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MONTHLY REVIEW OF B U S IN E S S C O N D IT IO N S Federal Reserve Agent Federal Reserve Bank o f San Francisco Vol. X V I I I San Francisco, California, November 20,1934 No. 11 T W E L F T H F E D E R A L R E S E R V E D IS T R IC T C O N D IT IO N S Although retail trade declined moderately in some parts of the Tw elfth District during October, increases in other cities were sufficient to maintain this bank’s adjusted index of de partment store sales at a level close to the highest of the year. Manufacturing activity was reduced by more than the seasonal amount, however, and the movement of freight on dis trict railroads also receded. Contracts awarded and permits issued for both publicly and pri vately financed construction turned upward sharply during the month. Production in m ajor industries for which current records are available— lumbering, flour milling, electric power, and petroleum produc ing and refining— declined during October, after allowance for seasonal factors. A l though activity during September and October was moderately lower than in August, the aver age for those three months was considerably higher than the average for the preceding three months when strike conditions prevailed. Industrial employment outside the canning in dustry has fluctuated within a narrow range during recent months. Department store sales were about the same in O ctober as in September on a daily average basis. Sales had expanded sharply during August and September. New automobile sales, which usually reach a peak in June and decline sharply during the remainder of the year, con tinued to expand through A ugust of this year, and were relatively well maintained during both September and October. Railway freight traffic declined substantially during October, continuing the tendency evident since July. Part of the improvement in retail trade v ol umes during recent months has reflected in creased agricultural purchasing power. W hile aggregate crop production has apparently been moderately smaller this year than last, prices of farm products have been running around 25 percent higher throughout most of the market ing season. Benefit payments because of the crop reduction program and emergency pur chases of livestock have augmented farm in come. Marketing of agricultural commodities reached a peak this year earlier than is usual, reflecting the early maturity of crops. Effects of drought on crops and livestock ranges in this district was relatively less important than in other important agricultural sections of the United States. Recent rainfall, moreover, has materially improved the condition of soil for crop planting and for the growth of range forage in most parts of the district. After advancing substantially from midJuly to mid-September, commercial and real estate loans of reporting member banks re mained unchanged from then until early N o vember. A small decline in such loans was reported during the two weeks ending N ovem ber 21. Investment holdings tended upward during most of O ctober and the first three weeks of November. Principally because of large Government disbursements in excess of local collections, total deposits have risen to the highest levels since mid-1931. Agriculture October weather conditions were favorable to agriculturalists and livestock growers throughout most of the Twelfth District. A l though widespread rains in O ctober and N o vember delayed harvesting of late field crops, they conditioned the soil for seeding, aided the germination of fall-sown wheat, started the growth of range feed, and replenished stock water. The shortage of winter feed for live stock, while less critical than a month earlier, is still serious in many parts of the district. Marketing, which usually reaches a peak in this region in September or October, was not as active in the later month this year as in O ctober 1933. Prices received for farm prod ucts were higher than a year ago, however, and in terms of farm income the price advance more than offset the decline in marketing. Prices paid farmers for their products, as measured by the index of the United States Department of Agriculture, were only slightly lower in October than in September, and were about 28 percent higher than in October 1933. 82 MONTHLY REVIEW OF BUSINESS CONDITIONS In the Pacific Northwest the growth of early fall-sown wheat progressed satisfactorily dur ing October. Marketing of the 1934 crop has been slow because farmers have held large stocks in the hope that a plan similar to the Federal export-subsidy plan in use last year would be adopted this season. Prices have been too high for export or Atlantic Coast shipment and there has been little demand by local millers. The cotton crop in California and Arizona matured unusually early this year and pick ing progressed rapidly during October, delayed only slightly by rains. The table below gives the acreage, yield, production, and amount of cotton ginned in California and Arizona and in the United States this season, compared with other recent years. Prices for cotton fluctuated with little net change during O ctober and the C O T T O N —Twelfth District Ginned ~—Yield per Acre----- >| (------ Production----- ^ prior to Acreage A v . Indicated N ov. 1 1934* 1923-32 1933 1934 1932 1933 1934* 1934 r (Thousand acres) A r iz o n a .. Calif. . . . Tw elfth D is t r ic t .. 132 222 (Pounds) 322 386 391 500 (Thousandbales) (Thousand bales) 377 539 69 129 96 217 198 104 250 56 189 354 378 480 500 313 354 245 United States . . .27,2 41 170 209 169 13,001 13,047 9,634 7,920 Source: United States Departm ent of Agriculture?. *Preliminary. first half of November. Although prices are now somewhat lower than they were in August and September, they are approximately 25 percent higher than a year ago. Threshing of California rice had been prac tically completed by mid-November. This year’s crop was estimated on November 1 at 3,449,000 bags, a gain of about 283,000 bags from the October 1 forecast, and 27 percent larger than production in 1933. Demand con tinued dull and exports were unusually small, but prices established under the rice market ing agreement remained unchanged. Estimates of the district’s bean crop, of which California produces nearly 70 percent, changed little dur ing October. The crop is expected to be slightly smaller this year than it was in 1933, and below average annual production for the period 1927-1931. Notwithstanding this fact, stocks in California warehouses on N ovem ber 1 were considerably larger than on the same date last year. The early maturity and movement to storage of this year’s bean crop and a slackening of market demand for beans during the past two months follow ing un usually large purchases earlier in the season help to explain the accumulation of warehouse stocks. A weighted average price at shipping points of the eleven principal varieties of beans grown in California declined steadily from November 1934 $5.11 per hundred pounds on October 3 to $4.81 on November 14. The average price was $4.17 per hundred on November 15, 1933. Because of the nearly complete failure of the 1934 sugar beet crop in Idaho and Utah, production in the Twelfth District amounted to only 60 percent of last year’s crop. A s har vesting of sugar beets progressed in California, yields were higher than anticipated earlier in the season, and estimates on November 1 in dicated an output in that state only 6 percent smaller than in 1933. Notwithstanding some increase in activity in Pacific Coast hop markets, prices for hops tended downward during October and are cur rently only about half those of a year ago. Supplies of hops in the United States for the 1934-1935 season are considerably greater than for last season, although the crop this year is only slightly larger than in 1933. Stocks are still being held by growers, pending settlement of the proposed marketing agreement with the Agricultural Adjustment Administration. Marketing of the district’s apple and pear crops continued active through October. Ship ments for the season through November 3 were markedly larger than last season to the same date, the year-period increase in apple shipments amounting to 50 percent, chiefly be cause of large increases in the Pacific N orth west. Pear shipments exceeded those of a year ago by about 20 percent. Prices received by growers averaged higher during October of this year than in October 1933. Shipments of grapes started to decline from their seasonal peak during the last week of October this year. W eighted average prices, which had de clined during the first part of October, recov ered later in the month, and in early November were higher than in the corresponding period last year. Returns to growers of citrus fruits in Ari- Agricultural Marketing Activity — r----------- October------------\ Carlot Shipments Apples and Pears Citrus F r u i t s ... Vegetables .......... Exports W h ea t (bu .) . . . Barley (b u .) . . . Receipts Cattle ................... H o g s ...................... Sheep ................... E g g s (cases) . . . Butter (lb s.) . . W heat (carlots) Barley (carlots) 1934 11,264 4,054 8,727 131,320* 122,592* 412,217* 125,168 4,913,300 3,838 298 Storage Holdings (end of m onth) W h ea t (b u .) . . . Beans (bags) . . Butter (lb s.) . . E g gs (case's) . . . f 1934-------------- \ October September 5,386,000 6,046,000 2,636,000 1,869,000 3,079,000 5,120,000 292,000 483,000 12,500 461,374 1933 11,596 5,831 8,461 6,733 433,041 61,827* 156,256* 329,748* 109,641 5,279,108 3,269 636 *Excludes receipts at L o s Angeles. Angeles since June 30. ,------Season to Date----1934 1933 31,936 23,335 71,451 71,544 57,871 55,012 2,620,897 2,130,497 13,900 2,018,020 9 83,694 t 614,8961l,8 4 5 ,5 3 0 f 2 ,043,739f 3,8 9 1 ,9 4 2 f 3,706,216f 1,549,963 1,395,606 65,321,155 63,892,046 25,298 20,974 1,820 2,257 f------------- 1933--------------^ October September 7,937,000 7,950,000 2,226,000 754,000 10,368,000 11,032,000 360,000 562,000 fE xclu des receipts at L os FEDERAL RESERVE AGENT AT SAN FRANCISCO November 1934 zona and California during the 1933-1934 sea son were about 33 percent more than returns from the 1932-1933 crop, according to the Cali fornia Fruit Growers Exchange. Carlot ship ments of citrus fruit from the two states during the season ended November 1 were 77,416, nearly all of which originated in California. In the preceding season shipments totaled 75,383 carloads. Prices for oranges averaged about 43 percent higher in the later year, while prices for lemons averaged 8 percent higher. The 1934-1935 California Navel orange crop which is now being marketed was estimated on November 1 to be 12,282,000 boxes, slightly larger than last year’s crop. Influenced by declining butter receipts and steady or increasing demand at leading dis trict markets, the price of 92 score butter in San Francisco advanced moderately in late October, and in m id-Novem ber was 33 cents per pound, compared with 2 8 ^ cents per pound a month earlier and 2 2 Y / 2 cents per pound on November 15, 1933. Although the number of eggs received at San Francisco, Los Angeles, and Portland increased seasonally from Sep tember to October, storage stocks on Novem ber 1 were smaller than on the corresponding date of any of the past ten years. Despite these small stocks, egg prices declined steadily during the first three weeks of November, losing all of the O ctober gain, but continuing above the level of last year at this season. Although rainfall in early November started the growth of range feed and alleviated the shortage of stock water, feed supplies remain below normal requirements in a large part of the district. On the whole, cattle and sheep are Employment— / Industries A ll Industries* Stone, Clay, and Glass Products. Lumber and W ood Manufactures .. ----—Californiia------- —^ r -------- Oregon L— N o. of N o. of /— Employees — > N o. r— Employees —» N o. Oct. of Oct. of Oct. Oct. 1933 Firms 1934 1933 Firms 1934 . 895 121,803 (+4.(P 117,142 117 18,830 ( -1 5 .4 ) 43 4,240 4,239 3 135 (— 25.0) 9,897 (— 14.8) 1,265 ( + 5.9) 210 (— 3.7) 2,548 (— 38.9) (0) 22,253 180 42 11,617 89 9,273 8,785 (+ 5 .6 ) 12 1,226 8 1,195 Textiles ................ 1,314 (— 6.7) Clothing, Millinery, and Laundering. 111 218 8,151 8,151 n (0) Food, Beverages, 4,168 29 and Tobacco . . . 223 36,422 37,675 (— 3.3) Public Utilities . . 37 35,385 34,576 (+ 2 .3 ) Other Industriesf. 378 49,847 47,048 ( + 5.9) 9,930 28 4,775 4,875 Miscellaneous .. . 39 12,644 ( + 27.3) (— 2.1) Wholesale and R e ta il................ 228 32,047 31,316 ------—_ ( + 2.3) ^Public utilities, wholesale and retail figures not included in this total, flncludes the following industries: Metals, machinery, and conveyances ; leather and rubber goods ; oils and paints; printing and paper goods. JLaundering only. Figures in parentheses indicate1 percentage change from October 1933. 83 in poor to fair condition in the Twelfth Dis trict, although in some limited areas their con dition is good. Cattle and lamb prices in leading Pacific Coast markets did not change mate rially and hog prices declined slightly during October and the first half of November. The Federal Government’s purchases of live stock in emergency drought areas and its ad vances of feed loans and funds to finance the movement of livestock have been an important factor in helping stock raisers to hold their remaining herds. From August 10, when cattle buying commenced, to November 7, the Gov ernment had purchased 272,000 head of cattle in the Twelfth District. From September 15, when the sheep buying program commenced, to November 7, the number of Twelfth District sheep purchased amounted to 600,000 head. In d ustry Available measures of Twelfth District in dustrial activity decreased during October, but the downward movement was less pronounced than in September. Production was at about the same level as a year ago. Industrial employment in California, exclud ing workers employed in canning of fruits and vegetables, increased by slightly more than the seasonal amount during October. This im provement was due largely to increases in the petroleum, clothing, printing, and motion pic ture industries. Payrolls expanded more sharply than the number of workers and aver age weekly earnings advanced. This bank’s indexes of both industrial em ployment and payrolls in Oregon increased, almost entirely because the number of workers and the wages paid in the lumber industry changed little instead of showing the usual seasonal decline in October. A ctivity at Pacific Coast lumber mills expanded slightly less than the customary amount for October. Operations increased in the W estern Pine region, whereas there is usually no change, but a rise in output in the more important Douglas fir producing areas did not come up to seasonal expectations. The volume of new orders was well maintained dur ing October, but shipments of lumber de creased sharply to the lowest level since last July, when strike conditions prevailed. There was some increase in shipments, however, dur ing the first half of November. California production of crude oil averaged 467,000 barrels daily during October. Output was about the same as in September and exceeded that authorized under proration schedules by about 15,000 barrels daily. R e flecting curtailed refinery output, gasoline in ventories were reduced considerably during October. Although the petroleum code was 84 MONTHLY REVIEW OF BUSINESS c o n d i t i o n s designed to prevent the marketing and ship ping of crude oil produced in excess of code allotments, part of the “ excess” oil has never theless found market outlets. The Pacific Coast agency agreement, which prohibits its members from marketing gasoline refined from oil produced in excess of allotments, was formed by the larger oil companies in June to prevent the evasion of code provisions and it was partly successful in curbing the disposal of the excess output. This agreement was strengthened further during O ctober by the participation of several additional concerns. There was a sharp upturn during October in the amount of construction scheduled to be undertaken in the Tw elfth District. Contract awards for both Federal and non-Federal pub lic works increased moderately from the rela tively low levels of the preceding month, and permits issued for privately financed con struction more than doubled in value. The value of awards for commercial and industrial structures was the largest for any month since March. N ew residential construction continued to increase. Particularly sharp expansion took place in both the number and amount of per mits issued for alterations and repairs to exist ing structures, a result in part at least of the impetus given this type of construction by ef forts of the Federal H ousing Administration. On the basis of employment reports, the motion picture industry of California has been more active during 1934 than at any time since 1929. During the first four months of this year the principal firms employed an average of approximately twice as many workers as in the corresponding period in 1933. There was some decline in employment during May and June, reported to have resulted partly from Industry — November 1934 curtailment of operations incident to the wave of adverse criticism directed at that time to the moral standard of the pictures being pro duced. Follow ing the inauguration of more rigid censorship of pictures under the Produc tion Code Administration, however, activity was increased in July and has since been main tained around the former high level. During the first ten months of this year, employment in the motion picture industry averaged 61 percent higher than in the corresponding period of 1933. A year-to-year increase was reported in every month except September, a comparatively high month in 1933. The California canned pear pack for 1934 has been estimated at 2,738,839 cases, the largest on record. This compares with 1,977,539 cases in 1933 and the previous record pack of 2,366,593 cases in 1928. Data on the canned pear pack in the Pacific Northwest have not been released, but it is anticipated that production in that area will be about the same as in 1933, indicating that the combined output of Pacific Coast states will be at least as large as at any time on record and perhaps larger. In recent years approximately 90 per cent of the United States pear pack has been canned in these states. Unsold stocks on hand in California on June 1, 1934 totaled 108,411 cases, compared with 121,647 cases on the same date in 1933 and 415,498 cases in 1932. Open ing prices on canned pears were quoted at 25 to 30 cents per dozen higher this year than in 1933. As a result of marketing agreement restric tions on the 1934 pack of yellow cling peaches, freestone peaches were canned in larger volume than in any year since 1929 when a severe frost damaged the California cling peach crop. The 1934 freestone pack of 340,011 cases com pares with 65,144 cases in 1933 and 23,542 cases in 1931. Indexes of daily average production, adjusted for seasonal variation (1923-1925 daily average= 100) t General - 1933---------\ ------- 1934------ ---------- N Oct. Sept. Aug. July Oct. Sept. Aug. Carloadings— Industrial. 541Ï 52 Elec. Power Production 1451f 150 49r 47 152 149 49 140 49 141 48 146 52 128 151 53 60 37 131 95 118 58 80 47 124 70 108 57 105 54 134 72 116 57 93 57 137 74 115 46 103 Distribution and Trade— Oct. Manufactures Lumber .......................... 49ÏÏ 52 Refined Mineral O ils f.. 1141Í 116 Flour .............................. 8511 98 Slaughter of Livestock. 14711 168 58 65 Cement .......................... W ool Consumptiont. . .. lllr Minerals Petroleum (California) f Lead (United S ta t e s )!.. Silver (United States)$. 71K 56 71 55 36 75 44 39 78 53 40 72 64 33 74 57 39 76 36 28 30 51 64 64 34 26 33 13 18 10 17 10 15 10 16 13 13 14 13 14 13 55 88 111 209 140 286 69 234 62 106 46 78 61 113 Building and C on stru ction # Total ............ ................. Building Permits— Value Larger C itie s ............ Smaller C itie s ............ Engineering Contracts Awarded— Value T o t a l ............ ............ Excluding Buildings fN ot adjusted for seasonal variation. ^Prepared by Federal Reserve Board. #Indexes are for three months ending with the month indicated. ^Preliminary. r Revised. Carloadingsî Merchandise . . . 1934---------------- x ,------------1933Sept. Aug. Oct. Sept. Aug. July Indexes adjusted for seasonal variation (1923-1925 average—100) 621Ï 69 Tf 67 78 69 82r 72 92 60 69 63 74 61 69 78 94 71 80 81 78 74 66 78 48 75 41 86 91 81 81 93 76 76 92 73 65 57 144 69 63 117r 71 65 129 68 62 127 53 49 85 59 56 87 55 52 86 Intercoastal Trade T o t a l .................. W estb ou n d ........ Eastbound ........ Retail Trade Automobile Sales$ Total .............. Passenger . . . . Commercial . . Department Store Salesî ............ Stocks§ ........ Collections# Regular . .. Installment 78TT 61ÏÏ 78 63 49.3 18.4 45.6 17.6 76 73 68 72 62 63 69 66 A 41 17 • Actual Figures — 44.7 42.0 45.6 44.6 17.2 16.2 19.3 16.6 73 61 T„^ 41.6 17.0 JDaily average. §At end of month. #P ercen t of collections during month to amount outstanding at first of month, Preliminary, r Revised. FEDERAL RESERVE AGENT AT SAN FRANCISCO November 1934 Trade Daily average department store sales re mained unchanged at the highest level of the year during October. Moderate expansion of sales in California at a time when there is usually no change was offset by a decline in seasonally adjusted sales of reporting stores in the Pacific Northwest and in Salt Lake City. Stores in agricultural centers continued to make an exceptionally good showing as comR E T A I L T R A D E —Twelfth District Percentage changes in value of sales and stocks f --------------1934 compared with 1933 ,--------- N E T S A L E S ----------* ST O C K S Jan. 1 to end of End of October October October Department Stores . . . . Los Angeles .............. Other So. California.. Oakland ...................... San F ra n cisco ............ Bay Region .............. Central California . . . Portlandf .................... Seattle ........................ Spokane ...................... Salt Lake City .......... Apparel Stores .............. Furniture Stores .......... All S to r e s ........................ 20.1 21.9 20.0 18.5 19.9 19.2 27.1 20.1 10.0 32.2 15.7 19.6 24.9 20.6 ( 69) ( 6) ( 9) ( 5) ( 8) ( 18) ( 5) ( 8) ( 4) ( 5) ( 4) ( 32) ( 34) (135) 9.1 5.0 8.8 5.4 8.0 7.7 14.4 11.7 11.6 29.1 14.6 12.3 11.3 9.7 — 10.3 — 17.0 — 13.9 — 0.4 — 9.1 — 6.8 — 8.3 — 10.3 — 5.7 12.4 — 4.8 — 8.5 — 11.1 — 10.3 ( ( ( ( ( ( ( ( ( ( ( ( ( ( 50) 6) 5) 5) 7) 16) 5) 7) 4) 5) 3) 21) 26) 97) since retail prices at which goods were sold were about the same as those prevailing a year ago, according to the Fairchild index of prices at department stores. The number of sales transactions of reporting stores was 13 percent greater than in October 1933. Freight loaded on district railroads increased during October, but by considerably less than the large expansion customary in that month. Seasonally adjusted indexes for both Califor nia and the Pacific Northwest decreased, the decline being particularly sharp in the former region. W holesale trade increased moderately be tween September and October. Sales of agri cultural implements, automobile supplies, drugs, electrical supplies, groceries, and hard ware showed increases, while furniture sales were practically unchanged and sales of shoes and paper declined. A ll lines, excepting furni ture, for which figures are received reported substantially larger sales than in October 1933. The composite year-period increase was 21 percent. W H O L E S A L E T R A D E —Twelfth District Percentage changes in value of sales tlncludes five apparel stores which are not included in district department store total. Figures in parentheses indicate number of stores reporting. pared with last year. Total value of sales exceeded that of a year earlier by 20 percent, the largest year-period increase since last March. This increase apparently represented almost entirely a larger volume of goods sold, Bank Debits*Arizona P h o e n ix ............... $ California Bakersfield .. . Berkeley .......... Fresno ............... L o n g Beach . . Los Angeles . . . Oakland ............ Pasadena .......... Sacramento . . . San Bernardino. San D iego . . . San Francisco. . San Jose .......... Santa Barbara. S t o c k t o n ............ Idaho Boise ................... Nevada R eno ................... Oregon Eugene ............... Portland ............ U tah O gden ................. Salt Lake C ity. W ashin gton Bellingham Everett ............... Seattle ............... Spokane ............ Tacom a ............ W alla W alla . ., Y a k i m a ............... Total October 1934 27,791 $ October 1933 $ 17,763 First ten months 1934 19331 249,890 $ 172,128 16,281 13,858 27,367 23,384 543,645 189,223 17,834 70,322 5,838 29,316 704,064 21,263 8,659 15,802 8,105 13,878 18,554 20,601 506,686 153,783 17,004 26,240 4,492 27,114 677,259 17,690 7,620 12,218 92,241 182,916 177,789 226,558 5,334,661 1,640,155 179,517 599,272 56,119 292,633 6,795,471 167,742 80,642 139,475 67,774 117,474 128,286 220,671 4,989,760 1,573,706 178,181 267,042 45,176 283,648 6,143,335 137,866 70,394 108,011 15,027 11,016 118,078 88,322 8,541 5,075 74,729 47,909 4,550 131,023 3,604 107,505 40,050 1,229,061 29,894 990,277 11,986 55,682 10,773 43,457 123,105 472,881 91,599 391,078 4,613 5,266 147,243 4,241 4,827 126,202 24,171 20,364 3,429 10,227 46,079 51,378 1,366,469 299,294 222,095 41,447 103,755 40,240 46,438 1,185,596 208,010 182,588 30,431 67,189 3 3 ,9 2 2 23,499 4,554 14,212 ............$2,174,765 $1,903,898 $20,403,502 $17,903,023 *In thousands of dollars, fMarch 1933 figures were incomplete for some cities during the banking holiday period. 85 Agricultural Implements Autom obile Supplies . . . . D rugs ...................................... D ry Goods ............................. Electrical Supplies .......... Furniture ............................... Groceries ............................... H a r d w a r e ............................... Shoes ...................................... Paper and Stationery . . . . A ll Lines ............................... October 1934 ,— compared with — \ Sept. 1934 Oct. 1933 16.5 77.6 2.7 13.1 25.1 12.9 — 0.1 22.5 20.8 11.8 0.4 — 27.4 4.8 28.1 7.1 17.2 — 7.2 18.3 31.5 — 4.6 5.4 21.5 Cumulative 1934 compared with 1933 69.8 11.3 24.5 15.0 37.2 — 0.8 16.2 27.2 14.3 21.5 21.4 W ater-borne intercoastal traffic continued to increase during October, although by a some what smaller amount than is customary for that month. Eastbound shipments of lumber and petroleum declined substantially during the month, while movement of other cargo to the Atlantic Coast increased. Shipments from the Atlantic to the Pacific Coast expanded. New automobile sales decreased somewhat less than seasonally during October. Registra tions of new passenger cars receded by the usual amount, but sales of commercial vehicles remained unchanged, whereas a considerable reduction is expected in October. Aggregate sales were larger than in any other October since 1930. Prices After declining slightly during October, most weekly indexes of wholesale com m odity prices in the United States advanced in the first half of N ovem ber and at the middle of the month were about the same as a month earlier. This upturn in national prices during the first half of November was not accompanied by November 1934 MONTHLY REVIEW OF BUSINESS CONDITIONS 86 higher prices in the Tw elfth District, although there was a tendency toward price stability in this area. W heat prices in leading district markets changed little during the period under review, and barley and oat quotations also remained steady. Alfalfa hay prices increased in San Francisco but declined in the Los Angeles area. Potato prices tended slightly upward. Except for canned pear prices, which showed a minor decline, quotations on canned fruits were stable between m id-October and m id-November. Prices of dried apples and dried apricots decreased slightly, while prune prices firmed and quotations on raisins re mained unchanged. The spot price for foreign silver at New York stood at 55% cents per ounce on N ovem ber 13, the highest point since April 1929. The code rice for domestic copper remained at 9 cents per pound and quotations on copper for export fluctuated around 6.85 cents per pound c.i.f. European ports. Zinc prices declined slightly and lead prices changed little. The Credit Situation Tw elfth District credit conditions continued the tendencies of other recent months during the period from O ctober 17 to November 21. Federal Government disbursements in this area continued to exceed local collections by a substantial amount, thus contributing further to the supply of district banking reserves. Total Government disbursements exclusive of currency and securities redemptions amounted to 96 million dollars during the five weeks. The principal departments or agencies spending money or making loans and the amount dis bursed by each were as fo llo w s : Reconstruc tion Finance Corporation, H om e Owners’ Loan Corporation, and Federal Em ergency Adm inis tration of Public W orks, 20 million dollars; Army, Navy, and Veterans, 19 million dollars; Post Office, 18 million dollars; San Francisco Mint and Seattle Assay Office, 9 million dollars ; Farm Credit Administration and other agri cultural agencies, 7 million dollars. Twelfth District collections by the Treasury between O ctober 17 and November 21 totaled only 46 million dollars, leaving 50 million dollars as the net amount of Federal Government disburse ments in this area during the five weeks. All of this amount constituted an addition to the Twelfth District supply of banking reserves. This increase was offset almost entirely, how ever, by a movement of funds out of the Twelfth District because of commercial and financial transactions and by an increased de mand for currency within the district, with the result that member bank reserve deposits changed little. Between October 17 and Novem ber 21 total loans and investments of reporting member banks increased moderately as a result of addi tional holdings of United States Government securities. Commercial and real estate loans declined during this period. Net demand de posits increased, while United States deposits decreased, and total deposits remained un changed. During 1934 to date, the United States Treasury has made net disbursements in this region averaging $5,070,000 a week. Since the end of June, these disbursements have averF E D E R A L R E SE R VE B A N K O F S A N F R A N C IS C O (in millions of dollars) S O U R C E S A N D U SE S O F B A N K I N G R E S E R V E S Twelfth District Changes in millions of dollars during the weeks indicated f N ov. 21 1934 SO U R C ES O F F U N D S W eek Ending 1934 September 19. September 26. October 3. . . October 10. . . October 1 7 ... October 24. . . October 31. . . November 7. November 14. November 21. W eek Ending 1934 September 19. September 26. October 3. . . October 10. . . October 1 7 ... October 24. .. October 31. . . November 7. November 14. November 21. Reserve Bank Credit + -6 — — + + — — 4+ + .3 1.8 .5 4.0 2.9 .5 .6 1.6 .1 — 7.6 — 9.9 + 9.8 — 8.1 + 11.7 — 19.8 — 12.9 + .6 — 6.4 — 17.1 U SE S O F F U N D S Member Bank Demand Re serve for Deposits Currency — — + + — — + + — — 3.6 2.3 5.7 .7 .4 3.8 2.4 6.7 3.1 2.7 *Change less than $50,000. Commercial Opérations — 1.9 + 3.2 + 5.8 * + 14.5 — 3.7 — 7.6 + 8.0 + 5.7 — 8.4 Treasury Operations + 1.7 + 10.4 + 3.3 + 8.9 — 2.3 + 16.1 + 6.9 + 12.5 + 7.2 + 7.0 Total Supply — 5.3 + .2 + 11.3 + 1.3 + 13.4 — 6.6 — 6.5 + 13.7 + 2.4 — 10.0 Total Bills and Securities.......... Bills D iscou n ted ...................... Bills Bought ............................ United States Securities.......... Total R eserves.............................. Total Deposits ............................ Federal Reserve Notes in C irculation................................ Ratio of Total Reserves to De posit and Federal Reserve Note Liabilities C om bined... -----Cond ition------- -------------N N ov. 14 Oct. 17 N ov. 22 1934 1934 1933 168 167 Ì66 327 268 i 66 338 276 “ i 166 338 277 172 3 3 166 275 197 213 215 214 212 168 68.0 68.7 68.9 67.2 R E P O R T IN G M E M B E R B A N K S —Twelfth District (in millions of dollars) r Other F .R .B . Accounts + .2 — .7 — .2 + .6 — .7 + .9 — 1.3 — 1.0 — .2 + 1.1 Total Demand — 5.3 + -2 + 11.3 + 1.3 + 13.4 — 6.6 — 6.5 + 13.7 + 2.4 — 10.0 Condition ■\ N ov. 21 N ov. 14 Oct. 17 N ov. 22 1934 1934 1933 1934 Loans and Investments— Total. 1,895 Loans— T o t a l.......................... 893 215 On S ecu rities...................... 678 All Other .......................... 1,002 Investments— Total .............. 620 United States S ecurities... 382 Other Securities ................ 159 Reserve with Reserve B a n k .. . . 732 Net Demand Deposits.............. 934 Time D e p o s its ............................ 192 Due from Banks ...................... 211 Due to Banks ............................ Borrowings at Reserve Bank. . . ... 1,894 899 216 683 995 619 376 161 739 937 191 218 ... 1,880 900 214 686 980 598 382 161 721 935 186 206 ... 1,695 891 218 673 804 485 319 101 585 858 139 133 1 November 1934 FEDERAL RESERVE AGENT AT SAN FRANCISCO aged $6,750,000 a week, compared with an average of $3,770,000 weekly during the first half of the year. The explanation of the larger net payments during recent months is to be found largely in a decrease in Treasury col lections in this area. This steady and substan tial addition to funds available to district banks has accounted for most of the significant changes in the local credit situation this year. There has been a concentration of these funds in city banks through the growth of individual deposits and of correspondent balances of country banks. Treasury disbursements have been directly responsible for an increase of 65 million dollars in member bank reserve bal ances since the beginning of the year and have contributed a large part of the funds trans ferred to eastern markets by city banks for the purchase of substantial amounts of securities during that period. Directly or indirectly Government expenditures have also been the principal reason for increases of 57 million dollars in time deposits and of 148 million dol lars in net demand deposits at reporting mem ber banks this year. Twelfth District city banks have reported large increases in balances due to other banks, principally country banks located in this dis trict, during recent weeks. These balances have averaged higher than at any time since late 1931 and have been about the same in amount as in the years immediately preceding that 87 date. As during the past two years, Twelfth District city banks’ balances in eastern banks constitute an amount larger in proportion to the balances deposited with them by other banks than was ordinarily the case prior to the depression. Although trading on the district stock exchanges was slightly greater in October than in September, turnover remained extremely small. Prices advanced somewhat during O cto ber and early November. The Los Angeles Curb Exchange consolidated with the Los A n geles Stock Exchange at the end of October, after a declining volume of trading throughout most of its six years of business life. Gold and S ilre r During the five weeks ending November 16 the San Francisco Mint and Seattle Assay Office purchased gold amounting to 9 million dollars and silver amounting to \y 2 million dollars. M ost of the gold came from new domestic production, although some was re ceived from secondary sources and a little from imports. The 1^2 million dollars disbursed for silver reflected purchases of 2,283,057 ounces of that metal, 2,053,055 ounces of which was new domestic production at 64.5 cents per ounce, and 230,002 ounces other silver purchased at 50.01 cents per ounce under the executive order of August 9 nationalizing all silver other than the newly-mined metal. S U M M A R Y O F N A T IO N A L C O N D IT IO N S P re p a red by the F ederal R e se rv e B oa rd Volum e of industrial production and factory employment, which usually shows little change at this season, increased in October, reflecting chiefly the resumption of activity at textile mills. W holesale com m odity prices, after de clining in September and October, advanced in the first half of November. Industrial Production and Employment. A ctivity at industrial establishments, as meas ured by the Board’s seasonally adjusted index, showed an increase from 71 percent of the 1923-1925 average in September to 73 per cent in October. A m ong the industries pro ducing durable manufactures, output at steel mills increased from 23 percent of capacity for the month of September to 25 percent for O cto ber, while output of automobiles and lumber declined. In November activity at steel mills continued to increase and in the week ending Novem ber 24 was at about 28 percent of capacity. Autom obile production has declined further in connection with the preparation of new models. The production of non-durable manufactures in the aggregate showed a con siderable growth in October, reflecting sharp increases at cotton, woolen, and silk mills, off set in part by a decline in activity at meat packing establishments. The increase in out put at textile mills after the strike in Septem ber brought output to a higher level than in August. A m ong the minerals, daily output of crude petroleum declined in October and that of anthracite increased by an amount smaller than is usual at this season. Factor}^ employment and payrolls in the country as a whole increased considerably be tween the middle of September and the middle of October. Sharp increases were reported at mills producing textile fabrics, while in the automobile, shoe, and canning industries there were declines of a seasonal nature. The value of construction contracts awarded was somewhat larger in October than in any other recent month. There was an increase in residential work as well as in publicly-financed projects. MONTHLY REVIEW OF BUSINESS CONDITIONS 88 Agriculture. Department of Agriculture esti mates, based on November 1 conditions, indi cate a cotton crop of 9,634,000 bales, 26 percent smaller than the 1933 crop, and a corn crop of 1,372,000,000 bushels, 41 percent smaller than last season and 45 percent smaller than the 19271931 average. The tobacco crop is also consid erably smaller than usual, while the potato crop is slightly above the five-year average. November 1934 farm products. The price of scrap steel also advanced, while lead and zinc declined. Bank Credit. Excess reserves of member banks were about $1,910,000,000 on N ovem ber 21, showing an increase of $150,000,000 in the preceding five weeks. The increase in re serves held was $200,000,000, of which $50,000,000 covered a growth in required reserves. Additions to reserves resulted mainly from gold PER CENT 1929 1930 I N D U S T R I A L P R O D U C T IO N Index numbers of industrial production, adjusted for seasonal varia* tion (1923-1925 average «=100). Distribution. The number of freight cars loaded per working day decreased from Septem ber to October. Department store sales showed a seasonal increase and were at about the same level, on a seasonally adjusted basis, as in most other months since March. Rural sales of gen eral merchandise, as reported by the Depart ment of Commerce, increased by less than the usual seasonal amount follow ing an unusually large increase in September. 1931 1932 1933 1934 D E P A R T M E N T STO R E SALES Indexes of daily average value of sales. (1923-1925=100). imports and further issues of silver certificates. Loans and investments of reporting member banks in leading cities declined somewhat in the four weeks ending Novem ber 14, follow ing an increase in the previous month. Sub stantial declines were shown in loans on securi ties and in holdings of securities other than those of the United States Government. Other loans, which had increased considerably in previous months, also showed some decline, PER CENT 1932 1933 1934 FACTO RY EM PLOYM ENT M E M B E R B A N K C R E D IT Federal Reserve Board’ s index of factory employment with adjust Wednesday figures for reporting member banks in 90 leading cities. ment for seasonal variation (1923-1925 average=100). Latest figures are for November 14. Com m odity Prices. W holesale com m odity prices, as measured by the Bureau of Labor Statistics’ weekly index, declined from 77.8 percent of the 1926 average in the week ending September 8 to 76.0 percent in the week ending November 3 and then rose in the follow ing two weeks to 76.7 percent. The decline was largely in prices of farm products and foods but there were also some decreases in the prices of textiles and building materials. Increases in the first half of N ovem ber were largely in the prices of while holdings of direct obligations of the United States Government and of securities fully guaranteed by the Government increased considerably. Customers’ deposits continued to increase, while Government deposits declined. There was a further decline in open-market rates on bankers’ acceptances at the end of O ctober to an offering rate of percent, Yields on short-term Government securities and other short-term open-market money rates showed little change.
@FedFRASER