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MONTHLY REVIEW OF B U S IN E S S C O N D IT IO N S ISAAC B. NEWTON, Chairman of the Board and Federal Reserve Agent Federal Reserve Bank of San Francisco Vol. X I San Francisco, California, October 20,1927 No. 10 S U M M A R Y O F N A T IO N A L C O N D IT IO N S Prepared by the Federal Reserve Board Industrial and trade activity increased less in September than is usual at this season of the year and continued in smaller volume than a year ago. The general level of wholesale com modity prices rose further, reflecting chiefly price advances for agricultural commodities. Production. The Federal Reserve Board’s index of both manufacturing and mineral pro duction, in which allowance is made for usual seasonal variations, decreased from August to September. Production of iron and steel was in smaller volume in September than in any month since 1925. There were also decreases from August to September in output of nonferrous metals, automobiles, and rubber tires, while the textile and shoe and leather indus tries continued active. Production of bitumi nous coal showed about the usual seasonal increase in September and October, but con tinued in smaller volume than during the same period of other recent years. Output of anthra cite was considerably reduced during Septem ber and the first half of October, follow ing an increase in August. W eekly output of crude petroleum has decreased slightly since the early part of August. The value of building con tracts awarded continued somewhat smaller during September and the first three weeks of PER CENT October than during the corresponding periods of 1925 and 1296. Declines occurred in con tracts for residential, commercial, industrial, and educational buildings, while contracts for public works and public utilities were larger in September than in the corresponding month of any previous year. Crop conditions improved in September, and the Department of Agriculture’s estimates for October 1st indicate larger yields of most grain crops than were expected a month earlier. The estimate for the corn crop was increased by 146,000,000 bushels and was only 43,000,000 bushels smaller than the yield in 1926. W heat production is expected to be 34,000,000 bushels larger than last year, while the estimated cotton crop of 12,678,000 bales is more than 5,000,000 bales below last year’s yield. Distribution. Trade of wholesale and retail firms increased in September by somewhat less than the usual seasonal amount. Compared with a year ago, sales of wholesale firms in nearly all lines, except shoes and drugs, were smaller; sales of department stores were in about the same volume, and sales of mail order houses and chain stores were somewhat larger. Inventories of merchandise carried by report ing wholesale firms in leading lines were rePER CENT 150 ! : 50 1923 1924 1925 1926 1927 IN D U ST R IAL PRODUCTION Index number of production of manufactures and minerals combined, adjusted for seasonal variations (1923-1925 average = 100). Latest figure, September, 105. W H O L E SA L E PRICES Index of United States Bureau of Labor Statistics (1926 prices —100, base adopted by Bureau). Latest figure, September, 96.5. 74 duced in September and continued smaller than last year. Stocks of department stores, on the other hand, increased slightly more than is usual in September, and at the end of the month were somewhat larger than a year ago. Freight carloadings were in smaller volume during September and the first week of October than in the corresponding period of last year for B I L L I O N S OF D O L L A R S .0 O c t o b e r , 192 7 M O N T H L Y REVIEW OF BUSINESS CONDITIONS Bank Credit. Total loans and investments of member banks in leading cities showed a fur ther increase for the four weeks ending O cto ber 19th, and on that date were about 660 mil lion dollars larger than in mid-summer. Of this growth in member bank credit, about 325 million dollars represented an increase in com mercial loans, a considerably smaller increase B I L L I O N S OF D O L L A R S ,------------- ^ -------------,-------------,-------- 2 A L L O TH ER L O A N S (LARGELY COM M ERC IAL ) TOTAL RE S E R V E BAIMK / CREDIT A L / DISCOUN ITS FOR MEMBER B A N K S { U.S.SECU1 CITIES jn s X A 1923 1924 1925 1926 1927 M E M B E R B A N K C R E D IT M on th ly averages of w e e k ly figures fo r banks in 101 leading cities. Latest figures are averages for first three w eek ly report dates in O cto b e r . all groups of commodities except grain and grain products of which loadings were larger than in the same period of any previous year since 1924. Prices. W holesale com m odity prices ad vanced in September for the fourth consecutive month, and the Bureau of Labor Statistics’ all commodities price index rose to the highest level since last January. There were large in creases from August to September in prices of livestock, meats, and cotton, and small ad vances in prices of leather, coal, and chemicals, while prices of grains, building materials, and rubber declined. During the first three weeks in O ctober prices of spring wheat, corn, cotton, coal, and iron and steel declined while prices of livestock, raw w ool, and rubber advanced. _____ ' / ACCEF T A N C E S / j \ / X i / 1 1 9 2 3 19 24 1925 1926 19 2 7 R E SE R V E B A N K C R E D IT M on th ly averages o f daily figures fo r 12 F ed era l R e se rv e B a n ks. Latest figures are averages o f first 23 days in O c t o b e r . than for the same period last year. A bout 335 million dollars represented an increase in in vestments and loans on securities. A t the re serve banks, total bills and securities increased during the four weeks ending October 19th, as is usual at this season, but were on the average about 60 million dollars below the level of the corresponding period last year. The increase, which was largely in the form of additions to the banks’ holdings of acceptances, reflected chiefly an increase in member bank reserve re quirements and an export demand for gold. Some seasonal firmness in the money market in October was reflected in an increase from 3^8 to 3% per cent in rates on 90-day bankers’ acceptances. The rate on commercial paper re mained unchanged at 4 per cent. T W E L F T H F E D E R A L R E S E R V E D IS T R IC T C O N D IT IO N S Seasonal changes, with indications of im provement in several lines of industry and trade, were apparent in the available data of business conditions in the Tw elfth Federal Reserve District for September. The late agricultural season, which heretofore has re tarded marketing operations, served to inten sify activity in movement of farm products as the end of the harvest approached. Industrial operations continued at approximately the levels of a year ago, as did distribution and trade, although trends in the latter field were not clearly defined during the month. Banking and credit statistics for late September and early October showed a pronounced recovery in district demands for credit. During Septem ber and early October, total loans reported by member banks of the district expanded to 1,291 million dollars, an increase of more than 40 million dollars (3.2 per cent) since the re cent low point of September 7th. The increase was chiefly in “ other loans— largely commer cial.” In the face of an increased demand, credit has continued in adequate supply, inter est rates have remained relatively low for the season of the year, and borrowings from the R e serve Bank, although well above the levels of early September, are lower than one year ago. O c to b e r , 1927 Earlier forecasts indicating a total agricul tural production approximately equal to that of 1926 generally have been substantiated by harvest returns. Prices are higher for most farm products than at this time last year, ac cording to the United States Department of Agriculture’s index. Volum e of industrial employment declined slightly during the month, while payrolls tended upward. Value of building permits was less in September, 1927, than in August, 1927, or September, 1926. A ctivity in the lumber and logging and flour milling industries increased during the month and was at higher levels than one year ago. Production of petroleum also in creased, but was less than in September, 1926. The daily average dollar value of sales at retail was greater in September, 1927, than one month ago or one year ago. Sales at wholesale and figures of carloadings were larger than one month ago but smaller than one year ago. The volume of bank debits (check payments) in 20 principal cities of the district increased sharply during September. After the figures have been adjusted for usual seasonal fluctua tions, however, the increase amounts to less than 3 per cent. This bank’s index of bank debits for recent months and for September and August, 1926, fo llo w s : B A N K D E B I T S * — T w e lfth D istrict Sept., A u g ., July, Sept., 1927 1927 1927 1926 W it h S ea s on a l A d ju s t m e n t . . . 1291* 1250 1230 124 W it h o u t S ea son a l A d ju s t m e n t 140 111 121 120 * D a ily a v e ra g e v o lu m e o f c h e c k p a y m e n ts , 1 9 2 3 -1 9 2 5 = 1 0 0 . lim in a ry . ^ R ev ised . A u g ., 1926 121 110 fP re - Agriculture Harvesting operations of the district are now being brought to a close. Earlier production forecasts generally have been substantiated by harvest returns. Unfavorable weather con di tions in the Pacific Northwest, during Septem ber, hampered grain harvesting operations. Livestock ranges were improved by early rains, however, and preparations for the planting of fall-sown grains were facilitated. The southern part of the district has experienced normal tem peratures and scant rainfall during the past six weeks. O ctober 1st estimates of grain production in the principal grain grow ing regions of the district indicate that the 1927 crop of winter wheat will probably exceed the 1926 crop by about 38 per cent, and that production of spring wheat will be nearly 18 per cent greater this year than last. Field crop production figures, indicated by current harvest returns, vary considerably when compared with figures for last year. Cot ton and beans show decreases of 26.4 and 12.7 per cent, respectively, while potatoes, rice, and sugar beets show increases of 24.6, 8.4, and 38.7 per cent, respectively. Favorable weather dur ing O ctober will govern the final output of 75 FEDERAL RESERVE AG EN T AT SAN FRANCISCO cotton which has a late developing top crop. The harvest of other field crops is generally well advanced. P R O D U C T I O N * — G rain and F ield C ro p s Prelim inary Estim ate A ctu al O ct. 1,1927 1926 W h e a t (b u s h e ls ) T w e lfth D i s t r i c t ........................ , 134,765 103,368 U n ite d S tates ............................. . 866,538 832,809 B a rle y (b u s h e ls ) T w e lfth D i s t r i c t ........................ . 41,314 43,053 U n ite d States ............................. . 264,703 188,340 R ic e (b u s h e ls ) T w e lfth D i s t r i c t f ...................... 8,659 7,986 U n ite d S t a t e s ............................. . 37,895 41,006 B ea n s (b u s h e ls ) T w e lfth D i s t r i c t ^ ...................... 5,884 6,739 U n ite d S ta tes ............................. . 18,434 17,138 C o tto n (b a le s ) T w e lfth D is tr ic t§ ...................... 186 253 U n ite d States ............................. . 12,678 17,977 P o ta to e s (b u s h e ls ) T w e lfth D i s t r i c t ........................ . 51,732 41,506 U n ite d S tates ............................. . 394,757 356,123 S u g a r B e e ts ( t o n s ) T w e lft h District|| ...................... 1,238 892 U n ite d S tates ............................. 6,757 7,223 H o p s (p o u n d s ) T w e lft h D i s t r i c t ........................ . 29,300 34,838 *000 o m itte d . fC a lifo r n ia . $ C a lifo rn ia and I d a h o . and A r iz o n a . ||C a lifo rn ia , I d a h o , and U ta h . F iv e -Y e a r (1922-1926) A v era ge 102,989 807,731 40,609 192,707 6,084 36,387 5,593 16,140 174 13,649 36,661 394,182 1,642 6,942 26,237 § C a lifo rn ia Export figures of wheat from the Pacific Northwest and barley from San Francisco dur ing the current season fo llo w : EXPORTS OF W H EAT AN D BARLEY - J u ly 1st — Septem ber 3 0 th ----------F iv e -Y e a r (1923-1927) W h e a t (b u s h e ls ) 1927 1926 A v era ge P u g e t S o u n d ...................... 2,459,466 3,247,332 1,552,159 C o lu m b ia R iv e r ............... 15,040,061 11,031,097 7,970,404 T o ta l .................................. 17,499,527 B a rley (b u s h e ls ) San F r a n c i s c o .................... 4,293,535 14,278,429 9,522,563 4,158,712 4,953,635 Harvesting of the district’s important decid uous fruit crops, which matured somewhat later than usual this year, progressed rapidly during the past month. Commercial apple production in the five principal apple growing states of the district is reported to be approximately 16 per cent smaller in volume than in 1926 and 11 per cent less than the five-year (1922-1926) average. A P P L E S — T w elfth D istrict and U nited States C om m ercia l Produ ction C a lifo rn ia Idaho O reg on . . U ta h . . . . F iv e -Y e a r F orecast A ctu al (1922-1926) O ct. 1,1927 1926 A v era g e (000 bushels) ( 000 bushels) (000 bushels) 4,587 6,144 4,881 4,230 3,615 2,775 3,174 4,502 5,100 408 621 480 . . . 21,162 25,650 24,261 . . 33,561 72,990 40,149 118,233 37,880 111,130 t--------June 1st — Septem ber 30th- — % S h ip m e n ts (carloads) 1927 C a l i f o r n i a ............................... I d a h o ...................................... O r e g o n .................................... U ta h _......................................... W a s h i n g t o n .......................... 656 190 4 3,124 1926 3,139 1,187 889 124 6,303 T o t a l .................................... 5,644 11,642 F ive* Y ea r (1923-1927) A v era ge 2,359 681 526 50 4,261 7,877 Although the condition of California citrus fruits is reported to have improved slightly during September, present prospects indicate that production will be lighter during the 19271928 season, which commences on November 1, 1927, than during the 1926-1927 season. The estimated production of the 1927-1928 Navel 76 M O N T H L Y REVIEW OF b u s in e s s O c t o b e r , 1927 c o n d it io n s orange crop is 11,150,000 boxes as compared with approximately 12,154,000 boxes produced during the year ending O ctober 31, 1927. The 1927 Valencia orange crop is estimated at 12,750.000 boxes as compared with approximately 11.260.000 boxes produced in 1926. Shipments of oranges and lemons from California during September, 1927, totaled 3,377 and 492 carloads, respectively, as compared with 3,232 and 593 carloads during September, 1926. Recent price trends have been favorable to the grower. In California, average yields of most decid uous fruits and a total production of apricots, grapes and prunes in excess of the five-year (1922-1926) average figures are reported. Ship- Livestock and ranges throughout the Twelfth District are in excellent condition, and livestock will go to the fall ranges in good flesh. Recent favorable price trends are reflected in an active demand for breeding stock, particularly cattle. Reports issued by the United States Depart ment of Agriculture indicate that in the states of the Pacific Coast there will be fewer sheep fed during the 1927-1928 season than last year. It is also reported that in the W estern states there will be fewer cattle fed. High prices for grain and for feeding stock have caused this decrease in feeding operations. PRODUGTION OF FRUITS A N D NUTS IN C AL IF O R N IA Industrial activity in the district continued, during September, at approximately the levels of a year ago. Volum e of industrial employment declined slightly during the month, while pay rolls tended upward. Both employment and payrolls were in about the same volume as in September, 1926. Continued seasonal demand for agricultural workers and the labor needs of the logging industry, which has resumed active operation follow ing abatement of the summer fire hazard, have recently offset declining de mands for labor in other industries. Value of building permits granted in 92 cities of the district declined by 8 per cent during September, 1927, as compared with September, 1926, and by a similar amount during the first nine months of 1927 as compared with the like period in 1926, according to data compiled by S. W . Straus and Company. The figures for September, 1927, were 15.2 per cent below those for August, 1927. In 20 principal cities, a slightly greater decrease (17.7 per cent) in value of permits issued was reported during the month, whereas the eight-year (1919-1927) average August to September movement was a decrease of but 6 per cent. It must be borne in mind, however, that monthly data probably in dicate the more significant trends with less ac curacy than do the cumulative and quarterly total value figures of permits issued. These latter data are presented graphically for the Preliminary Estimate Oct. 1,1927 Actual 1926 (tons) A lm o n d s ..................................... 12,000 A p r ic o t s ..................................... 187,000 F i g s .............................................................. . G r a p e s ......................................... 2,344,000 W in e ....................................... 455,000 T a b l e ....................................... 488:,000 R a is in .................................... 1,401,000 O liv e s ......................................... ....... P e a c h e s ....................................... 505.,000 P e a r s ............................................ 179',000 P lu m s ......................................... 57,000 P r u n e s ....................................... 200,000 W a ln u ts ....................................... 42,000 Five-Year (1922-1926) Average (tons) (tons) 15,750 176,000 11,350 2,129,000 414,000 398,000 1,317,000 9,800 541,000 207,000 71,000 150,000 15,000 10,150 164,600 9,990 1,859,400 407,400 314,400 1,317,600 11,460 411,000 160,800 55,600 135,000 25,100 ments of grapes from California continue in large volume. The total movement up to O cto ber 8th amounted to 46,381 carloads, compared with 44,268 carloads shipped by October 9th of the 1926 season. The tonnage of grapes to be dried as raisins is estimated to be approxi mately the same as in 1926. (272,000 tons of raisins were produced in California in 1926.) Preliminary estimates place the 1927 prune crop in this district at 220,000 tons, compared with a total production of 187,500 tons last year. Approxim ately 20,000 tons of the 1927 prune crop were grown in Oregon and W ash ington, and the remainder in California. (A) Employment— -----Oregon- ----------- x California--------- \ ( No. of No. of r— Employees —» No. No. t—Employees Sept., Sept., of Sept., of Sept., 1927 1926 1926 Firms Firms 1927 Industries 30.095 32,453 All Industries.......... 792 167,379 172,293 164 (-7 .3 ) (-2 .9 ) S to n e , C la y 131 201 5 7,355 6,926 51 G lass P r o d u c t s . f L u m b e r and w o o d M a n u fa ctu re s . . 126 T e x tile s .................... C lo th in g , M illin e ry an d L a u n d e r in g . (6 .2 ) 28,768 ( 4 .2 ) 2,690 18 ( — 2 .1 ) 62 7,947 (3 .2 ) F o o d s , B e v e ra g e s an d T o b a c c o . . . 170 W a te r, L ig h t an d P o w e r ................. 5 48,305 (5 .4 ) 27,599 2,748 7,697 45,823 ( — 3 4.8) 17,791 63 ( — 7.2) 10 8f 44 19,163 2,050 (5 .6 ) 429 1,942 3,702 (— 17.4) 4,484 (B) Building Permits— September. 1927 No. Value B e r k e le y ................... Long 429 7,667 8,913 ( — 14.0) 62,536 70,339 O th e r I n d u s t r ie s !. 347 ( — 11.1) 6,234 5,992 2,111 2,248 34 13 M is c e lla n e o u s . . . . ( — 3 .9 ) ( — 6 .1 ) f L a u n d e r in g o n ly . ^ In c lu d e s the fo llo w in g in d u s t r ie s : m etals, m a c h in e r y and c o n v e y a n c e s ; le a th e r and r u b b e r g o o d s ; c h e m ic a ls, o ils an d p a i n t s ; p r in t in g an d p a p e r g o o d s . Figures in parentheses indicate percentage changes from Sep tember, 1926. Industry B e a ch .......... . Los Angeles O a k la n d ................... P a sa d e n a .............. .. P h o e n ix ................... Portland .............. S a c r a m e n to .......... Salt Lake City . . , S an D ie g o ............ San Francisco S an Jose Spokane .. ............... ............... S t o c k t o n ................. T a com a ................. D is t r ic t .............. September, 1926 No. Value 293 122 108 452 3,421 627 34 310 111 1,150 18 264 92 674 717 95 874 190 92 210 $ 352,005 100,500 436,222 775,190 9,274,218 1,436,304 119,400 889 ,450 455,985 1,496,305 24,400 393,993 341,630 872,173 3,109,832 569,430 2,142,795 538,967 331,204 173,550 327 99 138 300 3,335 945 19 313 123 1,301 28 250 126 825 800 129 1,055 278 102 266 9,854 $23 ,833,553 10,759 $ 670,584 154,550 147,981 657,245 8,163,581 2,123,002 79,300 675,835 254,671 2,617,580 238,690 414,973 380,565 1,413,572 4,001,012 351,845 2,862,185 592,699 114,167 403,815 $26,317,852 O c to b e r , 1927 first three-quarters of 1927 and for each of the preceding 5 years in the accompanying chart. Inclusion of data for public buildings con structed and for engineering construction proj ects, were they available, might increase the 1927 figures both absolutely and in proportion to the figures of previous years. M IL L IO N S O F D O L L A R S. 420 U 390 dicates that lumber mills of the district cut more lumber during September than during August, and that production was substantially in excess of both shipments and orders received. Lumber shipped and orders received during September, 1927, closely approximated the volume of these items for September, 1926, while production was greater by 6.6 per cent, according to figures reported by mills to four associations in this district. LUMBER* 360 FOURTH 330 Q UARTER I 270 240 T H IR D Q UARTER 90 60 F IR S T NON -FERRO US M ETALS National Production Sept., Aug., C o p p e r (s h o r t to n s ) (m in e 1927 1927 Q UARTER 30 1923 1924 1925 1926 1927 V A L U E OF B U ILD IN G PER M IT S-20 CITIES Cumulative and quarterly totals, 1922-1927. Thirteen cities in the San Francisco Bay metropolitan area reported a 21 per cent reduc tion in value of permits granted during the period, January 1, to October 1, 1927, as compared with the corresponding period of 1926; 25 cities in the Pacific Northwest re ported a corresponding decrease of 10 per cent; while 39 cities in Southern California (including Los Angeles, where the value of permits granted approximates one-quarter of the total value for 92 reporting cities) exhibited only a 6 per cent decrease over the comparable nine months period. Available evidence indi cates the presence of a relatively high vacancy percentage for multi-family dwellings and office buildings in some of the larger cities of the district. Further reduction in building costs were re ported during September. The United States Bureau of Labor Statistics’ index of building materials prices at wholesale (1926 p rice s= 100) declined 0.8 per cent to 92.1 during the month. This index has declined 7 per cent since September, 1926. After remaining unchanged for four months, the Aberthaw index of indus trial building costs, including both labor and materials, declined from 192 (1914 costs=100) to 191 during September. One year ago this index stood at 197. Available data for the Pacific Coast lumber industry temporarily continue unsatisfactory for analysis and interpretation. Current infor mation, both statistical and non-statistical, in- (board feet) 895,7270 818,9330 805,215 465,143 193 Sept.,1926 (board feet) 777,106 . 740,674 724,603 504,136 179 Figures of national non-ferrous metals pro duction, together with a guide to the propor tionate importance of this district in such pro duction, are presented in the following table : 150 120 Aug, 1927 (boa*d feet) 828,707 743,070 725,899 483,681 193 * A s rep orted b y fo u r a s s o cia tio n s , 000 o m itte d e x c e p t in ca se o f n u m b e r o f m ills r e p o r tin g . f R e p o r t e d b y th ree a s s o cia tio n s . T h e fig u res are n o t s tr ic tly co m p a ra b le w ith o th e r figu res a p p e a rin g in the ta b le. ^ A v era g e. O Revised. S o u r c e : N a tio n a l L u m b e r M a n u fa ctu re rs A s s o c ia tio n . Q UARTER 21 0 ISO SECO ND Twelfth District Sept.,1927 P r o d u c t io n ......................................... Sh ip m en ts ........................................... O rd e rs ................................................... U n fille d O r d e r s t ............................. N o . o f M ills R e p o r t i n g ! ............... 300 1922 77 FEDERAL RESERVE AG EN T A T SAN FRANCISCO Per Cent of Total Produced in Sept., 12th Dist.* n 1926 1926 p r o d u c t io n ) ..................... 65,936 67,138 71,777 ........... 56,423 55,965 L e a d (s h o r t t o n s ) ( c r u d e ) f Z in c (s h o r t t o n s ) ( s l a b ) . 47,735 49,012 52,144 S ilve r ( o z .) (c o m m e r c ia l b a r s ) ................................... 4,641,000 5,036,000 4,995,000 64.1 13.3 13.3 69.7 * I n c lu d in g all o f A r iz o n a , the five so u th e a ste rn c o u n tie s o f w h ich are in th e E le v e n th F e d e ra l R e s e r v e D is t r ic t , fIn clu d e s fig u re s fo r M e x ic o . Average daily production of petroleum in California increased slightly during September, the third such increase this year. The general trend of production throughout the year to date has been downward. Indicated average daily consumption of petroleum declined 2 per cent during the past month, but was nearly 4 per cent larger than production. Crude oil stocks have decreased by over 3 million barrels (2.6 per cent) since December 30, 1926. PETROLEUM —California Indicated Average Stored Average Daily Stocks at Daily Consumption End of Production (Shipments) Month S e p t., 1 9 2 7 .. .. A u g ., 1 9 2 7 .. .. S e p t., 1 9 2 6 .. .. S ou rce: (barrels) 635,483 621,907 603,498 (barrels) 659,405 672,899 66 1 ,0 1 7 (barrels) 116,415,194 117,132,849 118,880,326 New Wells -s _Daily Produc tion Number Opened 51 75 58 (barrels) 18,559 42,286 26,832 A m e r ic a n P e tr o le u m In s titu te . An active demand for flour during Septem ber was reflected in a greater than seasonal in crease in output, but millers’ grindings for the month were still slightly below the five-year (1922-1926) average. Reports of 14 large mill ing companies of the district showed Septem ber production as 511,000 barrels, which was 92,000 barrels or 22 per cent larger than produc tion in August, 1927. The usual seasonal in crease has been 17.2 per cent. Millers’ stocks of flour were reduced 7 per cent during the month while their stocks of wheat were 72 per cent 78 M O N T H L Y R EVIEW OF BUSINESS CONDITIONS greater at the end of the month than at its be ginning. FLO UR M IL L IN G Five-Year Average Twelfth District Sept., 1927 511,000t O u tp u t ( b b l s .) .. . S tock s* 3 8 7 ,0 0 0 t F lo u r ( b b l s . ) . . W h e a t ( b u . ) . . . 3 ,1 6 1 ,0 0 0 t * A t en d o f m o n th . Aug., 1927 S ept., Sept., 1926 1922-1926 419,310 484,831 519,212 4 15,484 1,843,096 437,455 2,689,582 447,061 2,538,777 Distribution and Trade Trends in distribution and trade, as indi cated by figures of carloadings and sales at re tail and wholesale for this district, were not clearly defined during September. The daily average dollar value of sales at retail was greater in September, 1927, than one month ago or one year ago, while sales at wholesale and figures of carloadings were larger than one month ago but smaller than one year ago. If allowance be made for usual seasonal fluctua tions in the available data, the increase in retail trade activity was greater, and the increase in wholesale trade activity and in carloadings was smaller than is expected during September. Increases in the district’s retail trade over the year period were small, and were the result, chiefly, of increases reported from Los Angeles and Seattle. A n increase in value of stocks (C) D e p a r tm e n t S to r e s D r y G o o d s ............... F u rn itu r e ...............— 2.4 M e n ’ s A p p a r e l . . — 5.8 M e n ’ s an d W o m e n ’ s A p p a r e l ............... 5.7 W o m e n ’ s A p p a r e l. — 7.6 A ll R e p o r t in g 0.5 S to r e s .................. . 124 . 118 96 1 9 2 7 .. . 1 9 2 6 .. . 115 108 107 93 110 San Fran cisco (5) t Salt Lake City (5)t 109 103 87 112 103 82 86 106 117 94 90 116 112 90 91 120 116 107 92 114 105 111 117 110 102 106 107 103 110 103 104 108 103 91 114 111 121 112 111 118 Seattle (5)t Spo kane (3)t Dis trict (28) t 1 9 2 7 .. 1 9 2 7 .. 1 9 2 7 .. 1926. . . . . . 139 119 109 128 115 108 113 115 t F ig u r e s in p a re n th e se s in d ica te n u m b e r o f s to re s. O n e s to r e in c lu d e d in D is t r ic t fig u re s n o t in c lu d e d in citie s s h o w n a b o v e . ( 53) ( 27) 0.4 ( 4 5 ) ( 10) ( 11) 1.2 ( 10) — 0.5 6.4 ( 8) (1 3 2 ) 3.4 (1 1 7 ) - ■' 2.3 (3 1 ) (1 0 ) 1.8 (11) 8.8 (10) 1.8 (80) 2.8 (9 9 ) * P e r p e n ta g e in cre a s e o r d e c r e a s e ( — ) . F ig u r e s in p a re n th eses in d ica te n u m b e r o f s to r e s r e p o r tin g . F ig u r e s o f id e n tic a l d e p a rtm e n ts o f d e p a rtm e n t s to r e s r e p o r t in g s u c h fig u res s e p a ra te ly in c lu d e d in sales c o m p a r is o n s o f m e n ’ s a p p a rel s to re s, S e p te m b e r , 1927, w ith S e p te m b e r , 1926. The smaller than seasonal increase shown by sales at wholesale during September, and their decrease of nearly 5 per cent, as compared with one year ago, were in contrast with the in creases reported for retail trade during the month. Sharp declines in reported sales of auto mobile tires and, to a lesser extent, decreases in grocery and paper and stationery sales over the year period were chiefly responsible for the movement of our composite index of wholesale trade during September. Some allowance should be made in using wholesale trade data for the effect of the present lower level of wholesale prices (particularly for non-agricultural commodities) on current value of trade figures as compared with those of a year ago. W H O L E SA L E T R A D E —Twelfth District Index Numbers of Sales* No. of r- 1927 — 1926 Firms Sept. S August July Sept. A g r ic u ltu r a l Im p le m e n ts . . . 13 13 15 6 20 8 . 11 19 18 7 18 148 148 . D r u g s ........................ D r y G o o d s ............ E le c t r ic a l S u p p lie s S h o e s .................................... P a p e r and S ta tio n e r y . . A ll L in e s . . . . . ................. A ll L in e s , A d ju s t e d t . *1923-1925 m o n th ly a v e r a g e = 1 0 0 . 127 100 148 118 119 122 112 95 101 150 122 no 95 tF or 173 97 168 101 114 100 101 92 96 144 105 105 99 . . P a sa d e n a S a c r a m e n to . . S alt L a k e City S an D ie g o . . . San F r a n c is c o Spok ane D is t r ic t .......... S ept., 1927 S ept., 1926 $ 22,137 $ 19,403 15,332 14,879 52,148 47,712 45,049 43,870 .. 895,316 851,764 224,145 165,961 22,820 22,676 35,353 31,631 24,944 23,502 188,708 190,529 11,012 9,714 47,898 38,037 71,976 71,965 59,673 59,964 . . 1,345,227 1,004,533 28,650 28,246 250,346 235,713 61,930 57,885 30,418 27,175 47,719 43,901 15,052 15,369 . . . . . .$3,4 95,853 *000 omitted. $3,004,429 215 92 142 100 80 84 70 89 87 85 93 93 91 119 99 197 111 115 126 117 106 101 150 129 115 102 s e a s o n a l v a r ia tio n . (D ) Bank Debits* — ( 1923-1925 daily avera£e= 100) With Seasonal Adjustment S e p t., A u g ., J u ly , S ep t., -------- N E T SALES*---------------- *STOCKS* January 1 to Sept., 1927, Sept.30,1927, Sept.,1927, compared compared with compared -with' same period with Sept., 1926 Aug., 1927 in 1926 Sept., 1926 1.7 ( 4 2 ) 3.6 ( 4 3 ) 2.9 (3 7 ) 0.8 ( 3 6 ) 7.5 ( 7) 7.4 ( 6) 11.4 ( 5 ) 3.4 ( 4) L o n g B e a ch L o s A n g e le s D EPAR T M EN T STORE SALES—Index Numbers Los OakAngeles land (5)t (4)t nal Adjustment J u ly , S ep t., amounting to about 5 per cent during the month and 2 per cent during the year ending Septem ber 30, 1927, was reported by those stores for which such information is available. t P r e lim in a r y . The smallest Alaskan salmon pack since 1921 is indicated by preliminary figures for 1927. Estimated at 3,396,000 cases, the 1927 pack in Alaskan waters amounts to but little more than one-half the record pack of 1926 (6,633,278 cases). Output of canned salmon in United States waters outside Alaska during the present season was 23 per cent larger than the 1926 pack but was nearly 4 per cent below the five-year (1922-1926) average pack in that area. Preliminary 1927 figures for the United States (including Alaska and continental United States), from wrhose waters about 75 per cent of the w orld’s output is ordinarily taken, are 40.6 per cent smaller than the 1926 total of 7,491,684 cases. Preliminary estimates of the British Columbia pack, which usually constitutes more than two-thirds of the world production outside the United States, indicates that the output from Canadian waters will be less than one-half as large this year as it was in 1926. O c t o b e r , 1927 r - First N in e M on th s 1927 1926 $ 191,572 119,925 345,450 441,427 8,310,233 1,983,449 156,737 365,239 240,200 1,508,788 84,912 338,749 617,301 553,432 10,860,753 233,488 1,924,240 496,018 252,104 407,182 109,649 $29 ,540,848 $ 172,591 118,691 324,449 451 ,384 7,811,756 1,513,844 179,218 332,432 225,379 1,621,529 81,744 291,377 630,694 578,931 9,507,225 231,781 1,916,045 500,593 239,547 411,693 116,613 $27,25.7,516 O c to b e r , 1927 79 FEDERAL RESERVE AG EN T AT SAN FRANCISCO Carloadings figures reported for the Twelfth District were 3.7 per cent smaller in Septem ber, 1927, than in September, 1926. In addition to an actual decline in total carloadings, these figures may reflect the late agricultural season this year, and such changes in freight car capac ities and loading practices as have occurred during the past twelve months. Prices W holesale prices, as recorded by the United States Bureau of Labor Statistics’ new index of 550 commodities, averaged 1.4 per cent higher during September than during August, the index advancing from 95.2 (1926 p rice s= 100) to 96.5. The upward movement of the whole index during the past three months has brought it to within 3 per cent of the point at which it stood in September, 1926 (99.7), and the movement of its constituent group indexes, during most of 1927, has generally been in the direction of reducing existing price maladjust ments. Farm products prices were 6.1 per cent higher during September than during August, according to the United States Department of Agriculture’s index of prices paid for produce at the farm, which advanced from 132 (August, 1909-July, 1914 prices=100) in August to 140 in September. The United States Bureau of Labor Statistics’ index of non-agricultural products (1913 prices= 100)* increased but fractionally (151.0 to 151.6) during this period, and the ratio between the tw o indexes, an indi cation of the purchasing power of farm prod ucts, advanced to 92.4 (pre-war purchasing pow er= 10 0), the highest figure it has reached since August, 1925, and, with that exception, the highest figure it has reached since June, 1920. The ratio stood at 93 both in August, 1925, and in June, 1920. Cattle prices at Chicago worked steadily up ward during September, the average for that month being 4.3 per cent above average prices paid during August. As compared with Sep tember, 1926, prices were 18.1 per cent higher. Prices for hogs were higher by 12.2 per cent in * T h e o ld in d e x o n th e 1913 b a s e is u s e d b e c a u s e it is m o r e c o m p a ra b le than is th e n e w in d e x w ith th e D e p a r tm e n t o f A g r i c u ltu re ’ s fa rm p r ic e in d e x , w h ic h has n o t y e t b e e n r e v ise d on th e 1926 ba se. September than in August, but were 14.5 per cent below the September, 1926, average prices. Early in September prices for sheep at Chicago declined sharply to figures below either August, 1927, or September, 1926, and remained at or near the lower levels during the rest of the month. Lamb prices declined similarly during early September, but some strengthening of the market occurred in the latter part of the month, so that the average price paid during September was only 2.5 per cent less than the average price paid during August, and 4.5 per cent less than the average for September, 1926. LIVESTOCK PRICES A T C H IC A G O Percentage changes from <------Cents per pound ------\ Sept., Aug., Sept., One Month OneYear 1927 1927 1926 Ago Ago C a ttle ............................ H ogs ............................. S h eep ............................. L a m b s ........................... 12.29 10.20 5.66 13.50 11.78 9.09 6.03 13.84 10.41 11.93 6.06 14.13 4.3 12.2 — 6.1 — 2.5 18.1 — 14.5 — 6.6 — 4.5 Prices for wheat at Chicago declined during September but improved slightly during the first half of October. During the week ended October 15th, December contract wheat ranged from $1.29% to $1.31% per bushel as compared with a range of $1.28% to $1.35% one month earlier and $1.37% to $1.41% during the cor responding week in 1926. A sharp downward movement commenced on October 17,1927, and on October 20th quotations for this grade of wheat ranged from $1.24% to $1.26% per bushel. On September 20, 1927, the price of the December contract ranged from $1.28% to $1.31% per bushel. Fluctuations in cotton prices during late September and the first half of October were within relatively narrow limits. On October 20th, quotations for spot middling uplands cotton at New Orleans were 19.75 cents per pound as compared with 20.09 cents per pound on September 20th. These prices are approxi mately 50 per cent higher than the quotations recorded in October, 1926. The average of 98 wool quotations at Boston was 0.7 per cent lower for the week ending O c tober 15, 1927, than for the same week of 1926, but was 2.1 per cent higher than during the week ending September 17, 1927. The trend of this average has been upward since May 20, 1927. (E) Commodity Prices— C om m od ity W h o le s a le P r ic e s (U . S. B u re a u o f L a b o r S ta tis tic s — 1926 p r i c e s = 1 0 0 ) . P u r c h a s in g P o w e r o f F a rm P r o d u c t s ( U . S. D e p t, o f A g r i c u l t u r e ) * . . . . W h e a t ............................... C h ic a g o c o n t r a c t p r ice f o r D e c e m b e r w h e a t................ W o o l ..................................A v e r a g e o f 98 q u o t a t io n s at B o s t o n .............................. A p p le s ............................... J on a th a n s, E x tr a F a n c y , f. o . b. P a c ific N o rth w e s t O r a n g e s ............................ V a le n c ia s , F a n c y , w h o le s a le at San F r a n c i s c o . . . . P r u n e s ............................... S iz e 4 0 /5 0 in 25-lb. b o x e s , f. o. b . C a lifo r n ia ............. R a is in s ...............................Seed less, b u lk , in 2 5-lb. b o x e s , f. o. b. C a lifo r n ia .. C a n n ed P e a c h e s ............ C h o ic e C lin g , s lice d , 2 ^ s , f. o . b . C a lifo r n ia .......... B u t t e r ................................92 s c o r e at San F r a n c i s c o .................................................... C o p p e r ................................E le c t r o ly t ic , m o n th ly a v e r a g e at N e w Y o r k ............. L e a d .................................... M o n t h ly a v e r a g e at N e w Y o r k ......................................... S ilv e r .................................. M o n th ly a v e ra g e at N e w Y o r k .......................................... L u m b e r ( S o f t w o o d ) . .W e e k ly I n d e x , U n ite d S t a t e s f ......................................... Unit Oct. 7,1927 96.5 92.4 bu . lb . box box lb. lb. doz. lb . lb . lb . o z. $ 1 .3 0 ^ -1 .3 1 ^ 66 . 68 $ $ 2 .0 0 -2 .1 0 7 .5 0 -8 .2 5 .06*4 1.7 5 -1 .8 5 .48 12.940$ 6.297$ 55.445$ 29.91 One Month Ago 95.2 87.4 $ 1 . 3 6 ^ - 1 .3 8 ^ 65.18$ N o t q u o te d $6 .2 5 -7 .5 0 .0 5 3 4 - .0 6 4 .06*40 1 .75-1.8 5 .46 12.971$ 6.681$ 54.718$ 29.68 One Year Ago 99.7 83.0 $ 1 .3 9 ^ - 1 .4 2 67.38$ $ 1 .1 0 -1 .2 5 5 .2 5 -5 .7 5 .0 7 ^ -.0 8 .0 7 * 4 a 2 .0 0 -2 .1 0 0 .44 14.062$ 8.786$ 6 0.580$ 29.91 *Ratio of farm prices (August, 1909-July, 1914 prices=100) to wholesale prices of non-agricultural commodities (1910-1914 prices= 100). tA s published by “ The Lumber Manufacturer and Dealer.” ^Revised. O c t o b e r , 1927 M O N T H L Y R EVIEW OF BUSINESS CONDITIONS 80 Non-ferrous metals were lower in price dur ing September, 1927, than during September, 1926. Zinc and lead were lower than during August, 1927, while copper was unchanged, and silver was higher in September than in the preceding month. Banking and Credit Banking and credit statistics for late Septem ber and early October, show a pronounced re covery in district demands for credit accom m o dation. Anticipated autumn expansion in pri mary demand for credit, which is now reflected in bank reports, was delayed this year, as noted in the September Review, due to a greater than seasonal mid-summer slackening in commercial activity, the retarded agricultural season, and consequent business hesitancy during August. M IL L IO N S OF mercial” .which rose during that period (Sep tember 7th to October 12th) by over 30 million dollars or 3.2 per cent, reaching a total of 955 million dollars. Concurrently with this growth in commercial demand for funds, investment holdings of reporting banks were increased sub stantially and recourse was again had to the Federal Reserve Bank. Reporting member banks’ borrowings increased sharply from 9 to 52 million dollars during the four-week period ended October 12th. On O ctober 12th these borrowings were larger than at any time since the autumn of 1926. Between mid-September and m id-October net demand deposits declined 26 million dollars, while time deposits in creased by an equal amount. REPORTING M EM B ER B A N K S— Twelfth District (in million« of dollars, percentage changes in parentheses) Condition t--------- Changes from --------- » Oct. 12, One Month One Year 1927 Ago Ago D O LLA R S T o t a l L o a n s ................................ 1,291 955 C o m m e r c ia l L o a n s ................. L o a n s o n S e c u r itie s ............... 336 545 In v e s tm e n ts ............................... T o t a l L o a n s an d I n v e s tm e n ts 1,836 N e t D e m a n d D e p o s it s .......... 793 T im e D e p o s it s ........................... 945 B o r r o w in g s fro m F e d e ra l 52 R e s e r v e B a n k ........................ M EM B ER BANK CR ED IT—T W E L F T H DISTRICT Figures for about 65 member banks in leading cities, as of last Wednesday of each month. Latest figures, October 12th. Credit has continued in ample supply, and in terest rates have remained relatively low for this season of the year. The credit demands of agriculture, commerce, and industry were un usually small during early September, and the commercial loans of reporting member banks showed little change while their deposits in creased. Funds thus made available to the banks were used in liquidating their bills pay able and rediscounts with the Reserve Bank and in adding to their investment holdings. During the tw o weeks ended September 14th, member banks’ borrowings from the Reserve Bank declined from 36 to 9 million dollars, while their investment holdings increased dur ing the same period from 496 to 522 million dollars. W ith the approach of the peak of the harvest season, at the close of September and in early October, total loans reported by mem ber banks expanded to 1,291 million dollars, an increase of over 40 million dollars (3.2 per cent) from the low level of September 7th. This in crease was chiefly in “ other loans— largely com- ( + = increase. + 29 ( 2 .3 ) + 26 ( ( + 23 ( 4 .4 ) + 52 ( 2 .9 ) — 26 ( 3 .1 ) + 26 ( + 3 +43 - - = decrease. ) 2.8) 1.0) + 12 ( 1.0) + 12 ( 1.3) 0 ( 0.0) 2.8) + 70 +82 — 15 + 59 (4 7 0 .2 ) — (1 4 .8 ) ( 4 .7 ) ( 1.9 ) ( 6 .6 ) 5 ( 9 .1 ) W eekly condition statements of the Federal Reserve Bank of San Francisco for the midSeptember, m id-October period have reflected the expansion in demand for credit accom m o dations discussed above. Recent demands on the Reserve Bank have not been so heavy as in the corresponding period of 1926 and volume of discounts held by that bank on O ctober 12th, although well above the temporary low level of September 14th, was 6 million dollars (8.4 per cent) smaller than on O ctober 13, 1926. Acceptance holdings of the Reserve Bank at m id-October were substantially lower than at mid-September, 1927, and at m id-October, 1926 (33 and 61 per cent, respectively). In creased borrowing by member banks during recent weeks has resulted in an 8 per cent re duction in cash reserves of the Federal Reserve Bank, but total resources on O ctober 12, 1927, were still 12 million dollars or 4.5 per cent larger than one year ago. The primary reserve ratio* declined from 82.8 (the highest figure reported since August, 1924) on September 14, 1927, to 74.0 on O ctober 12th, which compares with 72.4 on O ctober 13, 1926. FED ER AL RESERVE BAN K OF SAN F R A N C ISC O (In millions of dollars, percentage changes in parentheses) Condition Oct. 12, 1927 T o t a l B ills and S e c u r i t i e s . .. B ills D is c o u n t e d ........................ U n it e d S tates S e c u r itie s . . . . B ills B o u g h t ................................ T o t a l R e s e r v e s .......................... T o t a l D e p o s i t s ............................. F e d e ra l R e s e r v e N o te ________ C ir c u la tio n ................................ * R a tio o f to ta l re se rv e s n o te s in c ir c u la tio n . to t---------Changes from--------- \ One Month One Y ear Ago Ago ( + = increase. + 37 ( 4 7 .4 ) + 42 (2 4 3 .6 ) 115 59 46 10 269 190 — 5 ( 3 2.7) — 25 ( 8 .4 ) + 7 ( 3 .7 ) 174 + — 1 ( 1.1) 2 ( to ta l d e p o s its 1 .4 ) and — =*= decrease.) — 14 (1 0 .6 ) — 6 ( 8 .4 ) + 7 (1 7 .8 ) — 15 (6 1 .1 ) + 12 ( 4 .5 ) + 12 ( 6.5 ) — 17 ( 8 .9 ) F e d e ra l re s e r v e