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MONTHLY REVIEW
OF
B U S IN E S S
C O N D IT IO N S
ISA A C B. NEWTON, Chairman of the Board and Federal Reserve Agent
Federal Reserve Bank of San Francisco
Vol. X V I
San Francisco, California, November 21,1932
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
Most of the September gain in Twelfth Dis
trict industrial activity was lost in October,
after allowance for seasonal changes, but the
sale and distribution of commodities was rela
tively well maintained during the month. The
easy money conditions of the past few months
continued in general, although renewed strain
became evident among country banks in some
areas. There was an adequate supply of funds
in the principal banking centers of the District.
Harvesting was nearly completed in October,
facilitated by the absence of the usual amount
of rainfall at this season. Ranges were not ap
preciably affected by the lack of moisture,
however, and the quality of livestock marketed
continued to be good. Marketing activity in
creased seasonally from September to October,
but remained less than in the corresponding
month of the preceding year. Prices for farm
products receded in October, approaching their
mid-summer lows.
Crude oil was produced at a slightly lower
rate in California during the six weeks ending
with mid-November, than in September. The
small decline failed by a considerable amount,
however, to bring output within the limits of
the current proration schedules. Activity at
refineries increased during the month, notwith
standing which gasoline inventories were re
duced. Lumber production increased less than
is usual from September to October, and orders
received by mills declined sharply. Activity at
flour mills receded, contrary to the seasonal
tendency. A decrease in the adjusted index of
electric power production offset an advance
in the preceding month. The ill effects of sea
sonal decreases in employment were mitigated
to a considerable degree by cooperative efforts
to spread available work and create new jobs.
W age rates were reported to have changed
little.
Department store sales continued to rise
from September to October, although a slight
decline is usual between those months. Inter
coastal traffic expanded further, after allowance
for seasonal factors, while automobile registra
tions declined. Freight carloadings increased
seasonally during October.
Demand for currency increased substantially
during the four weeks ended November 16, but,
since the additional currency issued consisted
entirely of national bank notes, no added strain
was placed upon the District banking structure.
Treasury expenditures in excess of collections
within the District not only offset an outflow
of funds to other parts of the United States on
commercial account, but also made possible a
reduction in borrowings from the Reserve
Bank. Except for further declines in commer
cial loans, there were no significant changes in
the condition of reporting member banks. In
certain country areas, notably Nevada, the
banking situation became more strained during
October and early November.
Agriculture
Harvesting of the District’s late maturing
crops was completed during October and early
November. Estimates of the volume of crops
produced in the District during 1932 have
not changed materially during the past three
months and it is now certain that production
of grains, field crops, fruits, and vegetables
has been greater this year than in 1931. Con
siderable quantities of fruits have not been
harvested, however, because of persistently un
favorable market conditions during the greater
part of 1932. The quality of livestock mar
keted during the autumn shipping season this
year reflects the improved range conditions
evident in the late spring and summer months.
Although fall ranges are dry, feeding conditions
have been relatively good. Forage on desert
ranges, which are used in some portions of the
District for the winter feeding of livestock, is
better than a year ago. In California, rain is
needed to start the growth of forage on winter
grazing ranges in the lower altitudes.
The volume of most crops and animal prod
ucts marketed during October of this year was
smaller than in October, 1931. The same year-
82
M O N T H L Y R EVIEW OF BUSINESS CONDITIONS
to-year relationship was shown during July,
August, and September. Reflecting the reduced
volume of agricultural marketings and a lower
level of prices, this Bank’s quarterly index of
the value of agricultural products marketed was
substantially lower, at 67 per cent of the 19251927 average, in the third quarter of 1932 than
in the third quarter of 1931, when the index
stood at 79.
PER CENT
VALUE OF AGRICULTURAL PRODUCTS MARKETED
Twelfth District
(1925-1927 average= 100)
During late October, rainfall throughout the
Pacific Northwest was helpful to the develop
ment of winter wheat, although cool weather
retarded the autumn growth of that crop. Lack
of rainfall in California has delayed the usual
fall tillage operations.
Movement of the 1932 California grape crop
to market had been practically completed at the
end of October. During the 1932 marketing
season to November 1, shipments of grapes
totaled 36,931 carloads, compared with 35,119
carloads shipped during a similar period in
1931. Prices paid growers were lower than in
any season since 1928, reports indicating that
considerable quantities of grapes sold at eastern
auction markets for prices scarcely high enough
A g r ic u ltu r a l M a r k e tin g A c tiv ity —
— October *
\ f— Season to Date ^
1932
1931
1932
1931
Carlot Shipments
77,940
83,434
22,207
30,228
Deciduous Fruit.
76,777
81,316
5,647
5,280
Citrus Fruit ___
24,219
33,243
5,772
5,602
Vegetables ..........
Exports
1,685,848
11,553,753
5,459,825
38,833
Wheat (bu.) ----2,900,557 2,411,620
539,972
942,700
Barley (bu.) ----Receipts
435,843
475,793
64,719
55,770
Cattle* ................
1,687,948 1,403,204
168,307
142,130
Hogs* ..................
3,412,847 4,093,221
358,489
323,065
Sheep* ................
1,396,405 1,590,113
135,174
89,452
Eggs (cases) . . . .
,423,397 5,738,672 67,635,139 67,090,541
Butter ( l b .) ........
20,169
23,737
3,994
6,076
Wheat (carlots) ..
2,746
2,646
672
643
Barley (carlots) .
Storage Holdings
(end of month)
Wheat ( b u .) .......... 3,211,000 8,339,000
Beans (b a g s )........ 2 225,862 2,595,248
Butter (lb.) .......... 3,373,018 2,258,170
300,252
267,142
Eggs (cases) .
*Receipts at Los Angeles not included.
November, 1932
or too low to cover shipping costs. Total pro
duction of grapes in California this year was
estimated on November 1 to be 1,882,000 tons
compared with a crop of 1,320,000 tons in 1931
and an average annual production of 2,097,000
tons from 1924 through 1928. Estimates of the
commercial apple crop (that part of total apple
production which is marketed) in the District
have been reduced 12 per cent since September,
due chiefly to decreases in the State of W a sh
ington where heavy culling has been necessary
to meet present grade requirements and where
the local market outlet for low grade fruit has
been restricted. It is still expected that the
commercial crop will be equal to or slightly
larger than in 1931, however, the November 1
estimate for California, Idaho, Oregon, and
Washington combined being 36,966,000 bushels,
compared with 36,588,000 bushels marketed in
1931. From 1926 through 1930, commercial
apple production in these states averaged
41,502,000 bushels. Shipments during the sea
son to November 1, totaled 17,241 carloads this
year, compared with 19,659 carloads during the
same part of last season.
The forthcoming Navel orange crop in Cali
fornia is maturing slowly and is now estimated
to be about 14,715,000 boxes, or approximately
the size of the crop a year ago. The crop is
described as being made up largely of medium
sized good quality fruit. The 1932-1933 lemon
crop is estimated to be 6,436,000 boxes, an
amount somewhat larger than was marketed
during the year ending November 1, 1932.
Shipments of oranges and lemons during the
twelve months ending November 1, 1932, were
63,175 carloads and 13,602 carloads, respecE m p lo y m e n t—
California--------\ /--------- —Oregon —
No. of
No. of
No.
Employees —> No.
r~ Employees —^
of
Oct.,
of
Oct.,
Oct.,
Oct.,
Industries
Firms 1932
1932
1931
1931 Firms
All Industries*
1,241 141,679 151,484
119
18,303
16,665
(-6.5)
(-8.9)
Stone, Clay and
Glass Products.. 63
5,072
6,478
( —21.7)
Lumber and Wood
43
7,989
Manufactures .. 140 14,085 18,180
9,273
(--13.8)
(-—22.5)
1,821
7
595
17
1,756
844
(— 3.6)
(--29.5)
Clothing, Millinery,
and Laundering 167 12,650 13,727
6$
210
247
(--1 5 .0)
Food, Beverages, and (— 7.8)
33
3,528
3,079
Tobacco .......... 297 41,521 38,173
(8.8)
(14.6)
Public Utilities.. . 42 47,613 52,221
(— 8.8)
Other Industriesf. 508 59,099 66,002
(— 10.5)
30
7,496
7,103
4,343
4,860
Miscellaneous . . . 49
(5.5)
(--1 0 .6 )
Wholesale and
189 32,564 36,314
(— 10.3)
*Public utilities and wholesale and retail figures not included in
this total, flncludes the following industries: Metals, ma
chinery, and conveyances; leather and rubber goods; oils and
paints; printing and paper goods. $Laundering only.
Figures in parentheses indicate percentage change from Octo
ber, 1931.
November, 1932
FEDERAL RESERVE AG EN T A T SAN FRANCISCO
tively, compared with 65,394 carloads and 15,922
carloads shipped during the crop season ending
November 1, 1931. Auction market returns for
oranges continued low during October as in
other recent months, while lemon prices ad
vanced.
Production of butter and eggs in the Pacific
Coast states declined during October. Although
the decline was accompanied by some reduc
tions in storage stocks, inventories of these
products remained larger on November 1, 1932,
than a year earlier.
Industry
A slight decline in Twelfth District indus
trial activity was recorded in October, follow
ing some advance in the two preceding months.
Lumbering and flour milling receded, after
allowance for seasonal factors. Activity in the
petroleum and construction industries changed
little. Electric power production declined by a
greater amount than is usual from September
to October.
Employment conditions were reported to
have improved in most parts of the District,
partly as a result of the continued efforts of
the spread-the-work program of the Twelfth
District Industrial and Banking Committee.
Data compiled by the California State Division
of Labor Statistics indicate that the reduction
in employment in that State from September to
October was smaller than has been recorded
between these months in most other recent
years. Furthermore, wage payments showed
little change and there was, therefore, a small
increase in average weekly earnings. The yearperiod decrease in employment has been re
duced considerably during the past five months,
and in October it was only 6.5 per cent. For
83
the most part, this apparent improvement may
be attributed to extremely sharp declines a
year ago rather than to an appreciable increase
in employment during recent months. In com
parison with last year the petroleum, textile,
and printing industries reported small reduc
tions in number of employed, while increases
over October, 1931, appeared in the motion pic
ture, canning, and miscellaneous food products
industries. Seasonal decreases in agricultural
employment were reported in most District
states.
A smaller than seasonal increase in the vol
ume of lumber cut during October may be
attributed entirely to reduced output in the
Western Pine region where operations during
preceding months had been maintained at a
relatively higher rate than in the District as a
whole. Activity in the Douglas Fir and Cali
fornia Redwood areas continued to increase
moderately during October, after allowance for
seasonal factors. Lumber orders receded con
siderably, approaching production levels, but
shipments were relatively well sustained. As
indicated by the accompanying chart lumber
production, seasonal movements allowed for,
declined almost continuously from late 1929 to
the end of 1931. Since the beginning of the cur
rent year output, although at an extremely low
level, has been practically unchanged.
While both the value of engineering contracts
awarded and building permits issued were per
ceptibly higher in October than in September,
there was a considerable drop in this Bank’s
seasonally adjusted index of their combined
total computed from an average of the last three
months. That index stood at 28 (1923-1925 aver
age = 100) in October, as compared with 33 in
September and 47 in October, 1931. The decline
was due to the dropping from the index for the
LUMBER PRODUCTION—Twelfth District
Indexes adjusted for seasonal variation (1923-1925 monthly average —100)
84
November, 1932
M O N T H L Y R EVIEW OF BUSINESS CONDITIONS
latest month of rather large Federal Govern
ment contracts in July, the month immediately
preceding the latest period for which the index
was computed. That class of engineering awards
has comprised an increasingly large proportion
of total construction in the District since 1927.
Awarding of the Hoover Dam contracts in
March, 1931, greatly enlarged the total for that
year, and in the first ten months of 1932, Fed
eral Government projects continued to be in
itiated on a relatively large scale. The value of
other public works construction has also been
comparatively well maintained during the past
two years, in part reflecting the speeding up by
state and municipal governments of contem
plated construction and the creation of addi
tional programs to provide employment. Loans
granted by the Reconstruction Finance Cor
poration to states have afforded some stimula
tion during the past two months. Contracts for
the Golden Gate Bridge amounting to $23,289,000 were awarded in early November (tentative
contracts let in July, 1931, had expired). On the
other hand, residential, commercial, and indus
trial building has declined almost uninterrupt
edly for the past seven years to the present
extraordinarily low level of approximately 10
per cent of the 1923-1925 average.
California crude oil production averaged
slightly lower in October than in September.
This decrease would doubtless have been larger
but for a series of ten-day capacity flow tests in
the Los Angeles basin area to determine new
potentials for certain producing fields. A l
though a considerable reduction was recorded
in late October and early November, output
averaged approximately 30,000 barrels above
the proration allowable of 440,000 barrels daily
during the first three weeks of November. Not
withstanding the fact that the quantity of crude
oil run to refinery stills was greater during
these weeks than in September, there was some
decrease in gasoline inventories, reflecting in
part increased shipments to the Atlantic sea
board.
Although production of flour usually expands
considerably at this season of the year, a de
crease was reported for October. Despite the
reduced output, inventories were larger at the
close of the month than at its beginning.
Millers’ stocks of wheat, however, were re
ported to have been reduced during October.
Industry—
D istr ib u tio n a n d T r a d e —
Trade
Sales of department stores increased mod
erately during October, following a net advance
of approximately seasonal proportions in the
three preceding months. Increases in sales of
San Francisco and Seattle stores were contrary
to the usual experience recorded from Septem
ber to October, and sales of Oakland and Salt
Lake City stores advanced more than season
ally. Los Angeles stores reported a somewhat
larger than customary decrease. The yearperiod reduction in total value of sales remained
about the same in October as in September. If
allowance is made for the fact that there was
one more business day in October, 1931, than in
October, 1932, however, the decline from the
preceding year was smaller than in September.
The number of sales transactions was 11 per
cent smaller than in October of last year.
Merchandise inventories continued to increase,
but at less than the seasonal rate.
Total freight carloadings increased by the
usual substantial amount from September to
October. Shipments of merchandise and mis-
,------------ 1932------------- s
,
1931--------- s
Oct. Sept. Aug. July
Oct. Sept. Aug.
Indexes adjusted for seasonal variations
/--------------- (1923-1925 average=100)------------- >
591f
59 52
57
66 71
72
7111
73 68
74
78 84
85
Indexes of daily average production, adjusted for seasonal variations
(1923-1925 daily average« 100)
,-----------------
General
° ctCarloadings— Industrial.. 41 If
Electric Pwr. Production. 135if
Manufactures
Lumber ............................. 36
Refined Mineral Oilst. . .
Flour .............. ^................. 75
Slaughter of Livestock..
Cement.............................. 42
Wool Consumptionf . . . .
Minerals
Petroleum (California)t. 7211
Lead (United States)Î . . 38
Silver (United States) $. 36
Building and Construction§
T otal................................... 28
Building Permits— Value
Larger Cities................ 10
Smaller Cities.............. 13
Engineering Contracts
Awarded— V aluei
T o ta l.......................... 52
Excluding Buildings. 91
1932
----------------
*------- 1931-------- s
Oct. Sept. Aug.
51
54
53
148 155 153
40
139
Au^- Julv
31
34
135 134
37
127
93
91
42
144
33
131
109
94
45
128
35
131
85
87
51
82
47
142
117
98
65
115
54
146
102
102
56
91
53
140
88
99
57
101
72
41
36
73
33
41
72
31
40
76
68
40
77
67
39
77
61
45
33
32
29
47
62
72
10
13
10
13
12
14
26
29
30
33
32
36
63
122
63
123
53
96
78
121
107
189
128
238
fN ot adjusted for seasonal variations. $Prepared by Federal Re
serve Board. § Indexes are for three months ending with the
nionth indicated. HPreliminary.
Carloadingst
Total ......................
Merchandise..........
Foreign Trade®
Total f ............................
Imports f ........................
E xp orts..........................
Intercoastal Trade
Total ...................... 62
Westbound ............ 70
Eastbound.............. 58
Retail Trade
Automobile Sales!
Total .................. 28
Passenger .......... 26
Commercial........ 50
Department Store
Sales*.................. 75
Stocks § .............. 61
Collections#
Regular ..........
Installment . . .
47
38
51
46
40
49
45
39
48
64
63
67
75
61
81
77
64
83
55
53
54
49
61
47
45
72
39
71
78
67
80
86
76
65
82
62
33
31
47
29
28
48
30
28
50
46
41
89
58
54
97
56
49
97
73
63
73
63
72
67
95
84
92
86
100
87
t------------------- Actual Figures -------------------->
43.3
14.7
39.6
14.0
38.6
14.4
39.2
13.4
45.5
15.7
41.5
15.1
41.2
15.9
JDaily average. ° Indexes are for three months ending with
month indicated. fExcluding raw silk. §At end of month.
#Per cent of collections during month to amount outstanding
at first of month, ftPreliminary.
November, 1932
cellaneous freight, which customarily account
for nearly the entire advance, increased some
what less than seasonally, while loadings of
industrial freight increased slightly after sea
sonal adjustment.
Intercoastal traffic expanded considerably
further during October, and this Bank’s index,
adjusted for seasonal variations, advanced to
62 per cent of the 1923-1925 average, the highest
point yet reached in 1932. A t 45 in July the
index stood at the lowest point recorded thus
far this year. The greater part of the increase
from July to October resulted from increases
in eastbound traffic, principally larger petro
leum shipments. Atlantic to Pacific traffic was
also larger in October than in September.
RETAIL TRADE-Twelfth District
Percentage changes in value of sales and stocks
with no adjustment for price changes
•1932 compared with 1931 STOCKS
NET SALES
January 1 to end
October
of October
October
Department Stores .
■22.7 ( 68) — 24.2 ( 6 6 ) — 25.9 ( 5 2 )
Los Angeles ............ — 22.0 (' 10) — 23.2 ( 1 0 ) — 26.6 ( 9 )
Other Southern Calif. — 18.5 ( 8) — 25.5 ( 7 ) — 18.4 ( 5 )
Oakland .................... — 22.7 ( 4) —22.8 ( 4)" — 27.7 ( 4 )
San Francisco ........ — 23.6 ( 7) — 2 0.7 ( 7) — 24.1 ( 7 )
Other Northern Calif. — 21.2 ( 8) — 22.3 ( 8) — 16.7 ( 8 )
Portland! .................. — 26.2 ( 7) — 31.6 ( 6) — 37.5 ( 7 )
Seattle ...................... — 20.6 ( 5) — 29.7 ( 5) — 27.2 ( 5 )
Spokane .................... — 25.5 ( 4) — 23.9 ( 4) — 19.1 ( 4 )
Salt Lake C it y ........ — 27.5 ( 4) — 26.1 ( 4) — 16.1 ( 3 )
Apparel Stores ............ — 19.4 ( 27) — 24.6 ( 2 2 ) — 28.3 ( 1 5 )
Furniture Stores.......... — 33.3 ( 38) — 30.1 ( 3 5 ) — 27.5 ( 3 1 )
All Stores .................... — 23.7 (133) — 24.9 (1 2 3 ) — 26.3 ( 9 8 )
tIncludes five apparel stores which are not included in District
department store total.
Figures in parentheses indicate number of stores reporting.
Note: These figures take no account of operating costs.
Value of wholesale trade decreased 7 per cent
from September to October. Sales of reporting
automobile supplies, dry goods, and hardware
wholesalers were only slightly smaller in value
than in the preceding month, while sales of
reporting drug houses increased, as is cusWHOLESALE TRADE—Twelfth District
Percentage changes in value of sales with
no adjustment for price changes
October, 1932
r------ compared with-------^
Agricultural Implements
Automobile Supplies . . .
Drugs ................................
Dry Goods ......................
Electrical Supplies ........
Furniture..........................
Groceries ..........................
Hardware ........................
Shoes ................................
Paper and Stationery . . .
All Lines ..........................
Sept., 1932
. . — 8.0
. — 1.9
.
,
— 3.4
— 10.0
Oct., 1931
— 45.4
— 17.3
— 22.5
— 21.0
— 39.1
— 36.4
— 20.6
— 21.9
— 5.1
— 17.4
— 22.9
Cumulative
1932
compared
with 1931
— 39.7
— 20.4
— 20.5
— 32.1
— 43.0
— 36.3
— 18.6
— 29.3
— 27.8
— 20.9
— 25.6
Note: These figures take no account of operating costs.
tomary during October. The reduction from
the corresponding month in the preceding
year was slightly larger in October than in
September.
Daily average sales of automobiles receded
more than is customary from September to
October and this Bank’s adjusted index de
clined to the lowest level recorded in any month
85
FEDERAL RESERVE AG EN T AT SAN FRANCISCO
in the ten years for which figures have been
compiled. The entire decline in the index re
sulted from decreased registrations of new
passenger cars, commercial vehicles having in
creased after seasonal adjustment.
The value of the District’s foreign trade was
lower during the three months ending with
September than in the second quarter of this
year. Imports, excluding raw silk, decreased
sharply in value and more than offset a con
siderable increase in exports. The increased
value of exports resulted partly from a marked
rise in canned fruit shipments in anticipation of
new tariff schedules announced by some for
eign countries to become effective in November.
Prices
The September decline in commodity prices,
which followed advances during June, July, and
August, continued during October and early
November. A t the end of the first week in
November weekly price indexes approximated
their June lows. The Bureau of Labor Sta
tistics’ monthly index of prices declined from
65.3 to 64.4 (1926 = 100) between September
and October, but remained above the June fig
ure of 63.9. W eekly indexes have shown some
stability since the first week in November.
As is usually the case, recent changes in
prices of agricultural commodities have been
of greater magnitude than have price changes
of most other commodity groups. The Decem
ber contract for wheat at Chicago declined
B a n k D e b its* -
Arizona
Phoenix ............ $
California
Bakersfield........
Berkeley ..........
Long Beach . . . .
Los Angeles . . .
Oakland ............
Pasadena ..........
Sacramento . . . .
San Bernardino.
San Diego ........
San Francisco .
San J o se ............
Santa Barbara..
Stockton ..........
Idaho
Cumulative
Oct.,
1931
28,086
1932
$ 201,831
1931
$ 302,457
8,034
11,445
18,283
21,950
493,711
158,725
15,949
34,047
4,742
27,956
631,627
15,397
7,993
11,490
10,999
18,432
30,419
37,020
728,8 52
192,711
28,048
49,418
8,642
43,349
859,244
26,746
12,560
17,570
74,346
139,708
153,971
260,744
5,558,957
1,623,233
212,327
381,521
58,898
336,707
6,564,096
159,468
91,376
128,506
105,888
167,538
225,967
406,179
7,957,795
1,875,811
300,995
469,311
87,008
474,725
9,681,114
247,147
129,588
173,114
7,630
15,449
97,260
133,728
Oct.,
1932
16,552
$
t------Ten Months-------
Nevada
Oregon
Eugene ............
Portland ..........
Utah
Salt Lake City..
Washington
Bellingham ___
Everett ............
Spokane ............
Tacoma ............
Y akima ............
6,090
10,027
74,816
101,507
3,622
94,954
5,974
147,191
38,122
987,589
54,988
1,434,309
9,609
41,490
14,032
60,287
91,255
419,626
139,518
591,658
3,804
4,659
117,466
26,012
17,625
8,921
6,730
8,622
176,583
41,447
29,828
13,704
45,649
53,593
1,290,325
276,876
208,121
77,931
67,433
91,788
1,930,196
412,459
330,717
120,531
Total .......... $1,819,783
*In thousands of dollars.
$2,621,970 $19,606,852 $28,013,469
86
almost continuously until November 3, when an
all-time low price of 41% cents per bushel was
quoted. After that date wheat prices recovered
slightly, the quotation on the same contract
ranging from 4 5 ^ -4 7 % cents per bushel on
November 14, but declining to a range of 42
43% cents per bushel on November 21. Quota
tions on barley, oats, and rice decreased during
October, but advanced slightly during the first
half of November. Prices for hay, beans, and
potatoes changed little. Cotton prices declined
during October, but remained fairly stable in
November, about 25 per cent above the low
levels reached in June. Apple prices advanced
some in October and November, although they
were lower than at that time in 1931. Prices for
grapes were lower during the 1932 marketing
season than at any time in recent years. The
upward tendency which has been usual at the
close of the shipping season in past years did
not materialize this year. California orange
prices averaged the same in October as in
September, but were lower than in the autumn
of 1931. Lemon prices were higher during
September and October than at any time in
1932 and were above the prices of a year ago.
Quotations on canned and dried fruits did not
change during October.
During October and early November cattle
sold at the lowest levels of the year. Hog
prices remained unchanged during October, but
declined slightly in November. Quotations on
lambs were higher in mid-November than at
the beginning of October.
Copper, lead, zinc, and silver prices were
lower in late October than in September, de
clining to levels approximating those of midJuly, when quotations for those metals were the
lowest recorded this year. Quotations on all
of these metals advanced, however, around midNovember. Pine and fir lumber prices in the
Pacific Northwest were the same in October as
in the preceding two months.
Credit Situation
Although currency in circulation increased
considerably during the four weeks ended No
vember 16, and there was some banking ten
sion in certain areas, the credit situation
remained relatively easy throughout most of
the District. The number of banks requiring
Federal reserve credit declined, deposits of sur
plus funds with city banks averaged higher
than in any other period of similar length this
year, and individual deposits of city banks were
maintained above the levels of preceding
months. In conformity with developments in
eastern money centers, rates charged by securi
ties brokers to customers carrying debit bal
ances were reduced.
An increase of 12 million dollars in District
November, 1932
M O N T H L Y REVIEW OF BUSINESS CONDITIONS
currency circulation during the four weeks
ended November 16 was somewhat greater than
is customary at that time of year. The presence
of banking disturbances in some parts of the
District offers some explanation of this expan
sion in demand for currency. The increase was
more than met by the issuance of new national
bank notes secured by Government obligations
and the volume of Federal reserve notes in cir
culation declined slightly. The District ex
perienced a slightly unfavorable balance of
commercial payments with other parts of the
SUPPLY OF AND DEMAND FOR BANKING FUNDS
Twelfth District
Changes between October 20 and November 16, 1932
(in millions of dollars)
Supply
Monetary gold stock... — 10.8
Treasury operations.. . .
25.8
Reserve bank credit. .. .
.5
Discounts..........
1.2
Acceptances . . .
.1
Other ................ — .8
____
Total ......................
15.5
Demand
Demand for currency...
Member bank reserve
deposits........................
Unexpended capital funds,
non-member deposits,
etc....................................
Total ........................
12.3
2.7
.....5
15.5
United States (chiefly New York City) which
was more than compensated for by United
States Treasury expenditures in excess of col
lections. This excess of Government disburse
ments was sufficient in amount to permit
member banks to reduce borrowings from the
Federal Reserve Bank and to build up their
reserve deposits.
Reserve balances have increased since mid
year, when net demand and time deposits of
city banks began to rise. Fluctuations in reREPORTING MEMBER BANKS—Twelfth District
( i n m illio n s o f d ollars)
----------- ,
,---------------- Cone
Nov. 16, Nov. 9, Oct. 19, Nov. 18,
1931
1932
1932
1932
1,863
1,738
1,725
Loans and Investments— Total. . 1,721
981
1,128
Loans— Total ..........................
965
970
299
242
245
243
On Securities......................
829
All Other ..............................
725
738
723
757
735
Investments— Total ..............
755
756
420
422
385
422
United States Securities . .
335
335
350
334
Other Securities ................
88
86
96
Reserve with Reserve Bank
88
666
569
571
566
Net Demand Deposits..............
890
894
945
Time Deposits............................ .
892
171
Due from Banks........................
181
167
127
179
Due to Banks..............................
185
186
178
Borrowings at Reserve Bank...
46
50
43
74
serve deposits of Twelfth District member
banks have reflected changes in deposits of cus
tomers rather accurately in the past, since it has
not been the custom of these banks to maintain
large excess reserves, even during times of easy
money. Present reserves of member banks in
this District are but little above the require
ments placed upon them by law. There was
little change in investments or security loans of
reporting member banks during the four weeks
ended November 16, but commercial loans con
tinued to decrease. Time and net demand de
posits were practically unchanged, while
Government deposits declined slightly.
In an area such as the Twelfth Federal Re
November, 1932
FEDERAL RESERVE AG EN T A T SA N FRANCISCO
serve District, which includes numerous regions
with widely dissimilar economic activities, it is
difficult to generalize as to credit conditions
during any particular month. Notwithstanding
the large increase in currency circulation, there
were only four bank failures during October—
three in Oregon and one in California. There
was, furthermore, a decrease of 30 (14 per cent)
in the number of banks borrowing from the Fed
eral Reserve Bank of San Francisco, although
the usual decrease from September to October
has approximated only one-third of that numFEDBRAL RESERVE BANK OF SAN FRANCISCO
(in millions of dollars)
r,u..... - ■■■"-■ Condition ........ —"—x
Nov. 16, Nov. 9, Oct. 19, Nov. 18,
1932
1931
1932
1932
200
189
183
Total Bills and Securities........
185
85
57
63
Bills Discounted ....................
59
2
58
2
Bills Bought............................
2
55
123
123
United States Securities . . . .
123
212
211
223
Total Reserves ............................ 213
149
148
181
Total Deposits ............................
151
Federal Reserve Notes in
234
225
232
Circulation................................ 232
Ratio^ of Total Reserves to De
posit and Note Liabilities
55.7
55.4
55.5
55.1
Combined..................................
ber. The usual seasonal decline in borrowings
of country banks had not taken place during
August and September, but the decrease dur
ing October corrected this situation, the needs
for reserve bank credit being less, with minor
exceptions, than at any previous time during
87
1932. Bankers’ balances at city banks were
increased further during the month. These
banks continued to transfer a considerable vol
ume of these and other funds to New York and
eastern markets. Open-market rates in those
centers now yield a net return of little more
than one-half of one per cent, the rate paid by
New York City banks upon balances of out-oftown correspondents.
The amount of bills accepted by District
banks has been increasing steadily since July,
principally at San Francisco banks. This in
crease is partly the result of the seasonal mar
keting of agricultural commodities. Despite the
larger amount of acceptances created, banks
have reduced their own holdings of bankers’
acceptances, the amount held at the close of
October (6J4 million dollars) being only onethird of their loans on this class of paper at the
end of July. The remainder has been disposed
of through regular dealers, only a small volume
of acceptances having been purchased locally
by the Federal Reserve Bank of San Francisco
during recent months.
On November 1 a 12-day banking moratorium
for the State of Nevada was declared by the
Lieutenant Governor of that State in the ab
sence of the Governor. A t the expiration of
that period the moratorium was extended for
two weeks.
S U M M A R Y O F N A T I O N A L C O N D IT IO N S
Prepared by the Federal Reserve Board
Volume of industrial output, after increasing
considerably during August and September, re
mained unchanged in October. Factory em
ployment and payrolls reported for the middle
of the month, showed a further increase. Dur
ing October, as in the last three weeks of Sep
tember, wholesale commodity prices declined,
and in the first three weeks of November the
general average was at the level of early
summer.
Production and Employment. Industrial pro
duction, as measured by the Board’s seasonally
adjusted index, continued in October at 66 per
cent of the 1923-1925 average, as compared with
a low level of 58 per cent in July. In the textile
industries, which had shown a rapid expansion
in August and September, there was a slight
decrease in consumption of raw materials, while
output of finished products increased some
what.
Shoe production, which also had increased
substantially in recent months, showed a sea
sonal decline. Operations at steel mills ex
panded from an average of 17 per cent of ca
pacity in September to 19 per cent in October
contrary to seasonal tendency, and, according
to trade reports, continued at about this rate
through the first three weeks of November.
Production of automobiles in October declined
further to a new low level. A t coal mines ac
tivity continued to increase rapidly until the
middle of October, but since that time a reduc
tion, largely seasonal in character, has been
reported.
Employment in most manufacturing indus
tries increased between the middle of Septem
ber and the middle of October, and the Board’s
seasonally adjusted index of factory employ
ment showed an advance from 60 per cent of
the 1923-1925 average to 61 per cent. A t textile
mills working forces increased by considerably
more than the usual seasonal amount, and sub
stantial increases were also reported at steel
mills, lumber mills, and carbuilding shops. In
88
M O N T H L Y R EVIEW OF BUSINESS CONDITIONS
the canning and automobile industries there
were decreases in employment.
Value of construction contracts awarded, as
reported by the F. W . Dodge Corporation, con
tinued at low levels during October and the
first half of November.
The Department of Agriculture estimate of
the cotton crop, based on November 1 condi-
November, 1932
zinc, lead, and tin advanced considerably, but
later the prices of these commodities declined.
Bank Credit. Volume of Reserve bank credit
showed little change for the four-week period
ending November 16. Member bank balances
at the reserve banks increased further by $75,000,000, and in the middle of November were
about $475,000,000 in excess of legal reserve
PER CENT
1927
1928
1929
1930
1931
1932
INDUSTRIAL PRODUCTION
FACTORY EMPLOYMENT
Index numbers of industrial production adjusted for seasonal
variations (1923-1925 average=100).
Federal Reserve Board's index of factory employment, with adjust
ment for seasonal variations (1923-1925 average=100).
tions, was 11,950,000 bales, about 525,000 bales
larger than the estimate a month earlier.
Distribution. From September to October
volume of freight traffic increased by more than
the usual seasonal amount; after the middle of
October carloadings declined, reflecting chiefly
seasonal developments. Dollar value of depart
ment store sales increased by the usual amount
in October.
Wholesale Prices. Wholesale commodity
prices, as measured by the monthly index of the
requirements. This growth in reserve balances
reflected an increase of $60,000,000 in the stock
of gold and the issue of additional national
bank notes. Demand for currency showed lit
tle change during the four-week period.
Loans and investments of reporting member
banks in leading cities, outside New York City
and Chicago, declined further between the mid
dle of October and the middle of November,
reflecting a further reduction of loans at these
banks. In New York City the investments of
PER CENT
WHOLESALE PRICES
Index of United States Bureau of Labor Statistics
(1926s* 100).
Bureau of Labor Statistics, declined from 65
per cent of the 1926 average in September to
64 per cent in October. W eekly figures show
declines in the general average from early Sep
tember through the first week in November,
reflecting reductions in the prices of many do
mestic agricultural products and their manu
factures as well as in the prices of steel rails,
copper, coffee, rubber, and silk. In the second
week of November prices of many leading com
modities including grains, hogs, cotton, silk,
FEDERAL RESERVE BANK CREDIT AND PRINCIPAL
FACTORS IN CHANGES
Monthly averages of daily figures. Latest figures are averages
of first 20 days in November.
member banks increased by an amount larger
than the decrease in loans so that total loans
and investments of these banks showed a fur
ther increase.
Money rates in the open market continued at
low levels during October and the first half of
November. Rates on 90-day bankers’ accept
ances were unchanged at
of 1 per cent and
rates on prime commercial paper declined from
a range of 1^4-2 per cent to a range of 1J4-1J4
per cent.
@FedFRASER