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M O N T H L Y R E V I E W OF BUSINESS CONDITIONS ISAAC B. NEWTON, Chairman of the Board and Federal Reserve Agent Federal Reserve Bank of San Francisco Vol. XII San Francisco, California, October 20,1928 No. 10 SU M M ARY OF N A T IO N A L CONDITIONS Prepared by the Federal Reserve Board Volume of production and distribution of commodities increased seasonally in September and was larger than a year ago. There was a further advance in the general price level. Loans of member banks in leading cities in creased in September and October in response to the seasonal demand for commercial credit. Production. Industrial production increased further in September and the output of manu factures was in larger volume than in any pre vious month. Factory employment and pay rolls also increased. Production of iron and steel and of automobiles was unusually large during September and October, although there has recently been some curtailment of opera tions in these industries. There were also in creases in September in the activity of the tex tile, meat packing, and tire industries and in the output of coal, petroleum, and copper, while lumber production showed a decline. Building contracts awarded, after declining in volume for three months increased considerably in Sep PER C E N T tember and exceeded all previous records for that month. The increase was due chiefly to certain large contracts for industrial plants and subway construction. During the first three weeks of October awards exceeded those for the same period last year, the excess being espe cially large in the eastern district. United States Department of Agriculture estimates of this year’s crop yields indicate that the production of all crops in the aggregate will exceed last year’s output by about 5 per cent. The corn crop is estimated at 2,903,000,000 bushels, or 5 per cent above last year’s pro duction. The October 8 estimate indicated a cotton crop of 13,993,000 bales, or 446,000 bales less than was forecast on September 8, com pared with a yield of 12,955,000 in 1927. Trade. Department store sales increased con siderably in September and were larger than a year ago, reflecting, in part, the influence of cooler weather. Inventories of department stores at the end of the month were smaller PER C E N T I N D U S T R I A L P R O D U C T IO N W H O L E S A L E PR IC E S Index number of manufactures and minerals combined, adjusted for seasonal variations (1923-1925 average = 100). Latest figure, September, 114. Index of United States Bureau of Labor Statistics (1926 prices =«100, base adopted by Bureau). Latest figure, September, 100.1. Requests for early numbers of this Review have been received from universities and libraries whose files of the publication are incomplete. It would be appreciated if those readers who have available copies of the Review for months prior to January, 1923, would forward them to the Federal Reserve Agent, Federal Re serve Bank, San Francisco. 74 M O N T H L Y R EVIEW OF BUSINESS CONDITIONS than on the same date of last year. Wholesale distribution in all leading lines, except meats, was somewhat smaller than in September, 1927. Freight carloadings showed more than a sea sonal increase in September and continued large in October. Shipments of miscellaneous commodities in recent weeks have continued in larger volume than in previous years. Prices. Wholesale commodity prices in creased further in September and the Bureau October, 1928 middle of September and the middle of Oc tober, reflecting seasonal activity in trade and marketing of crops. There was also a growth in loans to brokers and dealers in securities, though total loans on securities of reporting member banks showed little change. During the four weeks ending on October 24, a growth of about 40 million dollars in the total volume of reserve bank credit in use was due chiefly to continued increase in the demand for B IL L IO N S O F DOLLARS M E M B E R B A N K C R E D IT R ESE R V E B A N K C R E D IT Monthly averages of weekly figures for banks in 101 leading cities. Latest figures are averages for the first three weeks in October. Monthly averages of daily figures for 12 Federal Reserve Banks. Latest figures are averages for first 17 days in October. of Labor Statistics’ index advanced to 100.1 per cent of the 1926 average. Increases, which were largest in farm products and foods, oc curred in nearly all groups except hides and leather and textiles, which showed slight de clines. Since the latter part of September, there have been decreases in the prices of livestock and meats, grains, wool, and hides, and in creases in cotton, silk, rubber, and iron and steel. Bank Credit. Demand for bank credit for commercial purposes increased between the currency, offset in part by a small inflow of gold from abroad. Reserve bank holdings of accep tances increased by about 140 million dollars during the period, while the volume of dis counts for member banks declined by about 100 million dollars. United States security holdings remained practically unchanged. Open market rates on commercial paper and on bank acceptances remained unchanged be tween the middle of September and latter part of October, while rates on security loans de clined during the later month. T W E L F T H FED ER AL RESERVE DISTRICT CONDITIONS A generally satisfactory agricultural outlook, a large volume of trade, well sustained indus trial activity, and an ample supply of credit are the chief features of the present business situa tion in the Twelfth Federal Reserve District. Aggregate production of the District’s farms and ranges during 1928 has approximated that of a year ago, and, with the exception of a few specialized crops, market conditions have been satisfactory. The livestock industry has achieved a particularly favorable position. The volume of trade transacted during Sep tember, 1928, was at seasonally high levels and exceeded that of a year ago. Current trade con ditions reflect a generally satisfactory employ ment situation and seasonal expansion in buy ing power of agricultural communities. Industrial operations, excepting building, have been somewhat more active during recent weeks than either one month or one year ago. Improvement in those industries such as cop per mining, lumbering, and petroleum produc tion and refining, which have co-operatively achieved a partial regulation of output, has been noteworthy. An increased demand for the ample supply of credit available to commerce and industry was evident during early October, although the total volume of commercial loans extended by mem ber banks of the District was lower than during early September. Total loans on securities at these banks increased throughout September and the first half of October, reflecting, in part, increased activity in security markets. Dis counts at the Reserve Bank have decreased since reaching a high point on September 5. O cto b e r , 1928 Agriculture The continued absence of autumn rains in the Twelfth District has favored late harvest ing operations but has hindered both the fall sowing of wheat and the growth of forage on livestock ranges. Crop production estimates for 1928, made by the United States Department of Agriculture as of October 1, tend to confirm previous forecasts of an aggregate yield of the District’s principal crops equal to that of 1927. The yield per acre of wheat and barley har vested in the District has been slightly larger than was anticipated earlier in the crop season and October 1 production estimates were 3.5 per cent higher for wheat and 4.1 per cent higher for barley than the August 1 forecast. A decrease in exports of Pacific Northwestern wheat during the present season has been offset to some extent by increased domestic shipments to midwestern states, but the proportion of the crop marketed thus far is estimated to be lower than the average for like periods of recent years. EXPORTS OF W H E A T A N D BAR LEY — juiy i — a e p t e r a D e r o u ----------Three-Year (1925-1927) 1928 1927 Average respectively. The final outturn of these crops will depend largely upon weather conditions during the next few weeks. Harvesting of the District’s deciduous fruit crops, excepting apples in the Pacific Northwest and grapes in California, is now finished. Ship ments of grapes from California have totaled 57,003 carloads for the season to October 22, 1928, compared with a cumulative seasonal movement of 63,647 carloads up to October 22, 1927. On October 1, the Department of Agricul ture’s estimate of the 1928 grape crop in Cali fornia was reduced 27,000 tons from the Sep tember 1 forecast and now stands at 2,300,000 tons. The 1927 crop was 2,406,000 tons. Sales of California grapes at Eastern auction markets during the current season have brought smaller unit returns than one year ago. Similarly, Pa cific Northwestern apples have sold at prices approximately 75 cents per box lower than last year. A P P L E S — Twelfth District and United States Commercial Production (in thousands of bushels) C a lifo r n ia ................................ r ------- W h ea t (bushels) P uget Sound .................... Colum bia R i v e r ................ 1,683,200 7,580,971 2,348,567 15,042,101 2,130,739 9,899,532 T otal ............................... B arley (bushels) San F r a n c is c o .................. 9,264,171 17,390,668 12,030,271 4,408,765 5,037,336 4,529,945* * Subject to revision. Aggregate production of the principal field crops grown in the District is reported to be somewhat smaller this year than in 1927. On the basis of the present estimates beans, pota toes, rice, tame hay, and sugar beets show de creases of 10.7, 2.0, 23.0, 6.0, and 18.4 per cent, respectively, from one year ago, while hops and cotton show increases of 6.7 and 48.1 per cent, P R O D U C T I O N * -F ie ld and Grain Crops Beans (bushels) Preliminary Estimate O ct. 1,1928 Actual 1927 Five-Year (1923-1927) Average 5,835 15,896 6,531 16,891 5,811 17,134 277 13,993 187 12,955 199 14,160 14,770 92,688 15,712 106,219 15,144 93,153 31,810 t 29,794 f 27,462 f 49,594 . 463,722 50,602 406,964 38,393 383,526 California, I d a h o .................... U nited States .......................... Cotton (bales) U nited States .......................... H ay, Tam e (ton s) . H ops (p ound s) California, O regon, W ash. .. . Potatoes (bushels) T w elfth D i s t r ic t ...................... Rice (bushels) . Sugar Beets (ton s) California, Idaho, U ta h ......... 6,901 38,833 1,252 6,758 8,960 44,339$ 6,356 36,118 1,534 7,753 1,636 7,458 B arley (bushels) 40,244 41,147 T w elfth D i s t r ic t ...................... . 48,088 208,722 264,392 . 350,593 W h ea t (bushels) 110,250 133,754 T w elfth D i s t r i c t ...................... . 124,595 872,595 808,196 U nited S t a t e s .......................... . 903,865 com m ercial production of hops * In thousands. fU n ited States originates in California, Oregon, and Washington. JRevised. Source: United States Department of Agriculture. 75 FEDERAL RESERVE AGENT AT SAN FRANCISCO U t a h ......................................... W ashington .......................... United S t a t e s ........................ . . . Shipments (in carloads) California ....................... ............. ............. ............. ............. W a s h in g t o n ................... ............. Forecast Oct. 1,1928 Actual 1927 Five-Year (1923-1927) Average 7,083 3,771 4,284 585 30,483 4,656 5,400 2,925 402 22,302 4,972 4,005 4,363 584 24,377 46,206 100,449 35,685 77,700 38,301 97,328 June 1 — September 30-------- \ Five-Y ear (1923-1927) 1928 1927 Average 1,670 656 190 4 3,124 2,313 846 530 54 4,622 5,644 ............. 9,607 S ource : U nited States Departm ent o f A griculture. 8,365 3,366 1,099 519 57 4,566 The citrus fruit crop now on the trees in Cali fornia is reported to be in excellent condition and a large yield is anticipated. Shipments of oranges from California totaled 44,793 carloads between November 1,1927, and October 1, 1928. During the same period of the 1926-1927 crop season 54,517 carloads were shipped. Protracted dry weather in the Intermoun tain livestock range territory has retarded the growth of fall and winter forage, and caused a shortage of water in some stock raising sec tions. Livestock are reported to be in poorer condition than either one month or one year ago. Desert ranges in Idaho, Nevada, and Utah which are used for winter grazing pur poses have produced a short crop of feed this year. The supply of supplementary feed crops (chiefly hay) grown in these areas, however, approximates that of a year ago, except in Idaho, where the hay crop is reported to be 12 per cent smaller in volume than in 1927. The fall movement of cattle to the principal livestock markets in the District has not been so heavy as a year ago but probably represents a larger proportion of the stock on ranges than 76 M O N T H L Y REVIEW OF BUSINESS CONDITIONS was marketed in the fall of 1927. Cattlemen are selling most of their marketable stock at pres ent profitable prices, and restocking of herds is proceeding at a slower rate than usual. The movement of range lambs to market has continued heavier than in 1927. Unsatisfactory summer feed conditions are reflected in the large proportion of thin (feeder) lambs which have thus far arrived at livestock markets. Sheepraisers are reported to be retaining large numbers of ewe lambs for breeding purposes. Figures showing the receipts of livestock at the principal markets in the Twelfth District follow : O c t o b e r , 1928 ters of 1928 has been the stability of both output and prices in those industries which are suffi ciently well organized to achieve at least partial regulation of production. INDEX NUM BERS L IV E S T O C K R E C E IP T S — P R I N C I P A L M A R K E T S Twelfth District ,------------- 1928-------------> ,------------- 1927------------- * September Cattle .......................... 76,504 Calves ........................... 15,686 H ogs .......................... 144,575 S h e e p ............................ 520,910 Jan. - Sept. Inclusive September 624,281 141,638 1,889,515 3,022,978 88,863 20,205 142,762 365,302 Jan. - Sept. Inclusive 721,450 178,132 1,575,799 2,722,140 Cattle sold on Pacific Coast markets during September and early October have brought higher prices than were paid either one month or one year ago. Sheep prices at the same mar kets, although higher during September than a year ago, declined slightly during October. Hog prices declined slightly during September but remained at higher levels than in Septem ber, 1927. Industry Industrial activity in the Twelfth Federal Reserve District was well maintained during September. The mining industry was particu larly active, being stimulated by a strong de mand for copper wrhich brought about a sub stantial increase in production of this metal. Petroleum production was also well maintained during the month, while lumber and flour pro duction increased more than seasonally. This Bank’s seasonally adjusted index of freight carloadings of industrial commodities stood at 109 (1923-1925 daily average = 100) in September, 1928, as compared with 118 in August, 1928, and 108 in September, 1927. A salient feature of the industrial situation during the first three quar- (A) Industry— Indexes of daily average production, adjusted for seasonal variation. (1923-1925 daily average = 100) f-----------— 1928— 1927 Aug. July Sept. Sept. M anufactures: F lour .......................................... Slaughter o f L i v e s t o c k ......... L um ber ..................................... Refined M ineral O i l s f .......... Cement ....................................... W o o l C o n s u m p tio n ................. 108 84* 116* 159 117 98 890 1080 161 128 75 88 89 1020 158 105 66 98 97 112 153 111 97 96 121 79 95 115 108 82 97 113 97 84 96 104 111 90 109 118 117 108 Minerals : Petroleum (C a lifo rn ia )! . . . . Copper (U nited S ta tes)$ . . . . L ead (U nited States) X . . . . . Silver (U nited States) X General : Carloadings§ ............................ *Preliminary. fN o t adjusted for seasonal variation. $Prepared by Federal Reserve Board. § Other than Merchandise and Miscellaneous. Q]RevisecL C A R L O A D IN G S O F “ O T H E R T H A N M E R C H A N D IS E A N D M I S C E L L A N E O U S F R E I G H T ” — T W E L F T H D IS T R I C T Index adjusted for seasonal variation; 1923-1925 daily average = 100. Latest figure, September, 109. Employment increased somewhat more than seasonally during September, although in most instances the demand was well balanced by the available supply. A shortage of women can nery workers was reported from some sections of Oregon, and an acute shortage of cotton pick ers in the Salt River Valley in Arizona has re cently developed. Highway work and heavy construction begun during August, and agri cultural operations which were being rushed to take advantage of good weather, furnished em ployment to large numbers of men. During September there was a general advance in wages in the copper mining industry, averag ing approximately 10 per cent for all classes of labor. Lumber production increased during Sep tember, particularly in Washington and Ari zona. A firm demand from the Middle W est and some orders for local needs, together with the seasonal elimination of fire hazard, were the (B ) Employment— t t -Californ ia - ^ -------- — Oregon- ...... — N o. of N o. of N o. N o. Employees — > Employees of Sept., Sept., of Sept., Sept., 1927 Industries Firms 1928 1927 Firms 1928 31,875 All Industries........... 762 167,927 164,943 155 29,627 (7.6) (1.8) Stone, Clay and <— 250 5 269 45 6,796 7,178 Glass P rod u cts. (— 5.3) (7.6) L um ber and W o o d 16,826 56 17,850 Manufactures . . 117 27,518 27,910 (— 1.4) (6 .1 ) 2,148 2,353 2,690 10 1,875 18 (— 12.5) (— 12.7) Clothing, M illinery and Laundering. 63 8,131 8,263 9* 484 452 ( — 1.6) (7.1) F ood s, Beverages 4,236 43 5,874 and T o b a cco . . 166 43,722 45,474 (— 3.9) (38.7) W ater, L igh t, and 4 P ow er ................ 3,390 3,995 (17.8) O ther In d u stries!. 334 73,165 67,738 (8.0) 32 M iscellaneous . . . . 15 2,247 2,300 5,523 5,715 (— 2.3) (— 3.4) *L aunderin g only. tTncludes the follow in g industries : metals, m achinery and co n v e y a n ce s ; leather and rubber g o o d s ; chem icals, oils and p a in ts; printing and paper goods. Figures in parentheses indicate percentage changes from Sep tem ber, 1927. O cto b e r , 1928 77 FEDERAL RESERVE AGENT AT SAN FRANCISCO chief factors accounting for increased activity. This Bank’s seasonally adjusted index of lum ber production rose to 116 (1923-1925 daily av erage = 100) during September, 1928, accord ing to preliminary estimates. It stood at 108 in August, 1928 (revised estimate) and 112 in September, 1927. Shipments and orders are again running slightly ahead of production. Many of the orders received are highly detailed and call for well-seasoned lumber for immediate delivery, making it difficult for some mills to meet buyer’s specifications. Building activity during the first nine months of 1928 has been at substantially lower levels than during the same period in 1927. The total value of building permits issued in 92 cities of the Twelfth Federal Reserve District, as re ported by S. W . Straus and Company, was 11 per cent smaller than a year ago. The value of engineering and heavy construction contracts awarded during the first three quarters of 1928 also declined markedly as compared with the same period in 1927. Figures reported by the Engineering News Record for the far-western district show a decrease of 14 per cent. Awards of building permits and construction contracts declined sharply during September. Petroleum output in California during Sep tember, 1928, was larger than during August, 1928, and at approximately the same rate as in September, 1927. This Bank’s index of daily average production of petroleum stood at 96 (1923-1925 daily average == 100) in September, 1928, and September, 1927, and 95 in August, 1928. Although daily average production for September was high, the end of the month wit nessed a substantial recession in production. (C) Bank Debits*Sept., 1928 Sept., 19270 12,946 $ 12,484 $ 9,880 10,061 Bellingham 21,242 20,862 B e r k e l e y ............. 14,751 17,181 B o i s e .................... 7,481 7,629 E ugene ................ 13,243 13,533 Everett ............... 43,662 49,876 Fresno ............... 52,392 43,383 L o n g B each . . . 859.094 L os Angeles . . ., 1,023,494 232,593 214^163 Oakland ............. 21,840 23,117 O g d e n .................. 33,813 36,888 Pasadena ........... 23,837 31,724 P hoen ix ............. 181,023 185,900! P o r t la n d ............... 10,567 11,690 R en o .................. 1,499 1,230 R itzville ........... 46,247 55,107 Sacram ento 68,707 76,215 Salt Lake C ity. . 10,033 8,499 San B ernardino. 57,415 56,487 San D i e g o ......... 1,283,350 San Francisco . . 1,474,532 27,264 28,432 San Jose ........... 13,148 14,131 Santa B a rb a ra .. 240,852 239,756 S e a t t l e ................... 59,425 56,547 Spokane ............... 29,233 28,115 S tockton ............. 45,835 46,731 T a com a ............. 14,460 17,108 Yakim a ............. D i s t r i c t ........... $3,826,lOOf $3,414,607 t— First Nine M onths— N 19270 1928 $ 124,686 $; 116,141 90,687 87,907 190,677 195,913 134,042 119,344 67,015 66,715 114,231 121,791 343,178 306,034 439,761 489,437 8,274,011 9,459,502 1,973,467 2,203,469 155,757 162,158 363,699 363,668 239,093 304,320 1,501,103 1,582,662$ 84,467 88,182 7,946 9,094 337,098 445,547 614,032 661,188 91,235 94,075 551,174 562,498 10,798,876 13,764,136 232,102 251,306 125,309 120,868 1,914,746 2,188,258 493,513 504,937 250,919 262,973 405,298 410,129 118,921 109,057 $35,091,637$ $29,996,7.15 *In thousands, !In clu d es $16,629,000 at four banks not reporting prior to week ended M ay 2, 1928. $Includes $86,200,000 at four banks not reporting prior to week ended M ay 2, 1928. ORevised. Producers have continued their program of re strained production so that surface stocks may be kept at present relatively low levels during the winter, when demand is seasonally light. Copper production at the end of September had reached the highest level since December, 1918, and approximated sales for the first time in recent months. As a result, stocks of copper on hand are estimated to have changed little since the end of August. Orders for both for eign and domestic delivery were in large vol ume. Preliminary estimates indicate that there was some increase in lead production during September, and quicksilver mining in Califor nia and Arizona was active. Output of silver and zinc was well below the levels of the pre vious month and of a year ago. The volume of wheat ground at District flour mills increased more than seasonally during September. This Bank’s seasonally adjusted in dex of flour production advanced to 108 (19231925 daily average ==» 100) as compared with 98 in August, 1928, and September, 1927. Stocks of flour on hand at the middle of the month were 3 per cent smaller than at the middle of Sep tember, 1927. Both domestic and foreign ship ments were reported to be somewhat larger during the past month than in August. Trade Trade continued in large volume during Sep tember, 1928, and was larger than during Sep tember, 1927, despite the fact that there was one less trading day in September of this year than in September a year ago. The greatest increases in trade activity were reported from Oakland, California; Seattle, Washington; and Salt Lake City, Utah. Total carloadings in the District declined during the month, contrary to the usual sea sonal movement, due chiefly to lighter loadings of lumber, and merchandise and miscellaneous freight in California, but were larger than in September, 1927. This Bank’s seasonally ad justed index of merchandise and miscellaneous (D) Distribution and Trade— ,-------------- 1928------------- \ 1927 Carloadings, T o t a l! .......................... C arloadings, M erchandise and M iscella n eou s! ................................. Sales at W holesale^ .......................... Sales at R eta il! ................................... Stocks, Retail§ ..................................... Sales of N ew Autom obiles || Passenger Cars ................................ Com m ercial V ehicles .................... Sept. Aug. July 114 122 120 Sept. 111 118 99 123 109 124 103 1200 107 122 93 120 109 114 98 117 110 110 119 115 121 103 102 84 95 r-----------Index Numbers*----------- \ ------------- Actual Figures------------- * S tock Turnover, R e ta ilH ............................ 25 C ollections, R e ta il# R egular ............................................. 45.3 In stallment ....................................... 15.8 .27 45.1 17.1 .22 45.0 15.3 .25 44.4 16.0 * A djusted fo r seasonal variations, 1923-1925 average=100. !D a ily average. $M onthly totals o f eleven lines com bined. §A t end o f m onth. ||For source of figures, see June, 1928 R eview . ^Proportion of average stocks sold during month. # P e r cent o f collections during m onth to amount outstanding at first o f month. ORevised. 78 M O N T H L Y R EVIEW OF BUSINESS CONDITIONS freight carloadings stood at 118 (1923-1925 daily average = 100) in September, 1928; 124 in Au gust, 1928; and 114 in September, 1927. The decrease from last month in merchandise and miscellaneous carloadings in California was the result of decreased shipments of building mate rials and agricultural products other than grains. D IS T R I B U T I O N A N D T R A D E - T W E L F T H D IS T R IC T Indexes adjusted for seasonal variation. 1923-1925 average = 100. Daily average figures of department store sales and railway carloadings of merchandise freight. Monthly figures of sales at wholesale. Sales at retail of 150 department, apparel, and furniture stores were one per cent larger in September, 1928, than in September, 1927. Dur ing the first three quarters of 1928, such sales were 2 per cent larger than during the first three quarters of 1927. The seasonally adjusted index of daily average sales of 28 department stores compiled by this Bank advanced to 123 (19231925 average = 100) in September, 1928, as compared with 120 in August, 1928, and 117 in September, 1927. Stock on hand at 27 depart ment stores increased more than seasonally dur ing September, but at the end of the month was one per cent smaller than a year ago. R E T A I L T R A D E —Twelfth District ,--------- N E T S A L E S *--------- N Jan. 1 to Sept. 30,1928, compared with Jan. 1 to Sept. 30,1927 Sept., 1928, compared with Sept., 1927 Departm ent S to r e s f* * . 1.4 6.4 A pparel S t o r e s ............. Furniture Stores ......... — 2.0 ( 1.3 A ll S tores ...................... ( 67) 2.2 ( 28) 1.3 53) — 2.0 ( (150) 1.7 ( 61) ( 23) 43) (128) ST O C K S* Sept.,1928, compared with Sept., 1927 — 2.0 — 1.8 — 6.9 ( — 2.7 ( 52) ( 14) 33) (101) *P ercentage increase or decrease ( — ). Figures in parentheses in dicate num ber of stores reporting, fln clu d e s dry goods stores.. Total monthly sales of 238 firms in eleven lines of wholesale trade decreased during Sep tember, contrary to the usual seasonal move ment, but were about 2 per cent larger than dur ing September a year ago. While the influence of the number of trading days in a month upon total sales for that month is not so great in the case of wholesale trade as in the case of retail trade, the absence of one trading day undoubt edly does affect volume of sales and, if allow ance were made for this factor, sales at whole sale during September, 1928, would probably show a more substantial increase over sales of a year ago than is shown by the unadjusted fig O cto b e r, 1928 ures. This factor probably also accounts for part of the decrease in sales from last month. This Bank’s seasonally adjusted index of sales of 146 wholesale firms stood at 99 (1923-1925 monthly average = 100) in September, 1928; 103 in August, 1928; and 98 in September, 1927. No allowance is made in this index for the vary ing number of trading days during different months. Stocks held by wholesalers averaged practically the same at the end of September this year as a year ago. Wholesale grocers re port that accounts are being paid more rapidly than a year ago, but most other lines of whole sale trade show collections barely equal to or below September, 1927. Sales of new automobiles, both passenger cars and commercial vehicles, declined through out the District by more than the usual sea sonal amount. The seasonally adjusted index of passenger car sales in the District stood at 110 (1923-1925 daily average = 100) in Septem ber, 1928; 115 in August, 1928; and 84 in Sep tember, 1927, and for commercial car sales at 119 in September, 1928; 121 in August, 1928; and 95 in September, 1927. Prices The United States Bureau of Labor Statistics’ index of wholesale prices of 550 commodities advanced from 98.9 (1926 monthly average = 100) in August to 100.1 during September, the first time this index has reached 100 since June, 1926. Higher prices for farm products and for foods were chiefly responsible for the advance in the general index. Wheat quotations advanced moderately in late September and have held fairly steady since then, although some weakening in prices was recorded at mid-October. Prices for raw cotton likewise advanced after the sharp drop on Sep tember 10 and have fluctuated within compara tively narrow limits since the latter part of that month. Livestock prices were at relatively high levels throughout September, although their trend was downward. Toward the close of the month quotations for hogs declined sharply, and early in October cattle and lamb prices moved down ward, but recovered most of their loss before the middle of the month. No change of importance has occurred in prices of dried or canned fruits during recent weeks. Marketing of fresh grapes was in large volume during September and the first half of October, but at prices considerably lower than a year ago. Copper and lead prices were steady during early October following the September advance. Zinc prices have remained unchanged, and silver has fluctuated within narrow limits with out showing any definite trend. O cto b e r , 1928 79 FEDERAL RESERVE AGENT AT SAN FRANCISCO Banking and Credit The banking and credit situation in the Twelfth Federal Reserve District during Sep tember and the first half of October has reflected a maintenance of activity in the general busi ness field. There was some reduction in the volume of commercial loans at reporting mem ber banks during September, but this reduction was partially offset by increases during the first weeks of October. On October 17, these loans amounted to 973 million dollars compared with 986 million dollars on September 12 and 946 million dollars on October 19, 1927. Loans on securities at reporting banks expanded through out the period under review and on October 17 totaled 389 million dollars compared with 367 million dollars on September 12 and 335 mil lion dollars on October 19, 1927. Investment holdings showed a net increase of 20 million dollars during the five weeks from September 12 to October 17, of which 18 million dollars was in United States securities, representing sub scriptions by the banks for United States Treas ury certificates issued during September and October. Deposits of reporting member banks MILLIONS OF DOLLARS M E M B E R B A N K C R E D I T -T W E L F T H D IS T R I C T Monthly averages of weekly figures. Latest figures are averages for the first three weeks in October. showed little net change between mid-Septem ber and mid-October. Their borrowings from the Reserve Bank, over the period as a whole, declined 22 million dollars, a reflection, in part, of their subscriptions to United States securi ties, in part of an inflow of funds into the Dis- trict, and in part of Reserve Bank purchases of acceptances in local markets. Changes in demand for credit at the Federal Reserve Bank of San Francisco during this pe riod were the result almost wholly of changes in amounts borrowed by city member banks, and grew out of Treasury financing operations and the interdistrict flow of funds. These city member banks purchased from the Treasury approximately 45 million dollars of United States securities issued in mid-September and 18 million dollars issued in mid-October, giving the United States government deposit credits for these amounts. The United States Treasury withdrew 45 million dollars of these deposits during the month. In order to meet these with drawals the member banks disposed of approxi mately an equal amount of United States se curities. As a partial result of the disposal of these securities there was a net inflow of funds into the District for member bank account (in cluding the account of non-member clearing banks) of 36 million dollars. Member banks were thus able to meet the Treasury’s demands and, aided by purchase of 7 million dollars of acceptances by the Reserve Bank and a slight reduction in demand for currency they were also able to reduce their borrowings at the Re serve Bank by 23 million dollars, and to in crease their reserve balances by 2 million dol lars. The effects of these movements upon the condition of the Federal Reserve Bank of San Francisco were as follows: 1. Total deposits (chiefly member bank bal ances) were increased 2 million dollars. 2. Earning assets (chiefly member bank bor rowings) were reduced 19 million dollars. 3. Cash and currency other than Federal re serve notes, amounting to 4 million dollars was paid into circulation, and circulation of Federal reserve notes was reduced by 5 million dollars, the net result being a decrease of about one million dollars in the amount of currency in circulation in the District. 4. Cash reserves of the Federal Reserve Bank of San Francisco increased 14 million dollars, transfers of funds into the District from other parts of the United States amounting to 36 mil lion dollars being partially offset by Treasury transfers out of the District amounting to 19 million dollars and the payment into circulation of 4 million dollars in cash and currency other than Federal reserve notes. R E P O R T IN G M E M B E R B A N K S — Twelfth District (In m illion s of dollars) F E D E R A L R E SE R V E B A N K O F S A N F R A N C IS C O a O ---------------------Condition-------1928 T otal Loans and Investm ents . . T otal L o a n s ................................. . . C om m ercial L o a n s .................... L oans on Securities..................... Investm ents .................................. Net Dem and D e p o s i t s ............... Tim e D e p o s i t s ............. .............. . . B orrow in gs from Federal R e serve B a n k ................................. 2,027 1,362 973 389 665 851 1,013 (In m illion s of dollars) Sept.26, Sept.12, Oct.19, 1928 1927 1928 2,009 1,349 966 383 660 824 1,018 1,998 1,353 986 367 645 853 1,016 1,828 1,281 946 335 547 794 933 58 93 35 t----------------- Condition ---Oct. 17, Sept.26, Sept.12, Oct. 19, 1928 1928 1928 1927 T otal Bills and S e c u r it ie s ............. . Bills D iscounted ............................... 132 76 U nited States S ecurities.................. T otal Reserves ................................. . T otal D e p o s it s ................................... . Federal R eserve N otes in Circu. 16 251 197 120 64 39 17 262 190 151 99 33 19 238 195 95 42 7 46 280 187 169 170 174 171 O cto b e r , 1928 M O N T H L Y REVIEW OF BUSINESS CONDITIONS 80 E a r n i n g s a n d E x p e n s e s o f M e m b e r B a n k s in T w e l f t h District Analysis o f Costs and Earnings o f Non-Branch Operating Banks During 1927 . (Statem ent of amounts per $100 o f earning assets in even dollars and cents results in some instances in slight discrepancies betw een com ponent figures and related totals.) Twelfth D is tr i c t * California Idaho Oregon Utah W ash ington 620 213 73 148 128 45 $6. 7\\ $6.44 5.74 .69 $7.52 6.67 .85 $6.65 5.91 .73 $6.88 5.98 .89 ? 4.75 1.50 .11 2.03 1.11 5.61 1.90 .15 2.11 1.44 4.78 1.70 .04 1.96 1.07 5.08 1.54 .08 2.23 1.22 Net Earnings ................... ............................ 1.-77. 7 1.68 1.91 1.80 1.80 Net Losses.......................................................•??. 7) .65 1.56 .83 .99 Net Addition to Profits................................... •??. 3> 1.03 .35 1.03 .81 19 Dividends Declared..........................................-7?. 71 .73 .34 .65 .71 *!> 89.23 10.77 88.72 11.28 88.95 11.05 86.99 13.01 73.84 23.28 1.78 31.54 17.24 74.58 25.29 2.03 28.07 19.19 71.94 25.64 .66 29.56 16.09 73.83 22.46 1.18 32.48 17.72 26.15 25.42 28.06 26.17 Number of Banks.................................................... Amount per $100 of Earning Assets Total Earnings........................................... .$.6-77. Interest Earned ..........................................$.91. Other Earnings ........................................... *86 *!> V. Total Expenses...............................................$.00. Salaries and Wages ................................... Interest and Discount on Borrowed Money... .*0?. Interest on Deposits..................................2-03. All Other Expenses ................................... l.*?3. 54 .) 3 Amount per $100 of Earnings Interest Earned .......................................$7.36 Other Earnings .......................................X?-97. Total Expenses ..........................................7.3-7?. Salaries and Wages..................................24.41. Interest and Discount on Borrowed Money.. l.-?4. Interest on Deposits................................ 29.93 All Other Expenses ................................ .18.21. 71 21. 3 )' U Net Earnings ............................................. 26.2J. 56 *4 34 30 \:f 7(> x . 7,;.; / 2J!J IV> * H! 21 2 lf c ; Net Losses .................................................. 1.2-19 ii). 10.19 20.80 12.49 14.37 Net Addition to Profits................................ 1.4-P?. 1 15.96 4.62 15.57 11.80 l$ j Dividends Declared.......................................l.Q-7?. 10 .9 5 11.34 4.46 9.77 10.27 1 $752.76 2.62 1.93 36.32 68.74 4.69 26.57 $804.90 7.21 1.90 46.16 61.33 15.78 22.89 $701.16 5.69 2.34 40.05 38.64 31.70 29.65 $79 Nevada Oregon Utah R a i; t i o s (Amount per $100)1 Earning Assets to Invested Capital................ $734-&2$72;. Profits to Invested Capital...... ......................... 6.89 ;\h Interest on Deposits to Gross Deposits................ ?. 1.1 Time Deposits to Gross Deposits...................... 38.54 Losses on Loans to Total Losses........................ Losses on Securities to Total Losses................ 1?\1P. Other Losses to Total Losses........................... ??•.??. $665.07 6.84 2.29 34.00 64.19 14.67 21.14 r a t i v e I t e m 3j22 s SIE 30, 1927 Twelfth District Per Cent of Member Banks to All Banks........................... 72.67 Per Cent of Member Banks in Each State to All Member Banks in the District.......... 100.00 Arizona California Idaho 80.77 73.85 69.88 42.80 77.51 53.69 1.05 78.02 1.73 .52 6.61 2.54 W ash ington 9.53 “■Includes figures for A rizon a and Nevada which are not shown separately because o f small num bers o f banks included. These ratios are based upon data taken from the custom ary abstracts o f reports o f con dition and of earnings, expenses, and dividends. I t should be borne in m ind in using them that the statistics em ployed represent aggregates for all m em ber banks reporting on thè various dates, and such ratios as are shown in this table are therefore ratios o f aggregates in w hich figures fo r large banks have a statistical influence som ew hat disproportionate to their num ber in com parison with the figures fo r small banks. Data are on ly for m em ber banks fo r which com plete con dition reports for every call in a particular year w ere available. W h ere reports fo r any bank were not com plete during any year all figures for that bank were om itted.
@FedFRASER