a s t fa v o r a b le , fr o m in te r n a tio n a l s e n s itiv e in te r e s t r a te fa c to r b y to a la r g e s h a r e o f to ta l U n ite d c a p ita l flo w s to o f th e th e b e h a v io r o f im p o r ts . A s p ro v ed p lu s 1 9 5 3 d e v e lo p m e n ts e s t r a te d if fe r e n tia ls , it a c t s a s a Decline and upturn in United States grants and credits fa c to r s s e c u r ity d e y e a r s, te c h n ic a l, a s o p p o s e d m u tu a l o f p a y m e n ts, o n e m a te r ia l fin a n c ia l o f fa c to r s im p o r ta n c e . in s t it u t io n s r e ce n t in lo a n s t h e f ir s t h a lf o f 1 9 5 3 . D u r in g t h is t w o - y e a r p e r io d to th e o f d iffe r sh o r t-te r m s m a ll a m o u n t d u r in g N e v e r th e le s s , w ith o f a n d tr e n d g r e a te st ra tes. S ta te s s ta n tia lly th e e c o n o m ic th e to b e lo w e r T h e th e h a s b een U n ite d w ith m illio n . Strong and weak points in the United States balance of payments p o in t e n tia l a b o u t $ 6 0 a cc o rd a n c e in b a la n c e em e r g e n c y o n ly e x p e c te d O f F e b r u a r y 131 M O N T H L Y REVIEW November 1955 2 0 p erc en t o f to ta l fo r e ig n a n d in te r n a tio n a l g o ld a n d N a t io n s h e ld d o w n th e fo r e ig n g r a n t a n d c r e d it d o lla r h o ld in g s a t th e s ta r t o f 1 9 5 3 . T h is g a in to t a l. T h e r e c e n t r e v e r s a l r e fle c ts in h a s n o t b een la r g e p a r t s p e c ia l a id sh a red e q u a lly b y a ll n a tio n s a n d a r e a s ; r is in g im p o r ts to F r a n c e in s u p p o r t o f its m ilit a r y b u d g e t , o t h e r in c r e a s e s fr o m in a id to a fe w F a r a n d M id d le E a ste r n c o u n tr ie s , d is p o s a l o f s u r p lu s a g r ic u ltu r a l U n ite d S ta te s a n d p r ic e in c r e a se s fo r c e r ta in a n d ra w la r g e -s c a le th e m a te r ia ls h a v e c o n tr ib u te d to b a la n c e -o f- p a y m e n ts c o m m o d it ie s . d if fic u ltie s fo r a n u m b e r o f c o u n tr ie s . M o s t o f th e s e c o u n N e w o b lig a tio n a l a u th o r ity e x p e n d it u r e s o n y e a r lo w e r 1 9 5 6 is c o n fe r r e d b y in t e r n a tio n a l a ff a ir s a n d th a n th e 1 9 5 5 fig u r e C o n g r e ss fin a n c e b y fo r in fis c a l so m e $ 2 0 0 1 For a discussion o f the recent growth o f bankers’ acceptance financing, see the article, “ T h e R ole of Bankers’ Acceptances in International Trade and F inance” in the Monthly Review, July, 1955. tr ie s a re r e ly in g h e a v ily o n m o n e ta r y p o lic y th e ir d if fic u ltie s . I f t h e y a r e s u c c e s s fu l in im p o r ts a n d u p th e flo w w o r ld in b u ild in g w ill p r o b a b ly o f g o o d s a n d th e ir g o ld c o n tin u e s e r v ic e s a cr o ss to to o v e r c o m e r e s tr a in in g a n d m o v e d o lla r th e ir r e se r v e s, to w a r d a fr e e r n a tio n a l b o u n d a r ie s . 132 November 1955 FEDERAL RESERVE B A N K OF SAN FRANCISCO BUSINESS INDEXES—TWELFTH DISTRICT1 (1 9 4 7 -4 9 a v e r a g e = 1 0 0 ) I n d u s tr ia l Y ear and m o n th s r o d u c t i c n ( p h y s l c a l v o l u n ie> * P e tr o le u m * L um ber C rude R e fin e d C e m e n t L ead3 C op per9 W heat flo u r * T o ta l C ar n o n a g r i T o ta l m f ’g lo a d in g s c u ltu r a l E le c t r ic e m p lo y e m p lo y (n u m b er)» pow er s e n t4 m Ee xn pt o r t m 95 50 40 54 73 71 78 92 92 89 88 75 80 97 104 100 113 113 116 118 112 87 57 52 62 71 67 67 69 74 85 93 97 94 100 101 99 98 106 107 109 106 78 55 50 56 65 63 63 68 71 83 93 98 91 98 100 103 103 112 116 123 119 54 36 27 33 56 56 61 81 96 79 63 65 81 96 104 100 112 128 124 130 132 165 100 72 86 114 93 108 109 114 100 90 78 70 94 105 101 109 89 86 74 70 105 49 17 37 88 80 94 107 123 125 112 90 71 106 101 93 115 115 112 111 101 90 86 75 87 84 91 87 87 88 98 101 112 108 113 98 88 86 95 96 96 99 29 29 26 30 38 40 43 49 60 76 82 78 78 90 101 108 119 136 144 161 173 1954 S e p te m b e r O c to b e r N ovem b er D ecem ber 110 125 121 133 105 104 104 105 121 116 119 119 138 143 132 132 69 70 73 69 97 110 116 114 108 105 104 101 1955 January F eb ru ary M arch A p r il M ay June J u ly A u g u st S e p te m b e r 134 134 121 120 120 121 119r 123 117 105 105 106 106 106 106 106 106 106 116 122 120 118 115 120 128 127 132 119 131 137 149 155 153 157 160 159 74 76 82 77 78 76 72 67r 69 118 130 130 127 131 129 40 91r 127 107 112 108 97 96 97 94 101 108 1929 1931 1933 1935 1937 1939 1940 1941 1942 1943 1944 1945 1940 1947 1948 1949 1950 1951 1952 1953 1954 D e p ’t sto r e s a le s (v a lu e )2 R e ta il fo o d p r ic e s 1. s W a te r b o r n e fo r e ig n tr a d e * * • Im p o rts 30 25 18 24 30 31 33 40 49 59 65 72 91 99 104 98 105 109 114 115 113 64 50 42 48 50 47 47 52 63 69 68 70 80 96 103 100 100 113 115 113 113 190 138 110 135 170 163 132 124 80 72 109 119 95 101 * ÌÓÒ 101 96 95 99 102 99 103 111 118 122 120 ’4 7 60 55 63 83 121 164 158 122 97 100 102 97 105 122 132 139 136 102 68 52 66 81 77 82 95 102 99 105 100 101 106 100 94 97 100 101 100 96 89 129 86 85 91 186 171 140 131 "57 81 98 121 137 157 200 308 260 174 176 177 173 120 121 121 122 137 138 139 140 97 102 98 106 114 116 115 118 113 113 111 111 115 112 118 113 262 277 196 313 173 179 188 191 189 200 191 196 196 122 122 123 124 124 125 125 126 126 140 140 140 141 143 145 145 144 146 106 99 103 105 110 111 99 106r 107 125 118 118 120 118 118 123 122r 126p 112 112 112 113 113 112 113 111 112 163 184 163 149 162 152 171 287 263 240 290 280 299 368 BANKING AND CREDIT STATISTICS—TWELFTH DISTRICT (a m o u n ts in C o n d it io n I t e m s o f a ll m e m b e r b a n k s 7 Y ear and m o n th L oans U .S . and G o v ’t d is c o u n ts s e c u r it ie s D em and d e p o s it s a d ju ste d * T o ta l tim e d e p o s it s B ank ra tes o n sh o rt-ter m b u s in e s s lo a n s * 495 547 720 1 ,2 7 5 1 ,2 7 0 1 ,4 5 0 1 ,4 8 2 1 ,7 3 8 3 ,6 3 0 6 ,2 3 5 8 ,2 6 3 1 0 ,4 5 0 8 ,4 2 6 7 ,2 4 7 6 ,3 6 6 7 ,0 1 6 6 ,4 1 5 6 ,4 6 3 6 ,6 1 9 6 ,6 3 9 7 ,9 4 2 1 ,2 3 4 984 951 1 ,3 8 9 1 ,7 4 0 1 ,9 8 3 2 ,3 9 0 2 ,8 9 3 4 ,3 5 6 5 ,9 9 8 6 ,9 5 0 8 ,2 0 3 8 ,8 2 1 8 ,9 2 2 8 ,6 5 5 8 ,5 3 6 9 ,2 5 4 9 ,9 3 7 1 0 ,5 2 0 1 0 ,5 1 5 1 1 ,1 9 6 1 ,7 9 0 1 ,7 2 7 1 ,6 0 9 2 ,0 6 4 2 ,1 8 7 2 ,2 6 7 2 ,3 6 0 2 ,4 2 5 2 ,6 0 9 3 ,2 2 6 4 ,1 4 4 5 ,2 1 1 5 ,7 9 7 6 ,0 0 6 6 ,0 8 7 6 ,2 5 5 6 ,3 0 2 6 ,7 7 7 7 ,5 0 2 7 ,9 9 7 8 ,6 9 9 3 .2 0 3 .3 5 3 .6 6 3 .9 5 4 .1 4 4 .0 1 1954 O c to b e r N ovem b er D ecem ber 9 ,0 4 8 9 ,3 4 3 9 ,4 2 2 8 ,0 1 4 8 ,0 8 9 7 ,9 7 3 1 0 ,7 4 9 1 0 ,9 3 7 1 1 ,1 5 8 8 ,6 5 1 8 ,5 9 6 8 ,6 6 3 4 .0 1 1955 January F eb ru ary M arch A p r il M ay June J u ly A u gu st S e p te m b e r O c to b e r 9 ,5 1 0 9 ,6 1 2 9 ,6 9 6 9 ,6 5 7 9 ,8 1 0 1 0 ,1 0 2 1 0 ,1 9 1 1 0 ,3 9 2 1 0 ,5 5 9 1 0 ,6 6 5 7 ,9 9 8 7 ,6 9 3 7 ,3 9 0 7 ,7 5 6 7 ,6 9 0 7 ,4 4 6 7 ,5 5 7 1 1 ,2 4 6 1 0 ,9 4 5 1 0 ,7 3 3 1 1 ,0 6 0 1 0 ,9 5 1 1 1 ,0 2 3 1 1 ,2 1 2 1 1 ,1 6 3 1 1 ,3 1 2 1 1 ,4 6 5 8 ,7 2 5 8 ,7 6 5 8 ,8 3 7 8 ,8 3 3 8 ,8 8 5 9 ,0 2 6 8 ,9 9 5 9 ,0 2 1 9 ,0 5 4 9 ,0 6 7 7,407 7 ,3 7 5 7 ,4 8 7 + + + + + + + + + 3 .9 8 3 .9 9 + + + + + 34 21 2 2 1 2 2 4 107 214 98 76 9 302 17 13 39 21 7 14 2 C o in a n d T reasu ry C o m m e r c ia l c u r r e n c y In o p é r a t i o n s 13 o p e r a t i o n s 13 c i r c u l a t i o n 11 0 154 110 163 90 192 148 596 - 1 ,9 8 0 - 3 ,7 5 1 -3 ,5 3 4 -3 ,7 4 3 - 1 ,6 0 7 510 + 472 930 - 1 ,1 4 1 - 1 ,5 8 2 - 1 ,9 1 2 -3 ,0 7 3 - 2 ,4 4 8 + + + + + + + +1 +2 +4 +4 +4 +1 + — + +1 +1 +2 +3 +2 23 154 150 219 157 245 420 ,0 0 0 ,8 2 6 ,4 8 6 ,4 8 3 ,6 8 2 ,3 2 9 698 482 378 ,1 9 8 ,9 8 3 ,2 6 5 ,1 5 8 ,3 2 8 + 9 1 0 - 138 244 127 + + + 142 342 175 _ 34 15 10 60 55 27 10 23 17 43 + - 150 26 401 306 51 449 193 253 148 245 + — + + + + + + + + 77 57 362 261 195 429 217 200 276 174 + + + — + + — 4 .1 7 o f d o lla r s ) M e m b e r b a n k r e s e r v e s a n d r e l a t e d I t e m s 10 R eserve bank c r e d i t 11 — 2 ,2 3 9 1 ,8 9 8 1 ,4 8 6 1 ,5 3 7 1 ,8 7 1 1 ,9 6 7 2 ,1 3 0 2 ,4 5 1 2 ,1 7 0 2 ,1 0 6 2 ,2 5 4 2 ,6 6 3 4 ,0 6 8 5 ,3 5 8 6 ,0 3 2 5 ,9 2 5 7 ,0 9 3 7 ,8 6 6 8 ,8 3 9 9 ,2 2 0 9 ,4 1 8 1929 1931 1933 1935 1937 1939 1940 1941 1942 1943 1944 1945 1946 1947 1948 1949 1950 1951 1952 1953 1954 m illio n s + — + — + — + + + + + + + — — — — — + + + + + — + — + + + — + + + R eserves B a n k d e b it s In d ex 31 e itle s * * « (1 9 4 7 -4 9 -» 1 0 0 )* 42 28 18 6 48 18 14 3 31 96 227 643 708 789 545 326 206 209 65 14 189 132 39 30 175 147 185 287 549 584 754 930 1 ,2 3 2 1 ,4 6 2 1 ,7 0 6 2 ,0 3 3 2 ,0 9 4 2 ,2 0 2 2 ,4 2 0 1 ,9 2 4 2 ,0 2 6 2 ,2 6 9 2 ,5 1 4 2 ,5 5 1 2 ,5 0 5 32 30 32 39 48 60 66 72 86 95 103 102 115 132 140 150 153 23 27 23 2 ,3 6 4 2 ,4 4 0 2 ,5 0 5 150 158 173 79 13 1 15 50 35 9 8 18 15 2 ,4 8 1 2 ,4 4 7 2 ,4 1 8 2 ,4 3 2 2 ,4 7 6 2 ,4 3 9 2 ,4 9 5 2 ,4 1 5 2 ,5 4 1 2 ,4 1 7 161 166 177 165 170 178 166 177 173 171 25 " 1 A d ju s te d fo r s e a s o n a l v a r ia tio n , e x c e p t w h e r e in d ic a te d . E x c e p t fo r d e p a r tm e n t s to r e s t a t is t ic s , a ll in d e x e s a r e b a s e d u p o n d a ta fr o m o u ts id e s o u r c e s , a s f o l l o w s : l u m b e r , v a r i o u s l u m b e r t r a d e a s s o c i a t i o n s ; p e t r o l e u m , c e m e n t , c o p p e r , a n d l e a d , U .S . B u r e a u o f M i n e s ; w h e a t f lo u r , U .S . B u r e a u o f t h e C e n s u s ; e l e c t r i c p o w e r , F e d e r a l P o w e r C o m m i s s i o n ; n o n a g r ic u l t u r a l a n d m a n u f a c t u r i n g e m p l o y m e n t , U . S . B u r e a u o f L a b o r S t a t i s t i c s a n d c o o p e r a t i n g s t a t e a g e n c i e s ; r e t a i l f o o d p r i c e s , U .S . B u r e a u o f L a b o r S t a t i s t i c s ; c a r l o a d i n g s , v a r i o u s r a i l r o a d s a n d r a i l r o a d a s s o c i a t i o n s ; a n d f o r e i g n t r a d e , U .S . B u r e a u o f t h e C e n s u s . * D a ily a v er a g e. 8 N o t a d ju s t e d fo r s e a s o n a l v a r ia tio n . 4 E x c l u d e s fis h , f r u i t , a n d v e g e t a b l e c a n n in g . 6 L o s A n g e le s , S a n F r a n c is c o , a n d S e a t t le in d e x e s c o m b in e d . 6 C o m m e r c ia l c a r g o o n ly , in p h y s ic a l v o lu m e , fo r L o s A n g e le s , S a n F r a n c is c o , S a n D ie g o , O r e g o n , a n d W a s h in g to n c u s to m s d is t r ic ts ; s t a r t in g w it h J u ly 1 9 5 0 , “ s p e c ia l c a t e g o r y ” e x p o r t s a r e e x c lu d e d b e c a u s e o f s e c u r it y r e a s o n s . 7 A n n u a l fig u r e s a r e a s o f e n d o f y e a r , m o n t h ly f ig u r e s a s o f l a s t W e d n e s d a y i n m o n t h o r , w h e r e a p p l i c a b l e , a s o f c a l l r e p o r t d a t e . • D e m a n d d e p o s i t s , e x c l u d i n g i n t e r b a n k a n d U .S . G o v ’t d e p o s i t s , l e s s c a s h it e m s in p r o c e s s o f c o lle c t io n . M o n t h ly d a t a p a r t ly e s t im a t e d . * A v e r a g e r a t e s o n l o a n s m a d e i n f i v e m a j o r c i t i e s d u r in g t h e f i r s t 1 5 d a y s o f t h e m o n t h . w E n d o f y e a r a n d e n d o f m o n t h fig u r e s . 11 C h a n g e s f r o m e n d o f p r e v i o u s m o n t h o r y e a r . 11 M i n u s s i g n i n d i c a t e s f l o w o f f u n d s o u t o f t h e D i s t r i c t i n t h e c a s e o f c o m m e r c ia l o p e r a t io n s , a n d e x c e s s o f r e c e ip ts o v e r d is b u r s e m e n ts in t h e c a s e o f T r e a s u r y o p e r a t io n s . 18 D e b i t s t o t o t a l d e p o s i t s e x c e p t i n t e r b a n k p n o r t o 1 9 4 2 . D e b it s t o d e m a n d d e p o s it s e x c e p t F e d e r a l G o v e r n m e n t a n d in t e r b a n k d e p o s it s fr o m 1 9 4 2 . p — P r e lim in a r y . r— R e v i s e d .
@FedFRASER